Bulletin 2021-117 Conforming Overlay Removals and Updates

Conforming Overlay Removals and Updates

Newrez LLC "Newrez" Approved Correspondent Clients: Newrez has removed or revised numerous Conforming underwriting overlays, outlined below. These changes are effective immediately.


Conforming Guide Updates


Current Guideline

New Guideline

Acreage requirements
Texas 50(a)(6) Product Profile

Maximum 25 acres

Delegated Clients: 100 acres

Non-Permanent Residents
Chapter 1A Eligibility

R-1 Temporary Religious Workers not allowed


Non-arm’s Length Transaction
Chapter 1B Transactions

  • Non-arm’s length transactions are permitted for the purchase of existing properties only.
  • The purchase of a newly constructed home secured by either a second home or investment property is not permitted.

Added the following additional clarification:.

  • These transactions include, but are not limited to:
    • Family sales or transfers.
    • Corporate sales or transfers.
    • Borrowers employed in the real estate or construction trades who are involved in the construction, financing, or sale of the subject property.
    • Some transactions involving principals or a lender or other vendor (such as an appraiser, settlement agent, or title company) who is involved in the lending process of the subject property.

Purchasing a Short Sale Property
Chapter 1B Transactions


Added guidance for borrowers purchasing a short sale property

Ineligible Property Types
Chapter 1D Property Types


3D printed homes are not allowed

Interested Party Contributions
Chapter 1G Assets


Added guidance for reviewing loan documents when interested party contributions exist

Lender Incentives
Chapter 1G Assets


Added guidance for lender incentives

1031 Tax Exchange
Chapter 1G Assets



Added guidance for 1031 tax exchange

Marijuana Related Businesses and Hemp

Chapter 3I Employment and Income

Not allowed

Federal, state, and local laws restrict marijuana related activities therefore income or assets from these sources are not allowed for qualifying purposes.


Hemp income or assets derived from Hemp may be eligible in states where Hemp is legal. The borrower must:

  • Provide a written attestation by the hemp grower that they are validly licensed, or
  • Obtain a copy of such license.


Hemp income and/or assets are eligible in all states except the following:

  • Washington, D.C.
  • Idaho
  • Mississippi

Mortgage Credit Certificates

Chapter 1I Employment and Income

Not allowed

Allowed. Payment must be made to the borrower and not the servicer.

Mortgage Differential
Chapter 1I Employment and Income

Not allowed

Allowed. Payment must be made to the borrower and not the servicer.

Community Owned or Privately Maintained Streets


Added the following additional guidance for Fannie Mae loans:

  • If the property is not located in a state that imposes statutory requirements for maintenance, and either there is no agreement or covenant for maintenance of the street, or an agreement or covenant exists but does not meet the above requirements, the lender must indemnify Fannie Mae against all losses incurred by Fannie Mae due to the physical condition of the street or to establish and or retain access to the road.