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Fannie Mae Underwriting Guidelines

Fannie Mae underwriting guidelines are very important for the customers to understand before getting any financial service from the corporation. Underwriting is the process used by large financial service providers (such as bank, investment house and insurer) to assess the eligibility of the customers to receive their services or products (mortgage, credit, capital, equity or insurance). In order words, it is the process a loan package go through all the aspects of application to check whether the loan amount is acceptable for funding to the applicant or not. Fannie Mae underwriting guidelines include some common aspects such as;
  • The income of the applicant
  • Amount of the mortgage program
  • Applicant's employment history
  • Credit rating of the applicant
  • Applicant's net worth

Fannie Mae Underwriting Guidelines 2009

Fannie Mae has announced its underwriting guidelines for the year 2009 in the beginning of the year itself. These new guidelines include special emphasis on several types of mortgages that are acceptable to be sold to Fannie Mae by different lenders. The corporation has also announced that it will purchase only those loan packages that are acceptable through Fannie Mae Underwriting standards. With Fnma underwriting guidelines 2009, Fannie Mae allow lenders to submit new converted condominium projects for review by the corporation to determine the eligibility features. New underwriting requirements for attached condominium projects in Florida have also been issued and PERS approval will be required for all newly converted condominium projects in the state.

Fannie Mae Underwriting Requirements

Moreover, Fannie Mae will revise or introduce new eligibility requirements for pre-sale, hazard insurance, delinquent homeowner's association dues, fidelity insurance, non-residential space, legal document review for established and newly converted condominium projects. There will also be three additions in the ineligible projects of Fannie Mae's list that include projects with excessive financing structures, projects where single entity owns excessive percentage of units and projects with excessive non-residential space. Fannie Mae underwriting requirements also include clarification of owner-occupancy ratio requirements. Clarification on units (that are owned by financial institutions as Reo) are required to be treated for determining the owner-occupancy ratio.

Underwriting Guidelines 2008

Fannie Mae Underwriting Guidelines 2008 was primarily targeted at those lenders who work with the corporation. This guidelines have been the major cause of concern throughout the condominium community particularly over the provisions associated with delinquent member assessments. Fannie Mae also announced the establishment of a brand new Project Eligibility Review Service (PERS) that lenders can utilize to review project eligibility for newly converted condominiums. As Fannie Mae purchase mortgage packages from lenders, meeting their project eligibility conditions is the key to ensure that a property can qualify for a suitable mortgage loan. The underwriting guidelines for the year 2008 also include many new and updated project eligibility criteria for attached and new condominium developments.
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