Fannie Mae and Freddie Mac are making adjustments in response to issues arising due to the coronavirus pandemic.
While some lending standards are being tightened, others are being loosened as employment continues to change daily for many Americans.
The age of income and asset documentation is going from 4 months to 2 months.
Income verification requirements are also changing for self-employed individuals, going from 120 days to 10 days prior to the note date.
Meanwhile, some more flexible lending standards include:
- Desktop appraisals on new construction loans
- Flexibility demonstrating that construction has been completed
- Flexibility for borrows to provide documentation for renovation disbursements
- Allowing more use of power of attorney and remote notarizations
“The changes come just over a week after the GSEs announced they were easing their standards for property appraisals and verification of employment as part of a growing effort to ensure lending can continue under these extraordinary circumstances.
Now, the GSEs are making more changes. As referenced above, some of the most notable changes include “flexibilities” around appraisals of new construction.”