Fannie Mae tightens lending standards on Investment Homes

[DeWitt Gibson]

We have been discussing this at my office all day. I don't know much as this point, but here's what I know: 

"Fannie Mae is tightening the underwriting criteria for second homes and investment properties, the government sponsored entity said in a letter to sellers on Wednesday.

“Recent amendments to our senior preferred stock purchase agreement with Treasury impose additional risk criteria on the loans we acquire,” the GSE said in a letter. “One of those restrictions is a 7% limit on our acquisition of single-family mortgage loans secured by second home and investment properties.”

Fannie Mae said that the amendment has prompted changes in its eligibility policies. All second homes must be underwritten with Desktop Underwriter, receive an approve/eligible recommendation and be delivered as a DU loan, Fannie Mae said.

"The above policies apply to all lenders and include loans delivered under negotiated terms (such as variances or special requirements). The only exception that will be permitted for second home and investment properties loans is for high LTV refinance loans that are manually underwritten in accordance with the Alternative Qualification Path and delivered with Special Feature Code 840."

The policies will take effect for loans submitted to Fannie’s loan delivery system on or after April 1, and for loans delivered into MBS pools with issue dates on or after April 1."

Source: Housing Wire