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New Fannie Mae Guidelines Enable Commission as Down Payments and Provide Medical Debt Relief

Fannie Mae has recently unveiled groundbreaking guidelines that will significantly impact real estate agents and borrowers alike.

These game-changing updates include allowing licensed real estate agents to use their commissions for down payments on property transactions. Additionally, Fannie Mae has revised underwriting requirements for medical collections. This shake-up in the mortgage landscape is set to empower agents like never before.

The Down Payment Game-Changer for Real Estate Agents

In a move that will send shockwaves through the industry, Fannie Mae has given the green light for licensed real estate agents to use their earned commission as a source of funds for down payments when purchasing property. This change unlocks a new world of financial flexibility and is set to revolutionize the way agents approach property transactions.

While agents have been able to use their commission for closing costs for years, using it for down payments was previously prohibited for conventional loans insured by Fannie Mae. This newfound financial power is a game-changer, allowing agents to tap into a new source of funds when purchasing a property.

Commission Downpayment Requirements

For this newfound financial power to be utilized, the settlement statement must reflect the commission earned by the borrower, and the amount must be credited toward the mortgage loan. However, it's important to note that agents may need permission from their supervising broker to use their commission for down payments. In North Carolina, for example, agents wishing to use their commission towards down payments may require preauthorization from their Broker-in-Charge if they do not own their own firm.

Medical Collections: Fannie Mae Overhauls Underwriting Requirements

Fannie Mae's landmark decision to revise underwriting requirements for medical collections will bring much-needed relief to borrowers. Effective immediately, medical collection accounts are no longer required to be paid off at or prior to closing for both Desktop Underwriter (DU) and manually underwritten loans, regardless of the amount. This monumental shift aligns the Guide policy with DU's risk assessment and will ease the mortgage process for countless borrowers struggling with medical debt.

What This Means for Real Estate Agents and Our Clients

These revolutionary guidelines offer unprecedented opportunities for real estate agents and borrowers alike. The ability to use earned real estate commissions for down payments empowers agents with financial freedom, allowing them to pursue property transactions with confidence. Meanwhile, the updated underwriting requirements for medical collections pave the way for borrowers with unresolved medical debts to secure their dream homes.

Fannie Mae's updated guidelines are set to transform the real estate landscape. The allowance of earned real estate commissions as a source of funds for down payments is a game-changing development that will reshape the industry for broker-investors. As agents and borrowers navigate these groundbreaking changes, the future of real estate and mortgage lending has never been more exciting.

Will you use your commission as your downpayment on your next home? Share your thoughts in the comments below or join the conversation in our next CE class!


Fannie Mae. "B3-4.3-21, Borrower's Earned Real Estate Commission." Fannie Mae Single Family Selling Guide, 5 Apr. 2023.

Fannie Mae. "Underwriting Requirements for Collections and Charge-Offs on Non-Mortgage Accounts." Fannie Mae Single Family Selling Guide, 5 Apr. 2023.

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