The Impact of Fannie Mae Guideline Changes

Here are some upcoming guideline changes that Fannie Mae is implementing and will be filtering down to the banks and mortgage lenders:

· Minimum Borrower Contribution – The minimum borrower contribution requirements for all Fannie Mae conforming products (except DU Refi Plus, High Balance loans, interest only, 2-4 units and second homes) will no longer require a minimum 5% contribution from the borrower. The borrowers minimum investment may come from gift, grant or community seconds to meet this requirement.

· Foreclosure – Increased waiting period to seven years.

· PreForeclosure/Short Sale/Deed-in-Lieu – if the credit report reflects an account that may have been subject to a preforeclosure, short sale or deed-in-lieu the borrower will have to wait two years until applying for a new loan. Fannie Mae uses the terms “preforeclosure”, “deed-in-lieu” and “short sale” interchangeably.

· Revolving Debt – All revolving debt will be included in the dti calculation regardless of the number of payments remaining.

If you have any questions about these changes and how it may impact you or your clients, please contact me at 602-690-1462. Thank you.