Max LTV/CLTV. Units. Max Debt Ratio Purchase or Refinance % $1,500,000 40% Rate/Term Refinance Cash-Out N/A

Transcription

1 Jumbo Series 3 Summary Product Types Minimum Loan Amount 5/1 and 7/1 ARMs $417,001 or Fannie/Freddie loan limits 5/1 ARM qualifies at the greater of the fully indexed rate or Note rate +2%. 7/1 ARM qualifies at the greater of the fully indexed rate or Note rate. Primary Residence Loan Purpose Minimum FICO Purchase or Rate/Term 700 Cash-Out Units Max LTV/CLTV Maximum Loan Amount Max Debt Ratio 1 80% $2, % 2 70% $1,000,000 40% 1 70% 65% 60% $1,000,000 $1,500,000 $2,000,000 40% Second Home Loan Purpose Minimum FICO Units Max LTV Max CLTV Max Debt Ratio Purchase or % $1,500,000 40% Rate/Term Cash-Out N/A Jumbo Series III Program Motive Lending Page 1 of 6

2 Requirements and Eligibility Last Updated: September 6 th, 2014 Appraisals must be ordered through ine of the following AMCs and must be dated within 60 days of the submission date. A new appraisal is required after 90 days. Appraisals are required before a jumbo loan can be Approved. First American Mortgage Services StreetLinks Dart Managed Appraisal Services Lenders Aid RELs Valuation Property Rate United Lender Services Triserv Got Appraisals HVCC Acclaimed Appraisals Approvals prior to the appraisal are considered Subject To / Prior to Approval Two full appraisals (1004 or equivalent) are required on any loan over $1,000, or underwriter discretion and the appraised value variance between the appraisal may not exceed 10% An Enhanced desk review may be ordered at the underwriter s discretion o The appraisal review will be ordered in on the lower of the two appraisals. The appraisal review value cannot vary more than 10% from the appraised vale and must confirm eligibility or determine if the value conclusion is supported. LTV is calculated based on the lesser of the two appraisals or purchase price, subject to MOTIVE LENDING appraisal review process. All appraisers must hold at least the minimum required state license and a copy of the license must be submitted with the appraisal. Appraisals must be completed in compliance with FIRREA/USPAP and all applicable regulatory requirements. 1004MC Required. On purchase transactions, the appraiser must review the sales contract. Appraisal 1st generation PDF required. Accessory Apartments/Non-Permitted Addition/Granny or In-Law Units Properties with non-permitted accessory units, also know as Granny units, mother-in-law suites, etc. may be acceptable if all of the following are met: One or two-unit property Subject is typical, common and readily acceptable in the subject s market area. Appraisal demonstrates market acceptance of these accessory units. Rental income from the accessory unit may not be used to help the borrower qualify. Existence of the unit must not jeopardize any future hazard insurance claim. Properties must conform to all zoning laws and/or regulations. Legal non-conforming use may be acceptable provided its current use does not adversely affect its market value and marketability. Accessory unit is substantially smaller than the primary unit. Unit must not violate applicable zoning laws and/or restrictions in such a way that the property could not be rebuilt in its current design. Jumbo Series III Program Motive Lending Page 2 of 6

3 Credit Report All Loans require a Credit Score based on the following 3 non-derogatory trade lines. Non-traditional credit is not permitted with Jumbo loans. In addition to below, housing history of 24 months is required. 3 trade lines, each rated for at least 12 months 1 trade line must be open and active Authorized User accounts may not be used to satisfy the trade line requirements Minimum 2 year traditional credit history Pay downs to 10 months remaining payments are not allowed. ** A gap credit report must be run with in 14days of funding. Any new debt will require the loan to be reunderwritten A borrower is not eligible for financing if the borrower has a Bankruptcy discharged in the previous 5 years and/or a foreclosure, deed in lieu or short settled within the previous 5 years. A bankruptcy can either be a Chapter 7 in which the borrower discharges all debt or a Chapter 13 in which the borrower completes a reorganization of debt. The age of a bankruptcy is calculated from the date of the discharge for Chapter 7 and Chapter 13. A Chapter 13 must be discharged in order for the loan to be eligible under MOTIVE LENDING s programs. A borrower with a Chapter 13 that has been dismissed is not eligible. A Chapter 13 discharge indicates a re-establishment of debt by the borrower by meeting the terms of the repayment plan. Foreclosure / Deed in Lieu / Short Sale / Restructured Loans A borrower with multiple bankruptcies is not eligible for financing. A Chapter 13 becoming a Chapter 7 is considered one bankruptcy provided the Chapter 13 was not dismissed by the court. If the Chapter 13 was dismissed and borrower then filed a Chapter 7, the borrower would not be eligible for MOTIVE LENDING financing. A foreclosure is defined as any 120-day mortgage late within the last 60 months, notice of default, settlement on a real estate secured trade line, deed-in-lieu, and forbearance agreements. The age of the foreclosure is calculated from the date settled or the date of the most recent 120-day mortgage late. Borrowers are required to have re-established credit from like sources (i.e.: revolving, installment, mortgage) paid satisfactorily and which meet the minimum trade-line requirements. A letter of explanation is required from the borrower. A repossession must have been concluded over 60 months from application date. Evidence of date of completion must be provided. Credit Requirements Consumer Credit Borrowers in Consumer Credit Counseling within previous 24 months not eligible. Counseling Major Adverse Accounts Includes collection accounts, charge-off accounts, judgments, liens, delinquent property taxes, repossessions, garnishments, loan modifications, and non-mortgage accounts currently 90 days or more delinquent. Charge offs/collections with balances over $500or less than 5 years old must be settled/paid with supporting documentation. For accounts reporting older than 24 months, all State, IRS, and property tax liens (subject property and other properties), regardless of seasoning, are required to be paid whether or not they currently affect title. No payment plans or subordination is allowed. Jumbo Series III Program Motive Lending Page 3 of 6

4 Mortgage Rating Requires 24 months history, all mortgages, and/or rental history. 0 x 30 mortgage/rental delinquency in past 24 months ( rent free not eligible) VOR from a large, well known rental management company is acceptable For First Time Homebuyers, verification of 12 months rental payments is required in addition to the 24 month history. The loan file must contain 12 months cancelled checks or bank statements to evidence eligibility for mortgage/housing history for the loan program under which the loan is submitted. Written Verification of rent via the credit report is not permitted. First time homebuyers evidencing rental history will still be subject to payment shock of 200% maximum. Property Additional Occupancy Property Types Primary residence and second homes only. Investment properties are not allowed Eligible: SFR PUDs (attached or detached) Condominiums a. No entity can own more than 10% of the project b. For projects consisting of 10 units or less, no entity may own more than 1 unit, unless it is the developer Site Condominiums with the following requirements: a. Hazard coverage for a single family detached dwelling if the unit consists of the entire structure and site and air space and insured on 100% replacement cost b. Conventional Condominium/PUD Warranty form c. Conventional Homeowners Association Questionnaire for Limited Review 10 acre maximum Misc. States prohibited when subject is currently listed for sale or was listed for sale within the prior six months to the loan application date. All Motive Licensed States Jumbo Series III Program Motive Lending Page 4 of 6

5 General Requirements Age of Documents Assets Automated Underwriting Credit 90 days Assets 60 days All reserves must be from borrower s own funds. Gift funds may not count toward reserve requirements. Asset verification is required. Copy of all funds used to close must be in the file at time of closing and must be from verified source. Desktop Underwriter required with Approve/Eligible or Approve/Ineligible due to loan amount is required. *** A Photo ID will be required on all borrowers. Borrowers Eligible Borrowers Borrowers must be natural persons. All borrowers must be U.S. citizens, permanent resident aliens, or non- permanent resident aliens and must have a valid social security number in order to be eligible for a loan. The borrowers must have attained the legal age according to the local and state jurisdiction where the property is located. The borrower must be able to enter into a binding contract prior to the execution of the Note and Security Instrument. There is no maximum age limit for the borrower. The borrower must have the legal right to work in the U.S. Living Trust/Inter Vivos Revocable Trust Ineligible Borrowers Corporations, estates, life estates, limited or general partnerships, not-for-profit organizations, schools, churches, etc. Foreign nationals Borrowers with diplomatic immunity Builders, Developers and Real Estate Agents Gifts Impounds Income Documents Gifts and gift of equity are allowed. Sourced from donor required and must be a direct family member (mother, father, step mother, step father, children or adopted children, siblings). Gift letters required. Escrow waiver is allowed The following are the minimum requirements: W-2 Forms (most recent 2 years) Tax Returns-most recent 2 years, verified by 4506-T. All self employed borrowers are required to provide copies of individual tax returns and schedules for previous two years. Loan is ineligible if any of the past two years returns are on extension. YTD income & expense statement with balance sheet is required if 120 past last fiscal year end. Recent Pay Check (dated within last 30 days) Rental Income allowed if documented when borrower has owned property for at least 12 months and shows on Schedule E for prior years tax returns. If rental property is owned less than 12 months and not reflected on must recent filed tax returns, then the present signed lease is ok if borrower has two year history of property management as evidenced by the most RECENT two years IRS 1040 tax returns AND three months canceled checks or bank statement verifying receipt of rental income. Employment Gaps The stability of employment and income and its likelihood of continuance should be factored into the underwriting decision when there are gaps of employment. Written letters of explanations for employment gaps over 30 days in the last two years must be provided. Jumbo Series III Program Motive Lending Page 5 of 6

6 Self Employed: Requires minimum of 2 years history with same business and 2 years taxes on record with IRS; no exceptions. Variable Income Sources: All variable income sources including dividends/interest & stock options must verify three years continuance. Ratios Maximum income to debt ratio is 40% Reserves Subordinate Financing Interested Party Contributions Max Financed Properties Mortgage Insurance s Employment by Relatives or Transaction Participants Power Of Attorney Primary Home: Liquid Reserves of 9 months PITI be verified by most recent bank statement Second Home: Liquid Reserves of 18 months PITI be verified by most recent bank statement Source deposits greater than 25% of gross income, business funds OK to use if business is owned 100% by borrower and tax preparer confirms it won t impact business. Not allowed. 3% Maximum Up to 4 financed properties (including the subject property) and/or a maximum of $3 million aggregate financing on all properties. Not required. Maximum Cash-Out: $250,000 Maximum Cash in Hand: $100,000 If the borrower is employed by a relative, a closely held family business, the property seller, real estate agent or any party to the real estate transaction, the following documentation must be obtained: Borrower s signed and completed personal federal income tax returns for the most recent two years. If the business is a corporation o Obtain a signed copy of the corporate tax return showing ownership percentage or o A signed letter from the corporation Most recent two years W-2 forms YTD pay stubs covering 30 days. Verbal VOE. Current income reported on the paystub may be used if it is consistent with W-2 earnings reported on the tax returns. If the tax returns do not include W-2 earnings or income is substantially lower than the current pay stubs, further investigation is needed to determine whether income is stable. Power of Attorney documents must be submitted and approved by MOTIVE LENDING prior to issuing final loan approval. Note: If not explicitly mentioned above, standard Fannie Mae guidelines apply. Jumbo Series III Program Motive Lending Page 6 of 6