Selling Guide

Published April 1, 2020

The Selling Guide is organized into parts that reflect how lenders generally categorize various aspects of their business relationship with Fannie Mae. To begin browsing, select from any of the sections below. You may also download the entire Selling Guide in PDF format.

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What should the lender do when informed of a change in the borrower’s pay structure due to the pandemic?

Note: This FAQ comes from the published COVID-19, FAQs on Underwriting & General

What should the lender do when informed of a change in the borrower’s pay structure?

If the lender is notified that the borrower is transitioning to a lower pay structure, it must apply due diligence in determining the qualifying income amount.  For example, if an employer lowers a borrower’s base salary, the lender must use the lower amount for qualifying. Or if an employer reduces a borrower’s potential for variable income, for example with a decreased bonus payment plan, additional analysis must be conducted to determine whether the new income amount can be used for qualifying. See B3-3.1-01, General Income Information.

For more information, refer to the published Lender Letter LL-2020-03, Impact of COVID-19 on Originations.

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