source:
  type: guide
  id: fnma-sel-b2-2-04
  authority: Fannie Mae Selling Guide B2-2-04 — Guarantors, Co-Signers, or Non-Occupant
    Borrowers on the Subject Transaction
  description: Fannie Mae Selling Guide B2-2-04 — Guarantors, Co-Signers, or Non-Occupant
    Borrowers on the Subject Transaction.
  coverage_tier: operative
obligations:
- id: fnma-sel-b2-2-04-full
  canonical_id: fnma-sel-b2-2-04-full
  section: Fannie Mae Selling Guide B2-2-04 — Guarantors, Co-Signers, or Non-Occupant
    Borrowers on the Subject Transaction
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B2-2-04 — Guarantors, Co-Signers, or Non-Occupant
      Borrowers on the Subject Transaction
    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: 'B2-2-04, Guarantors, Co-Signers, or Non-Occupant Borrowers on
      the Subject Transaction (09/02/2020) Introduction This topic contains information
      on guarantors, co-signers, or non-occupant borrowers on the subject transaction,
      including: Deﬁnitions Down Payment and Qualifying Ratio Requirements for Manually
      Underwritten Loans LTV Ratio Requirements for Manually Underwritten Loans LTV
      Ratio Requirements for Loan Caseﬁles Underwritten through DU Deﬁnitions Guarantors
      and co-signers are credit applicants who do not have ownership interest in the
      subject property as indicated on the title; sign the mortgage or deed of trust
      note; have joint liability for the note with the borrower; do not have an interest
      in the property sales transaction, such as the property seller, the builder,
      or the real estate agent; and meet the requirements in B2-2-01, General Borrower
      Eligibility Requirements, except for the provisions related to establishing
      an ownership interest in the property. Non-occupant borrowers are credit applicants
      on a principal residence transaction who do not occupy the subject property;
      may or may not have an ownership interest in the subject property as indicated
      on the title; sign the mortgage or deed of trust note; have joint liability
      for the note with the borrower(s); do not have an interest in the property sales
      transaction, such as the property seller, the builder, or the real estate agent;
      and meet the requirements in B2-2-01, General Borrower Eligibility Requirements,
      except for the provisions related to establishing an ownership interest in the
      property. Note: Guarantors, co-signers, and non-occupant borrowers are permitted
      on purchase, limited cash- out and cash-out reﬁnance transactions. Down Payment
      and Qualifying Ratio Requirements for Manually Underwritten Published May 6,
      2026 231 Loans For manually underwritten loans, if the income of a guarantor,
      co-signer, or non-occupant borrower is used for qualifying purposes, the occupying
      borrower(s) must make the ﬁrst 5% of the down payment from their own funds unless:
      the LTV or CLTV ratio is less than or equal to 80%; or the occupying borrower
      is purchasing a one-unit principal residence and meets the requirements to use
      gifts, donated grant funds, or funds received from an employer to pay for some
      or all of the borrower’s minimum contribution. See B3-4.3-04, Personal Gifts;
      B3-4.3-06, Grants and Lender Contributions; and B3-4.3-08, Employer Assistance,
      for additional information. Using only the income of the occupying borrower(s)
      to calculate the DTI ratio, the maximum allowable DTI ratio is 43%. Note: This
      policy applies even if the combined qualifying ratios for the borrower and the
      guarantor, co- signer, or non-occupant borrower are well below Fannie Mae’s
      standard qualifying ratio benchmark. Minimum credit score and reserve requirements
      based on the LTV ratio and combined qualifying ratios of all borrowers must
      be met per the Eligibility Matrix. See Section B3–5.4, Nontraditional Credit
      History, for additional requirements that apply when the transaction includes
      a borrower who does not have a credit score. For additional information, see
      B3-6-02, Debt-to-Income Ratios. LTV Ratio Requirements for Manually Underwritten
      Loans For manually underwritten loans, if the income of a guarantor, co-signer,
      or co-borrower is used for qualifying purposes, and that guarantor, co-signer,
      or co-borrower will not occupy the subject property, the maximum LTV, CLTV,
      and HCLTV ratio may not exceed 90% (unless a Community Seconds is part of the
      transaction, in which case the CLTV ratio may not exceed 105% where permitted
      in the Eligibility Matrix. LTV Ratio Requirements for Loan Caseﬁles Underwritten
      through DU DU analyzes the risk factors in the loan caseﬁle for all borrowers
      on the mortgage loan. Regardless of whether an individual borrower will be occupying
      the property as their principal residence, DU will consider the income, assets,
      liabilities, and credit of that borrower. For DU loan caseﬁles with a guarantor,
      co-signer, or co-borrower who will not occupy the subject property, the maximum
      LTV, CLTV, and HCLTV ratio may not exceed 95% (unless a Community Seconds is
      part of the transaction, in which case the CLTV ratio may not exceed 105% where
      permitted in the Eligibility Matrix. Recent Related Announcements The table
      below provides references to recently issued Announcements that are related
      to this topic. Published May 6, 2026 232 Announcements Issue Date Announcement
      SEL-2020-05 September 02, 2020'
  judgment: false
