in this communication is a summary and is not complete. Refer to the Seller Guide for complete guidelines. This information is for of printing and is subject to change without notice. is a division of Wells Fargo Bank, N.A. 2016 Wells Fargo Bank, N.A. All Rights 1 This document is a summary of key overlays to Fannie Mae and Freddie Mac requirements 1 for submitted under a Seller s delegated underwriting authority. The summary is ordered alphabetically by subject. The primary source (Seller Guide section number) is provided for easy reference; however, Sellers should be aware that the references are not all-inclusive. Legend The most recent changes are identified as follows: Updated content Deleted content Clarified content This document should be used as a reference tool in conjunction with the Seller Guide and is not meant to be used as a replacement to the published guidelines. Refer to the Seller Guide for complete details. 4506-T and Ta Return Transcripts 4506-T is required for each borrower on the Loan and for each business ta return used to underwrite the Loan. W-2 IRS Transcripts required for borrowers with only W-2 income used to qualify; 1040 IRS Ta Return Transcripts are required for borrowers with non-w-2 income used to qualify. (505.04) Appraisals An Environment Property Inspection must be in the Closed Loan Package when the property is eposed to the environmental hazard of sulfur-containing drywall. (505.04) Transfer of appraisal is not permitted. (800.10) Document age (820.13(a)) - If the appraisal is older than 120 days, but is less than one year old from the date printed on the Note, an appraisal update is required indicating the property value has not declined. - If the effective date of the appraisal eceeds one year or the value has declined, a new appraisal is required. Interior photographs must be provided in addition to standard ehibits. (820.13(b)) Fannie Mae/Freddie Mac eternal-only appraisal report forms 2055/2055, 1075/466, 2095 and 2075 are not permitted. (820.27) Appraisal Management Companies (AMCs) Appraisal Submission Summary Report (SSR) Authorized AMC and ordering requirements apply for certain (refer to the Seller Identity of interest transactions (800.10, 820.26) Both Fannie Mae and Freddie Mac SSRs must be in the Closed Loan Package for all with an appraisal. A Successful UCDP status is required from one or both of the Agencies. (820.13(b)) Appraiser Policy If the appraiser is on the Wells Fargo Appraiser List (available on wellsfargofunding.com), a second appraisal is required. A copy of the appraiser s license/certification must be in the Closed Loan Package. (800.09) Assets as a Basis for Freddie Mac s policy for assets as a basis for mortgage qualification is not permitted. Mortgage Qualification (805.07, 820.05) Cash Assets -specific requirements apply for the following (refer to the Seller Liquidation of saving bonds Gifts from a related person(s), municipality, non-profit organization or employer Group savings, pooled funds, cash to close, sale of personal property and Individual Development Accounts (820.08)
in this communication is a summary and is not complete. Refer to the Seller Guide for complete guidelines. This information is for of printing and is subject to change without notice. is a division of Wells Fargo Bank, N.A. 2016 Wells Fargo Bank, N.A. All Rights 2 Citizenship Each borrower on the Loan must have a valid Social Security number. A copy of the Green Card is required for all permanent resident aliens. A copy of the front and back of the card must be included in the Closed Loan Package. All non-permanent resident aliens must provide evidence of a valid, acceptable visa or an Employment Authorization Document (EAD). A copy of the visa or EAD must be included in the Closed Loan Package. - -specific requirements apply for eligible visa classes (refer to the Seller Guide for details). A borrower with an epired visa may be considered, subject to additional requirements. to foreign nationals and individuals with diplomatic immunity are not permitted. (820.04) Construction-topermanent Effective with Loan applications dated on and after August 1, 2015, Wells Fargo Funding will no longer purchase single close construction. This includes one-time close construction loans which convert to permanent financing via a construction loan rider or a separate modification. Co-ops Not permitted. Wells Fargo Prior Approval Underwriting is required. (820.14(b)) DAPs, UCAPs, and First Mortgage sold to Wells Fargo is not subject to any terms or conditions of a HAPs bond program. DAP, UCAP, or HAP does not restrict the transfer of servicing rights of the first Mortgage sold to Wells Fargo. In addition, it may not require prior notification or approval from the sponsoring authority in the event of the transfer of the first Mortgagee's servicing rights. (820.35) Disaster Policy In the event of a major disaster, -specific requirements apply for appraisal, property inspections, and property damage (refer to the Seller Guide for details). (820.19, 820.20) DU Refi Plus -specific requirements apply for the following (refer to the Seller 4506-T, Ta Return Transcripts, W-2(s) Refinances of loans not currently serviced by Wells Fargo Allowable DU recommendation (805.06) Fannie Mae High- Balance Mortgage Fannie Mae HomeReady TM Program DU Approve/Eligible required. (805.06) DU Approve/Eligible required. 30-year fied rate and 5/1 ARMs only. The following are not permitted: - Combination with HomeStyle Renovation loans - Sweat equity Affordable Loan ULDD Data Collection Form must be included in the Closed Loan Package. (505.07, 805.06, 820.11, Form 11) Flood Insurance Additional -specific guidelines apply for the following (refer to the Seller - Detached structures - Condo project flood insurance - Flood zone disputes An escrow/impound account must be established for payment of the flood insurance premiums to all delivered to, regardless of the LTV and/or federal eemptions. (515.04, 545.06, 820.31, 825.18)
in this communication is a summary and is not complete. Refer to the Seller Guide for complete guidelines. This information is for of printing and is subject to change without notice. is a division of Wells Fargo Bank, N.A. 2016 Wells Fargo Bank, N.A. All Rights 3 Freddie Mac Home Possible Program Freddie Mac Super Conforming Mortgage Homebuyer Education Certification Home Opportunities Program Identity of Interest Illinois Land Trusts Income and Debt Documentation Sellers must contact Priceline to Register/Lock. 30-year Fied Rate only. Affordable Loan ULDD Data Collection Form must be included in the Closed Loan Package. -specific requirements apply for mortgage insurance (refer to the Seller Guide for details). (505.07, 805.07, 820.11, Form 11) -specific requirements apply for allowable LP recommendation and maimum Loan amount (refer to the Seller Guide for details). (805.07) For affordable, homebuyer education certification (and other required information) must be provided by completing and including the Affordable Loan ULDD Data Collection Form in the Closed Loan Package. (505.07, 805.06, 805.07, 820.11, Form 11) Not permitted. Wells Fargo Prior Approval Underwriting is required. (844) -specific requirements apply for the following (refer to the Seller Property type Documentation requirements Appraisal requirements (800.01(c), 820.26) -specific requirements apply for the following (refer to the Seller Eligible borrowers Required documentation Title and closing (820.02) Documentation evidencing how the underwriter determined the debt-to-income ratio must be in the Closed Loan Package for all. s Income and Debt Worksheet is highly recommended to meet this requirement. Refer also to the Helpful tips for completing the Income and Debt Worksheet, available on wellsfargofunding.com. (505.04, Form 36) Interest-Only Not permitted. (835) Investment Properties 15-, 20-, or 30-year FRM, 7/1 or 10/1 ARM only when the borrower owns more than one financed 1- to 4-unit investment property. Evidence of gross monthly rent for each non-owner occupied unit must be included in the Closed Loan Package (Operating Income Statement Form 998/216, Loan Application, appraisal, or other documentation). (820.36) Life Estates Not permitted. (820.02) Living Inter Vivos -specific requirements apply for the following (refer to the Seller Trusts Eligible borrowers Attorney s Opinion letter and other documentation Title and closing (820.02) Manufactured Homes Not permitted. (300.02, 25)
in this communication is a summary and is not complete. Refer to the Seller Guide for complete guidelines. This information is for of printing and is subject to change without notice. is a division of Wells Fargo Bank, N.A. 2016 Wells Fargo Bank, N.A. All Rights 4 Mortgage Insurance Borrower-paid MI (BPMI) or Lender-paid single premium (upfront) option only Financed MI and Lender-paid monthly or annual options are not permitted. Reduced MI is only eligible with standard Fannie Mae non-homeready TM purchase transactions greater than 95% LTV. originated with custom or lower cost PMI options are not eligible. -specific requirements apply for the following (refer to the Seller - BPMI premium plans - Approved MI providers - Documentation for single premiums and split premiums (545.13, 860) Relocation -specific requirements apply for the following (refer to the Seller - Lump sum cash payments provided by the employer - Employer financing (820.33) Resale-Deed Restrictions Resale-Deed Restrictions Residual Income Evaluation Sales Contract Changes/Renegotiated Purchase Agreements requires prior approval of resale deed restriction documentation for delegated. Submit documentation with the Resale Deed Restriction Approval Request Form (Ehibit 21). Full appraisal required - must include interior inspection, regardless of type of appraisal report allowed by LP/DU. The following are not permitted: - Resale restrictions providing for shared equity or shared appreciation - Community land trust ground leases Properties that are group homes or primarily serve disabled residents For resale-deed restrictions terminating upon foreclosure: - LTV is based on the lesser of sales price or appraised value - Cash-out refinance transactions are not permitted For resale-deed restrictions surviving foreclosure: - Cash-out refinances are not permitted, ecept on age-restricted properties - DAPs are not allowed if they contain a resale-deed restriction that survives foreclosure Second home and investment property transactions: o Standard Fannie Mae requirements apply, only allowed with age restricted properties when the Deed Restriction is reviewed and does not restrict to primary or principal occupancy, and - Are not allowed with the High Balance Conforming Loan Program when the property is subject to an age-related resale restriction. For resale-deed restrictions surviving foreclosure: - Must comply with Fannie Mae requirements - Cash-out refinances are not permitted, ecept on age-restricted properties - DAPs are not allowed if they contain a resale-deed restriction that survives foreclosure Second home and investment property transactions: o Standard Fannie Mae requirements apply, only allowed with age restricted properties when the Deed Restriction is reviewed and does not restrict to primary or principal occupancy, and o Are not allowed with the High Balance Conforming Loan Program when the property is subject to an age-related resale restriction. - Not permitted with Home Possible o (820.14(d)) Minimum residual income and reserve requirements apply. Residual income evaluation worksheet or other documentation must be included in the Closed Loan Package. (300.02, 84, 820.09) Restrictions apply for renegotiated purchase agreements that increase the sales price after the original appraisal has been completed. (800.01(d)) X
in this communication is a summary and is not complete. Refer to the Seller Guide for complete guidelines. This information is for of printing and is subject to change without notice. is a division of Wells Fargo Bank, N.A. 2016 Wells Fargo Bank, N.A. All Rights 5 Separated Borrowers If the borrower is legally separated, a copy of the legal separation agreement must be provided to determine the division of assets, liabilities, and potential obligations. - If there is no legal separation, a letter from the attorneys of both parties involved specifying the proposed settlement terms must be provided. - If no documentation can be obtained to verify the division of assets and liabilities, the Loan will generally be considered an unacceptable risk. If the borrower states there are no plans for a legal separation, no further documentation is necessary; he/she is legally married and qualified accordingly. (820.02(a)) Settlement Agent List with title insurance and/or closed by a settlement agents appearing on the Wells Fargo Settlement Agent List are not eligible for purchase. The Settlement Agent List is available on wellsfargofunding.com. (515.01) Specific Property Locations/State- Specific Requirements Ta and Insurance Escrows Properties located outside of the United States, or properties located in a Territory, Province, or Commonwealth in which the USA has an interest, are not eligible for financing. Properties that would not be eligible include those located in Guam, Puerto Rico, and the Virgin Islands. (820.14(a)) Properties located on the Island of Hawaii in Lava Zones 1 and 2 are not permitted. (820.14(a)) -specific requirements apply for escrows for repairs to or replacement of septic systems in Massachusetts (refer to the Seller Guide). (820.18) When flood insurance is required, an escrow/impound account must be established for payment of the flood insurance premiums on all delivered to Wells Fargo Funding, regardless of the LTV and/or federal eemptions. Otherwise, escrows for taes and insurance are required for all with LTVs greater than 80%, with the following eceptions: - California, where the LTV requirements are greater than or equal to 90%. - New Meico, where the LTV requirements are greater than or equal to 80%. (515.04, 820.31) Temporary Buydowns Not permitted. (800, 900) Teas Refinances For rate/term refinances secured by Owner Occupied, Homestead properties in the state of Teas, - Total financed closing costs are limited to 10% of the new loan amount - Additional -specific requirements apply for the following (refer to the Seller Title insurance coverage requirements when impounds for prepaid epenses are included in the new loan amount POCs credited to closing costs Payoff of subordinate financing used for purchase or home improvements Agency cash-out refinances Cash-out refinances in Teas are not permitted. (820.40) Third Party Originated originated by parties on the Third Party Originator List (available on X (TPO) wellsfargofunding.com) are not eligible for purchase. (300.02, 31) does not purchase Third Party Originated by a mortgage broker (Wholesale TPO) with lender-paid broker compensation where the broker charges third-party processing fees as a separate fee paid by the borrower, property seller, or a third party. (505.04, 300.02, 77)