Freddie Mac Asset Depletion: How It Works & Key Requirements
For borrowers who may not have enough traditional income to qualify for the mortgage, Freddie Mac provides an alternative path: converting eligible assets into monthly income using its asset depletion method. This calculated income can be added to other verified earnings and plays a direct role in establishing the debt payment and determining the debt […]
FHLMC Rental Income: Guidelines & Calculation Rules
Rental income plays a crucial role in the mortgage application process, especially when borrowers rely on income from investment properties or rental units to qualify. For lenders, Freddie Mac (Federal Home Loan Mortgage Corporation) provides a comprehensive set of guidelines that dictate how rental income must be verified and calculated in order to ensure underwriting […]
What Are Mortgage Buybacks? Causes, Process & Impact
Mortgage buybacks can be a substantial challenge for mortgage lenders because they can cut into their profits. When a seemingly secure loan sold into the secondary market fails to meet the investor’s or agency’s guidelines, the lender that originated the loan may have to repurchase it. This often results in financial losses and operational strain. […]
FHA Gift Funds: Guidelines & Policy Updates for 2025
In 2025, the Federal Housing Administration (FHA) continues to make homeownership accessible to first-time homebuyers and buyers with limited funds in their savings accounts. One way they do this is by allowing these borrowers to receive financial assistance through gift funds from eligible sources that can cover a portion or all of their down payment […]
What is Day 1 Certainty? Definition, Benefits & How it Works
Repurchase demands, documentation delays, and inconsistent underwriting still challenge even the most efficient lending teams. Day 1 Certainty is designed to fix that. By verifying borrower income, employment, and assets through approved vendors, it offers lenders relief from certain representations and warranties and a faster, cleaner path to loan approval. This guide breaks down how […]
A Simple Guide to Fannie Mae Rental Income Rules
Mortgage underwriting contains complex income qualification standards, especially for rental properties. Fannie Mae, as one of the nation’s leading mortgage purchasers, establishes specific guidelines that lenders must follow when evaluating rental income for mortgage qualification purposes. These standards create consistency, accuracy, and proper risk assessment across the mortgage industry. Understanding these guidelines helps mortgage professionals […]
Fannie Mae gift funds: Your top questions answered
Gift funds can be a valuable tool for helping borrowers meet down payment and closing cost requirements, especially when liquidity is a barrier to homeownership. Fannie Mae provides clear guidance on when gift funds are allowed, who can provide them, and acceptable documentation to ensure compliance. For mortgage lenders, understanding the nuances of gift fund […]
What is loan review? A guide to process & purpose
Loan review is a critical quality control mechanism for financial institutions. This systematic examination process evaluates loan portfolios, identifies potential weaknesses, and ensures regulatory compliance. For banks and credit unions, an effective loan review process represents the difference between a stable loan portfolio and one vulnerable to defaults and compliance issues. This article explores how […]
What Are FHA Compensating Factors? Key Insights for Lenders
FHA loans provide a way to homeownership for Americans who don’t qualify for conventional financing. While these government-backed Federal Housing Administration loans offer flexible qualification standards, they maintain core requirements to manage risk. When borrowers fall short of standard metrics, compensating factors become essential tools in the process. This article examines how FHA lenders can […]