Bulletin 2023-056 Underwriting Guideline Updates – Conforming
Newrez LLC "Newrez" Approved Correspondent Clients; effective immediately, unless otherwise noted, for all loans in pipeline, the topics contained in this announcement have been updated in the Conventional Conforming Underwriting Guides.
Please use this announcement as guidance until all applicable underwriting guides are published.
Conventional Conforming Updates
Chapter 1I Employment and Income
Allowable Age of Tax Returns
Expanded age of tax returns to reflect both Fannie Mae and Freddie Mac requirements based on note date.
Complete guidelines can be found in the Conventional Underwriting Guide, Chapter 1I, Employment and Income, 1I.1(h) Allowable Age of Individual Tax Returns
Fannie Mae Conforming Updates
Chapter 1B Transaction Types
Rate and Term Refinance Mortgage Loans
Update aligns with Fannie Mae SEL-2023-05 allowing use of funds under a rate and term refinance transaction to:
- Pay deferred balance from a previous loss mitigation and late fees
- Permit proceeds to satisfy any shared appreciation per a shared appreciation agreement when the subordinate lien is a Community Second
Complete guidelines can be found in the Conventional Underwriting Guide, Chapter 1B, Transaction Types, 1B.2 Rate and Term Refinance Mortgage
Manufactured Homes – Temporary Interest Buydowns SEL-2023-05: Currently under review. Information will be announced at a later date.
Qualifying Rate for 7 and 10 year ARMS SEL-2023-05: Currently under review. Information will be announced at a later date.
Freddie Mac Conforming Updates
Chapter 1D Manufactured Housing
Single-Wide Manufactured Homes – Removal of requirement that a single-wide manufactured home be 10 years old or newer is currently under review. Information will be announced at a later date.
Manufactured Home Appraisal Requirements – This is currently under review. Information will be announced at a later date.
Chapter 1E Underwriting
Asset and Income Modeler (AIM) for Income Using Direct Deposits
Asset and Income Modeler (AIM) has been enhanced for income using direct deposits. Per Freddie Mac Bulletin 2023-13, this enhancement now allows a borrower’s paystub to be included in the assessment. When a paystub is uploaded to the third-party service provider, Loan Product Advisor will use the data to identify additional income streams not currently found with direct deposits alone and to derive a more precise gross income amount. Finicity is the first third-party service provider to offer this enhancement. Clients currently using Finicity or interested in taking advantage of this enhancement should contact Finicity directly.
Complete guidelines can be found in Chapter 1E.4 Loan Product Advisor Asset and Income Modeler (AIM).
Area Median Income Limit Updates
Effective June 8, 2023, Freddie Mac Bulletin 2023-13, announced Loan Product Advisor was updated to reflect the 2023 Area Median Income (AMI) limits and Newrez has aligned with this update.
Heritage One Mortgages
At this time, Newrez will not be offering Heritage One Mortgages (Freddie Mac Bulletin 2023-13).
Update to Form 400 Warranty of Completion of Construction
Freddie Mac previously introduced Form 400 as an option for confirming the completion of proposed or newly constructed properties. Freddie Mac Bulletin 2023-13 announced updates to that form. At this time, Newrez does not accept Form 400 Warranty of Completion of Construction.
Borrower’s Social Security Number (SSN)
Freddie Mac Bulletin 2023-13 included updates to allow Sellers to redact or delete the borrower’s SSN from all documents in the mortgage file provided the Seller complies with requirements of Section 3301.1. Newrez will not be aligning with this update and redaction or deletion of the borrower’s SSN from all documents is not permitted.