Continuing a trend of tighter lending standards that began in 2007 with the housing downturn — including lower debt-to-income (DTI) and loan-to-value ratios, higher FICO scores and rising delivery fees — Fannie Mae has announced further program changes that will go into effect on Dec. 13.

The biggest change is beneficial to buyers who do not have enough of their own funds to pay for the minimum 5% required for the downpayment, closing costs and financial reserves. Buyers can now use gifts from their families, employer assistance, Community Seconds and other sources to pay this amount.

The rule on gifts is applicable to principal residences in one- to four-unit buildings with loan-to-value ratios of 80% or less.

Fannie Mae has actually been following this policy on gifts for some time, but this is the first time that it has been published by the agency.

In an additional update to its loan purchase requirements, Fannie Mae said that unsecured loans from a relative (including a spouse), domestic partner or financee or fiancé are no longer an acceptable source of funds for the borrower’s minimum contribution to any transaction.

Fannie Mae also is changing current policy that permits the lender to exclude from the debt-to-income ratio the buyer’s existing mortgage if there are 10 or fewer payments remaining. These payments will now be required to be included in the DTI ratio along with all other revolving debts.

Lenders are also being required to use the verified monthly payment in determining the DTI ratio. If the payment is not on the credit report and cannot be verified, the lender must use 5% of the outstanding balance to determine the qualifying monthly payment for underwriting purposes.

In a move to tighten requirements, Fannie Mae last December lowered the percentage of income borrowers were allowed to pay on debt from 55% to 45%.

Freddie Mac has said that it has been looking at the possibility of initiating similar policies, and housing finance analysts at NAHB say that such a move is likely.

For the Fannie Mae update on its selling guides — Announcement SEL-2010-13 — click here.

For the past several years, NAHB has been engaged in a dialogue with Fannie Mae, Freddie Mac and the Federal Housing Finance Agency to address the impact of tighter guidelines on borrowers, and it will continue to work with them on this concern.

For more information, e-mail Steve Linville at NAHB, or call him at 800-368-5242 x8597.