Topic

Description

Eligible Product

Standard Jumbo Fixed Rate – Fully amortizing

Loan Term

30 Year Fixed

Interest-Only Feature

Not allowed

Minimum Loan Amounts

$150,000

Maximum Loan Amounts

Up to $2mil – See Matrix

LTV/CLTV

See Matrix

Occupancy

Primary residence O/O only

2^nd Home

Not allowed

Investment / NOO

Not allowed

Loan Purpose

•       Purchase

•       Rate & Term Refinances

Cash Out

Not allowed

Secondary Financing

Not allowed

Topic

Description

Eligible Properties

•       Single family detached or attached

•       PUDs

•       Condos

Ineligible Properties

•       2-4 Units

•       Manufactured Homes

•       Condotels

•       Hotel Condominiums

•       Unimproved land

•       New construction homes purchased through auction

•       Log, earth or dome homes

•       Hobby farms

Factory Built Housing

Allowed provided marketability can be established

Manufactured/Mobile Homes

Not allowed

Property Flip Transactions

Not allowed

Properties with resale/deed restrictions

Not allowed

Lava Zones 1 and 2

Hawaii properties in Lava Zones 1 or 2 are not eligible for purchase

Properties Listed for Sale

•       Currently listed for sale – Not eligible for financing

•       Listed for sale within 6 months prior to loan application – Not eligible

Eligible Borrowers

•      US Citizen

•      Resident Aliens holding a Green Card

•      Non-Resident aliens holding a Social Security Number stating OK to work with INS authorization and a copy of a work visa or work authorization card

Non-Permanent Resident Aliens

•      Must have a minimum 2-year history of residence, employment and credit in the US, or

•      Borrowing with a US citizen or permanent resident alien

•      Must provide evidence of a valid, acceptable unexpired visa

Non-occupant co-borrower

•      Allowed

Foreign Nationals

•      Not allowed

ITIN Borrowers

•      Not allowed

Multiple financed properties

•      Total of 4 including all financed properties with all lenders

•      No restriction on # properties borrower owns free and clear

Topic

Description

Payoff vs. Paydown

•       Accounts may not be “paid down” to 10 months or less to qualify borrower

•       Installment or Mortgage accounts must be paid in full

•       Payoff of revolving accounts is NOT ALLOWED to qualify the borrower

•       If payments cannot be determined, use greater of $10 or 3% of outstanding balance

Deferred payments

•       Deferred payments with more than 10 months of payments remaining must be included in qualifying ratio

•       If actual payment cannot be determined, use 1.5% of original student loan balance

Co-signed loans

•       Monthly payment on a co-signed loan may be excluded with evidence of timely payments being made by someone else other than borrowers

•       Copies of cancelled checks for last 6 months or a statement from credit is acceptable documentation

Lease payments

•       Monthly payment associated with a lease must be included in total monthly obligation regardless of # of months remaining until the end of the lease term

HELOC

•       If not shown on credit report, payments on a HELOC with an outstanding balance may be calculated at 1% of the outstanding balance or the payment reflected on the Borrower’s billing statement

Topic

Description

Interested Party Contributions

Up to 6%

Temporary Buy-downs

•       2/1, 3/2/1 ALLOWED. 

•       Compressed and Present Value buy-downs NOT allowed.

Impounds/Escrow

•       Subject to state laws and are mandatory for loans with LTV’s > 80%

•       Subject to .25% price hit if waived

Assumptions

Not permitted

Age of Documents

Credit Documents – 120 days old

Appraisal – 90 days old

•       At closing, if appraisal is older than 90 days but less than 1 year, obtain an update from the appraiser indicating that the property value has not declined since original appraisal date.  Otherwise, a new appraisal is required.

Topic

Description

Converting Principal Residence to 2^nd Home

•       Qualify borrower for both payments if current residence will not be sold (closed) prior to the new transaction or converting to 2^nd home, AND

•       The greater of 6 months PITI reserve requirement for BOTH PROPERTIES, or 10% PCL required

Converting Principal Residence to Investment Property

•       If there is 30% documented equity in current property, use 75% of rental income to offset the monthly PITI payment in qualifying

–      Reserve requirement of 6 months PITI for BOTH PROPERTIES or 10% PCL required, AND

–      Rental income is documented with a fully executed lease agreement, AND

–      Proof is provided that a security deposit was received from tenant and deposited in borrower’s account.

–      If rental income will not be used, only two months PITI for both properties or 10% PCL is required.

•       If there is NO 30% equity, cannot use rental income,

–      Qualify borrower using both both payments,

–      Reserve requirement of 6 months PITI for BOTH PROPERTIES or 10% PCL required.

Topic

Description

Minimum Fico Score

•       720

•       All borrowers must meet the minimum credit score requirement

•       May not be delinquent currently on their mortgage or housing payment

Non Traditional Credit

Not allowed

Mortgage Payments

•       0 x 12

•       0 x 24 to go to 80% LTV

Housing Payment History

•       Mortgage, rental or combination covering most recent 12 months (minimum) with NO LATE payments must be verified either by the credit bureau or by direct verification

Revolving/Installment

•       Late payments are considered accounted for in credit score

Bankruptcy/Foreclosure

•       Bankruptcy, Foreclosure, Deed-in-Liew, Settled for less proceedings discharged within the last SEVEN (7) YEARS – NOT ELIGIBLE

Judgments, Collections, Charge Offs, Credit Counseling

•       Subject to individual evaluation based on investor review

Topic

Description

Down Payment / Funds to close

•       Gift/Grant from relative or non-profit organization or borrower’s employer

•       Full down payment may be gifted (LTV’s < 80%)

Use of Credit Card for payment of fees

Visa, MC, Discover allowed for:

•       Appraisal, Credit report, Origination fee, Commitment fee, Lock-in fee, extended lock fee

•       3% of new balance must be included in DTIR for qualifying

•       Purchases – Max 1.5% of mortgage amount may be charged plus credit report and appraisal fees

•       Refinances – Max $3,000 may be charged

PCL – Post Closing Liquidity

10% PCL required - Defined as a % of the new loan amount

Liquid assets to meet reserves (PCL)

•       Cash equivalents (checking, savings, money market accounts

•       100% of vested value of publicly traded stocks, mutual funds, securities

•       Cash surrender value of life insurance

•       70% of vested pension, profit sharing, 401k, IRA for borrower who have reached required age for non-penalty withdrawal

•       <80% LTV – ½ of liquid reserve may come from 70% of vested pension, profit sharing, 401k, IRA for borrowers who have NOT reached the required age for non-penalty withdrawals

•       Equity proceeds from the sale of a residence

Ineligible for meeting reserve requirements

•       Gift funds, borrowed funds, funds held in business accounts, proceeds from cash out refinances, proceeds from sale of other assets (not residence), stock in closely held corporations, borrowers who have not reached the required age for non-penalty withdrawal

Topic

Description

Prior Approval loans

•       Verbal Verification Of Employment is required for all borrowers

•       Applies to all income types with the exception of passive income

Self Employed Borrowers

•       All self-employed borrowers are required to provide copies of signed individual (and business if appropriate) tax returns, including all applicable scheduled for previous 2 years

•       YTD Income/Expense Statement and Balance Sheet are also required if more than 120 days have lapsed since the last fiscal year end

Child Support, Alimony, Maintenance Income

•       Need signed court order with proof of receipt for previous 6-12 months if monthly income does not exceed 30% of qualifying income

•       Cannot consider for qualifying if received < 6mos, partial payments, inconsistent

Commission Income

•       Must have 2 year history of receipt to use as qualifying income

Bonus Income

•       Must have 2 year history of receipt to use as qualifying income

Overtime, 2^nd Job

•       Must have 2 year history and likely to continue for the next 3 years

Foreign Income

•       Only if income can be verified on US personal tax returns

Rental Income

•       Follow standard Fannie guidelines

Notes receivable / Unsecured

•       Evidence of receipt for the last 12 months plus copy of note verifying payment amount and remaining term of at least 3 years

Employed by Relative

•       Need Borrower’s signed and completed personal federal income tax returns for most recent 2-year period, VOE, and W-2’s for most recent 2 years

•       Current income reported on VOE or pay stub may be used if consistent with W-2 earnings reported on tax returns

Topic

Description

Appraisal Requirements

•       All appraisals and valuations must be ordered by First Mortgage through RESdirect and obtained from Rels Valuation. 

•       Full appraisal is one prepared on Form 1004/70, 1095, 1073

•       PIA/PIW, 2055 or a 1075 Summary Report is not acceptable