Loan impact
Summarized from the announcement · verifiedApplies to: Conventional, AUS Jumbo, and Non-QM loans secured by units in project developments.
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
- Programs
- Conventional, Jumbo, Non-QM
- Affected area
- Eligibility
- Affected documents
- Property insurance policy; HO-6 policy
- Effective
- Applications dated on or after Jul 1, 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 |
|---|---|---|
| HO-6 property insurance coverage for project units under proprietary productsTightenedRequired | Not stated | Borrowers must carry an HO-6 policy if the master policy omits interior elements or features a unit deductible, with coverage meeting restoration costs or the deductible. |
| Applies when: Application date on or after July 1, 2026 · Program is Jumbo or Non-QM | ||
| Maximum per-unit deductible for project master property policies under proprietary productsRelaxed | Previously: Previously, the maximum per-unit deductible was capped at 5 percent, with HO-6 coverage cures permitted only for geographic-specific perils. | The 5 percent deductible limit and geographic restriction are retired, allowing master property insurance policy per-unit deductibles up to $50,000. |
| Applies when: Application date on or after July 1, 2026 · Program is Jumbo or Non-QM | ||
| Agency property insurance and deductible policy alignmentClarified | Not stated | Pennymac adopts the updated property insurance and deductible standards issued by Fannie Mae and Freddie Mac for project units. |
| Applies when: Application date on or after July 1, 2026 · Program is Conventional | ||
What to do
AWACS interpretation · not source languageWhat to review: Review the mandatory HO-6 property insurance coverage requirements for jumbo and non-QM project unit loans with application dates on or after 2026-07-01 where master policies omit interior elements or include unit deductibles.
Require borrowers on jumbo and non-QM loans with application dates on or after 2026-07-01 to provide an HO-6 policy when the project master policy excludes interior elements or includes a unit deductible.
QC implications
- Test project unit jumbo and non-QM loans applied for on or after 2026-07-01 to confirm that an HO-6 policy is present and covers restoration costs or the deductible whenever master policies exclude interior elements or apply unit deductibles.
- Verify that project master property insurance policy per-unit deductibles do not exceed $50,000 across all covered perils.
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
- Correspondent Announcement 26-76 (official) ↗ (opens in a new tab)
- Archived copy, SHA-256 96b6dfaa4e4d…
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