Fannie Mae releases updates to the Selling Guide
The newly updated Fannie Mae The November Sales Guide aims to modernize the special property eligibility criteria and leasehold underwriting requirements, and revised the Government Sponsored Enterprise (GSE) project review requirements for properties secured by manufactured homes.
The Sales Guide also updated the requirements “regarding the market area analysis of the valuation report and added[ed] standardized definitions relevant to assessment market areas in the glossary.” It also clarifies that sellers and servicers are “responsible for preventing, detecting and reporting mortgage fraud.”
Regarding the leasehold provisions, the GSE has revised the eligibility requirements “to provide clarifications and updates to the lease requirements, address scenarios related to leasehold properties in projects, and to include cooperatives as eligible property types,” the update said.
This included the addition of a “definitive list of eligible property types, definitions, and exceptions to the subject of leasehold,” as well as clarification of leasehold provisions regarding first lien enforceability, appraisal, and title insurance.
The guide also clarified that for manufactured homes located within a larger development, the homeowners association “must be the tenant.” And it updates certain lease requirements, such as those for standard notifications and title reinstatement and merger options. These provisions will enter into force in March 2025.
The guide also added a project overview for manufactured homes, including leasehold properties.
“To facilitate lending for manufactured homes in projects, we have clarified policies to resolve inconsistencies related to when a manufactured home must be submitted to the Project Eligibility Review Service (PERS),” the update said. It emphasized that manufactured homes in cooperative projects “remain ineligible project types and cannot be delivered to Fannie Mae.” This policy is effective immediately.
There is also a chapter on valuations. Fannie Mae partners with fellow GSE Freddie Mac to update requirements regarding “the appraisal report’s market area analysis and implementing standardized definitions for the terms ‘neighborhood’ and ‘market area’.” Fannie is urging sellers to implement these changes immediately, but they should be in effect by February 2025.
Finally, the update aims to clarify responsibilities when cases of mortgage fraud are discovered.
“Sellers and servicers are responsible for preventing, detecting and reporting mortgage fraud,” the update said. “Sellers and servicers are reminded that they must have policies and procedures in place to ensure the integrity of information and processes at every stage of a mortgage’s life cycle, from application to servicing.”
For sellers or administrators who have not yet met this requirement, compliance is encouraged immediately but must be completed by March 2025.
