FFBF Wholesale / Correspondent Overlays

Transcription

1 Conventional FHA VA USDA Assets Large Deposits Any large deposit not consistent with the borrower s earnings, employment and/or savings profile must be explained and sourced with acceptable documentation to be used for earnest money, down payment, closing costs, or reserves. - A signed letter of explanation from the borrower is required in all instances. - In some cases a borrower may be able to provide a reasonable explanation, but is unable or unwilling to sufficiently source the large deposit. In these cases when the borrower has assets other than the large deposit that are sufficient for closing, the large deposit may be deducted from the account balance and the remaining funds in the account are acceptable to be used for funds to close. The underwriter must exercise due diligence and be confident the funds are not from an unacceptable source. Large Deposits Obtain an explanation and documentation for any recent large deposits in excess of 2 percent of the property s sales price. The lender must verify that any recent debts were not incurred to obtain part or all of the required cash investment on the property being purchased. Collateral -No MHs greater than 15 years old (**existing MH not allowed for all Conventional loan products unless it is Same Servicer FFBF or HELOC is attached to subject property) - 10 acres is the standard, up to 20 acres if adequate comps are available & PMI -VA IRRL- Appraisal and credit reports required if loan is NOT serviced by FF -RECENTLY LISTED FOR SALE A minimum of six months is required from the listing expiration date or listing cancellation date before an application for a refinance can be originated. This policy applies to all property categories (primary, second home and investment). -Chain of Title First Federal requires a complete title commitment to be included in every closed loan package. Conventional and VA loans require a 12 month chain of title from the effective date of the title commitment including new construction or construction to permanent loans. FHA loans require a 12 month chain of title. A minimum of 12 months chain of title as evidenced by the title commitment, satisfactory to First Federal review and meeting FHA anti-flipping requirements as published in ML Conventional Jumbo requires a minimum 24 month chain of title. PROPERTY OWNERSHIP LIMITATIONS All Borrowers The following guidelines apply to the number of 1-4 unit properties financed with First Federal and all other lenders. All financed 1-4 unit properties for all borrowers on the loan 1 of 5 Revised 08/27/2013

2 transaction must be included in the total. There are no restrictions on the number of properties that the borrower owns free and clear. Occupancy Type Total # financed with all lenders including First Federal Primary 2nd Home Investment unlimited 4 (including primary) 4 (including primary) --Investment properties are not eligible for financing with First Federal on all Renovation and Construction Perm loans Credit Minimum Credit Score -620 ALL PRODUCTS -680 CP High Balance not allowed *With an Accept Finding, no additional trade lines required. LP should state: Credit Warranty: Not required to determine the borrower's willingness to repay or an acceptable credit reputation is evidenced. Minimum Credit Score CP -660 FHA Jumbo Purchase and Rate Term -680 FHA Jumbo Cash Out -680 VA Jumbo Alternate credit required if less than 3 active trade lines on credit report within last 12 months for government loans regardless of AUS findings Permanent/Non Permanent Resident Permanent Resident Aliens: As long as the borrower holds a Green Card (an Alien Registration Receipt Card, INS Form I-551), the loan is eligible under the same guidelines/terms as a loan made to a U.S. citizen. A copy of the front and back of the Green Card must be included in the file. An approved Green Card application will not be acceptable. Non-Permanent Resident Aliens: Temporary residents. Granted the right to live and/or work in the U.S. for a specified period of time. One of the following valid Visas are required: - H-1B, Temporary Worker. - L-1, Intra-Company Transferee. 2 of 5 Revised 08/27/2013

3 - E-1, Treaty Trader. - E-2, Treaty Investor. - G series (G-1, G-2, G-3, G-4). - TN or TC NAFTA VISA Used by Canadian or Mexican citizens. The approved application for one of the visas listed above will not be acceptable and a copy of the unexpired visa must be obtained. All Non-Permanent Resident Aliens must have a minimum 2 year history of residency, credit, employment, currently reside and work in the U.S. Income should be expected to continue for at least 3 years. If tax returns are required, they must be U.S. federal returns. Funds for closing must be in U.S. bank accounts. If funds were transferred from a foreign depository, the borrower must provide evidence that they owned the funds prior to the transfer. Collections/ Judgments Judgments: must be satisfied prior to closing Collections: Follow AUS/ Agency guidelines to determine if collections should be paid Judgments: must be satisfied prior to closing Collections: All AUS Accept/GUS Accept- Single collections over $500 must be paid in full prior to or at closing FHA/VA Medical Collections- Medical collections are exempt from this policy regardless of the balance. Outstanding Medical collections may remain unpaid. RD Medical Collections- Outstanding Single collection accounts over $500 / Rural Development- Collection accounts are defined as adverse credit in (d)(1): (vi): Accounts converted to collections within the last 12 months (utility bills, hospital bills, etc.), {still due and payable}, and (vii): collection accounts outstanding, with no satisfactory arrangements for payments, no matter what their age as long as they are currently delinquent and/or due and payable. Outstanding Single collection accounts over $500 must be paid in full prior to or at closing for RD loans. Medical collections exceeding $500 may be required to be paid on a case by case basis. If the Underwriter determines collection accounts may remain open and unpaid, they must document an adverse credit waiver on the underwriting analysis per (d)(3). Single Collection accounts may indicate an inability or unwillingness 3 of 5 Revised 08/27/2013

4 of the applicant to meet obligations as they become due. Underwriting may determine if an open collection account must be paid in full by the applicant prior to or at closing. Underwriting may consider the collection type, age, and its potential to negatively affect clear title to the subject property when making a determination. Applicants with credit scores below 680 must submit evidence to support the credit waiver to RD. Evidence supplied by the applicant must be retained in the permanent loan file regardless of credit score. Credit Documents Expiration Debt Ratio Qualifying rate/ Construction Permanent Documentation Escrow Self Employed Income Credit documents expire in 120 days 50% AUS approval is required for all loans**cp maximum DTI is 45%. No exceptions regardless of AUS Qualifying rate for Manufactured Housing and Modular is 6%. Site built is 5.5% Credit documents expire in 120 days Determined by AUS. See specific guidelines for FHA, VA, and USDA for additional guidance **CP maximum DTI is 48%. No exceptions regardless of AUS Required as stated on AUS Feedback Management Approval Required. Escrow funds for repairs maximum of $5,000 must be documented by a contract with supplier (NO estimates)-ffbf to hold 125% of cost in escrow. Must be completed, inspected, and paid out within 30 days after closing. Required as stated on AUS Feedback 2 years (SIGNED at application to limit exposure of personal information at closing agent) tax returns required on all self-employed borrowers to document a stable 2 year history of selfemployment income. Jumbo Overlays for FHA and VA FHA VA 4 of 5 Revised 08/27/2013

5 Second appraisals are required on Cash outs and 2 unit properties Down payment cannot come from Gift Funds 660 minimum FICO - Purchase and Rate/Term 680 minimum FICO - Cash-Out No bankruptcy or foreclosure in past 7 years on a Cash-out 0 x 30 payment history for all mortgages or rental payments due within the last 12 months. Grants/Second lien DPA--Not allowed Escrow Holdbacks - Not allowed 30 year term only Non Occupant Co-borrower - Not allowed. 1 and 2 units only Max cash back $100,000 New secondary financing not allowed AUS approval is required. Escrow holdbacks not allowed 0 x 30 payment history for all mortgages or rental payments due within the last 12 months, regardless of DU/LP. No bankruptcy or foreclosure in most recent 7 years, regardless of DU/LP. Minimum 680 credit score 2-4 units not allowed Gifts not allowed 30 year Fixed only 90% LTV/CLTV on regular refinance (rate/term or cash-out) transactions The borrower may not have any other financed properties other than the subject property. Regular refinance (rate/term or cash-out) transactions: Maximum $325,000 cash out; subject to maximum LTV and guaranty requirements. IRRRLs: Not eligible. New or existing secondary financing not allowed Manual underwriting not allowed Automated Underwriting System (AUS):AUS approval is required. 5 of 5 Revised 08/27/2013