FHA CONFORMING Program Code GF30 GF15 GA05 GA07 Loan Description FHA CONFORMING 30 YEAR FIXED FHA CONFORMING 15 YEAR FIXED FHA CONFORMING 5/1 LIBOR ARM FHA CONFORMING 7/1 LIBOR ARM Program Code FHA HIGH BALANCE Program Code GH30 GH15 GAHB05 GAHB07 Loan Description FHA HIGH BALANCE 30 YEAR FIXED FHA HIGH BALANCE 15 YEAR FIXED FHA HIGH BALANCE 5/1 LIBOR ARM FHA HIGH BALANCE 7/1 LIBOR ARM
Max LTV / FICO Requirements Mortgage Insurance Premiums (Not applicable for Streamline Refinances) Ability To Repay and Qualified Mortgage Rule Appraisals Age of Documents Ratios Exclusionary Lists LTV / CLTV FICO LTV / CLTV FICO LTV / CLTV FICO 96.50% 620¹ 97.75% 620¹ 85% 620¹ LTV UFMIP Monthly LTV UFMIP Monthly > 95% 1.75% 0.85% > 90% 1.75% 0.70% <= 95% 1.75% 0.80% <= 90% 1.75% 0.45% LTV UFMIP Monthly LTV UFMIP Monthly > 95% 1.75% 1.05% > 90% 1.75% 0.95% <= 95% 1.75% 1.00% 78.01% - 90% 1.75% 0.70% <= 78% 1.75% 0.45% Non-Permitted additions are typical for the market area and a typical buyer would consider the "unpermitted" additional square footage to be part of the overall square footage of the property. Preliminary Title Policies must be no more than 180 days old on the date the note is signed. DTI 50%: follow program credit score and LTV maximum DTI 50.01 to 55%: o Credit score 680, or Purchase Brokers are responsible for providing evidence of compliance with the ATR/QM rules. Clear itemization of fees and application of all credits that indicate paid by/to will be required on all loans. o LTV is 5% below the maximum DTI >55%: Loans are ineligible regardless of the Total Decision DTI ratios are not calculated, unless the transaction is credit qualified. HUD's CAIVRS does not need to be checked ¹ FICO 550-619 allowed on exception basis and off sheet pricing required Applies to Case Numbers assigned on or after January 26, 2015 for base loan amounts <= $625,500 Applies to Case Numbers assigned on or after January 26, 2015 for base loan amounts > $625,500 For case numbers assigned before January 26, 2015, please see ML 2013-04 For loans subject to the ATR/QM rule, ECOM will only accept loans that comply with the ATR/QM requirements. Note: Investment properties which are for business purposes (borrower does not intend to occupy for greater than 14 days in the year) are exempt from ATR/QM; however, such loans must meet agency eligibility requirements and are subject to the applicable points and fees threshold. A full appraisal (e.g. form 1004 or equivalent, accompanied by form 1004MC) is required for all submissions Appraisals are not required for The FHA appraiser who performed the original appraisal, if currently in good standing on the FHA Appraiser Roster, may use Part A (Summary Appraisal Update Report) or Part B(Completion Report). Any other FHA appraiser, currently in good standing on the FHA Appraiser Roster, may only use Part B. Ecom will accept loans secured by properties with unpermitted structural additions under the following conditions: The subject addition complies with all investor guidelines; The quality of the work is described in the appraisal and deemed acceptable ( workmanlike quality ) by the appraiser; The addition does not result in a change in the number of units comprising the subject property (e.g. a 1 unit converted into a 2 unit) If the appraiser gives the unpermitted addition value, the appraiser must be able to demonstrate market acceptance by the use of comparable sales with similar additions and state the following in the appraisal: The appraiser has no reason to believe the addition would not pass inspection for a permit Rate/Term Refinances FHA max CLTV = 125% based on the original appraised value Mortgage Insurance Premiums (Not applicable for s) Cash Out Refinances Credit documents must be no more than 120 days old (180 days for New Construction) on the date the Note is signed, including credit reports and employment, income and asset documents. The HUD Limited Denial of Partnership (LDP) list and the General Services Administration (GSA) lists must be reviewed for all loans, if any party to the transaction, including the borrower(s), is reflected on these lists, the loan is not eligible
Credit Score Credit Requirements Derogatory Credit Minimum FICO score of 620** ** FICO 550-619 permitted on exception basis only and will be subject to off sheet pricing Each borrower must have at least one credit score to be eligible. At least one borrower must have a minimum of one credit score to be eligible To be refinanced FHA loan mortgage history: - If the loan being paid off has less than 12 payments, it must have no 30 day lates during the life of the loan - If the loan being paid off has 12 payments or more: experienced no more than one 30 day late payment in the preceding 12 months, and made all mortgage payments within the month due for the three months prior to the date of the loan application 2 years elapsed since completion or discharge of Ch 7 or Ch 13 Bankruptcy 3 years elapsed since completion of Foreclosure, Deed in Lieu or Short Sale - The wait period for short sales can be waived if all of the following conditions are met: COLLECTIONS: If the total outstanding balance for all borrowers is equal to or greater than $2,000 at time of underwrite, lender must perform a capacity analysis. Capacity analysis includes: - Payment in full of collection accounts, prior to or at closing, along with documentation of acceptable source of funds, - Borrower makes payment arrangements, and provides proof of arrangement with payment included in DTI, or - 5% of the outstanding balance of each collection account is included as monthly payment in DTI. Non-borrowing spouse collection accounts ARE included in cumulative balance Medical collections and charge offs are excluded. JUDGMENTS: The loan was current at the time of the short sale The loan was paid on time in the 12 months preceding the short sale All other installment debts were paid on time in the preceding 12 months If the total outstanding balance for all borrowers is less than $2,000, a capacity analysis is not required to be performed. Judgments must be paid prior to or at closing. An exception to the payoff of a court ordered judgment may be made if the borrower has an agreement with the creditor to make regular and timely payments. Provide a copy of the agreement and proof of 3 months payments made prior to credit approval. Borrowers may not prepay the scheduled payments to qualify. DISPUTED ACCOUNTS: If the cumulative outstanding balance of disputed derogatory accounts are greater than or equal to $1,000, then the TOTAL Scorecard decision requires a manual downgrade if the disputed accounts contain derogatory information. Ecom does not allow manually downgraded loans. Cumulative outstanding balance of disputed derogatory accounts less than $1,000: Manual downgrade NOT required Disputed medical accounts, disputed derogatory accounts resulting from identity theft may be excluded from the $1,000 limit. Identity theft documentation must be provided. Disputed Derogatory Accounts defined as: - Disputed charge-off accounts, - Disputed collection accounts, and - Disputed accounts with late payments in the last 24 months The following disputed non-derogatory accounts are not included in the $1,000 limit: - Disputed accounts with $0 balance, - Disputed accounts with late payments 24 months or older, or - Disputed accounts that are current and paid as agreed
ARM Initial Interest Rate Adjustment Dates AUS Borrower Eligibility Documentation Type Please visit www.ecommtg.com, click on Forms, then, Tools, then choose Government ARM Initial Interest Rate Adjustment Dates for the Adjustable Rate Mortgage Initial Interest Rate Adjustment Dates Document. All loans must be submitted and approved through FHA TOTAL Scorecard Manual UW is permitted on exception basis only and will be subject to off sheet pricing U.S. citizens Permanent resident aliens, with proof of lawful permanent residence Nonpermanent resident alien immigrants with proof of lawful permanent residence Ecom allows Mortgage Credit Certificates (MCCs) in accordance with FHA policy (can be considered as acceptable income or used to offset the mortgage payment, before calculating the qualifying ratios). Include a copy of the MCC and lender's documented calculation in the file. Streamline refinance borrowers must all have a valid social security number Borrower(s) may only be removed under the Streamline refinance program when: - deceased (provide supporting documentation), or - the loan is credit qualified and the borrower(s) being removed do not occupy the subject property (provide supporting documentation). Borrower(s) can be added as long as the existing borrowers remain on the note and deed. Credit qualifying is not required to add a borrower. Tax transcripts are required for each borrower whose income is utilized as a source of repayment. Transcripts must be provided for the number of years of income used to qualify the borrower. Tax transcripts are required to support the income used to qualify the borrower. If only W2 income is used to qualify, the underwriter may obtain W2 transcripts as long as tax returns are not included in the loan file. Generally, when the documentation used to verify income is from the same calendar period as the tax transcript, the information must match exactly. However, if the income documentation is from the current calendar year and the transcript is from a prior year, there can be acceptable variances. If this variance exceeds 20%, document the rationale for using current income. If tax transcripts are not available (due to a recent filing) a copy of the IRS notice showing No record of return filed is required along with documented acknowledgement receipt (such as IRS officially stamped tax returns or evidence that the return was electronically received) from the IRS and the previous one years tax transcripts. A 4506-T, signed at application and closing, is required for all transactions TOTAL AUS "Accept" Self Employed Borrowers (ML 2012-03): P&L and Balance Sheet required if more than a calendar quarter has elapsed since date of most recent calendar or fiscal-year end tax return was filed by the borrower with no exceptions. Documentation Down Payment Assistance Escrow Holdbacks Financing Concessions High Cost / High Priced Additionally, if income used to qualify the borrower exceeds the two year average of tax returns, an audited P&L or signed quarterly tax returns obtained from IRS are required. Tri-merge credit report or mortgage account(s) rating is required. Tax Transcripts and the 4506-T are not required under the FHA. Down Payment Assistance programs are permitted in accordance with Agency Guidelines. The source of the Down Payment Assistance must be a Government Entity. (e.g. Non Profits and Trade Unions are not permitted) Escrow holdbacks are allowed in accordance with FHA guidelines, including but not limited to: o A post funding stipulation for a copy of a 1004D confirming completion will be placed on loans where the appraisal is "subject to" improvements. o A post funding stipulation for a final title policy endorsement that ensures the priority of the first lien will be required on any loan where the appraisal is "subject to" improvements. o A copy of the escrow agreement (HUD 92300 on FHA loans) will be required that states how the escrow account will be managed and how the funds will be disbursed. Financing concessions cannot exceed 6% of the sales price. ECOM will not accept high cost loans Higher Priced Mortgage Loans (HPML) transactions are eligible for purchase. HPML guidelines require: o Establishment of an escrow account for taxes and insurance premiums on any transaction secured by a principal residence. o Must meet all applicable state and/or federal compliance requirements. o A prohibition on ARM loans with an initial fixed rate period of less than seven years (7/1 ARMs are eligible).
Employment Verification Reserves / Funds to Close Seasoning Requirements Loan Purpose Ineligible Mortgag Products Eligible Property Types Ineligible Property Types Condominiums Disaster Policy The following Income and Employment documentation are required at a minimum: loans with less than a 6 month payment history on the date of the FHA case number assignment are not eligible Purchase with No Appraisal option o Credit Qualifying is allowed at the discretion of the DE. All existing FHA overlays are still in effect, including but not limited to credit history and tax transcripts for income validation o Disbursed cash out to the Borrower cannot exceed $500 SFR detached & attached 2-4 Units detached & attached PUDs o Salaried borrowers require a Verbal VOE o Self employed borrowers require verification of the business through a 3rd party source o Retirement and/or social security income requires the most recent bank statement or award letter Reserves are not required for. Funds to close documented in accordance with FHA guidelines. Limited Cash-Out/Rate & Term Refinance o Proceeds can be used to pay off a first mortgage regardless of age o Proceeds can be used to pay off any junior liens related to the purchase of the subject property or that are seasoned at least 12 months o Pay related closing costs and prepaid items o Disburse cash out to the Borrower in an amount not to exceed $500 Cash-Out Refinance o LTV is based on Purchase Price if property owned less than 12 months o Borrower must be 0x30x12 on the subject mortgage history o Non-occupant co-borrowers may not be added in a cash out refinance transaction in order to meet FHA s credit underwriting guidelines for the mortgage. Any co-borrower or co-signer being added to the note must be an occupant of the property. o Loans with less than 6 months seasoning are ineligible due to manual downgrade to TOTAL decision per TOTAL Scorecard User guide 2.4.2 Any FHA programs/mortgage types identified in the FHA Handbook that are not specifically allowed in the Eligible Mortgage Types above, including but not limited to Energy Efficient Mortgages. Generally, the borrower is not required to provide a 5% contribution on a 1 unit, owner occupied, standard balance purchase. Low-rise and High-rise Condominiums (must be FHA eligible) Rural Properties (in accordance with agency Guidelines, loans must be residential in nature) - Not allowed for Manufactured homes (built on a permanent chassis and attached to permanent foundations) **Some manufactured homes may be eligible on exception basis with off sheet pricing** Mobile Homes Cooperatives Condotels Hotel Condominiums Timeshares Geodesic Domes Working Farms and Ranches Unimproved Land and property currently in litigation Must be located in an FHA approved Condominium Project Condominiums involved in minor litigation subject to DE approval and in accordance with FHA requirements. Ecom may require a post-disaster inspection when the appraisal occurred before the incident end date of the disaster.
Occupancy Property Flipping Policy Qualifying Recently Listed Properties Identity of Interest Transaction Loan Limits Maximum Loan Amount Underwriting Method Owner-occupied Investment Properties allowed for occupancy is determined by the current use of the subject property, not the use at origination of the existing loan. Second Homes allowed for Properties resold 90 days or fewer following the date of acquisition by the seller are not eligible for FHA financing unless the loan meets the exceptions set forth in 4155.2 4.7.H. The date of acquisition is defined as date of settlement on the seller's purchase of the property. The resale date is defined as the date of execution of the sales contract by a buyer intending to finance the property with an FHA-insured loan. Properties resold between 91 and 180 days after acquisition require a second appraisal by a different appraiser if the resale price is 100% or more over the price paid by the seller when the property was acquired. Fixed rate qualify at the Note rate 5/1 and 7/1 ARMs qualify at the Note rate. No Cash-Out Transaction - Allowed when the property is listed for sale. The property and the borrower must be eligible and qualified for the refinance. Cash-Out Transaction - the listing must have expired or been withdrawn prior to the application date. Note: if the property was listed in the prior 30 days to the application date, the Early EPO provision will be extended to one year. (ML 2012-03) For the purpose of Identity of Interest transactions, the definition of family member includes: child, parent, or grandparent, spouse legally adopted son or daughter, including a child who is placed with the borrower by an authorized agency for legal adoption foster child, brother, stepbrother, sister, stepsister uncle, and aunt Note: A child is defined as a son, stepson, daughter, or stepdaughter. A parent or grandparent includes a step-parent/grandparent or foster parent/grandparent. As stated in handbook HUD 4155.1 2.B.2.b, identity-of-interest transactions may result in a reduced maximum loan-to-value. FHA mortgage limits for all areas: https://entp.hud.gov/idapp/html/hicostlook.cfm. Refer to Rate Sheet for High Balance price adjustments. FHA s are exempt from FHA loan limits The maximum loan amount for owner-occupied properties is: o The current principal balance (UPB) o Plus Net New UFMIP (New UFMIP less Existing UFMIP Balance) The current principal balance may Include: o The current principal plus any interest when the payoff is not received on the first day of the month o May not include delinquent interest, late fees or escrow shortages Additional Requirements: o Second Homes: Maximum loan amount may not exceed the outstanding pricinpal balance. Second Homes not eligible for ARM programs o Investment properties: Maximum loan amount may not exceed the outstanding pricinpal balance. Investment Properties not eligible for ARM programs There must be a net tangible benefit to the borrower that meets the requirements of the Tangible Benefit matrix found within ML 2011-11 Manual UW only.