CHAPTER 9 PRODUCT MATRIX

Contents

CHAPTER 9 – PRODUCT MATRIX

Conventional Conforming Loans……… 2

Secondary Market Arms…... 4

HARP (Fannie DU Refi Plus & Freddie Open Access) …... 5

Rural Housing……… 5

VA Programs………. 5

Jumbo Programs……… 5

My Community Mortgage™ Programs……… 6

Home Possible® Programs………..

7

Chapter 9 – Product Matrix

CONVENTIONAL CONFORMING LOANS

Excludes HARP loans, manufactured, My Community and Home Possible

10 - 30 YEAR FIXED, Approve/Eligible (DU)

FREDDIE MAC

10 – 30 YEAR FIXED, Accept (LP)

LOAN LIMITS

PRIMARY RESIDENCE

1 UNIT Owner occupied only

95.01-97% LTV/CLTV/HCLTV

Effective with DU version 9.2 12/13/14

• At least 1 borrower must be a 1st_{-time buyer}

• Refi of existing Fannie Mae loans only

• Loan must be fixed-rate only

• No minimum borrower contribution required

• NO MANUFACTURED HOMES

• No income limits

• Must be approve/eligible in DO/DU

HOME POSSIBLE ADVANTAGE MORTGAGE

Available on loans with a closing date on or after March 23, 2015

97%LTV/105%CLTV (105% CLTV if Affordable 2nd

LP will be updated in near future

• Fixed-rate only

• 1 UNIT Owner occupied only

• NO MANUFACTURED HOMES

• Income must not exceed 100% of area median income limits

• Homeownership education required if all borrowers are first time home buyers

PURCHASE &

LIMITED CASH OUT (DU) NO CASH OUT (LP) 1 UNIT 95% LTV/CLTV/HCLTV 2 UNIT 85% LTV/CLTV/HCLTV 3-4 UNIT 75% CLTV / HCLTV 1 UNIT 95% LTV/CLTV/HCLTV 2-4 UNIT 80% LTV/CLTV/HCLTV

Decrease LTV by 5% if secondary financing

CASH OUT REFINANCE

1 UNIT 80% LTV/CLTV/HCLTV 2-4 UNITS 75% LTV/CLTV/HCLTV 1 UNIT 80% LTV/CLTV/HCLTV 2-4 UNITS 75% LTV/CLTV/HCLTV

Decrease LTV by 5% if secondary financing

SECOND HOME

**1 UNIT ONLY**

LIMITED/NO CASH OUT 90% LTV/CLTV/HCLTV 1 UNIT ONLY

85% LTV/CLTV/HCLTV 1 UNIT ONLY Decrease LTV by 5% if secondary financing CASH OUT REFINANCE 75% LTV / 75% CLTV / HCLTV 1 UNIT ONLY 75% LTV/CLTV/HCLTV 1 UNIT ONLY

Decrease LTV by 5% if secondary financing

INVESTMENT PROPERTY

PURCHASE Minimum FICO 720

1 UNIT PURCHASE 85%LTV/85% CLTV / HCLTV 2-4 UNIT PURCHASE 75% LTV/75% CLTV / HCLTV 1 UNIT PURCHASE 85%LTV/CLTV/HCLTV 2 UNIT 75% LTV/CLTV/HCLTV

Decrease LTV by 5% if secondary financing LIMITED/NO CASH-OUT &

NO-CASH OUT

1-4 UNIT

75%LTV/ 75% CLTV / HCLTV

1-4 UNIT

75%LTV/CLTV/HCLTV

Decrease LTV by 5% if secondary financing

CASH OUT REFINANCE

1 UNIT 75% LTV / 75% CLTV / HCLTV 2-4 UNITS 70% LTV / 70% CLTV 2-4 units 1 UNIT 75% LTV/CLTV/HCLTV 2-4 UNITS 70% LTV/CLTV/HCLTV

*Decrease LTV by 5% if secondary financing

ALL LOANS

CONDOS, PUDS Note: FL condos – Please refer to Geographic Specific condo project consideration

@fanniemae.com

Must meet Specific Condo Project

Consideration guidelines Must meet FHLMC project guidelines

STANDARD MORTGAGE INSURANCE COVERAGE >20 yrs _≤20 yrs >95.01-97% 35% >90.00≤95% 30% 25% >85.00≤90% 25% 12% >80.00≤85% 12% 6% >20 yrs ≤≤≤≤20 yrs >95 35% >90.00≤95% 30% 25% >85.00≤90% 25% 12% >80.00≤85% 12% 6% ELIGIBLE BORROWERS U.S. Citizens

Permanent Resident Aliens Non-Permanent Resident Aliens

U.S. Citizens

LOAN LEVEL PRICE ADJUSTMENTS (LLPA) CUMULATIVE

ALL PRODUCTS

See Chapter 11 of the online manual See Chapter 11 of the online manual

PURCHASE ESSENTIALS

MINIMUM BORROWER CONTRIBUTION

0% of the sales price 1 unit primary residence 5% of the sales price 2 unit primary residence and 2nd _homes

LTV < 80% = 0% LTV > 80:

5% of the sales price (1 unit primary residence) 5% of the sales price (2 unit primary residence and 2nd homes)

INTERESTED PARTY/SELLER CONTRIBUTION

Can cover closing costs and/or prepaid subject to Fannie LImits

Secondary Market ARM (Adjustable Rate Mortgage) Loans

5/1 CONFORMING ARM FREDDIE MAC (LP) ONLY 1 YR TREASURY INDEX 2/2/5

LOAN LIMITS

LIMITED / NO CASH OUT

95% LTV / 95% CLTV 1 unit 80% LTV / 80% CLTV 2-4 units

Decrease LTV by 5% with Secondary Financing CASH OUT REFINANCE

80% LTV / 80% CLTV 1 unit 75% LTV / 75% CLTV 2-4 units

Decrease LTV by 5% with Secondary Financing PURCHASE &

LIMITED / NO CASH OUT

85% LTV / 85% CLTV

Decrease LTV 5% with Secondary Financing

1 UNIT ONLY

CASH OUT REFINANCE 75% LTV / 75% CLTV _{Decrease LTV 5% with Sec. Fin. 1 UNIT ONLY} PURCHASE &

LIMITED CASH OUT

85%LTV/ 85% CLTV 1Unit PURCHASE FICO 720 75% LTV/75% CLTV 1 Unit - No Cash Out 75%LTV/75% CLTV 2-4 units

Decrease LTV 5% with Secondary Financing CASH OUT REFINANCE

75% LTV / 75% CLTV 1 unit 70% LTV / 70% CLTV 2-4 units

Decrease LTV 5% with Secondary Financing CONDOS, PUDS

Note: FL condos – Please refer to

Geographic Specific condo project consideration @fanniemae.com

Must meet FHLMC guidelines

MANUFACTURED HOMES Only 7/1 and 10/1 ARMS allowed

STANDARD MORTGAGE INSURANCE COVERAGE >90.00≤95% 30% >85.00≤90% 25% >80.00≤85% 12% ELIGIBLE BORROWERS U.S. Citizens

Permanent Resident Aliens Non-Permanent Resident Aliens

LOAN LEVEL PRICE ADJUSTMENTS (LLPA) CUMULATIVE

ALL PRODUCTS

See Chapter 11 of the online manual

MINIMUM BORROWER CONTRIBUTION

0% of the sales price

INTERESTED PARTY/SELLER

HARP (Fannie DU Refi Plus and Freddie Open Access)

**If Mortgage Insurance is required Merchants Bank will only provide final approval for the

following MI companies:

MGIC

United Guaranty

Genworth

Arch MI

**We will modify the MI cert if the current MI provider is one of the four companies

listed above. The borrower will need to qualify for standard mortgage insurance if the

current MI cert is from a company other than what is shown above.

Rural Housing

∗

1 unit primary residence

∗

30 year fixed rate loan purchase

∗

GUS or manual

∗

Must meet RD income limits and property eligibility

∗

Minimum FICO 640 if manually underwritten

∗

Purchases 102% (appraised value can be exceeded by the 2% guarantee fee)

∗

Only non-streamline refinances unless Merchants Bank is the current servicer

VA Programs

***Product Not Available at this time***

Jumbo Fixed-Rate

MY COMMUNITY MORTGAGE

TM

PROGRAMS

Fully amortizing fixed-rate mortgage with terms to 30 years

LOAN LIMITS

PRIMARY RESIDENCE ONLY

PURCHASE & LIMITED CASH OUT REFINANCE*

95.01-97% LTV / 97% CLTV Purchase & Limited Cash Out (105% CLTV for Fixed-Rate Mortgage with Community 2nds) 1st_{-time home buyers only > 95%}

*Loans with >95% LTV not eligible for Limited Cash-out Refinance

95% LTV/ 95% Purchase & Limited Cash Out -- 2 units Minimum FICO 620

90% LTV / 90% CLTV Purchase & Limited Cash Out -- 3-4 Units Minimum FICO 720

CASH OUT REFINANCE NOT PERMITTED

SECOND HOME & INVESTMENT PROPERTY

NOT PERMITTED

ALL LOANS

CONDOS, PUDS

Must meet FNMA guidelines

Purchase & Limited Cash-out refinances 1-unit condo & PUD Purchase & Limited Cash-out refinances 2-4 units NO CONDOs allowed MORTGAGE INSURANCE COVERAGE > 80% < 85% = 6% > 85% < 90% = 12% > 90% < 95% = 16% >95.01-97% = 18%

BORROWERS OCCUPANCY Required

LOAN LEVEL PRICE ADJUSTMENTS (LLPA)

See Chapter 11 of the online manual

QUALIFYING RATIOS

Determined by DU; if Manual UW, Max DTI: See Eligibility Matrix and

reserve requirements @fanniemae.com

CASH RESERVES

Determined by DU. Or, if Manual UW:

2 months PITIA for 1 unit primary residence MINIMUM FICO 680

2 months PITIA for 2-4 units MINIMUM FICO 720 See Eligibility Matrix for additional reserve requirements at fanniemae.com

MINIMUM BORROWER

CONTRIBUTION 0% 1 unit 3% 2-4 UNIT

HOMEBUYER EDUCATION Required for 1st Time Homebuyers

EARLY DELINQUENCY

COUNSELING REQUIRED

Income Limits: Total income cannot exceed 100% of the area HUD median income except in certain areas as outlined in product description.

HOME POSSIBLE

®

PROGRAMS

HOME POSSIBLE FREDDIE MAC

HOME POSSIBLE ADVANTAGE FREDDIE MAC

LOAN LIMITS

PRIMARY RESIDENCE ONLY

PURCHASE & NO CASH OUT REFINANCE

>95% LTV/CLTV 1 Unit (105% CLTV is Affordable 2nd) 97% Home Possible Advantage only: See page 1 for 97% info

NO Manufactured homes _________________________________________________________________________________________ 95% LTV/CLTV 1 Unit 95% LV/CLTV 2 Unit FICO 620 90% LTV/90% CLTV 3-4 Units FICO 720 95% LTV/95% CLTV Manufactured 97% LTV/105%CLTV if 2nd is a “affordable 2nd _{mortgage product”}

CASH OUT REFINANCE NOT PERMITTED NOT PERMITTED

SECOND HOME & INVESTMENT PROPERTY

NOT PERMITTED NOT PERMITTED NOT PERMITTED

ALL LOANS

CONDOS, PUDS 95% LTV/CTLTV Purchase & No Cash Out - 1 Unit 97%/105% LTV/CLTV if 2

nd

is a “affordable 2nd _{mortgage product”}

MORTGAGE INSURANCE COVERAGE

>80%≤85% = 6% Manufactured Homes Only >85%≤90% = 12% ≤20 Year >20≤30 Year >90%≤95% = 16% >80%≤85% = 12% =17% >95-97% = 18% >85%≤90% = 25% =30% >90% <95%= 30% =35% >80%≤85% = 6% >85%≤90% = 12% >90%≤95% = 16% >95-97% = 18% BORROWERS

OCCUPANCY Required Required

LOAN LEVEL PRICE ADJUSTMENTS (LLPA) LLPA'S are cumulative

See Chapter 11 of the online manual See Chapter 11 of the online manual

QUALIFYING RATIOS Determined by LP or if Manual UW, Max DTI 45% Determined by LP or if Manual UW,

Max DTI 43%

CASH RESERVES

Determined by LP, Or, if manual UW:

No Reserves for 1 Unit primary residence LTV <80%, LTV >80% requires 2 months PITIA, Minimum Fico 680

2 months Reserve Required for 2-4 units (cannot be gift funds) Minimum Fico 720.

NONE

MINIMUM BORROWER CONTRIBUTION

None for 1 Unit 3% for 2-4 Units 5% for Manufactured

NONE HOMEBUYER

EDUCATION REQUIRED FOR 1

ST_{-TIME HOMEBUYERS} REQUIRED FOR 1ST-TIME

HOMEBUYERS EARLY DELINQUENCY

COUNSELING REQUIRED

REQUIRED

LANDLORD COUNSELING REQUIRED for 2-4 Units, purchase transactions N/A - 2-4 FAMILY NOT ALLOWED

Income Limits: Total income cannot exceed 100% of the area HUD median income except in certain areas as outlined in product description.

Automated Underwriting: Automated underwriting through LP is allowed for Accept/Accept recommendations.

SPECIALTY PRODUCTS

LOAN LIMITS

PRIMARY RESIDENCE

PURCHASE & LIMITED CASH OUT/NO CASH OUT

1 UNIT ONLY! 95 % LTV/ 95% CLTV - 30 Years 1 UNIT ONLY! 95 % LTV/ 95% CLTV - 30 Years Decrease LTV by 5% if secondary financing CASH OUT REFINANCE 1 UNIT ONLY! 65% LTV ≤ 20 years 1 UNIT ONLY! 65% LTV ≤ 20 years Decrease LTV by 5% if secondary financing Minimum Borrower Investment

0% borrower’s own funds if

primary residence 5% from borrower’s own funds

SECOND HOME

PURCHASE & LIMITED CASH OUT

1 UNIT ONLY! 90 % LTV/ 90% CLTV 5% from borrower’s own funds

1 UNIT ONLY!

85 % LTV/ 85% CLTV - 30 years

Decrease CLTV by 5% if secondary financing

CASH OUT REFINANCE NOT PERMITTED NOT PERMITTED

INVESTMENT PROPERTY

NOT PERMITTED NOT PERMITTED

CASH OUT

REFINANCE NOT PERMITTED NOT PERMITTED

ALL LOANS

CONDOS, PUDS Must meet Fannie Guidelines Must meet Freddie Guidelines LOAN LEVEL PRICE

ADJUSTMENTS (LLPA)

See Chapter 11 of the online manual

See Chapter 11 of the online manual

MAXIMUM DTI RATIO RESERVE REQUIREMENTS Determined by DU Determined by LP

MISCELLANEOUS

Additional legal description, lien perfection and title insurance requirements. See manual for details.

Additional legal description, lien perfection and title insurance requirements. See manual for details.

APPRAISALS 1004C appraisal 1004C appraisal

MISCELLANEOUS