• Home
  • Visit cvar.net
  • CVAR Calendar
  • Member Benefits
  • Affiliates & Appraisers
  • Contact
  • About

cvar connect

connecting you to what matters

  • CVAR.Live Videos
  • CVAR News
  • Market At A Glance
  • Industry News
  • Pro Tips
  • Government Affairs
  • Event Calendar
  • Home

Fannie Mae to Loosen Loan Requirements July 29

July 10, 2017

Fannie Mae Logo BlackFannie Mae will ease its loan qualification requirements, raising its debt-to-income ceiling from 45 percent to 50 percent on July 29. The move could make it easier for a larger number of new buyers to qualify for a mortgage, particularly millennials who may be burdened with student loan debt.

The debt-to-income ratio compares a person’s gross monthly income with his or her monthly payment on all debt accounts, including auto loans, credit cards, and student loans. It also factors in the projected payments on the new mortgage. Lenders see applicants with lower debt-to-income ratios as less at risk of defaulting.

Fannie Mae, Freddie Mac, and the Federal Housing Administration have exemptions that allow them to buy or insure loans with higher ratios than the federal rules, which are set at a maximum of 43 percent. The FHA allows debt-to-income ratios of more than 50 percent in some cases. In a recent study, Fannie Mae researchers looked at more than a decade and a half of data from borrowers with debt-to-income ratios in the 45 percent to 50 percent range. They found that a significant number of these borrowers had good credit and were not prone to default.

Not everyone with a debt-to-income ratio of below 50 percent will be approved. Borrowers will still be closely vetted by Fannie’s underwriting system to examine their complete application, including income, down payment, credit scores, and more.

With the release of DU Version 10.1, DU Version 9.3 will be retired. Therefore, effective the weekend of July 29, 2017, customers will no longer be able to resubmit loan casefiles to DU Version 9.3. Customers will continue to be able to view online loan applications and DU Underwriting Findings reports that were created under DU Version 9.3.
To obtain an updated underwriting recommendation after the weekend of July 29, customers must create a new loan casefile and submit it to DU.

Source: C.A.R., Fannie Mae

Filed Under: At A Glance, CVAR News, Government Affairs, Industry News, National News, Pro Tips Tagged With: Fannie Mae, FHA, loan qualifications

Subscribe to CVAR Connect

Loading

Recent Posts

Jan. 25 CVAR Connect

What MTV’s ‘Catfish’ Host Kamie Crawford Likes in a Listing

Sorry Dorothy, There’s No Place for Home

Copyright © 2021 · Citrus Valley Association of REALTORS® · Log in