Fannie Mae and Freddie Mac publish November conventional-loan updates

Fannie Mae now permits ADUs in eligible condo projects

Fannie Mae expanded its property-eligibility criteria so that an accessory dwelling unit, or ADU, can be located in an eligible condo project. Lenders may use the change immediately, and Fannie Mae also updated its UAD 3.6 Policy Supplement to reflect the new treatment.

The update does not make every condo project or ADU eligible. The project, unit, appraisal, legal use, ownership structure and any local zoning or permitting requirements still must satisfy the applicable Guide and lender review.

Sous: Fannie Mae · Announcement SEL-2026-10: Selling Guide Updates · November 4, 2026

Fannie Mae separates immediate Guide changes from a February 2027 manual-underwriting matrix

Announcement SEL-2026-10 also clarifies principal-residence and second-home occupancy language, reorganizes Community Seconds and grant guidance, and incorporates VantageScore 4.0 into the Selling Guide for manually underwritten loans and casefiles underwritten through DU Version 12.1. Fannie Mae says lenders may use these changes immediately.

A separate Lender Letter, LL-2026-09, revises the Eligibility Matrix for manually underwritten loans delivered to Fannie Mae on or after February 22, 2027. It aligns minimum credit-score requirements for fixed-rate and adjustable-rate loans, establishes consistent credit-score and reserve requirements for two- to four-unit principal residences and cash-out refinances, and combines the manual requirements for standard, HomeReady and HomeStyle Renovation loans in one matrix.

HomeReady and HomeStyle Renovation loans remain eligible for manual underwriting only for purchase and limited cash-out refinance transactions. The future matrix is a lender-delivery rule; it does not by itself establish that a borrower, property or loan will qualify.

Sous: Fannie Mae · Announcement SEL-2026-10: Selling Guide Updates · November 4, 2026Fannie Mae · Lender Letter LL-2026-09: Manual Underwriting Eligibility · November 4, 2026

Freddie Mac changes equity-buyout, rental-income and asset-documentation rules

Freddie Mac Bulletin 2026-15 reclassifies an eligible refinance used to buy out a co-owner's interest from a cash-out refinance to a no-cash-out refinance and renames the former special-purpose cash-out category as an equity buyout refinance. The transaction still must meet the updated Guide conditions; the new label is not an automatic approval or a promise of better pricing.

The Bulletin also reorganizes Freddie Mac's rental-income chapter, updates documentation when an appraisal is used, and adds flexibility for subject two- to four-unit principal residences and subject investment properties when rental income is not used to qualify. Freddie Mac additionally recognizes eligible third-party asset-verification reports as asset documentation and incorporates VantageScore 4.0 for manually underwritten mortgages.

Freddie Mac states that these changes took effect November 4, 2026, except for the related CHOICEReno eXPress terminology update, which applies to Loan Product Advisor submissions or resubmissions on or after January 25, 2027. Actual lender adoption, overlays and documentation may differ.

Sous: Freddie Mac · Bulletin 2026-15: Selling Updates · November 4, 2026

What borrowers and property owners should verify

These are agency eligibility and lender-delivery rules for mortgages sold to Fannie Mae or Freddie Mac. They do not require every lender to offer each scenario and do not replace underwriting of credit, income, assets, occupancy, property eligibility, appraisal or title.

• For a condo with an ADU, confirm project eligibility, the legal status of the ADU and the appraisal requirements before relying on rental potential or added living space.
• For manual underwriting, identify the agency, loan type, delivery date and matrix version that the lender will apply.
• For an equity buyout, document the ownership interest, title history, agreement between the owners and how the proceeds will be used; eligibility depends on the complete transaction.

Sous: Fannie Mae · Announcement SEL-2026-10: Selling Guide Updates · November 4, 2026Fannie Mae · Lender Letter LL-2026-09: Manual Underwriting Eligibility · November 4, 2026Freddie Mac · Bulletin 2026-15: Selling Updates · November 4, 2026