Residual Income Updates
Residual income updates are effective for all new loan applications dated on or after June 18, 2021.
Residual income based on family size will be increasing.
|
Family Size |
1 |
2 |
3 |
4 |
5 |
|
New Requirement |
$2,000 |
$2,500 |
$3,000 |
$3,300 |
$3,500 |
|
Existing Requirement |
$1,000 |
$1,680 |
$2,025 |
$2,280 |
$2,365 |
|
Over 5 |
Add $150 for each additional family member up to 7 (no change) |
||||
Additional Updates and Clarifications
The following clarifications are effective immediately.
- Cash-out Refinance transactions
- Updated to permit 1- to-4 unit properties (previously 1- to 2-units) (SmartEdge)
- Continuity of Obligation updated to clarify that time held in a limited liability company (LLC) may be counted towards the borrower’s six month requirement. Ownership must be transferred out of the LCC and into the name of the individual borrower(s) in order to close the transaction.
- Clarified that IRS Tax Return Transcripts and a Record of Account must be obtained prior to closing (SmartEdge).
- Clarified that large deposits do not need to be sourced on refinance transactions.
- Clarified that for self-employed borrowers, verification of the existence of the business is required on SmartEdge and SmartSelf products.
Please reference the Smart Series Product Profiles and Smart Guide in the NewRez Lending Library for the changes outlined in this announcement.