Good Morning!
When it comes to conventional loans there’s Fannie Mae and Freddie Mac, and basically, that’s it.
Here are some differences between the two that few know about…
1) Lower credit score and some credit dings? Try Fannie Mae. Fannie may now go up to 50% back-end dti on a case by case basis BUT it is still more aggressive with the DU
credit analysis than Freddie.
2) More aggressive additional income calculation? Go Freddie Mac. Freddie DOES NOT require a 2-year average and a YTD calculation for income such as bonus, overtime, tips, etc., Fannie Mae does. Merely most recent year and YTD.
3) Unpaid collections and non-mortgage charge-offs? Go Fannie. Fannie, on a primary SFR ONLY, does not require ANY of them paid off. Freddie Mac might.
4) Non-occupying co-borrowers? Both now allow it. BUT, Freddie REQUIRES a housing history, Fannie Mae does not.
That’s it for today!
Thanks for reading! Have a good day.
Brett