Issue: Q&A – March 25, 2019

VA – Acceptable Source of Gift Funds: Who is allowed to give a VA borrower gift funds? [Gift Funds & Gift of Equity Chart]

Answer: As long as you can satisfy the document requirements listed, the gift funds should be acceptable to the VA underwriter.  VA has always allowed gifts, they just relied on VA underwriters to use basic industry practices to underwrite files. Documentation Requirements: Evidence of the borrower’s deposit, or A copy of the donor’s funds by […]

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VA – IRRRL for Non-Owner Occupied: Does VA allow an IRRRL for a home that the Veteran no longer lives in? [VA Refinance Comparison Chart]

Answer: Yes.  The veteran just has to certify that they previously occupied the home as their primary residence. Social Media Post: Nice to Know:  VA will allow an IRRRL [Interest Rate Reduction Refinance Loan] on a home the Veteran still owns, but no longer occupies.  The Veteran only needs to certify that they previously occupied […]

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Fannie Mae – Refinance – Reserve Requirements: Does Fannie Mae require reserves on a 2-unit limited cash out or rate/term refinance? [NEW Chart: Refinance Loans – All Agencies Guideline Comparison]

Answer: It depends on the DU findings as DU determines reserve requirements on each loan. However, we do know that six months of reserves is required when the loan is cash out and the DTI exceed a certain percentage.  See highlighted text directly below, and then further below that is what the selling guide says […]

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VA – Guideline Changes: Did VA Implement the changes they discussed at the Annual Conference last Year? I can’t find anything on that. [NEW Chart – Comparison of Previous Chapter 4 (Credit Underwriting) Guidelines vs New Guidelines]

Answer: VA caused a big stir in the industry when they released and continued to release one update after another during the past couple of weeks.  VA did not issue any documentation regarding “what” changed, so we analyzed the changes and created an 8-page chart for the Chapter 4 credit underwriting guidelines.  In addition to […]

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