FHA 203K MATRIX. Second Appraisal Requirements

Transcription

1 FHA 203K MATRIX Self Help Allowed NO NO ELIGIBLE PROPERTIES 1-4 Family including HUD REOs 1-4 FAMILY INCLUDING HUD REOs ALLOWS RELATIVES/EMPLOYERS TO COMPLETE WORK NO NO MIXED USE ACCEPTABLE ONLY UNDER NO MIXED USE ALLOWED Repair/rehab minimum Minimum of $5, on Full-K (HUD guidelines apply) None on Streamline-K- HUD guidelines apply MAXIMUM RENOVATION TERM 6 months 6 months Second Appraisal Requirements Follow HUD/RHF guidelines -(re:flipping, second appraisal requirements) Follow HUD/RHF guidelines-(re; flipping second appraisal requirements) REPAIR COSTS DOCUMENTATION REQUIREMENTS/FULL and Obtain a detailed Consultant's work write up which must include estimates for labor and material and is signed by all parties where applicable AND obtain a detailed Contractor bid with labor and material costs separated and the estimate must be signed by Borrower (s) and Contractor and dated. The Underwriter must be satisifed that the estimates provided by the Borrower's Contractor are in line with the Consultant's. The higher of the two should be used in calculating the maximum mortgage - ALL FINAL WORK ESTIMATES MUST MATCH. Obtain detailed Contractor(s) bid(s) which reflect a separation of labor and material costs. Must be signed by Contractor (s) and Borrower (s) and dated. Underwriter must be satisifed the estimate(s) are in line with the work being done or a second estimate may be required. NOTE: A Consultant may be used if desired, however, the fee CANNOT be financed into the rehabilitation amount as allowed on a full 203K transaction Requires Labor estimates for installation of appliances or Yes. Labor and material estimates are always needed. Requires the "Self-Help" Agreement be signed by the borrower(s) whenever material purchase from "box stores" (ex. Lowes, Home Depot) Homeowner/Contractor form must be signed even if box store contractor a "box store" (ex. Lowes, Home Depot) is being used. regardless if store Contractor is doing work performing work Disbursement allowed at closing NO DISBURSEMENTS AT CLOSING Allows only 50% of Contractor estimates to be disbursed at closing.never to EXCEED 17, Allows 100% of permit costs which have been obtaineddocumentation is required to release funds Condominiums allowed HUD approved projects only. Interior renovation only-no common areas can be included. Follow HUD guidelines for acceptable projects-maximum number of units in a building 4,unless side by side townhouse style SAME AS condominium project. MAXIMUM LTV 100%-regardless of normal 203K guidelines Revised 10/07/13. 2nd. Review 11/18/13 Page 1 of 5

2 OCCUPANCY REQUIREMENTS OWNER OCCUPIED ONLY OWNER OCCUPIED ONLY CREDIT SCORE MINIMUM 640 and DU APPROVE MINIMUM 640 and DU APPROVE > 43% DTI and,=50% DTI Min. Credit Score 640. MUST HAVE A DU APPROVE. Two compensating Min. Credit Score 640. MUST HAVE A DU APPROVE. Two compensating factors required from following list: a) at least two month's reserves of factors required from following list: a) at least two month's reserves of liquid assets b) LTV< 90 c)residual Income > or = to 1.5 month's PITI liquid assets b) LTV< 90 c)residual Income > or = to 1.5 month's PITI d)payment shock less than 25% e)documented additional income which is d)payment shock less than 25% e)documented additional income which is not being used to qualify. not being used to qualify. DTI > 50 Not Acceptable even with a DU Approve Not Acceptable even with a DU Approve MULTI FAMILY CONVERSIONS(EX: reducing or increasing NOT ALLOWED " IN HOUSE"- must go to NXT /PAA ONLY NOT ALLOWED "IN HOUSE" MUST GO TO NXT/PAA ONLY number of units) Transactions with "Point of Sale" Violation reports All Violation /repair items must be "eligible" for the 203K program selected. All violation items must have accompanying estimates. Subjective items (i.e. cutting the grass) will be handled at Underwriter discretion. Items completed prior to closing shall be inspected by the appropriate entity (muncipality or appraiser) who cited them. A 20% CONTINGENCY IS REQUIRED. A copy of the violation report must be included in the Consultant's work write up. The Underwriter must affirm SAME AS EXCEPT - SINCE NO CONSULTANT IS USED the that all repairs listed on the Violation report have been included in the UNDERWRITER MUST DESIGNATE WHICH REPAIR IS A MUNICIPAL write up. In no case may the appraiser or HUD Consultant re-inspect on VIOLATION VS.PLAIN REHAB. ITEM AND the Municipality must agree in behalf of a muncipality. Lender must receive on muncipality letterhead writing to allow the lender to disburse the normal 50% up front release in (signed and dated) prior -to-closing a statement that the community will accordance with HUD guidelines allow the lender to hold escrow monies for point of sale violations. The letter must reference lenders name and it's successors and/or assigns. If the muncipality requires any additional escrow money ( in no case will our Escrow funds be held by the muncipality) the buyer must have verified suffiicent funds required by the muncipality documented in file. The fee for the municipality re-inspection shall be quoted on the GFE and appear on HUD line 893 a $ estimate is reccommended. Remaining Contingency Reserve or unused funds Applied to principal balance or additional improvements may be allowed with a completed "change order" request AND Investor approval. Applied to principal balance or additional improvements may be allowed with completed "change order" request AND Investor approval. Revised 10/07/13. 2nd. Review 11/18/13 Page 2 of 5

3 CONTINGENCY RESERVE REQUIREMENTS PARTIALLY COMPLETED PROJECTS A Minimum of 15% must be used. If the Consultant quotes a figure> then 15% the higher figure must be used. UW has the discretion to impose a higher figure.insure FIGURE USED MATCHES THE HUD CONSULTANT REPORT. Some situations require different Contingencies- review overlays. POS violations require 20% min. 10% minimum with a maximum of 20%. Vacant properties should not have less then 15%. Some situations require different Contingencies- review overlays. POS violations require 20% min. Properties in which prior owners started work but not completed OR Properties in which prior owners started work but not completed OR refinances with incomplete work in progress are considered on an refinances with incomplete work in progress are considered on an exception exception basis only. CANNOT BE USED TO FINISH A BUILD basis only. CANNOT BE USED TO FINISH A BUILD "WINTERIZED PROPERTIES" Allows 15% Contingency in lieu of Inspections RHF requires all utilties to be turned on for inspection (prior to closing) when a property is "winterized" and/or an appraiser indicates a mechanical systems check is required. In the rare case where this is impossible, with MANAGEMENT APPROVAL, a 15% contingency may be used in lieu of the inspection. If the Contingency is already at 15% ( ex. vacant property) then the UW must increase the Contingency to 20%. UW must use their discretion when using this option and consider all facets of the file. This option is NOT AVAILBLE on a full 203K. Properties must be Existing, at least one year old or more (CO) Allowable repairs HUD Guidelines apply- cannot use to finish new construction STRUCTURAL AND NON STRUCTURAL,Landscaping and Site Amenities. NO OUT BUILDINGS- SEE HUD GUIDELINES FOR HUD Guidelines apply- cannot use to finish new construction SEE HUD GUIDELINES FOR - NO STRUCTURAL WORK EVER ALLOWED UNDER STREAMLINE 203K REGARDLESS OF TOTAL COST. TOTAL COST b-14 on 203K worksheet can NEVER exceed 35, NO OUTBUILDINGS. NO landscaping or site amenities LTV/CLTV for PURCHASES-not maximum mortgage calculation Condominiums maximum 100%/100, /110 condominiums maximum 100%/100, /110 LTV/CLTV REFINANCE-not maximum mortgage calculation Condominiums maximum 100%/100, /110 condominiums maximum 100%/100, /110 Mortgage Payment Reserve Up to 6 months PITI can be financed,if the home is not habitable during Borrower must move into property within 30 days of closing. Mortgage renovation payments may NOT be escrowed. All specs and plans (if required for rehab) must be approved All specs and plans (if required for rehab) must be approved by the local all specs and plans (if required for rehab) must be approved by the local by the local authority prior to closing. authority prior to closing! authority prior to closing! MODULAR CONSTRUCTION ALLOWED NOT ALLOWED NOT ALLOWED PRODUCT TYPES CURRENTLY only 30 year FIXED rate CURRENTLY only 30 year FIXED rate Revised 10/07/13. 2nd. Review 11/18/13 Page 3 of 5

4 INSURANCE REQUIREMENTS Evidence of Contractor's insurance is required. If Contractor is GC and has Evidence of Contractor's insurance is required. If Contractor is GC and has no employees then no Workers Comp Insurance is needed. Policy must no employees then no Workers Comp Insurance is needed. Policy must not not be expiring within 6 weeks of anticipated closing date or an be expiring within 6 weeks of anticipated closing date or an update/extension is required. update/extension is required. MAX. Mortgage Restriction AND lowest sales price in the last 12 months Maximum mortgage calculation is based on the lowest price paid to transfer title in the past 12 months. A title transfer is any change in ownership including but not limited to a bona fide sale, an inter-family member transfer, an auction acquistion, a quit claim deed,etc. The lowest NOT APPLICABLE FOLLOW HUD GUIDELINES transfer price must be used regardless of the entity conducting the transfer (ex. Government or Federal chartered lenders) There are NO EXCEPTIONS like there are for "flipping" rules. UW SHOULD REVIEW M& T EXAMPLES OF SCENARIOS! IDENTITY OF INTEREST TRANSACTIONS MAXIMUM LOAN AMOUNTS NOT ALLOWED AT ANY LTV ( UW should review M&T 203K Identity of Interest Policy) NOT ALLOWED AT ANY LTV ( UW should review M&T 203K Identity of Interest Policy) FHA MAXIMUM MORTGAGE LIMITS VARY PER COUNTY.COUNTY LIMITS FHA MAXIMUM MORTGAGE LIMITS VARY PER COUNTY.COUNTY LIMITS MAY BE FOUND ON HUD WEBSITE MAY BE FOUND ON HUD WEBSITE The maximum The maximum mortgage mortgage amounts for any county are: 1 unit: 417,000.00, 2 units amounts for any county are: 1 unit: 417,000.00, 2 units $533,850.00, 3 units $533,850.00, 3 units $645,300, 4 units $ 801, FOR LOAN AMOUNTS $645,300, 4 units $ 801, FOR LOAN AMOUNTS HIGHER THAN THE HIGHER THAN THE ABOVE MAXIMUMS, THE FHA HIGH BALANCE 203K ABOVE MAXIMUMS, THE FHA HIGH BALANCE 203K Program is available Program is available subject to the following: FIXED RATE ONLY; REFER to subject to the following: FIXED RATE ONLY; REFER to RE-NEGOTIATED CONTRACT AFTER APPRAISAL COMPLETED REQUIRES THE USE OF THE LOWER OF THE ORIGINAL PP OR THE RE- REQUIRES THE USE OF THE LOWER OF THE ORIGINAL PP OR THE RE- NEGOTIATED PRICE IN CALCULATING THE MAXIMUM MORTGAGE NEGOTIATED PRICE IN CALCULATING THE MAXIMUM MORTGAGE NON OWNER OCCUPANTS ALLOWED UNDER ALL NORMAL FHA GUIDELINES ALLOWED UNDER ALL NORMAL FHA GUIDELINES 203K/SUPERSTORM SANDY EXCEPTIONS Use of this program is yet to be determined. Contact Management PRIOR TO STARTING any new application Use of this program is yet to be determined. Contact Management PRIOR TO STARTING any new application Revised 10/07/13. 2nd. Review 11/18/13 Page 4 of 5

5 MAXIMUM NUMBER OF CONTRACTORS The maximum number of Contractors allowed is (3) THREE. Otherwise, a GENERAL CONTRACTOR is required. It is acceptable to have ONE General Contractor and up to ONE Specialty Contractor. For example, a GC and a SEPTIC installer. It is always acceptable to have a LEAD or MOLD Contractor above the maximum number of contractors allowed. Lead Contractors must have a Federal ID. All Contractors on the job must sign all of the required 203K forms. If there is more than one contractor, the sum of all H/C Agreements must equal the entire amount of repairs appearing on B-1 of the MMWS(HUD ). Resumes and/or 203K documents are not required for sub-contractors hired by the GC.Subs fall under the main GC's "umbrella" and are not subject to lender review SAME AS REQUIREMENTS Revised 10/07/13. 2nd. Review 11/18/13 Page 5 of 5