Bulletin 2023-022 Cash-out Refinance Seasoning Requirement - Reminder

Cash-out Refinance Seasoning Requirement - Reminder

Newrez LLC "Newrez" Approved Correspondent Clients; Fannie Mae SEL-2023-01 announced a 12-month seasoning requirement for all cash out refinance transactions. Loans not meeting the guidelines below must have a Note date on or before March 31, 2023. 


For all cash-out refinance transactions paying off a first lien mortgage, the first lien mortgage being refinanced must be seasoned for at least 12 months (measured from the Note date of the mortgage being refinanced to the Note date of the cash-out refinance mortgage).


The seasoning requirement does not apply for the following cash-out refinance transactions:


  • Any existing subordinate liens being paid off through the transaction; or
  • When buying out a co-owner in accordance with Fannie Mae guidelines.


This change is in addition to the existing requirement that at least one (1) borrower be on title to the subject property for at least six (6) months prior to the disbursement date of the new loan, unless one of the ownership exceptions are met. Refer to the Conventional Conforming Underwriting Guide for complete details.


Complete guidelines can be found in the Conforming Underwriting Guide, Chapter 1B Transactions, 1B.3 Cash-out Refinance Mortgages.