EXPANDED PRIME PROGRAM

Transcription

1 LOAN PROGRAM:... 2 LOCK-IN/REGISTRATION:... 2 MINIMUM MORTGAGE:... 2 MAXIMUM MORTGAGE:... 2 MAXIMUM LTV/CLTV:... 2 ADDITIONAL CONSIDERATIONS:... 2 AGE OF DOCUMENTS:... 3 APPRAISAL REQUIREMENTS:... 3 ARM INDEX:... 3 ARM INITIAL INTEREST RATE CAPS:... 3 ARM INTEREST RATE CEILING:... 3 ARM INTEREST RATE FLOOR:... 3 ARM MARGIN:... 3 ARM RATE ADJUSTMENT:... 3 ASSUMABILITY:... 4 BORROWERS ELIGIBILITY:... 4 BORROWERS INELIGIBLE:... 5 BUYDOWNS (TEMPORARY):... 5 CASH RESERVES:... 5 CLOSING DOCUMENTS:... 6 CO-BORROWER(S):... 6 CREDIT:... 6 DISCLOSURES:... 7 DOCUMENTATION:... 7 DOWN PAYMENT REQUIRED:... 9 DU INFORMATION:... 9 ESCROW HOLDBACKS:... 9 ESCROW WAIVERS:... 9 GEOGRAPHIC RESTRICTIONS:... 9 GIFTS: INTEREST ONLY OPTION: LIMITATIONS ON REAL ESTATE OWNED: MORTGAGE CREDIT CERTIFICATE (MCC): MORTGAGE INSURANCE: MORTGAGE INSURERS APPROVED: NEW CONSTRUCTION: NON-OCCUPYING BORROWER: OCCUPANCY: POWER OF ATTORNEY: PREPAYMENT PENALTY: PROPERTY TYPES ELIGIBLE: PROPERTY TYPES INELIGIBLE: RATIOS: REFINANCES: RELOCATION OR TRAILING CO-BORROWER: RIGHT OF OWNERSHIP: SALES CONCESSIONS: SUBORDINATE FINANCING: TITLE REQUIREMENTS: TITLE VESTING: UNDERWRITING SUBMISSION PROCEDURE: Page 1 SG_EXPANDEDPRIME_C 1/12/2017

2 LOAN PROGRAM: Nn-Cnfrming Fixed Rate. Adjustable Rate ARM prducts with Interest Only ptins. Originatrs shuld refer t the Fannie Mae Seller Guide fr specific infrmatin cncerning qualificatin requirements that are nt specifically referenced in ur Overlays. Jumb is nly available nn-delegated. LOCK-IN/REGISTRATION: Available in Optimal Blue. Tips: Dc Type Full Incme and Asset Dcumentatin required. (included 4506-T) Lan Prgrams: SG_Exp_Prime_30_Fxd. SG_Exp_Prime_5/1_LBR_4.0_5/2/5. SG_Exp_Prime_5/1_LBR_4.0_5/2/5_IO. SG_Exp_Prime_7/1_LBR_4.0_5/2/5. SG_Exp_Prime_7/1_LBR_4.0_5/2/5_IO. MINIMUM MORTGAGE: $150,000. In NY State, the lan amunt must exceed FHFAs High Cst Cunty Limit. MAXIMUM MORTGAGE: $2,000,000 Primary Residence. $1,500,000 Secnd Hme. $1,000,000 Investment. MAXIMUM LTV/CLTV: 80/80 Primary Residence. 75/75 Secnd Hme with maximum lan amunt f $1,000, /65 Secnd Hme with maximum lan amunt f $1,500, /75 Investment. ADDITIONAL CONSIDERATIONS: Interest Only Terms:. Freign Natinals nt permitted. Maximum 50% DTI. Maximum 70% LTV/CLTV. Minimum f 18 mnths reserves. ARMs: All ARMs must be qualified at the greater f the nte rate r the fully indexed rate. Fr I/O s calculate the rate described abve, based n the riginal balance and remaining term at the end f the I/O perid (i.e. 240 mnths). The minimum interest rate (flr) is equal t the start rate. Escrw fr taxes and insurance will be required fr (i) 5 years fr all HPMLs and (ii) life f lan fr Freign Natinals. Purchases - N prperty flipping, prir wners must have wned the prperty greater than 6 mnths. (Bank wned REO are eligible and nt cnsidered a flip transactin) Ineligible transactins: Cnstructin t Perm. Nn Arm s length. Page 2 SG_EXPANDEDPRIME_C 1/12/2017

3 Texas Equity a (6). Builder Bailut. Cnversin Lans. AGE OF DOCUMENTS: Appraisal gd fr 120 days. Credit dcuments gd fr 90 days. APPRAISAL REQUIREMENTS: All appraisals must cmply with and cnfrm t USPAP and the Appraisal Independence Requirements, and any requirement fr HPMLs, if applicable. The appraiser must nt have a direct r indirect interest, financial r therwise, in the prperty r in the transactin. Selectin criteria shuld ensure that the appraiser is independent f the transactin and is capable f rendering an unbiased pinin. An appraisal prepared by an individual wh was selected r engaged by a brrwer, prperty seller, real estate agent r ther interested party is nt acceptable. Appraisal reprts that are altered by the appraiser t replace any references t the riginal client with the lender's name are nt acceptable. Additinally, the brrwer, prperty seller, real estate agent r ther interested party is nt allwed t select an appraiser frm an apprved appraiser list. Tw appraisals are required fr lan amunts > $1,500,000. Interir phts are required. Appraisals are gd fr 120 days. Any appraisal seasned greater than 120 days will require a recertificatin f value cmpleted by the riginal licensed appraiser. A recertificatin f value will be permitted up t 180 days. Legal nncnfrming zned prperties must indicate that the subject prperty can be rebuilt if it is severely damaged r destryed. Fr all Nn-Owner Occupied lans n Single Family residences, frm 1007 Schedule f Rents must accmpany the Fr 2 unit prperties, a FNMA 1025 Small Residential Incme Prperty Appraisal Reprt is required. A 1004MC is required fr all lans. Declining Markets: A 5% reductin in LTV/CLTV will be required fr all prperties identified t be in a declining market as designated by the appraiser. ARM INDEX: 1 Year LIBOR. ARM INITIAL INTEREST RATE CAPS: 5.0%. ARM INTEREST RATE CEILING: 5% ver start rate. ARM INTEREST RATE FLOOR: The interest rate flr is equal t the start rate. ARM MARGIN: 4.0%. ARM RATE ADJUSTMENT: 2.0% up/dwn. Page 3 SG_EXPANDEDPRIME_C 1/12/2017

4 ASSUMABILITY: Nt allwed n fixed rate prducts. Eligible fr ARM prducts after the fixed rate perid with prir apprval and qualificatin. BORROWERS ELIGIBILITY: U.S Citizens. Permanent Resident Aliens: Permanent Resident Aliens are individuals wh permanently reside in the United States. A legible frnt and back cpy f the brrwer(s) valid Green Card. Nn-Permanent Resident Aliens: Nn-Permanent Resident Aliens must meet the fllwing requirements: Must have an unexpired passprt frm their cuntry f citizenship cntaining INS frm I-94 which must be stamped Emplyment Authrized. An Emplyment Authrizatin Card alng with a cpy f the Petitin fr Nn-Immigrant Wrker (frm I- 140) in file The brrwer(s) must have a minimum f 2 years residency, with the likelihd f emplyment cntinuance fr at least 2 years. Primary Resid Brrwers with diplmatic immunity are ineligible. 70% LTV/CLTV Maximum. Single unit nly. Maximum 43% DTI. An additinal 6 mnths reserves is required. Freign Natinals: Lck cnfirmatin t shw lcked as Freign Natinal. A freign natinal is a persn wh is nt a resident f the United States and des nt permanently reside in the United States. Third party verificatin f incme and emplyment. (Tax returns nt required) Self Emplyed: A letter (n cmpany letterhead) frm a prfessinal based in the brrwer s cuntry f residence Accuntant/CPA/Financial Institutin Officer/ Licensed Financial Advisr verifying (i) the nature f the business (ii) incme figures fr the last 2 years and (iii) a year-t-date incme figure. Validatin f the existence f the business must include (i)internet Web page address, r (ii)business/peratr license frm a gvernmental ffice. Wage Earners: A letter (n cmpany letterhead) frm an authrized representative the emplyer stating (i) emplyment histry (psitin/title, time n jb),(ii) current mnthly salary and year-t-date earnings. A valid paystub/ pay ledger r financial institutin depsit/ transactin recrd that supprts the emplyment. Ineligible -Residents f any cuntry nt permitted t transact business with US cmpanies (as determined by any US gvernment authrity). Must be Secnd Hme r Investr nly. Must have a valid Passprt and Visa t enter the US. Must have a cpy f their last 4 mnths bank statements. Bank statements must be translated in t English language and must be shwn in US currency. If n freign credit reprt is available, the fllwing is required - 2 credit reference letters written in English. Can include nn-traditinal credit surces, i.e. utility cmpany. Satisfactry credit reference letters will assume a 660 FICO fr lcking and qualifying purpses. Page 4 SG_EXPANDEDPRIME_C 1/12/2017

5 1 bank reference letters written in English. Title vested in brrwer(s) name. Maximum LTV/CLTV 70%. Funds required fr dwn payment, clsing csts and reserves must be held in a US bank. Escrw fr taxes and insurance is required. Cash Out nt permitted. Fr Rate/Term Refinances, existing lan must be with a US financial institutin. Limited Pwer f Attrney (POA) is acceptable fr executing clsing dcuments. Business accunts are eligible fr Reserves, and reserves can remain at a financial institutin in brrwer s hme cuntry. See Reserves sectin fr additinal reserve requirements. The prhibitin f first time hmebuyers des nt apply t Freign Natinals. Inter-Vivs Revcable Trust. Nn-Occupant C-Brrwers: Nn-ccupant c-brrwers are credit applicants wh d nt ccupy the subject prperty as a principal residence. Nn-Occupant C-Brrwers must meet the fllwing requirements: D nt ccupy the subject prperty as a principal residence. Must be an immediate relative, prf f relatinship is required. Must sign the mrtgage r deed f trust. Must nt have an interest in the prperty sales transactin, such as the prperty seller, builder, r real estate brker. Maximum LTV/CLTV 70%. Single unit nly. Maximum DTI 43%. Occupying brrwer must have dcumented mnths reserves is required. Limited partnerships, general partnerships, crpratins - Persnal guarantr required. First Time Hme Buyers: First Time Hmebuyers ( FTHB ) are individuals that have nt wned a hme r had a residential mrtgage in the last 3 years. FTHBs must meet the fllwing requirements:. Primary Residence Only. Max Lan Amunt f $1MM. Max DTI f 45%. Minimum f 12 mnths PITI reserves required. Minimum FICO 700. Interest Only nt eligible. BORROWERS INELIGIBLE: Irrevcable r Blind Trusts. BUYDOWNS (TEMPORARY): Nt Allwed. CASH RESERVES: Primary Residence: 6 mnths with maximum lan amunt f $500, mnths with maximum lan amunt f $1,000, mnths with maximum lan amunt f $1,500, mnths with maximum lan amunt f $2,000,000. Brrwers with greater than 2 financed prperties require 12 mnths r therwise stated higher reserve amunt abve and an additinal 3 mnths f reserves fr each additinal financed prperty. The 3 Page 5 SG_EXPANDEDPRIME_C 1/12/2017

6 mnths additinal reserves are based n the PITI plus HOA fees f the ther financed prperties. Interest Only Lans require a minimum f 18 mnths reserves. Secnd Hme: 12 mnths with maximum lan amunt f $1,000, mnths with maximum lan amunt f $1,500,000. Brrwers with greater than 2 financed prperties require an additinal 3 mnths f reserves fr each additinal financed prperty. The 3 mnths additinal reserves are based n the PITI plus HOA fees f the ther financed prperties. An additinal 12 mnths reserves are required fr Freign Natinals. Investment: 18 mnths with maximum lan amunt f $1,000,000. Brrwers with greater than 2 financed prperties require an additinal 3 mnths f reserves fr each additinal financed prperty. The 3 mnths additinal reserves are based n the PITI plus HOA fees f the ther financed prperties. An additinal 12 mnths reserves are required fr Freign Natinals. CLOSING DOCUMENTS: Please fllw State/Federal Requirements and Fannie guidelines. Seller disbursement ver $5,000 must be explained excluding Title Cmmitment lien payff, Real Estate Cmmissins and Taxes. All Files sent t Investr Delivery lcated in Rsemnt, IL, must have full Title Cmmitment. Shrt frm plicies cannt be used in lieu f the title cmmitment. Nte dcument must nt say that the interest rate will never be less than the Margin when the rate is higher. The Flr Rate is the Nte Rate. A custm nte maybe required t meet this requirement. CO-BORROWER(S): C-Brrwers allwed. CREDIT: Minimum FICO f 660 fr Primary Residence. Minimum FICO f 680 fr Secnd Hme and Investment. Credit Reprt: A tri-merged in file credit reprt frm all three repsitries is required. Credit Reprt is gd fr 90 days frm applicatin t clsing. A written explanatin fr all inquiries within 90 days f applicatin is required. Additinal cnfirmatin that there is n new debt may include a new credit reprt, pre-clse credit scre sft-pull r gap reprt. The DTI shuld be recalculated based n any new debt, and any new credit scres must be reviewed fr qualificatins. Nt required fr Freign Natinals. See Freign Natinal sectin. Husing Histry: Mrtgage r Rental histry must be 0x30 ver prir 24 mnths. Rental histry evidenced by Institutinal VOR r 24 mnths prf f payment. Credit Scres: The representative credit scre is the lwest middle f the three scres fr each brrwer. If fewer than three scres are returned, the lesser f tw will be used. Satisfactry credit reference letters fr a Freign Natinal brrwer will assume a 660 FICO fr lcking and qualifying purpse. Credit Histry: Each Brrwer s credit prfile must include a minimum f 3 pen trade lines that have a 24 mnth histry. Current husing nt reprting n credit can be cnsidered an pen trade if supprted by bank recrds (cancelled checks/debits). Page 6 SG_EXPANDEDPRIME_C 1/12/2017

7 Brrwer(s) nt using incme t qualify and shwing $0 earned r is nt emplyed; dn t need t meet the minimum tradeline requirements listed abve. All tradelines with delinquency histry in the past 12 mnths requires a written explanatin. Any dergatry histry must be fully explained. N prir bankruptcies f any type allwed within 7 years f applicatin. N prir freclsure, shrt-sale, deed-in-lieu r mdificatins due t the brrwer s inability t pay r cntinue t satisfy their mnthly payment in its entirety by the brrwer are allwed within 7 years f applicatin. All Judgments r liens affecting title must be paid. Nn-title charge-ffs and cllectins exceeding $1,000 (individually r in aggregate) must be paid. All past due accunts must be brught current prir t clsing. Brrwers with a histry f cllectin accunts shuld be required t pay ff dergatry accunts. N authrized user accunts will be used t satisfy minimum trade requirements. Disputed accunts require a LOE per Fannie Mae. An updated credit reprt nt required. DISCLOSURES: Fllw State/Federal Requirements. DOCUMENTATION: Incme Dcumentatin: Wage Earners: Mst Recent Paystub including year-t-date earnings (cvering minimum f 30 days), tw years W2's and a Written Verificatin f Emplyment (if needed fr the analysis f vertime, bnus r cmmissin). Self-Emplyed Brrwers: (A) Tw years persnal and business tax returns (alng with all schedules and K-1 s) frm any businesses being used fr qualificatin where the brrwer has 25% r mre wnership interest. Brrwers must als prvide a letter frm a CPA r tax preparer, r evidence frm regulatry agency r applicable licensing bureau, stating the business has been in existence fr 2 years.* Or (B) One year persnal and business tax returns (alng with all schedules and K-1 s) and YTD P&L/Balance Sheet frm any businesses being used fr qualificatin where the brrwer has 25% r mre wnership interest. Year-t-date P&L (can be brrwer prepared), alng with the mst recent (i) 6 mnths persnal bank statements (depsits must be n less than 90% f P&L net incme), r (ii) 6 mnths Business bank statements (depsits must be n less than 90% f P&L grss incme). Brrwers must als prvide a letter frm a CPA r tax preparer, r evidence frm regulatry agency r applicable licensing bureau, stating the business has been in existence fr 2 years.* Brrwer will be qualified n the average f the tax return and P&L. (P&L mnthly incme limited t + 10% f the mnthly tax return incme) Self-emplyed brrwer incme in a licensed prfessin (i.e. Medical, Legal, Accunting) will be cnsidered frm a business that s been in existence fr less than 2 years, but greater than 1 year per the fllwing: Other The individual must have at least 2 years f dcumented previus experience in the same prfessin, r evidence f frmal educatin in a related field. A jint accunt with a nn-brrwing spuse r dmestic partner can be used fr qualifying as fllws: If nt cntributing incme/depsits, it must be validated by the CPA r tax preparer that prepares the returns, and brrwer affidavit. If cntributing incme/depsits, surce must be clearly identified (direct depsit, SSI, trust incme) and amunts must be subtracted frm the analysis. Page 7 SG_EXPANDEDPRIME_C 1/12/2017

8 Cmpnent Surces f Incme - A brrwer wh has a self-emplyed business and als receives incme frm ther surces is eligible. Incme surces include but are nt limited t rental prperties, trust & investment, alimny, etc. These incme surces shuld be separately dcumented n the 1003 and shuld be supprted by the bank statement depsits. Jint brrwers with ne wage earner and ne self-emplyed business wner can verify incme separately, with the self-emplyed brrwer utilizing (C) abve and the wage earner prviding paystubs/w-2s. The wage earner 4506T shuld include W-2 transcripts nly. Unusually large depsits (as defined by Fannie Mae) int persnal accunts must be dcumented and explained via LOE. Transactin histry printuts are nt acceptable. Multiple bank accunts may be used. If persnal bank statements prvided reflect payments being made n bligatins nt listed n the credit reprt, a thrugh analysis must be perfrmed and LOE prvided frm the brrwer, as utlined belw. If asset statements prvided reflect payments made n bligatins nt listed n the credit reprt r 1003, additinal infrmatin must be btained t determine if the liability shuld be included in the brrwer s debt-t-incme rati. If the bligatin des nt belng t the brrwer, supprting dcumentatin is required. If there is a nn-brrwer als n the accunt, a signed letter f explanatin frm the brrwer is sufficient. If the brrwer is the bligr n the debt, an accunt statement and pay histry shuld be btained t review the accunt fr acceptability. The payment must be included in the debt rati. Additinal requirements fr all dcumentatin types: In additin, Verbal Verificatin f Emplyment required fr all wage earners and must be cmpleted within 10 calendar days f the funding date. Wage Earners VVOE shuld include name f cntact at place f emplyment, phne number and title alng with cmpany name, address and brrwer s jb descriptin and title. Self-Emplyed Brrwers shuld include verificatin f a phne listing and address fr the brrwer s business AND verificatin thrugh a third party such as a CPA. If cntact is made verbally, the lan file must be dcumented t identify bth the surce f the infrmatin btained and the name & title f the persn wh btained the infrmatin. All brrwers under Dcumentatin Optin (A) & (B) - IRS Frm 4506T is required t be executed and all transcript dcumentatin btained fr the mst recent tw years (fr Optin A) r 1 year fr ptin (B), as listed abve. Fr self- emplyed brrwers, this is required fr bth persnal returns and business returns where brrwer has 25% r mre wnership f a business and is being used fr qualificatin. In the case where taxes have been filed and the tax transcripts are nt available frm the IRS, the IRS respnse t the request must reflect N Recrd Fund and be present in the lan file. Evidence f any IRS filing extensins must als be present in the lan file. Asset Utilizatin: The utilizatin f assets will be cnsidered as brrwer incme t qualify fr their mnthly payments. The unrestricted liquid assets can be cmprised f stcks/bnds/mutual funds, vested amunt f retirement accunts and bank accunts. If the assets r a prtin f the assets are being used fr dwn payment r csts t clse, thse assets shuld be excluded frm the balance befre analyzing a prtfli fr incme qualificatin. The mnthly incme calculatin is as fllws: Net dcumented assets (70% f the remaining value f stcks/bnds, 60% fr all retirement assets) and utilizatin draw schedule f 10 years. Cash Out nt permitted. Nn Owner Occupied is nt eligible. Page 8 SG_EXPANDEDPRIME_C 1/12/2017

9 Brrwers must have a minimum f the lesser f (i) 1.5 times the lan balance r (ii) $1mm in qualified assets, bth f which must be net f dwn payment, lan csts and reserve requirements t qualify. Six (6) mnths asset seasning required. Minimum FICO Scre f 700 fr 80% LTV fr 75% LTV. Asset Dcumentatin: Full Asset Dcumentatin is required fr bth funds t clse and reserves. Fr mst asset types, this wuld include all pages f the mst recent tw mnths statements r the mst recent quarterly statement. All Assets frm the brrwer(s) must be disclsed and verified by the lender. accunts may be used t meet reserve r dwn payment requirements unless the brrwer(s) are 100% wners f the business. A letter frm the businesses accuntant r cash flw analysis (Per FNMA) must be btained t cnfirm that the withdrawal will nt negatively impact the business. Stcks/Bnds/Mutual Funds - 70% may be used fr reserves. Must be publically traded and liquid accunts. Vested Retirement Accunts 60% may be cnsidered fr reserves. (certain eligible plans can use 70% if brrwer > 59 ½ - i.e. 401k) Assets being used fr interest/dividend incme, r fr Asset Utilizatin may nt be used t meet reserve requirements. If needed t clse, verificatin that funds have been liquidated (if applicable) is required. Grant funds, Pled funds are nt allwed. Gift f Equity is nt allwed. Builder prfits are nt allwed. N emplyer assistance assets are allwed. Interested Party Cntributins permitted up t 3% fr LTV >75%, 6% fr LTV<=75%. Nn-Owner Occupied maximum is 3%. DOWN PAYMENT REQUIRED: Refer t the Guides / AllRegs fr additinal cnsideratins. DU INFORMATION: All lans are required t be submitted fr a GSE AUS apprval decisin. A DU r LP underwriting findings reprt must be present in file verifying the lan des nt qualify fr delivery. ESCROW HOLDBACKS: Nt Allwed. ESCROW WAIVERS: Refer t Blue Cnnect r Optimal Blue fr price adjustments. T permit escrw waivers, subject t the mrtgage dcuments and applicable law, the waiver must nt be based slely n the LTV rati f a lan, but als n whether the Brrwer has the financial ability t handle the lump-sum payments f taxes and insurance i.e. Brrwers with blemished credit histries r first-time hmebuyers. If escrwing, HO6 must be escrwed (if applicable). Fr established escrw accunt fld insurance must be escrwed, if required. Refer t Chapter B (General Mrtgage Terms and Cnditins) f the Guides / AllRegs fr additinal cnsideratins. GEOGRAPHIC RESTRICTIONS: Califrnia All cunties eligible except San Bernardin & Riverside Cunties. Flrida Dade cunty ineligible, all thers eligible. Nevada - Ineligible. Hawaii Prperties in Lava znes 1 & 2 ineligible. Page 9 SG_EXPANDEDPRIME_C 1/12/2017

10 GIFTS: Texas Cash-ut refinances ineligible. Brrwer cannt receive any cash back. West Virginia. Guam. Puert Ric. American Sama. Nrthern Mariana Islands. U.S. Virgin Islands. Gifts frm family members, as defined by FNMA, are allwed. The brrwer(s) must have a minimum f 5% f wn funds available, (but may elect nt t use wn funds fr the transactin if sufficient gift funds are available). Gift funds cannt be cunted twards reserves. Purchase transactin nly. INTEREST ONLY OPTION: 5/1 and 7/1 ARMs. LIMITATIONS ON REAL ESTATE OWNED: The maximum number f financed prperties t any ne brrwer is limited t ten (10). Additinal reserves are required fr brrwers with greater than 2 financed prperties; please see reserves sectin fr requirements. MORTGAGE CREDIT CERTIFICATE (MCC): Ineligible. MORTGAGE INSURANCE: N/A. MORTGAGE INSURERS APPROVED: N/A. NEW CONSTRUCTION: Refer t REFINANCE sectin. NON-OCCUPYING BORROWER: Allwed. OCCUPANCY: Primary residence: A primary residence is a prperty that the brrwer(s) intend t immediately ccupy as his r her principal residence. Characteristics that may indicate that a prperty is used as a brrwer's primary residence include: It is ccupied by the brrwer fr the majr prtin f the year. It is in a lcatin relatively cnvenient t the brrwer's principal place f emplyment. It is the address f recrd fr such activities as federal incme tax reprting, vter registratin, ccupatinal licensing, and similar functins. Secnd Hme: (Cash Out and 2-4 Units ineligible) A prperty is cnsidered a secnd hme when it meets all f the fllwing requirements: Must be lcated a reasnable distance away frm the brrwer(s) principal residence. Page 10 SG_EXPANDEDPRIME_C 1/12/2017

11 Must be ccupied by the brrwer(s) fr sme prtin f the year. Is restricted t a ne-unit dwelling. Must be suitable fr year-rund ccupancy. Cash-ut transactins are nt permitted. Maximum lan amunt $1,500,000. The brrwer(s) must have exclusive cntrl ver the prperty. Investment prperties: (Cash Out ineligible) Occupancy designatin when the brrwer des nt ccupy the subject prperty. A Nn Owner Occupied prperty must meet the fllwing requirements: 680 Minimum FICO. Maximum lan amunt $1,000,000. Maximum LTV/CLTV 75%. Cash ut transactins are nt permitted. Maximum DTI f 50%. Interest Only lans are ineligible. POWER OF ATTORNEY: Nt eligible with lans clsed in a trust. POA must be dated/appinted n r befre the executin f any dcument executed using the POA. The security instrument, nte and all ther clsing dcuments must be signed exactly as appinted n POA. Ntary sectin crrect including: State, Cunty, Date, Brrwer name, Ntary s signature, Ntary expiratin, Ntary seal. N POA allwed fr lans with ne Brrwer. At least ne (1) Brrwer must be present at clsing. PREPAYMENT PENALTY: Nt allwed. PROPERTY TYPES ELIGIBLE: One Unit Single Family Residences and PUDs. (Attached and Detached) Warrantable Cndminiums. (Lw and High Rise) Nn Warrantable Cnds. (Requires Cnd Questinnaire) Lck cnfirmatin t shw lcked as Nn-Warrantable Cnd. Maximum LTV f 75%. Minimum f 12 mnths reserves are required. Primary Residence Only. Minimum Unit size f 500 square feet. Maximum Expsure f 25%. Must meet Fannie Mae warrantability requirements, with the exceptin f permitted variances. Eligible variances: Presale - At least 33% f units must be presld r under bnafide cntract. Investr Owned - Up t 55% f units can be tenant ccupied. Single Entity Ownership - A single entity can wn up t 25% f units. Seller Cncessins- permitted up t 1% in excess f Fannie limits. Cmmercial Use- Up t 35% nn-residential use. Ineligible variances: Nn Material Litigatin - slip and fall/single unit cmplaints/3rd party claims with adequate reserves. Material Litigatin -Structural/Functinal litigatin against develper. Insurance Cverage-Exceptins t Fannie Mae minimum cverage requirements. Delinquent HOA- in excess f Fannie Mae 15% limit. Reserves- <10% replacement, maintenance, and/r deductible. Newly Cnverted - nn full gut rehabs. Envirnmental hazards. Page 11 SG_EXPANDEDPRIME_C 1/12/2017

12 Twnhuse. 2-4 Unit. (Secnd Hme ineligible) 20 Acres Maximum. PROPERTY TYPES INELIGIBLE: Manufactured Hmes. 2-4 Unit Secnd Hme Prperties. Mbile Hmes. Limited Review Cndminiums. C-Ops. Cndtels. Wrking Farms, Ranches, Orchards. Agriculturally Zned. Fractinal Ownership/Timeshares. Barding Huses. Mixed use prperties. Incme prducing prperties. Prperties with mre than twenty (20) acres. If prperty has acreage, Appraiser must indicate ttal acreage. It is nt acceptable t have prperty appraised with nly 20 acres in rder t meet eligibility. Cmmercial Prperties. Prperties lcated in Hawaii Lava Zne 1 & 2. Any prperty perated as a htel. Husebat. Segmented Ownership Prjects. Unique Prperty in which marketability cannt be established i.e.: Dme, Lg, Gethermal, Stilt Hme, etc. One f a kind luxury residences. Prperties with cnditin rating f C5/C6. Prperties with cnstructin rate f Q6. Assisted Living/Cntinuing Care Facilities. Mandatry Cuntry Club Memberships. Unpermitted additins. Zning vilatin. Builder Bailut. RATIOS: Purchase & Rate Term - 55% Maximum DTI. Cash Out Refinance - 50% Maximum DTI. Nn Owner Occupied 50% Maximum DTI. All lan files must cntain Appendix Q/ATR underwriter wrksheets which detail the incme and bligatins cnsidered in the evaluatin. (Nt required fr nn-wner ccupied prperties) Residual Incme: If the lan is an HPML, r if the DTI exceeds 43%, brrwers must have a minimum mnthly residual incme that is 2X the requirement f the VA. (Nt required fr nn-wner ccupied prperties) Brrwer ATR Certificatin: Lans subject t Reg Z Ability t Repay must include a brrwer(s) certificatin attesting t the fllwing: (i) they have fully disclsed their financial bligatins; (ii) they have reviewed and understand the lan terms and (iii) they have the ability t repay the lan. Page 12 SG_EXPANDEDPRIME_C 1/12/2017

13 Payment Shck Payment shck is limited t 175% n primary residence transactins. The underwriter may apprve payment shck up t 250% when ne f the fllwing factrs is present: Debt rati is 38% r less; r Representative Credit Scre is 700 r greater Fr brrwers wh d nt have a current husing payment, r wn a hme free and clear, payment is shck is nt cnsidered. REFINANCES: Rate/Term: A Rate/Term Refinance transactin is when the new lan amunt is limited t the payff f the present first lien mrtgage, any seasned nn-first lien mrtgages, clsing csts and prepays. A seasned nn-first lien mrtgage is a purchase mney mrtgage r a clsed end r HELOC mrtgage that has been in place fr mre than 12 mnths and r nt having any draws greater than $2,000 in the past 12 mnths fr HELOC s. Withdrawal activity must be dcumented with a transactin histry frm the HELOC. Limited cash t the brrwer must nt be greater than 1% f the principal amunt f the new mrtgage t be cnsidered a Rate/Term refinance. (Delayed Financing is permitted in accrdance with Fannie Mae) If the prperty is wned less than 6 mnths, the LTV/CLTV will be based n the lesser f the riginal purchase price plus imprvements r current appraised value. The prir HUD-1 will be required fr prf f purchase price. Prf f imprvements is required. Prperties that have been listed fr sale within the past 6 mnths frm the lan applicatin date are nt eligible fr a rate/term refinance transactin. Inherited prperties may nt be refinanced prir t 12 mnths f wnership. The rate/term refinance f a cnstructin lan transactin is eligible with the fllwing cnditins: If the lt was acquired 12 r mre mnths befre applying fr the subject lan, the LTV/CLTV/HCLTV is based n the current appraised value f the prperty. If the lt was acquired less than 12 mnths befre applying fr the subject lan, the LTV/CLTV/HCLTV is based n the lesser f i) the current appraised value f the prperty and ii) the ttal acquisitin csts. Cntinuity f bligatin - Cntinuity f bligatin ccurs n a refinance transactin when at least ne f the brrwer(s) (r members f the LLC) n the existing mrtgage is als a brrwer/member n the new refinance transactin secured by the subject prperty. Cntinuity f bligatin requirements d nt apply when there is n existing mrtgage n the subject prperty as a result f the brrwer either having purchased the subject prperty with cash r when any prir mrtgage fr which the brrwer was an bligr was paid in full. Cash Out Primary Residence nly: A Cash Out Refinance transactin allws the brrwer t pay ff the existing mrtgage by btaining new financing secured by the same prperty r allws the prperty wner btain a mrtgage n a prperty that is currently wned free and clear. The brrwer can receive funds at clsing as lng as they d nt exceed the prgram requirements. T be eligible fr a Cash Out Refinance the brrwer must have wned the prperty fr a minimum f six mnths prir t the applicatin date. Prperties listed fr sale within the last 12 mnths are ineligible fr cash ut. If the prperty is wned less than 12 mnths but greater than 6 mnths, the LTV/CLTV will be based n the lesser f the riginal purchase price plus imprvements r current appraised value. The prir HUD-1 will be required fr Cntinuity f bligatin - Cntinuity f bligatin ccurs n a refinance transactin when at least ne f the brrwer(s) (r members f the LLC) n the existing mrtgage is als a brrwer/member n the new refinance transactin secured by the subject prperty. Cntinuity f bligatin requirements d nt apply when there is n existing mrtgage n the subject prperty as a result f the brrwer either having purchased the subject prperty with cash r when any prir mrtgage fr which the brrwer was an bligr was paid in full. Cash Out amunt limited t 70% Maximum LTV/CLTV, 50% Maximum DTI. Cash Out cannt exceed 50% f lan balance, except as defined belw. Cash Out unlimited if subject prperty is wn free and clear. Cash Out unlimited if LTV is n greater than 50%. Page 13 SG_EXPANDEDPRIME_C 1/12/2017

14 RELOCATION OR TRAILING CO-BORROWER: The use f trailing secndary wage earner incme is nt allwed. RIGHT OF OWNERSHIP: Fee simple. SALES CONCESSIONS: Interested Party Cntributins permitted up t 3% maximum fr LTV/CLTV >75%, 6% fr LTV/CLTV <=75%. Nn-Owner Occupied maximum is 3%. SUBORDINATE FINANCING: New subrdinate financing (institutinal) allwed fr purchase transactins nly. Primary residences nly. If a HELOC is present the CLTV must be calculated by dividing the sum f the riginal lan amunt f the first mrtgage, the amunt f the HELOC (whether r nt there have been any draws), and the unpaid principal balance f all ther subrdinate financing by the lwer f the prperty s sales price r appraised value. All subrdinate lan bligatins must be cnsidered, verified, and taken int accunt when calculating the Brrwer s DTI. If the subrdinate financing is a HELOC secured by the subject prperty, mnthly payments equal t the minimum payment required under the HELOC terms cnsidering all draws made n r befre clsing f the subject transactin. TITLE REQUIREMENTS: Full Title Cmmitment required. Title Cmmitment must be dated 90 days frm Nte date. TITLE VESTING: Individual. Jint Tenants. Tenants in Cmmn. Inter Vivs Revcable Trust (Living Trust). Refer t Chapter B (Inter Vivs Revcable Trusts) f the Guides / AllRegs fr additinal cnsideratins. UNDERWRITING SUBMISSION PROCEDURE: Guidelines are intended t reference and supplement Fannie Mae s Seller Guide. Originatrs shuld refer t the Fannie Mae Seller Guide fr specific infrmatin cncerning qualificatin requirements that are nt specifically referenced in ur Overlays. T the extent there is a difference in standards between the Overlays and the Fannie Mae Guides; Originatrs may rely n the Overlays. All lans must be manually underwritten. TILA status must be determined at riginatin and lan seller s designatin must be included in the lan file. Lans must be designated as ATR cmpliant and must adhere t the standards set frth in the CFPB s Reg Z, Sectin (c). Additinal HPML requirements are described herein. Federal, State, and Lcal High Cst Lans are nt permitted. All Lans must include a third party fraud detectin reprt. Reprt findings must cver standard areas f quality cntrl including but nt limited t brrwer validatin, Scial Security verificatin, prperty infrmatin including ther real estate wned. All lans are required t be submitted fr a GSE AUS apprval decisin. A DU r LP underwriting findings reprt must be present in file verifying the lan des nt qualify fr delivery. Page 14 SG_EXPANDEDPRIME_C 1/12/2017