Fannie and Freddie Change ARM Purchase Policies

February 17, 2021
ARM Purchase Policies
Additionally, Freddie Mac clarified when additional info regarding bank accounts needs to be verified.

 

Fannie Mae and Freddie Mac announced that they will no longer be purchasing ARMs based upon Treasury Indices. To be eligible for delivery to the agencies, all CMT ARMs must have application dates on or before Jun. 30, 2021 and delivered by the end of September…Freddie Mac also clarified when additional info regarding bank accounts needs to be verified -- additional documentation is now required only for purchase transactions and when the current balance in an account exceeds the average balance by more than 50% of the sum of the total monthly qualifying income and the amount derived from the asset calculation for establishing the debt payment-to-income ratio. Example: if the current balance reflected on the Borrower’s verification of deposit form is $15,000 and the average balance is $12,000, the source of the $3,000 increase must be verified if the Borrower’s total monthly qualifying income is less than $6,000.