Reminder: Fannie Mae and Freddie Mac 80% AMI Income Limits Changes
As a reminder, the Conventional 80% Area Median Income (AMI) qualifying income limits for all Minnesota counties have changed, but some loans may still need to use the 2019 limits (see below).
How does 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 do the new conventional income limits impact Fannie Mae loans?
- Loans with initial DU run dates on or after June 20 must use the new 2020 limits.
- Loans with initial DU run dates prior to June 20 must use the old 2019 limits.
Because our loan commitment system doesn't capture the DU run date, you may need to reach out to the Partner Solutions Team if the system does not generate the correct rate.
How do the new conventional income limits impact Freddie Mac loans?
Freddie offers more flexibility, but this may require you to reach out to the Partner Solutions Team if the system does not generate the correct rate.
- In counties where the income limits increased (all but Rice, Chippewa, and Houston Counties), you can use the more generous 2020 limits even if you had an LPA accept recommendation prior to July 12.
- In counties where the income limits decreased (Rice, Chippewa, and Houston Counties), if you had an LPA accept recommendation prior to July 12 you get to still use the more generous 2019 limits.
- For manually underwritten mortgages, use the 2020 limits for any loans with application received dates (i.e. initial 1003 date) on or after July 12, 2020.
Will the Minnesota Housing Commitment System automatically know which income limit and interest rate apply to my loan?
How can I make sure my conventional borrowers get the correct rate they are eligible for?
- Follow steps on the Conventional Income Limits document to determine whether your borrower is above or below 80% AMI.
- Compare the rate the system is generating to the rate for the borrower’s income tier (above or below 80% AMI) on the Minnesota Housing rate sheet.
- If the system did not generate the correct rate, contact the Partner Solutions Team at firstname.lastname@example.org for help locking your loan at the correct rate.
TIPS to Avoid Common Errors:
- Understand the difference between the Minnesota Housing Eligibility Income and Monthly Qualifying Income.