Fannie Mae recently issued Selling Guide Announcement SEL-2025-02 to a provide updates regarding forthcoming changes to the Selling Guide requirement. Fannie Mae included the following updates:
Condo Project Manager Integration
Fannie Mae has integrated Condo Project Manager (CPM) with Desktop Underwriter (DU) to help streamline the project review process for lenders in most transactions. Loans with an Approve/Eligible recommendation from DU and Approved status from CPM will show an approved status through the credit report expiration date. An updated project eligibility status will be available in DU if a lender makes additional changes during the loan process. Changes related to CPM messaging in DU will apply to new loan casefiles created on or after June 23, 2025.
New York Co-ops Mortgage Insurance Requirements
Fannie Mae added clarification to how a loan-to-value (LTV) ratio should be calculated when determining if mortgage insurance is required for purchase transaction on New York co-op properties. Effective immediately, mortgage insurance should not be added to a loan if mortgage insurance would be required based on the sales price, but the appraised value results in an LTV of 75% or less. This applies even if the sales price is lower than the appraised value. DocMagic will be applying an audit for New York Co-op loans to advise if mortgage insurance is present when the appraised value results in an LTV of 75% or less. The audit will be in production beginning on May 15, 2025.
Freddie Mac has issued Bulletin 2025-4 to announce several changes to their Seller/Servicing Guide. Notable selling updates include the following:
New Income Calculator Tool
Effective for submissions on or after May 11, 2025, a new income assessment tool will be available in Loan Product Advisor to help determine Borrower’s monthly income. Eligible income includes employed earnings using paystub(s) and W-2 data and self-employed income verified with tax returns or tax transcript data. Use of the tool will provide certain eligibility for income representation and warranty relief, which will be provided on the Freddie Mac Income Calculator Certificate and Feedback Certificate that is submitted to Loan Product Advisor.
Flood Risk Premium
In June 2024, Freddie Mac announced a new requirement for including the full flood insurance risk premium when calculating the housing expense-to-income and debt payment-to-income ratios for mortgages where a flood insurance policy on the subject property shows a full risk premium and a discounted premium. In September 2024, the effective date was extended to April 1, 2025. Now, Freddie Mac has announced that the effective date has been postponed until further notice, in a response to industry feedback.
Click here to view Fannie Mae Selling Guide Announcement SEL-2025-02.
Click here to view Freddie Mac Bulletin 2025.4.