A Fannie Mae borrower wants to use eligible vested retirement assets solely to meet reserves, not for the down payment or closing costs. After verifying account ownership, vesting, accessibility and the eligible amount, must the funds be withdrawn?
Correct Answer
B) No: retirement funds used for reserves need not be withdrawn
B. Eligible retirement reserves need not be withdrawn. The account is being used to demonstrate reserves rather than cash required at closing. Eligibility still requires ownership, vesting and withdrawal access regardless of current employment status. Scope and exceptions: Assets held as securities remain subject to the referenced valuation rules. Down-payment and closing-cost uses have different receipt-of-funds considerations. Do not substitute an invented universal haircut or count an unverified entire balance. Source: Retirement Accounts — https://selling-guide.fanniemae.com/sel/b3-4.3-03/retirement-accounts
Why This Is the Correct Answer
B. Eligible retirement reserves need not be withdrawn. The account is being used to demonstrate reserves rather than cash required at closing. Eligibility still requires ownership, vesting and withdrawal access regardless of current employment status. Scope and exceptions: Assets held as securities remain subject to the referenced valuation rules. Down-payment and closing-cost uses have different receipt-of-funds considerations. Do not substitute an invented universal haircut or count an unverified entire balance.
Why the Other Options Are Wrong
Option A: Yes: withdrawal is required whenever an account is a 401(k)
A 401(k) label does not impose mandatory withdrawal for reserves.
Option C: No: therefore the full statement balance may be counted without verification
No withdrawal does not mean no verification.
Option D: Yes: every reserve asset must first be converted to a checking-account deposit
Conversion to a checking deposit is not required for every reserve asset.
Exam Tip
Available for withdrawal and actually withdrawn are different requirements.
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