720 & ABOVE. Purchase Rate/Term Max Loan Amount. C/O Refi Max Loan Amount. Maximum Cash-out Amount 1 FICO SCORE $250,000

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1 SECOND HOME PRIMARY RESIDENCE SECOND HOME 720 & ABOVE PRIMARY RESIDENCE CORE JUMBO (CJ) PRIMARY & 2 ND HOME PURCHASE; RATE/TERM & CASH-OUT REFINANCE FICO SCORE Occupancy LTV/CLTV Purchase Rate/Term Max Loan Amount 80/80 2 $1,000,000 75/75 $1,500,000 70/70 $1,750,000 C/O Refi Max Loan Amount Maximum Cash-out Amount 1 65/65 $2,000,000 $750,000 $150,000 60/60 $2,000,000 $1,000,000 $200,000 55/55 $2,000,000 $1,250,000 $250,000 50/50 $2,000,000 $1,500,000 $300,000 75/75 $650,000 70/70 $800,000 65/65 $1,000,000 60/60 $1,250,000 55/55 $1,500,000 50/50 $1,750,000 $750,000 $200,000 75/75 $800,000 70/70 $1,000,000 65/65 $1,000,000 60/60 $1,250,000 $500,000 $200,000 55/55 $1,250,000 $750,000 50/50 $1,500,000 $1,000,000 70/70 $750,000 65/65 $800,000 60/60 $1,000,000 55/55 $1,250,000 $250,000 50/50 $1,500,000 $500,000 $150,000 1 Maximum Cash-out amount is the lesser of the above or 50% of property value 2 Inter-Vivos Revocable Trusts and Permanent Resident Aliens Max 75%) Core Jumbo Update: 6/10/2014 1

2 Product Details Loan Programs Loan Amounts ARM terms Cash-Out Guidelines Incidental Cash-Out Product Guidelines Fixed Rate 30, 25, 20, or 15 year terms, Hybrid ARMs 5/1, 7/1 and 10/1 hybrid ARMs 30 year term only, Minimum Loan Size - $417,100 Maximum Loan Size - $2,000,000 Intermediate Fixed Term ARMs with an initial fixed period of 5, 7 or 10 years. Rate Adjustments After the initial fixed period the loan s interest rate will adjust annually based on the Index plus the Margin, according to the loan caps. Index - One Year LIBOR; the average of interbank offered rates for ONEyear U.S. dollar denominated deposits in the London market ( LIBOR ), as published in the Wall Street Journal most recently available 45 days prior to the change date. Margins - 5/1 ARM is 2.25%, 7/1 and 10/1 ARM is 2.50%. Floor - 5/1 ARM is 2.25%, 7/1 and 10/1 ARM is 2.50%. Amortization term Only 30 year term. Interest Rate Caps - 5/1 ARMs - 2 / 2 / 5: o Initial Cap Start rate plus 2% is the maximum rate for the first adjustment, o Subsequent Adjustment Caps - Current rate plus 2% annually, o Life Cap Start rate plus 5%. Interest Rate Caps 7/1 & 10/1 ARMs 5 / 2 / 5: o Initial Cap Start rate plus 5% is the maximum rate for the first adjustment, o Subsequent Adjustment Caps - Current rate plus 2% annually, o Life Cap Start rate plus 5%. Borrower to have been on title to the subject property for a minimum of 6 months before any cash is received. Maximum cash-out is the lesser of 50% of the property value or the amount listed in the LTV Matrix No previous cash-out transactions are allowed on the property in the past 2 years. The payoff of any subordinate financing seasoned less than 6 months is considered cash-out. Loan is considered cash-out when borrower receives more than the lesser of $2,000 or 1% of the loan amount at closing. Incidental cash to the Borrower may not exceed the lesser of $2,000 or 1% of the loan amount. Cash-out is defined as any amounts paid out of settlement proceeds that are not applied to valid loans secured by the subject property or acceptable closing costs. Cash-out includes but is not limited to the payoff of credit cards, installment loans, subordinate financing less than 6 months old, as well as cash paid to the Borrower. Core Jumbo Update: 6/10/2014 2

3 Delayed Purchase Refinance Defined as a cash-out refinance of a property purchased with all-cash within 60 days of application. Should be classified as a rate & term refinance. Only Primary residences (no second homes). HUD-1 from the original purchase must show all cash used for the purchase of the property. Subordinate Financing QM requirements Title seasoning Debt to income ratio Qualifying Rate Non-Arms length Transactions Seller Concessions Subordinate financing is not allowed, unless pre-existing on a rate & term refinance. On cash-out refinances, all subordinate liens must be paid off at the closing. Eligible loan applications must fall into the category of Qualified Mortgage Safe Harbor under the current CFPB s regulations. On any refinance, if the property is owned less than one year it must be valued at the lower of the original purchase price or current appraised value. Borrower(s) are required to be on title for 6 months for a cash-out transaction. Primary Residence Purchase and Rate & Term Refinance o Fixed Rate Loans - 43% o Hybrid ARMs - 40% Cash-Out Refinance and Second Homes o All Loans - 40% Fixed Rate Loans At the note rate 5/1 ARM At the greater of initial note rate plus 2%, or the fully indexed rate 7/1 & 10/1 Hybrid ARM At the initial note rate Borrowers must not be related to property seller in any manner without full disclosure. Relationships include a business affiliation, renter, landlord, employer or employee, family member, or relative. Gift funds are not allowed. Appraised value must exclude any furnishing or non-permanent fixtures. Concessions include non-realty items such as cash, credit towards closing costs, furniture, automobiles, decorator allowances, moving costs, and other giveaways. Cash or credit concessions are allowed up to 3% and only if credited towards closing costs. Cash or credit contributions may not exceed actual closing costs paid by the Borrower. All non-cash concessions are to be deducted from the contract property price to determine the actual net property purchase price. The lower of the appraised value or net property purchase price will be used to determine the LTV Ratio. Regardless of the amount of the concession, ten percent (10%) of the purchase price must be from the Borrower s own funds. Core Jumbo Update: 6/10/2014 3

4 Gift Funds Gifts are only allowed for primary residences. Gifts are only allowed from immediate family members. Immediate family members are defined as spouse, child or other dependent related by blood, marriage, adoption or legal guardianship, a fiancé, or domestic partner. Gifts are not allowed for related party transactions. Gifts may not come from anyone affiliated with a builder, developer, real estate agent, or any other interested party to the transaction. A gift letter signed and dated by the donor is required. Gift letter must include the amount of the gift funds and any repayment terms. Gifts with repayment terms are to be treated as debt, not gifts. Verification of receipt of the gift funds by the Borrower is required through deposit receipt or bank statement. Regardless of the amount of the gift, at least ten percent (10%) of the purchase price must be from the Borrower s own funds. Gifts are not allowed to count towards reserve requirements. Lease to Purchase transactions Documentation Eligible Properties Second Homes Declining Market Area Eligible States In a lease/purchase option transaction where the purchase option is being exercised, the original lease/ purchase option agreement must have had a minimum term of at least 12 months. A copy of the lease is required to be provided. May not be more than 60 days old at the time of close Existing one-to-two unit residential properties. Detached or semi-detached dwelling or townhome. Condominium or planned unit development (PUD) acceptable to Fannie Mae Must be owned in fee simple Must be suitable for year round use. Must be located in either vacation area (beach, ski, golf, resort), or in a city. May not have rental units or be in a rental pool. 2 family properties are not eligible as second homes. Appraisals marked at declining should be given additional scrutiny to ensure the value is supported by the most recent market data: A minimum of 3 closed sales must be used, verified on the report by reference to public records with recorder's document numbers or multiple listing number or name and phone number of individual providing the data. At least 2 of the 3 comparable sales must be dated within 90 days of the appraisal date. All the comments from the appraiser are taken into consideration. All MCFI licensed states Core Jumbo Update: 6/10/2014 4

5 Properties Previously Listed For-Sale Eligible Borrowers Non-Occupant Co- Borrowers Ineligible Borrowers Maximum number of Borrowers First time homebuyers For refinance transactions, properties previously listed for sale must be unlisted for at least 6 months from the time of mortgage application. U.S. citizens Permanent Resident Aliens: Must have a social security number. Must provide proof of residency. The Permanent Resident Alien certification must be completed and included in the loan file. Must be one of the following: Parent or legal guardian Sibling Child of borrower. Foreign nationals Non-permanent Resident Aliens Borrowers without credit scores Borrowers who are not natural persons such as corporations and partnerships 3 Borrowers max per loan Maximum loan amount of $1,000,000 for first time homebuyers. First time homebuyers are borrowers that haven t owner a property for at least 5 years. Payment shock is not to exceed 200% for First Time Home Buyers. Use previous mortgage payment for borrowers who sold their home within the last 180 days. If home is owned free and clear, use the prior mortgage payment. Use the HUD1 for the sold home or proof of payment to determine previous mortgage payments. Definition: Self-employed - having a business ownership interest of 25% or more and receiving income from that business. Self-employed Borrowers The following are required: 3 years of stable employment and income must be demonstrated, Business must be established for at least 3 years, IRS Form 4506, signed by the borrower, Signed Form 1040 with all schedules for the most recent 3 years, Signed business Federal Income Tax Returns (Forms 1120, 1120S, I065, K-1, etc.) with all schedules for the most recent 3 years, Signed year-to date income (P&L) statement if beyond the first quarter of the new fiscal year as determined by tax returns, Evidence provided and updated through a third party source, not more than 30 days prior to the funding date, of the business existence for at least 3 years (no flexibility or exceptions). Core Jumbo Update: 6/10/2014 5

6 Borrowers with < 2yrs Employment History Rental Income Credit Requirement BKs, Foreclosures, Short sales & Deed-in-lieus Reserves Newly Employed - Verification of 2 years employment is not required if documentation is obtained showing the Borrower was in school or in a training program. All rental income must be accounted for in the cash flow even if not needed to qualify the Borrower. A 25% expense/vacancy deduction must be applied to all rental income. For the subject property (2 unit), the income must include an income approach. Copies of the present leases are required. If the property has been owned one year or more, federal income tax returns showing at least 12 months of rental history are required. If Borrower is not selling their existing residence and converting it to a rental property: o Copy of the fully-executed lease agreement, o Copy of the security deposit from the tenant, o Copy of the bank statement showing the deposited security funds are required. Minimum credit score is 700. Use middle of three credit scores, or the lower if only two are available Minimum of two credit scores are required. All Borrowers must have at least 2 years of credit history in the US. 0x30 for past 24 months on all mortgage debt. Each borrower must exhibit at least 3 active trade lines for at least 24 months. o Trade lines are active if they have been used within the past 6 months. No past bankruptcies are allowed. No foreclosures, short sales or Deed-In-Lieus are allowed within the past 10 years. Credit must be re-established for at least 3 years. No lates in the prior 12 months for ANY credit account. Foreclosures must be satisfactorily explained in writing by the Borrower. Age of a foreclosure is counted from the consummation of the sale. Primary Residence Loan Amount Total Reserves Less than $1,000, months PITI $1,000,001 - $1,500, months PITI Greater than $1,500, months PITI Second Home Loan Amount Total Reserves Less than $1,000, months PITI $1,000,001 - $1,500, months PITI Greater than $1,500, months PITI Financed Properties If a Borrower owns more than 2 financed properties, add 6 months of PITI reserves for each. Borrowers may not own more than 4 financed properties, including the subject property. Core Jumbo Update: 6/10/2014 6