(Purchase & Rate/Term Refinances) Fannie Mae DU

Transcription

1 Revisin: May 11, 2018 (Prduct Infrmatin Center, , HmeReady is a new Fannie Mae prgram replacing MyCmmunityMrtgage. HmeReady serves lw-t mderate-incme brrwers, with expanded eligibility fr financing hmes in designated lw-incme, minrity, and disaster-impacted cmmunities. (Purchase & Rate/Term Refinances) Fannie Mae DU Occupancy Owner Occupied LTV, CLTV, FICO TERMS Max LTV Min FICO 1 Unit FIXED 97% ARM NOT PERMITTED 1 Unit FIXED 95% 620 ARM 95% 2 Units FIXED 85% 620 ARM 85% 3-4 Units FIXED 75% 620 ARM 75% 1105% CLTV Rati/Cmmunity Secnds. The fllwing are nt permitted with Cmmunity Secnds: secnd hmes, investment prperties, cash-ut refinances, and ARM. 97% nly allwed n purchase transactin 97% nly allwed n 1 unit 97% nly des nt allw nn-ccupant brrwers State f NJ limited t 95% fr Fixed and 90% fr ARM 1

2 ATR and QM All lans must meet the Ability t Repay (ATR) and Qualified mrtgage (QM) prvisins f the Ddd-Frank Act. High Cst / High Priced Nt Allwed ARM Infrmatin Fr 5/1 ARM: Index: 1 YR Libr Caps: 2% initial adjust. 2% per adjust.,thereafter, 5% Life Flr: Margin Margin: 2.25% Rate at Adjustment On 5/1 ARM, the initial nte rate is in effect fr 60 mnths; the first interest adjustment is calculated by the lwer f Index plus Margin r Initial Rate plus 2%, and is subject t Life Cap f 5% plus Initial Rate if Index plus Margin is greater. Thereafter, a 2% annual adjustment cap begins with the secnd adjustment. Prducts/Terms Fixed Rate (30-Year) Fixed perid LIBOR ARMs with 30-year term (5/1). Texas Sectin 50(a)(7=6) is ineligible Buy Dwn Nt permitted Brrwer Qualificatin Fixed Rate: Brrwer is qualified at the Nte rate. 7/1 and 10/1 ARMS: Qualify at the greater f the Nte rate r the fully indexed rate. 5/1 ARMS: Qualify at the higher f the nte rate + 2% r the fully indexed rate. Mrtgage Insurance The fllwing cverage is required fr all fully-amrtizing prducts, regardless f DU Findings: Mrtgage Insurance Cverage Requirements LTV Fixed Rate > 20 years and ALL ARM s Fixed Rate < 20 years 97% % 25% 25% 90% % 25% 12% 85% % 12% 6% Financed MI and the Custm MI Flexible Mrtgage Insurance Optin (where a fee is required) is nt permitted. Required fr LTV > 80% BPMI premium allwed n all prgrams subject t AUS findings. (Effective 3/1/2018) DTI abve 45% requires a 700 minimum credit scre Radian Mrtgage Insurance Cmpany must be utilized fr DTI abve 45% and when Fic Scre < 700. LPMI premium allwed fr Fixed Prducts Only. Please refer t the prduct grid abve fr max LTV/CLTV allwed. (Effective 3/1/2018) DTI abve 45% requires a 700 minimum credit scre. DTI abve 45% and LTV > 95% exclude Radian as an MI ptin. High balance lan amunt requires a 660 minimum credit scre and DTI <= 45%. Maximum DTI and Fic Scre is subject t current mrtgage insurance guidelines and AUS findings. 2

3 Maximum Lan Amunt Minimum Lan Amunt is $75,000. Please review FNMA s Single Family Lan Limits fr Cunty specifics. Units Cntinental Us Hawaii Maximum Lan Amunt One $679,650 $1,019,475 Tw $870,225 $1,305,325 Three $1,051,875 $1,577,800 Fur $1,307,175 $1,960,750 Underwriting Methd Prepayment Penalty Occupancy Minimum Brrwer Cntributins Reserves Lans must receive a DU "Apprve/Eligible" Nne Primary Residence 1 unit: 0% 2 unit: 3% required if LTV > 80% Must cme frm brrwer wn funds if required. Eligible Brrwers US Citizens; Permanent Resident Aliens; Nn-Permanent Resident Aliens allwed with required VISAs); Revcable Trust; Must have valid Scial Security Number; Maximum f 4 brrwers per lan applicatin are allwed Acceptable Visa Types A-1 thru A-3 Visas- Nte: Brrwers with these Visa types wh have diplmatic immunity are nt acceptable E-1 thru E-3 Visas G-1 thru G-5 Visas- Nte: Brrwers with these Visa types wh have diplmatic immunity are nt acceptable H-1, H-1B and H-1C Visa s H-4 Visa- These visas are given t dependents (spuse and unmarried children under 21 years f age) f a qualified H-1 visa hlder. When incme is being used t qualify, a current (unexpired) EAD issued by USCIS is als required. L-1 Visa L-2 Visa- These visas are given t dependents (spuse and unmarried children under 21 years f age) f a qualified L-1 visa hlder. When incme is being used t qualify, a current (unexpired) EAD issued by USCIS is als required. O-1A Visa- Nte: Brrwers with this Visa type cannt wrk in the Arts, Mtin Picture r Televisin industry O-1B Visa- Nte: This Visa type is fr thse excluded frm eligibility n a O-1A visa as listed abve O-2 Individuals wh will accmpany an O-1, artist r athlete, t assist in a specific event r perfrmance TN, NAFTA Visa -Used by Canadian r Mexican citizens fr prfessinal r business purpses 3

4 TC, NAFTA Visa- Used by Canadian citizens fr prfessinal r business purpses Nte: An unexpired Emplyment Authrizatin Dcument(EAD) may be used in lieu f a Visa If EAD will expire within ne year, the fllwing must be prvided One previus EAD Renewal r if there are n prir EAD renewals, the likelihd f renewal must be determined based n the infrmatin prvided by USCIS If Visa frm the eligible list abve is expired, the brrwer may still be cnsidered if the belw can be met. Cnfirmatin that the brrwer has submitted an applicatin fr extensin f the visa r an applicatin fr a green card. Dcumentatin includes, but is nt limited t: USCIS Frm I-797- issued when applicatin r petitin is apprved USCIC Frm I-797C r I-797E- Cannt state applicatin has been declined USCIS Frm I-539 r equivalent r cpy f USCIS Frm I-485 r equivalent plus electrnic verificatin f receipt frm the USCIS website If spnsred by emplyer, the emplyer may verify that they are spnsring the visa renewal Prperty Types Cnd, PUD, SFR, 2-4 Units, Age restrictins (excludes deed restrictins(resale-restrictins), manufactured hmes, c-ps, cnd htels, mixed-used live/wrk, n gut rehab) Cnd cmplex with 4 r less units require that at least 3 ut f 4 are wner ccupied prperties. Cnd cnversin within the past 3 years nt allwed. New Cnd allwed if it s Agency Apprved. New cnd prjects in Flrida are eligible nly if apprved via FNMA PERS Apprved prcess. Owner ccupancy requirement fr cnds is n lnger applicable fr wner ccupied and secnd hme. Qualifying Ratis Maximum qualifying rati: 50% (Subject t AUS apprval and use f incme) Credit Nn-traditinal credit allwed subject t AUS with the fllwing restrictins: Primary 1 unit with all brrwers ccupying subject Wage Earner nly At least ne brrwer must have traditinal credit and thse brrwers must cntribute mre than 50% f the ttal qualifying incme At least ne brrwer must have at least ne credit scre Minimum credit scre(s): Minimum required per LTV/CLTV grid DU Apprve/Eligible General Credit Guidelines Mrtgage lates: DU findings Chapter 7 r 11 Bankruptcy: 4 years have elapsed since the discharge r dismissal date t the Nte date 4

5 Chapter 13 Bankruptcy: 2 years have elapsed since discharge date t the Nte date; 4 years have elapsed since dismissal date t the Nte Date Shrt Sale, Settled fr Less, Deed-in-lieu f freclsure, Pre-freclsure: with AUS apprval- 4 years waiting perid frm recrding date t the Nte Date. 2 years waiting perid (base n Credit Reprt Date) is acceptable if reasn was due t extenuating circumstances as per agency guidelines. Extenuating circumstances must be explained with adequate supprting dcumentatin Freclsure: 7 years waiting perid is required frm cmpletin date t the Nte date Brrwer with multiple BK filings within the last seven (7) years: five (5) years waiting perid since the mst recent discharged / dismissal date. If the freclsure is within the bankruptcy than the seasning requirements fllw bankruptcy guidelines. Brrwer Incme Eligibility Limit Brrwer Incme Eligibility Limit Area N Incme Limit Prperties in lw-incme census tracts 100% f area median incme All ther prperties T check t see if incme eligibility area g t Nn-Traditinal Credit Restrictins when n brrwer has a credit scre: Must have DU apprval Allwed nly n wage earners Primary ne (1) unit with all brrwers ccupying subject The transactin must be a purchase r limited cash-ut refinance The lan amunt must meet the general lan limits nt high balance limits The lan must be a fixed-rate mrtgage The Maximum LTV/CLTV, and HCLTV at 90% The DTI rati must be less than 40% Reserves may be required as determined by DU Tw (2) nntraditinal credit histry must be dcumented fr each brrwer withut a credit scre Restrictins when at least ne brrwer has n credit scre: Must have DU apprval Primary 1 unit with all brrwers ccupying subject Brrwer with n credit scre can nly be wage earner At least ne brrwer must have at least ne credit scre The transactin must be a purchase r limited cash-ut refinance 5

6 The lan amunt must meet the general lan limits nt high balance limits If the brrwer(s) with a credit scre is cntributing mre than 50% f the qualifying incme, then nn-traditinal credit histry is nt required fr each brrwer withut a credit scre else it required. Refer t Fannie Mae guidelines B , Dcumentatin and Assessment f a Nntraditinal credit histry, fr additinal infrmatin. If the brrwer with a credit scre is cntributing 50% r less f the qualifying incme, tw (2) nntraditinal credit histry fr each brrwer withut a credit scre is required. Maximum DTI subject t DU. Reserve may be required as determined by DU. Nntraditinal Dcumentatin Requirements Rental Payment Histry The brrwer s rental payment histry must be dcumented fr the mst recent cnsecutive 12-mnth perid. The fllwing dcumentatin is acceptable: Canceled checks can be prvided. In lieu f canceled checks, brrwer s bank statements, cpies f mney rders, r ther reasnable methds fr dcumenting the timely payment f rent. The dcumentatin must clearly indicate the payee and amunt being paid, and reflect that payments were made n a cnsistent basis. Direct verificatin f the payment f rent frm the landlrd. Direct landlrd verificatin is acceptable whether the landlrd is an individual r a prfessinal management cmpany. NOTE: If at least ne brrwer n the lan can dcument a rental husing payment as a surce f nntraditinal credit, the lan has met the rental payment histry requirement. Hwever, each nntraditinal credit brrwer still needs t dcument the minimum number f nntraditinal credit surces required. If tw r mre brrwers n a lan share the husing-related surce (fr example, they are bth named n the lease fr the prperty in which they are living), that dcumentatin cunts as ne surce f nntraditinal credit dcumentatin fr each brrwer, even if nly ne brrwer has been making the payments. Payment Histry Obtained frm the Brrwer Dcumentatin that describes the terms f the debt repayment r cntract tgether with canceled checks r cpies f bills marked paid that reflect the brrwer s payment histry ver the mst recent cnsecutive twelve (12) mnths. Standards fr Individual Credit References Obtained Directly frm a Creditr Individual credit references (ther than rental husing payments) frm a creditr must include the fllwing: The creditr s name 6

7 The name f the individual prviding the reference The date the accunt was pened The amunt f highest credit The current status f the accunt The required payment amunt The unpaid balance, and The payment histry NOTE: The histrical status f each accunt must be started in a number f times past due frmat using 0x30, 0x60, 0x90 days late. Vague statements such as current, satisfactry, r pays as agreed are nt acceptable by themselves. Assessment f the Payment Histry fr Nntraditinal Credit Surces Fr each nntraditinal credit surce, the fllwing requirements must be met: There cannt be any delinquency n rental husing payments within the past 12 mnths Only ne accunt, excluding rental husing payments, can have a 30-day delinquency in the past 12 mnths N cllectins (ther than medical cllectins) r judgments have been filed in the past 24 mnths All Judgments and liens must be paid in full Cllectins and Charge-Offs per AUS findings NOTE - If cllectin r charge ff des nt reflect as such n credit, subject t evaluatin by the Underwriter Fr mre detail infrmatin n acceptable nntraditinal credit, refer t Fannie Mae guidelines B , Dcumentatin and Assessment f a Nntraditinal credit histry, fr additinal infrmatin. Only brrwer paid mrtgage insurance (BPMI) mrtgage insurance are allwed when using nn-traditinal credit. Hmewnership Educatin If all brrwers n the lan relies slely n nntraditinal credit t qualify, at least ne brrwer must cmplete pre-purchase hmewnership educatin prir t lan clsing. Refer t Fannie Mae B2-2-06, Hmewnership Educatin and Husing Cunseling. Incme Dcumentatin Requirements subject t AUS findings 7

8 Future Emplyment Requirements: Purchase Transactins Only Primary Residence Only Max LTV/CLTV 80% Salary incme nly (hurly earnings are nt permitted) Emplyment start date must be within 90 days f the nte date Incme must be fr a new primary emplyment 1 Unit SFR, Cnd and PUD nly Emplyer cannt be a family member r interested party t the real estate transactin Required Dcumentatin: Cpy f Emplyment ffer letter r emplyment cntract Cntract must be fully executed and accepted by the brrwer and emplyer Clearly state the emplyer and brrwer Is nn-cntingent r verificatin frm emplyer that all cntingencies have been cleared Include the terms f emplyment, including emplyment start date and annual incme based n salaried incme nly An additinal six mnths PITIA abve the requirements stated by the AUS findings is required A pre-clsing verificatin verifying the terms f the emplyment letter r cntract have nt changed will be cmpleted by JMAC Lending within ten calendar days f the nte date NOTE: Paystub is nt required Lan must be delivered with Special Feature Cde 707 Nn-Brrwer Husehld Incme Requirements Cnsidered as a cmpensating factr t allw a DTI rati greater than 45%, up t 50% Nt included as qualifying incme, and des nt impact the DTI rati used in the risk assessment r displayed n the AUS Findings. The nn-brrwer husehld member IS NOT REQUIRED TO BE A FAMILY MEMBER. The nn-brrwer s incme must be at least 30% f the ttal mnthly qualifying incme being used by the brrwer the 30% culd be reached by an aggregate f mre than ne persn up t 3 and nt t exceed cmbined ttal f 4 brrwers n ne lan. The nn-brrwer incme must be dcumented in accrdance with standard Fannie Mae Selling Guideline plicy based n the incme type. There must be signed statement f intent fr the nn-brrwer t reside with the brrwer t reside with the brrwer fr a minimum f 12 mnths. (Fannie Mae prvides ptinal Frm 1019 fr this purpse) Must be reflected in DU as Other Incme Type f Nn-Brrwer Husehld Incme. 8

9 Example f nn-brrwer husehld incme sample scenari Brrwers incme $6,000 / mnth Brrwer s Liabilities $2,820 mnth = DTI Rati $2,820 / $6,000 = 47% NOT ELIGIBLE Existence f $2,000 mnth in nn-brrwer husehld incme (33.33% f the brrwer s qualifying incme) = DTI Rati remains the same $2,820 / $6,000 = 47% ELIGIBLE 9

10 Nn-Occupant Brrwers The cnsideratin f a nn-ccupant brrwer s incme, assets, credits and liabilities permitted fr qualifying: DU: maximum 95%LTV Incme is cnsidered part f qualifying incme and subject t HmeReady incme limits Example f Nn-Occupant brrwer sample scenari Brrwers incme $6,000 / mnth Brrwer s Liabilities $3,060 mnth = DTI Rati $3,060 / $6,000 = 51% NOT ELIGIBLE Nn-Occupant incme f $9,000 / mnth Nn-Occupant Brrwer s Liabilities $2,700 mnth TOTAL $15,000 / mnth $5,760 / mnth = DTI Rati $5,760 / $15,000 = 38.40% ELIGIBLE Difference between a Nnccupant brrwer and a Nn- Brrwer Husehld Member? Is the persn n the lan? Lives in the Hme? Incme Included in qualifying incme? Must meet incme eligibility requirements? Nn-Occupant Brrwer YES NO YES YES Nn-Brrwer Husehld Member NO YES NO NO Barder Incme Brrwer Incme Requirements: Barder incme (relatives r nn-relatives) fr HmeReady is permitted as qualifying incme if the eligibility guidelines are met as utline belw: 1 unit prperties nly, including Cnd, and PUD s. 15 and 30 year fixed rate prducts nly. ARMS nt permitted. Must have resided with the brrwer fr the mst recent 12 mnths. Des nt exceed 30% f the ttal grss incme used t qualify fr the Mrtgage. Rent must be averaged ver 12 full mnths. Barders may nt be bligated t the Nte. 10

11 NOTE: Rental incme fr accessry dwelling units may be cnsidered in qualifying the brrwer but must fllw the Rental Incme Guidelines Dcumentatin Requirements: Dcumentatin fr at least 9 f the mst recent 12 mnths rents received by the brrwer is required. (i.e. cpies f cancelled checks r bank statements). Dcumentatin f shared residency fr the past 12 mnths is required (i.e. cpy f a driver s license, bill, bank statement, etc. that shws the address f that persn t be the same as the brrwer s address). Rents received frm Barder Incme must be reprted n the eligible brrwers mst recent tax returns fr a HmeReady lan being bked t the CRA Prtfli Sub-allcatin. The amunt used t qualify must be entered as Barder Incme. If the field is nt available n the AUS enter as ther incme. DU will drp the standard cnditins and findings fr the type f incme selected. NOTE: If any f the required dcumentatin cannt be prvided, the incme may nt be used as qualifying incme and may nly be cnsidered as a cmpensating factr. Example f Barder Incme sample scenari Rental Incme Brrwers incme $6,000 / mnth Brrwer s Liabilities $2,820 / mnth = DTI Rati $2,820 / $6,000 = 47% NOT ELIGIBLE Rental Incme frm the Barder $ / mnth TOTAL = $ / mnth $2,820 / mnth = DTI Rati $2,820 / $ = 44.67% ELIGIBLE Fannie Mae Frm 216 (Operating Incme Statement) is required n all 2-4 unit prperties, regardless f whether the incme is needed t qualify. Rental incme is calculated frm the subject prperty s grss rental figure prvided by the appraiser using the lesser f 75% fr a 2-unit prperty, and 65% fr a 3-4 unit prperty, f the actual r prjected rent. The rental incme is added t the grss qualifying incme. Accessry Dwelling Units: Rental incme may be cnsidered in qualifying the brrwer per rental incme guidelines. NOTE: Nt permitted n 97% financing 11

12 Assets Cash Out Transactin Student Lan Tw t Fur Unit Cnd Prject Maximum Number f Financed Prperties Allwable Assets fr dwn payment and clsing: Checking Saving 401K, Stck, Bnds and Mutual Funds- 100% f vested balance minus any utstanding lans, may be used. Business Funds - must wn the cmpany 100% Life Insurance 100% f cash value Nt permitted Student Lan- Mnthly Payment calculatins: If a payment amunt is prvided n the credit reprt, that amunt can be used fr qualifying purpses. If the credit reprt des nt reflect a payment (r reflects $0), we can nw use 1% f the utstanding balance f the student lan, r a calculated payment that will fully amrtize the lan/payment, based n the dcumented lan repayment terms. Requires 3 ut f 4 t be wner ccupied. Primary Residence: up t 10 financed prperties including the wner ccupied prperty NOTE: The max number f prperties a brrwer can wn is 15. Recently Listed Prperties Delayed Financing Prperties that were listed fr sale must have been taken ff the market at least ne day befre the Nte date Nt Allwed Limited Review fr Cnds Please refer t Agency guideline fr reduced LTV s fr restricted states such as Flrida. If a cnd is in litigatin and litigatin is apprved, it s always subject t full review regardless f AUS findings. LIMITED REVIEW PARAMETERS Maximum LTV/CLTV/HCLTV: The maximum LTV/CLTV/HCLTV is dependent upn the methd by which the lan is evaluated and decisin as well as where the prperty is gegraphically lcated Apprve/Eligible Lans Primary Residence: 90%/90%/90% (75% / 75% / 75% fr Flrida prperties) 12

13 Interested Party Cntributins HmeBuyer Educatin The amunt f the cntributin made by an interested party is based n the LTV/CLTV f the mrtgage. Maximum Cntributin Limits LTV/CLTV 90.01% - 100% 3% LTV/CLTV % 6% LTV/CLTV <= 75% 9% Fannie Mae believes that high-quality hmewnership educatin and husing cunseling can prvide the brrwer with the additinal infrmatin and resurces t make infrmed decisins that supprt lng-term hmewnership. Hmebuyer educatin is required prir t the Nte date fr at least ne brrwer n all Purchase transactins. There are nw tw ptins fr brrwers t meet the pre-purchase hmewnership educatin requirements as described belw. Optin 1: May be prvided thrugh Framewrk, an nline prgram apprved by Fannie Mae. $75 fee paid by the brrwer t Framewrk fr a simple, accessible nline prgram with supprt 7 days a week. Hmebuyer Educatin certificate must be retained in the mrtgage file Althugh ne-n-ne cunseling is ptinal fr HmeReady, Framewrk will ffer brrwers a referral t a HUD-apprved cunseling agency fr additinal assistance. Brrwers als have the ptin t cnsult a cunselr f their chice. Online educatin may nt be apprpriate fr all ptential hme buyers. The presence f a disability, lack f internet access, and ther issues may indicate that a cnsumer is better served thrugh ther educatin mdes (i.e. in-persn classrm educatin, telephne cnference call, etc.). In these situatins, cnsumers shuld be directed t Framewrk s tll-free custmer service line, frm which they can be directed t a HUDapprved cunseling agency that can meet their needs. Framewrk will register the cnsumer fr ptential pst-purchase supprt. The cunseling agency that handles the referral must prvide a certificate f cmpletin, and the lender must retain a cpy f the certificate in the lan file. Optin 2: Pre-purchase husing cunseling and cmplete hmewnership educatin frm a HUD-apprved nn-prfit husing cunseling agency. Definitins, as evidenced by a Certificate f Cmpletin f Prepurchase Husing Cunseling (Fannie Mae Frm 1017), signed by bth the cunseling recipient and the HUD cunselr. The frm can be accessed at: Landlrd Educatin Nt required. 13

14 Leasehld Requirements Must nt be impaired by any merger f title between the lessr and lessee If a sublease is included within the leasehld estate, the dcuments must prvide that a default under the leasehld estate will nt by such default result in the terminatin f the sublease. The term f the leasehld must extend beynd ur lan term by n less than 5 years unless it can be dcumented that title will vest as Fee Simple at an earlier date. IE Leasehld expires and autmatically cnverts t Fee Simple. Lease must prvide that the leasehld can be assigned, transferred, mrtgaged and sublet unlimited withut restrictins r n payment f a reasnable fee and delivery f reasnable dcumentatin t the lessr. The lessr cannt require a credit review r require any qualifying criteria t any assignee, transferee, mrtgagee r sub-lessee. The lease must prvide that in additin t the bligatin t pay lease rents, the brrwer will pay taxes, insurance, utilities and hmewners assciatin dues (if applicable), related t the land in additin t thse he r she is paying n the imprvements The lease must be valid, in gd standing, and in full frce and effect in all respects. The lease must nt include any default prvisins that culd give rise t frfeiture r terminatin f the lease, except fr nnpayment f the lease rents. The lease must include prvisins t prtect the mrtgagee s interests in the event f a prperty cndemnatin. The lease must prvide lenders with the right t receive a minimum f 30 days ntice f any default by the brrwer, and the ptin t either cure the default r take ver the brrwer s rights under the lease. The lease must be current n all payments and assessments nr can the brrwer be in default r have any claims f default under any prvisin f the lease. Leasehld may nt cntain any deed r resell restrictins. (Age Restrictins are acceptable) Cannt be held in a Cmmunity Land Trust Indian Leased Land is nt eligible Hawaiian Hme Lands are nt eligible Leasehlds are nt eligible n Texas(a)6 lans A full appraisal is required regardless f AUS findings Lan must be ran thrugh DU nly and must meet all FNMA guidelines Dcumentatin Requirements: Cpy f the full lease agreement including any sub lease agreement(s) Evidence f the mnthly Grund Rent payment (must be included in the Husing DTI Calculatins if subject and ttal DTI if a prperty ther than subject); Grund rent payment shuld be included in any calculatins tward reserve requirements as well. Appraiser must prvide 3 clsed Leasehld interest cmparables; Fee Simple Cmparables are nt acceptable. 14

15 Title must include an ALTA Endrsement plus include the value f the lessee s leasehld imprvements if any. Full Title Plicy is required. Leasehld Rider will be included as an attachment t the Deed f Trust/Mrtgage and will require the brrwers signature. Cmmunity Secnds Purchase and Rate and Term Refinance nly Maximum CLTV is 105% r maximum per lan prgram chsen, whichever is less. If the Cmmunity Secnd has an Age-Related Deed restrictin nly, the fllwing additinal requirement is needed. At least ne individual wh ccupies the hme must be at least 55 years f age. This individual can be a nn-brrwing husehld member r renter in the case f an investment hme. The fllwing prperty/ccupancy types are eligible All Occupancy types are allwed 1-2 unit prperties, Cnds and PUDs N Deed/Resale restrictins allwed unless Age related N Gvernment subsidies allwed in cnjunctin with the agency wh is prviding the Cmmunity Secnd t ur brrwer- IE N Gv t assistance t the Agency prviding the Cmmunity 2nd A Cmmunity Secnd must be funded by a federal agency, municipality, state, cunty, state r lcal husing finance agency, nn-prfit rganizatin, emplyer r a reginal Federal Hme Lan Bank under ne f their affrdable husing prgrams. Lans frm Emplyers may nt include a prvisin requiring repayment upn terminatin The fllwing are acceptable payment terms fr a Cmmunity Secnd Fully amrtized payment with level payments thrughut the life f the lan Deferred payments fr a perid f time befre changing t a fully amrtizing level payment mrtgage Deferring payments ver the entire term f the lan Frgiveness f debt ver time When the repayment f the Cmmunity Secnd is deferred fr fewer than 5 years, the payment must be included in the DTI calculatins. A Cmmunity Secnd with a balln payment due 15 years r earlier frm the nte date, is nt eligible The maximum interest rate fr the Cmmunity Secnd cannt exceed the interest rate f the 1 st by n mre than 2% The Cmmunity Secnd cannt prvide an ptin fr negative amrtizatin Equity Sharing is nt eligible Please refer t sectins B & 02 f FNMA guidelines fr a cmplete list f guidelines 15

16 Subject New Subrdinating Financing N negative amrtizatin allwed Minimum payment due must equal the accrued mnthly interest Seller carried back 2 nd : Rate cannt be lwer than 2% f the rate f the 1 st TD (IE- 1 st TD is at 5%; lwest rate n 2 nd is 3%) Payment must be fully amrtized Maximum CLTV is 95% Brrwer s must make a 5% minimum dwn payment Balln payments less than 5 years frm the 1 st liens nte date are nt eligible With the exceptin f a HELOC, the payment stream must remain cnstant fr a minimum f 12 mnths at a time Emplyer secndary financing may be structured in any f the fllwing ways: Fully amrtized payments Deferred payments fr sme perid befre changing t fully amrtized level payments Deferred payments ver the entire term f the lan Frgiveness f the debt ver time May nt include prvisin requiring repayment upn terminatin HELOCs When calculating the CLTV- use current balance When calculating the TCLTV- use the full line amunt Subrdinate financing is nt allwed n a Texas(a) 6 lan Must allw fr prepayment withut restrictin Existing Secndary Financing (HELOCs) If the existing HELOC is beynd its draw perid- the UPB must still be utilize fr the CLTV and the ttal line must be utilized fr the TCLTV If HELOC has been permanently mdified- use the utstanding UPB t calculate the CLTV as well as the TCLTV when the utstanding balance is higher than the mdified line amunt; if the UPB is lwer than the mdified line amunt, use the mdified line amunt t calculate the CLTV and TCLTV Dcumentatin Requirements Fr existing secndary financing remaining in place, a fully executed subrdinatin agreement must be prvided Cpy f Nte/HELOC Agreement- fr bth existing and new secndary financing If mdified, prvide cpy f mdificatin agreement fr the secndary financing. 16