Lender Bulletin 2020-4: Reverification of Employment, Appraisal, and Pest Inspection Updates Related to the COVID-19 National Emergency

NJHMFA Lender Bulletin

Important Program Updates for Participating Lenders

April 2, 2020

Lender Bulletin 2020-4:

Reverification of Employment, Appraisal, and Pest Inspection Updates Related to the COVID-19 National Emergency

Effected Programs: All Programs

Effective Date: Ongoing

Due to the current health concerns related to COVID-19, the vast majority of NJHMFA staff will be working remotely until further notice. Please contact Agency staff via their work email address. NJHMFA encourages all of our business partners and constituents to submit any and all documentation in an electronic format whenever possible as staff will continue to check email and review information submitted electronically.

Attention Lenders:

This bulletin details NJHMFA’s response to the recent announcements by HUD, FHA, FHFA and the GSEs regarding updates related to COVID-19 National Emergency.

On March 30, 2020, the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2020-05 , “Re-verification of Employment and Exterior-Only and Desktop-Only Appraisal Scope of Work Options for FHA Single Family Programs Impacted By COVID-19.” On March 31, 2020, Fannie Mae issued an updated Lender Letter (LL-2020-03) , “Updates to COVID-19 impact on originations”. Below will detail how NJHMFA intends to implement the FHA and GSE guidance related to VOEs and appraisals. NJHMFA will continue to send updates as policies evolve.

FTHB and Homeward Bound Employment Verification

Lenders should make every effort to complete the required re-verification of employment within ten (10) days of the Note. If this cannot be obtained, lenders should provide the following documentation:

Evidence the Borrower has a minimum of 2 months of Principal, Interest, Taxes and Insurance (PITI) in reserves; and either of
A year-to-date paystub or direct electronic verification of income for the pay period that immediately precedes the Note date, or
A bank statement showing direct deposit from the Borrower’s employment for the pay period that immediately precedes the Note date

NJHMFA will require Lenders to submit the attached employee letter with all closed FTHB and Homeward Bound loans, regardless of re-verification process utilized. This letter should be signed by the borrower at closing and uploaded with the purchase package .

COVID-19 Employment Letter Sample

PFRS Employment Verification

VOEs should be done in accordance with NJHMFA and Fannie Mae guidelines. Lenders should review and utilize the updated Fannie Mae guidance form Lender Letter (LL-2020-03).

Appraisals for all loans

NJHMFA will accept Exterior-Only and Desktop Appraisals submitted in accordance with the investor/insurer guidelines for the COVID-19 emergency.

Pest Inspections for all loans

Lenders should attempt to meet the existing program guidelines for pest inspections. If the inspection cannot be completed prior to closing, NJHMFA will waive the requirement unless the appraisal used on the transaction notes pest presence or damage. In the instance of pest presence or damage noted on the appraisal, all pest inspection and remediation requirements must be completed prior to loan delivery.

Questions? Need Help?

If you have questions about one of our loan products or need help with a loan in the ILRS system, please e-mail your requests to SFLenders@njhmfa.gov

Access Forms, Checklists, Policies, Previous Lender Bulletins and more at the Lender Resources Page: www.njhousing.gov/lenders/

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New Jersey Housing and Mortgage Finance Agency | 609-278-7400 | NJHousing.gov