Underutilized Program a 'Potentially Big Deal' For Retirees

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Posted To: MND NewsWire

One of the biggest challenges for retired borrowers is their ability to meet lenders’ income requirements. With 'stated-income' and 'no doc' loans disappearing following the housing meltdown, and federally mandated mortgage reforms keeping lending standards high, retirees had to prove they had adequate income to qualify for loans. In 2011, Freddie Mac released guidance to lenders allowing them to use retirees’ IRAs and 401Ks as acceptable income sources , even if borrowers are not currently withdrawing funds from the accounts. Previously, borrowers drawing on their retirement accounts could use those funds as acceptable sources of income, but proof of withdrawal history was required. A new retiree could not use a retirement account for qualifying purposes until he established a...(read more)

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Source: http://www.mortgagenewsdaily.com/05102013_freddie_retiree_loan_program.asp

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