FNMA Guideline Updates

Announcement 2018 : 04

FNMA updated their guidelines in Fannie Mae Announcement 2018-01, issued January 30, 2018.

Highlights Include:

Federal Tax Installment Plans

Borrowers with IRS Tax Installment Plans are now eligible for financing with FNMA subject to the following requirements:

  • No federal tax lien has been filed in the County where the subject property is located;
  • Documentation of a fully approved and executed repayment plan, including the monthly payment and total amount due
    • Borrower must qualify with monthly payment and DTI; and
  • Documentation that Borrower is current and has made at least one (1) payment prior to closing/disbursement.

Condo/PUD Changes

FNMA is allowing more flexibility on detached condos and minor litigation in projects:

  • Detached condo units (aka site condos) no longer require project review;
  • Acceptable minor litigation criteria has been expanded to now include the following:
    • The HOA is the plaintiff and the lender has reasonably determined the matter is minor and will result in an insignificant impact to the financial stability of the project;
    • The reasonably anticipated or known damages and legal expenses are not expected to exceed 10% of the project’s funded reserves;
    • The HOA is seeking recovery of funds for issues that have already been remediated, repaired, or replaced and there is no anticipated material adverse impact if funds are not recovered; and
    • Litigation concerning localized damage to a unit in the project that does not impact the overall safety, structural soundness, habitability, or functional use of the project.

Properties with Values ≥ $1,000,000

FNMA will no longer automatically require a review appraisal. Previously, a field review was required on properties valued at $1,000,000 or more, when the LTV, CLTV, or HCLTV ratio exceeded 75%.

REMN Wholesale Product Guidelines have been updated to incorporate these changes, available here.

If you have any questions, please contact your Account Executive.