Loan impact
Summarized from the announcement · verifiedApplies to: Non-QM loans submitted under proprietary investor programs on or after the stated September 2026 application date.
Scope differs by change; see each change below.
- Addressed to
- Pennymac correspondent sellersFrom the publisher, not quoted from the text
- Investor
- PennymacFrom the publisher, not quoted from the text
- Affected areas
- Reserves; Eligibility
- Affected documents
- Written prepayment penalty agreement; Alien status documentation form; Direct verification bank statements
- Effective
- Applications dated on or after Sep 4, 2026
- Applicability confidence
- Verified: every row taken from the source text is supported by it; rows marked "from the publisher" are not quoted
Summary by AWACS. Pennymac 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| Requirement | Previously | Now |
|---|---|---|
| Builder non-arm length transaction eligibility restrictionsTightenedRequired | Not stated | Builder refinances where the developer constructed over four units in the project, as well as newly built second home or investment transactions involving borrower affiliations, are ineligible. |
| Departing home contract non-compliance reserve mandateTightenedRequired | Not stated | Loans missing specific pending-sale benchmarks treat the departing dwelling as another financed tract requiring two uncapped reserve cycles. |
| Rhode Island business purpose prepayment provisionsRelaxed | Not stated | Commercial business purpose mortgages located in Rhode Island may incorporate standard prepayment charges with early borrower approval. |
| Applies when: State is RI | ||
| Eligible notice of action paperwork variantsClarified | Not stated | Approved documentation for non-permanent resident status explicitly encompasses suffixes A, B, and C under Form I-797. |
| Departing residence property valuation reliefRelaxed | Not stated | Prior primary residences under sales agreements do not mandate an appraisal even when certain profile milestones are unfulfilled. |
| Automated asset data collection vendor expansionRelaxed | Not stated | Approved third parties may directly retrieve deposit history and compute qualifying income streams subject to re-underwrite review. |
What to do
AWACS interpretation · not source languageWhat to review: Review the mandatory ineligibility rules for builder-affiliated transactions and the two-cycle reserve requirement for departing residences missing pending-sale benchmarks effective September 4, 2026.
Enforce ineligibility for builder refinances where the developer built over four units and affiliated newly constructed second home or investment properties, and apply two uncapped reserve cycles when departing residences fail to meet pending-sale benchmarks for applications dated September 4, 2026, or later.
QC implications
- Audit Non-QM loans dated on or after September 4, 2026, to verify builder-affiliated transactions and projects with more than four units constructed by the developer were denied.
- Verify that files with departing properties missing required pending-sale milestones properly calculated and documented two uncapped reserve cycles.
- Sample Rhode Island business purpose files selecting prepayment penalties to confirm borrower agreement documentation is present.
Source and record
Version 1 · archivedChecks
Source verified: Passed
The document ID, link and publication date match the official source.
Quotes match the source: Passed
Every quoted passage appears word for word in the official document.
Requirements backed by the source: Passed
Anything marked required is backed by the requirement language and dates in the source.
In scope: Passed
The document is about residential mortgage lending.
Format and labels: Passed, adjusted automatically
The record follows the AWACS format and uses its standard labels.
- A detail the source does not support was removed or adjusted
Source
- Announcement 26-107 (official) ↗ (opens in a new tab)
- Archived copy, SHA-256 d29335095315…
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