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Finance Type
Purchase/Rate and Term Refinance
Property Type
Primary Residence
Second Home
Investment
Max Loan
Amount Max LTV Min FICO Max LTV Min FICO Max LTV
Min FICO
SFR/PUD/
Condo
$1,000,000 80% 70%
720
700 80% 720 N/A N/A
$1,500,000 70% 700 75% 720 N/A N/A
$1,750,000 80% 720 70% 720 N/A N/A
$2,000,000 80% 75% 65%
740 720 700
65% 720 N/A N/A
2 Units
$1,000,000 65% 700 N/A N/A N/A N/A
$1,500,000 60% 720 N/A N/A N/A N/A
Finance Type
Cash Out Refinance
Property Type
Primary Residence
Second Home
Investment
Max Loan
Amount Max LTV
Min FICO Max LTV/CLTV
Min FICO Max LTV/CLTV
Min FICO
SFR/PUD/
Condo
$1,000,000 70% 720 N/A N/A N/A N/A
$1,500,000 65% 700 N/A N/A N/A N/A
$1,750,000 60% 700 N/A N/A N/A N/A
$2,000,000 60% 55%
720 700
N/A N/A N/A N/A
2 Units
N/A N/A N/A N/A N/A N/A N/AMinimum Loan
Amount
The minimum loan amount is $417,001 or $1 above the Conforming loan limit for the area and number of units.
Eligible Terms
15 year fixed, 30 year fixed, 5/1 ARM, 7/1 ARM, 10/1 ARM Full amortized payment over 30 year term.
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LTV/CLTV is reduced by 5% in declining markets as indicated by appraiser.
Eligible
Borrowers
U.S. Citizens and Permanent Resident Aliens Foreign Nationals are not allowed
Non-Occupying Co-Borrowers not allowed
First Time
Homebuyers
Maximum Loan Amount $1,200,000. Payment shock not to exceed 250%
First Time Homebuyer is defined as an individual who has not had a mortgage in the past or owned a home in the past 3 years.
Reserve Requirements for First Time Homebuyers
o Loan amounts up to $1,000,000- 12 months PITI
o Loan amounts from $1,000,001- $1,200,000- 18 months PITI
Age of
Documentation
Credit, Income, Assets & Title - 90 days from date note is signed Appraisal - 120 days from date note is signed
Cash Out
Transactions
Borrower must have owned property for at least 6 months prior to the application date AND the loan being paid off must also be seasoned for at least 6 months to be eligible for a cash out refinance
Cash Out includes all consumer debt being paid through closing.
Max cash out $250,000 to 70% LTV/CLTV; Max cash out $350,000 to 65% LTV/CLTV. Max cash out $500,000 to 60% LTV/CLTV. Max cash out $750,000 to 50% LTV/CLTV.
Rate and Term
Refinance
Limited cash out is considered as the lesser of 1% of the loan amount or $10,000
The new loan amount is limited to the payoff of the present first lien mortgage any seasoned non-first lien mortgages, closing costs and prepaids. A seasoned non-first lien mortgage is a purchase money mortgage or a mortgage that has been in place for 12 months. A seasoned equity line is defined as not having any draws greater than $2,000 in the last 12 months.
Eligible/
Ineligible
Properties
ELIGIBLE: 1-unit attached and detached SFR, PUD and Warrantable Condos. 2-unit
properties eligible within matrix parameters INELIGIBLE: Manufactured Homes, Co-ops, 3-4 unit properties, Condotels, Mixed Use
properties, Log Homes, Unique properties, Properties located in Hawaii Lava Zones 1 & 2, Properties > 20 acres (see section below for additional guidelines)
Maximum
Acreage
Maximum acreage is 20 acres Appraiser must always indicate total acreage. It is not acceptable to have property appraised
with only 20 acres in order to meet eligibility. For properties > 10 acres but <= 20 acres, the following is required, 1) Maximum 35% land to
value, 2) No income producing attributes
Credit
Mortgage/Housing lates - 0x30 in past 24 months
Each Borrower: Minimum 3 open trade lines. One must be open and active for 24 months and the remaining trade lines must be rated for 12 months. At least one of the trade lines must be an installment or mortgage account
Chapter 7, 11 and 13 Bankruptcy - None allowed
Foreclosure, Short Sale, Loan Modification - None allowed
Non-title charge-offs and collections exceeding $1,000 (either individually or in aggregate) must be paid
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All past due accounts must be brought current prior to closing.
Borrowers with a history of collection accounts are required to pay off derogatory accounts. Rescored credit reports are not allowed.
Income / DTI
Maximum Ratios are 43%/43% Full income documentation required
Capital gains income requires the 3 most recent years tax returns
Dividend/interest income requires proof of receipt for the most recent 2 years (i.e. tax returns) Rental income requires 2 years tax returns and current lease for each property including
commercial properties listed on Part 1 of Schedule E of the 1040s. 2 year landlord history is required to use rental income to qualify.
Gaps in employment in excess of 30 days during the past 2 years require a satisfactory LOE and the borrower must be employed with their current employer for at least 6 months Social Security income must be verified by a Social Security Administration benefit
verification letter or Award Letter.
Non-taxable income: The amount of continuing tax savings attributed to regular income not subject to Federal taxes may be added to the borrower’s gross income. The percentage of non-taxable income that may be added cannot exceed the appropriate tax rate for the income amount. Additional allowances for dependents are not acceptable. Use the same tax rate the borrower used to calculate his/her income tax from the previous year. If the borrower is not required to file a Federal tax return, the tax rate to use is 25%.Qualifying Rate
Fixed Rate loans - Qualify at the Note Rate
5/1 ARM - Qualify at the greater of the fully indexed rate (index + margin) or the Note Rate + 2%
7/1 and 10/1 ARM – Qualify at the Note Rate
NAL
Transactions
Non-Arms Length (NAL) Transactions are not allowedListing History
and Cash Out
Restrictions
Rate and Term Transactions - Properties that have been listed for sale within the past 6 months of loan application are not eligible
Cash Out Transactions - Properties that have been listed for sale within the past 6 months of loan application are not eligible
Inherited properties may not be refinanced prior to 12 months ownership
Reserves
Loan Amount Primary Residence Second Home
Up to $1,000,000 6 months PITI 12 months PITI
$1,000,001 to $1,500,000 9 months PITI 18 months PITI $1,500,001 to $2,000,000 12 months PITI 24 months PITI If 2 or more properties are financed (including the subject property), an additional 6 months
PITI is required for each non- subject financed property owned.
Large deposits in excess of 50% of monthly qualifying income or any large deposit out of the ordinary is required to be explained and sourced.
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ability to meet their obligations, borrowers should disclose and verify all other liquid assets Business assets are not eligible source of reserves
Appraisal
Requirements
Refinance Transactions with loan amounts >$1,000,000 require 2 full appraisals Purchase transactions with loan amounts >$1,500,000 require 2 full appraisals Properties owned < 12 months must use the lesser of original purchase price or new
appraised value for LTV purposes
For properties purchased by the seller of the property within 90 days of the fully executed purchase contract, additional requirements apply: 1) Second appraisal required, 2) Property seller on the purchase contract is the owner of record, and 3) Increases in value should be documented with commentary from the appraiser and recent paired sales
Max Financed
Properties
The borrower(s) may own a total of five financed, 1-4 unit residential properties, including the subject property. Borrowers will be required to have 6 months reserves for each additional financed property.
LTV Reductions
If the borrower has less than twelve (12) months ownership in the property, the LTV for a refinance transaction is calculated on the lesser of the purchase price or appraised value
Max LTV is reduced by 5% in declining markets as noted by the appraiserDeclining
Income
A loan is ineligible if the income being used to qualify is declining in the most recent tax year. This includes ALL types of qualify income (self-employment income, overtime, bonus,
commissions, dividends/interest, retirement income, etc.). If only base income is being used to qualify, the loan is eligible.
Condos
Condo must be warrantableCondo projects with less than 10 units must be typical for the area and the appraisal must show similar comparables
Full lender review is required
Subordinate
Financing
New subordinate financing allowed up to max LTV/CLTV. Seller financing not allowed
Solar Panels
Follow FNMA Solar Panel requirementsHPML and HPCT
HPML/HPCT not allowed. This is defined as any loan where the APR exceeds the average prime offer rate (APOR) by 1.50% (not 2.5% as is generally required on Jumbo loans) or more and applies to ALL occupancy types
Qualified
Mortgage (QM)
Requirements
Bona fide discount points can be excluded from the points/fees test. Up to 2 bona fide discount points can be excluded if the interest rate before discount does not exceed the APOR for a comparable transaction by more than 1%, OR up to 1 bona fide discount point can be excluded if the interest rate before discount does not exceed the APOR for a comparable transaction by more than 2%
Discount points are not considered bona fide unless there is a 20 basis point improvement in rate per discount point
All loans must adhere to the Ability to Repay underwriting criteria as established by the CFPB using the criteria outlined in Appendix Q.
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Asset
Documentation
Requirements
Source Requirement
Checking and Savings Accounts
The two most recent, consecutive months’ statements for each account are required
Large deposits inconsistent with monthly income or other deposits must be verified
Marketable Securities/Stock Account
Two most recent, consecutive month’s stock/securities account statements are required.
70% max value of stock accounts can be considered in the calculation of assets available
Retirement Accounts Most recent retirement account statement covering a minimum two month period
60% of the vested value of retirement accounts, after reduction of any outstanding loans, may be considered toward the required reserves
Retirement accounts that do now allow any type of withdrawal are ineligible for use as reserves
Business Funds Business funds may be used for down payment and/or closing costs, not for purposes of calculating reserves. Cash flow analysis required using 3 months business bank statements to determine no negative impact to business based on withdrawal of funds
The borrower must be the sole proprietor or 100% owner of the business (or all borrowers combined own 100%). A letter from the business accountant is obtained to confirm that the withdrawal will not negatively impact the business
