Monthly roll-up – October 2026

September in review. Three big items heading into Q4 — plus the month’s other key updates below.

• VantageScore 4.0 priced like FICO on conventional (eff. Oct 1). Fannie Lender Letter LL-2026-06 reissued Sep 30 — the old VantageScore haircut is gone. UWM dropped its adjuster Sep 30; Pennymac Oct 1.
• DU 12.1 live (Sep 25). Update your workflows for the new Findings format before the older enhanced reports sunset Nov 30.
• VA collections: 5% of balance ÷ 12 (Handbook Change 47, Aug 25). Unpaid non-medical collections with no payment plan now count at 5% of the balance divided by 12 as the monthly payment — a $6,000 collection is $25/mo instead of $300/mo. LO action: re-run VA files declined on debt ratio. Medical collections still excluded entirely; VA only.
• PMI-cancellation servicer outreach rule. Servicers must proactively contact borrowers about PMI cancellation rights — watch for client questions on escrow statements.
• SB 296 disabled-veteran property tax break (eff. Jan 1, 2027). New California tax exclusion for disabled veterans — flag for qualifying purchase clients.

1. UAD 3.6 appraisal mandate — Nov 2, 2026

UAD 3.6 becomes mandatory for new UCDP submissions on Nov 2, 2026. Expect 1–3 extra days of turn time, especially early, and appraisal fees expected 10–20% higher (not yet observed). Most lenders are flipping to the new format early: PRMG is already on the new format for conventional orders (Appraisals@prmg.net); Nations Direct flips Oct 12. FHA accepts the new format optionally (INFO 2026-23, Oct 1) but doesn’t require it yet. Full topic: appraisals.

LO actions: set expectations on every purchase, warn borrowers on fees, order early.

2. Fannie departing-residence / rental-income rules — Dec 1, 2026 application date

Fannie SEL-2026-08 pushes the departing-residence rules to applications dated Dec 1, 2026 or later (moved from Nov 1). Market rent from the 1007 replaces the lease, with a 75% haircut — and positive rent only offsets PITIA unless the borrower has 12 months of landlord history on tax returns (then it counts as income). Move-up buyer trap: departing PITIA $3,200 vs $3,000 market rent = $950/mo DTI shortfall. Second punch: borrowers without 12-month landlord history need 6 extra months of departing-home PITIA in reserves ($19,200 on that example). Full topic: rental income.

LO action: re-run every live preapproval with a departing residence under December math now.

3. Credit scores — VantageScore 4.0 open on conventional

VantageScore 4.0 is open on conventional and — since Oct 1 — priced on the same LLPA chart as FICO (Fannie LL-2026-06 reissued Sep 30; UWM dropped its adjuster Sep 30, Pennymac Oct 1). One score model per loan for all borrowers; manual underwrites stay Classic FICO. FHA doesn’t take VantageScore until case numbers on/after Jan 1, 2027 (FICO 10T arrives then too). Full topic: credit scores.

LO action: pull both scores, price both, use whichever wins.

Watch dates: Oct 12 Columbus Day (no rescission/funding) · Oct 25 Freddie LPA new credit score messages · Nov 2 UAD 3.6 mandatory for new UCDP submissions · Nov 30 DU older enhanced Findings reports sunset · Dec 1 Fannie rental income rules · Jan 1, 2027 SB 296 disabled-veteran tax break, FHA takes VantageScore 4.0 and FICO 10T · Feb 3, 2027 Freddie asset income formula required.

Topics: appraisals, rental income, credit scores

Full topic references: LO Library · Alert archive