Fannie Mae Loosens Their Mortgage Guidelines

Today I’ve got some exciting news to share with you about the recent changes to the Fannie Mae mortgage guidelines.

Call me at 303-974-9471 for a FREE home buying or selling consultation to answer any of your real estate questions.

Fannie Mae has made four important changes to the mortgage guidelines that will definitely impact homebuyers. 

First, they’ve loosened up the debt-to-income ratio. It used to be that only 45% of your income per month could go toward debt of any kind, including car payments, mortgage, or other payments. They’ve now upped that number to 50%, giving you a little more room to find the right home and still be able to afford it.

The second thing is that loan-to-value is now going to be in the same range for adjustable rate mortgages and fixed rate mortgages. It used to be that these weren’t equal or similar in value due to the debt-to-income ratio, but that has changed.

Self-employment documentation used to be far more complicated, with the requirement being that you needed to have two years of verifiable self-employment income in order to get a loan. Fannie Mae has now reduced that requirement to just one year of verifiable self-employment income, making it easier for anyone who is self-employed to get a home loan.

Finally, we’re seeing some changes to how Fannie Mae treats relocations. It used to be that anyone who needed to relocate for a new job needed to provide one or two months of income from the new employment before they could get a loan. It would slow the entire process down and make it difficult to relocate.

We’re seeing some changes to how Fannie Mae treats relocations.

Fannie Mae is now accepting a letter of employment from your new employer as proof of your relocation and will be able to approve a loan faster. This means that you can get the loan before you even start the job and finish your relocation on a faster timetable.

It’s great news to see these changes with the mortgage guidelines, as it helps people enter the market and finally get the home of their dreams. If you have any questions about this topic or you’re looking to buy or sell a home, please give me a call. I’d be happy to help!


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