Tag Fannie Mae

Tag Fannie Mae

Fannie Mae Homepath Loan Program Discountinued October 6, 2014

John Thomas September 19, 2014 Tags: , , ,
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Fannie Mae Homepath Mortgage Loan Program will no longer be eligible for use by home buyers effective October 6, 2014. Fannie Mae designed the Homepath loan program to be used to purchase specifically targeted homes in their inventory of homes for sale. The Homepath loan is a special loan program that allows a home to be purchased with no appraisal and no mortgage insurance with only putting down 5% of the purchase price as a down payment. The original program only required 3% down payment but that was increased to 5% down payment effective November 1, 2013.

The highlights of Fannie Mae Homepath Loans are as follows: Keep Reading...

Fannie Mae New Rules for Delaware Home Buyers January 2014

John Thomas September 8, 2013 Tags: , , , ,
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Fannie Mae New Rules for Delaware Home Buyers Effective January 2014

Fannie Mae released an update to its Selling Guide SEL-2013-06 which will be effective January 10, 2014 with the update to automated underwriting system DU version 9.1. The update makes the following changes to conventional mortgage loans sold to Fannie Mae:

  • No longer accept mortgages with terms greater than 30 years (So no more 40-year mortgages)
  • No longer accept mortgages with an interest only option
  • Adjustable Rate Mortgages (ARMs) that are 7 years fixed or 10 years fixed will need to be qualified at higher of note rate or fully indexed rate whichever is higher
  • No longer allow Loan-to-Value (LTV) over 95% (So no more 97% LTV Loans!!!)
  • Will force Lenders to purchase back loans that can be proved to fail the ATR (Ability to Repay) test

The 97% Loan that is no longer eligible includes the My Community Mortgage programs and the HFA programs. The ATR test is the biggest change that most people will not directly see as it will affect how lenders underwrite loans after January 10, 2014. The new rule says that if a loan defaults at any time during the 30-year term of the loan, Fannie Mae can review the loan and if determines the lender failed to adequately document the borrower’s ability to repay then the lender must indemnify Fannie Mae for the complete loss. The big problem is Fannie Mae has not clearly defined what a lender is supposed to do in order to document the borrower’s Ability to Repay a loan. This means Fannie Mae can subjectively decide if a lender passes the ATR test when a loan goes bad. Keep Reading...

Fannie Mae makes it tougher for First Time Home Buyers in Delaware

John Thomas June 13, 2007 Tags: ,

Fannie Mae makes it tougher for First Time Home Buyers in Delaware

Fannie Mae made significant changes to its Desktop Underwriting (DU) for My Community programs.  The guidelines have changed to make it harder for first time home buyers to qualify for a mortgage to purchase a home with little to no money down.  The guidelines took effect May 19, 2007.  Borrowers who qualified before May 19th, may no longer qualify under the new guidelines.

This affects people trying to qualify for the Delaware Bond Program loans for Delaware first time home buyers because these loans must qualify through Fannie Mae’s DU.  Fannie Mae wasn’t specific about what exactly won’t qualify but it seems anybody with a credit score below 620 certainly won’t qualify anymore. Keep Reading...