Conventional Loans: Fannie Mae and Freddie Mac 80% AMI Income Limits Changes
Conventional 80% Area Median Income (AMI) qualifying income limits for all Minnesota counties are changing.
- 80% AMI income limits in three counties are decreasing (Chippewa, Houston, and Rice)
- 80% AMI income limits are increasing in the remaining 84 counties.
Fannie Mae Implementation Timing:
- The 2020 income limits are effective for loans with DU initial run dates on or after June 20, 2020.
Freddie Mac Implementation Timing:
- Automated underwritten loans
In counties where the income limits decreased, if you had an LPA Accept recommendation prior to July 12, 2020 (even if re-run on/after July 12) the more generous 2019 limits still apply.
In counties where the income limits increased, the more generous 2020 limits apply even if you had an LPA Accept recommendation prior to July 12.
- Manually underwritten loans
Use the 2020 limits for any loans with application received dates (i.e. initial 1003 date) on or after July 12, 2020.
Note: The Minnesota Housing Commitment system cannot automatically determine whether the borrower is under the 80% AMI limit. Consequently, the system may not automatically generate the lowest possible rate for your borrower if their loan qualifying income is between the old and new income limits.
How do the 80% AMI income limits impact conventional loans?
Borrowers with loan qualifying income at or below the 80% AMI limit are eligible for:
- A lower interest rate
- Less expensive (charter rate) mortgage insurance
- The Upfront Paid Mortgage Insurance (UPMI) option
How can I tell if my borrower is under the 80% AMI income limits (based on loan qualifying income)?
- Go to our Conventional Income Limits document
- Find the income limit table applicable for your borrower
- Find the row listing the 80% AMI limit for the county where the property is located
How can I make sure my conventional borrowers get the lowest rate they are eligible for?
- Follow the steps above to determine whether your borrower is above or below 80% AMI using the Conventional Income Limits document.
- If the borrower’s loan qualifying income is at or below 80% AMI, compare the rate the system is generating to the lower tier rate on the Minnesota Housing rate sheet.
- If the system did not generate the lower tier rate, contact the Partner Solutions Team at email@example.com for help locking your loan at the lower rate.