Freddie Mac Income Requirements - Effective 06/02/2020
In October 2019, Freddie Mac announced updates to their income requirements effective for mortgages with settlement dates on and after 06/02/2020.
Please refer to Freddie Mac Bulletins 2019-20 and 2020-13 for more details.
Relaxed Conventional COVID-19 Requirements
As previously announced, the following relaxations related to COVID-19 were implemented to Fairway Policy and were effective immediately for all conventional loans.
- Minimum FICO: 620
- DTI: Follow AUS
- Reserves: Follow Agency
Newly Revised Forbearance Policy
As previously announced in a Client Announcement, FNMA and FHLMC have issued the following forbearance guidance, which now applies to all mortgage loans the borrower is obligated on, and all conventional transaction types.
The reason for the borrower forbearance request, as well as any hardship, must be documented as overcome and not likely to recur. Any mortgage loan that has been, or is in forbearance will be analyzed as follows:
- Borrower is current and has no missed payments
- For borrowers whose payments are current follow standard conventional guidelines.
- If the borrower resolved missed payments through reinstatement (i.e. loan is now current), the borrower is eligible for a new mortgage loan.
- If the reinstatement was completed after the application date, the source of funds must be documented in accordance with standard policy.
- Repayment Plan
- The borrower must have resolved / completed the repayment plan; or
- Have made at least 3 timely consecutive payments (whichever comes first) prior to close. The new loan can include the remaining payments under the repayment plan.
- Payment Deferral
- The borrower must have made at least 3 timely consecutive payments following the effective date of the payment deferral agreement. The new loan can include the remaining payments of the deferred amount.
- Loan Modification
- The borrower must have made at least 3 timely consecutive payments following the effective date of the Loan Modification Agreement. The new loan can be used to pay-off the modified mortgage.
Refer to Freddie Mac Bulletin 2020-17 and Fannie Mae LL-2020-03 for more details.