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Impact on


LTV Ratios

Manually underwritten loans

Maximum ratio reductions: HCLTV (home equity combined loan-to-value ratio) for all loans LTV and CLTV for o 3- and 4-unit properties o Second homes o MCM (except with Community Seconds) o HomeStyle Renovation investment properties o Certain Streamlined Refinance products

Effective Date(s)*

June 1, 2008 (loan application date) Deliver loans u/w 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

Source Doc(s)/ Reference

Selling Guide (Announcements 08-08 and 08-10)

Authorized Users of Credit

Loans underwritten through DU 7.0 or manually

If loan applicant is the authorized user of a tradeline belonging to the applicant’s spouse, and the spouse is not an applicant, the authorized user tradeline must be considered. Manual underwriting is required in this situation (because DU 7.0 will not consider authorized user tradelines).

June 1, 2008 (loan application date)

Selling Guide (Announcement 08-08)

Desktop Underwriter (DU)

Change DU Version 7.0 August 2008 Update will:

  • Support origination and underwriting of Jumbo-Conforming Mortgages

  • Apply the National Down Payment Policy (Announcement 08-10; see Underwriting Policies section)

  • Implement 2008 Area Median Incomes (for MCM eligibility)

DU Version 7.0 includes a comprehensive update to DU’s credit risk assessment. These changes are intended to help Fannie Mae’s customers:

  • better manage default risk;

  • underwrite to current market realities; and

  • provide reasonable, prudent, and sustainable homeownership options to borrowers.

DU 7.0 users may be seeing:

  • Improved credit quality across all DU recommendation levels, especially for EA recommendations.

  • Some loan casefiles receiving more conservative recommendations, with others receiving improved recommendations compared to similar loan casefiles submitted to DU Version 5.7.

  • Reduced Approve and/or EA recommendation rates, although the overall impact varies depending on the mix of business submitted to DU.

Effective Date(s)

Source Doc(s)/ Reference

Weekend of August 16, 2008

Desktop Originator® (DO®)/DU Release Notes for Version 7.0 August Update

June 1, 2008

Desktop Originator® (DO®)/DU Release Notes for Version 7.0

© Fannie Mae 2008

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

  • August 21, 2008

  • Page 4 of 7

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