Fannie Mae Guidelines Changes on Conventional Loans
In this blog, we will cover Fannie Mae changes on conventional loans. Fannie Mae has recently made Fannie Mae Guidelines changes to Conventional loans, which should open up lending to people living in a home but not currently on the title or on the mortgage, to refinance. Fannie Mae and Freddie Mac are the two giant government-sponsored enterprises (GSEs). Fannie Mae and Freddie Mac are the secondary market’s largest purchasers of mortgage loans.
If you were told you do not qualify from a lender, try us. Over 80% of our clients at Gustan Cho Associates could not qualify at other lenders. We do not have any lender overlays on FHA, VA, USDA, and Conventional loans. We also have dozens of non-QM and alternative mortgage loan options for owner-occupant, second homes, and investment properties.
The Fannie Mae Guidelines changes were known as the continuity of obligation rule, which required seasoning on the title for at least six months before you could refinance into the name of either a spouse or immediate family member living in the house. In the following sections of this article, we will cover and discuss Fannie Mae Guidelines on changes in conventional loans.
Why Are Fannie Mae Guidelines Changes on Conventional Loans a Good Thing
Fannie Mae Guidelines changes on conventional loans are a good thing for borrowers. 1st, a non-borrowing spouse can assume the mortgage so long as they have the credit and income to do so.
Fannie Mae and Freddie Mac is the two largest mortgage giants in the nation. The role of Fannie Mae and Freddie Mac is to keep liquidity in the housing market by purchasing mortgage loans on the secondary market.of mortgage lenders. Fannie Mae and Freddie Mac is the two largest buyers of mortgages. Fannie and Freddie only buys mortgages that conform to their guidelines. This is why conventional loans are called conforming loans.
If the current borrower is filing bankruptcy or has pending litigation, it would be in their best interest to modify vesting (speak to an attorney on this matter please!). In this article, we will discuss and cover Fannie Mae Guidelines Changes On Conventional Loans.
Fannie Mae Guidelines Changes on Pending Divorce
If there is an impending divorce, and one party was going to remain in the house, rather than do a sale and pay transfer taxes, legal, and title costs, you can now refinance and remove the party leaving the house. Hence following the agreed-upon divorce decree to the remaining spouse.
In almost all cases where a married couple who own a home jointly divorces, there is going to be a refinance to take one of the spouse out of the mortgage loan. One spouse will get awarded a home and the other spouse will refinance and have the home under their name. In cases where one spouse gets awarded the home and the other spouse gets a portion of the equity, a cash-out refinance is common.
All too often, there is a divorce but no quitclaim deed is done removing the ex, and a couple of years later when they go to sell or refinance, the ex-spouse is still vested and has to sign papers. If they leave the country and cant be tracked down, you see the potential issue here.
Taking Over Ownership Of Home of Family Member
One other option is if the kids live in the house and work, and they are going to take over ownership. Why do a sale if they already live there? Put them on title, and one day later refinance to take the parents off. Some mortgage lenders have mortgage lender overlays such as wanting to see a utility bill in the kid’s name or a tax bill paid by them once. There may or may not be cash out restrictions.
Gustan Cho Associates are mortgage brokers licensed in 48 states including Washington, DC. There is no mortgage loans Gustan Cho Associates cannot do. With over 210 wholesale mortgage lenders, the team at Gustan Cho Associates has no lender overlays on FHA, VA, USDA, and Conventional loans.
But to pay off an ex in a divorce is not considered a cash out, so this may not be an issue on those types of transactions. However you look at this change, guidelines are opening up, so please consult a mortgage professional to see your options if this situation applies to you, there may be an option on the table. Remember credit and income re still needed, there are no free gifts of assumption on a mortgage unless willingness and ability have been verified.
Fannie Mae Guidelines Changes on Conventional Loans on Rental Verification
Fannie Mae Guidelines changes on conventional loans is verification of rent now counts towards an approve/eligible per automated underwriting system approval. What this means is if a borrower gets a refer/eligible per automated underwriting system, with verification of rent, they will most likely get an approve/eligible per AUS.
Fannie Mae Guidelines Changes on verification of rent means a refer/eligible per automated underwriting system borrower can get an approve/eligible per AUS if they have rental verification.
Verification of rent is considered a strong compensating factor. Rental verification with low payment shock is a strong factor in getting an approve/eligible per automated underwriting system. It may be possible for borrowers with bad credit or having a minimum credit score of 620 to get an approve/eligible with rental verification with low payment shock.
Best Lenders For Conventional Loans With No Overlays
To qualify for a conventional loan with no lender overlays, please contact us at Gustan Cho Associates. The team at Gustan Cho Associates are experts in originating and approving government and conforming loans with no lender overlays. Gustan Cho Associates are mortgage brokers licensed in 48 states including Washington, DC.
Over 80% of our clients at Gustan Cho Associates are borrowers who could not qualify at other mortgage companies due to a last-minute mortgage loan denial or due to the lender having overlays. Gustan Cho Associates has zero lender overlays on government and conventional loans.
We have a network of over 190 wholesale mortgage lenders including dozens of wholesale lenders with no overlays on government and conventional loans. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays. Gustan Cho Associates has a national reputation of being able to do loans other lenders cannot do.
