Underwriting Guidelines (FHA Loans)

Transcription

1 (FHA Lans)

2 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 OVERVIEW Purpse The fllwing dcument describes the respnsibilities and requirements f the Carringtn Mrtgage Services, LLC (CMS) Mrtgage Lending Divisin Underwriter (Underwriter) when reviewing and underwriting Federal Husing Administratin (FHA) mrtgage lan applicatins. Table f Cntents FHA Underwriting Overview FHA Lan Prgrams and Cmpliance Overview Mrtgage Insurance Prgrams Overview FHA Prgrams Sectin 203(b) Hme Mrtgage Insurance Sectin 234(c) Mrtgage Insurance fr Cndminium Units Sectin 251 Adjustable Rate Mrtgages Autmated Data Prcessing (ADP) Cde Descriptin FHA Insured Mrtgages fr HUD Emplyees Overview Underwriting HUD Emplyee Lans Prperty Dispsitin (Sale f HUD Owned Prperties) Overview Appraisal Requirements Seller Cntributins Requirements FHA Case Numbers Assigning the FHA Case Numbers / Sectins f the ACT / ADP Cdes FHA Cnnectin Overview Originatin Functins in FHA Cnnectin Case Number Assignment, Cancellatin, and Reinstatement Case Prcessing Menu Case Number Assignment Manual Case Number Cancellatin Autmatic Case Number Cancellatin by the Systems Case Number Reinstatement Case Number Cancellatin fr Lans Eligible fr Higher Cunty Lan Limits FHA Hme Ownership Center (HOC) Hme Ownership Centers FHA Lan Eligibility Overview LDP and GSA Prcurement/Nn-Prcurement Requirements Unifrm Residential Lan Applicatin Lan Applicatin Requirements CMS Plicies & Prcedures Page 2 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

3 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Face-T-Face Interview Overview Identity and Scial Security Number Validatins Identity Verificatin Scial Security Number Validatin Occupancy Types Overview Primary Residence Occupancy f Frmer Investment Prperty r Secnd Hme Brrwers, C-Brrwers, C-Signers, and Nn-Purchasing Spuses Brrwers, C-Brrwers And C-Signers Nn-Purchasing Spuse Cmmunity Prperty State-Specific Infrmatin Additinal State-Specific Requirements Transactin Types Overview Purchase Mrtgage Refinance Mrtgages Cnstructin Permanent Mrtgages (Single-Clse Mdificatin f Nte) Lan Transactins Paying Off Land Cntracts Principal Curtailment Refinance Transactins with Escrw Credits Leasehld Estates Overview Leasehld Estate Requirements Lease Requirements Grund Rents Maximum Mrtgage Limits Requirements Lan-t-Values Calculating Lan-t-Value Calculating Cmbined Lan-t-Value Cmbined Lan Amunt Definitin Minimum Brrwer Investment Overview Acquisitin Cst Secndary r Subrdinate Financing Overview Virginia Autmatic Subrdinatin Seller Cntributin Limitatins Cntributins/ Cntributrs Inducements t Purchase Premium Pricing Allwable Brrwer Paid Clsing Csts Requirements Building n Own Land Requirements Mrtgage Insurance Premiums Overview CMS Plicies & Prcedures Page 3 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

4 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Up-Frnt Mrtgage Insurance Premiums Mnthly/Annual Premium FHA MIP Rates Unearned MIP Refund Calculatins Requirements Refinance Authrizatin Requests UFMIP Refund When Greater Than New UFMIP (Streamline Refinances) Mrtgage Insurance Premium (MIP) Refund Charts Refund Schedules Upfrnt Mrtgage Insurance Premium Refund Schedule 5 Years FHA Upfrnt Mrtgage Insurance Premium Refund Schedule 7 Years FHA Risk Management Overview Lan Status Apprved Status Insuring an FHA Lan Requirements Risk Cntrls Verificatins Sent t Pst Office Bxes Fraud/Red Flags Appraisal Transfer Appraisal Transfer (Case Number Assignment After Cmpletin f Appraisal) Appraisal Assignment Rejected Applicatin Assignments Case Number Assignment After Cmpletin f Appraisal Fair Lending Denying Credit FHA Dcumentatin Overview Minimum Dcumentatin Requirements Dcumentatin Requirements t Clse an FHA Lan Dcumentatin Requirements t be Eligible fr Underwriting Electrnic Signatures Requirements FHA Autmated Underwriting Overview Eligibility Requirements FHA TOTAL Mrtgage Screcard Eligible Lan Types Eligible Lan Types Ineligible Lan Types Autmated Underwriting Decisins Overview Apprve/ Eligible Underwriting Findings Reprt Overview Risk/Eligibility Ptential Red Flags CMS Plicies & Prcedures Page 4 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

5 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Verificatin Messages/ Apprval Cnditins Observatins Underwriting Analysis Reprt Submissin/Resubmissin Requirements Requirements Credit Prcessing Requirements Credit-Related Waivers and Verificatin Dcumentatin Disputed Accunts and Public Recrds Incme/Emplyment Overview Incme/ Emplyment Waivers and Verificatin Dcumentatin Asset Dcumentatin Overview Retirement Accunts Gifts Appraisal and Dcumentatin Requirements Requirements FHA Credit Overview Credit Reprt Requirements Requirements Credit Reprt Red Flags Age f Credit Reprt Three Repsitry Merged In-File Credit Reprt (Trimerge) Residential Mrtgage Credit Reprt (RMCR) Nn-Traditinal Credit Undisclsed Debt Credit Scres Overview Credit Scre Risk Factrs Credit Scre Requirements Selecting Credit Scre Credit Histry Evaluatin Overview Number and Age f Accunts Payment Histries Credit Utilizatin Inquiries Credit Cmpnents Verificatin f Credit Requirements Husing Payment Histry Bankruptcy/ Freclsure/ Deed-in-Lieu Shrt Sales Shrt Payffs Cnsumer Credit Cunseling Services (CCCS) Majr Adverse Credit AUS Apprve AUS Refer r Manual Underwrite Disputed and Cllectin Accunts Delinquent Federal Debt CMS Plicies & Prcedures Page 5 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

6 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Judgments and Tax Liens FHA Emplyment and Incme Evaluatin and Dcumentatin Overview Dcumentatin Age Requirements Stability f Incme and Emplyment Requirements Tax Infrmatin Authrizatin IRS Frm 4506-T/Tax Transcripts Requirements Dcumentatin Requirements and Standards Dcumentatin Requirements Dcumentatin Standards Incme Types Overview Wage Earner Bnus r Overtime Cmmissin Emplyment by a Relative Self-Emplyed Incme Overview Incme Dcumentatin and Evaluatin by Tax Returns Dcumentatin Requirements Rental Incme Overview Calculatin f Rental Incme Net Rental Incme fr Three t Fur Unit Prperties Unacceptable Surces f Rent Other Incme Overview Alimny, Child Supprt and Maintenance Payments Aut Allwances and Expense Accunt Payments Disability Incme Emplyer Differential Payments Emplyment Gaps Fster Care Incme Future Emplyment Interest and Dividend Incme Leave f Absence Military Incme Nn-Taxable Incme Nte Incme Public Assistance Prgrams Retirement, Pensin, Annuity Incme and IRA Distributins Seasnal Incme Scial Security Incme Teachers Trust Incme Unin Members VA Benefits Unacceptable Surces f Incme Surces f Unacceptable Incme CMS Plicies & Prcedures Page 6 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

7 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 FHA Liabilities and Debt Ratis Overview Mnthly Husing Expenses Ttal Qualifying Primary Husing Expense-t-Incme Rati Mnthly Debt Obligatins Debt Pay Off/Pay Dwn Prjected Obligatins Ttal Qualifying Debt-t-Incme Ratis Cntingent Liabilities Other Cnsideratins Cmpensating Factrs Nn-Occupant C-Brrwers FHA Assets Overview Dcumentatin Age Requirements Minimum Dwn Payment and Cash t Clse Requirements Asset Surces Overview Bank Accunts Earnest Mney Depsits Emplyer Assistance Plans Equity frm Other Assets Gifts Incme Tax Refund Life Insurance Cash Value Lan Frm A Relative Real Estate Cmmissin frm Sale f Subject Prperty Rent Credits Repayment Of A Persnal Lan Retirement Accunts Secndary Financing Stcks / Bnds Sweat Equity Systematic Savings Trade Equity Cash Reserves Requirements Unacceptable Surces f Assets Requirements FHA Prperty Types and Appraisal Dcumentatin and Review Overview FHA Appraisal and Prperty Cnditins Assessment Requirements Appraisal Independence Overview Appraisal and Appraisal Management Cmpany (AMC) Third Party Organizatin Fees Appraisal Selectin in FHA Cnnectin CMS Plicies & Prcedures Page 7 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

8 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Appraisal Dcumentatin Age f Appraisal Updated Appraisal and/r Cmpletin Reprt (Fannie Mae frm 1004D/Freddie Mac frm 442 with update) Required Appraisal Frms Fr Yur Prtectin Get a Hme Inspectin Selecting an Appraiser Overview Prvisins f the Lender Selectin Prcess Appraisal Transfer (Case Number Assignment after Cmpletin f Appraisal)164 Overview Secnd Appraisal Case Number Assignment after Appraisal Cmpletin Appraisal Fees Overview Inspectin Fees Setting Prperty Related Cnditins Cnditinal Cmmitment/Direct Endrsement Statement f Appraised Value 166 Requirements Unifrm Appraisal Dataset (UAD) Overview Cnditin Quality Unacceptable Appraisal Practices Requirements Prperty and Prject Types Prperty Type Classificatins Eligible Prperty/ Prject Types Ineligible Prperty/ Prject Types Eligible Prperty Types Single Family Residence Mdular Hme, Pre-cut Hme, Panelized Hme Multi-Family Mixed-Use Prperty Cndminium Planned Unit Develpment (PUD) Deed Restrictins Leasehld Estates Appraisal Prcedures Fr Leasehld Estates Envirnmental Hazards Requirements Lcatins Near High-Pressure Gas and Liquid Petrleum Transprtatin Lines. 179 Overhead High-Vltage Transmissin Lines Operating and Abandned Oil and Gas Wells Operating and Abandned Statinary Fuel Strage Tanks Grund Subsidence Prperties Affected by Lead Base Paint Asbests Insulatin Chinese Drywall Heavy Traffic Railrad Tracks and Other High Nise Surces Prperties Affected By Airprt Nise and Hazards CMS Plicies & Prcedures Page 8 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

9 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Water and Sewage Systems Private Water Systems Cisterns Cmmunity Water and Sewer Systems Shared Wells Individual Sewage Systems Private Rads Requirements Certificatins Overview Utilities Carbn Mnxide (CO) Detectrs Prperty Inspectin Termite Inspectin New Cnstructin Prperty Requirements Prpsed Cnstructin Under Cnstructin Existing Cnstructin (less than ne year ld) New Cnstructin Exhibits and Inspectin Checklist Stages f Cnstructin Prcessing Prcedures fr New Cnstructin Lan-t-Value Rati HUD Apprved Ten Year Warranty Cmpanies Site Built Using Building Permits and Certificates f Occupancy Municipalities That D Nt issue Building Permits and/r Certificates f Occupancy Affirmative Fair Husing Marketing Plan Mve-On Cndminium Prjects Overview Maximum FHA Cncentratin Within A Prject Cntinuing Prject Eligibility Investr must Review Cnd Prjects t Determine their Eligibility Prir t Clsing Ineligible Cndminium Prjects Cndminium Prject Apprvals Warranty Prcess fr Units in Apprved Cndminium Prjects Htel and Transient Use (Tw-t Fur-Family) Requirements Cmpliance Inspectins Overview Initial Inspectin Framing Inspectin Final Inspectin New Cnstructin Exhibits Builder's Certificatin f Plans, Specificatins, and Site (HUD Frm ) Warranty f Cmpletin f Cnstructin / Builders Warranty (HUD Frm 92544)212 Termite Cntrl Carpet Identificatin Manufacturer's Warranties and Insulatin Certificate Cmpliance Inspectin Reprt (HUD Frm 92051) Ten Year Insured Prtectin Plan Warranty Certificate Of Occupancy CMS Plicies & Prcedures Page 9 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

10 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Appraisal Review Overview The Subject Prperty Neighbrhd Analysis Site Analysis Imprvement Analysis Sales Cmparisn Apprach Cst Apprach Incme Apprach Recnciliatin Natural Disasters Overview Inspectin Requirements FHA Cndminium Prject Matrix Revisin Histry Date Versin Descriptin f Change 05/03/ New dcument. CMS Plicies & Prcedures Page 10 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

11 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 FHA UNDERWRITING Overview This dcument describes hw t review and underwrite Federal Husing Administratin (FHA) mrtgage lan applicatins. FHA LOAN PROGRAMS AND COMPLIANCE Overview This sectin describes the eligible lan prgrams and cmpliance requirements necessary t btain case endrsement and Federal Husing Administratin (FHA) insurance. CMS must ascertain whether the specific prvisins f the lan prgram are permissible under all applicable laws and regulatins. CMS must als take the necessary steps t verify the cntinued validity f the lan prgram prvisins under applicable laws and regulatins, and must ntify any investrs in the event it believes that any prvisins might be restricted r impermissible under such laws r regulatins. The requirements utlined in this sectin represent FHA cre requirements fr manually underwritten lans. The FHA TOTAL Mrtgage Screcard decisin and recmmendatins fr reduced dcumentatin may be fllwed, unless therwise nted in this dcument. Waivers d nt apply t state specific cmpliance restrictins. See the HUD Rev. 5 Handbk fr additinal infrmatin. CMS Plicies & Prcedures Page 11 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

12 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Mrtgage Insurance Prgrams Overview This sectin describes the different lan prgrams available fr FHA financing. Ntes: The lan prgrams are limited t primary residences nly. The sectin numbers thrughut this sectin are references t the sectin f the Natinal Husing Act authrizing the prgram. FHA Prgrams Sectins f the Act Descriptin 203(b) 234(c) Basic 1 4 Family Hme Mrtgage Insurance Mrtgage Insurance fr Cndminium Units 251 Adjustable Rate Mrtgages Sectin 203(b) Hme Mrtgage Insurance Sectin 203(b) is used t finance the fllwing transactins: Existing ne t fur- units Prpsed husing New cnstructin husing - See the FHA Prperty Types and Appraisal Dcumentatin and Review sectin fr restrictins n maximum financing fr new cnstructin. Requirements fr Sectin 203(b) Prgram Up-Frnt MIP and Mnthly/Annual MIP apply. The Up-Frnt MIP premium may be financed in the mrtgage. The Mnthly/Annual premium is paid as part f the mnthly mrtgage payment. The mnthly MIP will be canceled when the lan is amrtized dwn t 78% LTV prvided the brrwer has been paying the mnthly mrtgage insurance premium fr at least five years. A refund is based n a three-year schedule and nly applies when the lan refinances t anther FHA lan. If the lan is refinanced t a cnventinal r VA lan r if the lan is paid ff thrugh the sale f the prperty, the brrwer is nt eligible t a refund. The mrtgage amunt may be runded dwn t the nearest $1.00. CMS Plicies & Prcedures Page 12 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

13 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Sectin 234(c) Mrtgage Insurance fr Cndminium Units Sectin 234(c) prvides insurance fr lans fr lan transactins in cndminium prjects. Requirements Up-Frnt MIP and Mnthly/Annual MIP apply. The Up-Frnt MIP premium may be financed int the mrtgage. The Mnthly/Annual premium is paid by the brrwer as part f the mnthly mrtgage payment Up-Frnt MIP and mnthly premium is calculated the same as Sectin 203(b) lans. The terminatin guidelines are the same as Sectin 203(b) lans. The mnthly MIP will be canceled when the lan is amrtized dwn t 78% LTV prvided the brrwer has been paying the mnthly mrtgage insurance premium fr at least five years. Refund f the Up-Frnt MIP paid at clsing will be the same as Sectin 203(b) lans. The refund is based n a three-year schedule and nly applies when the lan refinances t anther FHA lan. If the lan is refinanced t a cnventinal r VA lan r if the lan is paid ff thrugh the sale f the prperty, the brrwer is nt eligible t a refund. Calculatins t determine maximum mrtgage are the same thse fr Sectin 203(b). The mrtgage amunt may be runded dwn t the nearest $1.00. Sectin 251 Adjustable Rate Mrtgages Sectin 251 prvides insurance fr lans that are subject t variable rates. The brrwers are required t sign and acknwledge the infrmatin n the ARM disclsure frm at the time f applicatin. Requirements Up-Frnt MIP and Mnthly/Annual MIP apply. The Up-Frnt MIP premium may be financed int the mrtgage. The Mnthly/Annual premium is paid by the brrwer as part f the mnthly mrtgage payment. Sectin 251 is used in cnjunctin with Sectin 203(b). (i.e., 203(b)/251 r 234(c)/ 251). Calculatins t determine maximum mrtgage are the same as thse fr Sectin 203(b). The mrtgage amunt may be runded dwn t the nearest $1.00. CMS Plicies & Prcedures Page 13 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

14 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Autmated Data Prcessing (ADP) Cde Descriptin The Suffix/ADP Cde identifies a specific sectin f the Husing Act that applies t a lan insurance prgram. This cde breaks dwn a prgram by its features, such as, financing type, lan amunt, prperty type, r whether HUD r the lender wh will perfrm the underwriting review will issue a final decisin. FHA uses this cde when an apprpriate insurance fund needs a case number assigned. The ADP Cde is placed after the case number n all required frms. ADP Cdes beginning with the number 7 indicate that CMS will underwrite and issue final apprval n the lan. FHA Sectin f the Act Chart Suffix/ADP Cde Prgram Descriptin ADP Cde Sectin f the Act Standard FHA prgram Buydwn Cndminium With Buydwn Adjustable Rate Mrtgage With Cndminium (b) 203(b) 234(c) 203(b) / (c) / 251 CMS Plicies & Prcedures Page 14 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

15 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Autmated Data Prcessing (ADP) Cde (cntinued) Descriptin (cntinued) Determining the ADP Cde Direct When t Use Endrsement ADP Cde Fixed Rate Mrtgage prcessed under regular FHA prgram Sectin 203(b) A CMS Direct Endrsement Underwriter will issue Final Apprval Adjustable Rate Mrtgage CMS will issue Final Apprval Adjustable Rate Mrtgage prcessed under Sectin 234(c) The subject prperty is a unit in a cndminium CMS will issue Final Apprval Fixed Rate Mrtgage prcessed under Sectin 234(c) The subject prperty is a unit in a cndminium CMS will issue Final Apprval Fixed Rate Mrtgage prcessed with an Interest Rate Buydwn Fixed Rate Mrtgage prcessed under Sectin 203(b) The brrwer is a HUD emplyee HUD must underwrite and issue Final Apprval befre clsing Adjustable Rate Mrtgage The brrwer is a HUD emplyee HUD must underwrite and issue Final Apprval befre clsing Adjustable Rate Mrtgage prcessed under Sectin 234(c) The subject prperty is a unit in a cndminium The brrwer is a HUD emplyee HUD must underwrite and issue Final Apprval befre clsing Fixed Rate Mrtgage prcessed under Sectin 234(c) The subject prperty is a unit in a cndminium The brrwer is a HUD emplyee HUD must underwrite and issue Final Apprval befre clsing CMS Plicies & Prcedures Page 15 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

16 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 FHA Insured Mrtgages fr HUD Emplyees Overview The jurisdictinal Hme Ownership Center (HOC) must prcess all applicatins made by HUD emplyees r by a member f a HUD emplyee husehld. Underwriting HUD Emplyee Lans CMS can underwrite the lan but cannt issue a decisin. The lan must be submitted t the Hme Ownership Center (HOC) fr prir apprval prcessing. May fllw the autmated underwriting decisin and dcumentatin requirements. The case number must be rdered via the FHA Cnnectin as "HUD Prcessed" by entering "203" as the Sectin f the Act. CMS must submit a cpy package f the credit file including the appraisal t the apprpriate Hme Ownership Center in a brightly clred binder clearly marked HUD EMPLOYEE LOAN t the attentin f the prcessing and Underwriting Divisin Directr. D nt send the riginal underwriting lan file. HUD will nt return the package. Cpies must be stamped as "true and certified" cpies f the riginals. CMS is the nly party that may cntact the Hme Ownership Center t discuss. CMS Plicies & Prcedures Page 16 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

17 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Prperty Dispsitin (Sale f HUD Owned Prperties) Overview Financing f a HUD wned prperty is permitted fr primary residences. The sales cntract fr HUD wned prperties must be cmpleted n Frm HUD The first blck in item 4 f the sales cntract, as well as the blck fr the apprpriate FHA prgram will be checked by HUD. The infrmatin in Blck 4 must be cmpleted fr the prperty t be eligible fr FHA insured financing. A new FHA case number must be issued. The sales cntract will indicate the specific number f days the brrwer has until clsing (usually between 30 and 60). See the Instructins fr Sales Cntract dcument n the HUD website fr instructins fr cmpletin f HUD frm 9548 Sales Cntract. Appraisal Requirements Existing HUD Appraisal A new appraisal is usually nt required n HUD REO prperties. T request a cpy f the riginal as is appraisal, including the Prperty Cnditin Reprt that has been already cmpleted, cntact the Marketing and Management (M&M) cntractr whse name appears n the sales cntract. The appraisal btained frm the M&M cntractr shuld be n the standard applicable specific appraisal reprting frm with all applicable addenda including specific REO addenda and frms cmpleted by the appraiser and meet minimum prperty requirements. See the FHA Prperty Types and Appraisal Dcumentatin and Review sectin fr infrmatin n the minimum prperty requirements. A standard FHA appraisal package is required fr all REO prperty appraisals and must include the fllwing: Cmplete applicable prperty specific appraisal reprting frm. All required exhibits. A cpy f the Prperty Cnditin Reprt (PCR). Fr Yur Prtectin Get a Hme Inspectin. Radn Gas and Mld Ntice and Release Agreement HUD 9548E - must be included fr all single family hme REO transactins). A new appraisal may never be rdered because the sales price is higher than the value. See the FHA Prperty Types and Appraisal Dcumentatin and Review sectin fr Age f Appraisal and Updated Appraisal Requirements. CMS Plicies & Prcedures Page 17 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

18 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Prperty Dispsitin (Sale f HUD Owned Prperties) (cntinued) Appraisal Requirements (cntinued) Ordering A New Appraisal If a new appraisal must be rdered, the fllwing requirements apply: An apprved FHA appraiser must cmplete the appraisal as is. If the Updated Appraisal results in a lwer value f the prperty, the brrwers may prceed with the transactin with n adjustment made t the sales price. An additinal cash investment fr the difference between the sales price and the appraised value must be prvided by the brrwers. The purchase ffer may be withdrawn if the brrwer chses nt t prvide the additinal funds. The sales price will nt be adjusted if the Updated Appraisal results in a higher value. The mrtgage amunt will be based upn the value established by the Updated Appraisal. The mrtgage amunt cannt exceed the cntract sales price. Seller Cntributins Requirements HUD may ffer a seller cntributin tward the brrwer s clsing csts and prepaid expenses. The amunt f any cntributin will be n Line 5 f the sales cntract (Frm HUD-9548). The amunt f the seller cntributin must nt exceed the actual amunt f clsing csts and prepaid expenses. If the amunt f the seller cntributin exceeds the actual ttal amunt at clsing, the brrwer may nt receive cash back. Depending n the amunt f clsing csts paid by HUD, the maximum mrtgage amunt may have t be reduced in rder fr the brrwer t meet the minimum cash investment required. CMS must determine where t apply the HUD clsing cst assistance and perfrm any additinal calculatins required. If further calculatin is required, standard Sectin 203(b) prcedures apply. HUD autmatically pays the fllwing clsing csts: Brker Sale's Cmmissin fr Brad Listing Brker (6b f cntract) Prrating f prperty taxes and any special assessments such as Hme Owners Assciatin fees and utility bills Cndminium r Hme Owners Assciatin transfer fees Cst t prvide cndminium dcuments t the purchaser Settlement r Clsing fee Recrding fees CMS Plicies & Prcedures Page 18 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

19 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Seller Cntributins (cntinued) Requirements (cntinued) When cmpleting the cntract, the purchasers may specify a dllar amunt n Line 5 f Frm HUD-9548, which they expect HUD t pay twards financing and clsing csts. The amunt that HUD will actually pay cannt exceed a maximum f 3.5% f the purchase price. The actual amunt t be paid will be decided by the HOC REO Directr and any changes will be indicated n the executed cntract when it is returned t the purchasers. At time f clsing, HUD pays the lesser f the amunt indicated in Line 5 r the actual csts f the items specified. Any funds remaining after allwable clsing csts have been paid will nt be credited t the purchasers at clsing. Sales cmmissin fr the selling brker will be paid by HUD, nly if indicated n Line 6a f the sales cntract. Nn-allwable FHA clsing csts may nt be charged t the brrwer. Seller cntributins may still be used t cver nn-allwable clsing csts. The fllwing is a list f allwable clsing csts that HUD may pay at clsing if there are sufficient funds n Line 5 f the sales cntract t cver the expenses. Up t $20 fr a credit reprt Fld Certificatin nly if the prperty is in a fld plain New appraisal if the HUD appraisal expired prir t the sales cntract executin Hme Inspectin Fee including testing fr lead based paint, radn and mld Up t 3% in Discunt Pints t buy dwn the rate, with certificatin frm the lender Prepaid expenses and escrw items fr wner ccupant purchasers nly Recrding and/r transfer taxes if the charges are impsed n the purchaser. If the charges are impsed n the seller, HUD will nt pay Survey, if required by CMS investr Title Insurance Cverage fr CMS investr and fr the Owner Upn acceptance f the cntract, HUD returns the executed cpy f the sales agreement t the brker fr delivery t the purchaser. CMS Plicies & Prcedures Page 19 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

20 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 FHA Case Numbers Assigning the FHA Case Numbers / Sectins f the ACT / ADP Cdes FHA maintains prcessing and underwriting centers natinwide, called Hme Ownership Centers (HOC). Each HOC has jurisdictin ver several states and therefre ver several HUD Field Offices. Each FHA Field Office is assigned a threedigit identificatin number. Case numbers are assigned t prperties, nt t brrwers. Full FHA case numbers are made up f the fllwing digits: The first three digits f an FHA Case Number identify the field ffice in whse jurisdictin the prperty is lcated. The next seven digits are the numbers assigned by the Hme Ownership Center t the prperty. After the seven digits, there is a three digit Suffix r Autmated Data Prcessing (ADP) Cde. The Suffix/ADP Cde identifies a specific sectin f the Husing Act that applies t a Lan insurance prgram. This cde breaks dwn a prgram by its features, such as, financing type, Lan amunt, prperty type r whether HUD r the lender will perfrm the underwriting review and issue a final decisin. FHA uses this cde when they need t assign cases t the apprpriate insurance fund. The ADP Cde is placed after the case number n all required frms. ADP Cdes beginning with the number 7 indicate the underwriting will be cmpleted and final apprval will be issued by a Direct Endrsement lender (i.e., CMS). The case number fr each lan must be entered n all required lan dcuments. The suffix r ADP cde must be entered n the Case Number Assignment Screen in the FHA Cnnectin when rdering FHA case numbers. CMS Plicies & Prcedures Page 20 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

21 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 FHA Cnnectin Overview The FHA Cnnectin is HUD's interactive Internet System prviding apprved Federal Husing Administratin (FHA) lenders with real-time access t ver 60 Single Family Originatin and servicing Lan prcessing functins. All prcesses relating t the riginatin and insurance f FHA mrtgages must be cmpleted in the FHA Cnnectin. Originatin Functins in FHA Cnnectin Belw is a quick guide thrugh the riginatins functins available in the FHA Cnnectin. Nte: The Single Family Originatin Menu ptin cntains all f the primary screens invlved in the Lan riginatin prcess. Single Family Lan Prcessing Steps and Infrmatin Resurces CASE PROCESSING MENU Case Number Assignment Appraisal Lgging Insurance Applicatin Establish a New Case Update an Existing Case Hlds Tracking INFORMATION ON CASE PROCESSING FUNCTIONS LISTED BELOW: 203k Case Clse-Out Thrugh Refinance Credit Query 203k Case Clse-Out Appraiser Reassignment Brrwer/Address Change CAIVRS Authrizatin Inspectr Assignment MIC/NOR List Mrtgage Credit Reject Mrtgage Insurance Certificate Refinance Authrizatin Refinance Credit Query FHA APPROVAL LISTS MENU (all functins except Underwriter Registry see its link belw) 203k Cnsultants ADP Cdes ADP Cde Selectin Appraiser Selectin by Lender Appraisers Case Number Prefixes Cndminiums Distributin f Appraisals Selectin GSA Lists ORIGINATION REPORTS MENU Mrtgagee Perfrmance Reprt Retrieve Originatin Reprts Inspectrs Limited Denial f Participatin Mrtgage Limits Nn-Prfits Planned Unit Develpments (PUD) Prgram ID Cdes Underwriter Registry Underwriters Zip Cdes Request Originatin Reprts CMS Plicies & Prcedures Page 21 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

22 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 FHA Cnnectin (cntinued) Originatin Functins in FHA Cnnectin (cntinued) UPFRONT PREMIUM COLLECTION MENU Message Bard Case Master Summary Payment Details Case Histry Refund Details Refinance Exceptin Penalties Due List f Unendrsed Cases Disbursed Refunds Reprts CMS Plicies & Prcedures Page 22 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

23 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Case Number Assignment, Cancellatin, and Reinstatement Case Prcessing Menu The screens necessary t prcess an FHA case frm initial applicatin thrugh endrsement are included in the Case Prcessing Menu. Case Number Assignment The Case Number Assignment screen allws fr the establishment f a new case, fr the updating f an existing case fr the mnitring f any Lans in HUD Hlds- Tracking. Fr detailed infrmatin regarding the screens in FHA Cnnectin, see the FHA Cnnectin Guide. Manual Case Number Cancellatin An FHA case number may be canceled t clse utstanding files if ne f the fllwing applies: An appraisal has nt been cmpleted and the brrwer will nt clse the lan as an FHA lan. The FHA mrtgage insurance will nt be sught. The appraisal has already expired. A cancellatin request, stating the reasn fr cancellatin, must be sent via t the apprpriate HOC. Each cancellatin request must be n cmpany letterhead and include the fllwing: Signature f a lender representative. Case number f the case t cancel. Brrwer s name and the address f the prperty. Reasn fr the cancellatin f the case. Requestr s name, telephne number, and 10-digit lender ID. Indicate the fllwing: Whether the appraisal has been cmpleted. The date that the appraisal was perfrmed. The persn that perfrmed the appraisal. Nte: Nt all reasns fr canceling a case are viewed by the HOCs as being valid. The HOC makes a determinatin whether r nt it is apprpriate t cancel the case. See the FHA Hme Ownership Center (HOC) sectin belw fr infrmatin n the e- mail address t use when sending the cancellatin request. CMS Plicies & Prcedures Page 23 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

24 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Case Number Assignment, Cancellatin, and Reinstatement (cntinued) Autmatic Case Number Cancellatin by the Systems An uninsured case number where there has been n activity fr 6 mnths after the Last Actin taken n the lan/case will be canceled by FHA's systems (FHAC/CHUMS) unless ne f the fllwing actins have ccurred: An appraisal update has been entered fr the lan. The Upfrnt Mrtgage Insurance Premium (UFMIP) has been received. The Last Actin date is indicated in Case Query Results screen in FHA Cnnectin and includes any f the fllwing reasns: Case Number assigned date Appraisal infrmatin entered (Appraisal Lgging) Firm Cmmitment issued by FHA Insurance applicatin received date and subsequent updates Ntice f Return (NOR) and resubmissins fr insurance Updates t brrwers names and/r prperty addresses d nt register as a Last Actin. Fr example, updating the number f brrwers n the lan des nt reset the 6 mnths time frame fr autmatic cancellatin. FHA Cnnectin issues a reprt that lists the case numbers that will be autmatically canceled in the fllwing mnth. Case Number Reinstatement If a case number has been canceled and FHA insurance will be pursued, a request, requesting that the case number be reinstated t an active status, must be faxed t the apprpriate HOC. Case numbers that have been autmatically canceled, including case numbers fr cndminium units, will nt be reinstated unless ne f the fllwing ccurs: The Lender prvides evidence that the subject lan clsed prir t the cancellatin f the case number, such as a HUD-1 Settlement Statement. The Lender prvides evidence that nt reinstating the case number causes an undue hardship t the brrwer that is unrelated t recent changes t premiums and underwriting requirements. CMS Plicies & Prcedures Page 24 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

25 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Case Number Assignment, Cancellatin, and Reinstatement (cntinued) Case Number Cancellatin fr Lans Eligible fr Higher Cunty Lan Limits T be eligible fr higher cunty lan limits effective Nvember 18, 2011, it must be cnfirmed that lans meet the fllwing requirements befre canceling and requesting a new FHA case number: The lan must be fr the same brrwer and prperty. The lan must nt have clsed. Fllw the prcess belw fr canceling and rerdering an FHA case number fr eligible lans with higher cunty lan limits: Send an t the jurisdictinal Hmewnership Center with the fllwing infrmatin: Subject Line Include the fllwing: Case Number Cancellatin/<FHA Case Number t be Canceled> Bdy Include the Lender s name, phne number, address, cntact name, and include that the reasn fr the cancellatin is that the brrwer is nw eligible fr a higher cunty lan limit. See the FHA Hme Ownership Center (HOC) sectin belw fr infrmatin n the address t use when sending the cancellatin request. Update the lan file dcumentatin with the change in the lan amunt. FHA Hme Ownership Center (HOC) Hme Ownership Centers FHA has cnslidated its many field ffices int centralized prcessing centers, referred t as Hme Ownership Centers r HOCs. Each HOC is respnsible fr several states and has standardized plicies and prcedures fr all states in their jurisdictin. The fur Hme Ownership Centers and the states they supprt are: Atlanta HOC /ATLInsurance&Underwriting@hud.gv Alabama, Flrida Gergia, Illinis, Indiana, Kentucky, Mississippi, Nrth Carlina, Puert Ric, Suth Carlina, Tennessee Denver HOC /denhcinsure@hud.gv Arkansas, Clrad, Iwa, Kansas, Luisiana, Minnesta, Mntana, Missuri, Nebraska, New Mexic, Nrth Dakta, Oklahma, Suth Dakta, Texas, Utah, Wiscnsin, Wyming Philadelphia HOC /PHOCInsure@hud.gv Cnnecticut, Delaware, District OF Clumbia, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey New Yrk, Ohi, Pennsylvania, Rhde Island, Vermnt, Virginia, West Virginia. Santa Ana /snahcinsure@hud.gv Alaska, Arizna, Califrnia, Guam, Hawaii, Idah, Nevada, Oregn, Washingtn CMS Plicies & Prcedures Page 25 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

26 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 FHA LOAN ELIGIBILITY Overview This sectin prvides eligibility standards that all apply t all FHA lan prgrams. See the HUD Handbk Rev 5 fr mre infrmatin. Brkers must be apprved by CMS t riginate, underwrite, and deliver FHA prductin. LDP and GSA Prcurement/Nn-Prcurement Requirements Any brrwers wh have been suspended, debarred, r therwise excluded frm participatin in HUD prgrams are nt eligible fr a FHA insured mrtgage. The FHA's Limited Denial f Participatin (LDP) List and the gvernment-wide General Services Administratin's (GSA) List f Parties Excluded frm Federal Prcurement r Nn- Prcurement Prgrams must be examined. The review f these lists must be dcumented n the FHA Lan Underwriting and Transmittal Summary Frm HUD LT. All parties t the transactin must be verified against the lists, including the fllwing: Brrwers Sellers Selling and Listing Real Estate Agents Lan Officers Appraisers All ther licensed prfessinals cntracted t prvide certificatins fr the transactin (wd infestatin and mechanical certificatins such as termite cmpanies, heating, plumbing, air cnditining, rfing and electrical cmpanies). If any parties appear n either list, the lan is nt eligible fr mrtgage insurance. An exceptin is made when a seller appears n the GSA list and the prperty being sld is the seller's principal residence. Bth LDP and GSA sites can be accessed thrugh FHA Cnnectin r thrugh the links belw: FHA LDP: FHA GSA: CMS Plicies & Prcedures Page 26 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

27 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 LDP and GSA Prcurement/Nn-Prcurement (cntinued) Requirements (cntinued) If any party t the transactin appears n either list, the fllwing must ccur: It must be verified that the persn n the list is the same persn in the transactin. If evidence can be prvided prving that he r she is nt the same persn listed, the prcess may cntinue. The fllwing are examples acceptable dcumentatin: Evidence f residency fr the brrwer fr the past seven years t verify brrwer has nt lived at the address listed n the LDP r GSA. Evidence that the brrwer's full name differs frm the name n the list (e.g., Dcument brrwer has a different middle initial). If the persn listed is the same persn in the transactin, then that persn must be remved frm the transactin. If nne f the abve can be verified, cntact the FHA reginal ffice fr directin n hw t prceed. Unifrm Residential Lan Applicatin Lan Applicatin Requirements The lan applicatin submitted fr underwriting must be reviewed during the underwriting prcess t ensure it is cmplete: A full tw-year histry f emplyment and residency is required (unless therwise exempted by the lan prgram) and all persnal infrmatin fr each brrwer (scial security number, date f birth, address, and educatin) must be cmplete. All declaratin questins must be marked as well as whether the applicatin was taken face-t-face, by telephne, r by mail. All applicatins must be signed by the brrwers. The interviewer's name and emplyer must be cmpleted in all cases. The final applicatin fr clsing must adhere t the requirements abve, including the brrwer's cmplete and accurate financial infrmatin relied upn by the underwriter, and the applicatin must be signed and dated by all brrwers. The final applicatin must include all debt incurred during the applicatin prcess and thrugh lan clsing f the mrtgage. During the underwriting prcess, all transactins must be reviewed fr reasnability, including the feasibility f ccupancy claims and the verall financial picture f the brrwers. An adequate explanatin must be btained and dcumented in the lan file if cnflicting infrmatin exists between r within dcuments, All dcuments in the riginatin file relevant t underwriting must be reviewed fr signs f alteratin r fabricatin. An adequate explanatin must be btained and dcumented in the lan file if cnflicting infrmatin exists between r within dcuments. CMS Plicies & Prcedures Page 27 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

28 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Face-T-Face Interview Overview The brrwer must be given the ptin t cmplete the applicatin face-t-face fr all lan transactins. The file must be dcumented accrdingly t verify that this ptin was prvided if the applicant declines a face-t-face applicatin. The supprting dcumentatin must be cmpleted and maintained in all purchase files when the applicatin is cmpleted by mail, telephne, vide cnferencing, r electrnically. Identity and Scial Security Number Validatins Identity Verificatin The brrwer's identity must always be established even thugh a face-t-face interview is nt a requirement. The brrwer must prvide ne piece f acceptable identificatin t the clsing agent as evidence f his r her identity at clsing. The fllwing are acceptable frms f identificatin: Passprt (gvernment issued, valid, and unexpired) Resident Alien Card (gvernment issued, valid, and unexpired) Driving License (state issued, valid, and unexpired) State ID Card (state issued, valid, and unexpired) The brrwer's Identify Certificatin must be cmpleted and returned by the clsing agent. The frm must clearly indicate which f the abve dcumentatin was prvided as identificatin. CMS Plicies & Prcedures Page 28 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

29 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Identity and Scial Security Number Validatins (cntinued) Scial Security Number Validatin All brrwers must prvide evidence f a valid Scial Security number regardless f the Lan transactin. Acceptable dcumentatin fr Scial Security number includes the fllwing: Valid scial security card Current pay stub W-2 frm The Scial Security number prvided fr the brrwers will be validated by FHA prir t assigning a case number and prir t insurance endrsement. The validatin prcess is intended t recncile cnsistency with the numbering frmat, the brrwers names, and dates f birth. An verall cnfidence rating is returned based n the validatin prcess. A case number is assigned upn request. The fllwing day, the Hlds Tracking screen must be viewed in FHA Cnnectin t cnfirm the status f the validatin with the Scial Security Administratin. Any changes r crrectins t the brrwer's name, date f birth, r Scial Security number will require additinal validatin: If the system has matched the Scial Security number with the brrwer's name and date f birth, prceed as usual. If a match cannt be established, a Case Warning fr Scial Security number validatin will be placed n the case number. Subsequent attempts will be permitted t crrect infrmatin fr SSN validatin. The Case Warning fr SSN validatin will be remved if the revised data passes validatin. If the case cntinues t fail SSN validatin, a cpy f the brrwer's valid Scial Security card must be prvided t supprt the brrwer's identity. Written cnfirmatin must als be prvided frm the Scial Security Administratin that the Scial Security number is valid and belng t the brrwer. If a Case Warning is placed n the case number, it will appear n the Case Number Assignment Screen. Print and maintain the Hlds Tracking screen in the lan file. Prir t endrsing the Lan, the lcal FHA HOC will review the supprting dcumentatin and verify the brrwer's identificatin. The lan may nt be delivered t CMS investr while it is in Hlds Tracking status. CMS Plicies & Prcedures Page 29 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

30 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Occupancy Types Overview If a brrwer indicates that the subject prperty will be his r her primary residence, the viability f the brrwer ccupying the prperty must be assessed. Fr refinance transactins, the current address reprted n the Unifrm Residential Lan Applicatin (Fannie Mae frm 1003) must be cmpared t the addresses listed n the credit reprt. Any red flags r incnsistencies fund within the last 12 mnths must include a full explanatin. Primary Residence A primary residence is a prperty that is physically ccupied by the brrwer as his r her principal residence. A primary residence is a prperty that: The brrwer ccupies the prperty as his r her principal residence. The brrwer ccupies the prperty fr the majr part f the year. The lcatin is cnvenient t the brrwer's principal place f emplyment. The address is f recrd fr ne r mre f the fllwing: federal incme tax reprting, vter registratin, driver's license, ccupatinal licensing, etc. The brrwer must ccupy the prperty within 60 days f clsing. Brrwers can nly have ne FHA lan. Any persn individually r jintly wning a hme with an FHA insured mrtgage cannt purchase anther principal residence with an FHA lan except in the fllwing cases: Relcatin If the brrwer is relcating and establishing residency in anther lcatin and the new lcatin is nt within reasnable cmmuting distance frm the current primary residence, the brrwer is allwed t btain anther FHA mrtgage and is nt required t sell the existing prperty. Increase in Family Size The brrwer may be permitted t btain anther primary residence with an FHA mrtgage if the number f legal dependents increases where the present huse n lnger meets the family's needs. The brrwer must prvide satisfactry evidence f the increase in dependents and the prperty's failure t meet the family's needs. The brrwer must pay dwn the utstanding mrtgage balance n the present prperty t 75% LTV r less. A current residential appraisal must be used t determine LTV cmpliance. Tax assessments, market analyses by real estate brkers, etc. are nt acceptable prf f LTV cmpliance. Vacating a Jintly Owned Prperty If the brrwer is vacating a residence that will remain ccupied by a cbrrwer, the brrwer is permitted t btain anther FHA mrtgage. Nn-Occupying C-Brrwer A nn-ccupying c-brrwer n a prperty being purchased with an FHA mrtgage as a primary residence by ther family members may have a jint interest in that prperty was well as in a primary residence f their wn with an FHA mrtgage. In all ther cases, existing FHA mrtgages must be paid ff befre brrwers may btain anther FHA lan. CMS Plicies & Prcedures Page 30 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.

31 (FHA Lans) Mrtgage Lending Divisin Versin /03/12 Occupancy Types (cntinued) Occupancy f Frmer Investment Prperty r Secnd Hme Brrwers may refinance investment prperties r secnd hmes that they have reccupied as their primary residence. The fllwing table describes the maximum mrtgage amunt available fr Brrwers wh re-ccupy, as a primary ccupant, their frmer investment r secnd hme prperties: Occupancy f Frmer Investment Prperty/Secnd Hme 12 mnths r mre prir t the lan applicatin date f the refinancing mrtgage. Less than 12 mnths prir t the lan applicatin date f the refinancing mrtgage. Eligible Financing Maximum financing at the same level as an wner-ccupant. Restricted t Rate-and-Term refinancing nly (n streamline allwed). Maximum financing nt permitted. Refer t the prduct summary fr maximum LTV requirements. Brrwers, C-Brrwers, C-Signers, and Nn-Purchasing Spuses Brrwers, C-Brrwers And C-Signers A brrwer must be an individual. At the time f applicatin and at clsing, Title must be in the brrwer's name. Nn-individual legal entities such as crpratins, general partnerships, limited partnerships, real estate syndicatins, r investment trusts are nt eligible. Nn-applicant individuals may have an wnership interest in the security prperty (hld Title) withut signing the Nte, mrtgage/security deed. The nn-applicant is nt cnsidered a brrwer and will nt sign the lan applicatin as well as nne f his r her incme r assets be used fr lan qualificatin. A C-Signer is an individual wh des nt have wnership interest in the security prperty (des nt hld Title) and wh signs the lan applicatin and must be bligated n the Nte. A C-Signer des nt ccupy the subject prperty r sign the sales cntract. CMS Plicies & Prcedures Page 31 f 239 Prprietary and cnfidential. Fr Internal use nly. D nt distribute externally.