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< Fannie Mae Loans

Fannie Mae Reserve Requirements


In general, when you hear "Fannie Mae Reserve Requirements" it's referring to a reserve of cash or assets that may be used to make payments on the loan should anything happen.

Cash-out refinances and limited cash-out loans do not require reserves and therefore do not fall under this category. If you're seeking a loan for a primary or secondary home, all underwriters will determine, on a case-by-case basis, if your loan requires you to place assets in reserve in order to qualify.

If you're considering seeking a loan for an investment property, be aware that investment properties typically require a reserve of six months or more.

What are acceptable sources of reserves?

Acceptable reserves are any liquid financial asset that is readily available in:

  • Checking or savings accounts
  • Stocks, bonds, mutual funds, certificates of deposit (CDs), money market funds and trust accounts
  • Amount currently vested in a retirement savings account
  • Cash value of a vested life insurance policy

What are unacceptable sources of reserves?

Unacceptable reserves are any of the following financial instruments:

  • Funds that have not been vested
  • Funds that require retirement, employment termination or death before permitting withdrawal.
  • Stock held in an unlisted corporation
  • Non-vested stock options and non-vested restricted stock
  • Personal unsecured loans
  • Interested Party Contributions (IPCs)
  • Cash proceeds from a cash-out refinance transaction on the subject property

Additional Questions?

Have questions about extenuating circumstances like commissions, alimony and child support? Review our additional forms of income for conventional loans.

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