June 3, 2019 – The Art of Underwriting

Challenging Residential Lending To Rethink Risk

Assets as Qualifying Income

Posted on June 3, 2019June 6, 2019 by admin

Asset Depletion, also known as Asset Utilization or Asset Amortization is the creation of an income stream from specific asset types to use as qualifying income. It is designed for borrowers with substantial and seasoned liquid funds. This income source does not meet Appendix Q standards and therefore, must be categorized Continue Reading

Fannie Mae only requires you to document sufficient funds for closing and reserves. You do not have to paper trail the funds into escrow to ensure they came from the verified accounts (B3-4.2-01: Verification of Deposits and Assets 04/25/2017). Non-Agency investors may not explicitly address this topic or will defer to Fannie Mae. Therefore, if guidelines do not specify otherwise, you should be able to apply this policy to jumbo loans.

Fannie Mae recently provided clarification on their policy for eligible borrowers to address the DACA (Deferred Action for Childhood Arrivals) program. If a borrower has an unexpired DACA status and meets all other requirements, they are eligible for financing. Click Here for the complete update on Non-U.S. Citizens.