Fannie-Mae issued a letter recently with additional requirements for borrowers who are self-employed.
This comes as new regulations continues to emerge as our economy is gripped by the pandemic and it’s impact on businesses. The letter states that the lender more “determine if the borrower’s income is stable and has a reasonable expectation of continuance”.
What lenders are requiring now for self-employment income:
- An audited year-to-date profit and loss statement reporting business revenue, expenses, and net income up to and including the most recent month preceding the loan application date or an unaudited year-to-date profit and loss statement signed by the borrower reporting business revenue, expenses, and net income up to and including the most recent month preceding the loan application date, plus two business depository account(s) statements no older than the latest two months represented on the year-to-date profit and loss statement.
- Two of the most recent depository account statements to support and/or not conflict with the information presented in the current year-to-date profit and loss statement. Otherwise, the lender must obtain additional statements or other documentation to support the information from the current year-to-date profit and loss statement.
Lenders are encouraged to start working on these items with existing loans and soon-to-be loans in their pipelines.
If you are self-employed and have any questions, please reach out to us today.
