Announcement 2026-065 Fannie Mae Selling Guide SEL 2026-07

Fannie Mae Selling Guide SEL 2026-07

Newrez LLC "Newrez" Approved Correspondent Clients, Newrez is announcing updates to the Fannie Mae Selling Guide.

Fannie Mae updated the Selling Guide to incorporate most of the policy changes previously communicated in Lender Letter LL-2026-03, Updates to Project Standards and Property Insurance Requirements.

The updates include changes related to project standards and property insurance requirements and below are key implementation details and important effective dates.

Project Standards Updates

·         New standards for required reserves for projects will not be incorporated into the Selling Guide until after Jan. 4, 2027, when this change becomes effective for new loan applications.

·         Delivery Requirements in B4-2.1-01, General Information on Project Standards, have been revised, however, lenders must continue to use Project Type Code Q, Limited Review – Established condo project, as applicable, when delivering loans eligible under the Limited Review Process based on loan application dates before Aug. 3, 2026.

·         Additional guidance specific to property insurance was updated for HomeStyle Renovation mortgages which are not currently offered.

PERS Requirements for Manufactured Housing with Deed Restrictions and Single-Section Units

Newrez does not currently permit and will remain as an overlay.

Lease Term Requirements for Ground Lease Co-ops

Effective Date: These policy changes are effective immediately.

Lease term requirements for co-op projects subject to ground leases have been updated. The Selling Guide generally requires the ground lease term to extend at least five years beyond the loan maturity date. However, many co-op ground leases include renewal or extension options that may not be exercisable by the co-op corporation until late in the lease term, which can make it difficult to meet this requirement.

Key Guidance

·         For co-op projects located in jurisdictions where applicable state law permits early exercise of ground lease renewal or extension options, lenders may accept the exercised renewal or extension to determine compliance with the minimum remaining lease term requirement.

·         The resulting lease term must meet Selling Guide requirements.

·         The lender must obtain written confirmation from either the ground lessor or legal counsel to the co-op corporation confirming that the early renewal or extension was exercised in accordance with the lease and applicable law.

·         The written confirmation must also confirm that the early renewal or extension is binding on the ground lessor.

Miscellaneous Updates to the Selling Guide:

E-2-04 – Signature Requirements for Mortgage in Inter Vivos Revocable Trusts:

eNote loans with inter vivos trusts updated to limit only one inter vivos trust can be represented on an eNote.

B3-5.3-09 DU Credit Report Analysis and B3-6-05 Monthly Debt Obligations:

Clarified the treatment of authorized user tradelines for loans that receive a DU Approve/Eligible recommendation, and lender requirements for excluding certain debts paid by others from the borrower’s recurring monthly obligations and the DTI ratio.

References:

·         Fannie Mae Selling Guide: Fannie Mae

·         Announcement - SEL 2026-07