GTG Weekly Guideline Alert 2026-10-19

Three must-knows this week, plus lender notes and watch dates:

• Fannie DU 12.1 changes are here (release notes posted Oct 14). Nov 14 job rule: borrowers employed by a family member, the seller, the agent, or another party to the transaction who are paid a salary need 12 months at that same job (was 3 months current job + 12 months total history) — applies to DU casefiles first created on/after Nov 14. Nov 13: the DU occupancy red flag gets sharper (also reviews rental-management history); if it fires, the lender must document how occupancy was verified or the loan becomes investment. Nov 30: older “enhanced” DU Findings HTML/PDF versions retire. Dec 2: verbal VOE required for borrowers using Schedule K-1 income with less than 25% ownership, applications dated on/after Dec 2 (SEL-2026-09; no VOE if rental income is the only K-1 income). Dec 11: DU messages align with the October Selling Guide changes (looser verbal VOE methods; income continuance measured from application date). LO action: flag family/seller/agent-employed salaried borrowers for the 12-month rule on DU casefiles created on/after Nov 14; document occupancy verification when the occupancy flag fires; pull current enhanced Findings before Nov 30; order verbal VOEs for K-1 under-25% ownership applications dated Dec 2+. (DU/AUS library)
• Rental income: lenders are adopting Fannie’s new rules early (required for applications dated Dec 1, 2026 or later, SEL-2026-08). Averra adopted for DU loans Oct 15 (Memo 2026-076); Nations Direct similar; Kind briefed brokers Oct 19. Rules: departing-residence rent from the 1007/market rent report, never a lease; borrowers with under 12 months landlord history need 6 extra months of PITIA reserves; Averra market-rent options are an MLS report with 3+ comps or a Zillow Rent Zestimate Report PDF; one existing ADU’s rent can count on purchase/limited cash-out (max 30% of total qualifying income); short-term rentals OK if legally permitted, qualify off long-term 1007 rent; new leases (within 2 months of application) on properties not on the last tax return need 6+ month terms, first rent due by the first mortgage payment, tenant not family/party to the deal. LO action: underwrite to the early-adopter rules now — Averra DU (from Oct 15), NDM, Kind; use the 1007/market rent report for departing-residence rent, never a lease; document the ADU, short-term-rental, and new-lease conditions. (rental income library)
• UAD 3.6 starts Nov 2 (lenders not ready can request a one-time exception to May 2027; FHA still optional). Newrez began accepting the new format Oct 19. PRMG updated its appraisal guidelines and appraisal transfer policy Oct 14. Arc Home has a new transferred-appraisal policy effective now. LO action: confirm the lender’s accepted format BEFORE ordering; follow PRMG’s updated appraisal and transfer guidelines and Arc Home’s new transferred-appraisal policy. (appraisals library)

Lender notes: UWM October deadlines (owner-occ refis CD out Oct 22 / close Oct 26; purchases and non-owner refis CD out Oct 27), One-Time Close training requirement, CA co-signer notice at closing, Bullseye 90 through Oct 30; Averra ARM overlays removed, investor-refi ACE waivers on LPA (75% rate/term, 60% cash-out), multi-party/lender-paid temporary buydowns; PRMG Update 26-47 (homebuyer education before closing for first-time buyer programs, FHA excess land, Medical Professionals change, NHF co-signers); Arc Home lock extension fee now 4 bps/day (was 2); Spring EQ free appraisals on home equity + 75 bps off DSCR through Oct 31; Advantage Credit SSN corrections now by email only to ccs@advcredit.com (no more phone/chat fixes).

Watch dates: Oct 25 LPA score messages (VantageScore must get Accept; no mixing score types; condo Not Eligible messages will state why) · Nov 6 last day for feedback on FHA draft property rules (INFO 2026-22) · Dec 6 Freddie condo flood rules (Bulletin 2026-14) · Jan 1, 2027 FHA new score models, lowest score controls (ML 2026-11) · Feb 3, 2027 Freddie asset income required (Bulletin 2026-10) · 2027 loan limits not out yet (UWM honoring $847,440 1-unit conventional/VA).

Topics: DU/AUS, rental income, appraisals

Full topic references: LO Library · Alert archive