Mar 9, 2023 2023-01
Fannie Mae HFA Preferred Updates
Fannie Mae recently informed several state housing authorities, including Housing NM, that all income used in “qualifying” will count toward their Area Median Income (AMI) limits for HFA Preferred.
AMI is key in determining if a borrower is considered by Fannie Mae to be above or below 80 percent AMI.
Fannie Mae representatives clarified that income limit calculations must include non-occupant borrower / co-signer income. This potentially eliminates loans with co-signers from receiving the benefits outlined in Fannie Mae’s HFA Preferred product. Fannie Mae considers loans where the “qualifying” income exceed the higher of the HomeReady or the published HFA income limits ineligible for the HFA Preferred program. We were unsuccessful in convincing FNMA representatives to allow housing agencies to limit income limits calculations to only include occupant borrower income.
- Therefore, effective immediately, Housing NM will no longer accept new loan reservations with co-signers on FirstHome Conventional loans.
- It is important to point out that non-occupying co-signers ARE still permissible on FirstHome Government transactions.
FNMA did not allow a grace period for HFA Preferred loans in process. Therefore, lenders are encouraged to confirm that total qualifying income (as determined by the lender’s underwriter) for loans already reserved with Housing NM, does not exceed the higher of:
Housing NM FirstHome Income Limit OR FNMA HomeReady AMI Limit
For loans in process, and going forward, borrowers must meet both Fannie Mae’s AMI limit which is strictly based off “qualifying” income and Housing NM’s program income which is based on “household” income.
Housing NM cannot advise our lending partners on how to structure a loan in process as each borrower’s situation is unique. Your Underwriter is the best qualified to review and determine the best course of action.
Thank you for your support and patience.
Should you have questions please contact a member of the Homeownership Department at 505.843.6880.
