MPF Announcement 2023-13

MPF Xtra^® Selling Guide Updates

Effective Date: Immediately (unless otherwise noted)

Fannie Mae recently published SEL-2023-01, which covers the below referenced topics that are applicable to loans sold under the MPF Xtra product:

• Cash-out refinance eligibility: Updates made to the eligibility policy for cash-out refinances. The requirements require that any existing first mortgage being paid off through the cash-out refinance be at least 12 months old as measured from the note date of the existing loan to the note date of the new loan.

Effective: PFIs are encouraged to implement these changes immediately but must do so for all cash-out transactions with note dates on or after April 1, 2023.

NOTE: PFIs are to maintain all documentation used in the origination in the mortgage file AND if the loan is chosen for review in QC, a requirement will be to provide reliable documentation utilized during underwriting to establish the 12 months seasoning requirements of the loans being refinanced.

• Enhancements to support borrowers with nontraditional credit: Updates made to the policy regarding the DU loan casefiles for risk assessment when no borrower has a credit score. DU will apply the requirements outlined on the announcement which have been updated for new casefiles created effective on or after December 11, 2022.

Miscellaneous updates

• The Fannie Mae Selling Guide was modified to reflect changes to LLPAs announced in LL-2023-01.
• The Fannie Mae Selling Guide was updated to clarify that the lender may attempt to resolve the reason for ineligibility and resubmission in accordance with Selling Guide requirements.

To gain a full understanding of these topics, PFIs should review the entire Fannie Mae Announcement and any applicable Fannie Mae Selling Guide chapters, forms, or exhibits noted in the announcements.