Matrix A. T300RP, T304RP, and T300JRP ONLY 1

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1 The Federal Housing Finance Agency (FHFA) Home Affordable Refinance Program (HARP) is designed to assist borrowers who have demonstrated an acceptable payment history on their existingfannie Mae mortgage loan, but may not have been able to refinance to obtain a lower payment or move to a more stable product. Only Rate/Term Refinance transactions are eligible (E.G. Limited cash-out refinance) paying off the existing first FannieMae mortgage, financing of closing costs, and no more than $250 cash back to borrower. FannieMae loan look up table: is provided for reference purposes only. DU will determine if the existing loan is eligible for the program. To be eligible for DU Refi Plus, the note date of the mortgage being refinanced need so be on or prior to May 31, This change is effective immediately for new or existing DU Refi Plus applications. FNMA B The updates reflected in this product guide are applicable to DU Refi Plus loan transactions with M.I. findings as stated in the Automated Underwriting topic and also meet all of the other M.I. requirements herein stated. PRIMARY RESIDENCE Rate & Term Refinance LTV w/ DU REFI PLUS APPROVE for findings on or after 9/12/ Property LTV w/o CLTV/HCLTV Fico score Max DTI Type Secondary Fin. 3 Secondary Fin. 1 Unit SFR or PUD >105% - 125% >105% - 125% Unlimited Unit SFR or PUD 105% 105% Unlimited 620 DU % 105% 110% 620 DU Matrix A SECOND HOME Rate & Term Refinance T300RP, T304RP, and T300JRP ONLY % 105% 110% 680 DU INVESTMENT PROPERTY- Rate & Term Refinance % 105% 110% 680 DU 1 Please refer to Matrix B for other eligible products 2 Eligible only with Accept/Eligible DU Refi Plus findingsexcept for specific B.P.M.I. transactions with certificates that can be transferred or modified by an approved M.I. company. Please refer to specific M.I. topic for details. 3 Subject to Geographic State Restrictions Note: while DU findings may indicate higher LTV/CLTV findings, these parameters must be met. 1 P a g e

2 MATRIX B T301RP, A341RP, A342RP, A343RP, T301JRP and A341JRP Products 1 PRIMARY RESIDENCE Rate & Term Refinance DU REFI PLUS APPROVE 2 Property LTV w/o LTV w/ CLTV/ Fico score Max DTI Type Secondary Fin. 3 Secondary Fin. HCLTV % 105% 110% 620 DU SECOND HOME Rate & Term Refinance 1 105% 105% 110% 680 DU INVESTMENT PROPERTY- Rate & Term Refinance % 105% 110% 680 DU 1 Please refer to Matrix A for 20 and 30 year Fixed Rate products 2 Eligible only with Accept/Eligible DU Refi Plus findingsexcept for specific B.P.M.I. transactions with certificates that can be transferred or modified by an approved M.I. company. Please refer to specific M.I. topic for details. 3 Subject to Geographic State Restrictions Note: while DU findings may indicate higher LTV/CLTV findings, these parameters must be met 2 P a g e

3 TOPIC Ability to Repay and Qualified Mortgage Rule Appraisal Property Valuations Require ARM Products CRITERIA Effective with all loan applications dated on or after January 10, 2014 (Retail) or applications received on or after January 10, 2014 (Wholesale), all loans must meet the Ability to Repay and Qualified Mortgage provision of the Dodd-Frank Act. Please refer to SPM Compliance for further details and/or questions DU Refi Plus Property Valuation Requirements: The lender must comply with the property fieldwork requirements issued by DU. For certain DU Refi Plus loan casefiles, DU offers to waive the requirement for property fieldwork. For loan casefiles that are not eligible for a DU Refi Plus property fieldwork waiver, DU will require an appraisal based on an interior and exterior inspection reported on the appropriate appraisal report form for the type of property being appraised. If the lender exercises a property fieldwork waiver, the lender is not responsible for the standard representations and warranties related to the value, marketability, and condition of the property. See B , DU Refi Plus and Refi Plus Eligibility (08/26/2014), for additional information related to appraisal representations and warranties. DU Refi Plus Property Fieldwork Waiver:When a lender exercises the DU Refi Plus property fieldwork waiver, Fannie Mae accepts the property value estimate submitted to DU as the market value for the subject property and as noted above, the lender is not required to make any representation or warranty as to value, marketability, or condition of the subject property. However, the lender continues to be required to represent and warrant that all of the information and data submitted to DU is complete and accurate. The property value the lender enters in DU may be based on: the lender s estimate of value, determined at the discretion of the lender, or the borrower s estimate of value. If DU does not offer a property fieldwork waiver, the lender must obtain an appraisal on the form specified in the DU Underwriting Findings report. Note: DU will issue a message on DU Refi Plus loan casefiles when the subject property address cannot be standardized, or Fannie Mae's databases do not have sufficient information about the property to determine eligibility for the DU Refi Plus property fieldwork waiver. This message will state that based on the address and other information available to DU, the property is not eligible for a DU Refi Plus property fieldwork waiver. A lender may only exercise the DU Refi Plus property fieldwork waiver if: the final submission of the loan casefile to DU resulted in a property fieldwork waiver offer, and the property fieldwork waiver offer is not more than four months old on the date of the note and the mortgage. Fannie Mae specifically does not warrant that the estimated value used in the determination of eligibility for the DU Refi Plus property fieldwork waiver represents the actual value of the subject property Margin: Libor Index: 2.25% Life Floor: The life floor will never be lower than the margin Index: Libor Index = the average of interbank offered rates for one year in U.S. dollar-denominated deposits in the London market (Libor) as published in The Wall Street Journal. 3 P a g e

4 Payment Adjustment Date: 1 st payment change date is the first month following the interest-rate adj. and every 12 mos. thereafter. Life Cap: 5/1, 7/1 & 10/1-5% over the Note Rate. Interest Rate Adjustment Cap and Date: o 5/1 ARM: Interest rate is fixed for the first 60 months. The maximum interest-rate adjustment at the first adjustment date is 5% maximum first-time adjustment. Thereafter the interest rate adjusts annually with a maximum interest-rate change of 2%, which will not cause deferred interest. o 7/1 ARM: Interest rate is fixed for the first 84 months. The maximum interest-rate adjustment at the first adjustment date is 5% maximum first-time adjustment. Thereafter the interest rate adjusts annually with a maximum interest-rate change of 2%, which will not cause deferred interest. o 10/1 ARM: Interest rate is fixed for the first 120 months. The maximum interest-rate adjustment at the first adjustment date is 5% maximum first-time adjustment. Thereafter the interest rate adjusts annually with a maximum interest-rate change of 2%, which will not cause deferred interest. Note: The interest rate must always be rounded to the nearest 1/8 th of 1% (0.125%) o Qualification: 5/1 ARMS qualify at the greater of Fully Indexed or Note Rate +2 %. 7/1 & 10/1 ARM: Qualify at the Note rate. ASSUMPTION Not allowed S 4 P a g e

5 AUTOMATED UW Borrower Benefit Requirement Approve/Eligible: ExpressLoanDU REFI PLUS A/E Finding is required. DU finding will state the following message: o This loan case file was underwritten according to the DU Refi Plus expanded eligibility guidelines offered on certain limited cash-out refinance loan case files where the borrower s existing loan is identified by DU as a Fannie Mae loan. This loan case file must be delivered with Special Feature Code 147. o Loans with >80% LTV requiring M.I: Certain loan transactions with existing B.P.M.I insurance from an SPM approved MI company may be eligible for financing. The DU finding will read: Fannie Mae s records indicate that the existing Fannie Mae loan being refinanced with this DU Refi Plus transaction contains the following mortgage insurance (MI) information MI Provider MI Coverage Obtained MI Certificate Number (Will state specific MI co) (Will indicate the % of insurance coverage) (Discloses cert. #) To be eligible for financing with existing B.P.M.I: ALL of the criteria listed in the M.I. topic must be met exactly as stated. The Loan Originator (LO) is responsible to obtain and validate certain information from the M.I. issuing company prior to submission (E.G. the DU findings will not indicate all of the necessary M.I. details). This specific information- as stated in the M.I. topic under Originator Responsibilities- must be provided in the submission package exactly as required. Exceptions to the policy requirements are not available. Please refer to M.I. topic for complete details and requirements. Accuracy of both the Borrower and Subject Address input is required. o DU matches Borrower(s) Social Security Number(s) with the FannieMae loan. o FannieMae guidelines for entering correct standardized property address (including applicable unit number) must be followed. LTV/CLTV/FICO requirements must be met as stated in applicable product matrix regardless if findings permit a higher LTV/CLTV. Please note that a loan may lose eligibility if the AUS is reran and there have been significant change (i.e. MI rescinded, current mortgage delinquent, etc. as both FHLMC & FNMA update their databases on a monthly basis) By selling a DU Refi Plus or Refi Plus mortgage loan to Fannie Mae, the lender represents and warrants that the borrower is receiving a benefit in the form of at least one of the following: a reduced monthly mortgage principal and interest payment, a more stable mortgage product, a reduction in the interest rate, or a reduction in the amortization term. The following table provides scenarios that meet the borrower benefit provision: The borrower benefit provision is met if... The amortization term is extended (for example, from 15 to 30 years) resulting in a reduction in the principal and interest payment. Note: An extension of the amortization term is not considered movement to a more stable product. The mortgage loan type changes from a fixed-rate to an ARM provided there is a reduction in the principal and interest payment. 5 P a g e

6 Note: Movement from a fixed-rate mortgage to an ARM is not considered a movement to a more stable mortgage product. Lenders are encouraged to provide fixed-rate mortgages to borrowers whenever possible. Fixed-rate mortgages are required if the LTV ratio exceeds 105%. The principal and interest payment is staying the same or increasing provided the borrower is moving to a shorter term mortgage or more stable mortgage product. Borrower Eligibility Borrower Eligibility: The following provides borrower eligibility requirements applicable to DU Refi Plus An existing borrower(s) may be removed from the new loan provided that at least one of the original borrower(s) is retained on the new loan. Borrower(s) may be added to the new loan, provided the existing borrower(s) is retained. Generally, the borrower(s) on the existing mortgage (or the current borrower(s) if the existing mortgage was assumed) must be identical to the borrower(s) on the new mortgage. However, an existing borrower may be removed from the new loan provided that at least one of the original borrower(s) is retained on the new loan and that one of the following conditions is met: The remaining borrower(s) meets the mortgage payment history requirements described in B , DU Refi Plus and Refi Plus Underwriting Considerations (05/27/2014), and provides evidence that he or she has been making the payments on the existing mortgage from his or her own funds for the most recent 12 months prior to the application of the new mortgage. This 12-month payment history must be on the existing mortgage, and may not be satisfied using multiple consecutive first mortgages; or The remaining borrower(s) may be qualified based on the eligibility and underwriting requirements applicable to Refi Plus loans with principal and interest increases > 20% (regardless of actual payment change). This includes, but is not limited to, a maximum total DTI ratio of 45%, a new credit report supporting a minimum credit score of 620, and documentation of income and assets required for closing. If the borrower is being removed due to death, evidence of the deceased borrower's death must be documented in the loan file. As a reminder, each person who has an ownership interest in the security property, even if the person s income is not used in qualifying for the mortgage loan, must sign the security instrument Benefit to the Borrower is required. o DU cannot determine if FannieMae requirements are met, therefore, the UW must represent and warrant that the borrower is receiving a benefit from refinancing as stated in FannieMae guidelines o Asset and income doc requirements apply payment increase is >20%. o Adding Borrowers: Permitted as long as one of the original Borrowers is retained on loan o Removing/Deleting Borrower: Permitted as long the existing Borrower(s) is retained Permanent Resident : o If the borrowers on new loan are the same as the borrowers on existing loan, no verification of residency status required o If the borrowers on new loan are not the same as the borrowers on existing loan are not the same, SPM residency policy applies Non-Permanent Resident: o If the borrowers on new loan are the same as the borrowers on existing loan, no verification of residency status required o If the borrowers on new loan are not the same as the borrowers on existing loan are not the same, SPM residency 6 P a g e

7 policy applies Cash Back Limitation Cash Reserves /Assets Borrower may receive cash back at closing $ Any excess cash representing the difference between the estimated and the actual payoff of the original loan plus closing costs and prepaid fees that is more than $250 must be applied as a principal curtailment to the new mortgage or a reduction in the actual loan amount. Fannie Mae policy B applies As per DU findings and DU Refi Plus documentation requirements. 7 P a g e

8 TOPIC Condo/PUD Approvals CREDIT ELIGIBILITY CRITERIA FOR DURP LOANS CRITERIA Condo or PUD project reviews: Not required. Limited Reps & Warrants: UW is required to represent and warrant: Property is not in a condominium hotel or motel or cooperative hotel or motel. Property is not in a houseboat project or a timeshare or segmented ownership project Insurance requirements are met If an appraisal report is obtained, and indicates the subject project consists of an in-complete conversion and/or there is a presence of a rental office for unconverted apt. units, the project will not be eligible for DU Refi Plus regardless of DU findings. Condo/PUD type: Condo type V and PUD type E must be selected and accurately reflected on 1008 DU will not apply FICO score requirement for DU Refi Plus: UW must ensure the min FICO scores are met for applicable Product Matrix o Previous SPM requirement for 0 x 30 day Mortgage late history in the past 12 months is hereby removed o Borrowers whom have applied for or received a loan modification may be eligible to refinance under DU Refi Plus o The standard waiting period & re-establishment of credit criteria following a bankruptcy, foreclosure, deed in lieu or Preforeclosure sale is being removed for DU Refi Plus loan casefile. DU will issue a message on loan casefiles for borrowers with significant derogatory credit letting the lender know that DU did identify the event and that the loan casefile would be eligible for delivery to FNMA, regardless of when the event occurred. o If DU is reading a short sale or foreclosure incorrectly, as of 9.1, the UW has the ability to override the DU and make the corrections in the Declarations section just like any regular DU 9.1 loan< Please refer to applicable DU Refi Plus guidelines DURP loan eligible: DU Refi Plus guidelines are posted in FannieMae sections B through B E-FannieMae website has also posted numerous FAQ s for DU Refi Plus and HARP /23/2013- Effective immediately FNMA revised the eligibility date to be based on the note date of the original loan, on or prior to May 31, 2009 for all new and existing applications. o All DURP requirements stated in product guide must be met including, but not limited to Acceptable DU Refi Plus and ExpressLoan findings, applicable MI messages, LTV/CLTV parameters, credit, income, appraisal and documentation criteria. o The new loan amount must meetrate/term Refinance (E.G. Limited cash-out refinance) criteria: ONLY paying off the existing first FannieMae mortgage, plus financing of closing costs, and no more than $250 cash back to borrower The UW must enter only the balance of the first mortgage being paid off with the new transaction on line d., Refinance of the Details of Transaction section of the loan application. This amount must match the balance of the mortgage being paid off, as shown in the liabilities section of the loan application. Escrow shortages, delinquent property taxes, delinquent HOA dues etc. may NOT be included in the loan amount DURP loan ineligible: o Any loan not meeting eligibility criteria herein stated o Loan products not specifically listed as being eligible, including but not limited to: 10 Year Fixed Rate, & 3/1 ARM o Loans secured by properties ineligible for SPM financing include, but not limited to: Florida Condo s, Coops, Manufactured Homes, etc. 8 P a g e

9 ESCROW Escrow waivers are not available. Standard SPM Escrow/Impound policy applies. WAIVERS Existing Eligible Mortgage Loan Types INCOME DOC REQUIREMENT. GEO RESTRICTIONS Mortgage loans with note dates prior to June 1, Jumbo-conforming mortgages and high-balance mortgage loans:the eligibility parameters for DU Refi Plus supersede those for the high-balance feature. The new loan may have a high-balance feature, subject to current loan limits Per DU findings and DU Refi Plus documentation requirements All income must be validated with processed #4506. An additional signed #4506 is required at closing Geographic restrictions may apply. Please refer to the Geographic Restrictions posted on SPM website. Higher Price Mortgage Loans HPML Income Documentati on Requirement with Payment Increases > 20%& HPML Because DU is unable to determine if a DU Refi Plus loan casefile is an HPML loan, it is the Lender s responsibility to make the determination, and comply in all respects with Regulation Z requirements for HPML loans as follows: Primary & 2 nd Homes ( Investment Properties are exempt from HPML) DU Approved/Eligible only No Manual UW Maximum DTI ratio of 45% Impounds Required (regardless of LTV) Prohibition on ARM loans with an initial fixed rate period of < 7 years (7/1 ARM eligible) Full Credit, Asset, and Income Documentation Full Income Documentation as noted below- Full Asset Documentation as follows: Full Property Appraisal Report(1004, 1073, 1025) as per property type- no reduced valuation tool No Appraisal Delivery Waivers allowed file must document full compliance with ECOA Appraisal Delivery Regulations effective 01/18/20014 Income Documentation Requirements All DU Refi Plus Loans, Refi Plus Loans with Payment Increases > 20%, and Refi Plus Higher-Priced Loans Type of Underwriting Loan Application All new mortgage loans originated under Refi Plus must be manually underwritten. A DU Refi Plus loan casefile may not be converted to a manually underwritten Refi Plus mortgage loan. A new executed Form 1003 or Form 1003(S) is required from the borrower(s) with all information 9 P a g e

10 completed including borrower income, employment, and assets. Payment History of the Existing Mortgage The existing mortgage must be current. The lender must determine that the borrower has not had any 30 day mortgage delinquencies on the existing mortgage in the most recent six-month period, and no more than one 30 day delinquency in months The loan file for the new mortgage must contain documented proof from the lender's servicing system (printed after the date of the borrower's new mortgage application and prior to the date of the new mortgage note) that evidences the payment history requirements have been met for the required 12 month period. Credit Score and Credit Report Requirements Payment change 20%: minimum credit score of 620 is required. Payment increase > 20%: minimum representative credit score of 620. A new merged credit report with credit scores is required. The representative credit score will be used for pricing purposes and to determine eligibility. Higher-Priced Loan Requirements If the lender does determine that under Regulation Z the loan is either a higher-priced mortgage loan or a higher-priced covered transaction, the loan must have a representative credit score of 620 or more and a debt-to-income ratio of 45% or less in order to be eligible for delivery to Fannie Mae. Lenders are not relieved of complying with Regulation Z by only adhering to the stricter representative credit score and debt-to-income ratio. The mortgage loan 10 P a g e

11 must comply in all respects with Regulation Z requirements for higher-priced mortgage loans and higher-priced covered transactions, including the underwriting and consumer protection requirements. Significant Derogatory Credit Events Lenders are not required to comply with the waiting period and re-establishment of credit requirements for significant derogatory credit events for Refi Plus loans or the payoff or satisfaction of a judgment identified on the credit report. In addition, Form 1003 or (1003(S)) VIII, Declarations a through f are not required to be reviewed or considered in the underwriting evaluation. Mortgage Modifications DTI Ratio A borrower who has applied for or received a loan modification is eligible to refinance under Refi Plus. Note the following: The borrower benefit provision (described above) must be met. The terms of the modified loan (trial or permanent) must be used for this comparison. If the borrower was previously in a trial period plan, but denied a permanent modification, the current terms of the loan must be used for this purpose. Borrower must have made 24 months paid as agreed according to the new terms. The borrower must meet the mortgage payment history requirements for Refi Plus measured by either contractual or modified payments, as applicable. Payment increase > 20%: maximum DTI ratio of 45%. 11 P a g e

12 Verification of Income Income source: at least one borrower must have a source of income from an eligible source, per the Eligible Income Sources listed in the Income Documentation Requirements table below. Verification of the borrower's employment or self-employment can be completed with a verbal VOE, or an other (nonemployment) income source must be documented. Payment increase > 20%: verification of all income sources and amounts in accordance with the Income Documentation Requirements table below. Verification of Assets Multiple Financed Properties for the Same Borrower Property Listing Requirements Request for Transcript of Tax Return (IRS Form Payment change 20%: verification of assets required to close is required. Payment increase > 20%: verification of assets to close if the borrower is required to bring funds to closing. The assets must be verified in accordance with the Asset Documentation Requirements table below. Lenders are required to investigate large deposits that appear on account statements. Proof of liquidation of assets is required. There are no limits on the number of financed properties the borrower may own. The additional eligibility requirements for borrowers with multiple financed properties in B2-2-03, Multiple Financed Properties for the Same Borrower (06/24/2014), do not apply. Special Feature Code 150 must not be delivered even if the Refi Plus mortgage loan otherwise meets the requirements of SFC 150. The lender does need to confirm the subject property is not currently listed for sale. Payment change 20%: borrowers are required to 12 P a g e

13 4506 T) complete and sign an IRS Form 4506 T. Payment change > 20%: each borrower (regardless of income source) must complete and sign a separate IRS Form 4506 T at or before closing. See B , Requirements and Uses of IRS Form 4506-T (07/30/2013), for additional information. Mortgage Note, Security Instrument A new mortgage note, security instrument, and applicable riders and addenda are required. Except as otherwise expressly provided under DU Refi Plus described herein, all other loan documentation requirements contained in this Selling Guide applicable to newly-originated mortgages apply Income Documentation Requirements All DU Refi Plus Loans with Payment Increases > 20%, and Refi Plus Higher-Priced Loans Income Type/Eligible Income Sources All Employment Income Documentation Requirement Verbal verification of employment See B , Verbal Verification of Employment (08/20/2013), for additional requirements. Base Pay (salary or hourly) Bonus and Overtime Income Commission Income One paystub Applies to primary employment, secondary employment (second job and multiple jobs), and seasonal income. One paystub or one year personal tax return Applies without regard to the percentage of commission earnings. 13 P a g e

14 Self-Employment One year personal tax return Applies to primary and secondary self-employment. Alimony or Child Support Employment-Related Assets as Qualifying Income Rental Income Copy of divorce decree, separation agreement, court order or equivalent documentation, and one month documentation of receipt. Lender must obtain standard documentation for this type of income as described in B , Other Sources of Income (05/27/2014). The maximum LTV, CLTV, HCLTV ratio and minimum credit score requirements are not applicable to DU Refi Plus or Refi Plus transactions. Lease or one year personal tax return (Form 1007 is not required) Applies to rental income from subject or other properties owned by the borrower. Retirement and Pension Social Security Temporary Leave Income One of the following: award letter, one year personal tax return, W-2 or 1099 form, or one month bank statement reflecting direct deposit. One of the following: award letter, one year personal tax return, Form SSA-1099, or one month bank statement reflecting direct deposit. Lender must receive: the borrower s written confirmation of his or her intent to return to work, and no evidence or information from the borrower's employer indicating that the borrower does not have the right to return to work after the leave period. Regardless of the date of return, the amount of the 14 P a g e

15 regular employment income the borrower received prior to the temporary leave must be used to qualify. All Other Income Types Automobile Allowance Boarder Income Capital Gains Income Disability Income Long-Term Foreign Income Foster-Care Income Interest and Dividends Income Mortgage Credit Certificates Mortgage Differential Payments Income Notes Receivable Income Public Assistance Income Royalty Payment Income Tip Income Trust Income Unemployment Benefits (seasonal or nonseasonal in nature) VA Benefits Income Lender must determine appropriate documentation. Examples include (but are not limited to): an award letter or equivalent documentation or agreement, one paystub or equivalent documentation, one year personal tax return, IRS 1099 Form, or one month bank statement reflecting direct deposit. Asset Documentation Requirements DU Refi Plus Loans with Payment Increases > 20% Asset Type Checking Accounts Savings Accounts Documentation Requirement One recent statement (monthly, quarterly, or annual) showing asset balance 15 P a g e

16 Certificates of Deposit Money Mark Accounts Stocks, Bonds, Mutual Funds Retirement Accounts Trust Accounts Secured Borrowed Funds Donations from Entities (Hardest Hit Fund) Gifts Ineligible New Mortgage Types Loan Purpose Loan Term MAX FINANCED The following are ineligible new mortgage loan types for DU Refi Plus and Refi Plus transactions: ARM loans with initial fixed periods of less than five years; HomeStyle Renovation mortgage loans prior to the completion of the property; MyCommunityMortgage loans; and mortgage loans with temporary interest rate buydowns, unless dated before July 1, 2009, and delivered to Fannie Mae prior to December 1, Loan Purpose: The standard limited cash-out refinance requirements are modified as follows for DU Refi Plus and Refi Plus loan transactions. All other guidelines for limited cash-out refinances continue to apply. See B , Limited Cash-Out Refinance Transactions (05/28/2013). DU Refi Plus and Refi Plus loans must be originated according to the following limited cash-out refinance requirements: The new loan amount can include: payoff of the unpaid principal balance on the existing first mortgage; the financing of the payment of closing costs, prepaid items, and points; cash back to the borrower in an amount of no more than $250. For DU Refi Plus, if the borrower is receiving more than $250 cash back, as reflected in the Details of Transaction section of the loan application, the loan casefile will not be underwritten as a DU Refi Plus transaction. Any excess funds at closing must be applied as a principal curtailment. See B , DU Refi Plus and Refi Plus Closing, Pricing, and Delivery (05/28/2013). Subordinate financing is permitted. See the Eligible Subordinate Financing section below for additional requirements. Loan Terms are only available as stated in the project header at the top of the page. There is no 25 year fixed rate term available. No Limit regardless of occupancy type as per DU Refi Plus guidelines 16 P a g e

17 PROPERTIES MAXIMUM LOAN AMOUNT Standard: Subject to standard Fannie Mae loan limits High Balance/Jumbo: Subject to current High Balance/ Jumbo loan limits regardless if original FNMA loan was originated at a higher loan amount that was permitted at that time. 17 P a g e

18 MORTGAGE INSURANCE (BPMI transfer/mod of M.I. cert) SPM will permit the assignment/transfer/modification of an existing Borrower Paid M.I. (BPMI) policy from the current loan to the new loan for transactions >80% LTV from SPM approved M.I. companies. Eligible M.I.: BPMI (monthly) Ineligible M.I.: Any type of M.I coverage LPMI, HPMI, financed or single paid premium or M.I. certifications from companies not deemed an SPM approved company will not be eligible. ALL of the criteria must be met exactly as stated herein. Exceptions to these policies are not available. Approved companies: The DU findings must identify the insuring company. It must be one of the specifically SPM approved M.I. companies: Either Radian, MGIC, Genworth, or (UGICfor loans in processprior to ) o New M.I. certification option is not available. o Only the existing M.I. company listed on the DU finding will be able to transfer or modify the existing M.I. cert Ineligible insuring M.I. companies: PMI, Triad and RMIC. UGIC will be an ineligible company for new loans after (Note: Essent is not participating in this program). M.I. DU findings: Must be received exactly as illustrated in the Automated Underwriting topic. o The DU findings will NOT indicate the type of M.I. present on the current loan: Prior to loan submission, the Originator is responsible to contact the individual company listed on the DU findings to ensure that the current policy consists of an eligible Borrower Paid (BPMI) as stated in the Originator s responsibility section outlined below. o Level of MI coverage stated in DU findings MI Coverage Obtained will be acceptable subject to the M.I. Company s confirmation as outlined in below Originator Responsibility requirements. (Refer to Automated Underwriter topic for example) Originator s Responsibilities: Requirements must be completed PRIOR to loan submission without exception: o Ensure the M.I. policy reflected on DU findings was issued by one of the SPM approved companies listed above. o Contact issuing M.I. company listed on DU findings and obtain/confirm all of the following required information: Existing policy is an active/valid, policy AND Coverage type consists of Borrower Paid Mortgage Insurance (BPMI) AND The BPMI policy is transferrable/eligible for modification AND Obtain the factors for first 10 years and factors for remaining term o Certify in the loan submission package that: M.I. Company was contacted and all required information was confirmed with the issuing M.I. Company. The Originator s cert must include the exact and complete information for all FOUR requirements stated above. DURP Loan Originator s Certification of MI Information form posted on Doc Library website under Submission/Doc Draw tab. o ExpressLoan must be ran with the M.I. company provided factors Note: The Mortgage Insurance company may deny the request to modify or assign/extent the coverage due to any of the following reasons: No active certificate Certificate cancelled for LTV drop Eligibility requirement stating one of the borrower s must be present on the current certificate Current MI certificate is reported as delinquent in a CAT 10 or greater MI company is not the current MI provider Approved M.I. contact information: 18 P a g e

19 Note: The individual company may have a different processes or requirements for disclosing this information. Any specific company s requirement posted herein is provided strictly as a courtesy and may be subject to their revisions or changes. o Radian: Customer Care #: o MGIC: Customer Service #: o Genworth: Genworth Action Center #: Continued on following page MORTGAGE INSURANCE (transfer/mo d of M.I. cert) NON- Occupant CO- BORROWERS Occupancy & Property Eligibility o UGI: Customer Quality Center: Signed 1003 or Third Party Authorization form (available on their website) is required Completed form or 1003 must be sent to: loanmods@ugcorp.com Website information: Note: UGI information is being retained as a courtesy for loans already in process prior to Premiums:The SPM approved MI companies listed above have the same process with regard to the MI premium transfer. o Monthly BPMI: For borrower-paid monthly premiums, the premium rate on the existing MI cert remains the same. The monthly payment will be based on the new loan amount. The new loan amount may be higher or lower than the original loan amount. Monthly gap coverage owed may be required to be collected at closing. State tax/assessment fees may apply and must also be collected at closing. MI cert must be accurately reviewed to ensure the loan is closed correctly. SPM personnel: must follow the individual M.I. company s procedure to ensure the cert will meet FannieMae requirements including, but not limited to: o If a change or update occurs on the loan file (E.G. the loan amount increases or decreases), the request form must be re-sent with the updated information. o Ensuring that the M.I approval document matches the information on the DU cert: Loan #, New Loan Amount, Borrower s Name, Property address, MI cert #, monthly payment (if applicable), amount and type of MI coverage Discrepancy in Premium Coverage: If the M.I. Company confirms different coverage than reported in DU, Fannie Mae has confirmed that the coverage currently in effect will be the accurate MI coverage. Therefore, the MI coverage per the MI cert should be used to close the loan. o Any amount due at closing must be taken into consideration Non-occupant co-borrowers are permitted The following occupancy and property types are eligible for securing a DU Refi Plus or Refi Plus mortgage loan: one- to four-unit principal residences, one-unit second homes, and one- to four-unit investment properties. All property types are eligible including detached, attached, manufactured housing, and units in a PUD, condo, or co-op 19 P a g e

20 project. See Leasehold Estates Eligibility (below) for leasehold estate requirements and B , DU Refi Plus and Refi Plus Property Valuation and Project Standards (09/24/2013) for project standards requirements. The existing mortgage and the new DU Refi Plus or Refi Plus mortgage loan do not have to represent the same occupancy. The occupancy of the subject property may have changed by the time of the new mortgage transaction. Because the loan represents existing Fannie Mae risk, there is no requirement that the occupancy has stayed the same. PREPAY There are no prepayment penalties PENALTY SUBORDINAT E FINANCING Texas Section 50(a)(6) Mortgage The following policies apply to subordinate financing: New subordinate financing is only permitted if it replaces existing subordinate financing. Existing subordinate financing may not be satisfied with the proceeds of the new DU Refi Plus or Refi Plus mortgage loan. Existing subordinate financing can remain in place as long as it is resubordinated to the new DU Refi Plus or Refi Plus mortgage loan. Existing subordinate financing may be simultaneously refinanced as long as the new subordinate lien loan amount does not exceed the existing unpaid principal balance. Lenders must comply with the following provisions outlined in B , Subordinate Financing (08/20/2013), related to any subordinate financing for DU Refi Plus and Refi Plus transactions: Subordinate Financing Requirements, and Resubordination Requirements for Refinance Transactions. The remaining provisions related to existing subordinate financing, including acceptable subordinate financing types, do not apply to DU Refi Plus and Refi Plus transactions If the existing loan was originated as a Texas Section 50(a)(6) mortgage, then the new DU Refi Plus or Refi Plus loan will be a Texas Section 50(a)(6) mortgage and must meet the most restrictive of the Texas Section 50(a)(6) mortgage requirements, per the Selling Guide or the DU Refi Plus and Refi Plus requirements, as applicable. The only exceptions to this requirement are that a minimum credit score does not apply (unless the monthly principal and interest payment is increasing more than 20%) and the DU Refi Plus and Refi Plus loan-level price adjustments are applicable. All Texas Section 50(a)(6) mortgage requirements apply, including the following, which may be different than the standard DU Refi Plus or Refi Plus requirements: lender must be approved to deliver Texas 50(a)(6) mortgages; maximum 80% LTV and CLTV ratio; minimum 12 months seasoning; one-unit principal residences only; a new full appraisal is required Uniform Residential Appraisal Report (Form 1004), Manufactured Home Appraisal Report (Form 1004C), or Individual Condominium Unit Appraisal Report (Form 1073), as applicable; title insurance requirements for Texas Section 50(a)(6) loans must be met. See B5-4-05, Texas Section 50(a)(6) Mortgage Legal Considerations (03/29/2010); all applicable special feature codes must be delivered, including but not limited to 304, 147, or 288 (identifying the loan as a Texas Section 50(a)(6), DU Refi Plus or Refi Plus, respectively); and only mortgage products approved for Texas Section 50(a)(6) mortgages are eligible. DU is not able to determine if Texas Section 50(a)(6) applies to specific limited cash-out loan casefiles; therefore, the lender must make the determination and apply the corresponding eligibility requirements. All other DU Refi Plus or Refi 20 P a g e

21 Plus requirements apply The following table provides underwriting and documentation requirements applicable to DU Refi Plus mortgage loans: Type of Underwriting Mortgage loans originated under DU Refi Plus must be underwritten through DU, and are not eligible for underwriting through any other automated underwriting system. When a loan is delivered as a DU Refi Plus loan, the DU Refi Plus message must be issued on the final submission to DU. In addition, for loan casefiles underwritten with DU Version 9.1 and subsequent versions, the DU Underwriting Findings report will clearly indicate that the recommendation received was for DU Refi Plus. A DU Refi Plus loan may be re-underwritten manually and delivered as a Refi Plus loan. See Converting DU Refi Plus to Refi Plus below. Underwriting and Document Requirements Loan Application Accurate Property Addresses A new executed Form 1003 or Form 1003(S) is required from the borrower(s) with all information completed including borrower income, employment, and assets. An accurate property address is critical to determining if the subject property address on the loan casefile matches a subject property address for an existing Fannie Mae loan. Incomplete or inaccurate property address data may prevent a loan casefile from being underwritten according to the DU Refi Plus underwriting flexibilities. If DU is unable to match the subject property address on the loan casefile with an existing eligible Fannie Mae loan, the DU Underwriting Findings report will issue one or more messages, and the loan casefile will be underwritten according to the standard DU eligibility guidelines and documentation requirements. See Converting DU Refi Plus to Refi Plus below. 21 P a g e

22 DU Risk Assessment DU performs its standard credit risk assessment for DU Refi Plus loans, which includes a comprehensive review of the borrower's credit and mortgage payment history. Payment History of the Existing Mortgage The borrower must meet DU's mortgage delinquency policy. See B , DU Credit Report Analysis (07/29/2014). Credit Score and Credit Report Requirements A new merged credit report with the borrower's minimum credit score of 620 is required. Minimum credit score of 620 is required to establish eligibility. The representative credit score will be used for pricing purposes. Higher-Priced Loan Requirements Because DU is unable to determine if a DU Refi Plus loan casefile is either a higher-priced mortgage loan or a higher-priced covered transaction under Regulation Z, the lender must make this determination. If the lender does determine that the loan casefile is either a higher-priced mortgage loan or a higher-priced covered transaction, the loan casefile must have a representative credit score of 620 or more and a debt-to-income ratio of 45% or less in order to be eligible for delivery to Fannie Mae. Lenders are not relieved of complying with Regulation Z by only adhering to the stricter representative credit score and debt-to-income ratio. The mortgage loan must comply in all respects with Regulation Z requirements for higher-priced mortgage loans and higher-priced covered transactions, including the underwriting and consumer protection requirements. Significant Derogatory Credit Events Lenders are not required to comply with the waiting period and reestablishment of credit requirements for significant derogatory credit events for DU Refi Plus loans. DU will issue a message when a significant derogatory credit event is identified that indicates the loan is eligible for delivery regardless of when the event occurred. DU will not require the payoff or satisfaction of a judgment shown on the credit report. In addition, DU will require Form 1003 (or 1003 (S)) VIII, Declarations a through f to be reviewed or DU will not consider them in the underwriting evaluation. 22 P a g e

23 Mortgage Modifications DTI Ratio Verification of Income Verification of Assets A borrower who has applied for or received a loan modification is eligible to refinance under DU Refi Plus. Note the following: The borrower benefit provision (described above) must be met. The terms of the modified loan (trial or permanent) must be used for this comparison. If the borrower was previously in a trial period plan, but denied a permanent modification, the current terms of the loan must be used for this purpose. Borrower must have made 24 monthly payments as agreed according to the terms of the modificiation The borrower must meet DU's mortgage delinquency policy. DU Refi Plus loan casefiles are subject to the maximum allowable total expense ratio (DTI) currently applied to DU Refi Plus loan casefiles. DU Refi Plus loan casefiles that exceed the maximum allowable total expense ratio will receive an Ineligible recommendation. Income must be verified in accordance with the Income Documentation Requirements table below. Lenders are required to verify or assess the borrower s history or receipt of income or the anticipated continuity of the income. The amount of assets (which may include reserves) must be verified to the extent that the DU Underwriting Findings report requires such verification. Assets must be verified in accordance with the Asset Documentation Requirements table below. Lenders are required to investigate large deposits that appear on account statements. Proof of liquidation of assets is required. Furthermore, Fannie Mae's standard policy regarding discounting of certain assets applies if the assets are required to satisfy DU reserve requirements. Multiple Financed Properties for the Same Borrower There are no limits on the number of financed properties the borrower may own. The additional eligibility requirements for borrowers with multiple financed properties in B2-2-03, Multiple Financed Properties for the Same Borrower (06/24/2014), do not apply. Special Feature Code 150 must not be delivered even if the Refi Plus mortgage loan 23 P a g e

24 otherwise meets the requirements of SFC 150. Property Listing Requirements The lender does need to confirm the subject property is not currently listed for sale. Request for Transcript of Tax Return (IRS Form 4506 T) Mortgage Note, Security Instrument Each borrower must complete and sign a separate IRS Form 4506 T at or before closing. See B , Requirements and Uses of IRS Form 4506-T (07/30/2013), for additional information. A new mortgage note, security instrument, and applicable riders and addenda are required. Except as otherwise expressly provided under DU Refi Plus described herein, all other loan documentation requirements contained in this Selling Guide applicable to newly-originated mortgages apply. 24 P a g e