Conventional and Government Program Overlays. OVERLAYS All Programs

Transcription

1 4506-T/1040s Requirements Asset Verification Comparable Sales Credit Inquiries Delinquent Child Support Financed Properties OVERLAYS All Programs If TRV (Tax Return Verification) reveals C or E losses and/or unreimbursed expenses, 2 years of tax transcripts and 2 years 1040s will be required regardless of DU findings. If business income is used for qualifying the borrower, transcripts for the business tax returns are required if the business income was not identified on the borrower s1040 or if required by DU. Bank statements are required to verify assets. The source of closed comparable sales must be from a Multiple Listing Service (MLS) or MRIS at ris.com, Midwest Real Estate Data (MRED) at redllc.com, or North Texas Real Estate Information Systems, Inc. (NTREIS) at or San Antonio Board of Realtors at or GeoData at or Comps Inc. at psny.com Vermont and Maine - allowed to use another independent public source as MLS/MRIS are not common Address all inquiries on credit report within previous 120 days (not required on FHA non-credit qualifying Streamline and USDA Pilot Refinance program ) NOTE: USDA requires inquiries within previous 90 days be addressed. Must be paid current or in a payment plan Planet Home Lending exposure limited to maximum 2 loans to one borrower, one must be primary residence Minimum Loan Amount $60,000 Power of Attorney Rent Back Rural Property Square Footage Texas OO, C/O Refis - Section 50(a)(6) Allowed for active duty military personnel, military contractors, extenuating circumstances, and documented medical conditions. The maximum number of days a property seller may rent back the subject property from the buyer (borrower) after loan closing is 30 days. Maximum 20 acres Single family residences require a minimum of 650 square feet. Not allowed 1

2 Borrower Debt Certification* Escrow Holdbacks First Time Home Buyer Flip Transactions Ineligible Transactions Inter Vivos Trusts S/E Borrower CONVENTIONAL PROGRAM OVERLAYS Fannie Mae Conforming and High Balance Borrower must certify no new debt incurred from the time the credit report used to u/w loan was pulled to loan closing. One of the following required: Soft pull credit report, or Borrower Debt Affidavit (sample on Planet Home Lending website), signed by borrower or letter written and signed by borrower stating no new credit obtained. Escrow holdback must have been funded and work completed prior to purchase If purchasing an investment property as a FTHB, rental income cannot be used to qualify the borrower. Properties re-sold 90 days from acquisition require Planet Home Lending prior approval. Manual underwrite Non-traditional credit Eligible subject to Fannie Mae guidelines on owner-occupied and second home transactions only. Ineligible on Investment transactions. Borrower filed extension, a current YTD P&L including prior year must be provided *This is not a Planet Home Lending overlay; it is a requirement of Fannie Mae under LQI. This information is provided on this overlay document as a courtesy reminder for Sellers. 2

3 CONVENTIONAL PROGRAM OVERLAYS DU REFI PLUS AUS Decision Appraisal Credit Score Minimum Escrow Holdbacks Escrow/Impound Account Inter Vivos Trusts Maximum LTV MI Transfer Mortgage History S/E Borrower. Approve/Eligible Only Per DU Findings. The value provided on the 1003 must be entered in DU. The value on the 1003 and the value entered in DU must match. Minimum 620 regardless of DU Findings Not Allowed Required regardless of LTV unless prohibited by state law Eligible subject to Fannie Mae guidelines on owner-occupied and second home transactions only. Ineligible on investment transactions. 150% LTV for primary residence and second home 125% LTV for investment property Eligible with: Genworth MGIC Radian United Guaranty **Lender Paid Mortgage Insurance: Single premium only** 0 x 30 past 12 months Borrower filed extension, a current YTD P&L including prior year must be provided 3

4 95.01% - 97% DU Approve/Eligible required. Conventional and Government Program Overlays CONVENTIONAL PROGRAM OVERLAYS HomeReady. Product Manual Underwrites 2/2/6 caps not allowed Not Allowed 4

5 Back to Work Extenuating Circumstances Conversion of Current Residence (Borrower Vacating 2-4 unit O/O Prop) Credit Score Minimum Credit Score Minimum 640 credit score required FHA Standard Rental income from the units rented, excluding owner-occupied units the borrower is vacating, may be used for qualifying 1-unit conforming and high balance minimum 580 credit score with 90% LTV/CLTV 1-4 units conforming loan amount and 1- unit high balance minimum 620 credit score with maximum LTV/CLTV allowed per matrix Minimum 660 credit score for 2-4 unit high balance transactions Loans where not all borrowers have a credit score are eligible subject to the following: If a primary borrower exists, the loan may proceed without any additional documentation. A primary borrower is defined as: The individual has more than 50% of the qualifying income, and Meets the minimum tradeline requirements (3 tradelines with 12-month history; 1 of the 3 tradelines must have been active within the past 24 months), and The individual must occupy the property. If a primary borrower cannot be established because no borrower meets all of the above requirements, then the loan must follow HUD s non-traditional credit requirements. Maximum LTV/CLTV Credit score : Purchase transactions: 90% LTV/CLTV. No gift or DPA funds allowed for down payment; all funds for down payment must be from borrower own funds. Twelve-month verified housing history with 0x30 in previous 12 months is required. (Document with credit report or checks/money orders or evidence of consistent bank withdrawals). VOR, including VOR from professional management company or landlord letter is not acceptable. Rate/term refinance transactions: Rate/term: max 90% LTV/CLTV. Minimum 2 year payment history on the current loan with 0x30 in previous 24 months is required; or Credit score : Purchase transactions: 96.50% LTV/CLTV. No gift or DPA funds allowed for down payment; all funds for down payment must be from borrower own funds. Twelve-month verified housing history with 0x30 in previous 12 months is required. (Document with credit report or checks/money orders or evidence of consistent bank withdrawals). VOR, including VOR from professional management company or landlord letter is not acceptable. Rate/term refinance transactions: Rate/term: 97.75% LTV/CLTV. Minimum 2-year payment history on the current loan with 0x30 in previous 24 months is required; and 1-unit properties only (SFR, PUD, condos) 5

6 Credit Score (cont.) Credit Scores DTI LTV/CLTV Manual Downgrade Property Flips. FHA Standard (cont.) No gifts/dpa allowed meeting down payment requirement. Gift funds eligible after applicable down payment from borrower own funds requirement is met. Two (2) months bank statements dated prior to loan application date and signed letter attesting all funds are borrower funds required. VA residual income requirements apply. Refer to the FHA Program guidelines in the Seller Guide for residual income requirements. Max payment shock 100% %-100% require double residual income No property flips (property re-sold 90 days from acquisition) If the subject property is located in Arkansas, Connecticut, Delaware, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Jersey, New Mexico, New York, Oklahoma, South Carolina, Tennessee, or Utah AND the borrower has a credit score of , the following applies: Gifts are not permitted. Grants and DPA program funds are eligible. 0x30 in past 12 months housing history required Borrowers without prior 12 months housing history maximum 90% LTV. Borrowers with multiple residences in previous 12 months, a VOR is acceptable from a previous landlord only; current housing must be documented with checks/money orders NOTE: The additional requirements above do not apply to borrowers with a credit score 640 even if the property is located in one of the states identified above or to borrowers with a credit score and the subject property is not in one of the states above. Credit score: is 31%/43%, no exceptions Credit score: maximum 45% (based on occupant borrower only) Credit score DTI is 50%. Exceptions to exceed 50% are considered on a case-by-case basis. Purchase transactions, the combined loan amount of the first and second lien cannot exceed the lesser of 105% CLTV or 100% of the cost to acquire % LTV/CLTV may only be exceeded when using government entity for subordinate financing. Credit score maximum 90% LTV/CLTV on purchase and rate/term transactions Credit score maximum 85% LTV/CLTV on cash-out transactions Compensating factors are required on all loans downgraded to a manual underwrite. Reminder: HUD requires specific compensating factors when DTI exceeds 31%/43% (case numbers assigned on or after 4/21/14) 1-4 unit properties are eligible (Illinois 1-unit only; New Jersey/New York 1-2 units only) subject to the following: Properties re-sold 90 days from acquisition ineligible Regardless of the increase in value Planet Home Lending requires two appraisals, documentation/receipts of improvements and a property inspection. The lower of the value of the two appraisals must be used. Refer to the Planet Home Lending Seller Guide Chapter 6 Loan Eligibility, Property Re-sold 0-90 Days from Acquisition topic for detailed requirements. Property flips re-sold 90 days from acquisition are ineligible 2-4 units regardless of geographic region: Properties subject to a Short Sale Agreement are required to be listed on an MLS for a minimum of 30 days prior to the execution of the sales contract. Properties listed as an Exclusive Listing are ineligible for a flip transaction. 6

7 Additional State Restrictions Purchase Transactions. FHA Standard (cont.) Illinois 2-4 units and New Jersey / New York 3-4 units subject to the following: One full calendar year since acquisition date (closing date) to application date must have elapsed for the property to be eligible and there can be no relationship between the seller and borrower. (Does not apply when the seller is bank, government agency, etc.), - The subject property must not be in foreclosure, and - Signed affidavit required stating no relationship between buyer and seller, and - Max DTI 45%, and - If > 90% LTV, no gifts are grants allowed. Max CLTV is <105% or 100% of cost to acquire with 2nd from Government Entity ( FICO maximum 90% LTV/CLTV) 7

8 FHA Streamline Credit Score Credit Qualifying w/ Appraisal Maximum CLTV Occupancy Property Minimum 620 credit score for non-credit qualifying Minimum 580 credit score for credit qualifying ( restrictions apply). Refer to the Credit score topic below. Borrower must be receiving benefit of reduced annual MIP or CLTV for credit qualifying with appraisal Streamline; if not, loan should be processed as a rate/term refinance and have valid DU/Total Scorecard Approve/ Eligible Finding credit score max. 90% LTV/CLTV and max DTI 31%/43%. Minimum 24 mortgage seasoning on loan being refinanced with 0x30 in 24 months 125% CLTV Credit score max 90% CLTV Owner-occupied only Investment property eligible with single family residence only 1-unit only 8

9 Family size Veteran Only $ Veteran +1 $ Veteran +2 $2, Veteran +3 $2, Veteran +4 $2, Veteran +5 $3, Over 6 Conventional and Government Program Overlays VA Standard Cash-Out > 90% LTV Conforming loan amount only; no high balance Minimum 600 credit score 30 year fixed rate Minimal residual income requirements apply: Minimum Residual Income for each additional AUS Credit Score Loans must be run through DU. Planet Home Lending accepts: Approve/Eligible Finding, or Refer/Eligible. Refer/Eligible requires manual underwriting. An Approve/Eligible Finding requires a downgrade to manual underwriting for any of the following: Mortgage history indicates 1x30 in 12 months Disputed tradelines Subject loan was previously restructured/modified mortgage. A minimum of 12 months of 0x30 payments have been made on the modified loan If mortgage was in default at the time of modification it is not eligible. Minimum 580 credit score Minimum 600 with cash-out and > 90% LTV 9

10 Credit Score Collections DTI Eligible Borrowers Property Listed for Sale LTV/CLTV Maximum Loan Amount Short Sale VA Standard (cont.) Maximum 90% LTV/CLTV purchase transactions. Minimum 12 months housing history with 0x30 in 12months Document with in-file credit report trade line rating or checks/money orders with evidence of bank withdrawals (no VOR or landlord letter) Maximum 90% LTV/CLTV refinance transactions. Minimum 2 years pay history on loan being refinanced with 0x30 in 24 months 1-unit properties only (SFR, PUD, condos) 10% down from borrower own funds required. No gifts/dpa until after 10% borrower own funds requirement met. 2 months bank statements dated prior to loan application date and signed letter attesting all funds are borrower funds required. VA standard residual income requirements apply Max payment shock 100% %-100% require double residual income No property flips (property re-sold 90 days from acquisition) At underwriter discretion, collections may be required to be paid off (based on type and amount) Max DTI 31%/43% with a credit score Max DTI 45% with a credit score; > 45% requires Planet Home Lending prior approval Per DU Findings with a 640 credit score and Approve/Eligible. Only the veteran and the veteran s spouse are eligible. Loans defined as joint loans by VA are not eligible. If the property was listed for sale within the prior 12 months but is not currently listed for sale: Cash-out only eligible if the listing is expired/canceled or withdrawn 180 days prior to the application date The appraised value should be at least 10% below the lowest listing price. If the appraised value is not at least 10% less than the lowest list price, the underwriter must address the variance satisfactorily. The borrower must provide written confirmation of their intent to occupy as their primary residence. Cash-out allowed up to 100% LTV. Refer to Cash-Out > 90% topic for specific Planet Home Lending requirements > 90% LTV $1,000,000 in all states except Hawaii; m ax $1,500,000 in the state of Hawaii 2-4 unit properties subject to a Short Sale Agreement must have been listed on the MLS for a minimum of 30 days prior to the execution of the sales contract. Properties designated as an Exclusive Listing are ineligible. 10

11 State Restrictions VA Standard (cont.) Illinois 2-4 units, New Jersey, and New York 3-4 units are subject to the following: At least one full calendar year must have elapsed between the seller s acquisition of title and the execution of the sales contract (does not apply if the seller is a government agency, bank or bank subsidiary), and The subject property must not currently be in foreclosure, and The borrower and seller will be required to sign an Identity of Interest Certification stating that there is no relationship between them other than the transaction, and Max DTI 45%, and If LTV is > 90% no gifts or grants permitted. 11

12 >$417,000 Loan Amount (Alaska/Hawaii $625,500 or $750,000 Honolulu County, Hawaii) VA IRRRL Credit score requires full credit qualification Credit score 640 non-credit qualifying eligible. Maximum LTV is 100% Full credit report required for both credit and non-credit qualifying to verify mortgage history Mortgage history 0x30 in12 months for credit qualifying 0x30 in 24 months for non-credit qualifying Appraisal An AVM or 2055 is required for both conforming and high balance transactions as follows: CoreLogic GeoAVM with a standard deviation 18. If standard deviation > 18, a 2055 will be required; or ProTeck AVM with a confidence score of 80% or more for conforming loan amounts. If confidence score is < 80% a 2055 will be required; high balance loan amount requires confidence score of 90% or more; or Insurance 2055 HO-6 (walls-in) insurance required Credit Score Credit qualifying requires minimum 580 credit score Non-credit qualifying requires minimum 640 credit score Occupancy Credit scores of are subject to specific requirements. Refer to the Credit Score topic for details. 1-4 unit owner-occupied primary residence (2-4 unit ineligible on high balance) 1 unit second home (ineligible on high balance) 1-4 unit investment (ineligible on high balance) 12

13 VA IRRRL (cont.) Credit Score Credit qualification required. Maximum 90% LTV/CLTV purchase transactions. Minimum 12 months housing history with 0x30 in 12 months document with in-file credit report tradeline rating or checks/money orders with evidence of bank withdrawals (no VOR or landlord letter) Maximum 90% LTV/CLTV refinance transactions. Minimum 2 years pay history on loan being refinanced with 0x30 in 24 months 1-unit properties only (SFR, PUD, condos) 10% down from borrower own funds required. No gifts/dpa until after 10% borrower own funds requirement met. 2 months bank statements dated prior to loan application date and signed letter attesting all funds are borrower funds required. VA standard residual income requirements apply Max payment shock 100% %-100% require double residual income No property flips (property re-sold 90 days from acquisition) LTV/CLTV Maximum 125% LTV/Unlimited CLTV with AVM $417,000 loan amount Maximum 100% LTV/Unlimited CLTV on loan amounts > $417,000 ($625,500 Alaska/Hawaii or $721,050 in Honolulu county, HI) Refer to Credit Score topic above for LTV/CLTV restrictions Maximum Loan Amount $1,000,000 in all states except Hawaii; max. $1,500,000 in the state of Hawaii. 13

14 Appraisal AUS Findings CLTV USDA A 2055 is required on the Pilot Refi program A GUS Accept/Eligible or Refer Finding required on purchase and non-streamlined refinance transactions. USDA requires Refer Findings be manually underwritten. As a reminder, USDA requires full file documentation and documented mitigating circumstances/compensating factors are required to approve a loan receiving a Refer from GUS. Maximum 110% CLTV on Streamlined and Pilot refinance transactions Credit Score Minimum 640 DTI Purchase and non-streamlined transactions maximum 45%. 14