In PennyMac’s continuing effort to ensure guidelines support current lending conditions, effective immediately, PennyMac is updating overlays for VA loans as follows:
|Derogatory Credit: VA Full Doc|| || Follow applicable VA guidelines, however PennyMac interprets VA guidelines as follows: |
Chapter 7 BK
Chapter 13 BK
|Maximum Cash-Out: VA Full Doc||Cash-out funds, including non-purchase money second liens are limited to $100,000.||Follow applicable VA guidelines. Note: VA requires the subject property to have a lien secured against it, when completing a cash-out refinance. Cash-out of a free and clear property is not allowed.|
|Borrower Eligibility: VA IRRRL||The borrower must be the same except for the removal of a non-veteran spouse due to death or divorce (provide supporting documentation indicating event occurred at least 12 months before the time of application).||Follow VA guidelines for borrower removal. Removal is no longer restricted to death or divorce.|
|Mortgage and Housing History: VA IRRRL|| ||Must have a mortgage history of 0 x 30 for the last 3 payments. Note: Due to GNMA pooling rules, all loans being refinanced into an IRRRL must have a minimum of 6 payments. See PennyMac Announcement 16-42 for details.|
Please contact your Sales Representative with any questions.