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Announcement 2020-065 - Conventional Conforming and Government Guideline Updates

The following updates are effective for locked loans on or after May 28, 2020.

The following updates are effective for locked loans on or after May 28, 2020.

Conventional Conforming Agency Transactions

  • The following credit score updates are being made:
    • Primary Residence Cash-out refinance transactions require a 640 minimum credit score
    • Second Home and Investment Property Cash-out refinance transactions require a 700 minimum credit score
    • All Manufactured Housing transactions require a 660 minimum credit score
  • Manually underwritten loans are not permitted, including DU Approve and LPA Accept where one or no borrowers have a credit score
  • Adjustable Rate Mortgage (ARM) no longer eligible
  • Short-term Airbnb rental income from the borrower’s primary residence is no longer permitted (Section 5.4 of Conventional Product Profile)

Government Agency Transactions

FHA

  • The following credit score update is being made:
    • Cash-out refinance transactions require a 660 minimum credit score
  • New maximum 55% DTI for Purchase transactions
  • New maximum 55% DTI for Simple and Rate & Term refinance transactions
  • New maximum 50% DTI for Cash-out and Streamline refinance transactions
  • Manufactured Housing not eligible for Streamline Refinance transactions
  • Manufactured Housing not eligible for Cash-out refinance transactions

VA

  • The following credit score updates are being made:
    • Purchase transactions ≤ $510,400 require a 640 minimum credit score
    • Purchase transactions > $510,400 require a 680 minimum credit score (Max $1,000,000)
    • VA Type l and Type ll Cash-out refinance transactions require a 660 minimum credit score
    • IRRRL transactions ≤ $510,400 require a 640 minimum credit score
    • IRRRL transactions > $510,400 require a 680 minimum credit score (Max $1,000,000)
    • Manufactured Housing Purchase transactions require a 680 minimum credit score
  • New maximum of 55% DTI for Purchase transactions
  • New maximum of 50% DTI for Cash-out and Credit-qualifying IRRRL transactions