The below updates are effective for all loans beginning Friday February 7, 2020 unless otherwise noted below.
Updates applicable to smart products
underwriting
Clarified that the Fannie Mae selling Guide should be reference for additional requirements when not addressed within the individual product profiles.
Cash-out refinances (changes effective monday, february 10, 2020)
- Updated the maximum cash-out amount for investment properties to $500,000
- Seasoning:
- Added a minimum 12 month seasoning requirement for investment properties
- Added a minimum six months of seasoning for primary residences and second homes.
- If the property is owned less than 12 months but greater than 6 months at the time of application, the LTV/CLTV will be based on the lesser of the original purchase price plus documented improvements, or current appraised value. The prior settlement statement will be required for proof of purchase price,
- Seasoning is determined from the note date of the current mortgage to the application date of the new mortgage.
- Borrowers living rent free are not eligible for cash-out.
non-us citizen borrowers
Updated to clarify Valid Employment Authorization Document (EAD) us required for US employment if not sponsored by current employer (dependent on visa type). Not applicable to SmartVest and SmartFunds Products.
non-arm's length and at interest transactions
Updated to clearly define non-arm's length and at interest transactions, and better define requirements for both.
property flipping
Clarified that the second appraisal cannot be waived when required.
geographic restrictions
- Clarified that NY Subprime loans are not permitted.
- Non-prime mortgage loans (HPML) on primary propertied in Connecticut with loan amounts </=$417,000 are permitted for purchases and refinances.
- Refinance of a Special Mortgage, defined as a FHA, VA, USDA loan, or a bond loan provided by a Housing Finance Agency, require homeownerhsip counseling.
Income
- Added clarification for Record of Account to supplement tax transcripts and alternatives, when taxes are required (all but Self, Funds and Vest).
- Added requirement for Taxpayer Consent form (all but Fund and Vest).
borrowers retaining their current residence
Updated timing of signed occupancy affidavit requirement to permit at or prior to closing.
Assets
- Clarified that large deposits requirements in section 7.1 Assets are applicable to personal accounts, not business.
- Added more guidance on business assets (mirrors SmartSelf language for consistency).
- The above two changes do not apply to SmartFund
Smartvest
Removed requirement for letter of explanation for cash proceeds.
Please reference the NewRez Product Profiles for the changes outlined in this announcement.