Bulletin 2024-015 SmartVest Product Summary and SmartSeries Underwriting Guide Updates
Newrez LLC "Newrez" Approved Correspondent Clients; please note the following updates that are effective with applications on or after March 5, 2024.
The SmartVest Product Summary has been updated as follows:
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Current Policy |
New Policy |
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Debt Service Coverage Ratio (DSCR) |
Debt Service Coverage Ratio (DSCR) |
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The SmartSeries Underwriting Guide has been updated with the following:
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Current Policy |
New Policy |
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Employment and Income |
Employment and Income |
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Section 8A.1(a)(iv) Tax transcripts:
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Section 8A.1(a)(iv) Tax transcripts:
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Section 8A.4(b) Second Job Employment
Second-job employment refers to employment that is not the borrower's primary employment. The second job is in addition to the borrower's primary employment. A borrower should have a minimum of two (2) years, uninterrupted history on all second or multiple jobs in order to include the income for qualification purposes with a strong probability of continuance for three (3) years. A borrower may have a history that includes different employers is acceptable as long as the income has been consistently received.
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Section 8A.4(b)-Second Job Employment Second-job employment refers to employment that is not the borrower's primary employment. The second job is in addition to the borrower's primary employment. A borrower should have a minimum of two (2) years, uninterrupted history on all second or multiple jobs in order to include the income for qualification purposes with a strong probability of continuance for three (3) years. A borrower may have a history that includes different employers is acceptable as long as the income has been consistently received. Verification of a minimum history of two years secondary employment income is recommended. However, income that has been received for a shorter period of time (but, no less than 12 months) may be considered as acceptable income, as long as there are positive factors to reasonably offset the shorter income history. A borrower may have a history that includes different employers, which is acceptable as long as income has been consistently received. In no instance may the borrower have any gap in employment greater than one month in the most recent 12-month period. |
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Liabilities and Debt Ratios |
Liabilities and Debt Ratios |
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Section 7A.4(a) Alimony and Child Support Payments When the borrower is required to pay alimony and/or child support payments under a divorce decree, separation agreement, or any other written legal agreement, the payment(s) must be included in the DTI ratio. The payments must be considered for qualifying purposes, even if it appears likely that these obligations will be satisfied within ten (10) months or less. If there are fewer than ten (10) payments remaining and the underwriter determines these payments will not impact the borrower’s ability to pay, payments may be excluded from the DTI with evidence of the remaining duration of support payments in the file. Voluntary payments do not need to be taken into consideration. One (1) of the following is required to document the payment and the number of remaining payments and that the alimony or child support will continue for at least three (3) years:
Review of the application and loan file documentation may require additional validation to determine child support obligations. |
Section 7A.4(a) Alimony and Child Support Payments When the borrower is required to pay alimony and/or child support payments under a divorce decree, separation agreement, or any other written legal agreement, the payment(s) must be included in the DTI ratio. The payments must be considered for qualifying purposes, even if it appears likely that these obligations will be satisfied within ten (10) months or less. If there are fewer than ten (10) payments remaining and the underwriter determines these payments will not impact the borrower’s ability to pay, payments may be excluded from the DTI with evidence of the remaining duration of support payments in the file. Alimony obligations and separate maintenance obligations, the option to reduce the qualifying income by the amount of the alimony obligation in lieu of including it as a monthly payment in the calculation of the debt-to-income (DTI) ratio is allowed. A copy of the divorce decree, separation agreement, court order or equivalent documentation confirming the amount of the obligation must be obtained. Voluntary payments do not need to be taken into consideration. One (1) of the following is required to document the payment and the number of remaining payments and that the alimony or child support will continue for at least three (3) years:
Review of the application and loan file documentation may require additional validation to determine child support obligations. |