WHOLESALE FHA PRODUCT PROFILE

Transcription

1 Maximum LTV/CLTV & Minimum Credit Score Requirements LTV CLTV MIN CREDIT 2 INVESTOR CODES PURCHASE 96.50% 96.50% 580 I-12, I-15 1 NO CASH-OUT REFINANCE 97.75% 97.75% 580 I-12, I-15 1 CASH-OUT REFINANCE 85.00% 85.00% 580 I-12, I-15 1 Max financing 95% with score 2 High Balance requires 620 Credit Score Mortgage Insurance Premium Purchase, No Cash-out Refinance, Cash-out Refinance > 15 YEAR TERM 15 YEAR TERM Applies to Case Numbers assigned on or after June 3, 2013 for any base loan amount LTV UFMIP ANNUAL <78% 1.75% 0.45% Applies to Case Numbers assigned on or after April 1, 2013 for base loan amounts $625,000 LTV UFMIP ANNUAL LTV UFMIP ANNUAL >95% 1.75% 1.35% >90% 1.75% 0.70% 95% 1.75% 1.30% % 1.75% 0.45% Applies to Case Numbers assigned on or after April 1, 2013 for base loan amounts > $625,000 LTV UFMIP ANNUAL LTV UFMIP ANNUAL 95% 1.75% 1.55% >90% 1.75% 0.95% 95% 1.75% 1.50% % 1.75% 0.70% Applies to Case Numbers assigned on/after 06/11/2012 for Streamline Refis w/endorsements Prior to 05/31/2009 ONLY LTV UFMIP ANNUAL LTV UFMIP ANNUAL >95% 0.01% 0.55% 90%.01% 0.55% 95% 0.01% 0.55% 90%.01% 0.55% ProgGuideWS_FHA WS Rev. 07/29/2014 Page 1 of 10

2 Ability to Repay and Qualified Mortgage Rule (ATR/QM) Age of Documents Appraisal AUS Borrower Eligibility For loans subject to the ATR/QM rule, AFN will only fund loans that comply with the ATR/QM requirements. Clear itemization of fees and application of all credits that indicate who paid by and paid to is required on all loans NOTE: Investment properties which are for business purposes (borrower does not intend to occupy for more 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. Credit documents must be no more than 90 days old on the date the Note is signed, including credit reports and employment, income and assets documents. Preliminary Title Policies must be no more than 90 days old on the date the Note is signed. A full appraisal (e.g. from 1004 or equivalent, accompanied by form 1004 MC) is required for all submissions. 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. All loans must be submitted and approved through FHA TOTAL Scorecard. Loans may be manually underwritten, and must follow manual underwriting guidelines for DTI. Eligible US Citizens Permanent resident aliens with evidence of lawful residency Ineligible Foreign Nationals Non-permanent resident aliens Borrowers that have Government/Public Assistance Income (commonly known as Section 9) AFN does not allow Mortgage Credit Certificates (MCCs Inter Vivos Trusts) ProgGuideWS_FHA WS Rev. 07/29/2014 Page 2 of 10

3 Condominiums Co-borrowers Credit Must be located in an FHA approved condominium project HUD REOs do not require FHA condominium project approval Condominiums involved in minor litigation subject to DE approval and in accordance with FHA requirements If the LTV exceeds 75% and the co-borrower(s) will not occupy, the following restrictions apply: Subject must be 1 unit Co-borrower must be a close family member (child, parent, grandparent, spouse, adopted son or daughter, stepson or stepdaughter) If the co-borrower is unrelated or does not have longstanding relationship or if a parent is selling to a child, the parent cannot be the co-borrower unless the LTV is < 75% Each borrower must have at least one credit score to be eligible; non-traditional credit is not acceptable. Credit Derogatories 2 years must have elapsed since completion or discharge of Chapter 7 or Chapter 13 bankruptcy 3 years must have elapsed since completion of Foreclosure, Deed-In-Lieu, or Short Sale The wait period for Short Sale can be waived if the following conditions are met: o o o 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 Extenuating Circumstances: Reduced waiting periods for extenuating circumstances is not available on this product. Collections If total outstanding balance for all borrowers is < $2,000, capacity analysis is not required If total outstanding balance for all borrowers is $2,000 at the time of underwriting, lender must perform a capacity analysis, to include: (Continued) ProgGuideWS_FHA WS Rev. 07/29/2014 Page 3 of 10

4 Credit Derogatories (Continued) Collections (Continued) o Payment in full of collection accounts, prior to or at closing, along with documentation of acceptable source of funds, or o Borrower makes payment arrangements and provides proof of arrangement with payment included in the DTI, or o 5% of the outstanding balance of each collection account is included as monthly payment in DTI Non-borrowing spouse collection accounts ARE included in the cumulative balance C/P States only Medical collections and charge-offs are excluded Judgments 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 prior to credit approval. Borrowers may not prepay the scheduled payments to qualify. Disputed Accounts If the cumulative outstanding balance of disputed derogatory accounts is $1,000, then the TOTAL Scorecard decision requires a manual downgrade if the disputed accounts contain derogatory information. If the cumulative outstanding balance of disputed derogatory accounts is < $1,000, manual downgrade is not required. Disputed medical accounts and disputed derogatory accounts resulting from identity theft may be excluded from the $1,000 limit; identity theft documentation must be provided. o Disputed Derogatory Accounts are defined as: Disputed charge-off accounts Disputed collection accounts Disputed accounts with late payments in the last 24 months The following disputed non-derogatory accounts are not included in the $1,000 limit: o Disputed accounts with $0 balance o Disputed accounts with late payments 24 months or older o Disputed accounts that are current and paid as agreed ProgGuideWS_FHA WS Rev. 07/29/2014 Page 4 of 10

5 Documentation Type Downpayment Assistance Tax Transcripts Required for each borrower whose income is utilized as a source of repayment Must be provided for the number of years of income used to qualify the borrower Required to support income used to qualify the borrower If only W2 income used to qualify, the lender may obtain W2 transcripts as long as tax returns are not include in the loan file Generally, when documentation used to verify income is from the same calendar year as the tax transcript, the information must match exactly; however, if 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 recent filing) a copy of the IRS notice showing No record of return filed is required along with documented acknowledgment receipt (such as IRS officially stamped tax returns or evidence the return was electronically received) from the IRS and the previous 2 years tax transcripts 4506-T A 4506-T, signed at application and closing, is required for all transactions. TOTAL Scorecard AUS Accept Self-employed borrowers (ML ): P&L and Balance Sheet required if more than a calendar quarter has elapsed since the date of the most recent calendar or fiscal year-end tax return was filed by the borrower no exceptions Tax Returns If income used to qualify the borrower exceeds the 2-year average of tax returns, an audited P&L or signed tax returns obtained from the IRS is required. Downpayment Assistance programs are permitted in accordance with Agency Guidelines. The source of Downpayment Assistance must be a Government Entity Non-profits and Trade Unions are not permitted ProgGuideWS_FHA WS Rev. 07/29/2014 Page 5 of 10

6 Escrow Holdbacks Financing Concessions High Balance Escrow holdbacks are only done with HUD REO REPAIR ESCROWS (additional restrictions apply). Financing concessions cannot exceed 6% of the sales price. High balance loans require a 620 credit score. High Cost/High Priced AFN will not purchase High Cost Loans AFN will purchase Higher Priced Mortgage Loans (HPML) that comply with all federal and state regulations, and AFN guidelines require: o Validation of the borrower s ability to repay through verification of income, liabilities and assets in accordance with full documentation requirements o Establishment of an escrow account for taxes and insurance premiums on any transaction secured by a principal residence Identity of Interest Transaction (ML ) Income Loan Limits For the purpose of Identity of Interest transactions, the definition of family member includes: o Spouse o Child (including son, daughter, stepson, stepdaughter, foster child placed by authorized agency) o Parent or grandparent (including step-parent or grandparent and foster parent or grandparent) As stated in handbook HUD B.2.b., identity of interest transactions may result in a reduced maximum loan-to-value Full documentation is required, to include 1040 tax transcripts. FHA mortgage limits apply for all areas: (Refer to rate sheet for high balance price adjustments.) ProgGuideWS_FHA WS Rev. 07/29/2014 Page 6 of 10

7 Loan Purpose Mortgage Products, Eligible Mortgage Products, Ineligible Non Arm s Length Transaction Occupancy, Payment Shock Purchase Limited cash-out/rate and term refinance Proceeds can be used to: o Pay off a 1 st mortgage, regardless of age o 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 to the borrower, not to exceed $500 Cash-out 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 are not permitted Loans with < 6 months seasoning: Ineligible due to manual downgrade to TOTAL decision per TOTAL Scorecard User Guide Fixed Rate 10, 15, 20, 25 & 30 year terms (FHA High Balance only allowed on 25 & 30 yr terms) Section 203(b) Basic with ADP code 703 Section 234(c) Condominiums with ADP code 734 Streamline Refinance Refer to FHA Streamline Refinance Product Profile Any FHA program/mortgage type identified in the FHA handbook that are not specifically allowed in the Mortgage Products, Eligible above. Maximum 85% LTV/CLTV Owner-occupied Residences Only Payment Shock: o First-time Homebuyers (FTHB) = 100% o First-time Homebuyers (FTHB) with gift funds = 50% o Non-FTHB with gift funds = 100% If borrower is currently living RENT FREE loan is ineligible for I-15 ProgGuideWS_FHA WS Rev. 07/29/2014 Page 7 of 10

8 Property Types - Eligible Property Types - Ineligible Single Family Residence (attached or detached) PUDs Low-rise and High-rise condominiums (must be FHA eligible) 203k or Incomplete/Undistributed 203K Transaction 3 4 Unit Property Condotel/Hotel Condominium Cooperative Geodesic Dome Hawaii Lava Zone 1&2 Hawaiian Homeland HOPE Homeowners Program HUD 184 Indian Home Loan Guarantee Program Illinois Land Trust Leasehold Life Estates Loan to Non-profit Organization Manufactured Home (see FHA Manufactured Home Product Profile) MCC Military Impact Area Loans Mobile Home Property > 25 Acres Property in designated Coastal Barrier Property in Litigation Refinance of loans in Negative Equity Position (ML ) Reverse Mortgage Section 8 Housing Temporary Buydown Texas 50 (a)(6) Timeshare Unimproved Land Working Farm/Ranch ProgGuideWS_FHA WS Rev. 07/29/2014 Page 8 of 10

9 Property Flipping Policy (Property Sold Within 90 Days of Purchase) Qualifying Ratios A property flipping transaction is assessed using the 90-day timeline rule which is established by seller s date of acquisition as the date of settlement on the seller s purchase of that property and the execution of a sales contract to another party, restriction on re-sales occurring 90 days or less after acquisition HUD Prohibition on Property Flipping. The name of the owner on the title report must match the seller s name on the purchase contract If the seller is an entity (LLC, Trust, etc.), documentation showing legal registration of the entity such as articles of incorporation with the seal or business license is required o o The borrower(s) can have no affiliation with the entity of any kind The correspondent does not need to provide evidence to meet this requirement; AFN will investigate through a public records search and other resources The property cannot have been sold in the 12 months prior to the transaction in which the seller acquired the property The subject transaction cannot include a transfer of personal property or other special arrangement between buyer and seller The property must have been fairly and openly marketed through MLS, an auction or as a For Sale By Owner (FSBO) offering in a newspaper or other publication If property not listed on MLS, documentation such as the auction roster or FSBO advertisement must be included in the loan package If property value has increased from the prior sale by more than 20%, a second full appraisal is needed, along with a property inspection that is to be provided to the borrower prior to closing; the property inspector must have no interest in the property or relationship with the seller (refer to Federal Register 75 FR for details) Non arms-length transactions are prohibited Must contain a representative credit score of at least 680 Fixed Rate Qualify at the Note Rate 5/1 & 7/1 ARMS Qualify at the Note Rate Maximum 31%/43% ratio ProgGuideWS_FHA WS Rev. 07/29/2014 Page 9 of 10

10 Recently Listed Property States Restrictions Upfront Mortgage Insurance Premium (UFMIP) No Cash-out Transaction Allowed when the property is listed for sale; the property and the borrower must be eligible and qualified for 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. Texas 50(a)(6) Refinance Mortgages are prohibited. A copy of the FHA Connection Case Query evidencing receipt of the UFMIP must be included in the loan file at the time of delivery. ProgGuideWS_FHA WS Rev. 07/29/2014 Page 10 of 10