AGENCY HIGH LTV REFINANCE OPTION

Transcription

1 AGENCY HIGH REFINANCE OPTION The high refinance ptin is designed fr (FNMA/FHLMC) brrwers wh are making their mrtgage payments n time, but whse ratis exceed the maximum allwed fr standard limited cash-ut refinance transactins. Transactin Type Principal Residence Limited Cash-Out Refinance, Fixed Rate, ARMs with Initial Fixed Perids > 5 Years DU/LPA r Manual Underwriting Units Minimum Maximum Secnd Hme Investment FRM: N Limit ARM: 105% Min Credit Scre Max DTI 620 N Maximum Existing Lan Requirements Existing Lans must meet the fllwing criteria t qualify - be a first lien, cnventinal mrtgage lan wned r securitized by either FNMA r FHLMC - Have a nte date n r after Octber1, Have seasning f at least 15 mnths- meaning at least 15 mnths have passed frm the nte date f the existing lan t the nte date f the new lan. Fr example, if the nte date n the existing lan is January 1, 2018, the nte date f the new lan must be n earlier than April 1, Nte: Lans that are part f a risk-sharing structure (fr example, credit risk transfers) are eligible t be refinanced under the high refinance ptin. Cnversely, the fllwing lans are nt eligible fr refinance under the high refinance ptin: existing HARP lans; lans that are subject t utstanding repurchase demands; r lans that are subject t recurse, repurchase agreement, indemnificatin, r anther negtiated credit enhancement required at riginatin fr eligibility purpses are nt eligible unless the new lan is als subject t a credit enhancement that meets eligibility requirements, r such credit enhancement is nt required fr eligibility purpses n the new lan AGENCY HIGH PROGRAM Update: 1/18/2019 1

2 New Lan Requirements Existing Lans must meet the fllwing criteria t qualify - Have an applicatin date n r after Nvember 1, Be either: a fixed-rate lan; r An ARM that refinances an existing ARM, with the new ARM having a minimum five-year fixed rate term. have a term nt t exceed 30 years Meet current general r high-balance lan limits, as applicable, at the time f lan delivery. have a newly executed Unifrm Residential Lan Applicatin (Frm1003/1003(S))fr the brrwer(s) with all infrmatin cmpleted, including brrwer incme, emplyment, and assets. Prvide a benefit t the brrwer in the frm f at least ne f the fllwing: a lwer P&I payment; a lwer interest rate; a shrter amrtizatin term r; mvement t a mre stable prduct (fr example, frm an ARM r step-rate mdificatin t a fixed-rate lan). The new lan cannt be riginated pursuant t Sectin 50(a)(6)f Article XVI f the Texas Cnstitutin. Temprary interest rate buydwns are nt allwed. The standard limited cash-ut refinance requirements are mdified fr high lan transactins. The new lan amunt is limited t the payff f the UPB f the existing first mrtgage lan being refinanced (including accrued interest); the financing f clsing csts, prepaid items, and pints up t $5,000 ttal fr the new lan; and Cash back t the brrwer up t $250. Excess prceeds may be applied as a curtailment n the new lan. Lenders may prvide an incentive t the brrwer(s) in the frm f a payment t pay ff a prtin f the existing lan being refinanced prvided the fllwing: n repayment is required, the payment is reflected n the settlement statement as a lender credit, and Because any such reductin f the existing lan balance will impact the rati as it applies t the calculatin f the new lan amunt, lenders are advised t use cautin as incentives have the ptential t reduce the rati belw the minimum allwed fr this ptin. AGENCY HIGH PROGRAM Update: 1/18/2019 2

3 Prgram Details Brrwer Eligibility Generally, the brrwer(s) n the lan being refinanced (r the current brrwer(s) if the existing lan was assumed) must be identical t the brrwer(s) n the new lan. Hwever, an existing brrwer may be excluded frm the new lan fr either f the fllwing: the remaining brrwer(s) meets the mrtgage payment histry requirements and prvides evidence that they have been making the payments n the existing lan frm their wn funds fr the mst recent 12 mnths prir t the applicatin f the new lan, r Due t the death f a brrwer. Evidence f the deceased brrwer s death must be dcumented in the lan file. New brrwers may nt be added t the new lan refinanced via the high refinance ptin. Additinally, if the lan being refinanced was assumed by the current brrwer(s) prir t the refinance, the current brrwers must have been qualified fr the existing lan in accrdance with Agency Requirements Brrwers wh have applied fr r received a mdificatin are eligible fr refinancing prvided the fllwing: the brrwer benefit prvisin is met using the prevailing payment, and The payment histry requirement is met. All eligible prperty types are permitted fr refinance under the high refinance ptin. Prperty Eligibility Fr prperties in cnd, c-p, r PUD prjects, all prject review requirements are waived with the exceptin that the prject is NOT a cnd r c-p htel r mtel, husebat prject, timeshare, r segmented wnership prject. See. FNMA Ineligible Prject list fr details. Prperty and fld insurance will be required. AGENCY HIGH PROGRAM Update: 1/18/2019 3

4 Minimum requirements Fr the new lan t be eligible, the fllwing table prvides the minimum rati requirements fr bth fixed-rate and ARM lans. Occupancy Type Units Minimum Principal Residence % % % Secnd Hme % Investment Prperty % The lan being refinanced and the new lan d nt have t represent the same ccupancy. The ccupancy f the subject prperty may have changed by the time f the high refinance transactin. There are n maximum, C, r HC ratis fr fixed-rate lans. There is a maximum rati f 105% fr ARM lans, but n maximum C r HC rati. Eligible Subrdinate Financing Leasehld Estates Eligibility Multiple Financed Prperties Prgram Cde New subrdinate financing is nly permitted if it replaces existing subrdinate financing. In additin, the existing subrdinate financing may nt be satisfied with the prceeds f the new lan, but may remain in place as lng as it is resubrdinated t the new lan, and May be simultaneusly refinanced as lng as the new subrdinate lien lan amunt des nt exceed the existing UPB. The term f the leasehld must run fr at least five years beynd the maturity date f the mrtgage, unless fee simple title will vest at an earlier date in the brrwer. The lender is nt required t perfrm any additinal review f the leasehld terms. There are n limits n the number f financed prperties the brrwer may wn. HC (Cnfrming) HB (Hi-Balance) Term numbers t fllw i.e. HC30 (30 year fixed); HB5/1 (5/1 High Balance ARM) AGENCY HIGH PROGRAM Update: 1/18/2019 4

5 If the sum f all applicable LLPAs exceeds the caps listed belw, the excess will be waived at delivery. Occupancy Primary Units Lw Range (n LLPA Caps) Mid-Range LLPA Caps Term <=15yrs LLPA Caps Term > 15yrs High Range LLPA LLPA Caps Caps Term Term > <=15yrs 15yrs % 2.00% >115% 0% 0.75% % 2.00% >100% 0% 0.75% % 2.00% >90% 0% 0.75% 2 nd Hme % 3.00% >105% 1.50% 2.00% Investment % 3.00% >90% 1.50% 2.00% > 95% must refer t AGENCY > 95% /FICO LLPA grid All AGENCY LLPAs are cumulative AGENCY HIGH PROGRAM Update: 1/18/2019 5