APMC DU REFI PLUS MATRIX

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1 1. PRODUCT DESCRIPTION 2. EXISTING FIRST MORTGAGE ELIGIBILITY 3. FINAL FUNDING DATE Conventional Conforming Fixed Rate DU Version 9.1 LTV <=105% o Conforming Loan Limits & High Balance: 10, 15, 20, and 30 year terms LTV >105% <=125% o Conforming Loan Limits & High Balance: 15, 20, and 30 year terms LTV>125% o Conforming Loan Limits & High Balance: 15 and 30 year terms Fully amortizing Conventional Conforming five year/one year adjustable rate mortgage DU Version 9.1 Conforming Loan Limits & High Balance: 30- year term Non-convertible Fully amortizing Fannie Mae must be the investor of the existing first mortgage DU will determine if the existing first mortgage is eligible Existing first mortgage note must be dated prior to June 1, 2009 Lock date must be dated on or before December 31, 2015 and the final funding date must be on or before June 1, 2016 Conventional Conforming seven year/one year adjustable rate mortgage DU Version 9.1 Conforming Loan Limits:15 to 30 years in fiveyear increments Non-convertible Fully amortizing 4. INDEX N/A London interbank offered rate for 12-month United States dollar-denominated deposits, as published in the Wall Street Journal (LIBOR) 5. MARGIN N/A 5/2/5 Cap-2.250%, 2.375% or 2.500% 5/2/5 Cap-2.250%, 2.375% or 2.500% 6. ANNUAL N/A 2% ADJUSTMENT CAP 7. LIFE CAP N/A 5% 8. RATE AT ADJUSTMENT 9. TEMPORARY BUYDOWNS 10. QUALIFYING RATE AND RATIOS N/A Not permitted Qualifying Rate Qualify at note rate Ratios Evaluated by DU Maximum 55% Initial note rate is in effect for the fixed term, the first interest adjustment is up to 5%, thereafter, a 2% annual adjustment cap begins with the second adjustment Rate is equal to the note margin plus index rounded to the nearest.125%. Subject to annual/life caps Qualifying Rate Qualify using the greater of the fully indexed, fully amortizing rate or note rate + 2.0% Ratios Evaluated by DU Maximum 55% Qualifying Rate Qualify using the greater of the fully indexed, fully amortizing rate or note rate Ratios Evaluated by DU Maximum 55% 1

2 11. TYPES OF FINANCING 12. LOAN AMOUNT Rate & Term Refinance Loan amount may include o Payoff of the outstanding principal balance of existing first loan, plus any required per diem interest o Closing costs, prepaids and discount points o Delinquent taxes, escrow shortage and late fees o Existing loan that has been modified (or application made to modify) may be paid off. Borrower Benefit must be met. See the Underwriting section. The borrower may receive up to $250 cash back at closing. If the amount exceeds $250, see the Special Eligibility Requirements section for Principal Curtailment requirements. Properties listed for sale are ineligible Conforming Loan Limits High Balance Loan Limits Units Minimum Loan Amount Maximum Loan Amount Minimum Loan Amount Maximum Loan Amount 1 $75,000 $417,000 $417,001 $625, $75,000 $533,850 $533,851 $800, $75,000 $645,300 $645,301 $967, $75,000 $801,950 $801,951 $1,202, High Balance Loan Amounts: These amounts are the maximum loan amounts that may apply; the limit may be lower for a specific high-balance area; however may not exceed 115% of area median home process. See Loan Limit Look Up Table for eligibility in specific MSAs for county loan limits. 13. LTV/CLTV LIMITATIONS Units Min LTV Max LTV 1 Max CLTV / HCLTV Min FICO 1 Max DTI 1 LTV <=105% Programs PRIMARY RESIDENCE 1-4 N/A 105% N/A % SECOND HOMES 1 N/A 105% N/A % INVESTMENT PROPERTIES 1-4 N/A 105% N/A % LTV 105%-125% Programs PRIMARY RESIDENCE 1-4 >105% 125% N/A % LTV >125% Programs PRIMARY RESIDENCE 1-4 >125% No Limit N/A % 1 See Escrow Waivers section for limits for loans with waived escrows. 2

3 14. MANUAL UNDERWRITING 15. SECONDARY FINANCING Not allowed No new subordinate financing is allowed. Existing subordinate financing must be subordinated. Subordination of existing junior liens permitted. o See the LTV/CLTV Limitations section o The subordinate financing terms must be documented - applicable to any subordinate lien on title, including non-institutional second liens A copy of the note is required to confirm the monthly payment (if applicable) and total lien amount, unless the credit report verifies the outstanding balance, total lien amount and monthly payment (if applicable) IRS tax liens must be satisfied Subordinate liens, including tax liens, may not be paid off or paid down with refinance proceeds The simultaneous refinance of a second lien is eligible when the new subordinate lien loan amount does not exceed the unpaid principal balance Ineligible Secondary Financing Down Payment Assistance Programs (DPA) New secondary financing 3

4 16. PROPERTY TYPES Eligible Property Types 1-4 units Condo o Project review not required however documentation must be provided verifying subject project is not a Condo Hotel o Project Code = V/III o Standard Fannie Mae required hazard, flood, liability, fidelity, and HO-6 insurance policies must be followed and documentation kept in file Detached Units consists of the entire structure and site and air space o Hazard coverage for a single family detached dwelling, and o Insured on 100% replacement cost, or Unit consists only of air space for the unit and improvements o $1,000,000 liability coverage minimum per occurrence Attached $1,000,000 liability coverage minimum per occurrence AND Insured on 100% replacement cost PUD o Project review not required o Project Code = E o Detached No project insurance requirements o Attached Project consists of common buildings $1,000,000 liability coverage minimum per occurrence and Insured on 100% replacement cost o Project has no common buildings $1,000,000 liability coverage minimum per occurrence Ineligible Property Types 2-4 unit PUD Condo Hotel Co-op Manufactured Home 17. OCCUPANCY Primary Residence Second Homes Investment Properties 18. GEOGRAPHIC LOCATIONS Occupancy of existing loan does not need to be the same as new loan. Delaware Florida Massachusetts Maryland New Jersey North Carolina Pennsylvania Virginia 4

5 19. ASSUMPTIONS Not permitted. If existing loan was assumed, current borrowers must have been qualified per FannieMae Selling Guide. 20. ESCROW WAIVERS Escrow impounds are required on all loans with LTV > 80% Escrows may be waived for LTV s 80%. o Min 620 FICO o Max 50% DTI If any of the insurance premiums are waived, all insurance premiums must be waived Loan Has Mortgage Insurance o Flood insurance is required Taxes and all insurance premiums must be held in escrow o Flood insurance is not required Taxes and all insurance premiums must be held in escrow Permitted after first interest rate adjustment period. If existing loan was assumed, current borrowers must have been qualified per FannieMae Selling Guide. 21. PREPAYMENT PENALTY Loan Does Not Have Mortgage Insurance o Flood insurance is required Taxes and all insurance premiums must be held in escrow, or Taxes and all insurance premiums must be waived, or Taxes may be waived and all insurance premiums must be held in escrow. o Flood Insurance is not required Taxes and all insurance premiums may be held in escrow, or Taxes and all insurance premiums may be waived, or Taxes may be waived and all insurance premiums may be held in escrow, or Taxes may be held in escrow and all insurance premiums may be waived. None 5

6 22. UNDERWRITING/ AUS DECISIONS 23. DOCUMENTATION TYPES Loans must be underwritten by DU and receive an Approve/Eligible decision and indicate eligibility for DU Refi Plus program Manual underwriting is not permitted Completion of the Uniform Loan Application (Form 1003) is required with all information including borrower income, employment and assets Standard age of documentation applies for all loans, including those properties in a disaster area. One DU Refi Plus-Refi Plus transaction per property Borrower Benefit The borrower must receive a benefit from the refinance transaction o Acceptable borrower benefits are met if: Monthly P&I decreases, or Loan term is shortened, or Interest rate is reduced, or A more stable product Generally, a more stable product would include movement from: o An interest-only to a fully amortizing loan (provide amortization of principal and accumulation of equity in the property) o ARM to Fixed Rate o ARM to new ARM with an initial fixed period equal to or greater than that of the existing mortgage o 30-year Fixed Rate to a 15, 20, or 25-year Fixed Rate An increase in loan term is permitted if there is a reduction in the P&I payment DU does not make the determination that the refinance will benefit the borrower Modified Mortgage o Use the terms of the permanent modified loan for comparison o If borrower was in a trial modification and denied a permanent modification, use the original terms of the loan for comparison Standard 6

7 24. BORROWER ELIGIBILITY The borrowers on the existing note (or current borrowers if the existing mortgage was assumed) must be the same as the borrowers on the new note. o An existing borrower may be removed provided at least one original borrower remains on the new loan The remaining borrower(s) must demonstrate that they have been making the payments from their own funds for the prior 12 months (not required in case of death); The borrower being removed must also be removed from the deed (or provide evidence of death, as applicable). o A borrower may be added to the new loan provided at least one original borrower remains on the new loan Each person with ownership interest must sign the security instrument Permanent Resident If the borrowers on the new loan are the same as the borrowers on the existing loan, no verification of residency status is required If the borrowers on the new loan are not the same as the borrowers on the existing loan o Allowed with legal residency documented with one of the following: A valid and current Permanent Resident card (form-i-551) A passport stamped processed for I-551, Temporary evidence of lawful admission for permanent residence. Valid until. Employment authorized. This evidences that the holder has been approved for, but not issued, a Permanent Resident card. See the FannieMae Selling Guide for guidelines. Non-Permanent Resident If the borrowers on the new loan are the same as the borrowers on the existing loan, no verification of residency status is required If the borrowers on the new loan are not the same as the borrowers on the existing loan o Allowed with legal residency documented with one of the following: All borrowers signing the Note must have a valid social security number. Individuals classified under Diplomatic Immunity, Temporary Protected Status, Deferred Enforced Departure or Humanitarian Parole are not eligible. Verification of one of the following is required: Unexpired Employment Authorization Document (EAD) issued by the United States Citizenship and Immigration Services (USCIS). One of the following Visas: H series, L, E-1, G series and TN Visa. A valid passport, letter from employer/sponsor and an I-94 proving work authorization. See the FannieMae Selling Guide for guidelines. Foreign Nationals Not permitted Trusts May be allowed on a case by case basis, see your Account Executive or your Manager for approval. 25. CO-BORROWERS Non-occupant borrower are permitted 7

8 26. CREDIT Credit Score Requirements Credit report required See the LTV/CLTV Limitations section for minimum credit score requirements Housing (Mortgage/Rental) Payment History (PITIA) 12 month mortgage payment history is required No more than 90 days may have elapsed from the last paid date of the mortgage to the date of the credit report. Current mortgage payments history must be obtained if the reported history is more than 90 days old. 27. ASSET/ RESERVES 28. EMPLOYMENT / INCOME Significant Derogatory Credit See the FannieMae Selling Guide for guidelines on the following items o Bankruptcy o Foreclosure o Pre-foreclosure o Deed-in-lieu o Restructured Loans o Short Payoff Assets for closing must be stated on the application o Verification of assets required o Most recent monthly, quarterly or annual account statement o Explanations and documentation is not required for large deposits. However, if a large deposit was the result of a new loan as identified by the LQI Report, verification of terms and inclusion in DTI is required. o Proof of liquidation of assets (e.g., sale of stock) is not required even if those assets are being used by the borrower pay closing costs Net assets must be determined for the following: Stocks, bonds, mutual funds: Deduct 30% of the value less any outstanding loans Retirement account: Deduct 40% of the vested amount less any outstanding loans Employment and income must be stated on the application Documentation Requirements per DU as follows: o Salaried: 1 Full month s paystubs showing YTD o Self-Employed: minimum 1 year s federal income tax return o 4506-T s required for the number of years of income documentation required by DU o Tax Transcripts are required for the number of years of income documentation required by DU Verbal VOE within 10 days of closing for salaried borrowers or 30 days for self-employed borrower See the Income Documentation Requirements at the end of this matrix. Form 4506-T Required for all borrowers whose income is used to qualify o Prior to Closing 4506-T must be signed at application for all loans 4506-T must be processed and tax transcripts obtained o At Closing 4506-T must be signed at closing See the FannieMae Selling Guide for complete guidelines 8

9 29. LIMITATIONS ON OTHER R.E. OWNED 30. APPRAISAL REQUIREMENTS Multiple Loans to the Same Borrower No limit See the FannieMae Selling Guide for complete guidelines Follow DU DU Refi Plus Property Inspection Waiver must be executed when offered by DU o An extra $75 must be included in GFE Block 1 when using a PIW o Standard damage inspection policy is applicable o Must be dated within 90 days of the note date o PIW Disclosure is required o PIW s generally will not be issued by DU on 2-4 unit properties If DU requires an appraisal, follow the minimum level of fieldwork required. o Interior and Exterior Appraisal Report (Forms 1004,1004C,1073, or 1025) required if PIW is not available o Property condition and marketability must underwritten using standard APMC quality assurance procedures. o Condition ratings C1 through C6 are permitted o Quality ratings Q1 through Q6 are permitted o Appraisal reports with a C5, C6, or Q6 must be completed with an as is value. A value subject to repairs is not acceptable. If a Mortgage Insurance Company requires an appraisal but DU returns a PIW, APMC will ignore the appraisal for pricing/underwriting/delivery and use the PIW. Property Fieldwork Waiver Property Fieldwork Waiver may be offered by DU. Borrower choice on exercising option. Must be dated within four months of the note date The final DU submission resulted in a Property Fieldwork Waiver If the Property Fieldwork Waiver is not offered, obtain an appraisal per DU 31. SPECIAL REQUIREMENTS/ RESTRICTIONS 32. MORTGAGE INSURANCE FEMA Major Disaster Declaration Policy A re-inspection is required after a Major Disaster Declaration If damage is noted, an Interior and Exterior Inspection is required and repairs indicated by the appraiser must be completed prior to closing See the FannieMae Selling Guide for complete guidelines Principal Curtailment The borrower may receive up to $250 at closing o A principal curtailment of 2% or $2500, whichever is less is permitted for any amount exceeding $250 o The principal curtailment must be reflected on the HUD-1 o If the amount exceeds 2% or $2500, the loan amount must be recalculated, resubmitted to DU and re-approved. New documents must be drawn if the loan amount changes and signed by the borrower. LTV <=80% based on Appraisal Report or PIW o Mortgage insurance is not required. LTV >80% o Existing loan did not have mortgage insurance or it was cancelled or terminated: Mortgage insurance is not required. o DU will determine if mortgage insurance is required when the LTV is > 80% o Refer to the MI company requirements for additional eligibility guidelines If mortgage insurance is in place, the mortgage insurance may be transferred to the new loan or new mortgage insurance may be obtained. Mortgage insurance should be transferred whenever possible to provide the most benefit to the borrower. Include the calculation and rate factor use to determine mortgage insurance disclosed to the borrower on the initial application. Including the MI rate 9

10 card with the factor will allow APMC to direct the loan to the appropriate MI partner The Mortgage Insurance transfer must be executed prior to closing but should not be completed until after U/W approval. o Originators: DO NOT attempt to transfer the MI. o APMC s Corporate staff will execute the Mortgage Insurance Transfer. DU Findings will indicate the name of the Mortgage Insurance Company and list the Insurance Certificate Number. If there is a conflict between the insurance information in DU and the Mortgage Insurance Company s records, follow the Mortgage Insurance Company s direction and obtain documentation from the MI Company. o For example, the MI Company states the MI policy was cancelled. Mortgage Insurance Companies are allowed to charge a transfer fee which must be disclosed on the GFE as a Finance Charge in GFE Block 3. Mortgage Insurance premium cancelation will follow industry standard procedures (cancels at earlier of 78% LTV or loan mid-point) Mortgage Insurance Types and transfer eligibility (subject to Mortgage Insurance Company restrictions): o Financed Borrower Paid MI transfers are allowed o Split Premium Borrower Paid MI transfers are allowed o Lender Paid MI transfers are eligible Note: An interest rate adjustment may be required if the Lender Paid Mortgage Insurance requires APMC to remit monthly payments to the Mortgage Insurance Company. Contact the lock desk if APMC will be required to remit monthly payments to the Mortgage Insurance Company. The Mortgage Insurance Company will provide all rate and premium information. Transferred Mortgage Insurance Eligible for Transfer Transfer Requirements Borrower Paid MI The Provider, Coverage, and Type remain the same (no changes Monthly and Zero Monthly allowed) Level Annual The monthly payment may change based on the new loan amount Standard Annual LPMI is ineligible Split Premium (with or without options) Single Premium Acceptable MI Companies Mortgage Insurance can be transferred from the following companies: o MGIG o Radian Click Here to access Radian s HARP information website, Radian s Customer Service Number: o Genworth Click Here to access Genworth s HARP information website, Genworth s Customer Service Number: o PMI Click Here to access PMI s HARP information website, PMI s Customer Service Number: o Triad Click Here to access Triad s HARP information website, Triad s Customer Service Number: o United Guaranty Click Here to access United Guaranty s HARP information website, United Guaranty s Customer Service Number:

11 Eligible for New MI Certificate Borrower Paid MI (BPMI) Monthly and Zero Monthly Level Annual Standard Annual Split Premium (with or without options) Single Premium New Mortgage Insurance New Mortgage Insurance Requirements New mortgage insurance certificate is required subject to acceptable mortgage insurance company guidelines. If the mortgage insurance on the original transaction was LPMI, the new loan is not eligible for LPMI. The Provider, Type and Rate may change but the Coverage level must remain the same. Must identify the Coverage level in effect on the existing loan, which will be applicable on the new loan. The monthly payment may change based on the new loan amount. Acceptable MI Companies Mortgage insurance will be obtained by APMC from one of the following: o MGIC o Essent Guaranty o Radian Coverage <= 20 Years Coverage 80.01% - 85% 6% 85.01% - 90% 12% 90.01% - 95% 25% 95.01% - 97% 35% > 20 Years Coverage 80.01% - 85% 12% 85.01% - 90% 25% 90.01% - 95% 30% 95.01% - 97% 35% 11

12 33. ORIGINATOR WORKFLOW 34. UNDERWRITING GUIDELINES Take a complete application If the borrower has little or no equity, a low credit score, owns multiple financed properties, and is interested in a rate/term refinance: o Did they open their current mortgage prior to June 1, 2009? o Is their property currently serviced by Fannie Mae? o Do they qualify based on the above parameters? Pull Credit (check the date the mortgage being paid off was opened) Score the loan through DU o Make sure DU returns Refi Plus eligibility DU will return ineligible findings if the payoff amount in the liabilities section doesn t match Line D of the details of transaction on the DU will return ineligible findings if the cash back to borrower exceeds $250. DU will generate a borrower removal warning if the SS# s on the 1003 don t precisely match the SS# s on the current loan. DU will identify if the new loan require Mortgage Insurance DU will identify the current Mortgage Insurance Company if applicable DU will identify the Appraisal requirements DU will identify Fannie Mae s estimated property value DU may require a full appraisal if the DU valuation is significantly lower than the borrower s estimated property value. Try lowering the value entered in DU to match the DU valuation to see if DU will issue a PIW (assuming there is no impact to the other eligibility parameters). If Mortgage Insurance is required, review the Mortgage Insurance Company s website to identify transfer requirements and any relevant information. o Note, Mortgage Insurance Companies may change their respective guidelines or add information to clarify existing guidelines, so their information should be reviewed for each transaction. o Contact the borrower s current Mortgage Insurance Company to obtain the rate and premium information. Disclose the GFE or update the initial GFE o Any monthly borrower paid monthly mortgage insurance premium must be included in the borrower s payment on the GFE and on the o Any Mortgage Insurance Company modification/transfer fees must be disclosed in GFE Block 3 as finance charges o The $75 PIW Fee should be in GFE Block 1 (if applicable) If the loan will be done using a PIW, then you should add the PIW Borrowers Disclosure Form to the disclosure package which is under the Custom PDF Forms on the print menu. o The Appraisal Fee should be in GFE Block 3 Note: the appraisal fee should be disclosed on every loan unless a PIW is already obtained through DU. It is an acceptable Changed Circumstance to add $75 to GFE Block 1 and remove the Appraisal Fee from GFE Block 3 on a revised GFE but you cannot add $75 to Block 1 if the borrower never agreed to pay for an Appraisal Fee. o APMC may require a damage inspection from an appraiser if the property was/is located in a FEMA disaster area. The Inspection Fee should be included in GFE Block 3 and it can be added as a Changed Circumstance. Lock/Register and submit the loan to opening as you would any other file. o Pricing and Eligibility are available in the pricing engine Be sure to complete the Mortgage Insurance Option dropdown list on the Property and Loan screen Be sure to check off the Refi Plus check box at the bottom of the Property and Loan screen DO NOT attempt to transfer the MI. APMC s Corporate staff will execute the Mortgage Insurance Transfer. Existing loan must have been sold to Fannie Mae prior to June 1, o Use the loan look-up tool (prior to running DU) to verify that the borrower(s) current loan is a Fannie Mae loan at: o Note: some loans sold to Fannie Mae prior to June 1, 2009 may not be eligible for the DU Refi Plus program including: Loans that were subject to post closing credit enhancements Loans with outstanding repurchase requests Reverse mortgages 12

13 Government sponsored mortgages serviced by Fannie Mae (FHA, USDA, and VA) o If a loan appears that it should be DU Refi Plus eligible and DU findings do not return eligibility, you can contact DU support at They can initiate a review to determine if the DU Refi Plus eligibility database is inaccurate. DU Findings must return the following message: This loan case file was underwritten according to the DU Refi Plus expanded eligibility guidelines offered on certain limited cash-out refinance loan case files where the borrower s existing loan is identified by DU as a Fannie Mae loan. The title commitment must show the date of the mortgage being paid off as prior to May 31, 2009 or documentation is required to verify eligibility. DU must return Approve/Eligible findings Manual Underwriting is not allowed Borrower Payment History: No 60-day late in past 12 months on ANY mortgage tradeline and 0x30 last 6 months Max DTI: Determined by DU Approval Bankruptcy/Foreclosure: standard FannieMae Selling Guide policies apply Subject properties currently listed for sale are ineligible Other financed properties: No Limit and no additional reserves required other than as required by DU Condo s and PUD s o No project review is required o U/W must document the property is not in a Condo Hotel o Standard Fannie Mae required hazard, flood, liability, fidelity, and HO-6 insurance policies must be followed and documentation kept in file Documentation Requirements per DU as follows: o Salaried: 1 Full month s paystubs showing YTD o Self-Employed: minimum 1 year s federal income tax return o 4506-T s required for number of years of income documentation required by DU o Verbal VOE within 10 days of closing for salaried borrowers or 30 days for self-employed borrower o See the Income Documentation Requirements at the end of this matrix. New borrowers may be added Existing borrowers may be removed for any reason, not solely due to death or divorce, provided: o The remaining borrower(s) must demonstrate that they have been making the payments from their own funds for the prior 12 months (not required in case of death); o The borrower being removed must also be removed from the deed (or provide evidence of death, as applicable). Occupancy on new loan can change from occupancy on existing loan. Borrower must meet the requirements of DU, including the mortgage delinquency, bankruptcy, and foreclosure policies. Closing costs and Prepaids may be included in the new loan amount (follow MI company restrictions if MI is required). Borrower may receive no more than $250 cash back at closing (follow MI company restrictions if MI is required). Borrower(s) must receive a Net Tangible Benefit: o A reduction in interest rate o A reduction in the amortization term of the first lien mortgage o The replacement of an ARM or Balloon/Reset Mortgage with a fixed-rate mortgage o A lower monthly payment o The replacement of an Interest Only loan with a fully amortizing loan New Subordinate financing is not permitted. Signed 4506-T is required at application and closing Tax Transcripts are required for the number of years of income documentation required by DU Re-scoring loans after closing is strictly prohibited as DU will no longer return Refi Plus eligibility once Fannie Mae updates their records showing the original loan is paid off and DU could remove PIW eligibility (if applicable). Escrow impounds are required on all loans with LTV > 80%; escrows may be waived for LTV s 80%. 13

14 Income Types Base Pay (salary or hourly) Bonus Commission Employment by a Relative, Property Seller or Real Estate Broker Foreign Income Military or Military Reserve Overtime Seasonal Income Secondary Employment Self-Employment Temporary Leave Income Tip Income Union Member DU REFI PLUS EMPLOYMENT AND INCOME DOCUMENTATION REQUIREMENTS ALL NON-TAXABLE INCOME MUST BE GROSSED UP IF NEEDED TO QUALIFY EMPLOYMENT INCOME Verbal VOE required for all Employment Income Documentation is required to confirm income source and receipt of income. Documentation is not required to confirm receipt, history of receipt or continuity of income. Standard age of documentation requirements apply. Follow DU Follow DU Bonus income calculation must be annualized. If borrower does not qualify based on annualizing income, additional income documentation may be required. Follow DU Required regardless of percentage of commission earnings Commission income calculation must be averaged based on the year-to-date earnings. If borrower does not qualify, additional income documentation may be required. Most recent paystub Most recent personal tax return that includes foreign income Follow DU Follow DU Overtime income calculation must be averaged using the year-to-date earnings. If borrower does not qualify, additional income documentation may be required All of the following is required o Written VOE or most recent paystub o Evidence of current receipt and amount of unemployment, if applicable Employed and Self-Employed Document per income type per DU Follow DU All of the following is required o Borrower s written confirmation of intent to return to work and no evidence or information from employer indicating that the borrower does not have the right to return to work after the leave period. o Most recent paystub documenting pre-leave income Most recent paystub All of the following is required o Written VOE or most recent paystub o Final paystub from each employer worked during the current year, if multiple employers o Most recent personal tax return or W2s from all employers worked during the year 14

15 Income Types Alimony and Child Support Payments Automobile Allowance/Expense Account Payments Boarder Income Capital Gains Income Derived From Severance and Lump Sum Retirement Package or Retirement Accounts Foster Care Income Housing or Parsonage Allowance Interest and Dividend Income Long Term Disability Notes Receivable Public Assistance DU REFI PLUS EMPLOYMENT AND INCOME DOCUMENTATION REQUIREMENTS ALL NON-TAXABLE INCOME MUST BE GROSSED UP IF NEEDED TO QUALIFY NON-EMPLOYMENT INCOME Documentation is required to confirm income source and receipt of income. Documentation is not required to confirm receipt, history of receipt or continuity of income. There is no defined expiration date for non-employed income documentation therefore, the documentation is not required to be updated prior to closing One month documentation of receipt of income and one of the following is required o Divorce decree o Separation agreement o Court order o Equivalent documentation o Most recent paystub o Most recent personal tax return All of the following is required o Most recent account statement reflecting deposit o Evidence live-in aide for borrower with a disability resides in primary residence All of the following is required o Most recent personal tax return o Most recent account statement, which indicates borrowers owns the assets Most recent monthly, quarterly, or annual statement o Letter from organization providing income o Most recent personal tax return o Written VOE or letter from employer reflecting the amount of the housing allowance and terms paid o Most recent paystub o Evidence of one month receipt of housing allowance All of the following is required o Most recent account statement to identify ownership of asset o Most recent personal tax return Most recent account statement reflecting direct deposit and one of the following is required o Disability policy o Statement from benefits payer, insurance company or employer o Most recent personal tax returns o Most recent 1099 All of the following is required o Copy of Note o Most recent account statement or equivalent evidence receipt 15

16 Programs Rental Income Retirement and Pension/Government Annuity/IRA Royalty Payments Social Security Trust Unemployment VA Benefits o Award letter o Most recent personal tax return o Most recent 1099 o Most recent account statement reflecting direct deposit o Current lease o Most recent personal tax returns, including Schedule E o Award letter o Most recent personal tax return o Most recent W-2 or 1099 o Most recent account statement reflecting direct deposit o Most recent personal tax return o Most recent account statement reflecting direct deposit o Award letter o Most recent personal tax returns o Most recent SSA-1099 o Most recent account statement reflecting direct deposit All of the following is required o Trustee agreement or trustee letter o Most recent account statement reflecting direct deposit o Unemployment Insurance Benefit Approval o Most recent account statement reflecting direct deposit Letter or distribution form from the Veteran s Administration 16