25-124: Non-QM Program Updates and Clarifications

12/01/2025
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Pennymac is updating guidance and has clarified existing guidance for our Non-QM program, effective with new applications dated on or after December 01, 2025. These updates and clarifications apply to all Non-QM products and include, but are not limited to, the following:

Number of Financed Properties

  • Update: No borrower or guarantor may have more than 20 financed properties (previously limited to 10 properties).
  • New: No borrower or guarantor may have more than 10 properties or $7.5M UPB serviced by Pennymac.

Housing Payment History Validation

  • Clarified: Housing payment history for all REOs and rental payments evidencing payment activity must be validated for the most recent 24 months, regardless of whether the borrower/investor is on the note or vested on title.
  • New: The credit report may now be used to validate housing payment history.

Condo Project Review

  • New: Limited condo project reviews are now an eligible condo project review type.
  • New: Condo Project Manager (CPM) Fannie Mae approved projects are now eligible
  • New: For all condo project review types, a new HOA questionnaire and Condominium Project Certification is required for each loan.
  • New: Condo project review waivers are now eligible for certain project types.
  • Refer to the product profiles for complete project eligibility and project review requirements.

Escrow Waivers

  • Update: Credit score, LTV, and reserve requirements no longer apply for escrow waiver eligibility.
    • Escrow waivers are subject to an LLPA adjustment. Refer to the rate sheet for program-specific requirements.
  • For the A-, A, and A+ Programs: HPML loans require an escrow account for property taxes, hazard insurance, and flood insurance.

Single Appraisal Transactions

  • New: A Freddie Mac Loan Collateral Advisor® (LCA) score greater than or equal to 2.5 is now eligible to be used as a satisfactory valuation assessment.
    • If a Collateral Underwriter (CU) or LCA score is used as the secondary valuation, the Submission Summary Report (SSR) must be included in the file.
    • If both CU and LCA are run, they must be done at the same time, only one needs to have a passing score.

Refer to the product profiles for complete program requirements. Please contact your Sales Representative with any questions.