Selling Guide

Published June 02, 2021

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What are the requirements for seasoned loans?

Seasoned Loans

Seasoned loans are loans that are more than one year old from the first payment date to:

  • the loan purchase date for whole loans, or
  • the pool issue date for MBS loans.

Note: Fannie Mae restricts purchase or securitization of seasoned ARM loans to those that are delivered as a negotiated transaction. See B2-1.4-02, Adjustable-Rate Mortgages (ARMs) for additional restrictions on LIBOR ARM loans.

The table below provides the requirements for seasoned loans.

Seasoned Loan Requirements
  Seasoned loans may not be included in Fannie Majors MBS pools. See Chapter C3–6, Pooling Loans into Fannie Majors.
  The lender’s underwriting of the borrower’s credit and the security property for a seasoned loan must meet the current requirements set out in this Guide.
  The borrower has not had a 30-day delinquency in the 12-month period that precedes the lender’s delivery of the loan to Fannie Mae.
  If the current borrower assumed the loan and has owned the property for less than 12 months, he or she must have had no 30-day delinquency since purchasing the property.
  The borrower’s ability to pay must not have changed adversely.

Note: If the loan has been assumed, the new borrower’s credit must be fully documented and underwritten in accordance with the same standards used for new loans, unless the transfer of ownership was one of the exempt transactions that legally prohibit a credit review. See the Servicing Guide for an explanation of exempt transactions.

  The current value of the property cannot be less than the original value. If the lender is unable to provide this warranty, the loan is not eligible for delivery to Fannie Mae by the lender except on a negotiated basis.
  The status of the title to the property must not have been affected adversely.
  The loan must satisfy Fannie Mae’s current applicable mortgage eligibility requirements.
  If the loan is secured by a unit in a condo, co-op, or PUD project, the project must satisfy Fannie Mae’s current applicable project eligibility requirements.
  If the loan was modified prior to delivery to Fannie Mae, it must be a modification that is eligible for delivery in accordance with the requirements of this Guide as described below under Modified Mortgages.
  Except to the extent otherwise expressly permitted in the Selling Guide A2-3.2-01, Loan Repurchases and Make Whole Payments Requested by Fannie Mae), or the Servicing Guide with respect to the redelivery of loans to Fannie Mae, the loan being delivered cannot be one that was required to be repurchased by a secondary market investor, government-sponsored enterprise, or private institutional investor other than Fannie Mae for any documentation, underwriting, property valuation, or other deficiencies and/or issues with the property (including project eligibility if the property is in a condo, co-op, or PUD project), borrower credit or other deficiencies or for any other reason.

For additional information, see B2-1.5-02, Loan Eligibility.

 

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