Enact Holdings, Inc. · NASDAQ:ACT
Enact — Investor Presentation (August 2021)
44 slides from Enact's investor presentation, August 2021
Slide 1: Calculating Rental Income
Calculating Rental Income Fannie Mae and Freddie Mac Guidelines August 2021 Genworth Mortgage Insurance Corporation and Genworth Mortgage Insurance Corporation of North Carolina ©2021 Genworth Mortgage Insurance Corporation. All rights reserved.
Slide 2: Genworth MI is now Enact
Genworth MI is now Enact We’re changing to remain focused on you. As part of our evolution, we are now known as Enact. We’re building on our trusted reputation for quality service and success with an increased focus on providing responsive solutions and insightful expertise for you. Learn more at ht
Slide 3: Objectives
Objectives • General guidelines for calculation of rental income for Fannie Mae and Freddie Mac • Recent changes relating to rental properties from Fannie Mae Announcements and Freddie Mac Bulletins • Overview of Freddie Mac Rental Form 92 • Overview of Fannie Mae Rental Forms 1037, 1038, 1039 • Cal
Slide 4: Enact Training Resources
Enact Training Resources Genworth h Mis now © 800.444.5664 | | me Enact si We've changed to emain focused on you. Genworth MI is now Enact. LEARN MORE Underwriting Rate Express Training Innovate Underwriting Find Rates Quick Boost Your Knowledge KNOW MORE ETA QuoTE Now LEARN NOW +nact
Slide 5: Enact Training Resources
Enact Training Resources borrower's average monthly income and expenses. Fannie Mae Form 1084 Calculator (2019- 2020) Freddie Mac Form $2 Calculator (2019- 2030). rn enone aoe ‘current Ratio - Liquidity Calculator (aot5-2020) Cecutevon ata ison encores Fannie Mae Rental Gude (Calculator 03). atau ec
Slide 6: Calculator and Quick Reference Guide: Rental Income
— Enact — Calculator and Quick Reference Guide: Rental Income the! and auc guide to assist in rental income from IRS Form 1040 . te suggested ‘onty and does not Mae or Fredde Mac or The! not be used when rental come on 2 ‘spe Check: rental mcome m dechning year to year. Please check with your own le
Slide 7: Rental Income
Rental Income Basics about rental income requirements: • Rental income must be supported by the borrower’s most recent personal tax returns if used for qualification purposes* • Follow the underwrite you are utilizing • Desktop Underwriter® follow the DU findings report • Loan Product Advisor® follo
Slide 8: Freddie Mac
Freddie Mac Rental Income Guidelines 8
Slide 9: Freddie Mac Rental Income
Freddie Mac Rental Income https://guide.freddiemac.com/ci/okcsFattach/get/1001351_4 https://sf.freddiemac.com/content/_assets/resources/pdf/update/rental.pdf Let’s Review The New Rental Income Matrix And Form 92
Slide 10: Freddie Mac Rental Income
Freddie Mac Rental Income Use Rental Income Matrix • Documentation and History • Lease requirements • Properties placed into service in current calendar year • Maximum eligible amount rent • Rental Income calculations • Establishing the DTI • Appraisal Forms • Investment Property Management Experien
Slide 11: Freddie Mac Rental Income
Freddie Mac Rental Income ‘Notes: A vertical revision bar | "is used in the margin of this quick reference to highlight new requirements and. significant changes. Effective for mortgages with Freddie Mac settlement dates on and after July 1, 2020. If the borrower's monthly debt payment-to-income rat
Slide 12: Freddie Mac Rental Income Page 2
Freddie Mac Rental Income Page 2 https://sf.freddiemac.com/content/_assets/resources/pdf/update/rental.pdf
Slide 13: Freddie Mac Rental Income Page 3
Freddie Mac Rental Income Page 3 https://sf.freddiemac.com/content/_assets/resources/pdf/update/rental.pdf
Slide 14: Freddie Mac Rental Income Page 4
Freddie Mac Rental Income Page 4 https://sf.freddiemac.com/content/_assets/resources/pdf/update/rental.pdf
Slide 15: Freddie Mac Rental Income Page 5
Freddie Mac Rental Income Page 5 https://sf.freddiemac.com/content/_assets/resources/pdf/update/rental.pdf
Slide 16: Freddie Mac Rental Income Page 6
Freddie Mac Rental Income Page 6 https://sf.freddiemac.com/content/_assets/resources/pdf/update/rental.pdf
Slide 17: Freddie Mac Form 92
Freddie Mac Form 92 https://guide.freddiemac.com/ci/okcsFattach/get/1001351_4 Check Out Enact Website for Calculator
Slide 18: Freddie Mac Form 92
Freddie Mac Form 92 https://guide.freddiemac.com/ci/okcsFattach/get/1001351_4 Check Out Enact Website for Calculator
Slide 19: Enact's Freddie Mac Form 92 Calculator
Enact’s Freddie Mac Form 92 Calculator https://new-content.mortgageinsurance.genworth.com/documents/calculators/12413405.Training.Form.92.0621.pdf
Slide 20: Freddie Mac Seller/Servicer Guide
Freddie Mac Seller/Servicer Guide https://guide.freddiemac.com/app/guide/content/a_id/1000660 For Complete Rental Income Policy Refer To The Updated Chapter 5306.1 Of The Freddie Mac Seller/Servicer Guide
Slide 21: Reserves
Reserves Guide Impacts: 5501.2(b) • Max number of financed properties is 10 when subject is second home or investment property • 720 Credit score required when 7-10 financed properties and loan must be submitted to Loan Product Advisor with Accept/Eligible Recommendation • Loan Product Advisor will
Slide 22: Fannie Mae
Fannie Mae Rental Income Guidelines 22
Slide 23: Fannie Mae Selling Guide
Fannie Mae Selling Guide https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B3-Underwriting- Borrowers/#Documenting.20Rental.20Income.20from.20Subject.20Property
Slide 24: Calculating Monthly Rental Income or Loss
Calculating Monthly Rental Income or Loss Selling Updates • Also applies to manually underwritten loans https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B3-Underwriting-Borrowers/#Documenting.20Rental.20Income.20from.20Subject.20Property
Slide 25: Establishment of Property Management Experience
Establishment of Property Management Experience https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B3-Underwriting-Borrowers/#Documenting.20Rental.20Income.20from.20Subject.20Property
Slide 26: Fannie Mae Selling Guide: Non-Subject Rental Properties
Fannie Mae Selling Guide Non-Subject Rental Properties
Slide 27: Fannie Mae Selling Guide
Fannie Mae Selling Guide Partial or No Rental History Any Property • Annualize Schedule E or • Fully executed leases
Slide 28: Fannie Mae Rental Calculators
Fannie Mae Rental Calculators https://new.mi.genworth.com/self-employed-borrower-calculators
Slide 29: Borrowers with Multiple Financed Properties
Borrowers with Multiple Financed Properties DU uses the number of financed properties to apply the following eligibility guidelines: • A minimum credit score of 720 is required for borrowers with 7-10 financed properties • Borrowers are limited to a maximum of 10 financed properties https://selling-
Slide 30: Multiple Financed Properties Fannie Mae
Multiple Financed Properties Fannie Mae https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B2-Eligibility/Chapter-B2-2-Borrower- Eligibility/#Limits.20on.20the.20Number.20of.20Financed.20Properties
Slide 31: Reserves- Fannie Mae Multiple Financed Properties
Reserves- Fannie Mae Multiple Financed Properties Applies When The Subject Transaction Is A Second Home Or Investment Property AND The Borrower is Personally Obligated On The Financing
Slide 32: Reserves- Fannie Mae Multiple Financed Property Examples
Reserves- Fannie Mae Multiple Financed Property Examples Applies When The Subject Transaction Is A Second Home Or Investment Property AND The Borrower is Personally Obligated On The Financing
Slide 33: Rental Income-Fannie Mae Amounts
Rental Income-Fannie Mae Amounts* Fannie Mae Requirements 2-4 Unit Primary Residence • Purchase: Gross income is calculated from Form 1025 (small residential properties). • Net rental income is determined by taking the lesser of 75% of the gross rent from form 1025 or 75% of the existing leases. Not
Slide 34: You Need….
You Need…. • 2020 Schedule “E” handout • Rental Income Calculation Form • Impounded/non-impounded are calculated the same • Training today assume an escrowed or impounded loan
Slide 35: Schedule E Handout
Schedule E Handout SCHEDULE E Supplemental Income and Loss OMB No. 1545-0074 (Form 1040) (From rental real estate, royalties, partnerships, S corporations, estates, trusts, REMICS, etc.) D © 2 0 D of the T > Attach to Form 1040, 1040-SR, 1040-NR, or 1041. Att t Internal Revenue Service (99) > Go to
Slide 36: Mortgage Statement/Payment Coupon
Mortgage Statement/Payment Coupon Always ask for one • If loan is impounded or escrowed • What property the mortgage payment is associated with • If non impounded, obtain current tax and insurance information • If condo, PUD or Coop, most investors want verification of current HOA dues
Slide 37: Mortgage Statement/Payment Coupon
Mortgage Statement/Payment Coupon Total monthly payment is $3400 PITIA Payment Above Came From Mortgage Statement And HOA Coupon/Statement From Borrower And Is Impounded; For Non-impounded Loans Obtain Tax And Insurance Information
Slide 38: Enact Calculator and Quick Reference Guide: Rental Income
38 — ] Enact Calculator and Quick Reference Guide: Rental Income te suggested oniy and does not Mae or Freddie Mac structions of: ‘This method should not be used when rental ncome on a ‘spr rental neome "year to year Please check with your own legal for ‘ppicable to your business. Property 1 (Cotuot
Slide 39: Enact Rate Express
Enact Rate Express® Enact" MI&RATES | UNDERWRITING & GUIDES | LOS& CONNECTIONS | ENACT TOOLKIT | TRAINING ouRBLoG =| ABOUTUS Je’ve changed to Temain focused on you. Genworth MI is now Enact. ° Rate Express (0) Find Rates Quick GETA QUOTE Now Underwriting Innovate Underwriting Know More & 800 444.566
Slide 40: Enact Underwriting Guidelines
Enact Underwriting Guidelines 40
Slide 41: Enact Training Resources
Enact Training Resources Genworth Ml is now Enact MI&RATES | UNDERWRITING & GUIDES | LOS & CONNECTIONS | ENACT TOOLKIT TRAINING =| ~ 6 & 800.444.5664 | | me We've changed to emain focused on you. Genworth MI is now Enact. ee fe & Training Boost Your Knowledge LEARN Now Underwriting Op Rate Express I
Slide 42: Enact Training Resources
Enact Training Resources 42 Enact Self-Employed Borrower Tools by Enact MI ‘We get it, mental math is hard. That’s why Enact provides a collection of downloadable calculators and reference guides to help you analyze a self-employed borrower's average monthly income and expenses. Please note that the
Slide 43: Your Enact Resources
Your Enact Resources • ActionCenter® : 800 444.5664 • Your Local Enact Regional Underwriter • Your Enact Sales Representative 43
Slide 44: Legal Disclaimer
Legal Disclaimer Enact Mortgage Insurance is happy to provide you with these training materials. While we strive for accuracy, we also know that any discussion of laws and their application to particular facts is subject to individual interpretation, change, and other uncertainties. Our training is