FHA FHA STREAMLINE VA 203K USDA

Transcription

1 FHA FHA STREAMLINE VA 203K USDA

2 Correspondent Lending Library /Forward Mortgage/Government Product Guidelines/FHA: Standard and Jumbo/High Balance FHA: Standard and Jumbo/High Balance Eligibility Matrix Loan Purpose FICO Maximum LTV 1 Maximum CLTV Maximum DTI (Front/Back) > % % 2 45%/55% Purchase % 96.50% 31%/43% % 90.00% 31%/43% Rate and Term Refinance > % 97.75% 45%/55% % 97.75% 31%/43% % 90.00% 31%/43% Cash-out Refinance 3, 4 > % 85.00% 45%/55% % 85.00% 31%/43% 1 Maximum LTV for 2-4 unit properties with non-occupying co-borrower is 75% (FHA B.3.d). LTV is determined by the base loan amount, excluding any financed mortgage insurance. 2 CLTV allowed is 105% for purchases, if using a Govt. Down Payment Assistance Program. 3 A non-occupying co-borrower may not be added for qualifying purposes on cash out refinance transactions ( B.2.c). 4 Geographic restriction: Cash Out Refinance is not allowed in Texas. Eligible Properties 1-4 Unit Properties PUDs Condominium (in FHA approved projects) and site-condos Doublewide Manufactured Housing (Manufactured condos are not acceptable) Terms and Amortization Fixed Rate: 15, 20, 25 and 30 Years Adjustable Rate: 3/1 and 5/1 Occupancy Owner-occupied properties only Significant Derogatory Credit Events

3 Waiting periods applicable as per FHA/AUS. Automated Underwriting Systems DU or LP Approve/Accept DU or LP Refer eligible Manual Underwriting & Non-traditional credit AUS Refer, determined acceptable by Clear Lenders Refer to the Manual Underwriting section of the Underwriting Guide (click here) Reserves A minimum of three months of PITI reserves for 3-4 unit properties on all transactions. Gift and proceeds from loans are not acceptable source ( B.4.d). 2/1 Rate Buydowns Standard Loan Limits only Purchase Transactions only ( A.2.b) Fixed Rate 30-year only ( A.2.b) FHA Flip Waivers Eligible; must meet FHA's Flip Waiver requirements. A second appraisal is required when price increase exceeds 20%. Click here for the flip waiver requirements. Lender Insured (LI) Correspondents Clear Lenders recognizes lenders who have retained their LI status. Clear Lenders will provide greater flexibility and quicker purchase times. Non-Lender Insured (LI) Correspondents Correspondents who do not currently participate in FHA'S LI program may experience an additional 3-5 day delay while loan is being reviewed for risk factors. The Mortgage Insurance Certificate may be required when Clear Lenders determines a loan may have insuring issues. Correspondent Lending Library /Forward Mortgage/Government Product Guidelines/FHA: 203(K) Standard and 203(K) Jumbo/High Balance Rehabilitation Loans FHA: 203(K) Standard and 203(K) Jumbo/High Balance Rehabilitation Loans Eligibility Matrix Loan Purpose FICO Maximum LTV 1,2 Maximum CLTV Maximum DTI (Front/Back) Purchase > % 96.50% 45%/55% % 96.50% 31%/43% Rate and Term Refinance > % 97.75% 45%/55% % 97.75% 31%/43%

4 1 Purchase Transactions mortgage basis, lesser of: As-is value plus rehabilitation cost or purchase price plus rehabilitation cost, OR 110% of after-improved value (100% for condominiums including site-condos) Refinance Transactions mortgage basis, lesser of: Existing debt plus rehabilitation cost plus prepaid and closing cost, OR 97.75% of as-is value plus rehabilitation costs, OR 110% of after-improved value (100% for condominiums including site-condos) 2 Maximum LTV for 2-4 unit properties with non-occupying co-borrower is 75% (FHA B.3.d) LTV is determined by the base loan amount, excluding any financed mortgage insurance. 3 Ratios exceeding the 31%/43% for manual underwritten loan are acceptable with documented compensating factors ( F.2.b and c). Eligible Properties 1-4 Unit Properties PUDs Condominium (in FHA approved projects) and site-condos Doublewide Manufactured Housing (Manufactured condos are not acceptable) Terms and Amortization Fixed Rate: 15, 30 Years Occupancy Owner-occupied properties only Automated Underwriting Systems DU or LP Approve/Accept. DU or LP Refer eligible, see Manual Underwriting Manual Underwriting AUS Refer, determined acceptable by Clear Lenders Refer to the Manual Underwriting section of the Underwriting Guide (click here) Significant Derogatory Credit Events Waiting periods applicable as per FHA/AUS. Reserves A minimum of three months of PITI reserves for 3-4 unit properties on all transactions. Gift and proceeds from loans are not acceptable source ( B.4.d) Subordinate Financing Not Allowed Additional Guidebook

5 Clear Lenders Mortgage 203(K) Reference Loan Amount Limitations Non-Streamline 203(K): Repairs allowed up to 50% of the loan amount. (For repair amount constituting more than 40% of loan amount, max. LTV will be 100% calculated at after improved value.) Streamline 203(K): The maximum rehab amount is $35,000 and will include at least 2 Inspection Fee draws, 2 title updates, and a 15% contingency reserve. FICO Restrictions 680 FICO Score if either: rehabilitation amount is greater than 40% of loan amount calculated at after improved value, or rehabilitation includes additions and utility replacement and/or reconditioning. Types of Repairs that are eligible for a 203(K) loan Non-Streamline 203(K): Roof replacement, health and safety hazard mitigation, landscaping required to mitigate drainage or erosion issues, aesthetic landscaping when appraiser verifies that the value increases the dollar-fordollar cost, sidewalk/driveway repair necessary for home access, major repair of termite damage, drywall/insulation replacement, most repairs which require permits, finishing basements. Egress window wells for basements will be admissible. Structural and Foundation work will be permitted as long as the Contractors insurance coverage is sufficient (normally general liability insurance coverage of 1,000,000/each occurrence will be acceptable). Streamline 203(K): Cosmetic Repairs such as financing purchase/installation of new appliances; patching holes; replacing doors; painting; lead paint abatement; new counters, cabinets, windows, carpet (subfloor repair requires Non-Streamline 203(K); repair/installation of HVAC; weatherization; minor repair of termite damage. The property should be inhabitable at the time of loan closing. Note: For Doublewide Manufactured Housing, only non-structural repairs or additions are allowed. Requirement of Home Inspection A complete home inspection is required for all REO and vacant properties and for properties with repair amounts exceeding $15,000. REO and vacant properties are eligible under streamline 203(K); however, underwriter may advise about requirement of consultant depending on the scope of work. Home inspectors may not be an interested party, including the 203(K) consultant. The Inspector must be approved by The American Society of Home Inspectors ( or National Association of Home Inspectors, Inc. ( Home inspections are not required for transactions using the services of RenovationReady ( 203(K) Consultant & Contractors Clear Lenders must approve the use of all parties involved, including the consultant and contractor as applicable. 203(K) Self-Help Not allowed.

6 Exclusions on a 203(K) loan Streamline 203(K): Upfront draws are only available for documented material costs (with receipts or invoices). If the contractor is bonded, documenting material cost is not required to obtain an upfront material draw. Draws may not exceed 50% of the total rehabilitation amount. If no draw is required, contractor must provide certification that no initial draw is necessary and that he/she has available funds to complete the cost of rehabilitation. Geographic Restrictions: Clear Lenders currently does not offer FHA 203(K) in the state of TX. Supplemental Origination Fee 1.5% of Rehabilitation Amount or $350, whichever is greater, must be charged. Additional Forms and Work Exhibits Requirements Consultant, if applicable Specification of Repairs and Work Write-up exhibits must itemize material and labor costs. Consultant's Identity of Interest Master Draw Request (HUD-9746a) Contractor Work Write-up exhibits must itemize material and labor costs. Completed IRS-W9 License, E&O and/or Liability Insurance valid until rehabilitation is completed Contractor Profile Form Information for Contractors form Homeowner and Contractor Agreement Evidence of Assets or Sufficient Lines of Credit (VOD, Bank Statements, Credit lines etc.) to reasonably cover cost of material for rehabilitation. Draw request time line is taken into consideration. Not required when initial draw is provided on 203(K) streamline, see Exclusion on 203(K) loan section above. Borrower Borrower Identity of Interest Certification must be signed and dated by borrower(s), Consul 203(K) Borrower Acknowledgement must be signed, dated and completed by borrower(s). Conference call with borrower to be completed by Clear Lenders. Additional Guidelines LandSafe Title is not acceptable as the title company FHA Flips are not acceptable with the 203(K) loan 2/1 Rate Buydown Standard Loans Limits only Purchase Transactions only ( A.2.b) Fixed Rate 30-year only ( A.2.b) Correspondent Lending Library /Forward Mortgage/Government Product Guidelines/FHA: Streamline Refinance Standard and Jumbo/High Balance FHA: Streamline Refinance Standard and Jumbo/High Balance

7 Eligibility Matrix Loan Purpose Minimum FICO Maximum LTV Maximum CLTV 1 Maximum DTI Front/Back Streamline Refinance without appraisal Non-Credit Qualifying Credit- Qualifying % % N/A 31%/43% Streamline Refinance with appraisal Credit- Qualifying % % 31%/43% Streamline refinance without appraisal Maximum Loan Amount: cannot exceed the lessor the outstanding principal balance and interest due, minus applicable refund of the UFMIP, plus the new UFMIP that will be charged on the refinance or the original loan balance LTV / CLTV: LTV/CLTV for FHA Streamline Refinance is based on the original appraised value reporting in FHA Connection. Streamline refinance with appraisal Maximum loan amount: A credit qualifying streamline with appraisal may be used to increase the loan amount not to exceed 97.75%. (FHA C) LTV/CLTV: Based on new appraisal ordered in conjunction with the transaction. 1 The maximum accessible credit limits must be used when considering HELOCs (FHA C.2). 2 A credit-qualifying streamline is required when a change in the mortgage term will result in an increase in the mortgage payment of more than 20% when deletion of a borrower or borrowers will trigger the due-on-sale clause following the assumption of a mortgage that occurred less than six months previously, and does not contain restrictions (i.e. due-on-sale clause) limiting assumption only to a creditworthy borrower, or following the assumption of a mortgage that occurred less than six months previously, and did not trigger the transferability restriction (that is, the due-on-sale clause), such as in a property transfer resulting from a divorce decree or by devise or descent. 3 Ratios exceeding the 31%/43% for manual underwritten loan are acceptable with documented compensating factors ( F.2.b and c). Eligible Properties 1-4 Unit Properties PUDs Condominium and site-condos Doublewide Manufactured Housing (Manufactured condos are not acceptable)

8 Terms and Amortization Fixed Rate: 15 through 30 Years Adjustable Rate: 3/1 and 5/1 Occupancy Owner-occupied, Investment Properties and Second Homes Mortgage Late Payments Available Mortgage History Less than 12 months Requirements All mortgage payments must have been made within the month due 12 months or more No more than one 30 day late allowed in last 12 months All mortgage payments in last 3 months from the application date must have been made within the month due Note: Mortgage must remain current during application period to closing. Mortgage Only Credit Report / Verification of Mortgage Acceptable Automated Underwriting Systems AUS is not applicable on streamline refinance loans. All loans are manually underwritten. Reserves A minimum of three months of PITI reserves for 3-4 unit properties on all transactions. Gift and proceeds from loans are not acceptable source ( B.4.d) Funds Required To Close If funds are needed to close, the borrower must have the assets to be utilized in accordance with FHA's standards (e.g. 2 months of bank statements) C.3.a Maximum Term Lesser of 30 years or the remaining terms of the mortgage plus 12 years. ( C.2.b) Verbal Verification of Employment (VOE) For non-credit qualifying refinances, at least one borrower must be employed at time of closing. If a VOE cannot be obtained, alternative income documentation is acceptable to support an active source of income, such as: SSA Award letter / Pension letter 1099 or Tax Returns for other types of income Divorce Degree or Child Support Statement Correspondent Lending Library /Forward Mortgage/Government Product Guidelines/VA: Standard and Jumbo/High Balance

9 VA: Standard and Jumbo/High Balance Eligibility Matrix Loan Purpose FICO Maximum LTV 1 Maximum CLTV Maximum DTI Front/Back Purchase % % 45%/55% Cash-out Refinance 2, % % 45%/55% 1 LTV is determined by the base loan amount, excluding any financed funding/guaranty fees. 2 3 Cash-out refinance is considered even with the borrower is not obtaining any cash back. Properties owned free and clear are not eligible. Geographic restriction: Cash Out Refinance is not allowed in Texas. Eligible Properties 1-4 Unit Properties PUDs Condominiums Doublewide Manufactured Housing (Manufactured condos are not acceptable) Note: Property cannot be vested in the name of irrevocable trust Terms and Amortization Fixed Rate: 15, 20, 25 and 30 Years Adjustable Rate: 3/1 and 5/1 Occupancy Owner-occupied properties only Significant Derogatory Credit Events Waiting periods applicable as per VA/AUS. Automated Underwriting Systems DU or LP Approve/Accept DU or LP Refer eligible, see Manual Underwriting Manual Underwriting & Non-traditional Credit Eligible for correspondents with net worth exceeding $5,000,000 based on most recent year financial statements Entitlement VA Guaranty plus cash/equity must be equal to at least 25% of the purchase price or Notification of Value (NOV), whichever is less. Veteran must have full entitlement available or additional down payment may be required. Note: The percentage and amount of guaranty is based on the loan amount including the funding fee portion when the fee is paid from loan proceeds.

10 2/1 Rate Buydowns Not Allowed Correspondent Lending Library /Forward Mortgage/Government Product Guidelines/VA: IRRRL Standard and Jumbo/High Balance VA: IRRRL Standard and Jumbo/High Balance Eligibility Matrix Loan Purpose Minimum FICO Maximum LTV Maximum 2 CLTV 2 Maximum DTI (Front/Back) IRRRL 1 Non-Credit Qualifying Credit- Qualifying % N/A N/A 28%/41% 1 Maximum loan amount for a VA IRRRL is: existing VA loan balances plus late payments and late charges, plus allowable fees and charges (includes up to two discount points), plus the VA funding fee. 2 3 LTV calculation is required only for borrowers with qualifying FICO less than 580. LTV is determined by the base loan amount, excluding any financed funding/guaranty fees. For LTV purposes, a conventional appraisal or AVM may be used to determine the ratio. If an appraisal is ordered, it must be ordered via SWMC s Vendor Order website. AVMs are acceptable from RELS, CoreLogic, Veros, Freddie Mac s Home Valuation Explorer (HVE) or Interthinx. AVMS are acceptable when a value reflects a high or medium confidence rating (FSD.20 or less). 4 A credit-qualifying IRRRL is required when Loan being refinanced is 30 days past due Monthly PITI will increase 20% or more Eligible Properties 1-4 Unit Properties PUDs Condominium and site-condos Doublewide Manufactured Housing (Manufactured condos are not acceptable) Note: Property cannot be vested in the name of irrevocable trust Terms and Amortization Fixed Rate: 15, 30 Years Adjustable Rate: 3/1 and 5/1 Lesser of the original term of the VA loan being refinanced plus 10 years or 30 years (VA Pamphlet 26-7,

11 Chapter 6.1.i) Occupancy Owner-occupied only. Automated Underwriting Systems AUS is not applicable on IRRRL refinance loans. All loans are manually underwritten. Verbal Verification of Employment (VOE) For non-credit qualifying refinances, at least one borrower must be employed at time of closing. If a VOE cannot be obtained, alternative income documentation is acceptable to support a borrower has an active source of income, such as: SSA Award letter / Pension letter 1099 or Tax Returns for other types of income Divorce Degree or Child Support Statement Correspondent Lending Library /Forward Mortgage/Government Product Guidelines/VA Mega Jumbo Loan Program VA Mega Jumbo Loan Program The client needs to be approved for this loan program. Please contact your AE for further details. Eligibility Matrix Loan Purpose Minimum FICO2 Maximum DTI (Front/Back) Purchase / Cash-Out Refinance1 $1.5 M %/40% > $1.5 M $3.0 M 780 1Geographic restriction: Cash Out Refinance is not allowed in Texas. 2Non-traditional credit is not allowed. 2If bankruptcy, foreclosure, short sale or deed in lieu appears on credit report, then the borrower is ineligible. Eligible Properties Attached / Detached SFRs PUDs Note: Property cannot be vested in the name of irrevocable trust Terms and Amortization Fixed Rate 25 years and 30 years Adjustable Rate 5/1 (Please refer the Underwriting Guide for eligible Interest Adjustment dates on ARMs) Occupancy

12 Owner-occupied properties only Note: Properties converted to a rental property, even temporarily while borrower is on active duty, are not considered owner-occupied. LTV/CLTV Purchase Loan Amount LTV CLTV Less than or equal to $1.0 Million 90% NA (85% / 85% for all areas except those in Market Recovery Area List) Greater than $1.0 Million but Less than or equal to $1.5 Million 85% NA (80% / 80% for all areas except those in Market Recovery Area List) Greater than $1.5 Million but Less than or equal to $2.0 Million 80% NA (75% / 75% for all areas except those in Market Recovery Area List) Greater than $2.0 Million but Less than or equal to $3.0 Million 75% NA (70% / 70% for all areas except those in Market Recovery Area List) Cash-Out Refinance Loan Amount LTV CLTV Less than or equal to $1.0 Million 85% NA (80% / 80% for all areas except those in Market Recovery Area List) Greater than $1.0 Million but Less than or equal to $1.5 Million 80% NA (75% / 75% for all areas except those in Market Recovery Area List) Greater than $1.5 Million but Less than or equal to $2.0 Million 75% NA (70% / 70% for all areas except those in Market Recovery Area List) Greater than $2.0 Million but Less than or equal to $3.0 Million 70% NA (65% / 65% for all areas except those in Market Recovery Area List) Appraisal Less than or equal to $1.5 Million: 1 Full appraisal ordered by Clear Lenders. Greater than $1.5 Million but Less than or equal to $3.0 Million 2 Full appraisals ordered by Clear Lenders. Appraiser's Condition and Quality of Construction Properties with a condition rating of C5: As is condition is not acceptable unless deficiencies that caused the rating and/or hypothetical condition are completed prior to closing. Properties with a condition rating of either C6 or Q6 are ineligible.

13 Approval Type DU Approve/Eligible or LP Accept/Eligible only. Manual underwriting is not acceptable. Self Employed Allowed Mortgage Housing Lates None in the last 36 months on any mortgage. Collection Accounts Housing-expense related collection accounts within 24 months are not allowed Housing Payment Shock Subject to Clear Lenders approval. Subordinate Financing Not allowed Loan Amount Properties Located in Minimum Base Loan Amount Maximum Base Loan Amount 48 Contiguous States $625,501 $3,000,000 Note: For Cash-Out Refinance: Funds may only be used to pay for existing liens, prepaids and closing costs Borrower is not permitted to get more than $500 as cash proceeds. Minimum VA Entitlement VA Guaranty plus cash/equity must be equal to at least 25% of the purchase price or Notification of Value (NOV), whichever is less Veteran must have full entitlement available or additional down payment may be required. Note: The percentage and amount of guaranty is based on the loan amount including the funding fee portion when the fee is paid from loan proceeds. Minimum Reserves Less than or equal to $1.5 Million: 6 months PITIA Greater than $1.5 Million but Less than or equal to $3.0 Million: 12 months PITIA Additional 3 months PITI reserves for every investment property Escrow Holdback for Minor Repairs Not allowed Market Recovery Area List CA Counties: Contra Costa, Los Angeles, San Benito, San Francisco, San Mateo, Santa Clara, Alameda, Marin, Orange

14 HI Counties: Hawaii, Honolulu, Kalawao, Kauai, Maui MD Counties: Prince George's, Calvert, Charles, Frederick, Montgomery NJ Counties: Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union NY Counties: New York, Bronx, Kings, Nassau, Putnam, Queens, Richmond, Rockland, Suffolk, Westchester Departure Policy Refer the Underwriting Guide for details on departure policy Locks on this program are allowed upon underwriting approval only Correspondent Lending Library /Forward Mortgage/Government Product Guidelines/USDA: Rural Housing USDA: Rural Housing Eligibility Matrix Loan Purpose FICO Maximum LTV 1 Maximum CLTV Maximum DTI 2 Purchase, Rate and Term Refinance > % % Subject to GUS Approval 1 LTV basis includes any financed guaranty fees.

15 2 Refer the following points for GUS Refer or Manual Underwriting: Maximum DTI ratios are 29/41 If credit score is 680 and at least one compensating factor can be documented then PITI ratio cannot exceed 32% and TD cannot exceed 44% Compensating Factors are as follows: The proposed housing expense is equal to or less than the applicant s current verified housing expense for the 12 month period preceding loan application. A VOR or credit report will be needed and must include the actual payment amount due and report no late payments or delinquency for the previous 12 months. Rent or mortgage payment histories from a family member will not be considered unless 12 months of canceled checks, money order receipts, or electronic payment confirmations are provided. A history of less than 12 months will not be considered an acceptable compensating factor. Accumulated savings or cash reserves available post loan closing are equal to or greater than 3 months of PITI payments. A Verification of Deposit (VOD) or two consecutive bank statements, dated within 45 days of loan application, that document the average balance held by the applicant is required. Cash on hand is not eligible for consideration as a compensating factor. The applicant(s) (all employed applicants) has been continuously employed with their current primary employer for a minimum of 2 years. Verification of Employment (VOE) (Form RD , comparable HUD/FHA/VA or Fannie Mae form, or other equivalent), or VOEs prepared by an employment verification service (The Work Number, etc.) must be provided. This compensating factor is not applicable for self-employed applicants. Eligible Properties 1-Unit Properties PUDs Condominium Doublewide Manufactured Housing (New construction only) Subject property must be in an eligible area, Click Here for USDA s property eligibility Terms and Amortization Fixed 30 year Occupancy Owner-occupied properties only Significant Derogatory Credit Events None in the last 36 months. A significant event includes bankruptcies, foreclosures (including mobile homes), deed-in-lieu of foreclosure and short sales. Automated Underwriting Systems

16 GUS Approval; Manual underwriting is acceptable when Loan Note Guarantee is provided prior to purchase. Non-traditional credit is not acceptable. Gift Funds Eligible Maximum Number of Properties Financed 1 (inclusive of subject). Non-occupying Co-borrower Not allowed Subordinate Financing Not allowed 2/1 Rate Buydowns Not Allowed