Selling Guide

Published August 29, 2017

  • Selling Guide: Main Page
    • Part B: Origination Through Closing
      • B5: Unique Eligibility and Underwriting Considerations
        • B5-5: Community Seconds, Community Land Trusts, DU Refi Plus and Refi Plus, and Loans with Resale Restrictions
          • B5-5.2: DU Refi Plus and Refi Plus Mortgage Loans
            • B5-5.2-04: DU Refi Plus and Refi Plus Closing, Pricing, and Delivery (10/24/2016)

B5-5.2-04: DU Refi Plus and Refi Plus Closing, Pricing, and Delivery (10/24/2016)

This topic contains information on DU Refi Plus and Refi Plus closing, pricing, and delivery requirements, including:

Escrow Account Requirements

Lenders must comply with the provisions of B2-1.4-04, Escrow Accounts, for all DU Refi Plus and Refi Plus mortgage loans.

Resubordination

Lenders must resubordinate any existing subordinate liens (that are not simultaneously refinanced with a new subordinate lien) in order to preserve the first lien position of the new loan. If Fannie Mae owns the loan secured by the subordinate lien, the servicer of that loan must cooperate fully with the originator of the refinance to effect a resubordination as quickly as possible.

The GSEs, in conjunction with representatives of the American Land Title Association, developed standard form subordination agreements that lenders may use with refinances and modifications to resubordinate subordinate liens. Lenders that elect to use these forms will be responsible for ensuring their enforceability and compliance with applicable state laws and local recording requirements. To access the form, see Special Purpose Documents on Fannie Mae's website.

Cash Back to the Borrower at Closing

For DU Refi Plus and Refi Plus, the borrower may receive cash back at closing of no more than $250. Any excess cash representing the difference between the estimated and the actual payoff of the original loan plus closing costs and prepaid fees that is more than $250 must be applied as a principal curtailment to the new mortgage or a reduction in the actual loan amount.

Lenders may provide borrowers with certain incentives to refinance, however, those incentives are not included in the cash back to the borrower at closing calculation. See B3-4.1-02, Interested Party Contributions (IPCs) (Lender Incentives for Borrowers), for additional information.

Loan-Level Price Adjustments (LLPAs)

The LLPAs that are applicable to DU Refi Plus and Refi Plus mortgage loans are detailed in the Refi Plus Mortgages Only—LLPA Matrix.

Delivery Data Elements

For DU Refi Plus and Refi Plus mortgage loans, lenders must provide all applicable loan delivery data elements and SFCs.

Income must be reported to Fannie Mae for all DU Refi Plus and Refi Plus mortgage loans at the time of loan delivery even for those Refi Plus transactions where there is no maximum DTI ratio. For Refi Plus mortgage loans with payment changes less than or equal to 20%, the lender must report the stated income on the loan application (if any). If the borrower does not state any income and the lender uses the reserve alternative option (described in B5-5.2-02, DU Refi Plus and Refi Plus Underwriting Considerations) as the income source, the lender must deliver the equivalent of the new monthly payment (PITIA) as the “Monthly Income” data element (Sort ID 291).

Note: Lenders must report gross monthly rent in the loan delivery data for all investment properties and two- to four-unit principal residence properties, regardless of whether the borrower is using rental income to qualify for the mortgage loan. Refer to A3-4-02, Data Quality and Integrity, for additional information.

Refer to the ULDD Quick Guide — Guidelines for Home Affordable Refinance Programs-HARP, and ULDD Quick Guide — Special Feature Codes and New Required Fields for additional information.

Whole Loan Committing of Loans with LTV Ratios Above 105%

Separate committing is required for DU Refi Plus and Refi Plus loans with LTV ratios above 105% — loans may not be delivered against standard whole loan commitments. Specific “Refi Plus” products are available in Fannie Mae’s whole loan committing application.

Pooling Loans with LTV Ratios Above 105%

DU Refi Plus and Refi Plus mortgage loans with LTV ratios above 105% may be delivered into existing MBS contracts and use the same base guaranty fees as those used for the lender's standard conforming mortgage loans. However, these loans can not be included in TBA-eligible MBS but must be included in pools specifically created for DU Refi Plus and Refi Plus loans with LTV ratios above 105%.

Furthermore, lenders may deliver DU Refi Plus and Refi Plus loans with LTV ratios above 105% into the respective Fannie Majors pool specifically available for these loans. Due to the separate pool prefixes required for loans with LTV ratios above 105%, these loans may not be delivered into standard TBA-eligible Fannie Majors pools.

Delivery Deadlines

DU Refi Plus and Refi Plus whole loans must be purchased by Fannie Mae on or before June 30, 2018, or in MBS pools with issue dates on or before June 1, 2018.

Related Announcements

The table below provides references to the Announcements and Release Notes that have been issued that are related to this topic.

Announcements and Release Notes Issue Date
Announcement SEL-2016–08 October 24, 2016
Announcement SEL-2015–06 May 26, 2015
Announcement SEL-2013–04 May 28, 2013
Announcement SEL-2013–03 April 9, 2013
Announcement SEL-2012–14 December 18, 2012
Selling Notice November 19, 2012
Announcement SEL-2012–10 October 2, 2012
Announcement SEL-2012–06 June 26, 2012
Announcement SEL-2012–04 May 15, 2012
Announcement SEL-2011–13 December 20, 2011
Announcement SEL-2011–12 November 15, 2011
Announcement SEL-2010–13 September 20, 2010
Announcement 09–37 December 30, 2009
Announcement 09-26 July 24, 2009
Announcement 09-23 July 1, 2009
DU 7.1 June Update June 5, 2009
Announcement 09-13 May 11, 2009
Announcement 09-04 March 4, 2009