source:
  type: guide
  id: fnma-sel-b2-1.5-02
  authority: Fannie Mae Selling Guide B2-1.5-02 — Loan Eligibility
  description: Fannie Mae Selling Guide B2-1.5-02 — Loan Eligibility.
  coverage_tier: operative
obligations:
- id: fnma-sel-b2-1.5-02-full
  canonical_id: fnma-sel-b2-1.5-02-full
  section: Fannie Mae Selling Guide B2-1.5-02 — Loan Eligibility
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B2-1.5-02 — Loan Eligibility
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/selling-guide
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-05-25T14:09:57Z'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'B2-1.5-02, Loan Eligibility (06/05/2024) Introduction This topic
      contains information on mortgage loan eligibility requirements, including: Ability
      to Repay Loan Eligibility Requirements Acceptable Loan Terms HOEPA and State
      Higher-Priced Loans Impact of Special Assessments on Maximum Loan Amount Premium
      Pricing Private Transfer Fee Covenants Age of Loan Property Value for Loans
      Sold More than Four Months from Note Date Seasoned Loans Modiﬁed Loans Nonstandard
      Payment Collection Options Ability to Repay Loan Eligibility Requirements The
      following provisions apply to loans with application dates on or after January
      10, 2014. Note: As to any loan for which the original application was made before
      January 10, 2014, but which was assumed on or after January 10, 2014, and subsequently
      purchased or securitized by Fannie Mae, then, for eligibility purposes, the
      application date is considered to be the date on which Truth in Lending Act
      disclosure requirements were triggered with respect to such assumption. Published
      May 6, 2026 208 ATR Covered Loans. An ATR Covered Loan is a loan subject to
      the TILA’s ability to repay requirements under Regulation Z and is otherwise
      not an ATR Exempt Loan (deﬁned below). An ATR Covered Loan must meet the following
      requirements in addition to the other underwriting and eligibility requirements
      in the Selling Guide: have a loan term not exceeding 30 years (see Acceptable
      Loan Terms below); be a fully amortizing loan, as deﬁned in Regulation Z: the
      loan must have regular periodic payments that are substantially equal that do
      not result in an increase in the principal balance or allow the borrower to
      defer repayment of principal; have total points and fees as described below
      under Points and Fees Limitations; and have an APR-APOR spread as described
      below under APR-APOR Spread Limitations. The ATR Covered Loan requirements apply
      to acquisitions of newly originated loans (including government mortgage loans).
      These requirements do not apply to certain assumptions or modiﬁcations of existing
      Fannie Mae loans regardless of the dates on which the loans being assumed or
      modiﬁed were originally closed. Refer to the regulation for the applicable requirements.
      ATR Exempt Loans. An ATR Exempt Loan is, with certain exceptions, a loan that
      either is not subject to TILA or is exempt from the ability to repay requirements
      in Regulation Z (12 CFR § 1026.43(a) or (d)). For purposes of determining whether
      a loan is an ATR Exempt Loan, lenders must follow the TILA and Regulation Z
      deﬁnitions. Note: The classiﬁcation of certain transactions for TILA purposes
      and for eligibility and underwriting purposes by Fannie Mae do not always align.
      For example, Fannie Mae deﬁnes a four-unit property where the borrower occupies
      one of the units as a “principal residence.” If under TILA such a loan is considered
      to be for commercial or business purposes, it will be exempt from TILA and therefore
      considered an ATR Exempt Loan by Fannie Mae. Fannie Mae purchases or securitizes
      ATR Exempt Loans as long as such loans meet the other eligibility and underwriting
      requirements described in this Guide. Points and Fees Limitations. For purposes
      of these requirements, “total points and fees” and “total loan amount” must
      be calculated in accordance with Regulation Z (12 CFR § 1026.32). ATR Covered
      Loans: Total points and fees may not exceed 3% of the total loan amount or such
      diﬀerent amount in accordance with the qualiﬁed mortgage provisions of Regulation
      Z (12 CFR § 1026.43(e)(3)(i)). If a lender makes a cure payment in the amount
      and by the time required by 12 CFR § 1026.43(e)(3)(iii), such loan satisﬁes
      this requirement. ATR Exempt Loans: Total points and fees may not exceed 5%
      of the total loan amount. This determination may take into account either of
      the following adjustments: permitted reduction of total points and fees pursuant
      to 12 CFR § 1026.31(h); or in the case of loans not subject to TILA, restitution
      to the borrower of at least that portion of total points and fees that exceeded
      5% at the time of loan closing. APR-APOR Spread Limitations. Eﬀective for loans
      with applications dates on and after July 1, 2021, the APR- APOR spread is the
      maximum diﬀerence by which the loan''s APR cannot exceed the APOR. (Note: Loans
      with application dates before July 1, 2021 provided the loans otherwise meet
      the Revised QM Rule.) ATR Covered Loans: The spread may not exceed 2.25% or
      a diﬀerent amount as speciﬁed in the Published May 6, 2026 209 Revised General
      QM Rule, calculated in accordance with the provisions of that rule. Note: For
      ARMs with initial ﬁxed periods of ﬁve years or less, the APR must be calculated
      using the maximum interest rate that could apply during the ﬁrst ﬁve years after
      the ﬁrst payment is due. ATR Exempt Loans: The spread may not exceed 6.5% or
      more calculated in accordance with the Revised General QM rule. Acceptable Loan
      Terms Fannie Mae purchases or securitizes loans that have original terms up
      to 30 years. The term of a ﬁrst mortgage may not extend more than 30 years beyond
      the date that is one month prior to the date of the ﬁrst payment. The minimum
      original term is 85 months, subject to applicable committing and delivery requirements
      for whole loans and loans in MBS. Exception: The only exception to these requirements
      is for single-closing construction-to-permanent loans, which must have a loan
      term not exceeding 30 years after conversion to permanent ﬁnancing (disregarding
      the construction period). See B5-3.1-02, Conversion of Construction-to-Permanent
      Financing: Single-Closing Transactions. HOEPA and State Higher-Priced Loans
      A loan that is subject to the Home Ownership and Equity Protection Act of 1994
      (HOEPA), as described in Section 32 of Regulation Z, is not eligible for delivery
      to Fannie Mae. In addition, Fannie Mae does not purchase or securitize loans
      that meet the deﬁnitions under the following laws of the state in which the
      property is located (“state higher-priced loans”), regardless of whether any
      provision of such state law is preempted by federal law with respect to a particular
      loan or for a particular originator: State Loan Type Description Arkansas High-cost
      home loan Loans delivered on or after September 1, 2003 that meet the deﬁnition
      of “high-cost home loan” under the Arkansas Home Loan Protection Act (Ark. Code
      Ann. §§ 23-53-101 et seq.), notwithstanding the “safe harbor” language contained
      in § 23-53-103(5)(B). Published May 6, 2026 210 State Loan Type Description
      Georgia Home Loan Loans originated between October 1, 2002 and March 7, 2003
      that are governed by the Georgia Fair Lending Act (Ga. Code Ann. §§ 7-6A-1 et
      seq.). Georgia High-cost home loan Loans delivered on or after January 1, 2003
      that meet the deﬁnition of “high-cost home loan” under the Georgia Fair Lending
      Act (Ga. Code Ann. §§ 7-6A-1 et seq.), as amended eﬀective March 7, 2003. Illinois
      High risk home loan Loans delivered on or after January 1, 2004 that meet the
      deﬁnition of “high risk home loan” under the Illinois High Risk Home Loan Act
      (§ 815 Ill. Comp. Stat. 137/1 et seq.). Indiana High cost home loan Loans delivered
      on or after January 1, 2005 that meet the deﬁnition of “high cost home loan”
      under the Indiana Home Loan Practices Act (Ind. Code Ann. §§ 24-9-1 et seq.),
      notwithstanding the “safe harbor” language contained in § 24-9-1-1. Kentucky
      High-cost home loan Loans delivered on or after September 1, 2003 that meet
      the deﬁnition of “high-cost home loan” under the Kentucky high-cost home loan
      statute (Ky. Rev. Stat. § 360.100). Published May 6, 2026 211 State Loan Type
      Description Maine High-rate, high-fee mortgage Loans delivered on or after January
      1, 2008 that meet the deﬁnition of “high-rate, high-fee mortgage” under the
      Maine Consumer Credit Code – Truth in Lending (Me. Rev. Stat. Tit. 9-A §§ 8-101
      et seq.). Massachusetts High-cost home mortgage loan Loans delivered on or after
      November 7, 2004 that meet the deﬁnition of “high cost home mortgage loan” under
      the Massachusetts Predatory Home Loan Practices Act (Mass. Gen. Laws Ann. ch.183C).
      New Jersey High-cost home loan Loans delivered on or after November 27, 2003
      that meet the deﬁnition of “high-cost home loan” under the New Jersey Home Ownership
      Security Act of 2002 (N.J. Rev. Stat. §§ 46:10B-22 et seq.). New Mexico High-cost
      home loan Loans delivered on or after January 1, 2004 that meet the deﬁnition
      of “high-cost home loans” under the New Mexico Home Loan Protection Act (N.M.
      Stat. Ann. §§ 58-21A-1 et seq.). New York High-cost home loan Loans delivered
      on or after April 1, 2003 that meet the deﬁnition of “high-cost home loan” under
      the New York Banking Law § 6-l. New York Subprime home loan Loans delivered
      on or after September 1, 2008 that meet the deﬁnition of “subprime home loan”
      under New York Banking Law § 6-m. Published May 6, 2026 212 State Loan Type
      Description Rhode Island High-cost home loan Loans delivered on or after December
      31, 2006 that meet the deﬁnition of “high-cost home loan” under the Rhode Island
      Home Loan Protection Act (R.I. Gen. Laws §§ 34-25.2-1 et seq.), notwithstanding
      the exemptions contained in § 34-25.2-11 of the Rhode Island law. Tennessee
      High-cost home loan Loans delivered on or after January 1, 2007 that meet the
      deﬁnition of “high-cost home loan” under the Tennessee Home Loan Protection
      Act (Tenn. Code Ann. §§ 45-20-101 et seq.), notwithstanding the preemption provision
      contained in § 45-20-111 of the Tennessee law. Impact of Special Assessments
      on Maximum Loan Amount If special assessments have been levied against the property
      and they are not paid before or at closing, the maximum loan amount otherwise
      available must be reduced by the amount of the unpaid special assessments (unless
      suﬃcient deposits to pay them will be collected as part of the loan payment).
      If the security property may be subject to liens for taxes and special assessments
      and the liens are not yet due and payable, Fannie Mae does not consider these
      conditions, restrictions, and encumbrances material and does not require a reduction
      in the maximum loan amount. The lender must provide documentation to show that
      the current installments of taxes and assessments (or future installments of
      special assessments that have been levied) - including those which may have
      been attached as prior liens, but which are not now in arrears - have been paid
      or that suﬃcient deposits are being collected to pay them. Premium Pricing Premium
      pricing refers to situations when a borrower selects a higher interest rate
      on a loan in exchange for a lender credit. The lender credit cannot be used
      to fund any portion of the borrower’s down payment, and should not exceed the
      amount needed to oﬀset the borrower’s closing costs. Any excess lender credit
      required to be returned to the borrower in accordance with applicable regulatory
      requirements is considered an overpayment of fees and charges, and may be applied
      as a principal curtailment or returned in cash to the borrower. See the following
      sections for additional details on lender credits derived Published May 6, 2026
      213 from premium pricing: B3-4.1-01, Minimum Reserve Requirements B3-4.1-02,
      Interested Party Contributions (IPCs) B3-4.3-06, Grants and Lender Contributions
      B5-5.1-02, Community Seconds Loan Eligibility Private Transfer Fee Covenants
      In accordance with a regulation issued by the Federal Housing Finance Agency
      on March 16, 2012, as amended, and codiﬁed at 12 CFR Part 1228 (the “Private
      Transfer Fee Regulation”), except as provided below, Fannie Mae will not purchase
      or securitize loans on properties encumbered by private transfer fee covenants
      if those covenants were created on or after February 8, 2011, unless permitted
      by the Private Transfer Fee Regulation. The lender must establish policies and/or
      procedures to ensure that the loans it delivers to Fannie Mae, whether or not
      the loans were originated by the lender, are not secured by properties encumbered
      with a private transfer fee that is unacceptable under the Private Transfer
      Fee Regulation. The policies and/or procedures will be reviewed by Fannie Mae
      as part of the lender’s operational review process. As with all other federal,
      state, and local laws, the lender (and any third-party originator it uses) must
      be aware of, and in full compliance with, the Private Transfer Fee Regulation.
      (Refer to the Private Transfer Regulation for further detail concerning acceptable
      and unacceptable private transfer fee covenants, as well as the deﬁnitions of
      “private transfer fee” and “private transfer fee covenant.”) Fannie Mae will
      purchase loans secured by properties encumbered by excepted transfer fee covenants
      (as deﬁned in the Private Transfer Fee Regulation), including those that are
      part of shared equity transactions. See B5-5.3-02, Shared Equity Transactions:
      General Requirements . Age of Loan To be eligible for purchase by Fannie Mae
      on a ﬂow basis, a loan must be no more than six months old measured from the
      ﬁrst payment date to the "Purchase Ready" date (whole loans) or the MBS pool
      issue date (MBS loans). For example, if a whole loan is in "Purchase Ready"
      status in May 2023 or an MBS loan is in a May 1, 2023 issued pool, the ﬁrst
      payment date can be no earlier than December 1, 2022. NOTE: HomeStyle Renovation
      loans that are not delivered until renovation is complete (and delivered with
      SFC 279) can be sold up to 15 months after the note date. See B5-3.2-01, HomeStyle
      Renovation Mortgages for additional requirements. Property Value for Loans Sold
      More than Four Months from Note Date Published May 6, 2026 214 For loans that
      are more than four months old from the date of the note to the date the loan
      is sold to Fannie Mae, the current value of the property cannot be less than
      the original value. If the lender is unable to warrant that the current value
      of the property is not less than the original value of the property, the loan
      is not eligible for sale to Fannie Mae by the lender except on a negotiated
      basis. Seasoned Loans Seasoned loans are loans that are more than one year old
      from the ﬁrst payment date to: the loan purchase date for whole loans, or the
      pool issue date for MBS loans. Note: Fannie Mae restricts purchase or securitization
      of seasoned loans to those that are delivered as a negotiated transaction. Contact
      Fannie Mae customer account team for additional information. The table below
      provides the requirements for seasoned loans. ✓ Seasoned Loan Requirements Seasoned
      loans may not be included in Fannie Majors MBS pools. See Chapter C3–6, Pooling
      Loans into Fannie Majors. The lender’s underwriting of the borrower’s credit
      and the security property for a seasoned loan must meet the current requirements
      set out in this Guide. The borrower has not had a 30-day delinquency in the
      12-month period that precedes the lender’s delivery of the loan to Fannie Mae.
      If the current borrower assumed the loan and has owned the property for less
      than 12 months, they must have had no 30-day delinquencies since purchasing
      the property. The borrower’s ability to pay must not have changed adversely.
      Note: If the loan has been assumed, the new borrower’s credit must be fully
      documented and underwritten in accordance with the same standards used for new
      loans, unless the transfer of ownership was one of the exempt transactions that
      legally prohibit a credit review. See the Servicing Guide for an explanation
      of exempt transactions. The current value of the property cannot be less than
      the original value. If the lender is unable to provide this warranty, the loan
      is not eligible for delivery to Fannie Mae by the lender except on a negotiated
      basis. Published May 6, 2026 215 ✓ Seasoned Loan Requirements The status of
      the title to the property must not have been aﬀected adversely. The loan must
      satisfy Fannie Mae’s current applicable mortgage eligibility requirements. If
      the loan is secured by a unit in a condo, co-op, or PUD project, the project
      must satisfy Fannie Mae’s current applicable project eligibility requirements.
      If the loan was modiﬁed prior to delivery to Fannie Mae, it must be a modiﬁcation
      that is eligible for delivery in accordance with the requirements of this Guide
      as described below under Modiﬁed Loans. Except to the extent otherwise expressly
      permitted in the Selling Guide ( A2-3.2-01, Loan Repurchases and Make Whole
      Payments Requested by Fannie Mae), or the Servicing Guide with respect to the
      redelivery of loans to Fannie Mae, the loan being delivered cannot be one that
      was required to be repurchased by a secondary market investor, government-sponsored
      enterprise, or private institutional investor other than Fannie Mae for any
      documentation, underwriting, property valuation, or other deﬁciencies and/or
      issues with the property (including project eligibility if the property is in
      a condo, co-op, or PUD project), borrower credit or other deﬁciencies or for
      any other reason. Modiﬁed Loans A modiﬁed loan is a loan that was legally modiﬁed
      after loan closing in a way that changed any of the loan terms or attributes
      reﬂected in the original note. In general, loans with material modiﬁcations,
      such as changes to the original loan amount, interest rate, ﬁnal maturity, or
      product structure, are not eligible for delivery to Fannie Mae. A loan whose
      note was corrected to eﬀect technical or typographical corrections is not considered
      to be a modiﬁed loan and is eligible for delivery. All of the changes must correct
      errors in the executed documents, which reﬂect the terms of the original loan
      transaction. None of the changes can be the result of a subsequent modiﬁcation
      or amendment to the original loan amount, interest rate, or other material loan
      term. The correction may not result in a change to, or create any inconsistencies
      with, other legal documents. Fannie Mae permits the delivery of certain other
      modiﬁed loans based primarily on whether the loan was owned or securitized by
      Fannie Mae prior to the modiﬁcation, or the modiﬁcation of the loan was done
      in accordance with a standard product or is common and customary in a certain
      area. The table below provides a comprehensive overview of Fannie Mae requirements
      applicable to the delivery of modiﬁed loans. If the loan is not eligible in
      accordance with standard Selling Guide provisions, it may be eligible in accordance
      with a variance. Such variances may be subject to additional terms and conditions.
      Published May 6, 2026 216 Category of Modiﬁcation Owned or Securitized by Fannie
      Mae Prior to or at Time of Modiﬁcation? Eligible for Delivery to Fannie Mae
      After Modiﬁcation? Selling Guide or Servicing Guide Reference Converted ARMs
      Yes Yes Selling Guide: See B2-1.4-03, Convertible ARMs, for convertible ARMs
      that are redelivered to Fannie Mae after their removal from an MBS pool No No
      N/A Maturing Balloon with Conditional Right to Reﬁnance or Modify No No N/A
      Borrower Principal Curtailment and Recast Over Remaining Term Yes N/A — No redelivery
      required Servicing Guide: See Chapter C-1, Processing Mortgage Loan Payments
      No Yes Selling Guide: See below and B2-1.5-05, Principal Curtailments Changes
      to Borrowers Due to Death, Marriage, or Other Allowable Property Transfers Yes
      N/A — No redelivery required Servicing Guide: See Chapter D1–4, Transfers of
      Ownership No No N/A Single-Closing Construction-to-Permanent Financing No Yes
      Selling Guide: See B5-3.1-02, Conversion of Construction-to-Permanent Financing:
      Single-Closing Transactions Published May 6, 2026 217 Category of Modiﬁcation
      Owned or Securitized by Fannie Mae Prior to or at Time of Modiﬁcation? Eligible
      for Delivery to Fannie Mae After Modiﬁcation? Selling Guide or Servicing Guide
      Reference New York Consolidation, Extension, and Modiﬁcation No Yes Selling
      Guide: See B8-2-02, Special-Purpose Security Instruments Modiﬁcations that Result
      in Material Changes to Loan Terms No No Selling Guide: See Modiﬁed Loans, above
      Borrower Principal Curtailment and Recast Over Remaining Term Fannie Mae will
      purchase a re-amortized loan following the application of a principal curtailment
      received from the borrower. The curtailment reduces the principal balance and
      monthly mortgage payment over the remaining term of the loan. The following
      requirements must be met: The only changes to the original note terms are a
      corresponding reduction in the principal balance and a re-amortized reduction
      to the monthly mortgage payment. The original note amount must comply with maximum
      loan limits in eﬀect at the time of acquisition. See B2-1.5-01, Loan Limits.
      When the loan was underwritten, the borrower was fully qualiﬁed based on the
      original note amount. The loan must be delivered with Special Feature Code 76.
      The lender must complete an Agreement for Modiﬁcation, Re-Amortization, or Extension
      of Mortgage (Form 181), in accordance with the requirements of the Servicing
      Guide, place a copy in the loan servicing ﬁle, and deliver the completed documents
      to the applicable document custodian in accordance with Selling Guide E-2-01,
      Required Custodial Documents. The delivery data must comply with the delivery
      instructions for principal curtailments. See B2-1.5-05, Principal Curtailments
      for additional requirements related to principal curtailments. Nonstandard Payment
      Collection Options A nonstandard payment collection option is a payment option
      that permits the borrower to make loan payments on a schedule other than a monthly
      basis. If the nonstandard payment collection option terms are included in the
      loan documents, then the loan is ineligible for delivery to Fannie Mae. Lenders
      may oﬀer nonstandard payment collection plans as part of a separate agreement;
      however, the loan is eligible for delivery to Fannie Mae only under the following
      conditions: the agreement must not impact the terms and conditions of the mortgage
      note, nor the reporting or remittance of payments to Fannie Mae; Published May
      6, 2026 218 the agreement must be cancelable by the borrower without cost; and
      the loan must be identiﬁable by the lender such that the information can be
      provided to Fannie Mae upon request. Recent Related Announcements The table
      below provides references to recently issued Announcements that are related
      to this topic. Announcements Issue Date Announcement SEL-2024-04 June 05, 2024
      Announcement SEL-2023-06 July 05, 2023 Announcement SEL-2023-04 May 03, 2023
      Announcement SEL-2021-10 November 03, 2021 Announcement SEL-2021-08 September
      01, 2021 Announcement SEL-2021-05 June 02, 2021 Announcement SEL-2020-07 December
      16, 2020 Announcement SEL-2020-05 September 02, 2020 Announcement SEL-2019-07
      August 07, 2019 Announcement SEL-2019-05 June 05, 2019'
  judgment: false
