WHOLESALE Non-Agency Jumbo Fixed and ARM Fixed: T Year fixed rate, T Year fixed rate ARM: A500-5/1 ARM. A522-7/1 ARM and A527-10/1 ARM

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1 Transaction Type Units Min-Maximum Loan Amt. Non-Agency Fixed and ARM Jumbo Matrix 1 WHOLESALE BUSINESS CHANNEL ONLY Maximum Min. LTV 3 FICO Min.# Mos. Verified PITIA Maximum DTI Maximum Cash Out 4 1 Primary Residence 1 75% months 1 $417,001-$1,000,000 65% months Purchase & 2 60% months Rate/Term % months 2 $1,000,001- $1,500,000 55% months 1 65% months 2 $1,501,000-$2,000,000 45% 1 60% months $250,000 Cash Out 2 $417,001-$1,000,000 Refinance 2,4 1 55% months $250,000 2 $1,000,001-$1,500, % months $250,000 2 $1,500,001-$2,000,000 Second Home $417,001-$1,000,000 70% months Purchase & $1,000,001-$1,500,000 65% months 45% Rate/Term 2 $1,500,001-$2,000,000 60% months Cash Out Refinance 1 Exceptions to these parameters are not available. This product matrix is ONLY applicable to SPM s Wholesale business channel. 2 New Subordinate financing is not permitted. CLTV parameters are the same as LTV with existing subordinate financing. 3 Properties located in declining markets require a 5% LTV reduction. See declining market topic attached. 4 Six months seasoning requirements apply. Maximum cash out is $250,000 regardless if recorded liens are being satisfied, nonlien debts are paid, or proceeds disbursed to Borrower. 1

2 ARM Overview: This is a variable rate mortgage, without negative amortization, whereby the interest rate and payment is adjusted in accordance with the specified index. Index: The index used to determine the adjustable interest rate is the average rate for one year U.S. dollar denominated deposits in London Markets based on quotations of major banks, known as the London Interbank Offered Rate (LIBOR) as published in the Wall Street Journal. Margin: The margin is 2.25% Interest Rate Adjustment For each interest rate adjustment, the new interest rate is determined by adding the index to the margin and rounding the total to the nearest l/8 of 1%-subject to the interest rate adjustment caps Interest Rate & Payment change The initial note rate is in effect for 60 months, 84 months and 120 months respectively for 5/1, 7/1 and 10/1 ARMS. The interest rate and payment adjusts every 12 months following the initial fixed rate period. Adjustments/Caps First Adjustment Cap: At the first adjustment, the interest rate cannot be increased or decreased above or below the loan s initial interest more than 5%. Initial Adjustments: 5/1- After 5 years, 7/1 after 7 years and 10/1 after 10 years Subsequent Adjustment Cap: At each subsequent adjustment, the interest rate cannot be increased or decreased above or below the loan's interest rate for the preceding 12 months more than 2%. Lifetime Adjustment Cap: The maximum rate payable over the life of the loan is the loan's initial interest rate plus 5%. Floor: Over the life of the loan, the interest rate can never be lower than the margin. ARM Qualifying Qualifying criteria Loans must qualify with the following criteria: 5/1 ARM must be qualified at the Note Rate + 2% never less than the fully indexed rate based on a fully amortizing principal and interest payment; 7/1 and 10/1 ARM must be qualified at the Note Rate based on a fully amortizing principal and interest payment. 2

3 ***Note: s not addressed in this product guide default to standard SPM policies or FannieMae guidelines if not addressed*** Appraisal Requirements Assets/ Documentation Assumable Automated Underwriting/ Approval Borrower Eligibility Conversion Feature Appraisal must be AIR compliant. Full appraisals (with interior and exterior inspections) required. Drive-bys, or other reduced appraisals are not eligible. Appraisal requirements are as follows: o Loan amounts < $1,000,000 = One full appraisal Loan amounts >$1,000,000 = Two full appraisals. Age of appraisal may not exceed 120 days from Note Date All appraisal reports are subject to prior investor approval regardless of loan amount Appraisal updates/certifications of value are NOT permitted. Appraisal reports older than 120 days will require a new appraisal(s) will be required. All SPM appraisal policy requirements apply. Eligible sources of funds include standard liquid assets fully disclosed by Borrower and verified by UW as stated in documentation topic o Gifts and Gifts of Equity are NOT permitted o Verification of liquidation of assets (if applicable) is required whenever funds are needed to close o Stocks, Bonds, Mutual Funds and vested Retirement accounts must be appropriately discounted in accordance to standard FannieMae guides when used for reserves. o Business funds may be utilized ONLY for down payment (not reserves) and all of the following criteria must be met: Borrower must be 100% owner of company Letter from business accountant is required confirming that the withdrawal will not be negatively impact the business Ineligible sources of funds include: Gifts, Gift of Equity, Grant funds, Pooled funds, Builder profits, Employer assistance assets. Not assumable Automated underwriting is not permitted. Manual underwriting is the only method available. UW authority: delegated to $650,000 o OPS manager s signature required for loans $650,001 to $1,000,000. o In addition to SPM UW and OPS manager approval, investor approval is required for loans > $1,000,000 Eligible Borrowers: U.S. Citizens and Permanent Resident Aliens. Intervivos Revocable Trust vestings are permitted. o Borrower may NOT own > 2 financed properties including subject property. Restriction applies to all loan transactions regardless if subject property is owner occupied Primary or Second Home. See Maximum financed property topic. In-eligible Borrowers: Borrowers who own >2 financed properties, First Time Homebuyers, Non-Permanent Resident Aliens, Foreign Nationals, any other type of trust other than an Intervivos Revocable Trust, or Non-occupant Co- Borrowers. Any type of business vestings such as: Partnerships, LLC s, or Corporations are also prohibited. Not available 3

4 Credit Residential Mortgage Credit Report or tri-merged in file from all three repositories is required. Qualifying Credit Score: is determined as follows: o All Borrowers on loan transaction must meet minimum FICO requirements o The representative credit score for each Borrower is the median of the three scores (or lesser of two, if only two scores are returned); the representative score for the loan is that of the Borrower with the lowest representative score. o Minimum trade line requirements. Regardless of the FICO score, minimum trade line requirements are as follows: Minimum of three open and active trade lines are required All three trade lines must reflect activity within the past 6 months Adverse credit: Borrowers whose credit histories include any of the following are not eligible for this product: o Any mortgage lates within the past 24 months regardless if relative to subject property or other properties owned o Bankruptcy (any type) o Foreclosure o Deed in Lieu or Short Sale o Any loan modification (regardless if accompanied by satisfactory mortgage payment history) will render the loan ineligible for this product. Judgments, Liens and Collections: o All judgments or liens affecting title must be paid o Non-title charge offs and collection exceeding $1,000 (either individually or in aggregate) must be paid o Borrowers with a history of collection accounts must be required to pay off derogatory accounts. Contribution by Others Conversions Declining Market Standard FannieMae Not available 5% reduction from allowable LTV is required for all properties located in a declining market as identified in Declining Market Table posted in following link: The loan file must contain a screen shot from the Declining Market Excel spreadsheet reflecting the subject s property zip code and corresponding declining finding. o Properties whose zip codes are not located within a declining market will receive Record Not Found o The copy of the screen shot page must be placed in the E-folder. 4

5 Documentation Energy Efficient Mtgs. Escrow Holdbacks Exceptions First Time Homebuyers Geographic Restrictions Interest Only Feature LTV calculation (Refinance) Age of documentation (except appraisal report) may not exceed 90 days from Note date. Please refer to Appraisal topic for document age requirements. Full income documentation required. o Assets: Full Asset Documentation is required for both funds to close and reserves. For most asset types, this would include all pages of the most recent two months statements or the most recent quarterly statement. o Minimum 2 years verified employment is required for all Borrowers Continuous employment with same employer or in the same industry SPM verbal policy requirements applies Wage Earner/Salaried requires: Most recent full 30 day system generated paystub reflecting YTD earnings Two year s W-2 s o Self-employed requires: Documented continuous ownership in same business for minimum of 2 full years Personal tax returns for most recent 2 years Business tax returns for most recent 2 years o 25% or more ownership in a company: Requires 2 years tax returns o Commissioned/Bonus Income: Requires complete 2 year s tax returns IRS #4506 transcript validating the most recent two tax years are required for all loan transactions o Another fully executed #4506-T must be obtained at closing o For self-employed Borrowers owning >25% of a business, the validation of business returns is required Energy Efficient Mortgages (EEM s) are not permitted. Not permitted Exceptions to these guidelines or product matrices are NOT available. Not allowed Geographic restrictions apply. Please refer to Geographic restriction table. Note: Texas (a)(6) and loan transactions in the state of Ohio are not eligible. Not available Owned less than 12 months: Based off lower of purchase price or appraised value Owned greater than 12 months: Based on appraised value 5

6 Loan Transactions Multiple Properties Owned Non-Occupant Co-Borrower Non-Arms Length Property Eligibility Properties Listed For Sale Rate Locks Reserve Requirements Secondary Financing Texas(a)(6) Temporary Buy-downs Purchase: Arms length bona fide transactions only. Rate/Term Refi: o If owned less than 12 months, LTV must be based on lower of appraised value or original sales price plus the cost of any documented improvements. If the value has increased greater than 15%, photographs of improvements are required. o If owned more than 12 months, LTV is based on current appraised value. HUD-1 or Deed must be provided to verify ownership Cash -Out Refinance transactions are limited to maximum of $250,000 regardless if recorded liens are being satisfied, non-lien debts are paid, or proceeds disbursed to Borrower. Borrower may not own >2 financed properties including subject property. Restriction applies to all loan transactions regardless if subject property is owner occupied Primary or Second Home. Not permitted A Non-Arms Length transaction is one where there is a relationship or business affiliation between the Buyer, Seller, Loan Agent or Originator in the transaction. Non-Arms Length transactions as described herein are not eligible. Eligible Properties: SFD with less than 10 acres sites, PUDs, and Warrantable Condo s. Condo projects must have minimum 10 units. o Unpermitted additions: Appraiser must comment that any unpermitted addition is typical for the area and will not adversely affect the property value. Ineligible Properties: Non-warrantable Condo s or Condo projects consisting of fewer than 10 units, Manufactured Housing, Condo-tels, Mobile Homes, Properties that are atypical for the area, Mixed Use Properties, Log Homes and Properties with >10 acres. For Refinance transactions, the property may NOT have been listed For Sale within the past 6 months of loan application date. A FULL 6 months must have elapsed between loan application date and listing date. Rate Locks are now permitted PRIOR to investor loan approval.. Reserve requirements are tiered in accordance to loan amounts and are indicated on product matrix. Reminder: Gift funds or Business funds may not be utilized for reserves. Not permitted Texas (a) (6) loans are not permitted. Not Permitted 6