MPF Announcement 2024-18

MPF Xtra – HomeReady Product Enhancements

Effective Date: Immediately (unless otherwise noted)

Fannie Mae published Lender Letter LL-2024-01, announcing a temporary enhancement to their HomeReady product. This enhancement includes a $2,500 loan-level price adjustment credit for very low-income purchase borrowers (VLIP) that can be used for down payment and closing costs.

 Originators must provide the $2,500 credit to the borrower, the full amount of the credit must be provided directly to the borrower through the transaction, such as being applied to down payment and closing costs, including escrows and mortgage insurance premiums.

 The credit will be reimbursed through the standard LLPA credit process on the MPF Funding Date.

Originators must ensure:

• the Borrower and loan meets the eligibility requirements outlined in the Lender Letter and Selling Guide, such as:
  • The loan must be an eligible HomeReady purchase loan (underwritten in Desktop Underwriter® (DU®) or manually underwritten).
  • The borrower(s) must have total qualifying income less than or equal to 50% of the applicable area median income (AMI) limit for the subject property’s location.
• the loan must be delivered using the following Special Feature Codes:
  • 900 HomeReady loan, and
    
  • 884 HomeReady VLIP LLPA Credit.
  • For additional DU and delivery instructions, refer to the HomeReady VLIP LLPA Credit Job Aid.

Effective: This credit will be effective for loans delivered on or after March 1, 2024 to February 28, 2025.

 Fannie Mae also announced enhancements to their Best Efforts Commitments for HomeReady loans. PFIs are reminded they must refer to eMPF® to view the pricing and should use the MPF Xtra Best Efforts FX 30 - Fixed 30 Yr HomeReady product.

 To gain a full understanding of these topics, PFIs should review the entire Fannie Mae Lender Letter plus any applicable Fannie Mae Selling Guide chapters, forms, or exhibits noted in the announcement.