Top 5 Takeaways from Fannie Mae

June brings lots of good news for your clients! This month Fannie Mae announced several big changes that could ease qualification requirements for borrowers. This means more of your clients may qualify for the loan they want. The process will also be smoother, simpler, and faster than before. You can read Fannie Mae's official announcement here, or check out the summary below.

1. As of July 2017, new credit reports will no longer show most civil judgements or tax liens. Fannie Mae has assured lenders this will have little impact on risk in the marketplace. Although this change will have almost no effect on your clients' credit score and does not change Fannie Mae's policy regarding the payment of tax liens and civil judgements, it does mean less personal history will be shared unnecessarily with the lender. Fewer prying questions are a great way to improve client experiences!
2. New guidelines in effect on 7/29 will now allow for a 50% back-end debt-to-income (DTI) requirement for conventional loans. This is a huge change that will no doubt help make homeownership accessible for many of our clients who have been unable to qualify before.
3. ARM loans will have their Loan-to-value (LTV) brought into line with fixed rate loans. This is fabulous news, as interest in ARMs has been growing in the marketplace in recent months.
4. Updated processes will allow for asset and income verification through electronic avenues. If you have not yet read up on Fannie Mae Day 1 Certainty, you can here.
5. Changes in guidelines will lessen the documentation burden for self-employed borrowers. Great news for your self-employed clients!

If you have further questions on how these changes can affect your clients, or you have other questions or concerns, let us know and we would be happy to discuss them with you.