Fannie Mae successfully implemented the release of Desktop Underwriter® (DU®) Version 8.0 over the weekend of December 12, 2009. This release supports Announcement 09-29, Updates to Minimum Credit Scores, Mortgage Insurance, Pricing for Certain Desktop Underwriter Loans, Biweekly Loans, and Special Feature Codes, and other recent Announcements.
From Fannie Mae:
Summary of Changes
- An update to the DU credit risk assessment
- An update to the maximum allowable total expense (debt-to-income) ratio to 45 percent, with flexibilities up to 50 percent for certain loan case files with strong compensating factors (not applicable to DU Refi Plus)
- Retirement of Expanded Approval® (EA) EA-II and EA-III recommendations (except for DU Refi Plus loan casefiles)
- Minimum 620 credit score for delivery eligibility (not applicable to DU Refi Plus loan casefiles)
- Revised Minimum 620 credit score:
- Increased from 580 (not applicable to DU Refi Plus)
- Implementation of the high-balance mortgage loan eligibility guidelines specified in Announcement 09-08R and support of the 2010 high-cost loan limits specified in Announcement 09-34
- Implementation of changes described in Announcements, including 08-16, 09-02, 09-19, and 09-28
Product retirement and simplification:
- Streamline MyCommunity Mortgage® (MCM®) special feature codes (SFCs) to a single code (460)
- Retirement of Biweekly product (lenders may still offer biweekly payment plans)
MI updates:
- A new minimum MI coverage option for DU and manually underwritten loans that will permit broad use of our lowest MI coverage level requirements, currently available only on a limited basis; a loan-level price adjustment (LLPA) will apply
- Simplification of standard MI to be uniform across all products including Flexible mortgages and manufactured homes
- Retirement of reduced and lower-cost MI and related variances
Per Fannie Mae: These changes are intended to ensure that our guidelines reflect and appropriately respond to current market conditions, and that we continue to provide sustainable homeownership opportunities to borrowers.
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