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Breaking News for Self Employed Borrowers due to Covid-19 Pandemic
There was some breaking news this week from Freddie Mac ( the Government-owned backer of many conventional mortgages ) in regards to what documentation Self Employed Borrowers will now need to provide to a mortgage lender to prove their income is still sufficient to qualify for a mortgage.
As most everyone knows, almost all mortgages that are still available in the US post-COVID shutdown are now backed by one of the biggest agencies of the Federal Government, Freddie Mac. Other agencies including Fannie Mae, FHA, VA, and the USDA will most likely follow suit if they haven't already updated their guidelines. This change means almost all mortgage lenders now need to adhere to these new policies if they want their loans they originate to be eligible to be purchased by any of these entities. Freddie Mac came out on 5.28.2020 with its latest bulletin. Part of their updated guidance includes what lenders will now need to ask for from any borrowers seeking a mortgage if they are self-employed.
Among the changes now required are below:
Minimum additional documentation requirements
At a minimum, the following additional documentation must be obtained when assessing income from self-employment:
An unaudited year-to-date (YTD) profit and loss statement that ... more
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