MPF Traditional – Trust Income Eligibility
Effective Date: Immediately (unless otherwise noted within)
The following updates have been made to the MPF Traditional Selling Guide:
- Added a requirement that funds used from a trust for down payment, closing costs, or reserves must be subtracted from the total funds available to determine if the income meets the applicable Selling Guide requirements.
- Clarified the different treatments of variable and fixed trust payments and incorporated documentation requirements for each type.
- Incorporated a requirement that when eligible employment-related assets are liquidated and placed in a trust within 12 months of the loan’s application date, the PFI must comply with the policies in Employment-Related Assets as Qualifying Income.
For additional information see MPF Traditional Selling Guide Section 184.108.40.206 Continuity of Income, 220.127.116.11 Employment-Related Assets as Qualifying Income, and 18.104.22.168 Trust Income.
- MPF Announcement 2023-91