Fannie Mae Loan Guidelines Are Changing on Monday, December 13th, 2010

December 12th, 2010 // filed under: Buying a Home, Calvert County, Charles County, Credit Score, Fannie Mae Mortgages, First Time Home Buyers, MD, Mortgages, Prince Georges County, Southern Maryland, St. Mary's

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If you’re trying to get an Fannie Mae backed loan and your credit is marginal, you’re going to want to read this.  Fannie Mae is changing it’s loan approval guidelines again on Monday morning.

Loan approvals can be fickle beasts, what was approved in the past may not work now and people who get approved today may no longer be eligible after next week.  That’s just the nature of the credit markets these days.

What’s Changing (Bad News)

Fortunately, this is not going to be a huge change in policies. the biggest differences are going to be related to how debt is calculated.

  • Debt with less than 10 payments remaining must now be included in an applicant’s monthly obligations. (Car payment almost done?  Close doesn’t count anymore, they’re going to factor this against you in your Debt-to-Income, or DTI, ratio.)
  • Debt you are not currently obligated to make payments on is now going to be factored, at a rate of 5% monthly.  This means that if you took a zero interest or deferred payment loan on a car or furniture for $20,000, Your lender is going to count that as $1,000 monthly debt.

This can become a very sticky situation for people who have high credit and opted for a deferred payment loan, so please be aware of how this new rule works!

What’s Changing (Good News)

Down payments are still required, but now you can have up to 100% of the down payment money required to purchase a home come from a gift. This is a significant change, because Fannie Mae requires a 5% minimum down payment, and until now that had to come from the buyers reserves.  After Monday, that money can come from anyone who gifts it to the purchaser.

Finally Fannie Mae is also changing some of its documentation requirements. Salaried applicants from whom commissions and/or bonuses paid account for less than 25% of annual income will have fewer paystubs to produce for underwriting.

If you would like to review the complete guidelines and the recent changes, please visit http://efanniemae.com.

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This entry was posted on Sunday, December 12th, 2010 at 7:39 am and is filed under Buying a Home, Calvert County, Charles County, Credit Score, Fannie Mae Mortgages, First Time Home Buyers, MD, Mortgages, Prince Georges County, Southern Maryland, St. Mary's. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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