Wholesale ALERT – Updates for Conventional Overlays, Fannie Mae Guidelines, Agency Lending in North Dakota

The Arc Home Conventional Overlays document was modified to align with the existing Future Income requirements detailed on the Fannie Mae and Freddie Mac product matrices. The updated Conventional Overlays will be published on our website (HERE) soon.

Effective immediately for all Fannie Mae loans, Arc Home will align with the changes communicated by Fannie Mae in Announcement SEL-2023-03 and Announcement SEL-2023-04 for the topics below.

·         Borrower’s Earned Real Estate Commission: Revised guidelines to allow the use of the borrower’s earned real estate commission for down payment and closing costs. Refer to Fannie Mae Selling Guide B3-4.3-21 for details. 

·         Medical Collections: Removed requirement to pay off medical collection accounts, regardless of amount.

·         Subordinate Financing: Provided detailed documentation and eligibility requirements for acceptable subordinate financing. Refer to Fannie Mae Selling Guide B2-1.2-04 for complete details.

·         Tax Filing Documentation Alternatives: In addition to a copy of IRS Form 4868 as evidence the borrower filed an extension for the prior year’s tax returns, guidelines were updated to also allow proof of e-filing of IRS Form 4868 or confirmation of electronic payment(s) (including the confirmation number) for all or part of the estimated taxes due. At a lender’s discretion, it may be acceptable to rely on borrower-provided evidence directly from the IRS that no transcripts are available for the prior year. Refer to Fannie Mae Selling Guide B1-1-03 for details.

Effective for new loan registrations on or after July 10, 2023, transactions for properties located in the State of North Dakota are eligible within the Fannie Mae, Freddie Mac, FHA, USDA, and VA loan programs. The product matrices have been updated and will be available on our website soon (HERE).