PRE-CLOSING Underwriting Submission Checklist for Conventional NON-Conforming loans

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3 PRE-CLOSING Underwriting Submission Checklist for Conventional NON-Conforming loans Borrower: BB&T Loan Number: Correspondent: Contact Name: Contact Contact Phone: Contact Fax: Date MI required on all loans with an LTV of 80.01% to 90% MI company (please select one): ARCH Essent Guaranty GENWORTH MGIC NATIONAL RADIAN UGIC Cover Memo/Notes to Underwriting BB&T Lock Confirmation Sheet Final typed Transmittal Summary (Max DTI 43% Applicable with application dates on or after ) Final typed Application Original, Signed Initial Application Tri-merged Credit Report Credit Alerts Provide satisfactory documentation ALL Credit Alerts on borrower(s) credit report have been addressed and cleared. Verification of Residency (2 year minimum) Contract /Commitment Letter from Lender/HUD-1 for Current Residence Additional Credit Divorce Decree/Separation Agreement Trust (If Applicable) Employment Income Salaried Borrowers Include the following: Written Verbal Verification of Employment(s) covering 2 full years; AND Verbal Verification of Employment obtained either no more than 10 Business Days prior to the Note Date or after the Note Date but prior to delivery to BB&T; OR All of the following: Most recent YTD paystub or salary voucher documenting at least 30 days of income W-2(s) for the most recent 2 tax years Verbal Verification of Employment obtained either no more than 10 Business Days prior to the Note Date or after the Note Date but prior to delivery to BB&T; Self-Employed Borrowers Include the following: Income Analysis Form (Freddie Mac Form 91); Cash Flow Analysis Form (Fannie Mae Form 1084); or comparable Complete signed individual federal tax returns for most recent 2 years Personal Business Third party verification of business dated no more than 30 days prior to the Note Date or after the Note Date but prior to delivery to BB&T. Federal Tax Returns Personal Business Year to Date P&L and Balance Sheet Additional Income/Employment Verification IRS Form 4506-T, completed, signed and dated at application for each borrower Official IRS Federal Tax Return Transcript(s) or IRS Record of Account Verification of Assets (Funds on Deposit - most recent 2 statements) Additional Asset Verification Gift Funds/Gift of Equity Executed Purchase Contract for Subject Property with all Addendums Evidence of Appraisal ordered if submitting loan without appraisal Appraisal 2 appraisals if loan amount greater than $1,000,000 BB&T Condominium Classification Certification Include the following: Current Budget and Balance Sheet for HOA Declaration page for current insurance policies Condominium Project Questionnaire Full Form - full review required USA PATRIOT ACT Compliance if the application was taken Face to Face Borrower General Authorization to Release Information Preliminary title work Refinance loans only Hazard Insurance/Certificate of Insurance HO6 policy required for Condominiums if interior coverage not included in condominium master policy HO3/full coverage policy; blanket policy w/interior coverage; or blanket policy w/ho6 required for Attached PUDs Tax/Millage rate from county/city on New Construction, Construction Renovation, and Construction Conversion Flood Hazard Determination with Life of Loan Coverage Please Upload Loan file utilizing the upload through the BB&T Correspondent Lending website. ***Please Note: 1. This checklist is ONLY to be used for Jumbo Non-Conforming loans. 2. Do NOT submit ANY original documents at the time of underwriting. 3. Loans will be returned to the correspondent if not FULLY processed or does not contain all pertinent items required for underwriting. 4. All loans must receive final underwriting approval from BB&T prior to loan closing. I do hereby certify that I have submitted all documentation required by BB&T guidelines and BB&T Overlays. Printed Name Processor s Signature Date BB&T Internal The information in this document is the property of BB&T and is intended for the use of BB&T associates and authorized representatives. Any disclosure, copying, distribution, or use by others of the information contained herein is strictly prohibited

4 9:1 NON-CONFORMING/JUMBO FIXED RATE LOAN PRODUCT CODE LOAN PRODUCT LOAN TERM/AMORTIZATION TERM* Year Fixed months Year Fixed months *Minimum Amortization Term 120 months Refer to BB&T s current Non-Conforming/Jumbo Underwriting Guidelines section for additional information. ********************************************************************************************************************************* APPRAISAL REQUIREMENTS Loan amounts less than or equal to $1,000,000 One full URAR Loan amounts greater than $1,000,000 Two full URARs ASSUMABILITY Not assumable CERTIFICATIONS Qualified Mortgage (QM), Higher-Priced (HPML) and High Cost (HCL) Mortgage Loan Certification or comparable form that validates QM status, HPML and HCL. BB&T does not purchase high cost loans. CREDIT SCORE Refer to the Price Adjustments and LTV Charts for minimum credit score requirements. Rescoring and Credit Repair Legitimate corrections to a borrower s credit profile are acceptable, i.e. John Doe Jr. s derogatory credit is reflected on John Doe Sr. s credit report. In order to ensure the accuracy of the information, correction should be made at the credit repository level. Any supporting documentation sent to the credit repositories along with all copies of credit reports should be maintained in the Correspondent s loan file and included with the file submission when delivered to BB&T Correspondent Lending. The use of credit repair vendors who assist borrowers to falsely repair their credit by the manipulation of data contained in the borrower s credit profile to improve credit scores for purpose of loan eligibility, rate/price improvement and creditworthiness is expressly prohibited by BB&T Correspondent Lending. It is at BB&T Correspondent Lending s discretion to determine if the credit history and credit scores are legitimate, acceptable and meet guideline requirements. ESCROW WAIVER Permitted for loans with LTVs less than or equal to 80%. Refer to the SRP Schedule for the current fee when exercising the escrow waiver. Escrow waivers are NOT permitted for: Loans with LTVs greater than 80%. Higher Priced Mortgage Loans (HPMLs), regardless of LTV. Properties within a flood hazard area must have flood insurance escrows. HOMEOWNERSHIP COUNSELING DISCLOSURE Homeownership Counseling Disclosure required per the 2013 HOEPA Rule, an amendment to Regulation X (RESPA). BB&T Internal The information in this document is the property of BB&T and is intended for the use of BB&T associates and authorized representatives. NON-CONFORMING/JUMBO FIXED RATE

5 INELIGIBLE LOAN TYPES AND PROGRAMS ARMs Balloons Downpayment Assistance Programs Lending on Native American Tribal Lands Properties subject to Property Assessed Clean Energy (PACE) Obligations Properties exceeding 10 acres with LTVs greater than 80% LOAN AMOUNT Refer to the Price Adjustments and LTV Charts LOAN PURPOSE Purchase No Cash-Out Refinance Cash-Out Refinance LTV/TLTV/HTLTV Cash-Out Refinances are limited to 75% LTV. Loans on properties located in California are limited to 80% LTV. Refer to the Price Adjustments and LTV Charts MAXIMUM INTERESTED PARTY CONTRIBUTIONS Maximum financing concessions are based on TLTV when secondary financing is present. LTV when no secondary financing is present. OCCUPANCY LTV/TLTV AMOUNT Primary Residence/ Second Home Over 75% to 90% 6% 75% and below 9% Seller contributions may be used to pay closing costs. If the following conditions are met, the seller may also pay prepaids: Prepaids/escrows not paid by the borrower are paid by: The originating lender, The borrower s employer, and/or The property seller The prepaids/escrows paid by (i)- property seller or (ii) - the originating Lender affiliated through ownership with the property seller are included in the total financing concessions permitted. The loans do not have LTV ratios that exceed the maximum allowable amount. The loans are secured by 1-unit owner-occupied primary residences. The borrower makes a down payment of at least 5% from own funds or other acceptable equity. MORTGAGE INSURANCE Required on all loans with LTVs greater than 80%. Required mortgage insurance coverage: TRANSACTION TYPE MORTGAGE INSURANCE COVERAGE LTVs % LTVs % Loan Terms > 20 Years 12% 25% Loan Terms <= 20 Years 6% 12% Loans on properties located in California are limited to 80% LTV. All loans requiring MI must be sent for a full underwrite to the MI company. BB&T Internal The information in this document is the property of BB&T and is intended for the use of BB&T associates and authorized representatives. NON-CONFORMING/JUMBO FIXED RATE

6 Acceptable Mortgage Insurance Options Standard Premium Monthly Premium MI Split Premium MI combining monthly MI with upfront premium paid at closing. Upfront premium must be paid by the Borrower, Seller or Builder and cannot be paid through a Lender credit. NOTE: Split Premium MI where a portion of the borrower-purchased mortgage insurance premium is paid and the other portion is financed in the loan amount is not eligible for delivery. See Unacceptable Mortgage Insurance Options for additional information regarding unacceptable mortgage insurance options. Single Premium aka Super Single Premium Single upfront premium paid at closing. Proof of payment to MI Company required. Copy of check is sufficient. Financed Single Premium Maximum Gross LTV is 90% for Fixed Rate products (includes financed MI) Standard coverage is required. If the mortgage insurance is being financed or paid in cash, this information must be included when underwriting the loan and, if borrower is paying in cash, adequate funds must be verified. See the final 1003 application, page four, section VII, letter (n) to confirm if the premium is financed or being paid in cash. The dollar amount for the single premium must be disclosed on the settlement statement/closing disclosure. Lender- Paid MI Single Premium Option only. Proof of payment to MI Company required for LPMI. Copy of check is sufficient. The Correspondent is the Lender. BB&T does not offer special pricing for Lender-Paid MI. Unacceptable Mortgage Insurance Options Reduced Premium Plans Split Premium MI A portion of the borrower-purchased mortgage insurance premium is paid and the other portion is financed in the loan amount. Insured loans with Declining Renewals Eligible Private Mortgage Insurance Companies ARCH ESSENT GUARANTY GENWORTH MGIC NATIONAL MORTGAGE INSURANCE CORPORATION RADIAN UGIC Ineligibles Properties exceeding 10 acres with LTVs greater than 80% NOTE Freddie Mac 3200 Unit Number must be included in the property address line. Refer to Legal Document Matrix for additional information. BB&T Internal The information in this document is the property of BB&T and is intended for the use of BB&T associates and authorized representatives. NON-CONFORMING/JUMBO FIXED RATE

7 OCCUPANCY REQUIREMENTS Primary Residence Second Home POINTS AND FEES CAP 3% of the total loan amount PRICING Refer to the Rate Sheet and BB&T s current Price Adjustments and LTV Charts for any price adjustments that might be applicable. PROPERTY TYPES Primary Residence Family, Warrantable Condominiums, PUDs, and Townhomes Second Home - 1 unit, Warrantable Condominiums, PUDs, and Townhomes Attached PUDs Property Insurance requirements: HO3/comparable full coverage homeowners insurance policy; OR HO6 policy required with coverage, as determined by the insurer, which is sufficient to repair the unit to its condition prior to a loss claim event for attached PUDs where the homeowners association has a blanket policy covering the exterior structure only; OR Homeowners Association blanket policy covering the exterior AND interior of the unit. HO6 coverage will not be escrowed separately if blanket policy covers the exterior and interior of the unit. HO3/comparable full coverage policies will be escrowed. Condominiums Correspondents are responsible for classing Condominiums as outlined in the Non-Conforming/Jumbo Underwriting Guidelines. Property Insurance requirements: HO6 policy required with coverage, as determined by the insurer, which is sufficient to repair the unit to its condition prior to a loss claim event for Condominiums where the condominium master policy covers the exterior structure only; OR Condominium master policy covering the exterior AND interior of the unit. HO6 coverage will not be escrowed separately if master policy covers the exterior and interior of the unit. Ineligible Property Types 2 Units with LTVs greater than 60% 3-4 Units Investment Properties Manufactured Housing QM STATUS Safe Harbor: Mortgage that does not exceed limits on upfront points and fees; has an APR relative to the APOR that is equal to or less than 1.5% for first-lien loans. Rebuttable Presumption: Mortgage than does not exceed limits on upfront points and fees; has an APR that exceeds the APOR as of the date the interest rate is set by 1.5% or more for first-lien loans. Also known as Higher-Priced. QUALIFYING RATIOS Refer to the Price Adjustments and LTV Charts as well as the Non-Conforming/Jumbo Underwriting Guidelines. BB&T Internal The information in this document is the property of BB&T and is intended for the use of BB&T associates and authorized representatives. NON-CONFORMING/JUMBO FIXED RATE

8 REFINANCES Refer to the Price Adjustments and LTV Charts as well as the Non-Conforming/Jumbo Underwriting Guidelines RESIDENCY STATUS US Citizens Permanent Resident Aliens Non-Permanent Resident Aliens must meet the additional requirements under the Non-U.S. Citizens sub-section of the Borrower Eligibility section located in the Non-Conforming Underwriting Guidelines. SECONDARY FINANCING Refer to the Price Adjustments and LTV Charts Seller-held seconds and Builder-held seconds are NOT permitted. TEMPORARY BUYDOWNS Not Allowed UNDERWRITING Underwriting Options Delegated Jumbo Non-Conforming loan amounts up to and including $1 million may be underwritten and closed by Correspondents approved for Delegated Jumbo Non-Conforming Underwriting; or submitted to BB&T Correspondent Lending for underwriting approval prior to closing. Jumbo Non-Conforming loan amounts exceeding $1 million, must be submitted to BB&T Correspondent Lending for manual underwriting and receive final underwriting approval from BB&T prior to loan closing. Non-Delegated For those Correspondents not approved for Delegated Jumbo Non-Conforming Underwriting, all Jumbo Non- Conforming loans, regardless of loan size, must be submitted to BB&T Correspondent Lending for manual underwriting and receive final underwriting approval from BB&T prior to loan closing. Refer to the Non-Conforming/Jumbo Underwriting Guidelines for specific BB&T underwriting requirements, as well as the Price Adjustments and LTV Charts for minimum credit score and reserve requirements. WORKSHEETS Points and Fees Worksheet or comparable form Ability to Repay Worksheet or comparable form OR Income calculation for each borrower on either the Transmittal Summary or on a separate form; AND Income and debt amounts must match on the Transmittal Summary and final application. BB&T Internal The information in this document is the property of BB&T and is intended for the use of BB&T associates and authorized representatives. NON-CONFORMING/JUMBO FIXED RATE

9 9:2 NON-CONFORMING/JUMBO 3/1, 5/1, 7/1, and 10/1 P&I LIBOR ARMS LOAN LOAN PRODUCT PRODUCT CODE 343 3/1 Year Discounted or Premium Non-Convertible ARM with 2/2/5 Caps 145 5/1 Year Discounted or Premium Non-Convertible ARM with 2/2/5 Caps 147 7/1 Year Discounted or Premium Non-Convertible ARM with 2/2/5 Caps /1 Year Discounted or Premium Non-Convertible ARM with 2/2/5 Caps Refer to BB&T s current Non-Conforming/Jumbo Underwriting Guidelines section for additional information. ********************************************************************************************************************************* ADDITIONAL DISCLOSURES PRODUCT LIBOR-INDEXED ADJUSTABLE RATE MORTGAGE LOAN PROGRAM DISCLOSURE 343 3/1 Year Discounted or Premium Non-Convertible ARM with 2/2/5 Caps 145 5/1 Year Discounted or Premium Non-Convertible ARM with 2/2/5 Caps 147 7/1 Year Discounted or Premium Non-Convertible ARM with 2/2/5 Caps /1 Year Discounted or Premium Non-Convertible ARM with 2/2/5 Caps Note: Use the Discounted disclosure if the Note rate is less than the index plus margin. Note: Use the Premium disclosure if the Note rate is equal to or greater than the index plus margin. The Consumer Handbook on Adjustable Rate Mortgages must be given to the borrower at application along with the applicable disclosure as indicated above. APPRAISAL REQUIREMENTS Loan amounts less than or equal to $1,000,000 One full URAR Loan amounts greater than $1,000,000 Two full URARs ASSUMABILITY 3/1 ARM - assumable during life of loan 5/1, 7/1, & 10/1 ARMs - assumable while in the adjustable phase, not assumable during the fixed hybrid period. CERTIFICATIONS Qualified Mortgage (QM), Higher-Priced (HPML) and High Cost (HCL) Mortgage Loan Certification or comparable form that validates QM status, HPML and HCL. BB&T does not purchase high cost loans. CREDIT SCORE Refer to the Price Adjustments and LTV Charts for minimum credit score requirements. Rescoring and Credit Repair Legitimate corrections to a borrower s credit profile are acceptable, i.e. John Doe Jr. s derogatory credit is reflected on John Doe Sr. s credit report. In order to ensure the accuracy of the information, corrections should be made at the credit repository level. Any supporting documentation sent to the credit repositories along with all copies of credit reports should be maintained in the Correspondent s loan file and included with the file submission when delivered to BB&T Correspondent Lending. BB&T Internal The information in this document is the property of BB&T and is intended for the use of BB&T associates and authorized representatives. NON-CONFORMING/JUMBO 3/1, 5/1, 7/1, and 10/1 P&I LIBOR ARMS(Non-Convertible) (Continued on next page)

10 The use of credit repair vendors who assist borrowers to falsely repair their credit by the manipulation of data contained in the borrower s credit profile to improve credit scores for purposes of loan eligibility, rate/price improvement and creditworthiness is expressly prohibited by BB&T Correspondent Lending. It is at BB&T Correspondent Lending s discretion to determine if the credit history and credit scores are legitimate, acceptable and meet guideline requirements. ESCROW WAIVER Permitted for loans with LTVs less than or equal to 80%. Refer to the SRP Schedule for the current fee when exercising the escrow waiver. Escrow waivers are NOT permitted for: Loans with LTVs greater than 80%. Higher Priced Mortgage Loans (HPMLs), regardless of LTV. Properties within a flood hazard area must have flood insurance escrows. HOMEOWNERSHIP COUNSELING DISCLOSURE Homeownership Counseling Disclosure required per the 2013 HOEPA Rule, an amendment to Regulation X (RESPA). INELIGIBLE LOAN TYPES AND PROGRAMS Downpayment Assistance Programs Lending on Native American Tribal Lands Properties subject to Property Assessed Clean Energy (PACE) Obligations INDEX 12 Month LIBOR Index INTEREST RATE ADJUSTMENTS The Initial Interest Rate Adjustment will be 36, 60, 84,120 months after the first month following loan closing; thereafter, the Interest Rate will be subject to change annually. For loans which close on the first day of the month, the Initial Interest Rate Adjustment will be 36, 60, 84,120 months after the month of loan closing; thereafter, the Interest Rate will be subject to change annually. INTEREST RATE CAPS & FLOOR CAP 3/1, 5/1, 7/1 & 10/1 P&I LIBOR ARMs Initial 2% (Increase or Decrease) Annual 2% (Increase or Decrease) Lifetime 5% Margin of 2.25% is the Floor. INTEREST RATE FORMULA Index plus margin rounded to the nearest.125% LOAN AMOUNT Refer to the Price Adjustments and LTV Charts LOAN PURPOSE Purchase No Cash-Out Refinance Cash-Out Refinance BB&T Internal The information in this document is the property of BB&T and is intended for the use of BB&T associates and authorized representatives. NON-CONFORMING/JUMBO 3/1, 5/1, 7/1, and 10/1 P&I LIBOR ARMS(Non-Convertible)

11 LOAN TERM/AMORTIZATION Amortization terms months (15 years, 1 month to 30 years). The outstanding principal balance will be re-amortized over the remaining life of the loan at each interest rate change date. NOTE: Amortization terms below 181 months for Adjustable-rate products are NOT allowed. LTV/TLTV/HTLTV Purchase and No Cash Out Refinances are limited to 80% LTV Cash-Out Refinances are limited to 75% LTV. Refer to the Price Adjustments and LTV Charts MARGIN 225 basis points (2.25%) MAXIMUM INTERESTED PARTY CONTRIBUTIONS Maximum financing concessions are based on TLTV when secondary financing is present. LTV when no secondary financing is present. OCCUPANCY LTV/TLTV AMOUNT Primary Residence/Second Home Over 75% to 80% 6% 75% and below 9% Seller contributions may be used to pay closing costs. If the following conditions are met, the seller may also pay prepaids: Prepaids/escrows not paid by the borrower are paid by: The originating lender, The borrower s employer, and/or The property seller The prepaids/escrows paid by (i)- property seller or (ii) - the originating Lender affiliated through ownership with the property seller are included in the total financing concessions permitted. The loans do not have LTV ratios that exceed the maximum allowable amount. The loans are secured by 1-unit owner-occupied primary residences. The borrower makes a down payment of at least 5% from own funds or other acceptable equity. MORTGAGE INSURANCE N/A NEGATIVE AMORTIZATION None NOTE PRODUCT FREDDIE MAC FANNIE MAE , 147, Unit Number must be included in the property address line. Refer to Legal Document Matrix for additional information OCCUPANCY REQUIREMENTS Primary Residence Second Home BB&T Internal The information in this document is the property of BB&T and is intended for the use of BB&T associates and authorized representatives. NON-CONFORMING/JUMBO 3/1, 5/1, 7/1, and 10/1 P&I LIBOR ARMS(Non-Convertible)

12 PAYMENT ADJUSTMENTS The initial payment adjustment will be not less than 36, 60, 84, 120 months form the date of the first payment. Thereafter, the monthly payment is subject to change annually. POINTS AND FEES CAP 3% of the total loan amount PRICING Refer to the Rate Sheet and BB&T s current Price Adjustments and LTV Charts for any price adjustments that might be applicable. PROPERTY TYPES Primary Residence Family, Warrantable Condominiums, PUDs, and Townhomes Second Home- 1 unit, Warrantable Condominiums, PUDs, and Townhomes Attached PUDs Property Insurance requirements: HO3/comparable full coverage homeowners insurance policy; OR HO6 policy required with coverage, as determined by the insurer, which is sufficient to repair the unit to its condition prior to a loss claim event for attached PUDs where the homeowners association has a blanket policy covering the exterior structure only; OR Homeowners Association blanket policy covering the exterior AND interior of the unit. HO6 coverage will not be escrowed separately if blanket policy covers the exterior and interior of the unit. HO3/comparable full coverage policies will be escrowed. Condominiums Correspondents are responsible for classing Condominiums as outlined in the Non-Conforming/Jumbo Underwriting Guidelines. Property Insurance requirements: HO6 policy required with coverage, as determined by the insurer, which is sufficient to repair the unit to its condition prior to a loss claim event for Condominiums where the condominium master policy covers the exterior structure only; OR Condominium master policy covering the exterior AND interior of the unit. HO6 coverage will not be escrowed separately if master policy covers the exterior and interior of the unit. Ineligible Property Types 3-4 Units Investment Properties Manufactured Housing QM STATUS Safe Harbor: Mortgage that does not exceed limits on upfront points and fees; has an APR relative to the APOR that is equal to or less than 1.5% for first-lien loans. Rebuttable Presumption: Mortgage than does not exceed limits on upfront points and fees; has an APR that exceeds the APOR as of the date the interest rate is set by 1.5% or more for first-lien loans. Also known as Higher-Priced. BB&T Internal The information in this document is the property of BB&T and is intended for the use of BB&T associates and authorized representatives. NON-CONFORMING/JUMBO 3/1, 5/1, 7/1, and 10/1 P&I LIBOR ARMS(Non-Convertible)

13 QUALIFYING RATE* 3/1 P&I LIBOR ARMs Qualify at the greater of: Note rate plus 5.0% or Fully indexed rate (index plus margin) 5/1 P&I LIBOR ARMs Qualify at initial Note Rate plus 2% 7/1 & 10/1 P&I LIBOR ARMs Qualify at initial Note Rate 7/1 & 10/1 P&I LIBOR ARMs Higher Priced Covered Transactions as defined by Reg Z 12 C.F.R (b) Qualify at the greater of: Note rate or Fully indexed rate (index plus margin) *Correspondents must adhere to specific State requirements. REFINANCES Refer to the Price Adjustments and LTV Charts and Non-Conforming/Jumbo Underwriting Guidelines RESIDENCY STATUS US Citizens Permanent Resident Alien Non-Permanent Resident Aliens must meet the additional requirements under the Non-U.S. Citizens sub-section of the Borrower Eligibility section located in the Non-Conforming Underwriting Guidelines. RIDER PRODUCT FREDDIE MAC FANNIE MAE , 147, Refer to Legal Document Matrix for additional information SECONDARY FINANCING Refer to Price Adjustments and LTV Charts and Non-Conforming/Jumbo Underwriting Guidelines SECURITY INSTRUMENT Use the applicable Freddie Mac/Fannie Mae security instrument for the state in which the property is located. TEMPORARY BUYDOWNS Not Allowed BB&T Internal The information in this document is the property of BB&T and is intended for the use of BB&T associates and authorized representatives. NON-CONFORMING/JUMBO 3/1, 5/1, 7/1, and 10/1 P&I LIBOR ARMS(Non-Convertible)

14 UNDERWRITING Underwriting Options Delegated Jumbo Non-Conforming loan amounts up to and including $1 million may be underwritten and closed by Correspondents approved for Delegated Jumbo Non-Conforming Underwriting; or submitted to BB&T Correspondent Lending for underwriting approval prior to closing. Jumbo Non-Conforming loan amounts exceeding $1 million, must be submitted to BB&T Correspondent Lending for manual underwriting and receive final underwriting approval from BB&T prior to loan closing. Non-Delegated For those Correspondents not approved for Delegated Jumbo Non-Conforming Underwriting, all Jumbo Non- Conforming loans, regardless of loan size, must be submitted to BB&T Correspondent Lending for manual underwriting and receive final underwriting approval from BB&T prior to loan closing. Refer to the Non-Conforming/Jumbo Underwriting Guidelines for specific BB&T underwriting requirements, as well as the Price Adjustments and LTV Charts for minimum credit score and reserve requirements. WORKSHEETS Points and Fees Worksheet or comparable form Ability to Repay Worksheet or comparable form OR Income calculation for each borrower on either the Transmittal Summary or on a separate form; AND Income and debt amounts must match on the Transmittal Summary and final application. BB&T Internal The information in this document is the property of BB&T and is intended for the use of BB&T associates and authorized representatives. NON-CONFORMING/JUMBO 3/1, 5/1, 7/1, and 10/1 P&I LIBOR ARMS(Non-Convertible)

15 BB&T Correspondent Lending/BB&T Correspondent Lending Guide/Non-Conforming/Jumbo Underwriting Guidelines (06/07/18)/4:1 INTRODUCTION 4:1 INTRODUCTION BB&T Correspondent Lending expects its Correspondents to be fully familiar with mortgage underwriting secondary marketing requirements, and to keep abreast of industry changes that impact residential mortgages. This section is designed for two purposes: To supplement information referred to in the Non-Conforming/Jumbo Product Description section. To clarify BB&T's exceptions, allowances and restrictions regarding specific underwriting issues. BB&T Correspondent Lending/BB&T Correspondent Lending Guide/Non-Conforming/Jumbo Underwriting Guidelines (06/07/18)/4:2 UNDERWRITING REQUIREMENTS 4:2 UNDERWRITING REQUIREMENTS Underwriting Options Delegated Jumbo Non-Conforming loan amounts up to and including $1 million may be underwritten and closed by Correspondents approved for Delegated Jumbo Non-Conforming Underwriting; or submitted to BB&T Correspondent Lending for underwriting approval prior to closing. Jumbo Non-Conforming loan amounts exceeding $1 million, must be submitted to BB&T Correspondent Lending for manual underwriting and receive final underwriting approval from BB&T prior to loan closing. Non-Delegated For those Correspondents not approved for Delegated Jumbo Non-Conforming Underwriting, all Jumbo Non-Conforming loans, regardless of loan size, must be submitted to BB&T Correspondent Lending for manual underwriting and receive final underwriting approval from BB&T prior to loan closing. Regardless of Delegated status, loans must be documented according to the Non-Conforming/ Jumbo Underwriting Guidelines herein. Loans utilizing LPA or DU validated/documented approvals are not eligible for delivery to BB&T Correspondent Lending. BB&T policy applies to Non-Conforming/Jumbo loan amounts unless otherwise specified. Questions regarding specific underwriting issues can be directed to BB&T Correspondent Lending Information Central (CLIC). ALL NON-CONFORMING/JUMBO LOANS MUST ADHERE TO BB&T CORRESPONDENT LENDING REQUIREMENTS STATED IN BB&T S CORRESPONDENT LENDING GUIDE. BB&T Correspondent Lending/BB&T Correspondent Lending Guide/Non-Conforming/Jumbo Underwriting Guidelines (06/07/18)/4:3 AGE OF CREDIT DOCUMENTS AND APPRAISALS 4:3 AGE OF CREDIT DOCUMENTS AND APPRAISALS Existing and New Construction Credit documents cannot be older than 120 days. If the effective date of the appraisal report is more than 12 months before the Note Date, a new Full interior/exterior appraisal Freddie Mac 70/Fannie Mae Form 1004 is required. If the effective date of the appraisal report is more than 120 days before the Note Date, but not more than 12 months before the Note Date, an Appraisal Update (Freddie Mac Form 442/Fannie Mae Form 1004D) with at least an exterior-only inspection is required. The Note Date is equivalent to the Effective Date of Permanent Financing when the Mortgage is a Construction Conversion or Renovation Mortgage. The appraisal report can be used in the following two scenarios if the effective date of the appraisal report is more than 120 days before the Note Date, but no more than 12 months before the Note Date. Re-cert of Value Re-Use of the appraisal report for a subsequent transaction. The effective date of the appraisal report from the prior transaction must not be more than 12 months prior to the Note Date of the subsequent transaction. The new transaction may not be a purchase transaction, cash-out refinance, or a payoff of secondary financing. BB&T Correspondent Lending/BB&T Correspondent Lending Guide/Non-Conforming/Jumbo Underwriting Guidelines (06/07/18)/4:4 LTV/TLTV 4:4 LTV/TLTV Refer to BB&T's Price Adjustments and LTV Charts Properties located in the state of California are limited to maximum 80% LTV/TLTV BB&T Correspondent Lending/BB&T Correspondent Lending Guide/Non-Conforming/Jumbo Underwriting Guidelines (06/07/18)/4:5 MINIMUM CREDIT SCORE 4:5 MINIMUM CREDIT SCORE Minimum credit score requirement is 720/740. Reference the Price Adjustments & LTV Charts for minimum credit score requirements on specific product/loan types. FROZEN CREDIT The credit report utilized to make the credit decision for loans delivered to BB&T must reflect all three credit repositories have been accessed and none are currently frozen. RESCORING AND CREDIT REPAIR Legitimate corrections to a borrower s credit profile are acceptable, i.e. John Doe Jr. s derogatory credit is reflected on John Doe Sr. s credit report. In order to ensure the accuracy of the information, corrections should be made at the credit repository level. Any supporting documentation sent to the credit repositories along with all copies of credit reports should be maintained in the Correspondent s loan file and included with the file submission when delivered to BB&T Correspondent Lending. The use of credit repair vendors who assist borrowers to falsely repair their credit by the manipulation of data contained in the borrower s credit profile to improve credit scores for purposes of loan eligibility, pricing/fee improvement and creditworthiness is expressly prohibited by BB&T Correspondent Lending. It is at BB&T Correspondent Lending s discretion to determine if the credit history and credit scores are legitimate, acceptable and meet guideline requirements. Credit Score Indicator The term Loan Score refers to the overall score using the Agencies' "middle/lower, then lowest" credit score selection methodology. It is equivalent to Freddie Mac's Indicator Score and Fannie Mae's Representative credit score. Credit Score Selection The following criteria may be used to determine each individual borrower's Credit Score using the "middle/lower" method: If there are three valid scores for a borrower, the middle score (numerical middle of the three scores) is used.

16 If there are three valid scores for a borrower but two of the scores are the same, the duplicate score is used. If there are two valid scores for a borrower, the lower of the two scores is used. If there is one valid score for a borrower, that score is used. Loan Score Selection After selecting the appropriate Credit Score for each borrower, the Loan Score must be determined. If there is more than one borrower, the lowest selected Credit Score among all borrowers is the Loan Score. When there is only one borrower, the selected Credit Score for that borrower is also the Loan Score. BB&T Correspondent Lending/BB&T Correspondent Lending Guide/Non-Conforming/Jumbo Underwriting Guidelines (06/07/18)/4:6 BORROWER ELIGIBILITY 4:6 BORROWER ELIGIBILITY CO-BORROWER/CO-SIGNER/GUARANTOR Non-occupant co-borrowers are acceptable. The non-occupant co-borrower must be a parent, legal guardian, child, grandparent or sibling to the occupant borrower. Maximum Debt-to-Income (DTI) cannot exceed 43% for the occupant borrower. LIVING TRUST Living Trusts also referred to as "inter vivos revocable trusts" or "inter vivos trusts" are allowed and must meet the following eligibility requirements: The trust is created by one or more Settlors (individual who creates a Living Trust) during his or her lifetime. The trust becomes effective during the lifetime of the Settlor(s), and Each Settlor retains the right during his or her lifetime to revoke or amend the trust. The Settlor(s) is also: The Trustee or one of the co-trustees, Occupies the property as either a primary residence or second home, and Is the primary beneficiary of the trust. Correspondent must submit a completed Living Trust Certification with the delivery package. The certification is available through the BB&T Correspondent Lending Guide NON-ARMS LENGTH TRANSACTIONS Non-Arms length transactions are purchase transactions in which there is a relationship or business affiliation between the borrower and the builder, developer, or seller. BB&T Correspondent Lending will allow non-arms length transactions for the purchase of newly constructed or existing properties secured by a primary residence, and existing properties secured by second homes. Investment properties are ineligible. If a borrower has a business affiliation (any ownership interest or employment) with the builder, developer or seller of the property, additional due diligence including, but not limited to, detailed information regarding unsold builder/developer inventory held individually and/or through his or her business (LLC s, DBA s, etc.) is required to determine the legitimacy of the transaction. Note: Self Builds are ineligible. LOANS TO BUILDERS/DEVELOPERS See "Non-Arms Length Transactions" section for details. BB&T Correspondent Lending will not fund loans where the builder/developer is purchasing or refinancing their current unsold inventory. USA PATRIOT ACT The Correspondent is required to comply with all aspects of the USA PATRIOT ACT. Due to the nature of the law and severity of penalties associated with non-compliance, BB&T strongly urges the Correspondent adopts procedures to insure that their staff fully complies with the requirements of the Act and that Correspondent files are properly documented. For additional information concerning the USA PATRIOT ACT, Correspondents should contact their regulatory agency or access information via the web at NON-U.S. CITIZENS BB&T has adopted the following policy for extending mortgage loans to non-u.s. Citizens. USA Patriot Act documentation is required in addition to the following guidelines. A permanent resident alien who is lawfully residing in the U.S. is eligible for a mortgage on the same terms as a U.S. Citizen. BB&T does not differentiate between U.S. Citizens and permanent resident aliens for general underwriting guidelines. Non-Permanent Resident Aliens are subject to additional requirements as stated below. Permanent and Non-Permanent Resident Aliens BB&T requires sufficient documentation that the borrower is lawfully residing in the U.S., as permanent or non-permanent resident alien. All Borrowers are required to have a valid Social Security. Borrowers with an ITIN are not eligible. Borrowers must qualify on U.S. credit; U.S. reported income, U.S. assets, and U.S. residency history. All guidelines herein regarding the determination and documentation for stable monthly income (including the availability of tax transcripts), adequate credit history, sufficient liquid assets and residency must be applied in the same manner to each borrower regardless of residency status, permanent or non-permanent resident aliens. Permanent Resident Aliens Permanent Resident Aliens: must meet all requirements stated above, AND All permanent resident aliens must provide their valid Permanent Resident Card. Non-Permanent Resident Aliens Non-Permanent Resident Aliens: must meet all requirements stated above in the Permanent and Non-Permanent Resident Aliens section, AND All non-permanent resident aliens must provide evidence of a valid, unexpired eligible visa, as listed below. Evidence must be included in closed loan file. Visas granting diplomatic immunity or Foreign Nationals are not allowed. If Non-Permanent Resident Alien borrowers are unable to provide evidence of an eligible Visa Type listed in the chart below, the loan is ineligible for purchase. Non-Permanent Resident Aliens (Temporary Workers) Eligible Visa Types for Loans Delivered to BB&T A-1, A-2, A-3 and must verify no diplomatic immunity on each type E-1, E-2, E-3 G-1, G-2, G-3, G-4, G-5 and verify no diplomatic immunity on each type H-1B, H-1B1, H-4 (H-4 requires H-1B or H-1B1 on the loan) I J-1, J-2 (J-2 requires J-1 on the loan) K-1, K-2, K-3, K-4 and a US spouse (for K-1) or US citizen (for K-2, K-3 or K-4) on the loan

17 L-1, L-2 O-1, O-2, O-3 (O-3 requires O-1 or O-2 on the loan) Q-2 R-1, R-2 (R-2 requires R-1 on the loan) TN-1, TN-2, TD (TD requires TN-1 or TN-2 on the loan) V-1, V-2, V-3 and requires a permanent resident alien on the loan for each type. Maximum loan amount is limited to $1,000,000. If the mortgage is subject to subordinate financing, the combined loan amounts of the first and second may not exceed $1,000,000 Requires a 5% LTV/TLTV reduction from maximum allowed financing for property and transaction type, LTV/TLTV may not exceed 80%. For non-permanent resident aliens who work for an International Organization (i.e., Red Cross, UNICEF, World Bank, etc.), BB&T will require a copy of the most recent year s tax transcript evidencing "no record of return filed". For these borrowers who do not report income to the IRS, BB&T will not allow their income to be "grossed up" for qualifying purposes. PROPERTIES CURRENTLY OR FORMERLY IN THE NAME OF AN LLC If a property is currently in the name of borrower's LLC or has been in the name of the borrower's LLC in the most recent six month period, as measured backward from the date of the initial application, it is not eligible for refinancing into the borrower's name. If there is an outstanding lien against the property, it also must be in the borrower's name for a minimum of six months in order to be refinanced. CREDIT REPUTATION/REQUIRED MINIMUM NUMBER OF TRADELINES The credit report must show a minimum of two (2) years established credit history. Additionally, each borrower must have a minimum of three (3) tradelines with 12 months satisfactory history. A prior mortgage or rental history which evidences no late payments during the past 24 months is required. See Section 4:8 Liability Assessment Standards for additional requirements. Non-traditional credit is not permitted. CREDIT ALERT MESSAGES Credit Alert Messages on all credit reports must be reviewed. Alerts that are the result of discrepant information must be thoroughly addressed and require additional due diligence. ADDRESS DISCREPANCIES Explanations from Borrower must be provided for any credit report-generated alert referencing an address-to-file mismatch or the appearance of an address other than that disclosed by the Borrower within the most recent two years. Any additional address that does not have a reported date must also be explained. Additional addresses that are clearly variations or misspellings of disclosed addresses or addresses with reported dates more than two years old do not require an explanation. AUTHORIZED USER ACCOUNTS A tradeline for an account for which the Borrower is not the primary account holder, but is listed as an authorized user, may be considered a Borrower s tradeline if the Correspondent obtains and retains in the mortgage file documentation that evidences at least one of the following; and if considered as the Borrower s tradeline, must be included in the qualifying ratios. An authorized user tradeline may be considered if: Another Borrower in the mortgage transaction is the owner of the tradeline; or the Borrower can provide written documentation (e.g. canceled checks, payment receipts, etc.) that he or she has been the actual and sole payer of the monthly payment on the account for at least 12 months preceding the date of the application. If written documentation of the Borrower s monthly payments on the authorized user tradeline is provided, then the payment history, particularly any late payments that are indicated, must be considered in the credit analysis and the monthly payment obligation must be included in the debt-to-income ratio. Note: An authorized user tradeline must be considered if the owner of the tradeline is the Borrower s spouse and the spouse is not a Borrower in the mortgage transaction. FOREIGN CREDIT REPORTS Use of foreign credit reports is unacceptable. PAYMENT PLANS FOR UNPAID INCOME TAXES Loans where the Borrowers have payment plans for unpaid income taxes are eligible for delivery to BB&T Correspondent Lending unless a tax lien exists. DEROGATORY CREDIT The presence of significant derogatory credit events dramatically increases the likelihood of a future default and represents a significantly higher level of default risk. Examples of significant derogatory credit events include bankruptcies, foreclosures, deeds-inlieu of foreclosure, pre-foreclosure sales, short sales, and charge-offs of mortgage accounts. The following must be determined: The cause and significance of the derogatory information; Verification sufficient time has elapsed since the date of the last derogatory information; and Confirmation the Borrower has re-established an acceptable credit history. The recovery time is the amount of time that must elapse after a significant derogatory credit event before the Borrower is eligible for a new loan. The recovery time commences on the execution, completion, discharge, or dismissal date (as applicable) of the derogatory credit event and ends on the disbursement date of the new loan. Significant Derogatory Credit Events in the Credit Report The credit report and Section VIII, Declarations, of the loan application to identify instances of significant derogatory credit events; the public records section of the credit report and all tradelines, including mortgage accounts (first liens, second liens, home improvement loans, HELOCs, and manufactured home loans), to identify previous foreclosures, deeds-in-lieu, pre- foreclosure sales, charge-offs of mortgage accounts, and bankruptcies must be reviewed. The current status of each tradeline, manner of payment codes, and remarks to identify these types of significant derogatory credit events must be carefully reviewed. Remarks Codes are descriptive text or codes that appear on a tradeline, such as Foreclosure, Forfeit deed-in-lieu of foreclosure, and Settled for less than full balance. If there is any evidence of a short sale disclosed on the credit report or contained elsewhere in the mortgage file, the requirements for handling significant adverse or derogatory information caused by extenuating circumstances or financial mismanagement for Mortgages related to short sales apply and must be met. Significant derogatory credit events may not be accurately reported or consistently reported in the same manner by all creditors or credit reporting agencies. If not clearly identified in the credit report, copies of appropriate documentation must be obtained. The documentation must establish the completion date of a previous foreclosure, deed-in-lieu or pre-foreclosure sale, or date of the charge-off of a mortgage account; confirm the bankruptcy discharge or dismissal date; and identify debts that were not satisfied by the bankruptcy. Debts that were not satisfied by a bankruptcy must be paid off or have an acceptable, established repayment schedule Additional Requirements

18 Significant Derogatory Event Recovery Time for Reestablishment of Credit with Financial Mismanagement Recovery Time for Reestablishment of Credit with Extenuating Circumstances Bankruptcy - Chapter 7 or 11 Bankruptcy - Chapter 13 Multiple Bankruptcy Filings Foreclosure Deed-in-Lieu of Foreclosure and Charge-off of a Mortgage Account Short Sale Other Significant Adverse or Derogatory Credit Information 4 years (48 months) from the discharge or dismissal date 2 years (24 months) from the discharge date OR 4 years (48 months) from the dismissal date 5 years (60 months) from the most recent discharge or dismissal date if more than one filing within the past 7 years 7 years (84 months) from the completion date as reported on the credit report 4 years (48 months) from the execution date 4 years (48 months) from the completion date 4 years (48 months) from the most recent significant adverse or derogatory credit information 2 years (24 months) from the discharge or dismissal date 2 years (24 months) from the discharge or dismissal date 3 years (36 months) from the most recent discharge or dismissal date 3 years (36 months) from the completion date as reported on the credit report, and Additional Requirements after 3 years up to 7 years: 90% max LTV Purchase Primary Residence No Cash-out Refi - All occupancy types 2 years (24 months) from execution date 2 years (24 months) from completion date 2 years (24 months) from the most recent significant adverse or derogatory credit information Whenever a Borrower has had a bankruptcy within the last seven years, the Mortgage file must also contain: Copies of the bankruptcy petition, schedule of debts and discharge or dismissal Evidence to indicate that all debts not satisfied by the bankruptcy have been paid or are being paid Any other evidence necessary to support BB&T's determination that the Borrower has reestablished and maintained an acceptable credit reputation Whenever a Borrower has had a previous foreclosure, deed - in-lieu of foreclosure, short sale, or charge-off or mortgage within the last seven years, the Mortgage must either be: A purchase transaction Mortgage secured by a Primary residence with a maximum LTV/TLTV/HTLTV ratio of the lesser of 90% or the maximum LTV/TLTV/HTLTV ratio for the transaction, or A No Cash-out Refinance Mortgage that meets the requirements for refinances Additionally, the Mortgage file must contain evidence of the completion of the foreclosure, deed-in-lieu of foreclosure, short sale, or N/A charge-off of a mortgage account. Past Due, Collections and Charge-Offs of Nonmortgage Debt Judgments, Garnishments and Liens Past due accounts (not collections) must be brought current. Entire credit history must be evaluated to determine if derogatory credit is significant. If it is determined the derogatory credit is not significant, the file must be documented supporting the determination. If the derogatory credit is significant, determine whether the problems were due to extenuating circumstances or to financial mismanagement. Open judgments, garnishments, and all outstanding liens that are in the Public Records section of the credit report must be paid off at or prior to closing. of the satisfaction of these liabilities, along with verification of funds sufficient to satisfy these obligations, must also be maintained in the permanent loan file. Extenuating Circumstances Nonrecurring or isolated circumstances, or set of circumstances, which are beyond the Borrower s control. The underwriter is to clarify on the Uniform Underwriting and Transmittal Summary, the Borrower s explanation to the Mortgage file documentation that leads to a reasonable conclusion that the events causing the financial difficulties were beyond the Borrower s control, are not ongoing and unlikely to recur, and the Borrower has reestablished an acceptable credit reputation. The mortgage file must contain all of the following: Written statement from the Borrower attributing the cause of the financial difficulties to outside factors beyond the Borrower s control and are not ongoing and unlikely to recur, Third-party documentation confirming that the events related by the Borrower in the explanation were an isolated occurrence and significantly reduced the Borrower s income, and Evidence on the credit report and other credit documentation in the Mortgage file of the length of time since completion of the significant derogatory event to the date of the application, and of completion of the recovery time period requirement. Financial Mismanagement If unable to document extenuating circumstances, the conclusion is problems due to financial mismanagement. The underwriter is to explain on the Uniform Underwriting and Transmittal Summary, the rationale supporting the determination that the financial mismanagement is unlikely to recur and the Borrower s credit reputation is acceptable. The mortgage file must contain all of the following: Evidence that the Borrower has reestablished an acceptable credit reputation, and Evidence on the credit report and other credit documentation in the Mortgage file of the length of time since completion of the significant derogatory event to the date of the application, and of completion of the recovery time period requirement. Re-establishing Credit After a significant derogatory event, the Borrower s credit will be considered reestablished if all of the following are met: The waiting period and the related additional requirements are met; and All credit reviewed must be reestablished traditional credit. Nontraditional credit files are not acceptable. LETTERS OF EXPLANATION All letters of explanation must be signed with a wet signature or an electronic signature. All electronic signatures by the borrower must be in compliance with the E-Sign Act and the loan file must include a properly disclosed and executed E-Sign Disclosure and a Consent Form from each borrower. BB&T Correspondent Lending/BB&T Correspondent Lending Guide/Non-Conforming/Jumbo Underwriting Guidelines (06/07/18)/4:7 EMPLOYMENT AND INCOME UNDERWRITING STANDARDS