STATE COUNTY SEVERELY DECLINING DECLINING

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1 ADD CHANGED REMOVED AT RISK MARKETS STATE COUNTY SEVERELY DECLINING DECLINING ALABAMA ALASKA ARKANSAS ARIZONA CALIFORNIA COLORADO CONNECTICUT DIST OF COLUMBIA DELAWARE FLORIDA GEORGIA HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY BOYD X LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI Page 1 7/10/2017 Please be advised that BB&T is not liable for any changes made to this document once it has been distributed.

2 AT RISK MARKETS ADD CHANGED REMOVED AT RISK MARKETS STATE COUNTY SEVERELY DECLINING DECLINING MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OHIO BELMONT LAWRENCE OKLAHOMA OREGON PENNSYLVANIA RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH VERMONT VIRGINIA WASHINGTON WEST VIRGINIA WISCONSIN WYOMING Page 2 7/10/2017 Please be advised that BB&T is not liable for any changes made to this document once it has been distributed.

3 BB&T Correspondent Lending Appraisal Form Matrix Acceptable Appraisal Forms 1-unit 1-unit * Form 70, Uniform Residential Appraisal Report Interior & Exterior Inspection Form 2055, Exterior-Only Inspection Residential Appraisal Report 2-4 unit Form 72, Small Residential Income Property Appraisal Report Interior & Exterior Inspection Condo Attached or Detached Condo Attached or Detached Investment and 2-4 unit (occupy 1-unit as primary) 1-unit Investment Appraisal Update and/or Completion Report for all 1-4 unit properties Market Conditions Addendum, Interior & Exterior and Exterior Only Appraisal Field Review Report, 1-unit Form 465, Individual Condominium Unit Appraisal Report Interior & Exterior Inspection Form 466, Exterior-Only Inspection Individual Condominium Unit Appraisal Report Form 998, Operating Income Statement Form 1000, Single Family Comparable Rent Schedule Form 998, Operating Income Statement Form 1000, Single Family Comparable Rent Schedule Form 442, Appraisal Update and/or Completion Report Form 71, Market Conditions Addendum Form 1032, One-Unit Residential Appraisal Field Review Report ** Form 1004, Uniform Residential Appraisal Report Interior & Exterior Inspection Form 1025, Small Residential Income Property Appraisal Report Interior & Exterior Inspection Form 1073, Individual Condominium Unit Appraisal Report Interior & Exterior Inspection Form 1007, Single-Family Comparable Rent Schedule Form 1004D, Appraisal Update and/or Completion Report Form 1004 MC, Market Conditions Addendum Form 2000 One-Unit Residential Appraisal Field Review Report Appraisal Field Review Report, 2-4 unit Form 1072, Two-to-Four Unit Residential Appraisal Field Review Report Form 2000A Two-to-Four Unit Residential Field Review Report *Loan Product Advisor: Automated Collateral Evaluations are ineligible. **Desktop Underwriter: Forms 2055, 2075, and 1075 are obsolete and ineligible. PIW is ineligible. 6/16/2017

4 BB&T Correspondent Lending Contact Matrix Loan Registration, Lock or Extension: Input at Pricing Questions, Changes to Locked Loans or Re-locks of Expired Loans: Toll Free: Fax: Website, Product or General Loan Status Questions: CORRESPONDENT LENDING INFORMATION CENTRAL (CLIC) Toll Free: Fax: Non-Conforming Underwriting Questions: Corporate Address: BB&T Correspondent Lending ATTN: Executive Management 2713-B Forest Hills Road Wilson, NC Toll Free: Fax: Extended Rate Lock Fee: BB&T Correspondent Lending ATTN: CLIC 2713-B Forest Hills Road Wilson, NC Toll Free: Fax: Conforming Conventional Loans: Underwriting and Appraisal Questions FREDDIE FANNIE Correspondent Sales: BB&T Correspondent Lending ATTN: Sales Management 3209 Buford Highway Duluth, GA Toll Free: Fax: Original Note and Allonge Delivery: BB&T ATTN: SM DELIVERY NOTE TEAM- 1 ST Floor Mail Code: Millport Circle Greenville, SC Toll Free: Underwriting File Delivery: Upload files through the Correspondent s portal on the BB&T Correspondent Lending website. Closed Loan File Delivery: Upload files through the Correspondent s portal on the BB&T Correspondent Lending website. Final Documents Delivery: BB&T ATTN: POST-CLOSING Mail Code: Millport Circle, 1 st Floor Greenville, SC Toll Free: MLFinalDocs@BBandT.com Hazard, Flood, Wind and Hail Insurance Mortgagee Clause: Branch Banking and Trust Company Its Successors and/or Assigns ATIMA P.O. Box 7933 Springfield, OH Private Mortgage Insurance Certifications: BB&T P.O. Box 2068 Greenville, SC BB&T Assignment ID # s: MERS Org ID: HUD (FHA) ID: USDA Tax ID: Branch # 029 VA Lender ID: S/S ID: S/S ID: USDA: Conditional Commitment, Loan Guarantee, Lender Certification, Lender Record Change: Tax ID: Branch # 029 Lender Name: BB&T Address: 111 Millport Circle Greenville, SC USDA Post-Funding Documents Delivery: BB&T ATTN: SM Operations 111 Millport Circle, 1 st Floor Greenville, SC Toll Free: Fax: BB&T Mortgage Servicing: General Correspondence: BB&T Mortgage Loan Servicing P.O. Box 2467 Greenville, SC Toll Free: First Payment or Mortgage Payment with or without BB&T Coupon: BB&T Mortgage Payment Center P.O. Box Charlotte, NC Mortgage Payment Overnight Delivery: BB&T Mortgage Payment Department 111 Millport Circle, 1 st Floor Greenville, SC Forward Property Tax Bills to: BB&T Mortgage ATTN: Tax Administration PO Box 2387 Greenville, SC

5 DECLINING MARKET POLICY DECLINING MARKET POLICY Overview Conditions in the real estate industry have resulted in declining values in many markets. BB&T is implementing the following policy in order to mitigate some of the collateral risk associated with declining markets. A list of declining/at risk markets will be updated periodically and posted on the BB&T Correspondent Lending website. BB&T has identified two market conditions which are defined below: Declining markets are experiencing depreciation of value which is expected to continue trending downward. Severely Declining markets are experiencing significant depreciation of value which is expected to continue into the future. If the property is located in an area that is on the BB&T Declining/At Risk list or the appraiser indicates on the appraisal report that the property is located in a declining market, the property may not be eligible for maximum financing. The loan to value ratio for properties designated as being in a declining/at risk market must be reduced as indicated below. Conforming Loan Products (includes Fixed Rate and ARMs) Super Conforming Loan Products (includes Fixed Rate and 5/1 ARMs) Eligible loan products must be underwritten in accordance with and guidelines. Loans underwritten to satisfy these guidelines will not require a reduction in the LTV/TLTV. Correspondents are responsible for obtaining required mortgage insurance on all loans sold to BB&T which require mortgage insurance and for being knowledgeable of guideline changes and restrictions implemented by the mortgage insurance companies. Non-Conforming Loans (includes Fixed Rate and ARMs) Property located in a Declining market requires a 5% LTV/TLTV reduction from maximum allowed financing for the property and transaction type. The LTV/TLTV may not exceed 80%. For example, if the maximum LTV for the application is 80% LTV and 80% TLTV, the maximum allowed in a Declining market is 75% LTV and 75% TLTV. If the maximum LTV for the application is 70% LTV and 70% TLTV, the maximum allowed in a Declining market is 65% LTV and 65% TLTV. Property located in a Severely Declining market requires a 10% LTV/TLTV reduction from maximum allowed financing for the property and transaction type. The LTV/TLTV may not exceed 75%. For example, if the maximum LTV for the application is 80% LTV and 80% TLTV, the maximum allowed in a Severely Declining market is 70% LTV and 70% TLTV. If the maximum LTV/TLTV for the application is 70% LTV and 70% TLTV, the maximum allowed in a Severely Declining market is 60% LTV and 60% TLTV. If property is not on the list and the appraiser indicates a declining market, the LTV/TLTV must be reduced by 5%. The LTV/TLTV may not exceed 80%. If the appraiser indicates that the Marketing Time is over 6 months on a non-conforming appraisal, Management in its discretion will consider acceptable loan risk tolerance. This may result in a reduction in allowable loan amount for LTV maximums. Page 1 7/18/2016

6 DECLINING MARKET POLICY Construction Conversion and Renovation Mortgages Non-Conforming If the property is not on the BB&T Correspondent Lending At Risk Markets list and the appraiser indicates declining property values, the market condition will be considered declining. Refer to the LTV Charts for Non-Conforming, Declining and Severely Declining market requirements. Exceptions to this policy will be entertained if the appraisal supports that values and marketability are stable. The requirements listed below in the Exceptions Policy section must be met. Exceptions Policy Exceptions to this policy will be entertained if the appraisal supports that values and marketability are stable. All of the following must be provided. The application is not for a Non-Conforming loan that involves a cash-out refinance or condo. The appraiser provides days on the market for each comparable sale, including expired listings of the property and this data is consistent with marketing time reflected on the first page of the appraiser s report. The three closed comparable sales must have closed no more than six months from the date of the appraisal report. At least two of the comparable sales must have closed no more than three months from the date of the appraisal report. At least one pending sale is provided, as an additional comparable evidencing the market is stable. Adjustments to comparables must be in the standard 15% net and 25% gross adjustment range. Comparable sales should be located within one mile of the subject for urban and suburban areas and within 10 miles of the subject for rural areas. Additional Information This revision to the BB&T Correspondent Lending Declining Market Policy is effective with loans registered, locked or relocked with BB&T on or after July 18, Loans registered or locked prior to July 18, 2016 may be delivered provided they meet all previous declining market requirements. The current BB&T At Risk Markets list is available on the website. The registration confirmation will notify Correspondents that the property may be located in a Declining Market. Loans received for funding will be audited for compliance with BB&T Correspondent Lending s LTV/TLTV guidelines for Declining Markets. Any loan which exceeds our LTV/TLTV guidelines will not be funded. FHA, VA and USDA/Rural Housing loans are not affected by this policy. The applicable FHA, VA or USDA guidelines should be followed. Page 2 7/18/2016

7 LEGAL DOCUMENT MATRIX PRODUCT NUMBER LOAN TYPE CAPS MARGIN CONVERSION RATE CONVERSION FEE NOTE ADDENDUM DOT RIDER ARM DISCLOSURE Year Fixed Rate N/A / Conforming Year Fixed Rate Conforming N/A / Year Fixed Rate Conforming Year Fixed Rate Conforming Year Non-Conforming Fixed Rate Year Non-Conforming Fixed Rate Year Fixed Rate Conforming FTHB 144 Conforming 5 Year P&I LIBOR ARM Non-Convertible 145 Non-Conforming 5 Year P&I LIBOR ARM Non-Convertible 147 Non-Conforming 7 Year P&I LIBOR ARM Non-Convertible N/A / N/A / N/A / N/A / N/A / 2/2/5 2.25% N/A N/A /2/5 2.25% N/A N/A /2/5 2.25% N/A N/A N/A N/A N/A ARM Program Disclosure ARM Program Disclosure ARM Program Disclosure 8/16/ Please be advised that BB&T is not liable for any changes made to this document once it has been distributed.

8 LEGAL DOCUMENT MATRIX PRODUCT NUMBER LOAN TYPE CAPS MARGIN CONVERSION RATE CONVERSION FEE NOTE ADDENDUM DOT RIDER ARM DISCLOSURE 149 Non-Conforming 10 Year P&I LIBOR ARM Non- Convertible 2/2/5 2.25% N/A N/A N/A ARM Program Disclosure Year Fixed Rate Conforming HOME Now Year Fixed Rate Conforming HOME Now Year Fixed Rate Conforming HOME Now N/A / N/A / N/A / 201 FHA 30 Year Fixed N/A FHA Fixed Standard 202 FHA 15 Year Fixed N/A FHA Fixed Standard 204 VA 30 Year Fixed N/A VA Fixed Standard 205 VA 15 Year Fixed N/A VA Fixed Standard 302 Conforming 7 Year P&I LIBOR ARM Non-Convertible HOME Now 303 Conforming 10 Year P&I LIBOR ARM Non-Convertible HOME Now 5/2/5 2.25% N/A N/A /2/5 2.25% N/A N/A 5531 N/A N/A ARM Program Disclosure ARM Program Disclosure 2 8/16/2016 Please be advised that BB&T is not liable for any changes made to this document once it has been distributed.

9 PRODUCT NUMBER LOAN TYPE CAPS MARGIN CONVERSION RATE 340 Conforming 3 Year P&I LIBOR ARM Non-Convertible 343 Non-Conforming 3 Year P&I LIBOR ARM Non-Convertible 375 Conforming 7 Year P&I LIBOR ARM Non-Convertible 376 Conforming 10 Year P&I LIBOR ARM Non-Convertible 501 USDA/Guaranteed Rural Housing Year Fixed Rate Relief Plus Year Fixed Rate Relief Plus Year Fixed Rate Relief Plus CONVERSION FEE 2/2/5 2.25% N/A N/A /2/5 2.25% N/A N/A /2/5 2.25% N/A N/A /2/5 2.25% N/A N/A N/A / N/A / N/A / N/A / LEGAL DOCUMENT MATRIX NOTE ADDENDUM DOT RIDER ARM DISCLOSURE N/A ARM Program 5130 Disclosure 3189 N/A N/A N/A ARM Program Disclosure ARM Program Disclosure ARM Program Disclosure NOTES: ARM rate floor will never be less than margin. 8/16/2016 Please be advised that BB&T is not liable for any changes made to this document once it has been distributed. 3

10 OVERLAY AND ALLOWANCES MATRIX: CONVENTIONAL CONFORMING AND SUPER CONFORMING For Non-Conforming products, please refer to Chapter 4 of the Correspondent Lending Guide Appraisals Topic Attached PUDs Automated Findings Condominiums DU: Forms 2055, 2075, 1075 and PIW not accepted. LPA: Automated Collateral Evaluations are ineligible Super Conforming mortgages: The following requirements apply regardless of LPA or DU approval: Full interior/exterior URAR ( Form 70/ Form 1004 for 1 unit properties; Form 72/ Form 1025 for 2 4 unit properties) with all applicable addendums. For loans with LTV/TLTV/HTLTV ratios greater than 75% and the value is greater than or equal to $1,000,000, a full URAR and field review (Form 1032 for 1 unit properties and Form 1072 for 2-4 unit properties) are required. When the field review results in a different value, the lower of the original appraised value, field review value or sales price must be used to calculate the LTV/TLTV/HTLTV. 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. LPA Caution A-Minus eligible, LPA Caution, DU Refer with Caution and/or Manual Underwrite of non-eligible findings are not acceptable for delivery to BB&T Correspondent Lending. Loans receiving an approval through LPA or DU where the AUS Findings have been customized for a specific Lender are ineligible for delivery to BB&T Correspondent Lending. See Conforming and Super Conforming Underwriting Guidelines for DU overlays. Use Condominium Project Questionnaire Full Form or Condominium Project Questionnaire Short Form (or comparable formats) to determine condo classification. Condo must meet one of the Eligible Classifications shown on the BB&T Condominium Classification Certification. Correspondent must complete Certification. As determined by guidelines, Correspondent is responsible for reviewing HOA s current budget and declaration page of current insurance policies. All appropriate attachments must be included in submission of loan package. Note: If the reserve requirements cannot be identified from the budget, BB&T will require the reserve study. approved projects accepted. Must be warranted to and meet requirements. Limited Review ineligible. Florida New or Newly Converted Condos must have PERS approval to be eligible for delivery to. Streamlined Condominium Review eligible for LPA Accept and DU Approve/Eligible Mortgages only. Property Insurance requirements: HO6 coverage will not be escrowed separately if master policy covers the exterior and interior of the unit. BB&T Internal 12/18/2017 1

11 Topic Construction Conversion & Renovation Mortgages Credit History OVERLAY MATRIX: CONVENTIONAL CONFORMING AND SUPER CONFORMING For Non-Conforming products, please refer to Chapter 4 of the Correspondent Lending Guide Follow Section 3:16 of the Conforming and Super Conforming Underwriting Guidelines. Loans receiving LPA Accept & DU Approve/Eligible are eligible. LPA Caution A-Minus are not eligible. : Separate Construction Conversion Documentation option only. See the Seller/Servicer Guide. : Conversion of Construction-to-Permanent Financing Two-Closing Transactions option only. See Selling Guide Section B The following apply regardless of LPA or DU approval: Primary Owner Occupied and Second Homes only. 1 4 Unit Site Built homes only. All improvements must by fully completed before delivery to BB&T Correspondent Lending. Age of Credit Documentation: Credit documents must not exceed 120 days as of the Note Date (effective date of permanent financing). Appraisal Requirements: Interior/Exterior appraisal ( Form 70/ Form 1004 for 1 unit properties; Form 72/ Form 1025 for 2 4 unit properties) required regardless of LPA feedback. Appraiser s opinion of value must provide the as completed value. Age of Appraisals: If the effective date of the appraisal report is more than 120 days before the Note Date, and not more than 12 months before the Note Date, an appraisal update with at least an exterior-only inspection is required. For the purpose of this section, the Note Date is equivalent to the Effective Date of Permanent Financing when the mortgage is a Construction Conversion or Renovation Mortgage. If the effective date of the appraisal report is more than 12 months before the Note Date, a new appraisal with an interior and exterior inspection is required. If the new refinance mortgage replaces the interim construction mortgage more than 180 days after the property completion, a Right to Cancel would be required. Escrow holdbacks allowed for landscaping only. Ineligible Mortgages Construction Conversion and Renovation Mortgages Documentation structure: Integrated Construction Conversion Documentation Modification Construction Conversion Documentation Conversion of Construction-to-Permanent Financing: Single-Closing Transactions LPA and DU Approved Modified Construction Loans Mortgage File Documentation Requirements : Construction Conversion and Renovation Mortgages The following requirement applies in addition to the mortgage file documentation requirements located in the Seller/Servicer Guide. Purchase Transactions: Correspondents must provide an explanation on the Transmittal Summary addressing the decision to structure as a purchase transaction while documenting as a refinance. Follow Sections 3:8 & 3:11 of the Conforming and Super Conforming Underwriting Guidelines. Significant Adverse or Derogatory Credit/Waiting Periods: Short Sale - requirements for manually underwritten loans must be followed when loan file contains evidence of a short sale on the credit report or elsewhere in the loan file. BB&T Internal 12/18/2017 2

12 Topic Credit Score Requirements OVERLAY MATRIX: CONVENTIONAL CONFORMING AND SUPER CONFORMING For Non-Conforming products, please refer to Chapter 4 of the Correspondent Lending Guide 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 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. Conforming & Super Conforming Loan Amounts: Purchase & No Cash Out (NCO) = 620 Cash Out Refinance (C/O) = 620 Eligibility Requirements - Not All Borrowers Have Usable Credit Scores Loan Product Advisor (LPA) Requirements for Accept Mortgages: At least one Borrower on the transaction has a usable Credit Score, as determined by LPA, which meets BB&T Correspondent Lending minimum credit score requirements. The transaction is a purchase or no cash-out refinance. The Mortgage is secured by a 1-unit property, and all Borrowers occupy the property as their Primary Residence. Borrowers with a usable Credit Score contribute more than 50% of the total monthly income. Conforming and Super Conforming loan amounts are eligible. A-Minus mortgages where not all borrowers have a usable credit score are ineligible for delivery to BB&T Correspondent Lending. A-Minus mortgages are ineligible for delivery to BB&T Correspondent Lending. Desktop Underwriter (DU) Requirements for DU Approve/Eligible Mortgages: At least one Borrower on the transaction has a usable Credit Score, as determined by DU, which meets BB&T Correspondent Lending minimum credit score requirements. The transaction is a purchase or limited cash-out refinance. The Mortgage is secured by a 1-unit property, and all Borrowers occupy the property as their Primary Residence. Conforming loan amounts only; Super Conforming loan amounts are not eligible. Borrowers with a usable Credit Score contribute more than 50% of the qualifying income. Reserves may be required as determined by DU. BB&T Internal 12/18/2017 3

13 Topic Debt-to-Income Ratio OVERLAY MATRIX: CONVENTIONAL CONFORMING AND SUPER CONFORMING For Non-Conforming products, please refer to Chapter 4 of the Correspondent Lending Guide Super Conforming Loan Amounts DU/LPA 45% Downpayment Assistance Programs First Time HomeBuyer Program (DU Approval Only) Flood Insurance Requirements HOME Now (LPA Approval Only) Eligible for HOME Now products only. See product descriptions for additional information regarding eligible programs. Purchase transactions only. At least one borrower must be a First Time HomeBuyer (FTHB), which is defined as an individual who has not had an ownership interest (sole or joint) in residential real estate during the past three years. Minimum credit score is 620. Reduced Mortgage Insurance coverage of 18% is allowed with applicable risk fees. Risk based fees apply. Please refer to Price Adjustments & LTV Charts for details. For subject properties located in a Special Flood Hazard Area, BB&T Correspondent Lending requires flood insurance coverage equal to the amount of homeowners insurance coverage up to the National Flood Insurance Program (NFIP) maximum of $250,000. LTV/TLTV Property Type Maximum LTV Maximum TLTV 3 4 units 80% 95% Secondary Financing Secondary Financing must be an Affordable Second. Affordable Second financing cannot be a Home Equity Line of Credit if LTV exceeds 95%. Note: Affordable seconds with no payments before the 61 st payment on the HOME Now mortgages may be entered as a gift. Minimum Credit Score Requirements LTV <=80% LTV >80% 1 unit None units None units None N/A Investment Property Florida investment condos are allowed under full condo review only. Ineligible Loan Programs/Transactions Refer to Section 3:28 of the Conforming and Super Conforming Underwriting Guidelines under Ineligible Transactions and Product Descriptions for additional information. BB&T Internal 12/18/2017 4

14 Topic Large Deposits Letters of Explanation Loan Amounts Loan-to-Value Maximum Allowable Number of Financed Properties OVERLAY MATRIX: CONVENTIONAL CONFORMING AND SUPER CONFORMING For Non-Conforming products, please refer to Chapter 4 of the Correspondent Lending Guide Large deposits are defined as a single deposit that exceeds 50% of the total gross monthly qualifying income for the loan. This requirement is for all transactions where the deposit is needed to meet the requirements for Borrower Funds and/or required reserves. When a deposit that meets the definition for large deposits is not documented and is not needed for Borrower Funds and/or required reserves, the funds used for qualifying purposes by the amount of the unverified deposit must be reduced. Any borrowed funds including any related liability must be considered, including undisclosed debt. Therefore, a signed statement from the borrower explaining the origin of unverified deposits is required and must be included in the loan file. When a single deposit consists of both verified and unverified funds, the unverified funds are used when determining whether the deposit exceeds the 50% requirement. Note: The reduced amount of the asset must be entered into Loan Product Advisor or Desktop Underwriter. 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. Maximum loan amount based on existing Conforming Conventional policy. Super Conforming loans are capped at $1 million regardless of LPA Accept/DU Approve/Ineligible rating. Refer to Price Adjustments and LTV Charts for all LTV/TLTV/HTLTV limits Primary Residence: No limit on the number of financed properties on which the borrower may be obligated. Second Home or Investment Property: Each borrower individually and all borrowers collectively must not be obligated* on more than six 1-4 unit financed properties, including the subject property and Borrower s primary residence. Examples of financed properties that do not have to be counted in this limitation include: Commercial real estate; Multifamily (five or more units) real estate; Timeshares; Undeveloped land; Manufactured homes not titled as real property, unless the property is situated on the land that is titled as real property; Property titled in the name of the Borrower s business provided that the Borrower, in his or her individual capacity, is not on title and/or is not obligated on the property; and Property titled in the name of a trust where the Borrower is a trustee, provided that the Borrower, in his or her individual capacity, is not on title and/or not obligated on the property. *If a borrower is obligated on a mortgage note, but not on title to the property, this would still count in the maximum financed properties. Borrowers who own more than one financed Investment Property may not utilize the 3/1 or 5/1 ARMs for subsequent investment property transactions. BB&T Internal 12/18/2017 5

15 Topic Mortgage Insurance Non-Arms Length Transaction OVERLAY MATRIX: CONVENTIONAL CONFORMING AND SUPER CONFORMING For Non-Conforming products, please refer to Chapter 4 of the Correspondent Lending Guide Private mortgage insurance must be disclosed as life-of-loan PMI for second homes. Super Conforming loans with financed mortgage insurance are ineligible for delivery. Non-Arms Length transactions are allowed for the purchase of newly constructed or existing properties secured by a primary residence or existing properties secured by second homes. Investment properties not allowed. Non-Permanent Resident Aliens Eligible Visa Types Other Income Power of Attorney 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 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. Refer to Section 3.9 of the Conforming and Super Conforming Underwriting Guidelines for documentation requirements. Unacceptable on Texas Equity Section 50(a)(6) transactions. Property Flipping Recently Listed for Sale Distress Sales eligible as Primary Residence or Second Home purchase only. Any resale of a property to be no less than 90 days from the date of the seller s recorded deed to the new buyer s initial application date. Credit and collateral documentation must be dated on or after the application date. Exception from required 90 day waiting period for those properties acquired through inheritance, divorce agreement, federally charted institution or HUD, and relocation company. Private individuals, LLC s, Partnerships, or Investors are eligible Sellers after the 90 day waiting period. No Cash Out Refinances The subject property must not be currently listed for sale. It must be taken off the market on or before the disbursement date of the new Mortgage loan, and the Borrowers must confirm their intent to occupy the subject property (for principal residence transactions). Cash Out Refinances Properties that were listed for sale must have been taken off the market on or before the disbursement date of the new Mortgage loan, otherwise they are ineligible. BB&T Internal 12/18/2017 6

16 OVERLAY MATRIX: CONVENTIONAL CONFORMING AND SUPER CONFORMING For Non-Conforming products, please refer to Chapter 4 of the Correspondent Lending Guide Topic Refinance: Cash Out Regardless of LPA or DU: Minimum six months for Cash Out Refinance, unless transaction meets Special Purpose Cash Out Refinance guidelines; meets all cash out requirements for properties not owned for a minimum of six months; or for DU loans, meets s Delayed Financing Exception (B ). Residential loans must be titled in the name of individuals only. Loans may not be titled in the name of a business, Corporation, S-Corp, Partnership, LLC or other non-living business entity. Transfer of ownership from an LLC, Corporation, S-Corp, Partnership, or any other non-living business entity for the purpose of refinancing the loan into the prospective borrower s name is unacceptable. Student Loan Cash Out Refinance feature is ineligible. Refinance: No Cash Out Seasoning Requirements Rental Income Self Employed Borrowers Tax Returns Regardless of LPA or DU: No seasoning requirement for refinance of a previous arms-length purchase transaction. Residential loans must be titled in the name of individuals only. Loans may not be titled in the name of a business, Corporation, S-Corp, Partnership, LLC or other non-living business entity. Transfer of ownership from an LLC, Corporation, S-Corp, Partnership, or any other non-living business entity for the purpose of refinancing the loan into the prospective borrower s name is unacceptable. Follow LPA or DU, except for the following: For LPA approvals: When documenting the rental income from long-term rental income sources ( Selling Guide section (c)(ii), Option I), BB&T will not permit rental income to be deemed stable without obtaining the current lease and complete federal individual income tax returns, including schedule E. Follow LPA or DU. Refer to the Employment and Income Section of the Conforming and Super Conforming Underwriting Guidelines for additional details regarding tax return and tax transcript requirements. Refer to the Employment and Income Section of the Conforming and Super Conforming Underwriting Guidelines for details regarding tax return requirements. BB&T Internal 12/18/2017 7

17 OVERLAY MATRIX: CONVENTIONAL CONFORMING AND SUPER CONFORMING For Non-Conforming products, please refer to Chapter 4 of the Correspondent Lending Guide Topic Tax Transcripts (IRS Record of Account) Temporary Buydowns ULDD Data Entry Requirements Investment & 2-4 Unit Owner Occupied Properties Verifications of Employment Verbal and Written Note: An IRS Record of Account is acceptable in lieu of Tax Transcripts. References to Tax Transcripts and Record of Account are interchangeable. Full Personal Tax transcripts are required if: The borrower is self-employed and owns 25% or more of the business (including a Schedule C) The borrower is commissioned, and the commission income represents 25% or more of their total annual employment income Other income from a tax return is being used to qualify (i.e. dividend/interest, rental income, capital gains, notes receivable, etc.) W-2 Wage Earner Tax Transcripts are now accepted instead of Full Transcripts if: The borrower is a wage earner and receives less than 25% of their total annual employment income from commission The borrower receives 1099s from employers. Refer to the Employment and Income Section of the Conforming and Super Conforming Underwriting Guidelines for additional details regarding tax transcript requirements. Ineligible The following apply to all Conforming and Super Conforming loans delivered to BB&T Correspondent Lending on or after July 2, 2012 (See Bulletin , dated June 21, 2012): A completed Fair Market Rent Verification Form providing the gross rent for all investment and 2-4 unit owner occupied properties regardless of whether rental income was relied upon for loan approval must be included in all loans delivered to BB&T Correspondent Lending for funding. The Fair Market Rent Verification Form is available under the Forms section of the BB&T Correspondent Lending Library. Documentation must be provided showing how the gross rent figure was determined. The following items are considered acceptable documentation for determining fair market rent: - Signed lease stating monthly rent received for all non-owner occupied units. - Bank statements showing monthly rental income for all non-owner occupied units. - Signed statement from the borrower certifying the fair market rent for all non-owner occupied units. Please note: The above information is provided for ULDD data entry compliance purposes. If any income is needed in the qualifying process from an investment or owner occupied 2-4 unit property, BB&T Correspondent Lending income documentation guidelines must be followed. All verifications of employment 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 Internal 12/18/2017 8

18 ALLOWANCES MATRIX: CONVENTIONAL CONFORMING AND SUPER CONFORMING Topic Second Home Seasonal Occupancy Provision (LPA Approval Only) Allowances Second Homes not suitable for year round occupancy ARE eligible subject to the following: In the appraisal report, the appraiser includes comparable sales that demonstrate properties not suitable for yearround occupancy are typical for residential properties in the market area; and The Mortgage complies with all other requirements in Seller/Servicer Guide LPA CONFORMING/SUPER CONFORMING ACCEPT ELIGIBLE RATING ONLY. BB&T Internal 12/18/2017 9

19 Topic Assumability Attached PUDs Automated Findings Condominiums OVERLAY MATRIX: GOVERNMENT USDA: USDA loans with an assumability feature are not eligible for delivery to BB&T Correspondent Lending. FHA: 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. USDA: follow FHA property insurance requirements above. VA: follow FHA property insurance requirements above. FHA: LP Accept or DU Approve/Eligible findings required on Purchases, No Cash Out Refinances, Cash-Out Refinances. TOTAL Scorecard run through an approved FHA vendor is acceptable. The list of approved vendors is accessible in FHA Connection. Simple Refinance Transactions are not eligible for delivery at this time. USDA: Manual Underwriting or GUS Accept Eligible accepted. Loans submitted to GUS receiving a Refer or Refer with Caution and switched to manual underwriting are not eligible for delivery to BB&T Correspondent Lending. May not register USDA loans where funds are not available. VA: LP Accept or DU Approve/Eligible findings required on Purchase and Cash-Out Refinances. Manual Underwriting required on VA IRRRLs. FHA: FHA Approved; DELRAP and HRAP are acceptable. EXCEPTION: Streamline Refinances currently serviced by BB&T are acceptable for delivery to BB&T where the condominium project is no longer insurable under FHA guidelines or the project was DE approved and not FHA approved. 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. USDA: Condominiums must be approved or accepted by,, HUD or VA. Proof of agency approval must be included within the loan file. Follow FHA property insurance requirements above. VA: VA Approved only. Follow FHA property insurance requirements above. VA: All BB&T and Non-BB&T Serviced IRRRLs are required to have made at least six consecutive monthly payments on the existing loan at the time of the Note Date of the new refinance. Non-BB&T Serviced IRRLs - 12 month clean documented mortgage payment history. Prior rental history or history residing with family members is not acceptable. BB&T Internal 12/22/2017 1

20 Topic Credit History Credit Score Requirements OVERLAY MATRIX: GOVERNMENT FHA: Streamline Refinances - 12 months documented mortgage payment history required for Credit and Non-Credit Qualifying Streamline Refinances. Credit Inquiries: Written explanation is required from Borrower for all inquiries shown on the credit report that were made within the last 90 days. New debts must be included in debt ratios. VA: All BB&T and Non-BB&T Serviced IRRRLs are required to have made at least six consecutive monthly payments on the existing loan at the time of the Note Date of the new refinance. Non-BB&T Serviced IRRLs - 12 month clean documented mortgage payment history. Prior rental history or history residing with family members is not acceptable. 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 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 FHA: Purchases, No Cash Out, Cash-Out & BB&T serviced Owner Occupied Streamline Refinances/HUD REO properties: <= $453,100 = 660 $453,101 - $750,000 = 680 BB&T serviced Non-Owner Occupied Streamline Refinances: All loan amounts = 720 FHA Owner Occupied and Non-Owner Occupied Streamlines that are not BB&T serviced are ineligible. USDA: Minimum credit score is 640 for program eligibility and credit underwriting. Each borrower on transaction must meet the 640 minimum. For borrowers with one credit score reported on the traditional credit report, non-traditional credit sources are required. See USDA Product Description for more details. A non-traditional mortgage credit report score is not eligible for consideration to meet credit score requirement. No minimum credit score requirement for USDA Streamlined Assist Refinance transactions, however a merged credit report must be included with the loan submission package. VA: Purchases & Cash-Out Refinances: <= $453,100 = 620 $453,101 - $750,000 = 660 IRRRLs: An In-file or Tri-Merge Credit Report is required to determine compliance with BB&T minimum credit score requirements. O/O BB&T serviced all loan amounts: 620 O/O Non-BB&T serviced <= $453,100 = 640 O/O Non-BB&T serviced $453,101 - $750,000 = 660 Non-Owner Occupied BB&T serviced only IRRRL = BB&T Internal 12/22/2017

21 Topic Debt-to-Income Ratio Downpayment Assistance Programs Flood Insurance Requirements OVERLAY MATRIX: GOVERNMENT FHA: Maximum DTI is 50% on Purchases and Refinances, regardless of DU or LP Approval. FHA Jumbo loans are limited to 45% regardless of DU or LP Approval. DTI is not calculated on non-credit qualifying Streamline Refinances Credit Inquiries: Written explanation is required from Borrower for all inquiries shown on the credit report that were made within the last 90 days. New debts must be included in debt ratios. VA: No set maximum DTI with LP Accept or DU Approve/Eligible. Residual Guideline minimums must be met or exceeded. FHLB eligible for all government programs. See product descriptions for information regarding additional eligible programs. For subject properties located in a Special Flood Hazard Area, BB&T Correspondent Lending requires flood insurance coverage equal to the amount of homeowner s insurance coverage up to the National Flood Insurance Program (NFIP) maximum of $250,000. Identity Certification Income Individual Residential Water Purification System Ineligible Loan Types and Programs FHA: A "FHA Identity Certification" form must be signed by the Correspondent associate responsible for reviewing and verifying the Borrower's identity using valid government-issued photo ID. The completed form must be included in the submission package. A copy of the photo ID should not be provided to BB&T Correspondent Lending. FHA: Projected Income - Borrower s employment offer must be non-contingent, and the non-contingent offer letter must be retained in the file. In the event the borrower provides an offer letter with contingencies, the file must contain an additional letter from the employer stating that all contingencies have been cleared for employment. Borrower s written acceptance of the employment offer must also be retained in the file. FHA: Loans secured by properties with individual water purification systems are ineligible for delivery to BB&T Correspondent Lending. FHA: Construction Modification loans; Cooperative Mortgages; Disaster Victims Mortgages 203(h); Energy Efficient Mortgages (EEMs); Good Neighbor Next Door (GNND); Home Equity Conversion Mortgages (HECMS); Properties subject to Property Assessed Clean Energy (PACE) Obligations; Non-BB&T serviced Streamline Refinances; Refinance of borrowers in Negative Equity Positions; Simple Refinances as defined in HUD Handbook (4000.1: II.A.8.d.vi.B); Texas Equity Refinance Section 50(a)(6) loans USDA: Construction Modification loans; Energy Efficient Mortgages (EEMs); Properties located in mudslide zone; Properties subject to Property Assessed Clean Energy (PACE) Obligations; Streamline Refinances; Texas Equity Refinance Section 50(a)(6) loans VA: Construction Modification loans; Energy Efficient Mortgages (EEMs); Properties subject to Property Assessed Clean Energy (PACE) Obligations; VA Vendee Financing Program; Texas Equity Refinance Section 50(a)(6) loans Ineligible Properties FHA: Manufactured Housing, Single or Double-wide Manufactured Homes, Condotels, Geodomes, Earth Homes, Quonset Huts, and Co-ops. USDA: Manufactured Housing, Condotels, Geodomes, Earth Homes, Quonset Huts, Co-Ops, Properties encumbered by PACE Obligations, and Properties located in mudslide zone. VA: Manufactured Housing 3 BB&T Internal 12/22/2017

22 OVERLAY MATRIX: GOVERNMENT Topic Investment Property Letters of Explanation Loan Amounts FHA: Investment property purchases ineligible. Investment property allowed on Streamline Refinance if currently serviced by BB&T. VA: Investment property purchases ineligible. Investment property allowed for IRRRLs if currently serviced by BB&T. 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. FHA: Maximum base loan cannot exceed $750,000 in high cost areas. Upfront MIP can be added to maximum base. USDA: Maximum base loan cannot exceed current conforming conventional limit. Guarantee Fee can be added to maximum base. VA: Maximum base loan cannot exceed $750,000 in high cost areas. VA Funding Fee can be added to maximum base. Loan-to-Value VA: Purchase 100% LTV (if subject to subordinate financing, the maximum TLTV accepted by BB&T is 105%) Cash Out Refinance 90% LTV (if subject to subordinate financing, the maximum TLTV accepted by BB&T is 100%) Non-Permanent Resident Aliens Eligible Visa Types & Employment Authorization Documentation Cards (EAD) Eligible Visa Types 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 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. Eligible Employment Authorization Documentation Cards A03 A05 A08 A12 If the country of birth is El Salvador, Honduras or Nicaragua A17 Requires spouse with E-1 or E-2 Visa on the loan A18 Requires spouse with L-1 Visa on the loan C02 Requires spouse with E-1 Visa on the loan C08 C12 Requires spouse with E-2 Visa on the loan C36 Requires spouse with E-3, H-1B, H-1B1, L-1 or O-1 Visa on the loan BB&T Internal 12/22/2017 4

23 Topic Product Features Properties Sold at Auction, Foreclosure, Deed in Lieu, HUD Repo, Bank-Owned or Short Sale Property Flipping Refinance Texas Equity Refinance Section 50(a)(6) OVERLAY MATRIX: GOVERNMENT FHA: Fixed rate only 203(b), 234(c), and 203(k) eligible. 203(k) loans must be fully disbursed with a final inspection in the file at time of delivery to BB&T. Temporary buydowns ineligible. Manufactured Housing not permitted. USDA: Fixed rate only Temporary buydowns ineligible. Manufactured Housing not permitted. VA: Fixed rate only Temporary buydowns ineligible. Manufactured Housing not permitted. FHA: HUD REO properties - Refer to Product Description and Price Adjustments & LTV Charts for additional information. FHA: HUD REO properties - Refer to the Property Flipping section in the Product Description for additional information. All Government Programs ineligible for delivery to BB&T Correspondent Lending Refinance Simple FHA: Simple Refinance Transactions as defined in the FHA Single Family Housing Policy Handbook : II.A.8.d.vi.B are not eligible for delivery to BB&T. Refinance Streamlines FHA: FHA Streamline Refinances must be serviced by BB&T. Refinance Streamlined USDA: loan being financed must be an existing USDA Guaranteed loan which is currently serviced by BB&T. Assist Refinance Cash Out VA: 90% LTV (if subject to subordinate financing, the maximum TLTV accepted by BB&T is 100%) Refinance IRRRLs VA: VA Interest Rate Reduction (IRRRLs). All BB&T and Non-BB&T Serviced IRRRLs are required to have made at least six consecutive monthly payments on the existing loan at the time of the Note Date of the new refinance. This may be validated via a credit report or a Verification of Mortgage. The following apply to loans not serviced by BB&T: A borrower must have made all mortgage payments within the month due for preceding twelve months at the time of application. If current mortgage has less than twelve monthly payments, but at least the required six consecutive monthly payments, a prior mortgage to equate to twelve consecutive payments is required. Prior rental history or history of residing with family members is not acceptable. Non-owner occupied Interest Rate Reduction Refinances (IRRRLs) are allowed for BB&T serviced loans only. No Florida condominiums. BB&T Internal 12/22/2017 5