HomeReady vs. Home Possible Comparison

Transcription

1 Occupancy At least one of the borrowers must occupy as their Principal residence All borrowers must occupy as their Principal residence Primary Residence only Non-occupant Non-occupant borrowers permitted Desktop Underwriter using Non-occupant borrower income: Max 95% LTV Non-occupant borrowers are not allowed Not allowed First-time Home Buyer A First-time Homebuyer is an individual meeting all of the following: Is purchasing the subject property Will reside in the property as their Principal Residence Had no ownership interest (sole or joint) in a residential property during the 3-years prior to the Note Date A displaced homemaker or single parent is also considered a First-time Homebuyer if they had no ownership interest in a residential property during the prior 3-years other than the marital residence with a spouse. Note: None of the borrowers are to be a First-time Homebuyer for a HomeReady loan. A First-time Homebuyer is an individual meeting all of the following: Is purchasing the subject property Will reside in the property as their Primary Residence Had no ownership interest (sole or joint) in a residential property during the 3-years prior to the Note Date A displaced homemaker or single parent is also considered a First-time Homebuyer if they had no ownership interest in a residential property during the prior 3-years other than the marital residence with a spouse. If a displaced homemaker or single parent solely owned the marital residence, or solely or jointly owned a Second Home or Investment Property, then they are not considered a First-time Homebuyer. Occupant and non-occupant borrower(s) may have an ownership interest in other residential property at the time of closing. s may not have ownership interest in any other residential property. Ownership of Other Property For DU loans, DU will determine the income eligibility For Loan Product Advisor SM loans, Loan Product Advisor will determine the income eligibility. Income Limits Page 1

2 Purchase Purchase provided the existing lien Purchase Loan Purpose Fannie Mae (may use Fannie Mae s Loan Lookup tool). Note: This existing lien requirement does not apply if the CLTV > 95% solely due to a Community Seconds loan. Property Type 1-4 unit Manufactured Home (refer to Sections B & B for additional details) 1-unit, that is not a Manufactured Home 1-4 unit Manufactured Home (refer to Chapters 4501 & 5703) 1-unit, that is not a Manufactured Home Eligible Mortgages Max 30 years maturity Fixed Rate 5-year, 7-year or 10-year ARMs Max 30 years maturity Fixed-rate Max 30 years maturity (see Section (d) for max term on Manufactured Homes) 1-2 unit: Fixed Rate or 5/1, 7/1 or 10/1 ARMs 3-4 unit: Fixed Rate Manufactured Home: Fixed Rate or 7/1 & 10/1 ARMs (see Chapter 4501 & Section for additional details) Max 30 years maturity Fixed-rate Max Loan Amount Conforming loan amounts, or High-balance loan amounts Conforming loan amounts only High-balance loan amounts ineligible Conforming loan amounts only Super conforming loan amounts ineligible UNDERWRITING PATH: DU REQUIRED UNDERWRITING PATH: DU REQUIRED MAX LTV/TLTV/ MAX MAX HTLTV LTV TLTV* MAX MAX MAX LTV/CLTV/HCLTV LTV CLTV* 1-4 unit 95% 1-unit 97% 105% Fixed Rate: 1-unit 97% 105% Manufactured 95% if Accept 95%/97%/97%* 2-4 unit N/A N/A 1-unit Home Risk Class 2-4 unit N/A N/A (see Sections Manufactured N/A N/A & % if Caution Fixed Rate: Home 85% Manufactured 2-unit N/A N/A for add l details) Risk Class LTV/TLTV/ ARM: 75% Home Affordable Second & Affordable Second may not be a HELOC HTLTV Fixed Rate: 75% 3-4 units ARM: 65% Manufact. Fixed Rate: 95% Home 1-unit with Nonoccupant Fixed Rate: 95%/97%/97%* Community Seconds & Community Second may not be a HELOC Page 2

3 FREDDIE MAC UNDERWRITING PATH: MANUALLY UW LTV/TLTV/ HTLTV (cont.) 1-unit 2-unit 3-4 units MAX LTV/CLTV/HCLTV Fixed Rate: 95%* Fixed Rate: 85% ARM: 75% Fixed Rate: 75% ARM: 65% N/A (DU ) Manufact. Fixed Rate: 90% Home LTV/105% CLTV if Community Second 1-unit with Nonoccupant * If Community Second, then max 105% CLTV allowed (see Section B & Eligibility Matrix for additional details) * Max 95% LTV if sweat equity being used (see Section B for additional details) Secondary Financing is permitted & must meet the requirements of Sections B or B , as applicable including an Affordable Second, is permitted and must meet requirements in Chapter 4204 If Affordable Second does not require a monthly then may be entered in the Loan Product Advisor. Refer to Guide Section HRS Leveraged Seconds meeting Section requirements are permitted The Affordable Second cannot be provided by the property seller. be an Affordable Second meeting the requirements in Guide Section The Affordable Second cannot be a Home Equity Line of Credit (HELOC) If Affordable Second does not require a monthly then may be entered in the Loan Product Advisor. Refer to Guide Section HRS Leveraged Seconds are not permitted Must be submitted to DU Must be submitted to DU Must be submitted to Loan Product Advisor A-minus Mortgages are ineligible May be submitted to Loan Product Advisor SM A-minus Mortgages are ineligible Underwriting Path Page 3

4 FANNIE MAE HOMEREADY FREDDIE MAC Credit FICO DU will determine acceptability of credit At least one borrower must UNDERWRITING PATH UNDERWRITING PATH have a FICO MANUALLY UW MANUALLY UW LOAN (SEE SECTION ) LOAN (SEE SECTION ) PRODUCT PRODUCT ADVISOR / MORTGAGE MIN FICO ADVISOR / MORTGAGE MIN FICO Determined by Loan Product Advisor 1-unit Fixed Rate Purchase unit Fixed Determined 660 Rate Purchase by Loan 1-unit ARM 680 Product 1-unit Fixed Advisor Rate No unit No unit 700 Refer to Section (b) for additional details on Manufactured Home loans with a Caution risk class; and/or borrower with No max monthly housing Max DTI Determined by DU Qualifying Ratios: Determined by DU No max monthly housing Max DTI: Determined by LPA No max monthly housing Max DTI: Determined by LPA Qualifying Ratios MINIMUM BORROWER CONTRIBUTION 1-unit: No minimum borrower contributions is See Chapter B3-4 for eligible sources of funds MINIMUM BORROWER CONTRIBUTION LTV/TLTV/ LTV/TLTV/ LTV/TLTV/ LTV/TLTV/ HTLTV HTLTV HTLTV HTLTV >80% < 95% < 80% >80% < 95% < 80% 1-unit None None 1-unit None None 2-4-unit 3% 3% 2-4-unit 3% None Manufact. None None Manufact. None None Home Home For 1-unit properties, min 3% Contribution borrower contribution & max 95% LTV See Section for eligible sources of fund 1-unit: No minimum borrower contributions is See Section for eligible sources of funds Page 4

5 HomeReady vs. FANNIE MAE HOMEREADY 95% DU will determine the reserve requirements 97% DU will determine the reserve requirements Reserves Mortgage Credit HOME POSSIBLE HOME POSSIBLE 95% 97% 1-unit: No reserves 2-4-units: 2 months reserves 1-unit: No reserves See Section (c) for eligible sources of funds MCCs OK as qualifying income See Section B for details MCCs OK as qualifying income See Section for details (MCCs) At least one borrower must complete homeownership education as applicable Homebuyer Education The following three options are allowed: Framework homeownership education on-line course ($75 fee paid by borrower to Framework); counseling agency; or Programs by a Community Seconds or Down Payment Assistance Program provided by a HUD-approved agency, if the loan has a Community Seconds or Down Payment Assistance program. Lenders may choose to provide a credit against closing costs for the $75 Framework fee in accordance with the Selling Guide. Landlord Education Mortgage Insurance Coverage Levels Landlord education is not for 2-4 unit properties. 2-4 unit properties ineligible 25% coverage for LTV s % Standard MI coverage for LTV s of 90% or less Financed MI acceptable for 1-unit properties provided gross LTV does not exceed the max LTV allowed for the transaction (Note: MI coverage is determined using base LTV (base LTV = For purchase transactions where all borrowers are First-Time Homebuyers, then at least one borrower must complete homeownership education Homeownership Education Cert (or similar document) The following types of homeownership education are acceptable: Internet-based programs developed by MI companies Programs developed by HUD-approved counseling agencies, HFAs or Community Development Financial Institutions; Programs that meet the standards of the National Industry Standards for Homeownership Education and Counseling ( Programs using Freddie Mac s CreditSmart education curriculum, provided modules 1,2,7,11 and 12 are included, or access the Credit Smart-Steps to Homeownership Tutorial ( (See Section for additional details) For purchase transaction 2-4 unit properties, at least one borrower must complete Landlord Education. 2-4 unit properties ineligible 25% coverage for LTV s % Standard coverage for LTV s of 90% or less Custom MI is only available for Accept Mortgages Financed MI acceptable (see Section for additional details) premium included in the loan amount) (See Section B for additional details) Refer to Section B for additional details, including lower MI coverage + LLPA requirements The HomeReady vs. is intended for quick reference purposes only and may not include all factors relevant to loan eligibility. GSE requirements are subject to change without notice please refer to the Fannie Mae and Freddie Mac online fact sheets to verify complete and current guidelines. Desktop Underwriter, DU, Community Seconds and HomeReady are Fannie Mae trademarks. Home Possible, Home Possible Advantage, Affordable Seconds and CreditSmart are Freddie Mac trademarks; Loan Product Advisor is a Freddie Mac service mark. FICO is a registered trademark of Fair Isaac Corporation. SM 5 Concourse Parkway, Queen Bldg, Ste 2250, Atlanta, GA (877) Your actual rate, payment and costs could be higher. Get an official Loan Estimate before choosing a loan. This is not an extension to lend credit. Licensed by the Virginia State Corporation Commission (Lender License # MC-5493/ Broker License #MC-5493). Not all applicants will qualify. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act. Loans made or arranged pursuant to a California Finance Lenders Law license. Licensed by the NJ Department of Banking & Insurance. Georgia Residential Mortgage License # Regulated by the CO Division of Real Estate - AZ Banker License # Licensed by the Mississippi Department of Banking and Consumer Finance. Licensed by the Pennsylvania Department of Banking. Equity Prime Mortgage LLC NMLS # All rights reserved. Copyright Page 5