We recommend that you use the latest version of FireFox or Chrome. We are actively monitoring the current situation and taking every step to help ensure a safe and sound housing market. Hosts in the U.S. will be able to work with participating lenders to recognize Airbnb home sharing income from their primary residence as part of their mortgage refinancing application. The lender must continue to consider expenses reported on the profit and loss statement when assessing the impact of COVID-19 on the business. We are releasing information to our customers as quickly as possible and will update and republish these letters as new guidance becomes available. If the Renters Resource Finder confirms that Fannie Mae financed the apartment complex where you live, you may also be eligible for COVID-19-related tenant protections. No. Note: This guidance was updated due to the CARES Act. Can business tax returns continue to be waived in accordance with B3-3.2-01, Underwriting Factors and Documentation for a Self-Employed Borrower? Is it acceptable to only use year-to-date income to calculate qualifying variable income? Ask Poli is an Artificial Intelligence powered search tool. When the current level is less than the calculated amount, the lender must adjust the income downward to reflect the current level of stable income. Yes, lenders can continue to follow the requirements in the B3-4.3-02, Trust Accounts. How do the temporary age of document requirements in Lender Letter LL-2020-03 impact single-closing construction-to-permanent transactions? If borrowers and renters are having a hard time making their monthly payments, mortgage lenders can offer relief. never self-employed income for Fannie Mae or Freddie Mac? We’re here to help. Refer to B3-3.1-01, General Income Information. Selling Guide. Given that many student loans were placed into an automatic forbearance status and the other party may have missed payments due to the forbearance, we will allow exclusion of the monthly student loan payment if: The borrower is self-employed and owns a business that is closed due to the pandemic. Yes, however, lenders should apply additional due diligence to capital gains and interest and dividend income since it is calculated using a historical view which may not be sustainable given current market volatility. We are allowing certain documentation flexibilities due to the unique circumstances resulting from the COVID-19 pandemic to address the issue lenders have raised due to disruption of employer operations and their inability to be reached by phone. No. Our teams are fully operational and ready to execute your multifamily business. – The Federal Housing Finance Agency (FHFA) announced today that Fannie Mae and Freddie Mac (the Enterprises) will extend several loan origination flexibilities until August 31, 2020 to ensure continued support for borrowers during the COVID-19 national emergency. All guidance specific to COVID-19 will be communicated through Lender Letters and FAQ documents such as this. For example, rental income from a commercial property owned by the borrower is acceptable if the income otherwise meets all other requirements. While two years of tax returns are still required to demonstrate a stable history of capital gains and interest and dividends income, lenders must consider the current value of the underlying asset when evaluating income for qualifying purposes. Can lenders continue to use capital gains and interest and dividend income for qualifying a borrower? If a borrower has a history of renting the subject or another property, generally the rental income will be reported on IRS Form 1040, Schedule E of the borrower’s personal tax returns or on Rental Real Estate Income and Expenses of a Partnership or an S Corporation form (IRS Form 8825) of a business tax return. all other Selling Guide requirements have been met (for example, evidence of 12 total payments, either monthly or in aggregate, on the omitted debt). Three vertical lines aligned to the left. The Fannie Mae Learning Resource Center offers a wide range of materials to help you do business with Fannie Mae. Current Selling Guide policy requires these income types to be calculated considering the borrower’s history of receipt, the frequency of payment, and the trending of the amount of income being received. For loans meeting the 18 month extended timeframe requirements, the age of document requirements apply at the time of original loan closing only. If the lender determines that the business has been adversely impacted and the amount of income calculated following standard 1084 methodology must be adjusted, rep and warrant relief does not apply since the lender must make manual adjustments to the output of the tool. COVID-19 UPDATE: Find out how Fannie Mae is responding. Refer to B3-3.1-01, General Income Information for additional details. Lenders should continue to obtain the most recent year’s tax return filed by the borrower as indicated in B1-1-03, Allowable Age of Credit Documents and Federal Income Tax Returns. Please visit our Single-Family Here to Help page for the latest guidance and policy information related to COVID-19. For example, as stated in Lender Letter 2020-03, if the YTD P&L identifies a significant imbalance between expenses and revenue that could impact the financial stability of the business, additional documentation such as an updated business plan may be required. What if an hourly borrower is working less hours now than they worked earlier in the year prior to the COVID-19 impact? When the borrower experiences a gap of employment due to COVID-19 and their source of income is variable, is there a minimum amount of documented time the borrower is required to be back at work after the gap period? Instead, lenders can follow the guidance in Lender Letters LL-2020-03, Impact of COVID-19 on Originations, and LL-2020-04, Impact of COVID-19 on Appraisals. Ask Poli. Learn more. See LL-2020-03 for details. If borrowers and renters are having a hard time making their monthly payments, mortgage lenders can offer relief. Many renters are affected by the devastating impact of the coronavirus, or COVID-19. Is it acceptable to follow DU messaging that permits only the most recent year individual and business tax returns? CONFIDENTIAL Bulletin 2020-5 & 2020-23 Calculating Income 28 This program is available for households within the 50-80% range of Area Median Income (AMI). Fannie Mae's Disaster Response Network has published a guide for renters affected by the coronavirus (COVID-19). Fannie Mae Provides Assistance to Help Renters Impacted by COVID-19 Stay in Their Apartments. The income may not be used for qualifying. Our digital library includes learning modules, videos, frequently asked questions, demos, job aids, guides, and more. March 24, 2020. 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