Issue: Q&A – March 25, 2019

Fannie Mae – DACA & Non-US Citizen Policy Clarified by Fannie Mae – Fact Sheet Issued for Non-Citizen Borrower Eligibility – Dated March 2019-Released on March 22, 2019

Written By: Lloyd Rutherford, Staff Writer At long last, we have finally received clarification from one of the agencies regarding lending to DACA status clients!  In this update, Fannie outlines very clearly how to assist Non-US Citizen applicants. Rule Synopsis: Fannie Mae issues their first ever Fact Sheet to provide more clarity around a topic […]

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VA – Second Home: Does VA allow for financing on a second or vacation home? [Maximum Loan Calculator – Including Partial Eligibility and Sales Price Exceeding County Limits – VA]

Answer: While VA will allow a veteran to obtain a second VA loan using their remaining entitlement, that second loan must be for a new primary residence.  They cannot use the new loan to obtain a second home or an investment property. Social Media Posts: While VA will allow a Veteran to utilize their remaining […]

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FHA – Private to Public Sewer Requirements: If public sewer is available to the property, but the property has a private septic system, are they required to hook up to the public sewer?

Answer: One of my frustrations with FHA is that they say that connection must be made if ‘feasible and at a reasonable cost’ (see the full guideline below), but give absolutely no parameters for determining feasibility or reasonable cost. At the very least, an estimate must be obtained regarding the cost of connection.  Then the ‘reasonable cost’ […]

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FHA – Repeated Bankruptcy: If a client has a Chapter 7 in 2012 and a Chapter 13 that was recently dismissed due to withdraw, will FHA allow this? [Derogatory Credit Wait Periods – All Agencies – Chart]

Answer: The Chapter 7 wait period is well past, and FHA has no mandatory wait periods after a Chapter 13 dismissal, and does not discuss this event at all in their guidelines. That said, prudent underwriting would require a lot of scrutiny on the borrower’s payment history for the last 12-24 months as well as explanations regarding the borrower’s […]

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Compliance – Fannie Mae Lender Incentive Limits for Borrowers: Many of our competitors are offering incentives like gift cards with a value over the $500 limit for conventional lender incentives. Did this change?

Answer: First things first:  You are not missing an update.  In today’s ultra-competitive market, it is very likely that lenders of all shapes and sizes are ‘pushing the envelope’.  Sometimes they are playing by all the rules, sometimes they are not.  If a lender chooses to give more than what the selling guide allows for, […]

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