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Policy

Impact on

Change

  • Establish a five-year time period to reestablish credit for borrowers with multiple bankruptcy filings in the past seven years

  • Require a two-year time period to re-establish credit following a pre-foreclosure sale

Effective Date(s)*

Source Doc(s)/ Reference

Prior Foreclosures

Excessive Mortgage Delinquency

Loans underwritten through DU 7.0 or manually

  • Add eligibility requirements that apply after four years and up to seven years after completion of a deed-in-lieu of foreclosure

  • Manual underwriting: Changes from four years to five years the time required since a prior foreclosure

  • DU 7.0: Changes from two years to five years the time required since a prior foreclosure

  • Extenuating circumstances provision changes from years two through four after foreclosure to years three through five after foreclosure

  • Loans with excessive prior mortgage delinquencies ineligible for delivery

  • Defined as having one or more 60-, 90-, 120-, or 150-day mortgage delinquencies in past 12 months prior to credit report date

June 1, 2008 (application date for manually u/w loans; all DU 7.0 loans); deliver loans u/w through DU 5.7 or manually to pre–6/1/08 criteria:

  • Into MBS with issue dates on or before 10/1/08

  • Whole loans for purchase on or before 10/31/08

Selling Guide (Announcement 08-08)

Selling Guide (Announcement 08-08)

National Down Payment Policy

All loans (except certain Streamlined Refinance loans and government- insured loans)

Max LTV 97% with DU underwriting Max LTV 95% for manual underwriting Replaced Maximum Financing in Declining Markets Policy

Loans under- written through DU 7.0 or manually

New minimum credit score – 580 – loans underwritten manually or through DU except insured government loans, loans with nontraditional credit, and some Streamlined Refinances (Fannie Mae to Fannie Mae)

Minimum Credit Scores

Manually underwritten loans

Addition of minimum credit scores to all standard eligibility guidelines based on borrower equity, occupancy, property type, and amortization type Minimum credit score changes for certain products and transactions: MCM, IO, HomeStyle products, Streamlined Refinance Mortgages Credit score may not be lower than 580, or the minimum for the particular product or transaction minus 40 points, whichever is higher

June 1, 2008 (loan application date)

June 1, 2008 (loan application date) Deliver loans u/w through DU 5.7 or manually to pre–6/1/08 criteria:

  • Into MBS with issue dates on or before 10/1/08

  • Whole loans for purchase on or before 10/31/08

Selling Guide (Announcement 08-10)

Selling Guide (Announcement 08-08)

© Fannie Mae 2008

  • What’s New? Changes to Fannie Mae Pricing, Underwriting Policies, Desktop Underwriter, and Products

  • August 21, 2008

  • Page 3 of 7

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