Kevin Lamarque/Reuters (file)
Fannie Mae is expanding property eligibility to allow accessory dwelling units in eligible condominium projects, opening another potential route to mortgage financing for buyers and owners of condos with secondary units.
The change, included in the November 4 Selling Guide update, is available for lenders to use immediately. It does not make every condo project eligible, and it does not automatically approve a property or a borrower for a loan.
Fannie Mae also broadened the permitted use of VantageScore 4.0, extending it to manually underwritten loans and loan casefiles processed through Desktop Underwriter Version 12.1.
ADU eligibility expands within condo rules
The accessory-dwelling-unit change applies specifically to eligible condo projects. Fannie Mae updated its UAD 3.6 Policy Supplement to reflect the expansion, alongside changes to the Selling Guide’s special-property eligibility and ineligible-project topics.
For buyers and owners, the change may provide an additional route to Fannie-backed financing when a condo includes a secondary dwelling unit. The project, property and borrower still have to meet the applicable requirements. Eligibility is not a promise of financing.
Fannie Mae described the expansion as a way to recognize the growing role of ADUs in housing supply and flexibility for homeowners. The announcement did not quantify how many additional properties or borrowers would qualify.
More uses for VantageScore 4.0
The credit-score update incorporates the previously announced broad lender availability of VantageScore 4.0 into the Selling Guide. It then adds the two specific extensions: manually underwritten loans and DU 12.1 casefiles.
That gives lenders broader options for using the score in covered loan workflows. It is an expansion of an earlier rollout, rather than a first-time introduction of VantageScore 4.0, and normal underwriting requirements continue to apply.
Occupancy and assistance guidance clarified
Fannie Mae also aligned its principal-residence and second-home occupancy language with the wording in mortgage security instruments. The change clarifies existing policy rather than announcing a new occupancy category.
For Community Seconds and grants, the update clarifies eligible providers and lenders’ responsibility for reviewing the assistance programs, and revises the Community Seconds Checklist. Lenders may use those clarifications immediately.
The changes are set out in Fannie Mae’s November 4 Selling Guide announcement and its update summary.
JBizNews Desk | Washington
© JBizNews.com. All rights reserved. Unauthorized reproduction or redistribution is strictly prohibited.
