AC-005 COVID-19 Overlays and Desktop Appraisals
COVID-19 Overlays
Self-Employment Income Requirements
- Great News, Fannie Mae and Freddie Mac are retiring the overlays for borrowers with qualifying income derived from self-employment if the most recent federal income tax returns filed are not older than 2020 so lenders can follow standard underwriting guidelines and policies with respect to self-employment income. However, if the most recent federal income tax returns filed are dated before 2020, the underwriter must continue to apply the prior additional documentation and analysis for self-employed borrowers, which remain unchanged and are listed in our Temporary Policies Related to COVID-19 (version 45). Important: Note that the temporary requirements for verification the Borrower’s business is currently operating within 20 days prior to closing continue to apply to all loans using self-employment income to qualify. (30-calendar days required on FHA/USDA/VA loans).
Furlough Borrowers
- Removed guidance for furloughed borrowers; refer to and follow temporary leave income per standard product requirements.
Desktop Appraisals
Fannie Mae and Freddie Mac will be allowing the use of Desktop Appraisals on certain purchase transactions in March of this year. The Form 1004 Desktop requires the use of a floor plan in addition to a building sketch and other exhibits required for traditional appraisals and should adhere to the UAD specification for Form 1004 and must be submitted through the Uniform Collateral Data Portal. UCDP)