For example, for declining variable income, the requirements and guidance for declining income trends in the B3-3.1-01, General Income Information are applicable. Lenders should apply due diligence and review the actions of the business and any impact the current situation has taken on the flow of income. Selling, Securitizing, and Delivering Loans, Research These have been separated for easier reference by topic. The flexibilities were set to expire on July 31, 2020. While two years of tax returns are still required to demonstrate a stable history of capital gains and interest and dividends income, lenders must consider the current value of the underlying asset when evaluating income for qualifying purposes. If the credit report does not provide a monthly payment for the student loan, or if the credit report shows $0 as the monthly payment, the lender must either calculate a qualifying payment per B3-6-05, Monthly Debt Obligations, or use the most recent income-driven repayment plan payment (with supporting documentation). The changes are to ensure continued support for borrowers during the COVID-19 national emergency. COVID-19 FAQs Selling - Underwriting & General Last Updated Dec. 16, 2020 . The lender must use the profit and loss statement (and other supplemental documentation) to determine the current level of stable income. & Insights, Pricing & If the COVID-19 pandemic has caused job loss, income reduction, sickness, or other issues that impact your ability to pay your home mortgage or rent, relief options are available — find details here and take action now.. Mortgage & Rental Payment Histories-All Transactions (effective 4/29/2020-updated 7/28/2020) AIG is providing overlays to Fannie Mae’s temporary Purchase and Refinance eligibility requirements, announced in LL- 2020-03 and updated 7/9/2020; Lenders can continue to waive business income tax returns when the requirements of the Selling Guide are met. Our COVID-19 task force is monitoring and analyzing the current situation, and we have implemented our business resiliency plans. When the borrower experiences a gap of employment due to COVID-19 and their source of income is variable, is there a minimum amount of documented time the borrower is required to be back at work after the gap period? If the trend is declining, the income may not be stable. Learn More See Frequently Asked Questions about Enterprise assistance options for homeowners and renters impacted by COVID-19 or Information for Tenants in Rental Properties With a Fannie Mae or Freddie Mac Mortgage. For a comprehensive list of resources such as access forms, announcements, lender letters, notices and more. Lenders must obtain the additional documentation, such as an audited profit and loss statement, or an unaudited profit and loss statement and three months’ business depository account statements and assess the impact to the business and adjust income accordingly. Does the lender need to consider a Paycheck Protection Program (PPP) loan when analyzing a self-employed borrower? 15, 2020, if a self-employed borrower has not filed 2019 income tax returns, is an audited Profit and Loss Statement for 2019 required in order to support qualifying income? Fannie Mae's Disaster Response Network has published a guide for renters affected by the coronavirus (COVID-19). Browse our online resources, learn at your own pace, and discover Fannie Mae learning tools. As reflected in LL-2020-03, self-employed borrowers must provide either a 2020 audited year to date Profit and Loss Statement OR a 2020 unaudited year to date Profit and Loss Statement along with three months business depository account statements. These FAQs provide additional information on the temporary policies. We are allowing certain documentation flexibilities due to the unique circumstances resulting from the COVID-19 pandemic to address the issue lenders have raised due to disruption of employer operations and their inability to be reached by phone. SUBJECT: SELLING GUIDANCE RELATED TO COVID-19 We continue to work closely with Fannie Mae under the guidance of the FHFA to address the ongoing economic implications and uncertainty related to the coronavirus disease (COVID-19) pandemic and its impacts on Borrowers and ... Age of income and assets documentation 12/10/20: Single-Family Lender Letter (LL-2020-04), Impact of COVID-19 on Appraisals, 12/10/20: Single-Family Lender Letter (LL-2020-03), Impact of COVID-19 on Originations, 12/9/20: Single-Family Lender Letter (LL-2020-02), Impact of COVID-19 on Servicing, 11/18/20: Single-Family Lender Letter (LL-2020-07), COVID-19 Payment Deferral, 11/13/20: Single-Family Lender Letter (LL-2020-06), Selling Loans in Forbearance Due to COVID-19, 7/15/20: Single-Family Lender Letter (LL-2020-09), Incentive Fees for Retention Workout Options, 7/15/20: Single-Family Lender Letter (LL-2020-08), Servicer Principal and Interest Requirements Change, 7/15/20: Single-Family Lender Letter (LL-2020-07), COVID-19 Payment Deferral, 7/15/20: Single-Family Lender Letter (LL-2020-02), Impact of COVID-19 on Servicing, 7/9/20: Single-Family Lender Letter (LL-2020-03), Impact of COVID-19 on Originations, 7/9/20: Single-Family Lender Letter (LL-2020-04), Impact of COVID-19 on Appraisals, 6/29/20: Fannie Mae Announces Updated Protections for Renters Impacted by COVID-19, 6/11/20: Single-Family Lender Letter (LL-2020-06), Selling Loans in Forbearance Due to COVID-19, 5/26/20: Fannie Mae Launches "Here to Help" Effort to Help Homeowners and Renters Impacted by COVID-19, 5/19/20: Fannie Mae Announces Flexibilities for Refinance and Home Purchase Eligibility, 5/13/20: Fannie Mae Announces COVID-19 Payment Deferral, 5/7/20: Fannie Mae Helps Multifamily Renters Impacted by COVID-19 With 'Renters Resource Finder', 4/27/20: Understand Your COVID-19 Mortgage Options, 4/24/20: Multifamily Lender Letter 20-08, COVID-19 Underwriting Guidance, 4/23/20: Multifamily Lender Letter 20-07, CARES Act: Paycheck Protection Program, 4/23/20: Multifamily Investor Update Regarding COVID-19 Forbearances, 4/22/20: Fannie Mae is Providing Greater Liquidity to the Mortgage Market, 4/16/20: COVID-19 Foreclosure Prevention Fraud and Other Scams, 4/15/20: Single-Family COVID-19 Forbearance Script, 4/14/20: Single-Family COVID-19 Servicer Webinar Recording (Fannie Mae Connect credentials required), 4/7/20: Multifamily Lender Letter 20-06, Loan Document Update, 4/7/20: Multifamily Lender Letter 20-05R, COVID-19 Forbearance Process Guidance, 3/25/20: Fannie Mae Multifamily Investor Update Regarding COVID-19. In response to the COVID-19 national emergency, Fannie Mae and Freddie Mac have provided temporary guidance to lenders on several policy areas that support selling mortgage originations. To: All Fannie Mae Single-Family Sellers Impact of OVI -19 on Originations We are actively monitoring the spread of COVID-19 (coronavirus) in the United States and understand there are concerns about its potential impact on borrowers, businesses, and loan originations. The lender must continue to use the required level of tax return documentation to calculate self-employment income. In addition, lenders must apply the age of document and other requirements and guidance in LL-2020-03 for any market-based assets in the trust account required for the transaction. Do the temporary requirements for self-employed income announced in Lender Letter 2020-03 apply to the High Loan-to-Value Refinance Option? This program is available for households within the 50-80% range of Area Median Income (AMI). If the borrower is furloughed but continues receiving income for a specified period of time, such as four weeks, can the income be used for qualifying? Under the CARES Act, PPP loan terms allow deferred payments for a specified period, no personal loan guarantee, and the potential for all or some portion of the loan to be forgiven. Yes. Fannie Mae Provides Assistance to Help Renters Impacted by COVID-19 Stay in Their Apartments. We are actively monitoring the current situation and taking every step to help ensure a safe and sound housing market. If you have additional questions, Fannie Mae customers can visit Ask Poli to get We have taken numerous steps to protect our employees, customers and consumers from the impacts of the coronavirus (COVID–19). If your mortgage is backed by Fannie Mae… General Requirements for Documenting Rental Income. 14, 2020 we announced that we will extend our implementation timeline for the redesigned URLA and automated underwriting systems (AUSs) to support the industry during the COVID-19 pandemic. notices and more. Our digital library includes learning modules, videos, frequently asked questions, demos, job aids, guides, and more. COVID-19 UPDATE: Find out how Fannie Mae is responding. For example, rental income from a commercial property owned by the borrower is acceptable if the income otherwise meets all other requirements. Given the unprecedented and rapid instances of voluntary and mandated business closures, and the concerns over whether employees will continue to be paid, is updated income documentation required prior to closing? An SBA PPP or any other similar COVID-19 related loan or grant is not considered a source of business revenue. If you have additional questions, Fannie Mae customers can visit Ask Poli to get We’re here to help. information from other Fannie Mae published sources. Certain types of temporary leave may be eligible for qualifying. Additional federal protections The Renters Resource Finder is an online tool that identifies apartments and other multifamily properties financed by Fannie Mae, whose residents are eligible for eviction protection … Fannie Mae’s renter hotline number is 1-877-542-9723 and Freddie Mac’s renter hotline number is 1-800-404-3097. Center, Apps Keeping our Capital Markets desks open and trading mortgage-backed securities (MBS). Learn more. All essential functions are fully operational. Also, note that loans in forbearance due to COVID-19 are not subject to the disaster-related forbearance policies in A2-3.2-02, Enforcement Relief for Breaches of Certain Representations and Warranties Related to Underwriting and Eligibility. Our COVID-19 Response. Lender Letter LL-2020-03 – Impact Covid-19 Originations December 10, 2020 This Lender Letter provides reminders and temporary flexibilities to support mortgage originations. Given that many student loans were placed into an automatic forbearance status and the other party may have missed payments due to the forbearance, we will allow exclusion of the monthly student loan payment if: The borrower is self-employed and owns a business that is closed due to the pandemic. If I provide a lease to verify rental income, does it have to comply with the Age of Documentation requirements in Lender Letter LL-2020-03? CONFIDENTIAL Bulletin 2020-5 & 2020-23 Calculating Income 28 Lenders must continue to analyze the impact of the pandemic on the business income used in qualifying as outlined in LL 2020-03. For loans meeting the 18 month extended timeframe requirements, the age of document requirements apply at the time of original loan closing only. Hourly workers are covered under our variable income policy. Ask Poli features exclusive Q&As and more—plus official Selling & Servicing Guide content. Lease agreements do not need to meet the Age of Documentation requirements. See B3-3.1-01, General Income Information; Continuity of Income. For full details on these temporary flexibilities, read Lender Letter (LL-2020-03) – Impact of COVID-19 on Originations and Lender Letter (LL-2020-04) – Impact of COVID-19 on Appraisals. In the event the current value of the underlying asset indicates an increased amount of capital gains or interest or dividends, the lender should continue to use a two-year average calculated using the borrower’s tax returns. Income types such as hourly, commission and overtime, are variable by nature. Our teams are fully operational and ready to execute your multifamily business. Three vertical lines aligned to the left. Refer to B3-3.1-01, General Income Information for additional details. Yes, in some cases income documentation may need to be updated. Refer to B3-3.1-01, General Income Information. Can proceeds from an SBA PPP or any other similar COVID-19 related loans be considered business assets for the purpose of funding the transaction? Yes, however, lenders should apply additional due diligence to capital gains and interest and dividend income since it is calculated using a historical view which may not be sustainable given current market volatility. Instead, lenders can follow the guidance in Lender Letters LL-2020-03, Impact of COVID-19 on Originations, and LL-2020-04, Impact of COVID-19 on Appraisals. For single-closing construction-to-permanent mortgages with loan applications dated during the timeframe covered in LL-2020-03, unless the loan meets the requirements for the extended 18 month timeframe permitted in the Selling Guide, the 60-day age of income and asset document requirements stated in the Lender Letter apply at both the time of the original closing date of the construction loan and the time of conversion to permanent financing. As a DUS lender, you can grant forbearance to a customer with the delegation Fannie Mae provided you. When the current level is less than the calculated amount, the lender must adjust the income downward to reflect the current level of stable income. Selling Guide. In response to the COVID-19 national emergency, Fannie Mae and Freddie Mac have provided temporary guidance to lenders on several policy areas that support selling mortgage originations. A gap in employment or a reduction in income due to COVID-19 cannot be excluded from the calculation, and the year to date income must continue to be calculated over the entire time period. Launch all other Selling Guide requirements have been met (for example, evidence of 12 total payments, either monthly or in aggregate, on the omitted debt). As a DUS lender, you can grant forbearance to a customer with the delegation Fannie Mae … Regardless of whether the forbearance or deferment is related to COVID-19, lenders must consider the monthly debt payment in the borrower’s DTI. The PPP is a loan issued by Small Business Administration lenders under the CARES Act. The new mandate date for the use of the redesigned URLA and AUS specifications is Mar. Yes, reference the guidelines and flexibilities announced in LL-2020-03. On Apr. When variable income is the source of income used in qualifying the borrower(s), lenders must follow the requirements as outlined in B3-3.1-01, General Income Information and perform a trending analysis. COVID-19 (Coronavirus) has affected millions of Americans, through the loss of a job or income, or illness. The lender must continue to consider expenses reported on the profit and loss statement when assessing the impact of COVID-19 on the business. Do Fannie Mae’s existing disaster policies in the Selling Guide apply to the COVID- 19 pandemic? Visit Selling and Servicing Guide Communications and Forms. For additional information about rental income see B3-3.1-08, Rental Income. Once it has been determined that any portion of the PPP loan must be repaid, follow the Selling Guide requirements for loans paid by a business. version of a page. Is it acceptable to exclude the payroll and other expenses (e.g., utilities, business rent) covered by PPP loan proceeds when assessing current business cash flow? Our Customer Support teams are here to help you — please contact your Account Team if you need assistance. Mortgage & Rental Payment Histories-All Transactions (effective 4/29/2020-updated 7/28/2020) AIG is providing overlays to Fannie Mae’s temporary Purchase and Refinance eligibility requirements, announced in LL- 2020-03 and updated 7/9/2020; Fannie Mae, along with our lending and servicing partners, is committed to ensuring assistance is available to homeowners in need. The flexibilities were set to expire on October 31, 2020. In no instance may income be averaged over the period of declination. Use of these worksheets is optional. TDHCA CARES Act funding is from the U.S. Department of Health and Human Services (USHHS) and the U.S. Department of Housing and Urban Development (HUD) . We are working with and following guidance from the Centers for Disease Control and Prevention (CDC) and local health agencies, and we are actively adhering to our corporate internal business continuity and contingency plans. Airbnb has an initiative with Fannie Mae and four lenders to help hosts refinance their mortgages. A borrower who is furloughed or laid off is not considered to be actively employed. If the lender confirms the business depository account statements support the level of revenue reported in the unaudited profit and loss statement, what is required related to the review of business expenses? Please visit our COVID-19 Investor Resources page for the latest investor news and information related to COVID-19. We will continue to take immediate action based on our business continuity plans and guidance and risk assessments from the CDC and local health agencies. 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