AWACSMortgage compliance intelligence from Flightline

Newrez Correspondent · Correspondent Announcement 2026-082 · Published

Product and Underwriting Policy Changes for Smart Series Mortgages

SmartVest purchase transactions require borrowers to contribute at least five percent from own funds unless LTV or CLTV is eighty percent or less. The update also adds a seven-year adverse credit lookback for refinances, removes the maximum reserve cap on SmartVest, and eliminates underwriter review of automated scoring tools.

Action requiredApplications dated on or after Sep 24, 2026Checks passed· adjusted automaticallyRead the announcement ↗ (opens in a new tab)

Loan impact

Summarized from the announcement · needs review

Applies to: Smart Series loans currently in processing as well as new submissions received on or following the announcement date.

Scope differs by change; see each change below.

Addressed to
Newrez correspondent sellersFrom the publisher, not quoted from the text
Investor
NewrezFrom the publisher, not quoted from the text
Affected areas
Gifts; Reserves
Affected documents
Asset statements; scoring engine documentation
Effective
Applications dated on or after Sep 24, 2026
Applicability confidence
Needs review: some rows could not be matched to a quote from the source

Summary by AWACS. Newrez Correspondent's guide is proprietary, so AWACS does not reproduce its text. Read the official announcement ↗ (opens in a new tab)

What changed

Summarized from the announcement · Sections 6A.1(a), 6A.4(b)
RequirementPreviouslyNow
Minimum borrower contribution from own funds on SmartVest loans when LTV or CLTV exceeds 80%TightenedRequiredSection 6A.1(a)Previously: All down payment and closing cost monies were permitted to come entirely from gift funds.For all occupancy types, borrowers must provide at least 5% from their own funds based on the purchase price or appraised value, whichever is less, unless the LTV or CLTV is at or below 80%.
Applies when: Product is SmartVest
Review threshold for large deposits on SmartVestRelaxedSection 6A.4(b)Previously: Underwriters had to evaluate substantial deposits across all purchase files to verify absence of gift funds.Evaluation of substantial or irregular deposits for gift monies is restricted to purchase loans exceeding eighty percent financing.
Applies when: Product is SmartVest · Purpose is purchase
Adverse credit event lookback for rate and term refinancesNewNew requirementDerogatory mortgage history and bankruptcy filings must not have occurred within seven years prior to the note date.
Applies when: Purpose is no_cash_out_refi
Interest-only reserve calculation methodology on SmartVestClarifiedNot statedReserve computations for interest-only offerings must incorporate the interest-only payment figure alongside escrow and association dues.
Applies when: Product is SmartVest
Ceiling on subject property reserve requirementsRemovedNot statedThe cap restricting total required reserves to fifteen months has been eliminated.
Applies when: Product is SmartVest
Automated underwriting scoring tool reconciliationRemovedNot statedThe requirement for underwriters to reconcile submitted scoring tools with final transaction parameters was eliminated.

What to do

AWACS interpretation · not source language

What to review: Underwriting teams should first review pipeline and newly submitted SmartVest purchase loans with financing above 80% LTV or CLTV to enforce the mandatory 5% minimum borrower contribution from personal funds.

Underwriting

Effective September 24, 2026, ensure SmartVest purchase applications in the pipeline and newly submitted require at least 5% borrower contribution from own funds based on the lesser of the purchase price or appraised value whenever LTV or CLTV exceeds 80%.

QC implications

  • Sample SmartVest purchase transactions with LTV or CLTV exceeding 80% to verify borrowers contributed at least 5% from their own funds rather than relying solely on gifts.
  • Verify that rate and term refinance files reflect the seven-year adverse credit lookback for bankruptcy filings and derogatory mortgage history.
  • Confirm that SmartVest interest-only reserve calculations include the interest-only payment amount with escrow and association dues, and that reserves are no longer capped at fifteen months.

Source and record

Version 1 · archived

Checks

  • Source verified: Passed

    The document ID, link and publication date match the official source.

  • Quotes match the source: Passed, adjusted automatically

    Every quoted passage appears word for word in the official document.

    • A loan-impact detail without a supporting quote was removed
    • A detail the source does not support was removed or adjusted

  • Requirements backed by the source: Passed, adjusted automatically

    Anything marked required is backed by the requirement language and dates in the source.

    • An independent check could not confirm a requirement; it is shown as review, not action
    • An independent check could not confirm which way a change moves a rule; it is not marked as required

  • In scope: Passed

    The document is about residential mortgage lending.

  • Format and labels: Passed

    The record follows the AWACS format and uses its standard labels.