Conforming Product Updates
NewRez LLC "NewRez" Approved Correspondent Clients: please note, NewRez is updating and clarifying our guidelines with the updates highlighted below.
Highlights of Updates
- Seasonal and Secondary Income (Fannie Mae SEL-2021-01)
- Secondary employment-clarified that while a borrower may have different employers, they may not have any gap in employment greater than one month in the most recent 12-month period, unless the secondary employment is considered seasonal income.
- Seasonal income: removed the requirements to confirm with the employer if the borrower is likely to be rehired the next season and to confirm if the work is in the same job (or same line of work) as the previous two years.
- Sale of Other Assets (Fannie Mae SEL-2020-07)
The following is required when using sale of personal assets for the transaction:
- Proof of ownership for all asset types that are titled assets, such as an automobile title;
- The value of the asset, as determined by an independent and reputable source, if the proceeds represent more than 50% of the total monthly income used in qualifying. The lesser of the estimated value (as determined by the independent source) or actual sales price must be used when determining the amount of funds for the transaction.
For example, a borrower plans to sell their vehicle. The value as determined by an independent source is $10,000; the sales price of the vehicle is $12,000. $10,000 can be added to the borrower’s available funds even if the sale has already occurred.
- The transfer of ownership of the asset, as documented by either a bill of sale or a statement from the purchaser; and
- Evidence of receipt of the proceeds (e.g., deposit slip or account statement).
- Fannie Mae Open 30-Day Account Clarification
Open 30-day accounts do not need to be included in the DTI ratio. The borrower must have sufficient funds to pay off the outstanding balance, in addition to the funds required for the transaction.