Full Doc. 24 Months 12 Months

Transcription

1 Leverage Prime Primary Residence FICO Loan Amount ,000,001-2,500,000 2,500,001-3,000, ,000,001-2,500,000 2,500,001-3,000, Full Doc 24 Months 12 Months Purch / RT Refi Cash Out Purch / RT Refi Cash Out nths nths nths 85 nths nths 85 nths 70 nths 70 nths nths 90 nths nths nths 70 nths nths 65 nths nths nths 85 nths nths nths 70 Effective Date: 4/6/2018 Self-Employed Solutions 24 Mo Bank Statements 12 Mo Personal Bank Statements FICO Loan Amount Purch / RT Refi Cash Out Purch / RT Refi Cash Out 90 1 /85 nths 85 nths 720+ nths 70 nths 70 2,000,001-2,500,000 nths 70 nths 70 2,500,001-3,000,000 nths nths nths nths nths 70 nths 70 2,000,001-2,500,000 nths 70 nths ,500,001-3,000,000 nths nths nths nths 70 nths 70 nths Note: 1) >85% available for Personal Bank Statements only GENERAL Maximum Cash to Borrower Maximum cash to borrower is limited to % of Property Value including Free and Clear properties Loan Amounts exceeding $1,000,000, Condominiums, and Multi-Units limited to 70% of Property Value 15 Year Fixed 40 Year Fixed ( Interest-Only) 5/1 LIBOR ARM (2/2/5 Caps) 7/1 LIBOR ARM (5/2/5 Caps) 30 Year Fixed - ARM Qualifying Rate: Greater of the Fully-Indexed Rate or Note Rate Eligible Products Interest Only Available for 30 Year and 40 Year - ARM Index: 12 Month LIBOR - ARM Note Margin = 3.% - ARM Floor = Margin IO Period: 120 Months Loan Term: 360 Months (Qualified Term: 240 Months) Interest Only Available Products: 5/1 ARM, 7/1 ARM, 30 or 40 Year Fixed Loan Term: 4 Months (Qualified Term: 360 Months) Maximum : % Loan Amounts Second Homes Program Minimum Loan Amount: $150,000 Loan Amounts >$1,500,000 require 2 appraisals Maximum : % or program max, whichever is lower. CREDIT Minimum FICO: 660 Credit History: 0x30x24 Credit Event Seasoning (Bankruptcy,, Short Sale, DIL): 48 Months Tradelines: At least 3 open and active trade lines that have reported for a minimum of nths

2 Leverage Prime Income Tax Liens Residency 12 Months Bank Statements Restrictions Borrowers who live rent free or without a complete 12-month history Debt-To-Income (DTI) Gift Funds Residual Income Appraisal US Citizen; Permanent resident alien; Non-permanent resident alien 43% Maximum DTI 50% DTI Allowed with the following restrictions: Full Doc Only; nths of reserves are required; may not exceed 85% 55% DTI Allowed with the following restrictions: Effective Date: 4/6/2018 All income tax liens (federal, state, local) must be paid off prior to or at loan closing. Tax liens that do not impact title may remain open provided the following are meet; The file must contain a copy of the repayment agreement A minimum of 6-payments has been made under the plan with all payments made on time The balance of the lien must be included when determining the maximum CLTV for the program Refinance transactions require a subordination agreement from the taxing authority DTI/INCOME/ASSETS Maximum DTI is 43%; Non-occupant co-borrowers not allowed; Minimum 660 credit score; Primary Borrower must be Self-Employed; Limited to sole proprietor and 100% business owners; First-time Homebuyer not allowed Personal Accounts: Verify the existence of the business and ensure the business is active with the following; a letter from either the businesses tax professional certifying 4 years of self-employment in same business, or regulatory agency or licensing Bureau; along with either a phone listing and/or business address using directory assistance or internet search; Verify that the borrower is 100% owner of the business; Most recent nths of PERSONAL bank statements; Most recent 2 months of BUSINESS bank statements DTI may not exceed 36% Full documentation (nths) only Primary Residence only Four (4) months of reserves added to the otherwise applicable requirement 10% minimum borrower contribution Any available portion of a 12-month history must be paid as agreed. Borrower(s) who own their primary residence free and clear aren t considered living rent free - A minimum of nths of reserves are required; - Refinance transactions that do not meet the Net Tangible Benefit definition - may not exceed 85%; are not allowed; - Primary Residence Only; - Minimum of $3,000 / Month. Add $250 for the first dependent. Add $125 for - Minimum FICO Score: 6; each additional dependent; - Allowed for Full Income Documentation only - First Time Home Buyer not permitted Unless otherwise specified, Gift Funds are acceptable if ONE of the following applies: 1. A 5% down payment has been made by the borrower from their own resources % Gift Funds are allowed for Leverage Prime-Full Doc loans only, with a maximum LTV of %. Borrower(s) must meet both reserve and residual income requirements. Fannie Mae guidelines should be used for donor relationship to borrower(s), documentation, proof of funds, and evidence of receipt; Gift funds may not be used to meet reserve requirements; Gift of Equity allowed for Primary Residence only. Must meet all other guidelines for Gift Funds. Additional - Each financed property in addition to the subject property, will increase the applicable reserve requirement by two (2) months PITIA on the subject property to a maximum requirement of nths (Additional reserves based upon the PITIA of the subject property); for a loan with an Interest Only feature based upon the interest only payment; Proceeds from a cash-out refinance cannot be used to meet the minimum reserve requirements unless the loan meets the requirements listed under, cash-out debt consolidation; Reserve requirements are waived for Rate-And-Term Refinance transactions when the transaction results in a reduction to the monthly principal and interest payment of 10% or greater AND history is 1x30x12 or better. Waiver not eligible for DTI greater than 50%. For an interest only loan the reduction is based on the amortizing payment used for loan qualification; Proceeds from 1031 Exchange cannot be used to meet reserve requirements. Minimum of $2,500 / Month. Add $250 for the first dependent. Add $125 for each additional dependent. PROPERTY Appraisal should be dated no more than 120 days prior to the Note Date. After a 120-day period, a re-certificatiion of value is acceptable up to 1 days. New appraisal is required after 1 days. Condition rating must be C4 or lower; Quality rating of Q5 or below is acceptable. Second Appraisal from Clear Capital or Assurance is required when any of the following conditions exist. The lower of the two "Appraised Value" is used and the second appraisal must be from a different company and appraiser than the first appraisal. - Loan Amount exceeds $1,500,000 - Transaction is a flip as defined in the Property Flipping section Appraisal Review: - CDA from Clear Capital is required on all transactions; or - A field review or 2nd appraisal from Approved AMC is acceptable. Source of the appraisal review product may not be the same AMC used for the appraisal. If the CDA reflects a value more than 10% below the appraised value or cannot provide a validation, the next option in the review must be followed which is a field review or 2nd appraisal.

3 Leverage Prime Property Type Limitations Compliance Eligible States Financed Properties Condo / 2-4 Unit: 85% Max LTV Non-Warrantable Condo: % Max LTV Non-Warrantable Condo Maximum Loan Amount: $1,500,000 Rural Property: % Max LTV Max 10 acres Impounds are required Points and Fees may not exceed 3% Loans considered high-cost by Federal or State law are not eligible for purchase See our licensed state list MISCELLANEOUS 20 financed properties including subject; RPF exposure to a single borrower not to exceed $3,000,000 or 6 properties; Effective Date: 4/6/2018 Add 2 months reserves for each additional financed property (including departure residence). Total reserve requirement is not to exceed. Primary residence only Minimum 540 credit score DTI may not exceed 50% Minimum of reserves Not eligible for 12-month bank statement income documentation 12-month rental history required reflecting 0x30. Rental history is not required for borrowers living rent free Payment shock limited as follows: First Time Home Buyers Credit Score >36% DTI <=36 DTI Credit Score >= 620: Credit Score < 620: FTHB with gift funds: 300% current 200% current 150% current Payment shock not applicable Payment shock not applicable Payment shock not applicable Interested Party Contributions Non-Occupant Co-Borrowers LTV>=: 4% LTV<: 6% Allowed for Full Doc only, co-borrowers must be immediate family members. Borrower and Co-Borrower must complete and sign a Non-Occupant Co-Borrower Certification Occupying borrower(s) must have a DTI ratio of 55% or less. Excluding income/debts of non-occupant borrower. Eligible transactions limited to purchase only.

4 Leverage Lite Effective Date: 4/6/2018 Full Doc 24 Months 12 Months Purch / RT Refi Cash Out Purch / RT Refi Cash Out 2 months months A 2 months months 2 months 2 months 85 B 2 months months 70 B months months C months Self-Employed Solutions 24 Mo Bank Statements 12 Mo Personal Bank Statements FICO Loan Amount Purch / Purch / RT Refi Cash Out RT Refi Cash Out 90 1 / months 70 nths months 70 nths 70 A months nths B B C 500+ Note: 1) >85% available for Personal Bank Statements only Loan Amounts Program Minimum Loan Amount: $100,000 Loan Amount < $150,000: % Max LTV Loan Amounts>$1,500,000 require 2 appraisals Maximum Cash to Maximum cash to borrower is limited to % of Property Value including Free and Clear properties Borrower Loan Amounts exceeding $1,000,000, Loan Amounts less than $150,000, Condominiums, and Multi-Units limited to 70% of Property Value Eligible Products Interest Only Second Homes Income Tax Liens Tradeline Requirements Residency FICO 15 Year Fixed 40 Year Fixed ( Interest-Only) 5/1 LIBOR ARM (2/2/5 Caps) 7/1 LIBOR ARM (5/2/5 Caps) 30 Year Fixed Loan Amount Interest Only Available for 30 Year and 40 Year GENERAL - ARM Qualifying Rate: Greater of the Fully-Indexed Rate or Note Rate - ARM Index: 12 Month LIBOR - ARM Note Margin = 3.% - ARM Floor = Margin IO Period: 120 Months Loan Term: 360 Months (Qualified Term: 240 Months) A & B s Only Minimum FICO: 660 Available Products: 5/1 ARM, 7/1 ARM, 30 or 40 Year Fixed Loan Term: 4 Months (Qualified Term: 360 Months) Maximum : % Maximum : % or program max, whichever is lower A, B, & B- s Only Minimum FICO: 540 Residual Income: Minimum of $2,500 / Month. Add $250 for the first dependent. Add $125 for each additional dependent. CREDIT All income tax liens (federal, state, local) must be paid off prior to or at loan closing. Tax liens that do not impact title may remain open provided the following are meet; The file must contain a copy of the repayment agreement A minimum of 6-payments has been made under the plan with all payments made on time The balance of the lien must be included when determining the maximum CLTV for the program Refinance transactions require a subordination agreement from the taxing authority Standard Tradeline Requirements: A minimum of three trade lines per credit report. At least one trade line should be active for the most recent nths; and two trade lines should have reported in the last nths. Limited Tradeline Requirements: If Standard Tradelines requirements are not met and the borrower has a valid credit score per the Credit Score section of this guide the following restrictions apply: Max grade of B Max of % A 10% down payment has been made by the borrower from their own resources Primary residences only Not allowed for nth bank statement and Asset Depletion doc types US Citizen; Permanent resident alien; Non-permanent resident alien DTI/INCOME/ASSETS

5 Leverage Lite Effective Date: 4/6/ Months Bank Statements Restrictions Asset Utilization Borrowers who live rent free or without a complete 12- month history Debt-To-Income (DTI) Gift Funds Residual Income Appraisal Property Type Limitations Compliance Eligible States Financed Properties Maximum DTI is 43%; Non-occupant co-borrowers not allowed; Minimum 660 credit score; Primary Borrower must be Self-Employed; Limited to sole proprietor and 100% business owners; First-time Homebuyer not allowed Personal Accounts: Verify the existence of the business and ensure the business is active with the following; a letter from either the businesses tax professional certifying 4 years of self-employment in same business, or regulatory agency or licensing Bureau; along with either a phone listing and/or business address using directory assistance or internet search; Verify that the borrower is 100% owner of the business; Most recent nths of PERSONAL bank statements; Most recent 2 months of BUSINESS bank statements A borrower s liquid assets may be used to augment income for loan and product qualification purposes. See guidelines for details Max LTV: % Max Loan Amount: $1,000,000 Max DTI: 43% Minimum FICO: 6 Minimum : 6 Months A only DTI may not exceed 36% Full documentation (nths) only Primary Residence only Four (4) months of reserves added to the otherwise applicable requirement 10% minimum borrower contribution Any available portion of a 12-month history must be paid as agreed. Borrower(s) who own their primary residence free and clear aren t considered living rent free 43% Maximum DTI 50% DTI Allowed with the following restrictions: - A minimum of of reserves are required; - may not exceed 85%; - Not Allowed for Bank Statements or Asset Utilization doc types 55% DTI Allowed with the following restrictions: - A minimum of nths of reserves are required; - Refinance transactions that do not meet the Net Tangible Benefit definition are not allowed; - may not exceed %; - Residual: Minimum of $3,000 / Month. Add $250 for the first dependent. Add $125 for each additional dependent; - Primary Residence Only; - Allowed for Full Income Documentation only - First Time Home Buyer not permitted; Unless otherwise specified, Gift Funds are acceptable if ONE of the following applies: 1. A 5% down payment has been made by the borrower from their own resources % Gift Funds are allowed for Leverage Prime-Full Doc loans only, with a maximum LTV of %. Borrower(s) must meet both reserve and residual income requirements. Fannie Mae guidelines should be used for donor relationship to borrower(s), documentation, proof of funds, and evidence of receipt; Gift funds may not be used to meet reserve requirements; Gift of Equity allowed for Primary Residence only. Must meet all other guidelines for Gift Funds. Additional - Each financed property in addition to the subject property, will increase the applicable reserve requirement by two (2) months PITIA on the subject property to a maximum requirement of nths (Additional reserves based upon the PITIA of the subject property); for a loan with an Interest Only feature based upon the interest only payment; Proceeds from a cash-out refinance cannot be used to meet the minimum reserve requirements unless the loan meets the requirements listed under, cash-out debt consolidation; Reserve requirements are waived for Rate-And-Term Refinance transactions when the transaction results in a reduction to the monthly principal and interest payment of 10% or greater AND history is 1x30x12 or better. Waiver not eligible for DTI greater than 50%. For an interest only loan the reduction is based on the amortizing payment used for loan qualification; Proceeds from 1031 Exchange cannot be used to meet reserve requirements. Minimum of $1,250 / Month. Add $250 for the first dependent. Add $125 for each additional dependent. PROPERTY Appraisal should be dated no more than 120 days prior to the Note Date. After a 120-day period, a re-certificatiion of value is acceptable up to 1 days. New appraisal is required after 1 days. Condition rating must be C4 or lower; Quality rating of Q5 or below is acceptable. Second Appraisal from Clear Capital or Assurance is required when any of the following conditions exist. The lower of the two "Appraised Value" is used and the second appraisal must be from a different company and appraiser than the first appraisal. - Loan Amount exceeds $1,500,000 - Transaction is a flip as defined in the Property Flipping section Appraisal Review: - CDA from Clear Capital is required on all transactions; or - A field review or 2nd appraisal from Approved AMC is acceptable. Source of the appraisal review product may not be the same AMC used for the appraisal. If the CDA reflects a value more than 10% below the appraised value or cannot provide a validation, the next option in the review must be followed which is a field review or 2nd appraisal. Condo / 2-4 Unit: 85% Max LTV Non-Warrantable Condo: % Max LTV Non-Warrantable Condo Maximum Loan Amount: $1,500,000 Rural Property: % Max LTV Max 10 acres MISCELLANEOUS Impounds are required Loans considered high-cost by Federal or State law are not eligible for purchase Points and Fees may not exceed 3% See our licensed state list 20 financed properties including subject; Royal's exposure to a single borrower not to exceed $3,000,000 or 6 properties; Add 2 months reserves for each additional financed property (including departure residence). Total reserve requirement is not to exceed.

6 Leverage Lite Effective Date: 4/6/2018 Primary residence only Minimum 540 credit score DTI may not exceed 50% Minimum of reserves Not eligible for 12-month bank statement income documentation 12-month rental history required reflecting 0x30. Rental history is not required for borrowers living rent free Payment shock limited as follows: First Time Home Buyers Credit Score >36% DTI <=36 DTI Credit Score >= 620: 300% current Payment shock not applicable Credit Score < 620: 200% current Payment shock not applicable FTHB with gift funds: 150% current Payment shock not applicable Interested Party Contributions Non-Occupant Co-Borrowers LTV>=: 4% LTV<: 6% Allowed for Full Doc only, co-borrowers must be immediate family members. Borrower and Co-Borrower must complete and sign a Non-Occupant Co-Borrower Certification Occupying borrower(s) must have a DTI ratio of 55% or less. Excluding income/debts of non-occupant borrower. Eligible transactions limited to purchase only. GRADE DETERMINATION A Minimum FICO 620 1x30x12 B Minimum FICO 540 0x60x12 B- Minimum FICO 500 0x90x12 C Minimum FICO 500 1x120x12

7 Leverage Investor - DTI Effective Date: 4/6/2018 FICO Loan Amount Full Doc Self-Employed Solutions 24 Months OR 12 Months 24 Mo Business or 12 Mo Personal Bank Statements Purch / RT Refi Cash Out Purch / RT Refi Cash Out 720+ nths nths 70 nths nths nths 70 nths 70 nths nths A nths 70 nths nths nths nths 65 nths nths nths NA NA NA B NA NA NA NA NA NA B NA NA NA Maximum Cash to Borrower Eligible Products Interest Only Loan Amounts Prepayment Penalty Tradeline Requirements GENERAL Maximum cash to borrower is limited to 65% of Property Value including Free and Clear properties Loan Amounts exceeding $1,000,000, Loan Amounts less than $150,000, Condominiums, and Multi-Units limited to 60% of Property Value cash in hand 5/1 LIBOR ARM (2/2/5 Caps) 7/1 LIBOR ARM (5/2/5 Caps) 15 Year Fixed 30 Year Fixed - ARM Qualifying Rate: Greater of the Fully-Indexed Rate or Note Rate - ARM Index: 12 Month LIBOR - ARM Note Margin (A ): 6% - ARM Note Margin (B,B-, s): 7% - ARM Floor = Margin IO Period: 120 Months A & B s Only Loan Term: 360 Months Maximum : % Loan Term: 360 Months; Qualified at 360 Months Minimum FICO: 660 Available Products: 5/1 ARM, 7/1 ARM, 30 Year Fixed Program Minimum Loan Amount: $,000 Loan Amount < $150,000: 70% Max LTV Loan Amounts>$1,500,000 require 2 appraisals Terms up to 3 years available for 3 Year ARMs. Otherwise terms up to 5 Years are acceptable. The following structures are acceptable - of interest on the amount of the prepayment that exceeds 20% of the original principal balance - 3%, 4%, or 5% for the term of the penalty - Declining structures that do not exceed 5% and do not drop below 3% in the first 3 years (5%/4%/3%/2%/1%, 5%/4%/3%, etc) Penalties not available in New Mexico and loan vested to individuals in New Jersey CREDIT A minimum of three trade lines per credit report. At least one trade line should be active for the most recent nths; and two trade lines should have reported in the last nths. The following are not acceptable to be counted as a tradeline: non-traditional credit as defined by Fannie Mae, any liabilities in deferment status, accounts discharged through bankruptcy, authorized user accounts, charge-offs, collection accounts, foreclosures, deed-in-lieu of foreclosure, short sales, or pre-foreclosure sales. Limited Tradelines are not allowed Residency Asset Utilization Debt-To-Income (DTI) Gift Funds US Citizen; Permanent resident alien; Non-permanent resident alien DTI/INCOME/ASSETS A borrower s liquid assets may be used to augment income for loan and product qualification purposes. See guidelines for details Max LTV: % Max Loan Amount: $1,000,000 A only Minimum FICO: 6 Max DTI: 43% 43% Maximum DTI 50% DTI Allowed with the following restrictions: - Not Allowed for Self-Employed Solutions Express ( Bank Statements) or Asset Utilization Unless otherwise specified, gift funds are acceptable only if a 20% down payment has been made by the borrower from their own resources. Fannie Mae guidelines should be used for donor relationship to borrower(s), documentation, proof of funds, and evidence of receipt; Gift funds may not be used to meet reserve requirements. Gift Funds not allowed for loans qualified under the Debt Service Coverage Program. Gift of Equity not allowed. Each financed property, in addition to the subject property, will increase the applicable reserve requirement by two (2) months PITIA on the subject property to a maximum requirement of 12 months. The additional reserves are based upon the PITIA of the subject property. must be sourced and documented per guidelines. for a loan with an Interest Only feature based upon the interest only payment (ITIA). Proceeds from a cash-out refinance cannot be used to meet the minimum reserve requirements. Proceeds from 1031 Exchange cannot be used to meet reserve requirements.

8 Appraisal Property Type Limitations Compliance Eligible States Financed Properties Interested Party Contributions Vesting in Entities Appraisal should be dated no more than 120 days prior to the Note Date. After a 120-day period, a re-certificatiion of value is acceptable up to 1 days. New appraisal is required after 1 days. Condition rating must be C4 or lower; Quality rating of Q5 or below is acceptable. Second Appraisal from Clear Capital or Assurance is required when any of the following conditions exist. The lower of the two "Appraised Value" is used and the second appraisal must be from a different company and appraiser than the first appraisal. - Loan Amount exceeds $1,500,000 - Transaction is a flip as defined in the Property Flipping section Appraisal Review: - CDA from Clear Capital is required on all transactions; or - A field review or 2nd appraisal from Approved AMC is acceptable. Source of the appraisal review product may not be the same AMC used for the appraisal. If the CDA reflects a value more than 10% below the appraised value or cannot provide a validation, the next option in the review must be followed which is a field review or 2nd appraisal. Non-Warrantable Condo Max Loan Amount: $1,500,000 Rural Property: 70% Max LTV Max 10 acres Impounds are required Points and Fees may not exceed 5% Loans considered high-cost by Federal or State law are not eligible for purchase See our licensed state list No limit on financed properties; exposure to a single borrower not to exceed $3,000,000 or 6 properties; Add 2 months reserves for each additional financed property (including departure residence). Total reserve requirement is not to exceed. May not exceed 3% PROPERTY MISCELLANEOUS To vest a loan in an Entity, the following requirements must be met: Purpose and activities are limited to ownership and management of real property. Any business structure is limited to a maximum of 4 owners or members. All members, partners, or shareholders of the Entity, as the case may be, (each, a Member, and up to a maximum of 4 members per Entity) must provide personal guarantees of the obligations of the Entity in a form satisfactory to RPF. Each Entity Member must complete a Form 1003 or similar credit application indicating clearly that such document is being provided in the capacity of guarantor. The application of each Member and such person s credit score and creditworthiness will also be used to determine qualification and pricing. Each Member of the Entity must receive notice of the loan and its terms prior to closing. The following Entity documentation must be provided: - Entity Articles of Organization, Partnership, and Operating Agreements, if any - Tax Identification Number - Certificate of Good Standing - Certificate of Authorization for the person executing all documents on behalf of the Entity - Borrowing Certificate Minimum FICO 620 A 1x30x12 Minimum FICO 540 B 0x60x12 B- Minimum FICO 540 GRADE DETERMINATION 0x90x12

9 Leverage Investor - DSCR Effective Date: 4/6/2018 DSCR >= 1.15 DSCR < 1.15 Purchase Rate/Term Cash Out Purchase Rate/Term Cash Out 6 Months 70 6 Months 70 None 70 None Months 70 6 Months None None Months Months Months Months None None Months Months None None Months Months <=500, Months NA NA NA NA Credit Event Seasoning FICO Loan Amount Mortgage / : 0x30x12 BK (Chap 13 Discharge): > : >36 mo FC: >36 mo Short Sale / DIL : >24mo Maximum Cash to Borrower Eligible Products Interest Only Loan Amounts Investor Experience Prepayment Penalty GENERAL Maximum cash to borrower is limited to 65% of Property Value including Free and Clear properties Loan Amounts exceeding $1,000,000, Loan Amounts less than $150,000, Condominiums, and Multi-Units limited to 60% of Property Value cash in hand 3/1 ARM (2/2/5 Caps) 5/1 LIBOR ARM (2/2/5 Caps) 7/1 LIBOR ARM (5/2/5 Caps) 15 Year Fixed 30 Year Fixed - ARM Qualifying Rate: Greater of the Fully-Indexed Rate or Note Rate - ARM Index: 12 Month LIBOR - ARM Note Margin: 7% - ARM Floor = Margin IO Period: 120 Months Maximum : 70% Available Products: 5/1 ARM, 7/1 ARM, 30 Year Fixed Minimum FICO: 660 Loan Term: 360 Months; Qualified at 360 Months Program Minimum Loan Amount: $,000 Loan Amount < $150,000: 70% Max LTV Loan Amounts>$1,500,000 require 2 appraisals Minimum Loan Amount $150,000 when DSCR < 1.15 Experienced Investor: A borrower who has owned 2 or more properties within the most recent nths (Primary residence can be included), with 1 having documented rental income of nths or more. Rental income can be documented with one of the following; o Two (2) mortgage trade lines on the credit report, reflecting 0x30x12 history, or o Copy of lease with 2-months proof of receipt First Time Investor: A borrower that does not meet the Experienced Investor criteria. First Time Investors must have owned a residence (primary or rental) for a minimum of the most recent nths. - First Time Investors Maximum LTV: 65% Terms up to 3 years available for 3 Year ARMs. Otherwise terms up to 5 Years are acceptable. The following structures are acceptable - of interest on the amount of the prepayment that exceeds 20% of the original principal balance - 3%, 4%, or 5% for the term of the penalty - Declining structures that do not exceed 5% and do not drop below 3% in the first 3 years (5%/4%/3%/2%/1%, 5%/4%/3%, etc) Penalties not available in New Mexico and loan vested to individuals in New Jersey CREDIT Residency US Citizen; Permanent resident alien; Non-permanent resident alien Eligibility : 0x30x12 BK-Chap 13: BK-Other: 36 mo : 36 mo : A minimum of three trade lines per credit report. At least one trade line should be active for the most recent nths; and two trade lines should have reported in the last nths. Tradeline Requirements The following are not acceptable to be counted as a tradeline: non-traditional credit as defined by Fannie Mae, any liabilities in deferment status, accounts discharged through bankruptcy, authorized user accounts, charge-offs, collection accounts, foreclosures, deed-in-lieu of foreclosure, short sales, or pre-foreclosure sales. Limited Tradelines are not allowed Gift Funds Income DTI/INCOME/ASSETS Gift Funds not allowed for loans qualified under the Debt Service Coverage Program. Gift of Equity not allowed. Debt Service Coverage Ratio (DSCR): Gross Income/PITIA Transaction qualified on cash flow of the subject property Gross Income: Lower of Estimated Market Rent from Form 1007 and monthly rent from an existing lease (If lease amount higher, may be utilized with two months proof of receipt) Each financed property, in addition to the subject property, will increase the applicable reserve requirement by two (2) months PITIA on the subject property to a maximum requirement of nths. The additional reserves are based upon the PITIA of the subject property. must be sourced and documented per guidelines. for a loan with an Interest Only feature based upon the interest only payment (ITIA). Proceeds from a cash-out refinance cannot be used to meet the minimum reserve requirements. Proceeds from 1031 Exchange cannot be used to meet reserve requirements.

10 Appraisal Property Type Limitations Compliance Eligible States Financed Properties PROPERTY Appraisal should be dated no more than 120 days prior to the Note Date. After a 120-day period, a re-certificatiion of value is acceptable up to 1 days. New appraisal is required after 1 days. Condition rating must be C4 or lower; Quality rating of Q5 or below is acceptable. Second Appraisal from Clear Capital or Assurance is required when any of the following conditions exist. The lower of the two "Appraised Value" is used and the second appraisal must be from a different company and appraiser than the first appraisal. - Loan Amount exceeds $1,500,000 - Transaction is a flip as defined in the Property Flipping section Appraisal Review: - CDA from Clear Capital is required on all transactions; or - A field review or 2nd appraisal from Approved AMC is acceptable. Source of the appraisal review product may not be the same AMC used for the appraisal. If the CDA reflects a value more than 10% below the appraised value or cannot provide a validation, the next option in the review must be followed which is a field review or 2nd appraisal. Condo / 2-4 Unit: 70% Max LTV Unleased Properties (Loan Bal <=$1mm): 65% Max LTV (Applies to Refinance transactions only) Rural Property: 60% Max LTV Unleased Properties (Loan Bal >$1mm): 60% Max LTV (Applies to Refinance transactions only) Non-Warrantable Condo Maximum Loan Amount: $1,500,000 Max 10 acres MISCELLANEOUS Impounds are required Points and Fees may not exceed 5% Loans considered high-cost by Federal or State law are not eligible for purchase See our licensed state list No limit on financed properties; exposure to a single borrower not to exceed $3,000,000 or 6 properties; Add 2 months reserves for each additional financed property (including departure residence). Total reserve requirement is not to exceed. Requirement is not applicable when there is no reserve requirement