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Financial Services Law Insights and Observations

Fannie and Freddie issue Covid-19-related selling updates

Federal Issues Covid-19 Fannie Mae Freddie Mac Underwriting Loan Origination SBA Mortgages

Federal Issues

On July 1, Fannie Mae and Freddie Mac updated its Covid-19 frequently asked questions regarding the underwriting and loan eligibility for sellers.  Fannie Mae’s FAQs (previously discussed here) were updated to address questions regarding documentation and calculations related to self-employed income and variable income, including where borrowers experienced gaps of employment due to Covid-19.  Freddie Mac’s origination, underwriting, and eligibility FAQs were updated to address questions regarding, among other things, pre-closing verifications, fluctuating employment earnings, self-employed income, determining income eligibility with additional analysis and documentation, documentation requirements, and Covid-19 business assistance, including proceeds from Paycheck Protection Program loans.

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