Wholesale Matrix The Matrix is a summary of Pacific Union Financial, LLC, dba thelender (Pacific Union, dba thelender) guideline overlays. This document should be used in conjunction with Pacific Union, dba thelender published guidelines and is not intended as a replacement to those guidelines. Where the Matrix is silent or conflicts with published guidelines, the published guidelines will prevail. Primary Residence Manual Only Purchase, Rate/Term, Simple Refinance: 560 if LTV 90% Cash-out Refinance: Conforming Balance: 560 credit score High Balance: 580 credit score FHA AUS Decision - Credit Scores Secondary Residence Manual Only Rate/Term and Simple Refinance: 560 credit score All Occupancy Types Manual Only Credit Qualifying Streamline Refinance: 560 if LTV 90% If a Pacific Union serviced loan is being paid off, no minimum score required. Credit Debt-to-Income Ratio Note: Loan Level Pricing Adjustments (LLPA) may apply. Chapter 13 Bankruptcy Specialty Plus pricing required when a borrower is participating in an active Chapter 13 Bankruptcy repayment plan 30-year Fixed Rate only Not applicable to Streamline and Simple Refinance transactions Total Scorecard Approve / Accept Eligible Transactions: If ANY borrower is a first-time homebuyer purchasing a 2-4 unit property, regardless of geographic location, maximum 50% DTI ratio. New Jersey s TOTAL Scorecard approved and manually underwritten loans for 2-4 unit properties: Maximum 50% DTI ratio Matrix Wholesale Page 1 of 8 04/23/2018
Income Ineligible Features Ineligible Property IRS 4506-T/Tax Return Transcript Policy Loan Terms Section 203(h) Mortgage Insurance Disaster Victim s 2 units: Three months PITI required 3-4 units: Six months PITI required Satisfactory 12 months housing expense must be verified by credit report or cancelled checks. Borrowers living rent free during the most recent 12 months are NOT eligible. Utah For all properties located in the city of Moab, Utah, an engineer and soil report is required to confirm the property is not located on or near a sinkhole. Any property identified to be located on or near a sinkhole (as indicated by the appraisal, Section 8 subsidies may NOT be used to offset the borrower s mortgage payment. Building on own land Construction to Perm Easements and Deed Restrictions Loans with resale deed restrictions, with the exception of age restricted properties. Proposed or Under Construction Economic Life / Section 223(e) loans Energy Efficient Mortgages (EEM) Hawaiian Homelands Loans to Non-Profit Organizations Reverse Mortgages Section 203(k) Rehabilitation Mortgage Section 248 Mortgages on Indian Reservations and Other Restricted Lands Texas: Texas Home Equity loans Co-op properties DELRAP projects that require Pacific Union approval Manufactured Homes in a mobile home park Self-employed and >25% Commission: Tax return transcripts are required for each year of income documentation. 10 year term 15 year term High Balance Purchase, Rate/Term, Cash-Out: Loan terms in five year increments Manual underwrite only: 560 minimum credit score Ineligible features and transaction types include the following: 2-4 unit properties HUD REO transactions Refinance transactions VA Standard 620 - All occupancy, loan purposes and loan amounts Specialty Matrix Wholesale Page 2 of 8 04/23/2018
Debt-to-Income Ratio for Credit Qualifying Transactions Ineligible Features Ineligible Property IRS 4506-T/Tax Return Transcript Policy Loan Amount Loan Terms Manual Underwrite: 560 Conforming Balance Purchase 560 Conforming Balance and High Balance Cash-Out 600 High Balance Purchase AUS Approved: 500 All occupancy, loan purposes and loan amounts Note: Loan Level Pricing Adjustments (LLPA) may apply. Refer/Eligible recommendations or manually underwritten loans: 45% DTI, with the exception of insufficient credit. 41% DTI for insufficient credit transactions (no credit references or only group II non-traditional credit references) Loans for Alterations and Repairs Loans to Native American Veterans on Trust Lands Loans with resale deed restrictions, with the exception of age restricted properties. financing on purchase and refinance transactions One Year, 7/1 and 10/1 ARM Texas: Texas Home Equity Leaseholds Self-employed and >25% Commission: Tax return transcripts are required for each year of income documentation. Maximum $1,200,000 base loan amount, except for loans in California California: Maximum $2,000,000 base loan amount 15 Year term - High Balance 10 Year term Purchase and Cash-Out: Loan terms that are not in 5 year increments Cash-Out: Specialty Primary Residence: 1-4 units: 90% max IRRRL: Standard Primary Residence: 1 unit: 130% max 2-4 units: 100% max Specialty Primary Residence: 100% max Standard and Specialty Second Home and Investment Properties: 100% max Matrix Wholesale Page 3 of 8 04/23/2018
Prior Approval Loans Escrow Holdbacks IRS Form 4506-T Appraisal Income Ineligible Features Ineligible Property Loans that require VA prior approval (such as Joint Loans, loans to veterans that have been rate incompetent, and IRRRL of a delinquent loan) are NOT eligible. USDA Allowed. Repairs/improvements may not be completed by a borrower who is a general contractor. Loans with resale deed restrictions, with the exception of age restricted properties. One-Time Close Rural Energy Plus Provisions Texas: Texas Home Equity loans Borrower(s) must fully complete and sign IRS Form 4506-T (or a comparable IRS form) for the previous two years prior to loan application. Conventional Freddie Mac Desk Review Form 1033 is not acceptable to establish market value for the subject property. Fannie Mae/Desktop Underwriter (DU): A qualifying credit score 620 is required for at least one borrower on the transaction, regardless of DU approval. Loan casefiles that include borrowers without a usable credit score are eligible only when the borrower with the credit score contributes more than 50% of the total monthly qualifying income. Note: The borrower without a credit score must contribute 50% or less of the qualifying income and non-traditional credit is not acceptable, regardless of DU messaging. Freddie Mac/Loan Product Advisor (LPA): A qualifying credit score 620 is required for at least one borrower on the transaction, regardless of LPA approval. Loan casefiles that include borrowers without a usable credit score are eligible only when the borrower with the credit score contributes more than 50% of the total monthly qualifying income. Note: The borrower without a credit score must contribute 50% or less of the qualifying income and non-traditional credit is not acceptable, regardless of LPA messaging. Self-Employed: Requires an audited Profit and Loss statement if a higher income than what is supported on the tax returns is used to determine qualifying income. Fannie Mae Student Loan Cash-Out Refinance transactions. Energy Efficient Mortgages (EEM). Fannie Mae HomeStyle Renovation Freddie Mac Renovation Mortgages Manufactured Homes are not allowed. Resale restricted properties: Matrix Wholesale Page 4 of 8 04/23/2018
Loan Terms Property Listed for Sale Refinance Transactions with a PACE Subordinate Lien Underwriting Assets Income Fannie Mae/Desktop Underwriter (DU): Resale restricted properties are not allowed, with the exception of age restricted properties. Freddie Mac/Loan Product Advisor (LPA): Income-based resale restrictions that survive foreclosure or completion of a deed-in-lieu of foreclosure are not allowed. Loan terms that are not in five year increments Rate/Term ( No Cash-out ) and Cash-Out Refinances Properties listed for sale are eligible subject to the following: The listing must have been cancelled at least one day prior to the disbursement date of the new loan. A copy of the MLS cancellation meeting this requirement must be included in the loan file. A signed letter of explanation from the borrower explaining why property was listed for sale and removed, and if Primary Residence, statement of intent to continue to occupy the property. Fannie Mae/Desktop Underwriter (DU): Rate/Term refinance transactions are not allowed when loan proceeds will pay off a PACE or PACE-like obligation (including HERO). Loans with Community/Affordable Seconds subordinate liens are not eligible. Manual underwriting not allowed. DU Approve/Eligible or LPA Accept/Eligible required. Non-traditional credit is not allowed. Desktop Underwriter (DU) Self-Employed Income: The existence of the borrower s business must be verified within 30 days prior to the Note Date. Loan Product Advisor (LPA) Self-Employed Income: The existence of the borrower s business must be verified within 30 days prior to the Note Date. Fannie Mae HomeReady Sweat Equity A qualifying credit score 620 is required for at least one borrower on the transaction, regardless of DU approval. Loan casefiles that include borrowers without a usable credit score are eligible only when the borrower with the credit score contributes more than 50% of the total monthly qualifying income. Note: The borrower without a credit score must contribute 50% or less of the qualifying income and non-traditional credit is not acceptable, regardless of DU messaging. Boarder Income Non-Borrower Household Income Adjustable Rate Mortgages (ARMs) Loan terms that are not in five year increments Matrix Wholesale Page 5 of 8 04/23/2018
Mortgage Insurance Property Temporary Buydowns Underwriting Purchase: Conforming Balance: Maximum 97% High Balance: Maximum 95% Rate/Term: Maximum 95% LPMI Minimum MI Coverage (with an LLPA) No 2-4 unit properties Resale restricted properties are not allowed, with the exception of age restricted properties. No Community Seconds financing on purchase and refinance transactions. Not allowed Manual underwriting is not allowed. Non-traditional credit is not allowed. Self-Employed Income: The existence of the borrower s business must be verified within 30 days prior to the Note Date. Freddie Mac Home Possible Appraisal Assets Income Ineligible Properties Freddie Mac Desk Review Form 1033 is not acceptable to establish market value for the subject property. Cash on Hand Sweat Equity A qualifying credit score 620 is required for at least one borrower on the transaction, regardless of LPA approval. Loan casefiles that include borrowers without a usable credit score are eligible only when the borrower with the credit score contributes more than 50% of the total monthly qualifying income. Note: The borrower without a credit score must contribute 50% or less of the qualifying income and non-traditional credit is not acceptable, regardless of LPA messaging. Boarder Income is not allowed Adjustable Rate Mortgages (ARMs) Loan Terms Loan terms that are not in five year increments Mortgage Insurance Property Maximum 97% on Home Possible Advantage LPMI Custom Minimum MI Coverage (with an LLPA) No 2-4 unit properties Matrix Wholesale Page 6 of 8 04/23/2018
No income-based resale restrictions that survive foreclosure or completion of a deed-in-lieu of foreclosure. Temporary Buydowns Underwriting No Affordable Seconds financing on purchase and refinance transactions. Not allowed Manual underwriting is not allowed. Self-Employed Income: The existence of the borrower s business must be verified within 30 days prior to the Note Date. DU Refi Plus Ineligible Property Loan Term Mortgage Payment History Property Minimum 620 credit score required, regardless of DU approval. Refer to the Geographic Matrix ARMs not allowed. Manufactured Homes are not allowed. Loan terms that are not in five year increments Primary Residence (1-4 unit), Second Home, Investment Property (1-4 units): Maximum 135% LTV with unlimited CLTV Primary Residence (1 unit): Maximum 200% Non-Pacific Union to Pacific Union transactions: The existing loan must be current. Resale restricted properties are not allowed, with the exception of age restricted properties. Loans with Community Second subordinate financing are not eligible. financing on purchase and refinance transactions. Self-Employed Income: The existence of the borrower s business must be verified within 30 days prior to the Note Date. Freddie Mac Relief Refinance Appraisal Ineligible Properties Loan Terms Freddie Mac Desk Review Form 1033 is not acceptable to establish market value for the subject property. Minimum 620 credit score required, regardless of LPA approval. Refer to the Geographic Matrix ARMs not allowed No income-based resale restrictions that survive foreclosure or completion of a deed-in-lieu of foreclosure. Loan terms that are not in five year increments Matrix Wholesale Page 7 of 8 04/23/2018
Primary Residence (1-4 unit), Second Home, Investment Property (1-4 units): Maximum 135% LTV with unlimited CLTV. Primary Residence (1 unit): Maximum 200%. financing on purchase and refinance transactions. Self-Employed Income: The existence of the borrower s business must be verified within 30 days prior to the Note Date. Matrix Wholesale Page 8 of 8 04/23/2018