Business Purpose Loans Reminder
Newrez LLC "Newrez" Approved Correspondent Clients: For Conforming loan transactions, Newrez will waive the requirement that investment property transactions pass the 3% QM Points and Fees test when the transaction is for business.
In order to qualify for a waiver, the borrower(s) must sign a business purpose certification/attestation confirming that they do not intend to occupy the subject property for more than 14 days in any calendar year, and that no loan proceeds from the transaction will be used for consumer or non-business purposes. While the 3% QM points and fees requirement will be waived, all business purpose loans will need to pass a 5% Points and Fees requirement, as required by Fannie Mae and Freddie Mac.
The certification/attestation must be signed by the borrower(s) at or prior to closing.
Effective Date
Effective immediately.
Resources
- Business Purpose Certification/Attestation
- Fannie Mae Selling Guide Ability to Repay Loan Eligibility Requirements
- Freddie Mac Selling Guide ATR/QM Rule Eligibility and Compliance