Announcement 2026-046 Conventional/Conforming Agency Guideline Update

Conventional/Conforming Agency Guideline Update

Newrez LLC "Newrez" Approved Correspondent Clients, Newrez has updated the Conventional/Conforming guides for Fannie Mae and Freddie Mac loans.

Effective immediately for all pipeline and new applications on and after June 25, 2026 unless otherwise noted.

Fannie Mae SEL 2026-06:

Authorized User Tradeline Update: Guide B3-5.3-09 and B3-6-05

For loans with a Desktop Underwriter (DU) Approve/Eligible recommendation, underwriters are no longer required to perform additional credit history investigations unless DU instructs otherwise. DU messaging will be updated in DU version 12.1 for casefiles submitted or resubmitted from June 26, 2026, onward. Additionally, underwriters should refer to the “Debts Paid by Others” section to determine when certain debts can be excluded from recurring monthly obligations and debt ratio calculations. 

Retirement of rural high-needs value acceptance:

Fannie Mae is retiring the rural high-needs value acceptance program for casefiles created on or after June 27, 2026. Although loans will no longer receive this acceptance offer, they may still be eligible for Value Acceptance + Property Data.

IRS Form 8821:

IRS Form 8821 is now an acceptable alternative to IRS Form 4506-C for obtaining tax transcripts required for loan files. Borrowers must explicitly authorize Newrez to disclose IRS-derived information to Fannie Mae when using this alternative form.

Freddie Mac Bulletin 2026-1:

CHOICEHome: Applications on and after June 4, 2026, in collaboration with Fannie Mae, have updated manufacturers uniform specification requirements for permanent foundations, roof pitch, energy efficiency, exterior features and site improvements.  Refer to the agency’s guides for complete details. 

Freddie Mac Bulletin 2026-7:

Credit Underwriting Updates:

Non-Self-employed income characteristics – Section 5303.1

The policy on guaranteed payments from partnerships has expanded. A history of less than one year of guaranteed payments may be considered stable monthly income if:

• Payments come from a professional services partnership (e.g., accounting or law firm).
• The borrower recently transitioned from employee to partner in the same firm with a nominal ownership interest.
• Documentation includes recent year-to-date earnings, K-1 forms, and partnership agreements. If the history is less than two years, employment history and documentation requirements for prior employed income apply. 

Non-Self-employed Borrowers with Less than 25% Business Ownership:

Borrowers with business ownership interest(s) less than 25%, Freddie Mac has updated the title to specify that these requirements are intended for Non-self-employed Borrowers.  No requirements have changed as a result of this update.

Self-Employed Borrowers with Less than Two Years History – Section 5304.1

The requirement for underwriters to use the lesser of the borrower’s stable monthly income from self-employment or previous occupation has been removed. However, underwriters must still meet all other requirements for borrowers with less than two years of self-employment history.

Properties with Incomplete Improvement Eligibility – Sections 4602.1, 5601.3 and 5605.5

The guide has been updated to specify that the requirements for a property with incomplete improvements apply to site-built homes that are newly built or constructed and to existing site-built homes.
They have also expanded the eligibility to permit Mortgages secured by Manufactured Homes and mortgages with a Property Data Report.