08/27/2026 - Conventional and Government August Updates

Effective immediately for new applications and loans in the pipeline unless otherwise noted below.

Conventional

Conforming Overlays – New

Income Commencing after Note Date/Future Income

• FNMA Option 1/FHLMC Option 2 requiring a paystub before delivery.
• Post-close paystub required 30 days after the Note date. If paystub will be obtained greater than 15 days from the Note date, Capital Markets must be engaged to delay delivery which may require the rate lock to be extended
  

Assignment of Contract

Assignment of sales contract is not permitted.

Government

VA Guidelines – 3A.15(b) Underwriting Joint Loans

• Updated policy to align with VA Circular 26-22-09, that lenders with automatic authority have VA’s prior approval to close a VA guaranteed loan made to the following:
  • Two or more Veterans who are all using entitlement; or
  • A Veteran who has been rated unable to manage financial affairs (one for whom VA has appointed a fiduciary).
• Added additional joint loan scenario to 3A.15 Joint Loans.
  • The Veteran and a Non-Borrowing party who is to be on title but is not the Veteran’s spouse.

DU for Government – VA Version 4.1

Effective for all new VA loan casefiles on and after August 22, 2026, VA Version 4.1 has been implemented.

• Existing casefiles created under VA v4.0 will continue to be underwritten using v4.0.
• VA v3.1 is now retired but will still be viewable for loan applications and DU finding reports. However, any updated underwriting recommendations after August 22, 2026, will require the creation of a new loan case file and resubmission to DU.

Reference:

• Conventional Guidelines > Conventional Underwriting Guidelines > Conventional > Conventional Conforming Overlays
• Government Guidelines > Government Underwriting Guidelines > VA Underwriting Guidelines > VA Underwriting Guide

This memo is issued as interim guidance to address guidelines ahead of the formal update in RezGuide. Until the updates are made, this memo serves as the controlling guidance and should be referenced accordingly by underwriting, quality control (QC), and any other affected teams. Questions on interpretation or application of this guidance should be directed to your manager.