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NJHMFA is issuing the following notice regarding the ineligibility of the use of positive rent payment history in Loan Product Advisor (LPA) for HFA Advantage loans.
Freddie Mac has granted some lenders an approval to consider a borrower’s positive rent payment history through the use of a Loan Origination System (LOS) checkbox or indicator when that history has been documented using borrower‑provided information.
While this flexibility may apply on loans delivered directly to Freddie Mac by lenders with this allowance, this approval does not extend to HFA Advantage loans delivered to NJHMFA under our seller/servicer agreement.
For HFA Advantage loans delivered to NJHMFA, positive rent payment history may not be applied in LPA through the use of this LOS checkbox. If LPA returns feedback code FCL0438, lenders must remove the indication that borrower supplied rental documentation was used and re-run LPA to verify that the loan remains Accept/Eligible.
Loans delivered to NJHMFA utilizing LPA feedback code FCL0438 for manual rent documentation may be subject to purchase denial or post-purchase repurchase requests.
Lenders are encouraged to review Freddie Mac Guide section 5201.1 to ensure compliance with applicable LPA requirements.
Lenders should note that this guidance is specific to the use of the LPA positive rent payment history indicator. This is separate from the NJHMFA allowance for use of rental history as an acceptable alternative tradeline to meet the minimum of two tradelines per borrower. The NJHMFA tradeline allowance remains in place, in accordance with our Lender’s Guide.
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