Archived Agency Announcements

2019 Fannie Mae Announcements Archived

Document Name Document Date

Fannie Mae - Selling Guide Update - February 2019

Fannie Mae has updated their Selling Guide and have announced updates in SEL-2019-01. The following sections of the guide have been updated as of 02/06/2019. Credit Policy is currently reviewing the updates to the Selling Guide and the Announcement and will update KnowledgeOwl accordingly.

Loan Amoritzation Types
  • B2-1.3-01, Fixed-Rate Loans
  • B2-1.3-02, Adjustable-Rate Mortgages (ARMs)  
    • Fannnie Mae currently offers several adjustable-rate mortgage (ARM) plans that use the monthly weighted-average cost of funds index (COFI) as computed each month by the Federal Home Loan Bank of San Francisco. Due to the retirement of this index scheduled to occur in January 2020, with the December 2019 COFI being the last published rate, Fannie Mae is proactively removing all references to this index and associated ARM plans (681, 682, 760, and 761) from the Selling Guide and Standard ARM Plan Matrix. They are also retiring all legal documents specific to use of COFI from their website.
Other Loan Attributes

Appraisal Requirements

Effective Date
Lenders may implement this change immediately, but are required to do so on or before May 6, 2019

  • B4-1.2-03, Requirements for Postponed Improvements
Second Lien References Removed

Because FNMA no longer accepts delivery of second lien loans, they have removed all references to this practice from the Selling Guide. In the event second lien loans are approved for delivery in the future, they will update the Guide accordingly.



DU for Government Loans Release Notes Feb 2019

Fannie Mae has announced, during the weekend of 02/16/2019, Desktop Underwriter (DU) for government loans will be updated to support the announced Veterans Administration (VA) updates in Circular 26-18-30. These updates include loan to value (LTV) changes on refinanced loans and new VA messaging as follows:

  • LTV Changes on Refinanced VA loans
    • VA LTV Guaranty - VA will no longer guarantee TYPE I and TYPE II Cash-Out Refinance loans when the LTV exceeds 100 percent. DU will provide a Refer recommendation on non-IRRRL refinanced VA loans that exceed 100% LTV calculation. Please refer to Circular for the definitions of a TYPE I and TYPE II Cash-Out Refinance.
    • LTV Calculation – The VA funding fee is included in the LTV calculation for TYPE I and TYPE II Cash-Out Refinance applications. All VA refinance casefiles submitted or resubmitted on or after the weekend of 02/16/2019, which are not an Interest Rate Reduction Refinancing Loan (IRRRL), will be underwritten using an updated LTV calculation. This updated LTV calculation will include the financed portion of the funding fee. The CLTV calculation will also be impacted by this change as the LTV amount is used to calculate the CLTV.
    • Please note the following dates:
      • Because the VA Circular 26-18-30 updates are effective for applications taken on or after 02/15/2019, non-IRRRL VA refinance applications taken on or after 02/15/2019 should be resubmitted to DU after the weekend of 02/16/2019 to ensure that they receive the correct messaging and calculations.
      • For loan casefiles for applications taken prior to 02/15/2019 that are resubmitted after the weekend of 02/16/2019 and receive a Refer recommendation due to LTV changes made in this update, lenders should contact their VA Regional Loan Center for assistance.
  • New VA Messaging
    • To further accommodate this VA Circular, DU will be adding additional messaging for the LTV updates, and messaging related to seasoning, net tangible benefit and fee recoupment requirements.

LL-2019-02 Fannie Mae Reserves Employment and Income Impact of Government Shutdown

Fannie Mae & Freddie Mac - Government Shutdown Reserve Requirements and Income Updates

Fannie Mae and Freddie Mac have jointly announced in LL-2019-02 and 2019-3, and in consultation with the FHFA, concerns with the impact on borrowers’ ability to meet their mortgage payment and other monthly obligations during the continued Government Shutdown.

  • Both FNMA and FHLMC are imposing a minimum reserves requirement, which serves as a compensating factor to offset the risk associated with the interruption of income.
  • Additional flexibility is also now available with regard to the verbal verification of employment (VOE) and their paystub age requirements.

Note: These temporary requirements apply to borrowers impacted by the shutdown and will automatically expire when the federal government resumes full operations.

Liquid Financial Reserves

For loans, other than FNMA High LTV and FHLMC Enhanced Relief Refinances, with application dates on or after January 16, 2019, the borrower must have the greater of:

  • two months of documented reserves; or
  • the amount of reserves required for loan casefiles underwritten through Desktop Underwriter (DU) or Loan Product Advisor (LPA)

Note: Reserve requirements must be followed for any overlays as required by the Fannie Mae Selling Guide for certain transactions; or for manually underwritten loans, the amount of reserves required for the transaction per the Eligibility Matrix and Selling Guide.

Verification of Employment and Income

The following policies apply to all impacted loans (without regard to the application date):

  • Lenders should continue to attempt to obtain the verbal VOE before delivery of the loan. Based on information received by the agencies, VOEs for the majority of government employees and other workers impacted by the shutdown continue to be readily available from automated systems or third-party service providers.
  • If the lender is unable to obtain the verbal VOE due to the shutdown, FNMA/FHLMC will waive the verbal VOE requirement if the lender documents the loan file with a written statement describing:
  • the steps the lender took to obtain the verbal VOE, and
  • that the requirement could not be met as a direct result of the shutdown.
  • FNMA/FHLMC are waiving the requirement that the paystub be dated no earlier than 30 days prior to the initial loan application date. Lenders must obtain the most current paystub that reflects year-to-date earnings and may need to obtain the final 2018 year-to-date paystub to accurately calculate income. All other paystub requirements remain unchanged.
  • The lender warrants that the borrower is employed at the time the loan is delivered to FNMA and/or FHLMC.
  • The lender must obtain all other employment documentation as required by the Fannie Mae and/or Freddie Mac Selling Guide.

Impacts to Government Shutdown   (as previously announced)



LL-2019-01 Fannie Mae Government Shutdown and Credit Reporting

Fannie Mae has announced clarification extending the following flexibility to servicers to determine the appropriate method for reporting the status of a mortgage loan for a borrower impacted by the federal government shutdown to the credit repositories.

  • Servicers are permitted, but not required, to suspend credit reporting in these instances. As a reminder, servicers are responsible for complying with all applicable laws when reporting a mortgage loan status to the four major credit repositories.

This guidance is effective immediately and will automatically expire when the federal government resumes full operations. Fannie Mae may provide additional guidance if the shutdown lasts for a prolonged period of time.


Fannie Mae and Freddie Mac – ULDD Phase 3 Reminder

FNMA and FHLMC (the GSEs) are reminding Lenders to begin collecting specific new data points for loans with an Application Received Date on or after 01/01/2019. While there are no changes to the ULDD Specification or Phase 3 Implementation Timeline, the GSE’s are addressing Lender Feedback regarding the closing costs and down payment data conditionally required by the GSEs. For additional information, refer to the following updated documents:


EarlyCheck Release Notes Version 5.8

Fannie Mae will introduce EarlyCheck Version 5.8 during the weekend of 02/23/2019. New and Modified Edits will align with existing Loan Delivery edits and upcoming Loan Delivery edit changes. The EarlyCheck updates include new edits for condo project type, credit score and MI; and edit severity changes. Additional details on the planned edits are noted below:

  • For the loan delivery XML file format (ULDD-MISMO 3.0):
    • 18 new loan-level edits (7 Fatal; 11 Warning)
    • 16 edit severity changes (7 changing from Warning-to-Fatal to Fatal; 9 changing from Warning to Fatal)
    • 1 edit message text change
    • 2 edit deactivations
  • For the 1003 and MISMO AUS 2.3.1 origination file formats:
    • 1 edit message text change

Fannie Mae - Releases November 2018 Monthly Summary

Fannie Mae has announced the release of their November 2018 Monthly Summary. The monthly summary report contains information about Fannie Mae’s monthly and year-to-date activities for their gross mortgage portfolio, mortgage-backed securities and other guarantees, interest rate risk measures, serious delinquency rates, and loan modifications.



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