Loans that combine construction and long-term financing into a single transaction can only be pooled or delivered to Fannie Mae once construction is complete and the conditions of the construction loan have been converted to permanent financing. When a limited cash refinancing transaction is used, the borrower must have complied legally with the lot before receiving the first advance of the interim financing of the construction. The borrower uses the proceeds of construction financing to pay the existing pledge fees on the land and finance the construction of the property. This type of transaction is not a “real” limited refinancing, in which the borrower refinances a loan used to purchase a completed property; However, all other requirements apply to limited cash refinancing. See B2-1.3-02, Limited Cash-Out Refinancing Transactions and Limited Refinancing Requirements for Cash Distributions in B5-2-03, Manufactured Housing Underwriting Requirements. The credit report was signed through the DU and received an “Approval/Eligible” recommendation. Manual instruction is not allowed. Note: The initial construction credit amount and the modified final amount of the loan notified to Fannie Mae must meet the current credit limits. The lender must include the corresponding conversion document in its loan application package.
When modified building credit driver documents are registered, the lender must also contain a copy of the original documentation signed by the borrower. For manually underwritten loans: if the recalculated DTI (based on the change in the interest rate or loan amount) does not exceed 45%, the loan must be rewritten with updated information to determine if the loan is still eligible for delivery. the purchase price (the sum of the construction costs and the sale price of the lot) or, as described in the table below, rewritten tolerances can be applied if the interest rate or loan amount has been changed. (All other changes need to be rewritten.) Option 1: A construction credit driver must be used to modify Fannie Mae`s unique instrument used for the permanent mortgage. The driver must indicate the construction loan conditions and the provisions relating to the construction of the driver must be null and void at the end of the construction period and before the sale of the permanent mortgage to Fannie Mae. Since the permanent mortgage cannot be sold before amortization begins, a lender must modify the work lender and the accompanying single instrument if construction is completed sooner or later than planned.