The latest updates to the Fannie Mae Selling Guide for November focus on modernizing special property eligibility and underwriting considerations for leasehold estates, as well as revising project review requirements for properties secured by manufactured homes.
The Selling Guide now includes updated requirements for market area analysis in appraisal reports and standardized definitions in the glossary. Sellers and servicers are also reminded of their responsibility to prevent, detect, and report mortgage fraud.
Specifically addressing leasehold provisions, the GSE has revised eligibility requirements to provide clarity on lease requirements, scenarios involving leasehold estates in projects, and the inclusion of co-ops as eligible property types.
< p>This update includes a definitive list of eligible property types, definitions, exceptions to the leasehold topic, and clarification of provisions related to first-lien enforceability, appraisal, and title insurance for leasehold properties.
For manufactured homes within larger projects, the homeowners association must be the lessee. Certain lease requirements have been updated, including default notifications and options for curing title issues. These provisions will be effective in March 2025.
A project review for manufactured homes, including those on leasehold estates, has been added to the Guide to address inconsistencies related to when a manufactured home requires submission to the Project Eligibility Review Service (PERS). Manufactured homes in co-op projects are still considered ineligible for delivery to Fannie Mae.
In collaboration with Freddie Mac, Fannie Mae has updated requirements related to the Market Area analysis of appraisal reports and implemented standardized definitions for the terms ‘Neighborhood’ and ‘Market Area.’ Sellers are encouraged to implement these changes immediately, with full compliance required by February 2025.
The update also emphasizes the importance of sellers and servicers in preventing, detecting, and reporting mortgage fraud, with compliance required by March 2025 for those not already meeting these standards.