Fannie Mae Automated Underwriting (DU) Eligibility Changes

Kim Neilson our Senior Vice President just released some information to all our Loan Officer about Industry Changes that will be happening over the next two to three months. These are changed that will affect many of us in the Real Estate Industry, especially the change that I am writing about in this blog, Fannie Mae Automated Underwriting (DU) Eligibility Changes. If all of us are up to date on the up coming changes, than we can all better serve and advice our Borrowers and Buyers.

This first change, Fannie Mae Automated Underwriting (DU) Eligibility Changes, is going to have a major impact on 2 Unit Multi-Family Properties, and the sooner the word gets out about it the better. Fannie Mae will be releasing Automated Underwriting (DU) Version 8.0 on December 12. Changes included with the release are as follows:

• Minimum FICO score 620 (was 580)
• 2 Unit Owner Occupied Property - maximum LTV 80% for purchase & rate/term refinance (was 90%)
• 2 Unit Owner Occupied Property - maximum LTV 75% for cash out refinance (was 85%)
• 2 Unit Investment Property - maximum LTV 75% for purchase & rate/term refinance (was 80%)
• Unit Investment Property - maximum LTV 70% for cash out refinance (was 75%)

All new cases submitted to DU on or after December 12 will be scored with the 8.0 version and the new eligibility will be applied. New cases submitted prior to December 12 will be scored with the current version DU 7.1 and will continue to score as DU 7.1 on subsequent submissions, however, loans using DU version 7.1 must close by February 12, 2010.

Similar changes were already put in place several months back on 3 & 4 Unit Multi-Family Properties, and those requirements will continue as is. These changes continue to make FHA an even more attractive loan product for Multi-Family Owner Occupied Properties (FHA does not do loans on Non-Owner Occupied Properties), and making Conventional Loans even tougher to do.

Tomorrow I will write about the second change that will go into affect very soon. Stay tune!!!

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, andConventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com