Home Equity Line of Credit

Transcription

1 Home Equity Line of Credit PRIMARY RESIDENCE 1 PURCHASE, RATE/TERM REFINANCE & CASH-OUT REFINANCE Property Type 1 to 2-Unit Warrantable Condo PUD Maximum CLTV Maximum Line Amount Minimum Credit Score Total Debt Ratio 89.99% $500, % SECOND HOME 1 PURCHASE, RATE/TERM REFINANCE & CASH-OUT REFINANCE Property Type 1-Unit Warrantable Condo PUD Maximum CLTV Maximum Line Amount Minimum Credit Score Total Debt Ratio 80% $500, % 1. Properties located in the state of Texas are not eligible. PROGRAM SUMMARY Revolving line of credit with a 10-year draw period followed by a 20-year repayment period; full term is 30 years. Payment during the draw period and the repayment period will consist of principal and interest payments based on the outstanding balance. This product must be closed concurrently with a Flagstar Bank conventional first mortgage. HELOCs will be table-funded and will close in the name of Flagstar Bank, FSB. PRODUCTS OFFERED Product Name Description HELOC: P&I Pymt (2nd-Concurrent) Principal & interest payments during the draw period HELOC Amortization Schedule (requires Microsoft Excel 2013 or later) ELIGIBLE BORROWERS Borrowers must be the same for both the first mortgage loan and the HELOC for all transactions U.S. citizens Permanent resident aliens Non-permanent resident aliens Non-occupant co-borrowers Revocable/ living trusts are acceptable provided it is established by, and the primary beneficiary is, an individual; Loans closing in a trust must follow the same trust requirements as the first mortgage INELIGIBLE BORROWERS Land trusts are not eligible, including Illinois land trusts V. Product Descriptions 1 of 12 Document #5561

2 ELIGIBLE PROPERTY TYPES Home Equity Line of Credit 1 to 2-unit properties Warrantable condominiums (on Flagstar s approved projects list unless eligible for Limited Review) Planned unit developments (PUDs) Modular homes INELIGIBLE PROPERTY TYPES 3 and 4-unit properties Manufactured/mobile homes (single- or double-wide) Cooperatives Properties currently listed for sale Properties under construction at time of loan closing Properties titled as Life Estates are not eligible INELIGIBLE FIRST LIEN TYPES FHA, VA, or USDA mortgages Construction or renovation loans MINIMUM LINE AMOUNT $10,000 is the minimum line that can be requested; there is a $1.00 minimum initial draw requirement FEES Customers may not charge any fees other than bona fide third-party charges. ADMINISTRATIVE/COMMITMENT FEES Administrative and commitment fees are not assessed on HELOC loans ANNUAL FEE $75 per year; waived the first year APPRAISAL FEE No separate appraisal is required for the HELOC loan; however, a full appraisal based on the property type from the first mortgage must be used (appraisal waivers from the first mortgage AUS response are not permitted); the appropriate appraisal fee must be disclosed/charged on the first mortgage disclosures EARLY CLOSURE FEE None FLOOD CERTIFICATION FEE $5.75 HELOC ORIGINATION FEE Flagstar will pay the broker or correspondent customer a flat fee of $250 for each funded HELOC, and the fee will show on the Fees Summary page in Loantrac as a HELOC Origination Fee ; customers may not charge additional fees other than bona fide third-party fees V. Product Descriptions 2 of 12 Document #5561

3 Home Equity Line of Credit RECORDING FEE The appropriate recording fee for the mortgage/security instrument must be charged on the HELOC loan SETTLEMENT/CLOSING FEE A settlement/closing fee may be charged by the settlement agent for closing the HELOC loan STATE-SPECIFIC OR GOVERNMENT IMPOSED FEES AND TAXES Any fees or taxes charged by state or local governments must be charged on the HELOC, as applicable TITLE FEES No title insurance is required for the HELOC; the title commitment from the first mortgage will be used INTEREST RATES/PRICING Rates for the HELOC product will be posted to the daily price indication sheets on the same page as the Second Mortgage rates. Lines of credit can be locked by calling the Marketing Dept./Lock-ins at (866) , Option #2. The lock period will be 10 days, and the HELOC must be in a Final Approval Clear to Close status. All HELOC loans will be priced at par (100.00). HELOC loans may eligible for the following rate/margin discounts: INITIAL DRAW $25,000 DISCOUNT If an initial draw is taken at closing of $25,000 or greater the borrower will receive a rate/margin discount. Refer to the daily price indication sheet for the current amount of the discount. INITIAL DISCLOSURES HELOCs are exempt from the TILA-RESPA Integrated Disclosures (TRID) rule. Thus, Loan Estimates and Closing Disclosures are not provided for HELOC loans. A TILA disclosure is required, but it is not the same as the TIL disclosure provided for pre-trid loans. Instead, both documents mentioned below must be individually downloaded and provided to borrower(s) within three days of application. In addition, customers must select the checkbox after clicking the Acknowledgement of Disclosures button within the Disclosure Compliance module in Loantrac to acknowledge that the HELOC disclosures were provided as required. Applicants must be provided the following HELOC-specific documents with the initial disclosures: Important Terms of Your Home Equity Line of Credit, Doc. #3263 (this is the TILA disclosure for HELOCs); this document must be signed by the borrower(s) and included with the submission to Underwriting Federally-mandated CFPB booklet, What you should know about home equity lines of credit QUALIFYING RATE/PAYMENT The Qualifying Rate for all HELOCs is the fully indexed rate (index + margin) plus 1.00%. The Qualifying Payment for all HELOCs is a 20-year fully amortizing payment calculated at the Qualifying Rate. Use the HELOC Amortization Schedule tool to determine the qualifying rate/payment for the line of credit and to run payment scenarios using various initial draw amounts as well as subsequent draw and repayment amounts. Important Note: Users must have Microsoft Excel 2013 or later installed in order for the tool to calculate properly. V. Product Descriptions 3 of 12 Document #5561

4 TOTAL DEBT RATIO Home Equity Line of Credit The maximum debt-to-income (DTI) ratio is 45% (regardless of whether DU or LP approved a higher ratio amount for the first mortgage) APPRAISAL A full appraisal appropriate to the property type must be obtained. The appraisal from the first mortgage can be used; however, any reduced appraisal options offered by the first mortgage AUS findings, including a property inspection waiver (PIW), are not eligible. A full traditional first mortgage appraisal must be disclosed as part of the first mortgage disclosures. UNDERWRITING All loans must meet the parameters as set out in Flagstar Bank s current Conventional Underwriting Guidelines, except as modified below: This HELOC program is offered only in conjunction with a concurrently closing first mortgage loan underwritten by Flagstar Bank. Delegated underwriting is not permitted on concurrently closing transactions. Both the first mortgage and HELOC must be underwritten together by a Flagstar underwriter. Credit documents must be uploaded into Paperless for each linked loan that is part of the same transaction (both the first mortgage and HELOC loan files). Both the first and second lien loans must be linked together in Loantrac using the Linked Loan functionality in the left-hand navigation menu; both loans should be submitted to Underwriting at the same time. Lines of credit may not be used to pay off a land contract unless it is recorded. CREDIT: The credit report issued for the first mortgage, and used in the AUS submission(s), should be reissued through Loantrac for the HELOC transaction. Minimum four tradelines; one currently active and open for more than 12 months with a minimum high balance of $1,000, regardless of credit score. Credit score for the file will be determined using the standard Agency method (file score is lowest individual score; individual borrower scores determined as the middle score for a three repository credit report or the lower score for a two repository credit report). Credit history must show 0x30 for all mortgages in last 12 months. Bankruptcies/CCCS discharged at least four years with excellent re-established credit. Foreclosures/repossessions/short sales not allowed. Collections or charge-offs less than 24 months old or over $1,000 cumulative must be paid off prior to or at closing. All credit must be current at time of underwriting. Co-signers cannot be used to offset derogatory credit or the inability of the main borrower to budget. Borrowers can pay off debts to qualify; however, the debt must be paid in full and all remaining debt will be included in qualifying ratios; all debts to be paid off must be clearly identified on the HUD-1 settlement statement; lease payments and student loans will always be included in the debt ratio. V. Product Descriptions 4 of 12 Document #5561

5 EMPLOYMENT AND INCOME Home Equity Line of Credit Income, employment and assets must be listed on the 1003 and verified. Documentation may not be more than 90 days from date Note is signed. Borrowers must have two years consistent employment with the same employer or in the same industry. Standard Fannie Mae full documentation is required (two years W2s and current pay stub, etc.). Pay stubs must be computer generated. Handwritten pay stubs require a borrower to provide tax returns and all schedules. The following documentation must be provided for each borrower whose income is used to qualify: Income Type Employment Income Salaried Hourly & Variable Income Part-Time Income Commission Overtime & Bonus Required Documentation An earnings trend must be established and documented. Large increases in salary over the previous two years must be explained and documented. W-2 for prior two years. Year-to-date pay stub up through and including the most current pay period at the time of application. If borrower is claiming overtime pay, it must be shown on the YTD pay stub. An earnings trend must be established and documented. Stable to increasing income should be average over a minimum two year period. When declining income has occurred, the most recent 12 months should be used. In all cases, the decline in income must be analyzed to determine if the rate of decline would have a negative impact on the continuance of income and the borrower s ability to repay. Declining income must be explained by the employer/borrower and a written determination by the underwriter must be provided if declining income is used for qualifying. W-2 forms or personal tax returns, including all schedules, for prior two years. Year-to-date pay stub up through and including the most current pay period at the time of application. Borrower must have worked the part-time job uninterrupted for the past two years, and plans to continue. When declining income has occurred, the most recent 12 months should be used. In all cases, the decline in income must be analyzed to determine if the rate of decline would have a negative impact on the continuance of income and the borrower s ability to repay. If the part-time income shows a continual decline, income should not be used. W-2 forms for prior two years. Year-to-date pay stub up through and including the most current pay period at the time of application Commission income must be averaged over the previous two years. When declining income has occurred, the most recent 12 months should be used. In all cases, the decline in income must be analyzed to determine if the rate of decline would have a negative impact on the continuance of income and the borrower s ability to repay. If the commission income shows a continual decline, income should not be used. W-2 forms for prior two years if commissions are less than 25% of the total income. Tax returns, including all schedules, and W-2 form from the previous two years if commissions are 25% of the total income. Unreimbursed business expenses (form 2106) must be subtracted from income. Year-to-date pay stub up through and including the most current pay period at the time of application. An earnings trend for bonus and overtime must be established and documented. A period of more than two years must be used in calculating the average overtime and bonus income if the income varies significantly from year to year. When V. Product Descriptions 5 of 12 Document #5561

6 Home Equity Line of Credit Income Type Returning to Work After an Extended Absence Employment Gaps Self-Employed Income Borrower Employed by Family Member Required Documentation declining income has occurred, the most recent 12 months should be used. In all cases, the decline in income must be analyzed to determine if the rate of decline would have a negative impact on the continuance of income and the borrower s ability to repay. If either type of income shows a continual decline, income should not be used. W-2 for prior two years. Year-to-date pay stub up through and including the most current pay period at the time of application. For a Borrower who has less than a two-year employment and income history, the Borrower's income may be qualifying income if the Mortgage file contains documentation to support that the Borrower was either attending school or in a training program immediately prior to their current employment history. School transcripts must be provided to document. A borrower s income may be considered effective and stable when recently returning to work after an extended absence if he/she: Is employed in the current job for six months or longer; and Can document a two year work history prior to an absence of employment using: o Traditional employment verifications; and/or o W-2 forms, for prior two years. If gap is in excess of 30 days during the past two years, a satisfactory letter of explanation is required and the borrower must be employed with current employer for a minimum of six months. Gaps in employment due to the borrower attending training or schooling for a specific profession must be documented with diploma, transcripts, etc. See VOE requirements. Self-employed borrowers are defined as those individuals who have 25% or greater ownership interest or receive a 1099 statement to document income. When declining income has occurred, the most recent 12 months should be used. In all cases, the decline in income must be analyzed to determine if the rate of decline would have a negative impact on the continuance of income and the borrower s ability to repay. A signed 4506T for each business will be required for all business in which the business income/loss is being used to qualify the borrower(s). If the borrower has self- employment income and/or zero income reported, and it is not needed to qualify, it is not required to obtain the P&L and balance sheet. If the borrower has a loss, regardless of the amount, the documentation will be required on the self-employment type and will be used to qualify the borrower(s). Borrowers who are employed by a family member are considered to be selfemployed, regardless of the percentage of ownership, and self-employed documentation is required. Potential ownership by the borrower must be addressed. The underwriter must clarify potential ownership by the borrower. A borrower may be an officer of a family operated business but not an owner. Written verification of the borrower s status should be obtained by written confirmation from an accountant or legal counsel. Borrowers must provide the preceding two years signed, dated individual and business (if applicable) tax returns, with all supporting schedules. YTD pay stub up through and including the most current pay period at the time of application. W-2 forms, for prior two years V. Product Descriptions 6 of 12 Document #5561

7 Home Equity Line of Credit Income Type Sole Proprietorship Partnerships (General, Limited) Limited Liability Companies S Corporations Corporations Rental Income Required Documentation Current YTD P&L through the most recent quarter YTD balance sheet through the most recent quarter. Personal tax returns, including all schedules, for prior two years. Note: only depreciation and depletion may be added back Current YTD P&L through the most recent quarter YTD balance sheet through the most recent quarter. Personal tax returns, including all schedules, for prior two years. K-1s from prior two years, showing ownership percentage. K-1s are not required if the source is reporting positive income and the income is not used for qualification. If K-1s show a loss, they are required, regardless if they are used for qualifying purposes. If using capital gains, interest/dividend or W2 income from this source is used, K-1s are required. Business tax returns (1065/1120), including all schedules, for the prior two years are required if the borrower has an ownership percentage 25%; they are not required if reporting positive income via a K-1, and the income is not used for qualification purposes. Rental income may be used to qualify if the rental income can be documented with two years tax returns or a lease agreement due to the property being acquired after the most recent tax returns were filed. All properties Departing Residence Retirement Income Pension, Annuity, and IRA distributions, Personal tax returns, including all schedules, for prior two years. For properties listed on Schedule E of the borrower s tax returns, net rental income should be calculated as the total of (income + depreciation + interest + taxes + insurance) divided by the applicable months minus the current PITI. o If the subject property is the borrower s primary residence and generating rental income, the full PITI must be included in the borrower s total monthly obligations. If rental income is not available on the borrower s tax returns, a current executed lease agreement is required. Net rental income should be calculated as the gross monthly rent multiplied by 75%. Net rental income must be added to the borrower s total monthly income. Net rental losses must be added to the borrower s total monthly obligations. When a borrower vacates a principal residence in favor of another principal residence, the rental income, reduced by the appropriate vacancy factor, may be considered in the underwriting analysis under the following circumstances: Sufficient Equity in Vacated Property: o The borrower has an LTV, CLTV or HCLTV of 70% or less as determined by a residential appraisal dated within 6 months. o Full appraisal or exterior only appraisal allowed. Fixed income payments such as social security or pension income can be used at full value/distribution and may not be considered in any annuitization calculation. Existing distribution of assets from an IRA, 401K or similar retirement asset account must be sufficient to sustain income continuance for the first three years of the loan o Verification of the assets of the plan and verification of receipt of the distribution of at least six (6) months is required, o Note: Distributions from asset accounts cannot be set up, or changed, solely for loan qualification purposes V. Product Descriptions 7 of 12 Document #5561

8 Home Equity Line of Credit Income Type Asset Depletion/Dissipation Social Security Income Other Income Alimony, Separate Maintenance & Child Support Income Capital Gains Dividend/Interest Stock Options & Restricted Stock Grants Note Income Trust Income Foreign Income Required Documentation Refer to Conventional Underwriting Guidelines, Employment - Related Assets as Qualifying Income for Fannie Mae. Benefits (for children or surviving spouse) with a defined expiration date must have a remaining term of at least three years. Acceptable documentation may include a copy of the Social Security Administration s award letter, copies of the borrower s previous 12 months bank statements to confirm regular payment deposits, or signed personal tax returns from the prior two years. See non-taxable income for social security income treatment. Will be considered with a divorce decree, court ordered separation agreement, court decree, or other legal agreement providing the payment terms confirming that income will continue for at least the first three years of the loan three (3) years. Documentation evidencing that the borrower has been receiving full, regular, and timely payments for the past 6 months. See non-taxable income for child support income treatment. Capital gains for like assets may be considered as effective income. The earnings trend or loss must be considered in the overall analysis of this income type. If the trend results in a gain, it may be added as effective income. If the trend consistently shows a loss, it must be deducted from the total income. Tax returns for the prior three years, including Schedule D. Gains must be consistent amounts from consistent sources. Verified assets to support continuance must be documented. Interest and Dividend income may be used as long as documentation supports a two-year history of receipt. Tax returns for the prior two years Proof of asset(s) to support the continuation of interest and dividend income. May not be used as qualifying income A copy of the Note must document the amount, frequency and duration of payments Regular receipt of note income for the past 12 months must be documented, and evidence of note income must be reflected on tax returns. Verification that income is expected to continue for the first three years of the loan Income from trusts may be used if guaranteed and regular payments will continue for the first three years of the loan Regular receipt of trust income for the past 12 months must be documented. A copy of the Trust Agreement or Trustee Statement showing: o Total amount of borrower-designated trust funds o Terms of payment o Duration of trust o Portion of income that is not taxable Non-taxable trust income must include proof of distribution. Foreign income may be used only if its stability and continuance can be verified. Personal tax returns, including all schedules, for prior two years. Year-to-date pay stub up through and including the most current period at the time of application. All income must be converted to U.S. currency. Note: Foreign Earned Self Employed Income is not acceptable V. Product Descriptions 8 of 12 Document #5561

9 Income Type Non-Taxable Income including child support, disability, foster care, military, etc. Home Equity Line of Credit Required Documentation Documentation must be provided to support continuation of income for a minimum of three (3) years. Tax returns must be provided to confirm income is non-taxable. Income may be grossed up by the applicable tax amount (must use the tax rate to calculate the consumers last year s income tax). If the consumer is not required to file a tax return, the tax rate to use is 25%. Trailing Co-borrowers Income from trailing co-borrowers will not be considered. Unacceptable Income Unacceptable income sources include, but are not limited to Any unverified source Income that is temporary or a one-time occurrence Rental income received from the borrower s single family primary residence or second home. Retained earnings Education benefits Income with a defined expiration date must continue for at least the first three years of the mortgage. IRS 4506-T is required for all loans. The 4506-T must be executed to validate all income used for qualifying prior to closing and acceptable results must be returned from the IRS prior to receiving a Clear to Close. o In the case where taxes have been filed and the tax transcripts are not available from the IRS, the IRS response to the request must reflect No Record Found. In these cases, an additional prior year s tax transcript should be obtained. Large increases in income that cannot be validated through the tax transcript may only be considered for qualifying on a case by case basis. o In the case where taxes for the prior year have not been filed (between January 1 and the tax filing date (typically April 15) the following are required: IRS form 1099 and W-2 forms from the previous year. Loans closing in January prior to receipt of W-2 s may use the prior year year-end paystub. For borrowers using 1099 s, evidence of receipt of 1099 income must be provided. o Between the tax filing date and the extension expiration date (typically October 15), the following are required (as applicable): Copy of the filed extension. W-2 forms for corporations. Form 1099 for commission income. Current year profit & loss (signed by the borrower). Year-end profit and loss for prior year (signed by the borrower). Balance sheet for prior calendar year if business is a sole proprietorship. o After the extension expiration date, loan is not eligible without prior year tax returns. Verbal VOE to be performed by Flagstar Bank prior to closing for non-self-employed borrowers or if self-employed, an independent written confirmation of self-employment is required (i.e., copy of business license reflecting ownership of company, corporate minutes, etc.), as required. Two continuous years of self-employment in same business are required. V. Product Descriptions 9 of 12 Document #5561

10 Home Equity Line of Credit o If borrower has been employed in current position for less than two years, VOE must be completed for all positions to verify that gaps are not 30 days or greater within the last 24 months. Written explanation from borrower must be obtained. A Verbal Verification of Employment (VVOE) confirming the borrower s employment status is required for all borrowers whose income is used for qualification purposes. The VVOE should be completed within 10 business days before the Note date (or funding date for escrow states) for wage income. Verification of self-employed businesses by a third-party source should be obtained within 30 calendar days from the Note date (or funding date for escrow states). ASSETS Assets must be documented according to the standards of the first mortgage. Reserve requirements are based on the reserve requirements of the first mortgage; however, both the PITI of the first mortgage and the qualifying payment of the HELOC must be used when calculating the number of months of reserves. All EMD funds must be verified. If EMD reflected on 1003 is different than the EMD disclosed on the purchase agreement, the underwriter will require verification of those funds. INSURANCE COVERAGE MORTGAGE INSURANCE Mortgage insurance is not required for HELOCs TITLE INSURANCE Not required; title commitment from the first mortgage will be used for the line of credit HAZARD INSURANCE Refer to Hazard Insurance Requirements, Doc. #4602 for hazard insurance guidelines FLOOD CERTIFICATE/FLOOD INSURANCE A Flood Certificate must be obtained prior to closing for all loans, not simply all transactions; thus, a separate Flood Certificate will be required for both the first mortgage loan and the home equity line of credit; flood insurance will be required where necessary; refer to Flood Insurance, Doc. #4603 for flood insurance requirements STATE ELIGIBILITY Available with the following geographic restrictions State Puerto Rico Texas US Virgin Islands Restriction Not eligible Not eligible Not eligible V. Product Descriptions 10 of 12 Document #5561

11 VARIABLE RATE DETAILS Home Equity Line of Credit Interest Rate Adjustment Caps Margin Index Interest Rate Floor 1.99% None other than Interest Rate Floor & Ceiling Rate; no periodic rate caps See Price Indication Sheet The Wall Street Journal Prime Rate Ceiling Rate 21.00% The rate will adjust on the first calendar day following any event Change Dates impacting the Margin or following the publication of any change to the Index. Conversion Option None Assumption Negative Amortization Not assumable None CLOSING DOCUMENTATION Closings must be scheduled through Closing Services. Closing documents must be ordered through Flagstar s Web-Based Closing Docs (WBCD) service available in Loantrac. HELOCs will be table-funded and will close in the name of Flagstar Bank, FSB. All title holders must sign the mortgage even if they are not on the loan. ALL HELOCS Flagstar HELOC Line Agreement DocMagic document HELCASD22.CST State-specific future advance mortgage, open-end deed of trust, etc., as applicable ADDITIONAL DOCUMENTS THAT MAY BE NEEDED IN CERTAIN CIRCUMSTANCES Condominium Rider - HELOC, DocMagic document USHERDCN.HLC Planned Unit Development Rider - HELOC, DocMagic document USHERDPU.HLC 1-4 Family Rider - HELOC, DocMagic document USHERD14.HLC (for 2 to 4-unit transactions) Second Home Rider - HELOC, DocMagic document USHERD2H.HLC Employee Rate Adjustment Amendment, DocMagic document ERAA.CST (all FSB employee loans) FIRST PAYMENT DATE FOR HELOCS Payments for all HELOC loans will be due on the first of the month. HELOCs with disbursement dates on or before the 9th of the month (e.g., October 7th) will have a first payment date of the first of the next month (November 1). HELOCs with disbursement dates on or after the 10th of the month (e.g., October 11th) will have a first payment date of the first of the following month (December 1). The method for determining the first payment date for HELOC loans described above is different than the method used for first mortgage loans. Therefore, it is possible that the first payment date of the HELOC could be earlier than the first payment date of the first mortgage if the disbursement date is on or before the 9 th of the month. MORTGAGE ELECTRONIC REGISTRATION SYSTEM (MERS) HELOC loans do not require MERS registration or MIN numbers V. Product Descriptions 11 of 12 Document #5561

12 HIGH COST (SECTION 32) OR HIGHER PRICED (SECTION 35) MORTGAGE LOANS Home Equity Line of Credit Flagstar Bank will not fund or purchase any High Cost (Section 32) mortgage loans under this program, or loans for which the points and/or fees exceed specific federal, state or local regulations. Higher Priced (Section 35/HPML) mortgage loan regulations do not apply to open-ended credit transactions. RIGHT OF RESCISSION Standard rescission guidelines apply. All primary residence borrowers and title holders must execute a Notice of Right to Cancel form at closing. Purchase borrowers will be required to execute a Notice of Right to Cancel form for the non-purchase-money portion of the line of credit. POWER OF ATTORNEY Powers of Attorney are acceptable only for purchase money transactions and bona fide rate/term refinance transactions where the line of credit is used to pay only outstanding mortgage debt on the subject property along with closing costs and prepaid expenses. The Power of Attorney must be specific to the proposed loan transaction. All borrowers must have signed the original loan application (Fannie Mae 1003). ESCROWS An escrow account for taxes and insurance can be established with the first mortgage loan, but not with the home equity line of credit. However, regardless of whether an escrow account is established with the first mortgage loan, all housing expenses, including first and subordinate mortgage loan payments, property taxes, homeowner s insurance, association fees, etc., must be included in the debt ratio calculation. ACCESSING HELOC FUNDS AFTER CLOSING Borrowers will receive a checkbook with which to access their line of credit approximately three weeks after closing. If they anticipate needing funds prior to that time, they should be encouraged to take those funds as a draw at closing. Borrowers can also access available line of credit funds using the following methods: In person at a Flagstar Bank branch Flagstar s 24 Voice automated telephone system ( ) Online banking available at Flagstar Bank mobile application for ios and Android devices Wire transfer V. Product Descriptions 12 of 12 Document #5561