Guide Update 26-07
:  Letters of Credit
Effective:
Letters of Credit (Redline).pdf
Future Clean Version - Effective 2026-03-11.pdf

Primary Audience: Letter of Credit Managers

HIGHLIGHTS

Effective for all Mortgage Loans as of March 11, 2026, updated the eligibility rating criteria for a financial institution to issue or confirm a Letter of Credit. 

 

Primary Changes

Updated the rating criteria in Part I, Chapter 2: Mortgage Loan, Section 204.02: Issuers and Ratings to clarify that to be eligible to issue or confirm a Letter of Credit, the financial institution must:

  • if rated by only 1 of the following rating agencies, have either a:
    • Standard and Poor’s long-term issuer rating of "A" or better; or
    • Moody’s long-term issuer rating of “A2” or better; or
  • if rated by both of the following rating agencies, have both a:
    • Standard and Poor’s long-term issuer rating of "A" or better; and
    • Moody’s long-term issuer rating of “A2” or better.

 

Questions

Please contact Lender Risk Management at [email protected] with any questions.