Ginnie Mae Requirements for VA Refinance Loans
As a reminder, APM 18-04, which implemented The Economic Growth, Regulatory Relief, and Consumer Protection Act, P.L. 115-174, (“the Act”) established certain securitization restrictions on all VA-Guaranteed refinance loans, including refinances of non-VA loans and VA cash-out refinances. The Veterans Administration (VA) has recently published Circular 26-18-30, which clarified that the VA seasoning requirements for cash-out refinance loans apply only when refinancing another VA-guaranteed loan.
A number of Ginnie Mae issuers have pointed out that the VA Circular addresses only VA-to-VA refinances. This results in VA seasoning requirements that are narrower than the seasoning requirements imposed by Ginnie Mae in APM 18-04. The seasoning requirements imposed by Ginnie Mae in APM 18-04 are not limited to VA-to-VA refinance situations.
The requirements of APM 18-04 are necessitated by the language of the Act applicable to Ginnie Mae’s statute and are not impacted by the recently published VA Circular.
Ginnie Mae is not able to conform its pooling requirements to the VA circular because doing so would be contrary to the provisions of the Act. That said, we are aware of the potential for legislative action that could modify the terms of the Act and allow for consistency among programs. As the situation develops, Ginnie Mae may publish additional guidance clarifying other applications of the provisions of the Act.
Annual Audited Financial Statements Reminder
To remain in compliance with Ginnie Mae requirements, Issuers must submit annual audited financial statements and Fidelity Bond and Errors and Omissions insurance documentation. This includes Issuers that did not have outstanding Ginnie Mae securities or commitment authority to issue new securities at any time during the fiscal year.
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