WHOLESALE LENDING - AT-A-GLANCE PROGRAM GUIDE

Transcription

1 GENERAL The Economic Opportunity Mortgage (EOM) Program is available for borrowers who meet the income limits or targeted census tracts requirements for fixed-rate mortgage programs. Refer to Eligibility Section below. DESCRIPTION Assumption Not assumable. Pre-Payment Penalty None Term Fixed-Rate 10, 15, 20, 25 or 30 years Transactions Purchase, no cash-out refinance and cash-out refinance Union Bank Lender Origination Charge - $495 ELIGIBILITY Eligibility Targeted Census Tracts A borrower would be eligible for the EOM program if the subject property is located in a targeted census tract. Refer to the list of Eligible EOM Census Tracts. Income Limits Borrowers are also eligible for the EOM program if their combined qualifying income does not exceed the following limits: High Cost Areas Income cannot exceed 120% of the Median Family Income limits. High Cost Areas include all of CA and the following counties in OR and WA: OR Clackamas, Columbia, Multnomah, Washington and Yamhill WA Clark, King, Pierce, Skamania, Snohomish Other Counties For all other counties in OR and WA, the borrower s income cannot exceed 80% of the Median Family Income. Refer to the EOM Income Limit Charts. Home Buyer Education A Certificate of Completion is required as evidence the borrower attended a Home Buyer's Education session if: The loan is a purchase transaction TLTV exceeds 90%, and Borrower has not previously owned a home; and either Total debt ratio exceeds 40%, or Borrower's credit history covers a period of less than 2 years. NOTE: If the borrower is required to attend a Home Buyer Education class in conjunction with obtaining a DAP/2 nd or a grant, that would be sufficient to meet this requirement. The borrower must provide a copy of the Home Buyer Education Certification for the loan file. Eligible States (within Union Bank lending footprint): CA, OR, WA Ineligible States (within Union Bank lending footprint): IL APPRAISAL A full appraisal is required. ASSETS Cash-on-Hand Not Allowed. Closing Costs Borrowers may fund closing costs (including prepaid items) with gifts from relatives, or with gifts, grants or unsecured loans from the borrower s employer, non-profit organization, and municipality or public agency. Refer to Gifts below, for gift requirements. Down Payment 3% from the borrower s own funds, or Broker-Glance Economic Opportunity Mortgage/EOM Page 1 of 7 01/26/2018

2 ASSETS 1% from the borrower s own funds if the LTV is 80% or less because of the presence of a down payment assistance/subsidized second. The remainder of the down payment may be in the form of a gift from a relative; a gift, grant or unsecured loan from a public agency or non-profit organization, or grant-like secured financing from a public agency. NOTE Regardless of the TLTV, the borrower must still put 1% or 3% of their own funds into the transaction. Borrower funds not applied toward the down payment would need to be applied toward closing costs. Agency Programs Grants and subordinate financing from agencies must be approved by Union Bank s Residential Credit Administration Department. A credit union is not considered a non-profit organization. Refer to the Subordinate Financing Section below. Also refer to the Broker Glance- DAP-Subsidized Seconds for the process/requirements for having a DAP-Subsidized Seconds program approved. Gifts If gift funds are used, borrower to pay a minimum of 3% of purchase price from own funds (unless LTV/TLTV is 80% or less). Remainder of down payment and closing costs may be from a gift. Gifts or grants from public agencies or employers are allowed provided no repayment or lien on the property is required. Gifts or Grants from Public Agencies or Employers Allowed; cannot require repayment or a secured or unsecured lien. Reserves Not required, except when a borrower is purchasing a new primary residence and retaining his/her current residence as a second home or rental property. Refer to Broker Glance Key Underwriting Guidelines, Disposition of Borrower s Current Residence. Unsecured Loans Not Allowed. Individual Development Account/IDA Allowed if certain requirements are met. Contact your Account Executive for details. For other types of assets, refer to Broker-Glance Key U-W Guidelines BORROWER ELIGIBILITY Maximum Properties Owned LTV 90% - A borrower may own one other residential property in addition to the subject property. LTV > 90% and/or Expanded EOM Loan Amounts - A borrower may not have an ownership interest in any other residential properties. Non-Occupant Co-Borrower LTV 90% - Income of all borrowers is included in determining the eligibility relative to the applicable income limits. The occupying borrower must have 3% of the purchase price in his or her own funds. LTV > 90% and/or Expanded EOM Loan Amounts - Non-occupant co-borrowers are not allowed. Eligible Borrowers: U.S. Citizens Permanent Resident Aliens Non-Permanent Resident Aliens (meeting certain visa requirements) Asylees and Refugees must meet certain documentation and underwriting requirements. Contact your Account Representative for details. CREDIT Follow Standard Credit guidelines, including Alternative/Non Traditional Credit References for Standard EOM Program and EOM 500 (Refer to Wholesale At-a-Glance Credit.) Move to the additional parameters below as warranted and/or required: Less Than Two Years Consideration A credit history of less than two years will be considered, if the following requirements are met: Broker-Glance Economic Opportunity Mortgage/EOM Page 2 of 7 01/26/2018

3 CREDIT At least a 12 month credit history, and No less than 3 tradelines/credit ratings each with 6 months activity during the previous 12 months, at least 1 account currently active, and LTV is 90% or less, and TLTV is 97% or less, and No derogatory ratings. Non-Traditional Credit Histories/Loan Amounts Conforming loan amounts and the EOM 500 program are eligible with non-traditional credit histories. Refer to Wholesale Lending At-a-Glance Credit. Note: If one of the borrowers meet standard credit requirements, it is not necessary to develop a non-traditional credit history for the other borrower. Contributing Co-Borrower with No Credit History or Does Not Meet Standard Credit Tradeline Requirements If no credit history is available for a co-borrower who is contributing income towards qualifying, or if the co-borrower does not meet standard credit tradeline requirements, the co-borrower s income can still be used for qualifying as long as the other contributing borrower meets standard credit requirements. Additional Co-Borrower Consideration - The acceptable credit reputation of one borrower cannot be used to offset the unacceptable credit reputation of another. However, if one of the borrowers is not necessary for qualification, because the borrower provides: No qualifying income; Contributes no separate assets toward borrower funds or reserves for qualifying; and Any separate liability is included in the qualifying ratios. Has no derogatory credit. Then, the underwriter may disregard the co-borrower's credit reputation when underwriting the collective credit reputation as long as the Bank's lien is not impaired. NOTE The primary borrower s credit score will be used as the representative credit score. EOM Credit Requirements for LTVs > 90% and/or Expanded EOM Loan Amounts In addition to meeting Standard Credit requirements, a minimum 620 credit score is required and the credit score must be a valid credit score. Refer to Wholesale Lending At-a-Glance Credit. Alternative Credit Score Validation for LTV > 90% and/or Expanded EOM Loan Amounts An overall 2-year history (determined by oldest opened date), and No less than 2 accounts are rated by the credit bureaus with a minimum of 6 months activity during the previous 2 years and a credit score is being reported by the credit bureaus, and One account is currently active, and No derogatory ratings in the last 24 months, then One non-traditional credit tradeline can be used to supplement the required 3 accounts for a valid credit score in the last 2 years. Refer to Wholesale Lending At-a-Glance Credit. Contributing Co-Borrower with No Credit History, Does Not Meet Standard Credit Tradeline Requirements, and/or Does Not have a Credit Score/Invalid Credit Score: The primary borrower s credit score can be used as the representative credit score for the loan if all of the following criteria are met: The primary borrower has a minimum 620 valid credit score (the primary borrower is required to earn 51% or more of the qualifying income) None of the borrowers on the loan can be self-employed Borrowers have no history of bankruptcy or foreclosure Standard EOM loan amounts only Broker-Glance Economic Opportunity Mortgage/EOM Page 3 of 7 01/26/2018

4 CREDIT Additional Co-Borrower Consideration If the co-borrower is not necessary for qualification, because he/she provides: No qualifying income; Contributes no separate assets toward borrower funds or reserves for qualifying; and Adds no separate liabilities to the qualification. The co-borrower cannot have any history of a bankruptcy or foreclosure Then, the underwriter may disregard the co-borrower's credit reputation and the credit score. The borrower with the income and assets will be used for loan qualification providing the coborrower does not have any history of bankruptcy or foreclosure NOTE The primary borrower s credit score will be used as the representative credit score. DEBT RATIOS 38/44% NOTE: LTV 90% with Standard EOM Loan Amounts - the housing ratio of 38% may be exceeded at the underwriter s discretion. If the housing ratio or the total debt ratio exceeds 44%, an exception would be required. LTV > 90% and/or Expanded EOM Loan Amounts - If the housing ratio is > 38% or the total debt ratio exceeds 44%, an exception would be required. EMPLOYMENT / INCOME Employment History Minimum two-year employment history required. Boarder Rent This type of income can be considered as stable if the boarder is a relative who has resided with the borrower for at least the last 12 months. A documented history of shared residency (such as a copy of a driver s license, bill, bank statements, etc., showing relative-boarder s address the same as borrower s address). Documentation showing the receipt of rental payments via the borrower s most recent tax returns is required. LTV > 90% and/or Expanded EOM Loan Amounts - Boarder income not allowed Public Assistance/Welfare If public assistance or welfare is being used as qualifying income, the borrower must document a two (2) month history of receipt. Income Limits If subject property is not located in an eligible census tract, refer to Eligibility Section above and EOM Income Limit Charts on Platform. LTV Refer to Rate Sheet and Subordinate Financing Section below. Declining Values Reduction in LTV/TLTV is not required. LTVs > 90% and Expanded EOM Loan Amounts To qualify for LTVs greater than 90% and up to 97%, and/or Expanded EOM loan amounts, the borrowers must meet the additional requirements noted below: Additional Requirements Property Location CA, OR, or WA SFRs, PUDs, and Condominiums only Purchase and no cash out refinances only Minimum 620 credit score (credit score must be considered valid refer to Credit section above and Wholesale At-a-Glance - Credit) No boarder income No non-occupant co-borrowers Maximum 5 acres No unpermitted granny flats/in-law units or finished basements with amenities that allow them to be utilized as separate living units. Broker-Glance Economic Opportunity Mortgage/EOM Page 4 of 7 01/26/2018

5 LTV Debt Ratios 38/44% Borrowers may not own or have an ownership interest in any other residential properties NOTES: Counties not shown in the tables below are eligible for standard EOM loan amounts only. The expanded loan amounts listed below for CA and WA are eligible for the expanded LTVs if the transaction meets the additional requirements above. 2-unit properties located in the CA counties shown below are eligible for the expanded loan amounts noted below, but under standard LTV/TLTV guidelines (refer to the rate sheet for maximum LTV/TLTV). The transaction must meet the additional requirements above (except for property type). 2-unit properties not located in one of the CA counties shown below, 3-4 unit properties in CA, and 2-4 unit properties in WA are eligible for conforming loan amounts under standard EOM guidelines. Expanded EOM Maximum Loan Amounts MAX LOAN AMOUNT PURCHASE NO CASH-OUT REFINANCE SFRS, CONDOMINIUMS & PUDS (NO MANUFACTURED HOMES) CALIFORNIA $679,650 $679,650 Alameda, Contra Costa, Los Angeles, Marin, Orange, Napa, San Benito, San Francisco, San Mateo, Santa Clara, Santa Cruz $672,750 $672,750 Ventura $649,750 $649,750 San Diego $648,600 $648,600 Sonoma $625,500 $625,500 Santa Barbara $615,250 $615,250 Monterey, San Luis Obispo $529,000 $529,000 Mono $517,500 $517,500 El Dorado, Placer, Sacramento, and Yolo $500,000 $477,250 Nevada $500,000 $463,450 Alpine $500,000 $460,000 Solano OREGON Standard EOM Loan Amounts Only WASHINGTON $667,000 $667,000 King, Pierce, and Snohomish $500,000 $483,000 San Juan MAX LOAN AMOUNT PURCHASE NO CASH-OUT REFINANCE 2-UNIT PROPERTIES CALIFORNIA $679,650 $679,650 Alameda, Contra Costa, Los Angeles, Marin, Orange, Napa, San Benito, San Francisco, San Mateo, Santa Clara, Santa Cruz $672,750 $672,750 Ventura $649,750 $649,750 San Diego $648,600 $648,600 Sonoma $625,500 $625,500 Santa Barbara $615,250 $615,250 Monterey, San Luis Obispo All other counties in CA Standard EOM loan amounts only ($580,150) and standard guidelines WASHINGTON $667,000 $667,000 King, Pierce and Snohomish OREGON & WASHINGTON Standard EOM loan amount only ($580,150) and standard guidelines. Broker-Glance Economic Opportunity Mortgage/EOM Page 5 of 7 01/26/2018

6 LOAN AMOUNTS Maximum Loan Amounts Standard conforming loan limits apply: 1 unit - $453,100 (also see EOM 500 and Special LTV/TLTV & Loan Amount Considerations, below) 2-units - $580,150 3-units $701,250 4-units - $871,450 EOM 500 Loan amounts up to $500,000 are permitted if the following additional requirements are met: Purchase transactions SFR, PUD or Condominium MORTGAGE INSURANCE Not Required OCCUPANCY Primary, owner-occupied only. PORTFOLIO EXPRESS If the subject property is located in an eligible census tract, the borrower may be eligible for a Portfolio Express no cash-out refinance. Additional EOM eligibility and guideline criteria that must be met include: Occupancy Maximum loan amount Maximum properties owned Debt ratios Refer to Broker-Glance Portfolio Express for all other EOM/Portfolio Express requirements including minimum credit score, mortgage history, maximum LTV/TLTV, etc. PROPERTY ELIGIBILITY Property Types: LTV 90% - SFR, PUD, Condominium, 2-4 units only LTV > 90% and/or Expanded EOM Loan Amounts - SFR, PUD and Condominiums, only. 2- unit properties eligible for Expanded EOM loans; see requirements in LTV/TLTV section above. Property Location California, Oregon, or Washington Eligible Census Tracts Refer to Eligibility Section above and to EOM Eligible Census Tracts Charts on Platform. Property Inspection Requirements On a case by case basis, inspections and/or completion of repairs will be a condition of loan approval. The determination is based on loan to value, age, and condition of property, and whether the borrower has the ability to make the repairs. The object is to avoid a situation in which a borrower with no reserves is suddenly faced with large repair costs in order to have a safe, sound, and sanitary home. SUBORDINATE FINANCING / MAX TLTV Maximum TLTV Purchase and No Cash Out Refinance: Down Payment Assistance/Subsidized Seconds 105%. Refer to Broker Glance DAP Subsidized Seconds for additional information, including allowable repayment terms. Broker-Glance Economic Opportunity Mortgage/EOM Page 6 of 7 01/26/2018

7 SUBORDINATE FINANCING / MAX TLTV Non-Subsidized Second When the second trust deed is not a Down Payment Assistance/Subsidized Second, the maximum TLTV is 90%. Up to 97% TLTV allowed for loans meeting the requirements noted in LTV/TLTV section above. Maximum TLTV Cash Out Refinance Same as the maximum LTV shown on the Rate Sheet. Down Payment Assistance/Subsidized Seconds Refer to Broker-Glance Down Payment Assistance/Subsidized Seconds Non-Subsidized Seconds/Subordinate Financing Refer to Broker-Glance Key U-W Guidelines Broker-Glance Economic Opportunity Mortgage/EOM Page 7 of 7 01/26/2018