Income Calculator:

What's New: Fannie Mae has introduced an Income Calculator tool, allowing lenders to determine monthly qualifying income for self-employed borrowers more accurately.

Requirements: To use this tool effectively, ensure that all information submitted is accurate and complete. A copy of the Findings Report generated by the Income Calculator must be kept in the loan file.

Effective Date: Lenders can start using this tool immediately.

Verification of Employment Alternatives:

What's New: Lenders can now use alternative methods to verify employment within 15 business days prior to the note date.

Options: Borrowers can provide the most recent paystub meeting specific requirements or bank statements dated no earlier than 15 business days before the note date.

Responsibility: Lenders remain responsible for income, employment, and asset representations and warranties.

Effective Date: Lenders can implement these changes immediately.

Restricted Stock Units and Restricted Stock:

What's New: Restricted stock units and restricted stock are now considered eligible income sources.

Requirements: Documentation must be provided, including evidence that the stock is publicly traded, vesting schedules, bank statements, and IRS W-2 forms.

Effective Date: Lenders can use this income source starting from March 1, 2024.

Using Nontaxable Income to Adjust Gross Income:

What's New: Lenders can treat 15% of Social Security income and the full amount of qualifying child support income as nontaxable income without additional documentation. Example: Benefit amount: $1,500 Nontaxable amount: $1,500 x 15% = $225 Gross-up amount: $225 x 25% = $56 (rounded to the nearest dollar) Qualifying income: $1,556 (does not require additional documentation)

Note: If the lender opts to gross-up more than 15% of Social Security income, documentation to support that the additional income is nontaxable must be included in the loan file.

Effective Date: This policy change can be applied immediately.

Certified Shared Equity Program List:

What's New: Fannie Mae has introduced a Certified Shared Equity Program List to assist lenders in identifying programs that meet specific requirements.

Responsibility: Lenders must still review all applicable Fannie Mae requirements.

Effective Date: Lenders can use this list immediately.

Financial Reporting Requirements:

What's New: Large non-depository sellers/servicers are now required to submit a Mortgage Bankers' Financial Report Short Form (Form 1002A) monthly in addition to quarterly reporting.

Effective Date: Applicable sellers/servicers must comply by May 31, 2024, for the April 2024 monthly reporting.

Sale of eMortgages to Fannie Mae:

What's New: The Selling Guide now incorporates guidance on delivering eMortgages to Fannie Mae, emphasizing the use of special purpose legal documents.

Clarification: Certain loans no longer require supplemental documents for certification.

Effective Date: Immediate implementation.

Requirements for Use of Attorney Title Opinion Letters:

What's New: Lenders may obtain either a lender's title insurance policy or, in limited circumstances, an attorney title opinion letter for specific transactions.

Conclusion:

These updates to Fannie Mae's Selling Guide aim to make the mortgage process more efficient and accessible for lenders and borrowers. Stay informed about these changes and consult Fannie Mae's resources for detailed information on each topic.