Mortgage Guidelines

We are known for Simplifying Mortgage Guidelines, so we decided to simplify our name too! Mortgage Currentcy is now MortgageGuidelines.com! Same Great Company - Easier Name to Remember and Share! Check us out at www.mortgageguidelines.com

ASK THE EXPERTS – QUESTION OF THE WEEK! Our loan scenario desk experts receive thousands of questions from our subscribers. Our experts work in the field and have over 25 years of experience, which is why they are known for saving a lot of deals. We hope you learn something new! Fannie Mae – Borrower on Title, Not on Note Question: Our client is divorced, and her ex-husband refinanced the home out of her name. Although she is still technically on title as a 10% owner, the loan was refinanced out of her name. Is she liable for any of the taxes and insurance? Answer: If a borrower is only on the title to a property (not the subject) and is not obligated on the note, then the expenses of that property are not required to be included in the DTI ratio calculation. In addition, a mortgage payment history is not required when the borrower is not obligated on the note of the property for either subject or non-subject properties. Reference: FAQs: Liability Assessment, B3-6-01, General Information on Liabilities, and B3-6-02, Debt-to-Income Ratios.

2 NEW Charts Released with Investor Overlays! All Agency Comparison w/ Investor Overlays - All On One Chart! Income Analyzers – Child Support & Family Owned Business * The agency guidance is at the top of the chart, as it has always been. * Scroll down to the bottom, and you will see the Overlays by Investor or Investors with No Overlays. * Charts denoted with a "w/Investor Overlays" at the end of the name let you know that this chart now contains investor overlays. * Our Investor experts are working through all of our charts, so you can expect investor overlays to be added each week until all charts are revised! Investor Guidelines are on the Charts & Checklists page under the "Investor & Mortgage Insurance Guidelines" tab. Do you have an investor that we do not host? It's free for the investor, so have them contact us at info@mortgageguidelines.com "Doing What Others Said Was Impossible is Fun!" - Walt Disney Keeping You Smarter Than the Competition By Simplifying the Complicated! www.mortgageguidelines.com

Fannie Mae & Freddie Mac – Using a Tax Credit for Minimum Required Investment Our loan scenario desk experts receive thousands of questions from our subscribers. Our experts work in the field and have over 25 years of experience, which is why they are known for saving a lot of deals. We hope you learn something new! Question: In our state, taxes are paid in arrears, so the buyer has a sizable tax credit. Can we use that for their MRI [Minimum Required Investment/Down Payment]? Answer: According to conventional agency guidelines, a legitimate pro-rated real estate tax credit in places where real estate taxes are paid in arrears is not considered a financing concession and is not subject to Fannie Mae’s Interested Party Contribution (IPC) limits. However, it cannot be considered when determining if the borrower has sufficient assets for the transaction. In summary, while a seller tax credit can be part of the transaction, it cannot be used to meet the minimum borrower contribution requirements. The borrower must still meet the minimum contribution from their own funds or other eligible sources as specified in the guidelines. Resources: Subscribers have access to two All Agency Comparison Charts addressing this topic. Both can be found under “Charts & Checklists” in the category of All Agency. Or do a quick search in our library for “Pro-Rated Real Estate Tax Credits” or “Assets – Acceptable Sources of Funds for Reserves and Down Payment.” Submit Your Loan Scenario Question at www.mortgageguidelines.com

December 2024 - Mortgage Rules Issue Released! The Rules Issue is the EASY & FAST way to catch up on Guideline Changes! Our Experts Read the Bulletins, Then Bottom Line it for you! ✔ 7 NEW Agency Updates ✔ 2 NEW All Agency Comparison Charts w/ Investor Overlays - Income Analyzers - Hourly Income & Overtime Income ✔ 3 NEW All Agency Comparison Charts - Renovation Loans - Self-Employed as Secondary Income - Timeshares ✔ 2 NEW Social Media Posts ✔ Multiple Updated Charts - See Our 'Latest Updates' Section Updates Include – * Fannie Mae & Freddie Mac 2025 Loan Limits * Fannie Mae DU/DO Release Notes Version 12.0 - Big Changes - DTI, Risk Factors, Credit Scores, Derogatory Events & More! * Freddie Mac Bulletin - Restricted Stock Units, Authorized Users, Appraisal Waiver Expansion * Freddie Mac Releases CreditSmart Military Booklet for Veterans & Active Duty - Use Our New Social Media Post! * FHA 2025 Loan Limits * FHA Mortgagee Letter - Cyber Incident Reporting Requirements * CFPB 2025 ATR/QM/HTML Thresholds - Annual Update Subscribers can find the "Rules Issue" under "Current Issue" on our site. Use the "Past Rules Issue" link to find Archived Rules' Issues. Keeping You Smarter Than the Competition By Simplifying the Complicated! www.mortgageguidelines.com

Question: Will Fannie Mae or Freddie Mac allow gifts from the borrower’s employer for a downpayment? Answer: The answer is yes and no…… I will explain below. There are very specific guidelines that are required for this type of down payment. See references for details. The most critical puzzle piece is that this has to be for ANY EMPLOYEE at the company and cannot be just a ‘one-off.’ This must be part of the employer’s written policies. Technically, the agencies don’t call it a gift from an employer. Instead, it is referred to as Employer Assistance because the donor is not family, etc., and employers are not eligible donors, so it must fall under the terms of Employer Assistance. More often than not, these are generally structured as a grant. An employer assistance program offers a number of different options, but a true gift is not allowed and would have to be treated as a grant. References: Fannie Mae Section B3-4.3-08 The lender must document: - that the program is an established company program, not just an accommodation developed for an individual employee. - the dollar amount of the employer’s assistance. - an unsecured loan from an employer with an award letter or legal agreement from the note holder and must disclose the terms and conditions of the loan. - the terms of any other employee assistance being offered to the borrower (such as relocation benefits or gifts). - that the borrower received the employer assistance funds directly from the employer (or through the employer-affiliated credit union). The employer assistance may be in the form of: - a grant, - a direct, fully repayable second mortgage or unsecured loan, - a forgivable second mortgage or unsecured loan, or - a deferred-payment second mortgage or unsecured loan. Freddie Mac Section 5501.4 An Employer Assisted Homeownership (EAH) Benefit may be used as a source of funds to qualify the Borrower for the Mortgage transaction if the terms of the EAH Benefit comply with the following: The EAH Benefit is provided to an employee from the employer pursuant to an established, ongoing, and documented employer benefit program, provided (i) the employer is not an interested party (as described in Section 5501.5) and (ii) the funds were not obtained from an interested party either directly or through a third party. The Mortgage is secured by a 1- to 4-unit Primary Residence Documentation requirements In addition to the documentation requirements for specific benefit types, the following requirements must be met: - EAH Benefits must be documented with a copy of the employer benefit program that provides the amount of the benefit and the terms of the program - Evidence of receipt of the EAH Benefit must be provided (e.g., funds on deposit in Borrower’s account or funds reflected on the Settlement/Closing Disclosure Statement) Submit Your Loan Scenario Question at www.mortgageguidelines.com

NEW Chart Released - Evaluating Self-Employment as Secondary & Separate Source of Income - All Agency Comparison How Do The Agencies View Secondary Self-Employed Income/Loss to Qualify a Borrower? Our New Chart Answers: * What to Do if a Loss Shows Up on the Tax Returns * Determining Whether to Use the Income to Qualify * Affect of a Co-Borrower's Self-Employed Income/Loss When Their Income is Not Used * All Agency Comparison w/ Investor Overlays * Guideline References for Each Agency Subscribers can find our new chart under “Latest Updates” on the “Charts & Checklists” page and under “All Agency”. Keeping You Smarter Than the Competition By Simplifying the Complicated! www.mortgageguidelines.com

FHA released FHA Mortgagee Letter 2024-21 [Forward] & 2024-22 [HECM] announcing loan limits for Forward Mortgages [Standard FHA Programs] & Home Equity Conversion Mortgages [HECM]. These loan limits are effective for CASE NUMBERS ASSIGNED on or after January 1, 2025. Pay attention to the case number assignment date if you want to take advantage of the higher loan limits. FHA is unlike Fannie Mae & Freddie Mac, which go by the "sale date" to Fannie or Freddie. Forward Mortgages: FHA "Floor" and "Ceiling loan limits have increased to $524,225 and $1,209,750 [High-Cost Areas] for a one-unit property. Alaska, Hawaii, Guam, and the U.S. Virgin Islands are subject to a higher "ceiling." See the Mortgagee Letter for details if you originate in those areas. 2 Units Floor is $671,200 and Ceiling is $1,548,975 3 Units Floor is $811,275 and Ceiling is $1,872,225 4 Units Floor is $1,008,300 and Ceiling is $2,326,875 To search for the maximum loan amount for your County/MSA, visit the "Maximum Mortgage Web Page" and sort by your County/MSA. When using this search feature, be sure to select "CY2025" under "Limit Year," as the default is still CY2024. FHA Mortgagee Letter 2024-21 https://lnkd.in/gHypFrKp HECM Mortgages: For the period of January 1, 2025, through December 31, 2025, the HECM MCA will be $1,209,750 (150 percent of Federal Home Loan Mortgage Corporation’s (Freddie Mac) national conforming limit of $806,500). The MCA of $1,209,750 is also applicable to the special exception areas: Alaska, Hawaii, Guam, and the Virgin Islands. FHA Mortgage Letter 2024-22- https://lnkd.in/g3wjA8Fu Keeping You Smarter Than the Competition www.mortgageguidelines.com Simplifying the Complicated

New Loan Limits Released for Fannie Mae & Freddie Mac The maximum baseline conforming loan limits and high-cost area loan limit values will be effective January 1, 2025. For a 1-unit property in most areas in the U.S., the 2025 maximum baseline conforming loan limit value will be $806,500. The maximum loan limit value for a super-conforming mortgage secured by a 1-unit property will be $1,209,750. Full Details and loan limits for all counties can be found here: https://lnkd.in/e3SyskZg Keeping You Smarter Than the Competition www.mortgageguidelines.com Simplifying the Complicated

It's the Best of our "Ask the Expert Questions" - November 2024 - Q&A Issue JUST RELEASED! 3 NEW Charts - Renovation Program Comparison - All Agency - Timeshares - All Agency - VA IRRRL vs. Cash-Out 2 NEW Social Media Posts! 4 NEW Charts with Investor Overlays Added - Income Analyzers - Overtime, Commission, Hourly, Capital Gains Our Experts Get 100's of Questions Each Month - Here are Some Highlights! ✔ Using Income When Formerly Self-Employed & Now Salaried ✔ Use of Tax Credits for Minimum Required Investment ✔ Gift From Employer Rules ✔ Expiration Dates for Condo Certification ✔ Not Counting Mortgage Debt When Co-Signing - Payment History Interrupted by Refinance ✔ Transferring Title & FHA Flip Requirement ✔ Builder Offers Personal Loan to Buyer for Debt Reduction ✔ VA Cash-Out When Veteran is Not on the Title ✔ Compensating Factors to Approve a High DTI Loan Plus, More Questions and Answers on Our Site! Subscribers can find this issue under "Current Issue" and Archived Issues under "Past Q&A Issue." Keeping You Smarter Than the Competition! www.MortgageGuidelines.com