2017 FNMA Guidelines

2017 FNMA Guidelines Changes For Conventional Loans

There are 2017 FNMA Guidelines Changes for mortgage loan borrowers for Conventional Loans. Fannie Mae and Freddie Mac are the two mortgage giants in the United States that sets mortgage requirements for Conventional Loans. Conventional mortgage borrowers need to meet the minimum Fannie Mae and/or Freddie Mac mortgage standards in order to qualify. Conventional mortgages are also called Conforming Loans because they need to conform to the Fannie Mac and/or Freddie Mac Lending Standards. Conventional Loan Guidelines changes without notice so just because a borrower thinks they qualify for a Conventional Loan at one time does not mean that they will qualify at a later date. There have been Guidelines Changes for 2017 and we will cover those changes on this blog.

Waiting Period On FHA Versus Conventional Loans

All mortgage programs have mandatory waiting period to qualify for a mortgage loan after a borrower has had a prior bankruptcy, foreclosure, deed in lieu of foreclosure, and short sale.

  • FHA requires that the borrower needs to wait two years from the discharged date of a Chapter 7 Bankruptcy in order to qualify for a FHA insured mortgage loan.
  • There is no mandatory waiting period to qualify for a FHA Loan after a Chapter 13 Bankruptcy discharged date.
  • However, if the Chapter 13 has not been seasoned for two years after the Chapter 13 discharge date, then it needs to be manually underwritten.
  • There is a two year waiting period to qualify for a Conventional home loan after a Chapter 13 discharged date.
  • There is a three year mandatory waiting period to qualify for a FHA Loan after the recorded date of a foreclosure and/or deed in lieu of foreclosure.
  • There is a three year mandatory waiting period to qualify for a FHA Loan after the date of a short sale. FHA requires the same mandatory waiting period of three years after foreclosure, deed in lieu of foreclosure, and short sale.
  • Conventional Loans are different.
  • Fannie Mae and Freddie Mac have separate waiting periods after foreclosure and deed in lieu of foreclosure and/or short sale.

Another ground breaking Fannie Mae change is with borrowers who had mortgage part of bankruptcy .

  • With the new 2017 FNMA Guidelines, there is a four year waiting period after a Chapter 7 Bankruptcy discharged date to qualify for a Conventional Loan if you had a mortgage part of your Chapter 7 Bankruptcy.
  • The foreclosure of the mortgage that was part of your Chapter 7 Bankruptcy can be recorded at a later date after the discharge of your Chapter 7 Bankruptcy and as long as the deed of the property has been transferred out of your name at a later date, the four year waiting period time clock starts from the date of your Chapter 7 Bankruptcy discharged date.
  • This is different with FHA Loans because with FHA Loans, if you had a mortgage part of your Chapter 7 Bankruptcy, then there is a three year mandatory waiting period from the recorded date of the foreclosure after the Chapter 7 Bankruptcy discharge date.
  • If the deed of the property has not been recorded three year after the Chapter 7 Bankruptcy discharge date, then the three year waiting period will start from the recorded date of the foreclosure.
  • This new 2017 FNMA Guidelines on the waiting period on having a mortgage part of your Chapter 7 Bankruptcy opens up many doors for borrowers who had a mortgage part of Chapter 7 Bankruptcy that cannot qualify for a FHA Loan but can now qualify for a Conventional Loan.
  • Conventional guidelines applies with regards to credit scores, debt to income ratios, and other conforming lending requirements.

Changes With Waiting Period After Deed In Lieu Of Foreclosure And Short Sale

There are major changes with the waiting period after deed in lieu of foreclosure and short sale with the new 2017 FNMA Guidelines.

  • Before, a borrower can qualify for a Conventional Loan after two years out of a deed in lieu of foreclosure or short sale with 20% down payment. However, this rule is no longer in effect and under the 2017 FNMA Guidelines, there is a four year waiting period after a deed in lieu of foreclosure and/or short sale to qualify for a Conventional Loan. The good news is that a borrower can qualify with a 5% down payment on a home purchase after a deed in lieu of foreclosure and/or short sale after meeting the 4 year mandatory waiting period instead of the old FNMA guidelines after two year waiting period after deed in lieu or short sale where 20% down payment was required.

As stated earlier, borrowers who had a Chapter 13 Bankruptcy discharge can qualify for a Conventional Loan two years after a Chapter 13 Bankruptcy discharged date as long as they meet all other Fannie Mae and/or Freddie Mac mortgage guidelines.

If you had prior credit issues and are looking for a Conventional mortgage lender with no overlays, please contact me at 262-716-8151 or email me at gcho@gustancho.com. My staff and I are available 7 days a week to take your phone calls or email inquiries and answer any questions you may have.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

Comments are closed.