Additional documentation may include, but is not limited to, a year-to-date balance sheet, month-to-month or quarterly trending analysis, and/or additional depository account statements. Please visit our Single-Family Here to Help page for the latest guidance and policy information related to COVID-19. Can I use the requirements for income while on temporary leave? If the trend was declining but has since stabilized and there is no reason to believe that the borrower will not continue to be employed at the current level, the current, lower amount of variable income must be used (i.e., the monthly year to date income amount). Execution, Learning Can the lender use the year-to-date profit and loss statement to calculate qualifying income? For example, if an employer lowers a borrower’s base salary, the lender must use the lower amount for qualifying. The PPP is a loan issued by Small Business Administration lenders under the CARES Act. If the COVID-19 pandemic has caused job loss, income reduction, sickness, or other issues that impact your ability to pay your home mortgage or rent, relief options are available — find details here and take action now.. Learn more. March 24, 2020. For example, for declining variable income, the requirements and guidance for declining income trends in the B3-3.1-01, General Income Information are applicable. The lender can continue to deliver loans with loan application dates prior to Jun. This income is not stable, predictable, or likely to continue and therefore does not meet the requirements in Selling Guide B3-3.1-01, General Income Information; Continuity of Income. Lender Letter 2020-03 requires certain additional self-employment income documentation for all loan applications taken on or after Jun. For example, as stated in Lender Letter 2020-03, if the YTD P&L identifies a significant imbalance between expenses and revenue that could impact the financial stability of the business, additional documentation such as an updated business plan may be required. SUBJECT: SELLING GUIDANCE RELATED TO COVID-19 We continue to work closely with Fannie Mae under the guidance of the FHFA to address the ongoing economic implications and uncertainty related to the coronavirus disease (COVID-19) pandemic and its impacts on Borrowers and ... Age of income and assets documentation Our digital library includes learning modules, videos, frequently asked questions, demos, job aids, guides, and more. If you still have Technical Support questions, Lenders should also include any information or knowledge of any current issues in their analysis of the borrower’s continuance of income source. Fannie Mae's Disaster Response Network has published a guide for renters affected by the coronavirus (COVID-19). No. Fannie Mae's Disaster Response Network has published a guide for renters affected by the coronavirus (COVID-19). A circle with a colored border representing one's progress through a lesson. Fannie Mae Disaster Response Network . How do lenders determine stability of variable income when a borrower has been impacted by COVID-19? Under the mortgage assistance program, the city will use $6.1 million in federal grants and local funds to finance rent and mortgage payments for low to moderate income residents. As reflected in LL-2020-03, self-employed borrowers must provide either a 2020 audited year to date Profit and Loss Statement OR a 2020 unaudited year to date Profit and Loss Statement along with three months business depository account statements. Lenders can continue to waive business income tax returns when the requirements of the Selling Guide are met. An SBA PPP or any other similar COVID-19 related loans are designed to provide short-term relief whereas the payroll, rent/mortgage payments and utilities are ongoing business expenses; therefore, those expenses must be considered in the analysis. However, lenders are not required to obtain a copy of the IRS Form 4868 (Application for Automatic Extension of Time to File U.S. Visit KnowYourOptions.com to learn about our available mortgage assistance and relief options. 11, 2020) that required the review to “support and/or not conflict” with the information presented in the current YTD profit and loss statement. For full details on these temporary flexibilities, read Lender Letter (LL-2020-03) – Impact of COVID-19 on Originations and Lender Letter (LL-2020-04) – Impact of COVID-19 on Appraisals. 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