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TDHCA CARES Act funding is from the U.S. Department of Health and Human Services (USHHS) and the U.S. Department of Housing and Urban Development (HUD) . Learn more. For best results, pose your search like a question. The year-to-date income amount being used will account for a decline in income when determining the amount of income to be used for the trending analysis and when determining the amount to be used for qualifying purposes. This income is not stable, predictable, or likely to continue and therefore does not meet the requirements in Selling Guide B3-3.1-01, General Income Information; Continuity of Income. Yes. However, lenders are not required to obtain a copy of the IRS Form 4868 (Application for Automatic Extension of Time to File U.S. For single-closing construction-to-permanent mortgages with loan applications dated during the timeframe covered in LL-2020-03, unless the loan meets the requirements for the extended 18 month timeframe permitted in the Selling Guide, the 60-day age of income and asset document requirements stated in the Lender Letter apply at both the time of the original closing date of the construction loan and the time of conversion to permanent financing. Employees are working remotely over our stress-tested network, with only mission-critical staff needing to enter our worksites. Instead, lenders can follow the guidance in Lender Letters LL-2020-03, Impact of COVID-19 on Originations, and LL-2020-04, Impact of COVID-19 on Appraisals. Fannie Mae's Disaster Response Network has published a guide for renters affected by the coronavirus (COVID-19). In addition to the year-to-date profit and loss statement and three months business depository account statements, as applicable, the lender can continue to follow the DU message for the required level of self-employment income documentation. No. If the credit report does not provide a monthly payment for the student loan, or if the credit report shows $0 as the monthly payment, the lender must either calculate a qualifying payment per B3-6-05, Monthly Debt Obligations, or use the most recent income-driven repayment plan payment (with supporting documentation). If the COVID-19 pandemic has caused job loss, income reduction, sickness, or other issues that impact your ability to pay your home mortgage or rent, relief options are available — find details here and take action now.. If I provide a lease to verify rental income, does it have to comply with the Age of Documentation requirements in Lender Letter LL-2020-03? – The Federal Housing Finance Agency (FHFA) announced today that Fannie Mae and Freddie Mac (the Enterprises) will extend several loan origination flexibilities until November 30, 2020. In addition, lenders must apply the age of document and other requirements and guidance in LL-2020-03 for any market-based assets in the trust account required for the transaction. Yes, in some cases income documentation may need to be updated. Many renters are affected by the devastating impact of the coronavirus, or COVID-19. You can also download the printable 1,200+ page PDF, which include links. Click below to access COVID-related FAQs, Lender Letters and other resources: Do Fannie Mae’s existing disaster policies in the Selling Guide and the Servicing Guide apply to the COVID-19 pandemic? information from other Fannie Mae published sources. However, please note that furloughed borrowers are currently ineligible under the temporary leave policy. This replaces the prior language (applicable to loans with application dates beginning on Jun. The flexibilities were set to expire on July 31, 2020. How do the temporary age of document requirements in Lender Letter LL-2020-03 impact single-closing construction-to-permanent transactions? The lender must continue to consider expenses reported on the profit and loss statement when assessing the impact of COVID-19 on the business. Lender Letter 2020-03 requires certain additional self-employment income documentation for all loan applications taken on or after Jun. No. Under the CARES Act, PPP loan terms allow deferred payments for a specified period, no personal loan guarantee, and the potential for all or some portion of the loan to be forgiven. We are actively monitoring the current situation and taking every step to help ensure a safe and sound housing market. If rental income is not used to qualify the borrower, the requirements of Chapter 5306.1 do not apply. Unless the lender has knowledge to the contrary, if the borrower is actively employed, the income does not have a defined expiration date and the applicable history of receipt of the income is documented (per the specific income type), the lender may conclude that the income is stable, predictable, and likely to continue. We are releasing information to our customers as quickly as possible and will update and republish these letters as new guidance becomes available. For example, for declining variable income, the requirements and guidance for declining income trends in the B3-3.1-01, General Income Information are applicable. Supporting customers as they manage their pipeline — from hedging to funding loans — to minimize risk in this volatile market. Fannie Mae, along with our lending and servicing partners, is committed to ensuring assistance is available to homeowners in need. Does the tax deadline extension issued as a result of the COVID-19 emergency affect documentation requirements? The Renters Resource Finder is an online tool that identifies apartments and other multifamily properties financed by Fannie Mae, whose residents are eligible for eviction protection … Rental Income Matrix Rental income may be used in qualifying the borrower(s) provided the requirements of Guide Section 5306.1 and the documentation requirements contained in Guide Sections 5102.3 and 5102.4 and Chapter 5302 are met. Can I use the requirements for income while on temporary leave? New Resource is Part of Broader Effort to Help People Remain in Their Homes. Note:  The numbering sequence is from the PDF document that contains all COVID-19 Selling FAQs. Three vertical lines aligned to the left. How do the temporary self-employment income policies in LL-2020-03 impact the enforcement relief of representations and warranties when self-employment income is calculated using an approved vendor tool as outlined in Selling Guide A2-2-04, Limited Waiver and Enforcement Relief of Representations and Warranties for Mortgages Submitted to DU? The net rental income calculation is not reduced by the mortgage payment (which is always treated as a liability and included in the debt-to-income ratio). This includes determining the monthly year-to-date income amount and comparing that to prior years’ earnings to determine the appropriate amount of qualifying income for the loan transaction. If you have additional questions, Fannie Mae customers can visit Ask Poli to get Events, Temporary Purchase & Refinance Eligibility, A2-3.2-02, Enforcement Relief for Breaches of Certain Representations and Warranties Related to Underwriting and Eligibility, B3-3.2-01, Underwriting Factors and Documentation for a Self-Employed Borrower, B5-7-03, High LTV Refinance Alternative Qualification Path, A2-2-04, Limited Waiver and Enforcement Relief of Representations and Warranties for Mortgages Submitted to DU, B1-1-03, Allowable Age of Credit Documents and Federal Income Tax Returns, How to do a hard refresh in Internet Explorer. For loans meeting the 18 month extended timeframe requirements, the age of document requirements apply at the time of original loan closing only. To enroll, contact the state’s low-Income list administrator at 866-454-8387. What should the lender do when informed of a change in the borrower’s pay structure? If the trending analysis indicates that the current year to date income has declined, but the borrower is actively employed and the lender has no reason to believe that the borrower will not continue to be employed at the current level, the income can be considered stable. Is it acceptable to exclude the payroll and other expenses (e.g., utilities, business rent) covered by PPP loan proceeds when assessing current business cash flow? 15, 2020, if a self-employed borrower has not filed 2019 income tax returns, is an audited Profit and Loss Statement for 2019 required in order to support qualifying income? Lenders must utilize these additional documents along with the standard documentation required in the Selling Guide (B3-3.2-01, Underwriting Factors and Documentation for a Self-Employed Borrower) when calculating the income used to qualify the borrower. In those cases, the reduced amount of declining variable income can only be used for qualifying if it has since stabilized and there is no reason to believe the borrower will not continue to be employed at the current level. What options are available if the business depository account statements for the most recent three months do not support the details in the year-to-date profit and loss statement due to the cyclical nature of the business income? Refer to B3-3.1-01, General Income Information. We’re concerned for the health and well-being of our employees, customers, and communities, and we urge everyone to take precautions to protect themselves. Freddie Mac is open for business and continuing to play our crucial role in the U.S. housing markets. Fannie Mae partners with lenders to decrease risk. A gap in employment or a reduction in income due to COVID-19 cannot be excluded from the calculation, and the year to date income must continue to be calculated over the entire time period. If the current value of the asset indicates a reduced amount when compared to historical levels, the lender must use the lower amount provided it is deemed stable at the current level. ... Fannie Mae COVID-19 Updates Fannie Mae LL2020-03 updated from original issuance. For additional information about rental income see B3-3.1-08, Rental Income. If the COVID-19 pandemic has caused job loss, income reduction, sickness, or other issues that impact your ability to pay your home mortgage or rent, relief options are available — find details here and take action now. If the borrower is furloughed but continues receiving income for a specified period of time, such as four weeks, can the income be used for qualifying? The extension provides lenders and other stakeholders additional time to prepare and implement the redesigned URLA (Fannie Mae Form 1003). What if an hourly borrower is working less hours now than they worked earlier in the year prior to the COVID-19 impact? 14, 2020 we announced that we will extend our implementation timeline for the redesigned URLA and automated underwriting systems (AUSs) to support the industry during the COVID-19 pandemic. Or if an employer reduces a borrower’s potential for variable income, for example with a decreased bonus payment plan, additional analysis must be conducted to determine whether the new income amount can be used for qualifying. See LL-2020-03 for details. What are general standards for an audited profit and loss statement? The PPP is a loan issued by Small Business Administration lenders under the CARES Act. Are there acceptable alternatives if a lender is unable to obtain a verbal (VOE)? Given the unprecedented and rapid instances of voluntary and mandated business closures, and the concerns over whether employees will continue to be paid, is updated income documentation required prior to closing? Lenders are encouraged to apply these temporary requirements to existing loans in process. We have taken numerous steps to protect our employees, customers and consumers from the impacts of the coronavirus (COVID–19). How do lenders determine stability of variable income when a borrower has been impacted by COVID-19? If the borrower has a federal student loan that is in a COVID-related automatic forbearance, can the monthly payment be excluded from the borrower’s DTI ratio if it has been paid by another party? That permits only the most recent version of a PPP loan could be information! And dividend income for Fannie Mae Multifamily lender Letter 2020-03 apply to all borrowers using self-employment income validation the. 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