Conventional Matrix Fixed Rate revised 5/25/2016

Transcription

1 This matrix is intended as an aid to assist in determining if a property/loan qualifies for certain Fannie Mae offered programs. It is not intended as a replacement for Fannie Mae guidelines. Users are expected to know and comply with Fannie Mae requirements. NOTE: This matrix includes overlays which may be more restrictive than Fannie Mae s requirements. Please read through this matrix completely and thoroughly. Program Codes: Program Qualifications Eligible loans are conforming loans receiving a DU/DO Version 9.0 or later Approve/Eligible or LP Accept (as allowed) findings Maximum Loan Amounts CONFORMING MAXIMUM LOAN AMOUNTS UNITS CONTINENTAL US ALASKA AND HAWAII 1 $417,000 $625,500 2 $533,850 $800,775 3 $645,300 $967,950 4 $801,950 $1,202,925 Transaction Type (1,2,3) Purchase & Limited Cash Out Refinance (LCOR) Cash Out Refinance (5,6) Matrix 1 Standard Eligibility Requirements Conforming Loan Amounts <+ $417,000 Fannie Mae DU/DO Approve/Eligible Only Primary Residence, Second Home and Investment Occupancy Units Restrictions Maximum LTV/CLTV/H CLTV (2,4) Minimum Credit Score Cash Out 1 (3)(7) Fully Amortizing 97/97/97%(8) 620 Ineligible Primary 2 Fully Amortizing 85/85/85% 620 Ineligible Residence 3 4 Fully Amortizing 75/75/75% 620 Ineligible Second Home 1 (3) Fully Amortizing 90/90/90% 620 Ineligible Investment Purchase -Fully Amortizing 85/85/85% 620 Ineligible 1 (3) LCOR - Fully Amortizing 75/75/75% 620 Ineligible 2-4 Fully Amortizing 75/75/75% 620 Ineligible Primary 1 (3,5) Fully Amortizing 80/80/80% 620 $150,000 Residence 2-4 (5) Fully Amortizing 75/75/75% 620 $150,000 Second Home 1 (3,5) Fully Amortizing 75/75/75% 620 $150,000 Investment 1 (3,5) Fully Amortizing 75/75/75% 620 $150, (5) Fully Amortizing 70/70/70% 620 $150,000 1

2 1. Borrower with one credit score eligible on primary residence Purchase, Rate/Term on a 1 unit property. Approve/Eligible required. Max 95% LTV. Min credit score 620. Refer to Credit for specifics. 2. Refer to other matrices as follows a. For multiple finance properties (5-10) refer to Matrix 2 1. Florida Condominiums eligible, but Max LTV is 97% with FULL REVIEW of condo association only. Further restrictions apply. See Property Types section for details 2. HCLTV (HELOC CLTV) = first lien balance + total HELOC amount (funded plus unfunded portion) the lesser of the appraised value or sales price (if applicable) 3. If the property was purchased within the prior six months, the borrower is ineligible for a cash out refinance transaction 4. If the property was listed for sale in the last 6 months, the LTV ratios for a cash out transaction are limited to 70% LTV (or maximum allowed if less than 70% LTV) 5. Exception: Manufactured Home financing is eligible, but must have a minimum credit score of 640 and limited to 95% LTV for Purchase or Refinance. See Manufactured Home Financing for details 6. Subject to MI guidelines and requirements. Reference 97% Section. Transaction Type Occupancy Units* Purchase * Limited Cash Out Refinance (LCOR) Cash Out (3) Footnotes: Matrix 2 Conforming Loan Amounts 5 10 financed properties Second Home and Investment Property Second Home 1* Investment Second Home or Investment Investment 2 4 Amortization and Property Restrictions Purchase and LCOR Fully Amortizing Cash Out Fully Amortizing Maximum LTV/CLTV/HCLTV Minimum Credit Score 75/75/75% 720 1* Purchase and LCOR Fully 75/75/75% Amortizing 70/70/70% 720 Not allowed unless Delayed 1 Financing 720 Exception: 70/70/70% Not allowed unless Delayed Financing Exception: 65/65/65% 720 2

3 Florida Condominiums eligible, but Max LTV is 97% with FULL REVIEW of condo association only. Further restrictions apply. See Property Types section for details 2 HCLTV (HELOC CLTV) = first lien balance + total HELOC amount (funded plus unfunded portion) the lesser of the appraised value or sales price (if applicable). 3 Cash Out is eligible using the Delayed Financing Option ONLY, refer to Financing Type Delayed Financing Exception for eligibility requirements. Eligibility Requirements 97% LTV Fannie Mae Program LPMI not available on this product Standard MI required is 35% 30 Year/fixed rate term only Maximum interest party contribution is 3% At least one borrower must be a first time homebuyer 1 unit Owner Occupied, single family residence allowed multi unit properties & manufactured homes ineligible Reserve requirements to be determined by DU Down payment may not be gifted it must be the borrower s own funds All other FNMA requirements for purchase loans apply Purchase transaction only Fannie Mae Home Ready Program DU must identify in the findings that the loan is eligible as a HomeReady mortgage Eligible Properties include one unit properties, including manufactured housing and units in condos and PUDS Manufactured housing is available with this program, but must follow max LTV/CLTV ratios for manufactured housing per FNMA guidelines. Homeownership Education is required for at least ONE borrower for both a purchase. FannieMae requires a specific vendor to provide the class. The link for Framework (education vendor) is: Cost for class is $75 PMI standard mortgage insurance is required. DU will identify % needed for the LTV requested. Borrowers who occupy the property may not have an ownership interest in any other residential dwelling at the time of loan closing. Reserve requirements will be determined by DU Borrower not required to be a First Time Home Buyer but may not retain any currently owned property to be eligible for use of program. Borrower must not exceed 80% of the area s median income for the property s location. Please use Fannie Mae s HomeReady chart to confirm borrowers meet income requirements. 3

4 There is not an income limit for properties located in a low-income census tract (median tract income no greater than 80% AMI) All other FNMA guidelines apply These guidelines are not all inclusive of the programs full requirements. Please reference FNMA s site for the full set of guidelines: HomeReady requirements specific to % LTV Ratios: Fannie Mae permits LTV, CLTV and HCLT ratios to exceed 95% if certain requirements are met. The table below describes the requirements for HomeReady mortgage transactions with LTV ratios of % LTV Criteria Requirements CLTV Ratio % if the subordinate lien is not a Community Seconds loan 105% if the subordinate lien is a Community Seconds loan HCLTV Ratio % Loan Purpose Purchase Transactions Only Loan Type Fixed rate loans with terms up to 30 years Note: High balance, adjustable rate, manufactured housing and Homestyle Renovation loans are not permitted Property and Occupancy One-unit principal residence. All borrowers must occupy the property Underwriting Method DU Only Reserves Reserves requirements will be determined by DU Other All other HomeReady requirements apply Freddie Mac Program (Home Possible Advantage) Borrower s household income may not exceed 100% of the area median income limits. There is no income limitations if the property is located in an underserved area. Reference FHLMC s website to identify underserved areas. Single family residence allowed. 2 4 unit allowed with 2 months reserves. LP will determine if further reserves will be required. Borrower(s) do not need to be a first time home buyer Rate/Term Refinance or purchase transactions allowed Owner Occupied only If all borrowers are first time homebuyers, homeownership education program is required. These guidelines are not all inclusive of the programs full requirements. Please reference Freddie Mac s site for the full set of guidelines: Each loan type must be properly identified when locking for the Lock Desk to price and lock correctly. In the comments section of the lock screen located at the bottom of the page, please place a note to the Lock Desk advising them of which program you are using. 4

5 Appraisal Requirements Assets Standard appraisal requirements apply, with the exception of: One Unit Residential Appraisal Field Review Report (Form 2000) also required if the property value is >= $1 Million and the LTV/CLTV/HCLTV >75% Form 1007 is required whenever rental income is used to qualify the borrower Appraiser to comment when FNMA guidelines are exceeded Evaluated per DU and Fannie Mae guidelines with the following restrictions: Stand-alone VOD (Verification of Deposit) is ineligible. VOD must be accompanied by at least one monthly bank statement. ALL deposits above $5000 need to be sourced/documented Borrower s Own Funds Depository assets which have been seasoned or sourced and are under the ownership and control of the borrower Sourced Funds A large deposit, not originating from an established income source, identified on any asset statement(s) located in the file MUST be sourced and documented. All asset statements for a given month are accumulated and compared Individual or cumulative deposits, exceeding twenty percent (20%) of the borrower s monthly gross income are generally defined as large Borrower Investment Primary residence 1-Unit loans, excluding high balance loans: Greater than 80% LTV require a 5% investment from borrower s own funds, excluding gifts After the borrower has made 5% investment then additional down payment may come from a gift Primary residence 2 4 unit loans, second home loans and high-balance loans: Greater than 80% LTV require a 5% investment from borrower s own funds, excluding gifts Investment property loans require entire down payment from borrower s own funds, gifts are ineligible Seller Contributions: Basis for the limit is LTV/CLTV ratio as follows: Primary residence and Second Homes 3% for LTV/CLTV > 90% 6% for LTV/CLTV >75% but <=90% 9% for LTV/CLTV =<75% Investment Properties 2% at all LTV/CLTV s Gifts Primary Residence and Second Homes Eligible provided the required borrower investment is met 5

6 Waive borrower investment when gift funds reduce the LTV/CLTV to 80% or less Investment Properties Gift ineligible Reserves Additional reserves may be required by DU/DO based on risk Cash Out refinance the cash out may not be used to meet the reserve requirement Primary Residence Reserve Requirements 1-4 Units (per DU/DO) DU/DO now requires a minimum of 6 months reserves for 2-4 unit principal residence transactions including Second Homes (all transaction types) Per DU/DO, typical requirements is 2 months PITI for Investment Property (all transaction types) Per DU/DO, typical 6 months PITI Reserves required for mortgages secured by Primary Residence when Borrower s current Primary Residence is pending sale or being converted to a second home or investment property: Six months for the subject property and Six months for property pending sale or being converted Or, when LTV/TLTV/HLTV ratios are <=70% for property pending sale or being converted two months for the subject property and two months for property pending sale or being converted To verify LTV for property pending sale or being converted an appraisal dated within 120 days of closing must be provided Manual Reserve Calculations for Specific Transactions In certain cases, DU/DO is unable to determine the reserve requirements for the transaction. Therefore, lenders must perform a manual calculation of the required minimum reserves. To determine the total amount of assets to be verified for the transaction, lenders will be required to add the amount of the Total Funds to be Verified (as specified in the DI/DO Underwriting Findings report) to the minimum reserve requirements specified in the Fannie Mae Selling Guide for the following scenarios: Principal residence transactions where the current principal residence is pending sale, converting to a second home or converting to an investment property and Second home and investment property transactions for borrower who will have 1 10 financed properties. The total amount of assets to be verified, per the guidance above, must be reflected in the Asset section of the loan application (1003). 6

7 See Fannie Mae Selling Guide for additional information (B Minimum reserve requirements) Refer to Section Limitations on Other Real Estate Owned for additional reserve requirements Mortgage Insurance companies reserve the right to impose further requirements per their underwriter guidelines and approval process over and above these guidelines. Assumptions Borrower Eligibility Ineligible Eligible US Citizen Permanent Resident Alien Ineligible Foreign Nationals Inter Vivos Revocable Trust Agreement Corporations, LLC s Non-Permanent Resident Alien Co-Borrowers DU/DO Approve/Eligible Ratios determined by DU/DO Non-Occupant Co-borrower is eligible per DU and FNMA guidelines Ineligible 5 to 10 properties, borrower with one credit score and delayed refinancing a non-occupant co-borrower is ineligible Credit DU/DO Approve/Eligible findings only Refer to Loan Amount and LTV Limitations for credit score requirements Housing (Mortgage/Rental) payment history (PITIA) is inclusive of all liens regardless of position, as well as all occupancy types Mortgage history evaluated by DU/DO Mortgage/Rental Delinquencies Loans are ineligible with one or more mortgage/rental delinquency of 60, days or greater reported within 12 months of the date of the credit report. Multiple Finance Properties (when Second Home or Investment Property is the Subject) Bankruptcy or Foreclosure the borrower cannot have any history of bankruptcy or foreclosure within the past 7 years Mortgage Delinquencies the borrower cannot have any delinquencies, 30 day or greater, within the past 12 months on any mortgage loans Disputed Credit Report Tradelines When DU identifies a disputed tradeline and that tradeline was not included in the credit risk assessment, the lender must obtain a new credit report with the tradeline no longer reported as disputed and resubmit the 7

8 loan casefile to DU. The report must be a re-scored report or a brand new report and may not include supplements for the adjusted information. FSB does not manually underwrite conventional loans so there is no manual underwrite solution. If DU does not issue the disputed tradeline message, the lender is only required to ensure the payment for the tradeline, if any, is included in the total expense ratio if the account belongs to the borrower. Credit Scores all borrowers must have at least 2 (two) credit scores For Primary Residence Purchase & Rate/Term financing flexibilities apply as follows: One borrower on every loan must have 2 credit scores Loans > 80% LTV with 2 score borrowers are subject to Mortgage Insurers requirements for eligibility Borrower with one credit score is ineligible on primary residence Purchase, Rate/Term, 1 Unit maximum 95% LTV Waiting Periods after Significant Derogatory Credit Events The waiting period commences on the completion, discharge or dismissal date (as applicable) of the derogatory credit even and ends on the application date of the new loan. FSB follows standard FNMA Waiting Period Requirements. Reduced waiting periods with Extenuating Circumstances are not allowed. Higher Priced Mortgage Loans (HPML) Allowed per Reg Z Age of credit report cannot exceed 90 days from the date of the credit report to the note date Ineligible: Manual Underwriting Divorce/Child Support Divorce decree and/or child support order is required. Proof of receipt for 12 months of any payments being received per the decree. Any discrepancy between divorce decree and actual payments being received must be documented. Documentation Document as determined by DU Findings or LP Findings, Freddie Mac Selling Guide or FNMA Selling Guide and FSB guidelines Escrow Waivers Property tax and insurance escrows may be waived when LTV requirements are met as follows: <=80% LTV for properties in all states Must be locked accordingly with lock showing waiver adjustment Proof must be supplied that RE Taxes are not delinquent Escrow Accounts for Taxes and Insurance If during the underwriting of the loan, the loan exceeds 80% LTV, an impound account is required. Property Taxes 8

9 When calculating escrow set up for property taxes, FSB will require certain parameters to insure accuracy. All tax amounts are to show on the title commitment or tax certificate. Tax amounts must show without excess exemptions applied. If an exemption will be in effect when the borrower takes possession of the home, we must have documentation that the title company will file the exemption at closing. If the title company cannot provide this confirmation, the exemption must be removed and tax calculation showing at the worst case scenario for escrow set up and DTI calculation. For New Construction, the title company must provide an estimate of the property taxes based on the appraised value of the home. A state/county approved calculator for property taxes will be allowed but the calculation must be based on appraised value. Homeowners Insurance Homeowners insurance must have the following on the declarations page: Property address to match appraisal address exactly Deductible to be indicated on dec page cannot exceed 5% of dwelling or $5000 whichever is less Borrowers names to match 1003 and be spelled correctly Mortgagee Clause to read exactly: Flanagan State Bank ISAOA 333 Chicago Road PO Box 302 Paw Paw, IL Loan number to be on policy Dwelling coverage to be indicated. Must cover loan amount. If a manufactured home, exceptions may apply Effective date and expiration date to be on or before closing date Must show policy is effective for 1 year if a purchase If a refinance and policy will expire before first payment is made, FSB will need proof of what the new premium will be upon renewal Must have invoice or paid receipt for premium in file prior to closing Condo must have HO-6 insurance to cover 20% of appraised value Condo insurance must show unit owner name and unit. Must have $1,000,000 in building coverage and liability coverage Coverage must be bound prior to closing. A quote can be used for initial underwriting, but will not be accepted for final approval. Flood Insurance Dwelling to cover loan amount. Unless loan amount is over $250,000. $250,000 is the max FEMA allows. FSB requires total estimated cost new on cost approach section of appraisal. Flood zone to be indicated and must match flood zone on appraisal and flood cert. Unless a higher maximum amount is required by state law, the maximum allowable deductible is $5000 9

10 All the other homeowner s insurance requirements apply to flood insurance as well, see above. Financing Types Purchase Mortgage Valid purchase contract must be received by underwriting to include all parties signatures e-signatures are acceptable Expired contracts are subject to loan being suspended until a valid contract is received All contract addendums & disclosures are required prior to the clear to close being issued. Closing must take place prior to the contract expiration or an addendum for extension will be required before we will draw closing docs Rate/Term Refinance & Limited Cash Out Refinance HUD-1 settlement statement(s) required from any transaction within the past 6 months. If previous transaction was a cash out or if it combined a first and non-purchase money subordinate lien into a new first, loan to be coded as cash out. If new transaction combines a first and non-purchase money subordinate lien into a new first loan, it is considered cash out Pay off of the existing first mortgage regardless of seasoning Pay off existing subordinate liens that were used in whole to acquire the subject property Closing costs and prepaid items may be financed into loan amount Cash out limited to the lesser of 2% of the principal amount of the new loan or $2000 Acceptable Continuity of Obligation Properties listed for sale within the last six month are eligible as follows: Property has been taken off the market on or prior to the application date Borrower provides written confirmation of the intent to occupy if a primary residence Owner occupied properties located in Texas with Texas Section 50(a)(6) are ineligible If the first or second Texas Section 50(a)(6) loan is being paid off, regardless of whether the borrower is getting any cash back, the loan is restricted to the Texas home Equity Section 50 (a)(6) and is ineligible If the first mortgage is not a Texas Section 50(a)(6) loan and the second mortgage is a Texas Section 50(a)(6), the second lien may be subordinated and is considered a rate/term refinance. The second lien must be subordinate to the first mortgage and a subordination agreement must be executed. Borrower cannot receive any cash back from first mortgage transaction If a Texas Section 50(a)(6) second lien is being paid off, the loan is restricted to the Texas Home Equity Section 50(a)(6) and is ineligible The title policy will reference the Texas Section 50 (a)(6) 10

11 Cash Out Refinance One Borrower must have held title to the subject property for at least 6 months prior to the date of the loan application. Properties acquired within 6 months of application date are ineligible for cash out refinance, unless the property was purchased by the borrower with no financing. To be eligible for a cash out refinance with less than a 6 month history of ownership, you must meet the FNMA delayed financing rules. Acceptable Continuity of Obligation FSB s Credit Management review is required when cash out is greater than $150,000 and requirements are as follows: Minimum credit score of 720 or program minimum, whichever is greater Reduce maximum LTV by 10% or maximum of 70%, whichever is less Delayed Financing Exception (see FNMA Selling Guide) Subject property must have been purchased within the past 6 months from the application date The preliminary title search or report must not reflect any existing liens on the subject property. If the source of funds to acquire the property was an unsecured loan or HELOC, secured by another property, the new HUD-1 must reflect that source being paid off with the proceeds of the new refinance transaction. Any gift funds used for purchase are ineligible as part of the cash out proceeds The new loan amount can be no more than the actual documented amount of the borrower s initial investment in purchasing the property plus the financing of closing costs, prepaid fees and points: subject to Loan Amount & LTV/CLTV/HCLTV Limitations The purchase transaction of the subject property must have been an armslength transaction The source of funds for the purchase of the subject property must be documented (i.e.: bank statements, personal loan documents, HELOC funds from another property) The transaction must be documented by the HUD-1, confirming no mortgage financing was used to obtain the subject property Equity may be taken out of the subject property for any purpose, but may be subject to investor restrictions Delayed Financing Exception is not allowed for High Balance loans with 5-10 financed properties Any RE Taxes that are due within 45 days from closing will be required to be paid or the amount held in escrow by title if the previous mortgage company will be paying. Proof of payment must be supplied to release the funds. Locations/Restrictions Limitations Eligible states are as follows: All states except for NY, MA, VT, CT, ME, RI, NH, NJ, VA, AK, HI Delegated Only, Washington D.C. Additional Transactions as follows Texas Cash Out 50(a)(6) is ineligible 11

12 Income State specific regulatory requirements supersede all underwriting guidelines set forth by FSB Evaluated per DU or LP and Freddie Mac/FNMA guidelines with the following restrictions: Stand-alone VOE (Verification of Employment) is ineligible. VOE must be accompanied by a paystub and W-2 At minimum a paystub and W-2 are required Self-Employment History Borrower must have been self-employed for a minimum of 2 years(24 months) regardless of documentation requirements Most recent 2 years tax returns with all scheduled are required no exceptions If business returns are filed, FSB must be provided 2 years business returns that coincide with the personal tax returns Transcripts for the provided tax returns must be available from the IRS to use for income calculation. Limitations on Other Real Estate Owned 4506T must be executed for all borrowers, regardless of income type and is required with initial submission and at closing. The 10 financed property limit is cumulative for all borrowers. These limitations apply to the total number of properties financed, not to the number of mortgages on the property. Multiple Loans to the Same Borrower Maximum 20% concentration in any one project or subdivision FSB will purchase loans on up to 4 financed properties for one borrower, including the subject property, or a total of $2 million in financing for one borrower, whichever is less. Primary Residence Borrower may have an unlimited number of financed properties with multiple different lenders. Second Homes & Investment Properties Borrower may own or be obligated on up to 10 financed property, including borrower s primary residence Subject Property Second Home - Per DU (typically 2 months PITIA) if subject property is a second home Subject Property Investment - Per DU (typically 6 months PITIA) if subject property is investment property Other Financed Properties When Borrower has 1-4 financed properties: 2 months PITIA on each other financed second home or investment property When Borrower has 5 10 financed properties: 12

13 6 months PITIA on each other financed second home or investment property New multiple loans must be underwritten simultaneously NOTE: DU/LP is not able to determine the exact number of financed properties the borrower owns or is obligated on, but does issue a message on second homes and investment property transactions when the borrower appears to have other financed properties. The lender must apply the eligibility and underwriting requirements, including reserves, manually to investment property and second home transactions that are underwritten through DU/LP. Mortgage insurers reserve eligibility requirements may supersede those listed above. Page 10 Loan Amount Minimum Conforming Loan Amount: $35,000 Loan amounts <$50,000 allowed on O/O, Purchase and R/T only Mortgage Insurance When two (2) scores per borrower are used, the MI price may be substantially (PMI) higher than normal. The pricing is based on the lowest credit score received. Confirm the pricing with an MI representative in the early state of the loan transaction. The following supersedes all other guidelines for >80% LTV with MI availability All loans must be submitted to DU/DO and receive and Approve/Eligible Reserve requirements by mortgage insurers prevail FSB s approved MI Companies are: Genworth MGIC United Guaranty Eligible MI certificate are as follows: Borrower paid monthly and must be ordered as nonrefundable, constant renewal, deferred payment (initial premium is paid with the first monthly loan payment) Financed MI Lender Paid MI Premiums for all lender-paid MI plans must be shown on the HUD as being paid to the MI company by the Lender Single Premium paid by borrower or seller of the property 13

14 Include calculation and rate factor used to determine MI premium disclosed to the borrower on the initial loan application. Including the MI rate card with the factor identified to ensure the appropriate MI partner is chosen. Ineligible MI Lender paid pool coverage (referred to as GSE pool insurance) Investor paid pool coverage Loans covered by recourse and/or indemnification agreements Secondary market coverage agreements Coverage requirements for greater than 20 years Coverage LTV 12% 80.01% - 85% 25% 85.01% 90% 30% 90.01% - 95% Coverage requirements for less than or equal to 20 years Coverage LTV 6% 80.01% - 85% 12% 85.01% 90% 25% 90.01% - 95% Reduced MI cover age amounts provided by agency and AUS decisions are ineligible Note: Certain states have a tax surcharge assess for Mortgage Insurance. The states requiring the inclusion of a surcharge are as follows: Florida, Kentucky and West Virginia Ensure the MI premium also includes the additional surcharge. Some MI companies include the additional charge in the MI Premium and others do not. Ensure you have identified which is the premium amount and which is the tax amount. For the MI Monthly Premium to be escrowed properly, the total of the two is used for the monthly payment. Occupancy Prepayment Penalty Property Types Primary Residence Second Homes Investment Property Not allowed 14

15 Eligible property types 1-4 units Manufactured Homes please reference Manufactured home section for details Modular Pre-Cut/Panelized Housing PUDs Attached Condos Fannie Mae approved projects (1028/PERS Approval) ( or Limited Review only Detached Condos Fannie Mae approved projects or Limited Review only. See FNMA Selling Guide B , Limited Review Process for Detached Condo Units See FNMA Selling Guide B , Condo Project Eligibility, and B , Limited Review Process for Attached Condo Units FNMA Warrantable Condos only Florida Condos have specific requirements for FNMA and they can be reference below and by following this link: Freddie Mac FL Condo may be eligible and will follow FHLMC guidelines, which do restrict new condo projects. 15

16 Ineligible Condo Hotels Co-ops Leasehold Estates 2-4 unit properties in PUDs Properties encumbered with private transfer fee covenants (per Regulation 12 C.F.R. Part 1228) Qualifying Rate Manufactured Homes Eligible LTV max 95% for Rate/Term Refinance or Purchase using 20 year term LTV max 90% > 20 year term Cash out Max LTV 65% and 20 year term FSB will not finance manufactured homes in a flood zone. 16

17 Property Requirements: The land where the manufactured home rests must be fee simple The MFH must be a single family dwelling legally classified as real property The towing hitch, wheels, and axles must be removed The MFH must assume the same characteristics of a site-built housing The MFH must have sufficient square footage, room dimensions to be acceptable to purchasers in the subject market area The MFH must have been built in compliance with Federal Manufactured Home Construction and Safety Standards that were established June 15, 1976 as amended and in force at the time the home is manufactured, and additional requirements that appear in HUD regulations at 24 C.F.R. Part 3280 as evidenced by: HUD Data Plate/Compliance Certificate A paper document located on the interior of the subject property that contains, among other things, the manufacturer s name and trade/model number. In addition to the data required by Fannie Mae, the data plate includes pertinent information about the unit factory-installed equipment; and HUD Certification Label (sometimes referred to as a HUD seal or tag ) A metal plate located on the exterior of each section of the home The appraisal form 1004C must indicate evidence of both the HUD Data Place/Compliance Certificate and the HUD Certification Label The MFH must be attached to a permanent foundation system The MFH must be permanently connected to the septic or sewage system The MFH must be permanently connected to all necessary utilities (water, electricity, gas service, etc.) The MFH must not have been installed or occupied previously at any other location or site The MFH must not have any additions or structural modifications to the original structure this includes a garage, deck or room addition. Exceptions available case by case (see Foundation Certification) This includes additional room count or additional living area square footage which is not allowed Typical porches and decks installed at time of siting, as well as adjacent carports and garages are allowed Foundation Certification For both FHA and VA loan programs, a foundation certification by a licensed engineer is required. Certification must state foundation is in compliance with the Permanent Foundation Guide for Manufactured Housing and contain engineer s signature and seal. IF there are additions to the original structure, the foundation certification must state that these additions do not affect the structural integrity of the home. FSB does not guarantee that the home will qualify with the additions as this is an investor overlay and underwriting will have to review prior to final approval of the loan. 17

18 Appraisal Requirements: Full interior and exterior appraisal must be completed (Manufactured Home Appraisal Report Form 1004C required) Appraiser should use three comparable sales of similar manufactured homes A detailed and supported cost approach to value is required on all MFH appraisals The following are ineligible. If the site or manufactured home is substantially non-conforming with the neighborhood it is ineligible Creating comparable sales by combining vacant land sales with the contract purchase price of the home is prohibited. (This may be used as additional supporting documentation only.) Evidence of surrender of certificate of title or that no certificate was issued, refer to individual state requirements. The FNMA Titling Manufactured Housing website has additional information pertaining to state requirements: Confirm property is legally classified as real property, on a permanent foundation, and owner owns both land and MFH ALTA Endorsement 7, 7.1, or 7.2 or any other endorsement required for manufactured homes to be treated as real property Deed of Trust (or other security instrument) must include a comprehensive description of the manufactured home and the land in the property description section or on a separate attached rider. The description must include the serial or VIN number for each unit/section; make, model, size, and any other information required by applicable law to definitively identify the manufactured home. Affidavit of Affixture Borrower and Lender must sign and notarize acknowledging their mutual intent that the manufactured home be a permanent part of the real property securing the mortgage. Affidavit must be recorded simultaneously with security instrument. Limited Power of Attorney pertaining to title issues and foreclosure must be signed with closing documents Property Types Eligible Single Family Manufactured House with minimum requirements as follows: Doublewide 600 minimum square feet Ineligible FSB does not finance mortgages on manufactured homes built prior to June 15, 1976 Condo manufactured housing Co-op manufactured housing MFH in parks MFH that has been moved from original installation Singlewide manufactured housing Homes with effective ages that are significantly lower than the mortgage term offered 18

19 The Certification Label (also known as a HUD tag) is a metal plate that is affixed to the outside of the manufactured home. HUD Labels (Tags) verification is required HUD does not reissue tags for manufactured homes. However, the Department can issue a letter of label (tag) verification for units for which it can locate the necessary historical information. The label numbers can be found on a data plate, a paper label affixed inside the home and is the size of a standard sheet of paper (8 ½ x 11 ) inside the home in one of three locations: on or near the main electrical panel, in a kitchen cabinet, in a bedroom closet. The data plate has a map of the United States to let the consumer know the Wind Zone, Snow Load, and Roof Load for which their home was built. You may request letters of label verification from the Institute for Building Technology and Safety (IBTS), by visiting IBTS website at You may also contact IBTS Label Department at or via fax at: Qualifying Rate and Ratios Secondary Financing Restrictions on Value vs Acquisition Costs If the borrower has owned the manufactured home and land for less than 12 months prior to the application date and the manufactured home and land are secured by a single lien, value is the lower of: The purchase price at which the manufactured home and land were previously sold during the 12 month period preceding the application date or, The current appraised value of the manufactured home and land Qualifying Rate Fixed Rate = Qualify at note rate. See Eligibility Matrix Loan Amount & LTV Limitations for Min Credit Score Ratios DU/DO Approve/Eligible Loans ratios evaluated by AUS with a max of 55% Ineligible Manual Underwrite Secondary Financing is eligible and requirements are as follows: Refi Includes 1 st Lien Payoff Payoff of purchase money 2 nd ; no cash out Payoff of non-purchase money 2 nd, regardless of cash out being taken Underwrite Transaction as Limited Cash Out Refinance Cash Out Refinance Comments N/A N/A 19

20 Payoff of 1 st lien seasoned a minimum of 6 months, with subordinate financing being resubordinated and left in place, regardless if the subordinate financing was used to purchase the property and the cash out does not exceed the limited cash out refinance transaction Refinance of a cash out transaction within the Limited Cash out Refinance Cash Out Refinance last 6 months Note: Subordinate financing left in place will not affect the type of refinance transaction used. Down Payment Assistance Program (DPA) Ineligible Subordinate financing must be factored into risk assessment based on CLTV, HCLTV and DTI ratio Subordinate lien must be re-subordinated N/A Special Feature Codes Temporary Buydown Underwriting Refer to the DU/DO Findings to identify the applicable Special Feature Code number Ineligible DU/DO Approve/Eligible or LP Accept 4506T must be processed prior to loan submission A new 4506T is required to be signed with closing docs package as well as at application, even when the form has been processed 5 10 properties with DO/LP Approve/Eligible and the following: Type of Property Ownership Joint ownership of residential real estate. (This is considered to be the same as total ownership of an individual property) Note: Other properties owned or financed jointly by the borrower and co-borrower are only counted once Ownership of Commercial Real Estate Ownership of a multifamily property consisting of more than four dwelling units Joint or total ownership of a property that is held in the name of a corporation of S- Corporation, even if the borrower is the owner of the corporation and the financing is in the name of the Corporation or S-Corp Joint or total ownership of a property that is held in the name of a corporation or S- Property Subject to Limitations? Yes No No No Yes 20

21 Corporation, even if the borrower is the owner of the corporation. However, the financing is in the name of the borrower Ownership in a timeshare Obligation on a mortgage debt for a residential property (regardless of whether or not the borrower is an owner of the property) Ownership of a vacant (residential) lot Joint or total ownership of a property that is held in the name of a Limited Liability Company (LLC) or partnership Ownership of a manufactured home and the land on which it is situated that is titled as real property Ownership of a manufactured home on a leasehold estate not titled as real property (chattel lien on the home) No Yes No Yes Yes No Property Flipping Other underwriting flexibilities When the Seller of the property has been on title less than 90 days extra diligence must be taken with the transaction. Underwriter in its sole discretion reserves the right to condition for additional information and collateral support to include desk review, field review, or additional appraisal in order to support value. There is not a specific FNMA requirement. First-time Home Buyer is allowed Foreign Income is allowed per FNMA guidelines(b ) Corporate Relocation Plans (fully documented per FNMA ) are allowed When the borrower s employer assumes responsibility for paying off the existing mortgage in connection with a corporate relocation plan, the lender must obtain a copy of the executed buyout agreement to document the source of funds. 21

22 A copy of sales contract or a listing agreement is not an acceptable source of verification of proceeds from the sale. (Note: Restricted Relocation Mortgages which are mortgages made under express agreement between employer and lender are not allowed.) Ineligible Manual underwriting Effective immediately, if the balance of a revolving debt has been paid down to zero before settlement, the account no longer is required to be closed. 22