New Loan Approval Guidelines
Fannie Mae's latest update continues to tighten the rules for loan approval. The new version of D esk Top Underwriting, Fannie Mae's automated underwriting system begins December 12, 2009
· maximum Debt to Income Ratio will now be 45% down from 55%
· 2 months reserves required for all second homes, and 6 months reserves for all investment properties
· minimum 4 years required after dismissal or discharge of Chapter 7 bankruptcy--no exceptions
· minimum 2 years required after dismissal or 4 years after discharge on chapter 13 bankruptcy--no exceptions
· minimum 5 years required after multiple bankruptcies
· minimum 5 years required after foreclosure, with some additional restrictions up to 7 years
· minimum 4 years required after deed-in-lieu of foreclosure, with additional restrictions up to 7 years
· minimum 2 years required after a short sale
· credit report can't be more than 90 days old at time of closing
· trailing co-borrower income not permitted
· value of stocks, bonds, mutual funds and retirement accts for reserves has been reduced
· lower maximum LTVs for 2-unit properties (now 95%, going to 80% for primary residence purchase)
According to the guidelines, it is much better for a distressed homeowner to do a short sale than to allow the home to be foreclosed. If you want to discuss short sales, foreclosures or anything real estate related, call me. I want to be your real estate resource.
leslie edwards 770-460-9448 leslie@leslieedwards.com