Effective for new loan applications dated on and after March 27, 2026, Pennymac is implementing several changes to our Non-QM program guidelines, including but not limited to the guidance outlined below:
All Non-QM Programs (A-, A, A+, and DSCR)
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Credit & Documentation:
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The age of documentation requirement has been increased to 120 days (previously 90 days). This includes credit reports, employment, income, and asset documents.
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Private party Verifications of Mortgage (VOMs) and non-institutional Verifications of Rent (VORs) are now allowed with additional documentation.
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Assets:
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Ownership requirements for borrowers using business assets for qualification purposes have been reduced to 25% ownership (previously 50%).
A-, A, A+ Programs
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Income & Assets:
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The large deposit threshold has been increased to 100% of monthly income (previously 50%).
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The business bank statement program has been updated to allow a minimum of 25% ownership (previously 50%).
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Non-Arm’s Length Transactions:
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Non-arm’s length transactions are now eligible for primary residence purchase transactions, subject to the following restrictions:
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Renter purchasing from landlord: Requires 12 months of canceled checks evidencing on-time payments. A VOR is not acceptable.
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Purchase between family members: Requires a fully executed gift letter if a gift of equity is involved (the equity credit must be on the CD), verification of earnest money, and a 12-month mortgage history on the existing mortgage to confirm it is not a foreclosure bailout.
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Credit:
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Credit inquiry guidance has been updated: If new credit was extended, a new credit score does not need to be obtained. If a new report or score is obtained, the following is required:
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The new score must be used for qualification purposes.
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The new payment and terms must be included in the DTI in all cases.
DSCR Program Only
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Cash-Out Refinances:
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Ownership seasoning has been reduced to a minimum of 6 months (previously 12 months), measured from the original acquisition date of the property to the note date of the subject transaction.
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Credit:
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Credit inquiry guidance has been updated: If new credit was extended, a new credit score does not need to be obtained. If a new report or score is obtained, the new score must be used for qualification purposes.
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Housing payment history for other REO has been updated as follows:
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For mortgages appearing on the credit report or other documentation in the file, a
0x30x12 history is required.
- Mortgages not appearing on the credit report or other documentation in the file do not
require validation. The mortgages must be included in the REO count and UPB limit.
Refer to the updated product profiles for complete requirements.
Please contact your Sales Representative with any questions.