source:
  type: guide
  id: fnma-sel-b5-7-03
  authority: Fannie Mae Selling Guide B5-7-03 — High LTV Refinance Alternative Qualification
    Path
  description: Fannie Mae Selling Guide B5-7-03 — High LTV Refinance Alternative Qualification
    Path.
  coverage_tier: operative
obligations:
- id: fnma-sel-b5-7-03-full
  canonical_id: fnma-sel-b5-7-03-full
  section: Fannie Mae Selling Guide B5-7-03 — High LTV Refinance Alternative Qualification
    Path
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B5-7-03 — High LTV Refinance Alternative Qualification
      Path
    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: 'B5-7-03, High LTV Reﬁnance Alternative Qualiﬁcation Path (06/04/2025)
      Introduction This topic contains information about using the Alternative Qualiﬁcation
      Path for the high LTV reﬁnance option, including: Eligibility Requirements Documentation
      Requirements Uniform Appraisal Dataset (UAD) 3.6 Policy Eligibility Requirements
      The following table provides criteria for using the Alternative Qualiﬁcation
      Path. Published May 6, 2026 812 If any of the following apply to the new loan...
      Then the loan... the P&I payment increases by more than 20% from the current
      P&I payment must comply with the Alternative Qualiﬁcation Path requirements.
      a borrower on the loan being reﬁnanced is being excluded from the new loan other
      than due to death, and the remaining borrower(s) cannot provide evidence of
      making payments on their own for the prior 12 months the loan is a higher-priced
      mortgage loan or a higher-priced covered transaction under Regulation Z In addition
      to all other requirements associated with the high LTV reﬁnance option loans,
      loans originated in accordance with the Alternative Qualiﬁcation Path must also
      meet the requirements described in the following table. ✓ Additional requirements
      for high LTV reﬁnance loans originated using the Alternative Qualiﬁcation Path
      Minimum credit score of 620. Maximum DTI ratio of 45%. Veriﬁed assets needed
      to close, when applicable. The lender is required to manually underwrite all
      loans subject to the Alternative Qualiﬁcation Path. Documentation Requirements
      In addition to the eligibility considerations described in this topic, the documentation
      requirements in the following table apply. Published May 6, 2026 813 Income
      Type and Eligible Income Sources Documentation Requirements All Employment Income
      Verbal veriﬁcation of employment (See B3-3.1-04, Verbal Veriﬁcation of Employment,
      for additional requirements.) Note: Each borrower must complete and sign a separate
      IRS Form 4506-C at or before closing. Base Pay (salary or hourly) Tip, Bonus,
      and Overtime Income One paystub or a completed Request for Veriﬁcation of Employment
      (Form 1005). Applies to primary employment, secondary employment (second job
      and multiple jobs), and seasonal income. Commission Income One paystub or Form
      1005 or one year personal tax return. Military Income A military Leave and Earnings
      Statement or a veriﬁcation of employment. Self-Employment One year personal
      tax return. Applies to primary and secondary self-employment. Alimony, Child
      Support, or Separate Maintenance Copy of divorce decree, separation agreement,
      court order or equivalent documentation, and one month documentation of receipt.
      Employment-Related Assets as Qualifying Income Lender must obtain standard documentation
      for this type of income as described in B3-3.4-06, Employment Related Assets
      as Qualifying Income. Rental Income Lease or one year personal tax return (Form
      1007 is not required). Applies to rental income from subject property or from
      other properties owned by the borrower. Published May 6, 2026 814 Income Type
      and Eligible Income Sources Documentation Requirements Retirement and Pension
      One of the following: • award letter, • one year personal tax return, • W-2
      or 1099 form, or • one month bank statement reﬂecting direct deposit. Social
      Security One of the following: • award letter, • one year personal tax return,
      • Form SSA-1099, or • one month bank statement reﬂecting direct deposit. Temporary
      Leave Income Lender must receive: • the borrower’s written conﬁrmation of their
      intent to return to work, and • no evidence or information from the borrower’s
      employer indicating that the borrower does not have the right to return to work
      after the leave period. Regardless of the date of return, the amount of the
      “regular employment income” the borrower received prior to the temporary leave
      must be used to qualify. Published May 6, 2026 815 Income Type and Eligible
      Income Sources Documentation Requirements All Other Income Types • Automobile
      Allowance • Boarder Income • Capital Gains Income • Disability Income - Long-Term
      • Employment Oﬀers or Contracts • Foreign Income • Foster-Care Income • Housing
      or Parsonage Allowance • Interest and Dividends Income • Mortgage Credit Certiﬁcates
      • Mortgage Diﬀerential Payments Income • Non-Occupant Borrower Income • Notes
      Receivable Income • Public Assistance Income • Royalty Payment Income • Schedule
      K-1 Income • Trust Income • VA Beneﬁts Income Lender must determine appropriate
      documentation. Examples include (but are not limited to): • an award letter
      or equivalent documentation or agreement, • one paystub or equivalent documentation,
      • one year personal tax return, • IRS 1099 Form, or • one month bank statement
      reﬂecting direct deposit. Asset Type • Checking Accounts • Savings Accounts
      • Certiﬁcates of Deposit • Money Mark Accounts • Stocks, Bonds, Mutual Funds
      • Retirement Accounts • Trust Accounts • Secured Borrowed Funds • Grants (Hardest
      Hit Fund) • Gifts One recent statement (monthly, quarterly, or annual) showing
      asset balance. Uniform Appraisal Dataset (UAD) 3.6 Policy Lenders using UAD
      3.6 must follow the requirements in the UAD 3.6 Policy Supplement. Recent Related
      Announcements The table below provides references to recently issued Announcements
      that are related to this topic. Published May 6, 2026 816 Announcements Issue
      Date Announcement SEL-2025-04 June 04, 2025 Announcement SEL-2021-11 December
      15, 2021 Announcement SEL-2020-07 December 16, 2020'
  judgment: false
