Product Introduction

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Section 2

Products

Product Introduction

--- --- 2.2

Conforming Fixed Rate (including DU RefiPlus)

--- --- 2.3

Conforming LIBOR ARMs

--- --- 2.8

Fannie Mae HomePath Mortgage

--- --- 2.13

FHA Program Overlays

--- 2.14

VA Program Overlays

--- 2.15

USDA Program Overlays

--- 2.16

Capital Markets Jumbo Fixed & ARMs

--- 2.17

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Product Introduction

Loan programs offered to the Wholesale & Correspondent Lending Divisions may vary from time to time at South State Bank’s sole discretion. The following is a list of traditional loan products and guidelines. Daily Pricing includes Service Release Premiums (SRP). Loan Level Price Adjustments (LLPA) and Fees are listed on the current day’s rate sheets and are subject to change.

Changes in LLPA or Fees will be sent via e-mail, fax, and/or written MEMO delivered by USPS first class mail. Changes will be sent prior to the change(s) taking effect.

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Conforming Fixed Rate Mortgage (10 – 30 Year Fixed Terms)

Topic Guidelines Program Type &

Loan Term

Primary / Second Home / Investment

Term Program Code

30 Year Fixed CFR30

20 Year Fixed CFR20

15 Year Fixed CFR15

10 Year Fixed CFR10

Minimum/Maximum

Loan Min Loan Amount Max Loan Amount

$75,000 $417,000 or Conforming Limit Lower loan amounts may be considered with applicable fee

Maximum

LTV/CLTV/HCLTV Primary Residence

Purchase/No Cash Out Refinance Property Type Max LTV

CLTV/HCLTV Min Credit Score SFD/Condo/PUD 95/95/95% 620* MI requirements may differ 2 Unit 85/85/85% 620* MI requirements may differ 3-4 Unit 75/75/75% 620

Cash Out Refinance Property Type Max LTV

CLTV/HCLTV TV Min Credit Score SFD/Condo/PUD 85/85/85% 620* MI requirements may differ 2-4 Unit 75/75/75% 620 Maximum LTV/CLTV/HCLTV Secondary Residence

CLTV/HCLTV Min Credit Score SFD/Condo/PUD 90/90/90% 620* MI requirements may differ

CLTV/HCLTV Min Credit Score SFD/Condo/PUD 75/75/75% 620 Maximum LTV/CLTV/HCLTV Non-Owner-Occupied

CLTV/HCLTV

Min Credit Score

SFD/Condo/PUD 75/75/75% 720

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Topic Guidelines (Conforming Fixed Rate) Eligible States of

Origination GA, MD, NC, SC, TN, VA, WV

Escrow Waiver Available for all loans with LTV ≤ 80% with fee Assumable No

Buydowns Permanent Buy-downs Only

Subordinate Financing

 Must meet LTV/CLTV restrictions stated above

 Must comply with Fannie Mae Selling Guide for Acceptable Subordinate Financing Types

Documentation & Income Requirements

Follow AUS findings report for items not addressed in this guide (see LP Requirements section for overlays) – Additional supporting documentation may be required

Qualifying Ratios Max DTI of 43% Eligible Borrowers US Citizens

Permanent Resident Aliens Non-Permanent Aliens

Eligible Property Types

One Unit SFD, 2-4 Unit (Primary Only), PUD, & Established Condominium  New Condominium Projects Not Eligible

Multiple Property Ownership

Follow FNMA guidelines for number of properties financed.

 South State will finance a maximum of 4 properties or up to $1,000,000 total exposure, whichever is less.

4506-T Wholesale

 A completed, signed, dated, and unexpired IRS form 4506-T for all borrowers whose income is used to qualify must be included in file submission authorizing South State to obtain income information for all borrowers.

 A new 4506-T must be signed at closing. Correspondent

 A completed, signed, dated, and unexpired IRS form 4506-T for all borrowers whose income is used to qualify must be included in file submission.

 4506-T is to have been executed by the Correspondent with the transcripts also included in file submission.

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Topic Guidelines (Conforming Fixed Rate) Conversion

of Principal Residence

Second Home

 Mortgage payment for current residence and new residence must be counted against borrower for qualifying.

 6 months PITI for reserve requirements. Investment Property

 If less than 30% equity in current residence then six months PITI for existing primary and six months PITI for new property.

 If equity in current residence is greater than or equal to 30% then up to 75% of rental income may be used to qualify. If less, no rental income may be used.

 To include rental income, the following must be documented:  Fully executed lease agreement

 Security deposit from tenant

 Bank statement verifying funds of security deposit  Validation of home value

Appraisal Eligible Appraisal Forms

 Full Interior-Exterior 1004 / 1073 (Condo)  Property Inspection Waiver (PIW)

 Must receive DU PIW findings

 Only eligible on South State Serviced DU Refi Plus mortgages  Hazard declarations page must be included with the initial file

submission. Coverage required in the amount equal to 100% of the insurable value of improvements as determined by the INSURER or the loan amount, as long as such is a minimum of 80% of the insurable value of improvements as determined by the INSURER.  Increase underwriting fee $75 on initial GFE disclosure for PIW

execution.

Ineligible Appraisal Forms

 Freddie Mac LP offered Exterior-Only Inspection Appraisal Reports (2055 & 466-Condo)

 LP offered Condition and Marketability Report (2070 - no value given)  LP offered Property Inspection Alternative (PIA) – Similar to PIW

Escrows for Completion

Escrows for completion may be allowed on a case by case basis. Escrows for items that affect livability will not be considered.

Title/Deed Restrictions

The following are ineligible for purchase:  Life Estates

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Topic Guidelines (Conforming Fixed Rate) Refinance –

Permanent Financing for an Existing

Construction Loan

South State does not provide financing for initial construction loans. The refinance of a construction loan to permanent financing is allowed. Limited Cash-Out Refinance

 Standard Agency refinance guidelines apply.

 Maximum LTV based on appraised value and subject to LTV/CLTV restrictions in Refinance Matrix above.

Cash-Out Refinance

 Borrower(s) must have held legal title to the lot for at least six months prior to the closing of the permanent mortgage.

 All other standard Agency cash-out refinance guidelines apply.  Maximum LTV based on appraised value and subject to LTV/CLTV

restrictions in Refinance Matrix above. Private Mortgage

Insurance

General Coverage Requirements

Fixed Rate > 20 Years Fixed Rate < 20 Years

LTV Coverage LTV Coverage > 90% But ≤ 95% 30% > 90% But ≤ 95% 25% > 85% But ≤ 90% 25% > 85% But ≤ 90% 12% > 80% But ≤ 85% 12% > 80% But ≤ 85% 6%

 Transactions requiring mortgage insurance may be subject to MI Company overlays

 Fannie Mae standard coverage levels required

Private Mortgage Insurance

Disclosure

All transactions requiring Mortgage Insurance must include appropriate Private Mortgage Insurance Disclosure to borrower(s).

Underwriting Loans must be evaluated by Fannie Mae Desktop Underwriter or Freddie Mac Loan Prospector (see LP Requirements for additional overlays)

Loans receiving the following message through AUS are not eligible for purchase:

 Out of Scope or Error

 DU Expanded Approval (DU Refi Plus Only)  DU Refer with Caution

 LP A Minus  LP Caution

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Topic Guidelines (Conforming Fixed Rate)

LP Requirements Loans evaluated by Freddie Mac Loan Prospector must meet the following requirements:

 Max LTV/CLTV of 95% unless lower max LTV/CLTV listed in Product Matrix above

 620 minimum score up to 80%, 700 minimum score over 80%

 Max LTV/CLTV of 90% for non-occupying co-borrower with income used for qualification

 No manufactured housing  Max DTI 43%

 If tax returns required to document income, 2 years must be obtained  Full interior/exterior appraisal required

 MI Coverage must meet Fannie Mae minimum requirements

DU Refi Plus Loan Currently Serviced by South State

 125% LTV/CLTV/HCLTV Maximum  Current MI Certificate may be transferred  Loan Level Pricing Adjustment Caps:

 Primary > 80% LTV & Term < 20 years – 0 points  Primary > 80% LTV & Term > 20 years – 0.75 points

 Primary < 80% LTV, all Second Home & Investment – Standard LLPA’s

Loan Currently NOT Serviced by South State  105% LTV/CLTV/HCLTV Maximum  Owner Occupied

 Single Family Detached  660 Minimum FICO

 Current MI Certificate may not be transferred

 Transactions requiring mortgage insurance (new certificate) are not eligible for PIW – Full interior/exterior appraisal required

 Loan Level Pricing Adjustment Caps:

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Conforming Libor Adjustable Rate Mortgage

Minimum/Maximum

Loan Min Loan Amount Max Loan Amount

$75,000 $417,000 or Conforming Limit Lower loan amounts may be considered with applicable fee

Maximum

LTV/CLTV/HCLTV Primary Residence

CLTV/HCTLV TV Min Credit Score SFD/Condo/PUD 90/90/90% 620* MI requirements may differ 2 Unit 75/75/75% 620 3-4 Unit 65/65/65% 620

CLTV/HCTLV Min Credit Score SFD/Condo/PUD 75/75/75% 620 2-4 Unit 65/65/65% 620 Maximum LTV/CLTV/HCLTV Secondary Residence

CLTV/HCTLV

SFD/Condo/PUD 80/80/80% 620

CLTV/HCTLV Min Credit Score SFD/Condo/PUD 65/65/65% 620 Maximum LTV/CLTV/HCLTV Non-Owner-Occupied

CLTV/HCTLV

SFD/Condo/PUD 65/65/65% 720

2-4 Unit Ineligible Ineligible

Topic Guidelines Program Type &

Loan Term

Primary / Second Home / Investment

Term Program Code

3/1 ARM (30 Year Am) CARM31

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Topic Guidelines

(Conforming ARM – Including NC/SC Conforming Flagship) Eligible States of

Origination

GA, MD, NC, SC, TN, VA, WV

NC/SC Conforming Flagship ARM

Program guides are applicable for the NC/SC Conforming Flagship ARM pricing.

Escrow Waiver Available for all loans with LTV ≤ 80% with fee

Assumable No

Buydowns Permanent Buydown Only

Subordinate Financing

 Must meet LTV/CLTV Restrictions stated above

Documentation & Income

Requirements

Follow AUS findings report for items not addressed in this guide (see LP Requirements section for overlays) – Additional supporting documentation may be required

Qualifying Ratios Max DTI of 43%

Eligible Borrowers US Citizens

Permanent Resident Aliens Non-Permanent Aliens

Eligible Property Types

One Unit SFD, 2-4 Unit (Primary Only), PUD, & Established Condominium

 New Condominium Projects Not Eligible

Follow FNMA guidelines for number of properties financed.

 South State will finance a maximum of 4 properties or up to $1,000,000 total exposure, whichever is less.

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(Conforming ARM – Including NC/SC Conforming Flagship) Conversion of

Principal Residence

Second Home

Appraisal Eligible Appraisal Forms

 Full Interior-Exterior 1004 / 1073 (Condo) Ineligible Appraisal Forms

 Property Inspection Waiver (PIW) – DU RefiPlus only available on Conforming Fixed Rate product

 Freddie Mac LP offered Exterior-Only Inspection Appraisal Reports (2055 & 466-Condo)

 LP offered Condition and Marketability Report (2070 - no value given)  LP offered Property Inspection Alternative (PIA) – Similar to PIW

Escrows for Completion

Escrows for completion may be allowed on a case by case basis. Escrows for items that affect livability will not be considered.

Refinance – Permanent Financing for an Existing Construction Loan

Cash-Out Refinance

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(Conforming ARM – Including NC/SC Conforming Flagship) Title/Deed

Restrictions

The following are ineligible for purchase:  Life Estates  Irrevocable Trusts  1031 Exchanges  Un-Permitted Additions Private Mortgage Insurance

General Coverage (subject to change) 3/1, 5/1, 7/1, 10/1 Conforming ARM

LTV Coverage

> 85% But ≤ 90% 25%

> 80% But ≤ 85% 12%

 Transactions requiring mortgage insurance may be subject to MI Company overlays

 Fannie Mae standard coverage levels required Private Mortgage

Insurance Disclosure

All transactions requiring Mortgage Insurance must include appropriate Private Mortgage Insurance Disclosure to borrower(s).

Caps

Product Max First Adjustment Max Subsequent Adjustment Max Life Adjustment 3/1 Libor 2% 2% 6% 5/1 Libor 5% 2% 5% 7/1 Libor 5% 2% 5% 10/1 Libor 5% 2% 5% Margin 2.25%

Index One Year WSJ Libor

Disclosures Appropriate ARM Disclosure is required. Convertible No

Qualifying Payment Initial fixed rate period 3 years

 Greater of the note rate plus 6% or the fully indexed rate Initial fixed rate period 5 years

 Greater of the note rate plus 5% or the fully indexed rate Initial fixed rate period greater than 5 years

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(Conforming ARM – Including NC/SC Conforming Flagship) Underwriting Loans must be evaluated by Fannie Mae Desktop Underwriter or Freddie Mac

Loan Prospector (see LP Requirements for additional overlays)

Loans receiving the following message through AUS are not eligible for purchase:

 Out of Scope or Error

 DU Expanded Approval (DU Refi Plus Only)  DU Refer with Caution

 LP A Minus  LP Caution

Manually underwritten loans are not eligible

LP Requirements Loans evaluated by Freddie Mac Loan Prospector must meet the following requirements:

 Max LTV/CLTV of 90% unless lower max LTV/CLTV listed in Product Matrix above

 620 minimum score up to 80%, 700 minimum score over 80%

 Max LTV/CLTV of 90% for non-occupying co-borrower with income used for qualification

 No manufactured housing  Max DTI 43%

 If tax returns required to document income, 2 years must be obtained  Full interior/exterior appraisal required

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Occupancy Purpose Property Type Max Loan Amount Max LTV/CLTV/ HCLTV Minimum Credit Maximum DTI Reserve Requirement 1 Unit - Attached & Detached, Condo, PUD $417,000 95%/95%/95% 660 43% As Required per Fannie Mae DU 1 Unit - Attached & Detached, Condo, PUD $417,000 80%/80%/80% 620 43% As Required per Fannie Mae DU 2 Units $533,850 85%/85%/85% 660 43% As Required per

Fannie Mae DU 2 Units $533,850 80%/80%/80% 620 43% As Required per

Fannie Mae DU 3-4 Units $645,300 3 Unit $801,950 4 Unit 75%/75%/75% 620 43% As Required per Fannie Mae DU 1 Unit - Attached & Detached, Condo, PUD $417,000 90%/90%/90% 660 43% As Required per Fannie Mae DU 1 Unit - Attached & Detached, Condo, PUD $417,000 80%/80%/80% 620 43% As Required per Fannie Mae DU 1 Unit - Attached & Detached, Condo, PUD $417,000 85%/85%/85% 720 43% As Required per Fannie Mae DU 1 Unit - Attached & Detached, Condo, PUD $417,000 80%/80%/80% 720 43% As Required per Fannie Mae DU 1 Unit - Borrower with 5-10 Financed Properties $417,000 75%/75%/75% 720 43% As Required per Fannie Mae DU Purchase

• DU messages relating to items outside standard Fannie Mae eligibility addressed above may be ignored • 30 year fixed rate conforming product

• HomePath product is for the purchase of Fannie Mae-owned properties designated by Fannie Mae as eligible Investment Purchase

Fannie Mae HomePath Mortgage - 30 Year Fixed

Primary

Residence Purchase

• Mortgage Insurance is not required for transactions over 80% LTV

• Condo Eligibility - Review of the entire project's Master Insurance policy(s) is the only project eligibility requirement • Primary residence, Interested Party Contributions of 6% on LTV's greater than 90% are eligible

• DU approval is required - Recommendation must reflect "Approve/Eligible" NOTES/OVERLAYS:

• Copy of the "Listing Details" page from www.homepath.com showing HomePath Mortgage logo is Required

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Occupancy Purpose Property Type Max Loan Amount

Max LTV/CLTV

Minimum

Credit Maximum DTI

Purchase 1-4 Unit Max MSA FHA

Loan Limit 96.5%/100% 640 43%

Refinance 1-4 Unit Max MSA FHA _{Loan Limit} 97.75%/97.75% 640 43% Cash Out

Refinance 1-2 Unit

Max MSA FHA

Loan Limit 85%/85% 640 43% Streamline Refinance Second Home Investment

Ineligible

FHA 15 & 30 Year Fixed

Primary Residence

• Maximum of 4 financed properties (cumulative)

• DU approval is required - Manual underwrites are not eligible

• Cash Out refinance - Properties listed for sale must be canceled 6 months prior to initial loan application

• New subordinate financing is not allowed on Refinance transactions • Max 6% seller contributions

NOTES/OVERLAYS:

• 0 x 30 or greater on mortgage lates in the most recent 12 months for Refinance transactions

• Minimum 12 month chain of title required

• Condominiums and Manufactured Housing are not eligible

• Minimum term is 180

• Maximum 4 borrowers per transaction

• Non Occupant Co-borrower is allowed for 1 unit only - No Cash Out • Streamline Refinance is not eligible

• Maximum of 1 x 30 on mortgage lates in the most recent 12 months for Purchase transactions

• Cash Out refinance requires a 6 months payment history on subject property

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Minimum

Purchase 1-4 Unit $417,000 100%/100% 620 43%

Refinance "Other"

(Loans that refi construction or installment land contract) 1-4 Unit $144,000 90%/90% 620 43% Cash Out Refinance (called "cash-out" by VA even if borrower receives no cash) 1-4 Unit $417,000 90%/90% 620 43% VA IRRRL Second Home Investment

Ineligible

VA 15 & 30 Year Fixed

Primary Residence

Ineligible

• Non Occupant Co-borrower is not allowed

• Maximum of 1 x 30 on mortgage lates in the most recent 12 months for Purchase transactions • Maximum of 4 financed properties (cumulative)

• Minimum term is 180

• Cash Out refinance requires a 6 months payment history on subject property

• True Cash Out refinance - Properties listed for sale must be canceled 6 months prior to initial loan application NOTES/OVERLAYS:

• Bonus entitlement may not be used on Refinance "Other" • Condominiums and Manufactured Housing are not eligible

• 0 x 30 or greater on mortgage lates in the most recent 12 months for Refinance transactions • Max LTV/CLTV can be exceeded by the inclusion of the VA Funding Fee

• DU approval is required - Manual underwrites are not eligible

• IRRRL transactions are not eligible

• Flip transactions are not eligible - Title reveals changes in ownership in the course of a few months

• Max 4% seller contributions

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Minimum

Purchase 1-4 Unit $417,000 100%/100% 640 29%/41% Refinance Cash Out Refinance Streamline Refinance Second Home Investment

• Foreclosure/Short Sale within 36 months of application - Bankruptcy discharged within 2 years of application

• Ownership of 1 additional dwelling - Outside commuting area, not structurally sound, or not functionally adequate

• Properties sold within 90 days of seller's acquisition with a sales price > 20% over acquisition are Ineligible • Non Occupant Co-borrower is not eligible

• Max 6% seller contributions • Credit waivers are not allowed

• Outstanding collection accounts, regardless of age, with no arrangements for payments are ineligible • Each borrower must have a minimum of 2 scores reporting

Ineligible

• All Refinance transactions are ineligible

• Maximum 4 borrowers per transaction

• Maximum of 1 x 30 cumulative on any secured or unsecured debt in the past 12 months • 2-4 Unit, Condominiums and Manufactured Housing are not eligible

NOTES/OVERLAYS: Primary

Residence

Ineligible

• Single Family Residence and PUDs only • LTV/CLTV is based on Appraised Value

• Max LTV/CLTV can be exceeded by the inclusion of the financed Guarantee Fee • GUS approval is required - Manual underwrite is not eligible

Ineligible

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Capital Markets Jumbo Product

Topic Guidelines Program Type & Loan

Term

Primary Residence & Second Home

15 Year Fixed JFCMI15

30 Year Fixed JFCMI30

5/1 ARM (30 Year Only) JACMI51

Minimum/Maximum Loan

Min Loan Amount Max Loan Amount

$417,001 $1,500,000 Maximum LTV/CLTV & Loan Amount Primary Residence

Purchase/No Cash-Out Refinance 1 Unit, PUD Max Loan Amount Max LTV/CLTV/HCLTV Min Credit Score $1,500,000 80/80% 760 $1,500,000 75/75% 720 $1,500,000 70/70% 700 Cash-Out Refinance 1 Unit, PUD Max Loan Amount Max LTV/CLTV/HCLTV Min Credit Score $1,500,000 70/70% 720 Max Cash Out

 LTV/CLTV/HCLTV < 50% = $500,000  LTV/CLTV/HCLTV > 50% = $300,000

Note: Max cash out includes pay off of subordinate liens Maximum LTV/CLTV

Secondary Residence Purchase/No-Cash Out Refinance

1 Unit, PUD Max Loan Amount Max LTV/CLTV/HCLTV Min Credit Score $1,000,000 75/75% 720 $1,000,000 70/70% 700 $1,500,000 70/70% 720  Second Home not eligible for cash-out refinance

Maximum LTV/CLTV Non-Owner Occupied

Ineligible

Declining Market Policy Maximum LTV/CLTV/HCLTV financing is subject to a reduction of 5% for properties located in a declining or distressed market.

 Declining/distressed market is defined as the neighborhood section of the appraisal indicates that Property Values are declining

 Reduction is waived when the following criteria is met: o Minimum FICO score of 740

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(Capital Markets Jumbo Fixed & ARM) Eligible States of

Origination (TPO)

GA, MD, NC, SC, TN, VA, WV

Underwriting Manual Underwrite Required

 There are No Exceptions to this guide

 Contact South State Underwriting for questions on any items not addressed in guide

Appraisal Full Interior-Exterior 1004

 Market Conditions Addendum 1004MC required

 1004D required for conversion of interim construction financing to permanent transactions (2 close only)

 The date of appraisal(s) must be within 120 days of closing – If greater than 120 days, a new appraisal will be required, recertification is not eligible Transactions Requiring 2 Appraisals

 All transactions with loan amount > $1,000,000

 First Time Homebuyer (see also First Time Homebuyer section)

Appraisal – Valuation

Comparables

 The appraisal should contain at least 3 recently closed comparables  Generally the appraisal should not contain comps greater than 6 months

from the report date

 Comparables between 6-12 months are typically permitted with acceptable appraiser explanation

 Comparables greater than 12 months from the report date are not permitted  Typically comps used should be within 1 mile of the subject, as well as

similar in age, size, features, amenities

 Net Adjustments should not exceed 15% of the comparable’s sales price, gross adjustments should not exceed 25%, and individual line items should not exceed 10%

Assumable Not eligible

Buy-downs Not available

Continuity of Obligation

For a refinance of an existing lien (no cash-out or cash-out) continuity of obligation must be present. Acceptable continuity of obligation exists when any of the following conditions are met:

 At least 1 borrower obligated on the new loan was also a borrower obligated on the existing loan being refinanced

 The borrower has been on title and residing in the property for 6 months and has either paid the mortgage for the last 6 months or can demonstrate a relationship with the current obligor

 The borrower recently inherited or was legally awarded the property (divorce, separation, etc)

 The title on the existing loan has been held in the name of a natural person or an LLC and the borrower was a member of the LLC prior to the transfer – Transfer must occur prior to application

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Topic

(Capital Markets Jumbo Fixed & ARM)

Convertible Not eligible

Conversion of Principal Residence

Current Home Pending Sale

 Mortgage payment for current residence and new residence must be counted in qualifying ratios

Converting to Second Home

 Mortgage payment for current residence and new residence must be counted in qualifying ratios

Converting to Investment Property

 Equity in current residence must be greater than or equal to 30% to use 75% of rental income to qualify

 If less than 30% equity, no rental income may be used and the mortgage payment for current resident plus the new residence must be counted in qualifying ratios

 To include rental income, all of the following are required: o Fully executed lease agreement

o Copy of canceled check for security deposit

o Bank statement verifying deposit in borrower’s account

o Validation of home value through appraisal no older than 6 months from date of application

Credit History  Minimum of 3 trade lines from a traditional source that reported for 24 months or more, and

 1 open mortgage trade line in the last 36 months

o 0 x 30 – previous 12 months; 1 x 30 – previous 24 months o See “First Time Homebuyer” section for applicable credit history

requirements

o Borrowers currently owning home free and clear requirement is waived for free and clear period – A copy of the title is required

 Borrower(s) must have a minimum of two credit scores

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(Capital Markets Jumbo Fixed & ARM) Derogatory

Credit

Borrowers with previous severe derogatory credit history must have re-established acceptable credit since the event with at least 3 satisfactorily paid accounts.

Delinquent credit impacting title must be paid off prior to or at close. Charge-offs or collection accounts that do not impact title are not required to be paid off if the cumulative balance does not exceed $5,000. If the total exceeds $5,000, all collection balances must be paid in full and past due brought current.

Bankruptcy

 None in the past 7 years based on the discharge or dismissal date Foreclosure/Deed-in-Lieu/Notice of Default

 None in the past 7 years

 Foreclosure filed/consummated/redeemed, delinquent property taxes, delinquency of 120 days or more, and workout agreements are treated the same as Foreclosure (as per title work, tax certificate, and/or credit report) Pre-Foreclosure Sale/Short Sale/Short Refinance/Modification

 None in the past 4 years

Consumer Credit Counseling Service (CCCS)

 None in the past 7 years based on the completion date

Documentation Full Documentation Required

 Credit report/credit verifications, income and asset documentation may not be more than 90 days at time of close

o Stock asset values used for dividend/interest income may be no more than 30 days old at close

 2 years income documentation required – See “Income” section for detailed information

 Assets must be sourced & seasoned for 60 days - 2 months asset statements required

o Statements must provide – Borrower as account holder, account #, time period covered, current balance, & statement date

o See Eligible Funds section for additional asset information  Previous 24 month primary housing payment history is required

o Should include mortgage payment, rental payments or combination o 0 x 30 – previous 12 months; 1 x 30 – previous 24 months

 Fully processed 4506-T with Tax Transcripts required for all borrowers, personal returns only

 Certificate of Occupancy required on all new construction properties

Eligible Borrowers  US Citizens

 Permanent Resident Aliens – Proof of lawful residency required Not Eligible

 Non-Permanent Resident Aliens

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Eligible Funds Asset documentation must be sourced and seasoned for 60 days. Large or irregular deposits (in excess of 5% of the transaction) must be explained and may require additional documentation.

Acceptable for Down Payment/Closing Costs & Reserves  Funds from borrower’s checking or savings account(s)  Proceeds from sale of borrower’s personal assets

o Value and evidence of sale must be verified

 Proceeds from a loan secured by borrower’s assets (example: loan secured by other real estate)

 Proceeds from sale of other real estate

 Stock, retirement accounts, COD, pension &/or other savings plan  Business funds when borrower is the sole owner and the company’s CPA

provides a statement that withdrawal of the funds will not negatively affect the business

Specific to Down Payment/Closing Costs

 Gift funds are eligible on Primary & Second Home

o 5% minimum borrower contribution before gift may be used o Gift letter required stating donor’s relationship, address, phone #,

amount of gift, & no repayment required

o Donor must be related to borrower – Domestic partner acceptable with proof of shared residency history

o Evidence of donor’s ability to provide the funds – 60 days sourced & seasoned

 Proceeds from a loan secured by financial assets (401K, stock, life insurance, etc)

 Ownership & proof of liquidation is required when stock, retirement accounts, COD, etc are used for down payment/closing costs Specific to Reserves

 60% of the net vested amount of assets located in retirement funds may be used for liquid reserves

 70% of the value of stocks, bonds, and mutual funds in non-retirement accounts may be used for liquid reserves

Reserves _{Loan Amount (Primary, 1 Unit)} _{Months of PITI}

≤ $1MM 6 Months Liquid

> $1MM 12 Months Liquid

 Second Home requires 12 months liquid reserves

 An additional six (6) months reserves is required for each financed property owned by the borrower(s)

 First Time Homebuyer requires 12 months liquid reserves

 See “Eligible Funds” section for information on allowable funds for reserves

Employment History

2 year employment history required Gaps In Employment

 All gaps exceeding 1 month must be explained in writing

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(Capital Markets Jumbo Fixed & ARM) Escrows for

Completion

Escrows for completion are not allowed

Escrow Waiver Available with fee

Note: Partial waiver of insurance only is acceptable with fee First Time

Homebuyer

First time homebuyers, defined as no ownership interest in a residential property during preceding 3 years, are allowed with additional restrictions:

 Primary residence only  $1,000,000 max loan amount  720 minimum credit score

 24 month housing history, 0 x 30 required

o Payments documented via an institutional VOR or canceled checks/bank records

o Borrowers living rent free are not eligible  12 months liquid reserves required

 Payment shock cannot exceed 200%

Income _{This section outlines guides specific to different borrower income sources. If} income has been declining or inconsistent, the lowest annual compensation over the prior 2 year period should be used.

Annuity & Pension Income – Verified by one of the following:  Copy of retirement award letter(s)

 12 months’ most recent bank statements showing receipt, OR

 Most recent years’ W-2, 1099, or signed tax return along with copies of 2 most recent bank statements showing deposit of income

Asset Dissipation

 Must be an employment related asset & borrower must be of retirement age  Borrower must have unrestricted access to the account and can only use if

distribution is not already set up

 70% of the value is to be used if the employment related asset is in the form of stocks, bonds, and mutual funds

 Funds used for closing or required reserves must be subtracted out of value  Maximum LTV/CLTV/HCLTV 70%

 Purchase & rate term refinance only

 Divide “Net Documented Assets” (value after funds for transaction are subtracted and any discounts applied) by 360 for monthly income figure Automobile Allowance

 Verified allowance minus all unreimbursed expenses – Add figure to income (if negative reduce income by)

 Automobile payment(s) is included in ratios Bonus/Incentive Income

 Must be consistent and documented for a minimum of previous 2 years  Written verification from the employer defining the dollar amount paid

during past 24 months, OR

 The most recent 30 days paystub & 2 years W-2’s or signed tax returns  If being used for down payment and is the only source of funds, it may not

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(Capital Markets Jumbo Fixed & ARM) Income (continued) _{Capital Gains/Losses}

 Sale of assets – including mutual funds, but excluding the sale of real estate  2 year history & sufficient assets to continue generating similar earnings

required evidenced by 2 years signed tax returns

 If assets generating capital gains are being sold as part of the mortgage transaction, income must be reduced by the % of assets that are being sold Commission Income

 2 years receipt required, same employer/same line of work  2 years signed tax returns & year to date earnings

Child Support/Alimony

 Divorce decree/separation agreement, AND

 Copies of court records, bank statements or canceled checks reflecting 12 months receipt

Disability Income

 Verify benefits with a copy of the awards letter or a statements from the benefit’s payer

Dividend/Interest Income

 Received for previous 24 months with current YTD in line with previous earnings

 Verification of stock assets no older than 30 days at closing with sufficient assets remaining to generate income

 Document with 2 years tax returns (4 years for non-public company stock)  The cash/stocks/bonds producing dividend/interest income may not be used

as a source for down payment or pledged as security Employed by a Relative

 Document income with 2 years tax returns and a current 30 day paystub reflecting YTD earnings

Non-Taxable Income

 Non-taxable portion (verified on 1040) may be grossed up 25% Notes Receivable Income

 May be used to qualify if received at least 12 months and will continue for at least 3 years

 Evidenced by – a copy of the 12 month seasoned note, individual tax returns, AND copies of bank statements

Overtime & Part-Time/Second Job

 Must have been received for previous 24 months

 Document with 1 current 30 day pay stub with YTD earnings & W-2’s or tax returns for previous 2 years

Rental Income

 Tax returns for the prior 2 years, including Schedule E, AND a current lease are required

 A 2 year history from time of application of managing residential investment properties is required

o Must be free of unexplained gaps greater than 3 months o This can be waived for borrowers converting current primary to

(24)

(Capital Markets Jumbo Fixed & ARM) Income (continued) _{Salaried Income/Wage Earner}

 Document via current 30 day pay stub with YTD earnings, 2 years W-2, and a verbal verification of employment executed within 10 calendar days of closing

Self-Employed

 25% or more ownership interest in a business

 Self-employment income not used to qualify must still follow self-employment documentation guidelines

 2 years signed personal and business returns (if applicable), including all schedules, K-1s, and statements required

o A year-to-date profit and loss statement may be required when the application date is more than 120 days after the end of the business tax year

 Self-Employed Verification of Existence of Business is required within 10 calendar days prior to close

Social Security and Retirement – Including retirement distributions, document via:

 Copy of social security award letter  2 years tax returns

 2 years 1099, OR

 3 months bank statements

 Proof of continuance required for retirement distributions Social Security Disability – Document via:

 Copy of social security award letter, AND  12 months bank statements showing direct deposit Trust Income

 Trust must be irrevocable to use income

 A copy of the trust agreement or trustee’s statement confirming the amount, frequency, & duration of payments is required

Verification of Employment Requirements

Salaried Verbal Verification

 Must be executed within 10 calendar days of closing  Confirm the borrower is employed at time of verification

 Include the name & phone number of the person processing the verification  Include the name, position, & phone number of the person providing the

employment verification

 The telephone number of the borrower’s employment must be verified independently

Self-Employed Verification of Existence of Business  Must be executed within 10 calendar days of closing

 The existence of business must be verified through a disinterested 3rd_party which can include:

o CPA

o Regulatory agency o Professional association

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(Capital Markets Jumbo Fixed & ARM) Ineligible

Transactions

 Investment Transactions  Interest Only

 Properties listed for sale within 6 months of refinance application date  Properties titled to a separate legal entity (LLC, corporation, limited

partnership, etc)  Non-QM transactions

 High Cost/Section 32 Transactions (HOEPA)  Higher Priced/Section 35 Mortgage Loans (HPML)  Lease-Purchase Option

 Leasehold Properties

 Escrows for Work Completion  Properties purchased through auction

Note: This list is not inclusive of all ineligible parameters. Please review guidelines in their entirety to ensure loan eligibility, including “Property Eligibility” section.

Interested Party Contributions/Sales Concessions

Maximum 3rd_{Party Concessions are 6%. Ineligible Concessions and concessions} above 6% must be deducted from the purchase price prior to determining LTV. Allowable Concessions

 Permanent reduction of the interest rate on the mortgage

 Payment of mortgage financing charges (discount points, loan fees, origination fees, property taxes, insurance escrows, etc)

 Pay the cost of other items typically paid by borrower (appraisal fee, application fee, attorney fees, title insurance, transfer taxes, etc) Ineligible Concessions

 Payment of HOA dues

 Concessions not addressed above

Lawsuit/Pending Litigation

Borrower presently involved in a lawsuit or pending litigation:  Primary Purchase or Rate Term Refinance only

 A statement from borrower’s attorney explaining circumstances, potential liability, & insurance coverage may be necessary

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Liabilities Installment Debt

 Payments may be excluded from the DTI calculation if there are less than 10 payments remaining to pay in full

o Excluded payment may not exceed 5% of borrower’s qualifying income

o Installment debt cannot be paid down to 10 payments in order to exclude

Revolving Debt

 The minimum required payment as stated on the credit report should be used in DTI calculations, unless,

 Revolving accounts where there are less than 10 payments remaining based on the remaining balance divided by the payment, may be paid off and closed to exclude from DTI calculation

o If there are more than 10 payments remaining the debt must be included in the DTI and cannot be paid off & closed to exclude o Revolving debt cannot be paid down to 10 payments in order to

exclude

 Revolving accounts with no payment listed on the credit report and no supplemental documentation to support a payment less than 5% of the balance, require 5% of the outstanding balance to be used as payment (Ex: American Express revolving accounts)

Home Equity Lines of Credit

 The qualifying payment used for all HELOCs, including non-subject property, is the greater of the payment listed on the credit report or 1% of the entire line amount, regardless of balance

Alimony/Child Support

 Payments may be excluded from the DTI calculation if there are less than 10 payments remaining to pay in full

Business/Co-signed Debt

 For co-signed debt, if the credit report does not reflect borrower is co-signer, a copy of the note/security instrument is required to verify borrower is not the primary obligor

 Proof of payment by the business/primary obligor is required to exclude debt from borrower’s DTI calculations

o 12 months, consecutive canceled checks are required for proof o If 12 months cannot be obtained, the debt must be included in DTI  New accounts with less than 12 months proof of payment, must always be

counted in borrower’s DTI calculations Multiple Property

Ownership

 Maximum of four mortgaged residential properties, regardless of occupancy  An additional six (6) months reserves is required for each financed property

(27)

(Capital Markets Jumbo Fixed & ARM) Non-Arms

Length Transactions

 Primary residence only

 Ineligible if additional risk factors are present (distressed sale, selling assets for down payment, etc)

 Appraiser must be informed of the non-arms length transaction and address whether or not the market value has been affected

 Principals or employees of lender or service provider cannot provide services on their own transactions

Additional Family Transaction Requirements  Gift of Equity letter required

 Foreclosure bailouts ineligible

o Payoff statement & VOM required on current mortgage as verification  HUD-1 must reflect all liens on title paid, not all proceeds going to family

member

 Current appraised value used for LTV purposes when borrower purchasing subject property from a family member

Non-Occupying Co-Borrower

 Primary, 1-unit, SFR only

 Occupying borrower DTI may not exceed 40%

 Non-occupying co-borrower must sign the Note as well as be on title prior to closing on a refinance or must take title at closing on a purchase  Non-occupying co-borrower must have a family or long standing

relationship with the borrower and may not be an interested party to the transaction

Occupancy Primary Residence & Second Home

Payment Shock Payment Shock is defined as the percentage of change from the Borrower(s) current housing payment to the Borrower(s) new housing payment. It reflects total rental payment or the PITIA on the Borrower’s Primary Residence. POA Requirements A Limited Power of Attorney may be used for execute the closing documents

provided the POA meets the following requirements:  POA is specific to the transaction

 Contains an Expiration Date

 POA is used only to execute final loan documents  Borrower(s) signed the initial 1003

 No interested party to the transaction may be POA  POA is recorded with the Mortgage/Deed of Trust

Private Roads Acceptable subject to the following:

 Title company must insure access to the subject property from a public street

 An adequate, legally enforceable agreement or covenant for maintenance is required

o Should include provisions for payment of repairs, default remedies, & term of the agreement

 If the state has statutory provisions defining the responsibilities of property owners for maintenance & repairs, no separate agreement or covenant is required

(28)

(Capital Markets Jumbo Fixed & ARM) Property Eligibility Eligible Property Types

 1 Unit Single Family Attached & Detached  PUD (Type E & F)

o Project Budget & PUD Questionnaire required on New PUD (Type F)  Rural Properties – Primary Only

 Historical Homes – 2 comps listed with the historical society required  Accessory Units/In-Law Units/Non-Conforming Addition acceptable if:

o 1 unit property

o Typical, common and acceptable in subject market o 3 comps provided on appraisal with similar accessory unit o Rental income may not be used

o Accessory unit must not jeopardize future hazard insurance claims o Accessory unit must be substantially smaller

Ineligible Property Types  Condominiums  Co-ops

 2-4 Unit Properties  Lease-Purchase Option  Leasehold Properties

 Properties Greater Than 10 Acres  Properties Less Than 600 Square Feet  Mixed-Use Properties

 Manufactured, Modular, & Log Home Properties

Note: Special consideration must be given for properties where land value exceeds 35% of total value to ensure typical & common in market area. Purchase

Transactions

 Verification of a satisfactory chain of title is required for a minimum of 24 months

 The seller must be on title for a minimum of 90 days, (from the date seller takes title to date sales contract executed)

Qualifying Ratios Maximum DTI = 40%

 Max DTI of 43% is allowed when the following are met:

o LTV/CLTV/HCLTV ratio is five percent (5%) below the indicated maximum, and

o Reserves (on the subject property) are six (6) months more than the required minimum, and

o Payment Shock is less than 50%

Qualifying payment used for Equity Lines of Credit

 Greater of the payment listed on the credit report or 1% of the entire line amount, regardless of balance

Initial fixed rate period 5 years

 Greater of the Note rate plus 2% or the fully indexed rate Initial fixed rate period great than 5 years

 Greater of the Note rate or the fully indexed rate

(29)

(Capital Markets Jumbo Fixed & ARM) Refinance

(Cash-Out)

 Primary Residence only  Maximum cash-out limits:

o LTV/CLTV/HCLTV < 50% = $500,000 o LTV/CLTV/HCLTV > 50% = $300,000  Max cash out includes pay off of subordinate liens

 6 month seasoning required since the most recent first mortgage transaction (purchase or refinance) from Note date to Note required for cash out  Properties listed for sale within 6 months prior to application date are

ineligible

 Copy of the Note for any subordinate lien is required

 Subordinate liens not provided by a financial institution are not eligible

Refinance (Rate Term)

 Proceeds used to pay off current first mortgage, including closing costs and prepaids

 Proceeds may be used to pay off junior liens used to purchase the property or those with 12 months seasoning

o Home equity line of credit draws cannot exceed a total of $2,000 in previous 12 months

 A maximum of $5,000 incidental cash may be received back by the borrower

 If owned less than 6 months, LTV is based on lesser of the current appraised value or the original purchase price plus the cost of any documented improvements

 Properties listed for sale within 6 months prior to application date are ineligible

Permanent Financing for Newly Constructed Home

The conversion of construction-to-permanent financing, replacing interim construction financing on a new home with a long term mortgage, may be treated as a purchase, refinance or cash-out refinance. South State does not offer interim construction financing. Permanent financing is eligible.

Purchase

 Borrower used proceeds from the interim construction financing to purchase the lot

 The LTV is calculated by dividing the unpaid principal balance by the lesser of the appraised value or the total acquisition costs (costs of improvements + purchase price of the lot)

Limited Cash-Out Refinance

 Borrower held legal title to the lot prior to construction financing application and is named as the borrower for the construction loan

 For borrowers who acquired the lot 12 months or more before applying for the construction financing, LTV is based on the current appraised value

 For borrowers who acquired the lot within the 12 months preceding the application dated for the construction financing, LTV is based on the lesser of the appraised value or the total acquisition costs (costs of improvements + purchase price of the lot)

Cash-Out Refinance

 Must meet all requirements for a Limited Cash-Out Refinance

 Borrower(s) must have held legal title to the lot for at least six months prior to the closing of the permanent mortgage

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(Capital Markets Jumbo Fixed & ARM) Secondary

Financing

Secondary financing must meet LTV/CLTV/HCLTV restrictions stated in the Product Matrix. There also may be no terms that restrict prepayment of the secondary transaction.

Simultaneous Closing

 Copy of loan approval & copy of the executed Note at closing Subordinate Existing Financing

 The terms of the second lien (copy from lender if not able to determine from credit), unsigned copy of subordination agreement prior to close, & executed subordination agreement at close are required

 Greater of the payment listed on the credit report or 1% of the entire line amount, regardless of balance is used as payment for Equity Line of Credit Term Fixed Rate Term

 10 to 30 year amortization

 Terms < 180 months will be priced as 15 years; > 180 months will be priced as 30 years

ARM Term

 5/1 & 7/1initial fixed rate period options  30 year amortization only

 A completed, signed, dated, and unexpired IRS form 4506-T for all borrowers whose income is used to qualify must be included in file submission

authorizing South State to obtain income information for all borrowers.  A new 4506-T must be signed at closing.

Correspondent

 A new 4506-T must be signed at closing.

ARM Specific

Caps

Product Max First Adjustment Max Subsequent Adjustment Max Life Adjustment 5/1 Libor Jumbo 2% 2% 5% 7/1 Libor Jumbo 5% 2% 5%

Disclosures Appropriate ARM Disclosure is required. Index One Year WSJ Libor

Lookback Most recently available 1 Year LIBOR 45 days prior to the interest rate change date

(31)

Topic Guidelines Program Type & Loan

Term

Primary Residence & Second Home

3/1 ARM (30 Year Am) FSTPO31 5/1 ARM (30 Year Am) FSTPO51 7/1 ARM (30 Year Am) FSTPO71 10/1ARM (30 Year Am) FSTPO101 Minimum/Maximum

Loan

Min Loan Amount Max Loan Amount

$417,001 $1,500,000 Maximum LTV/CLTV & Loan Amount Primary Residence

Purchase/No Cash-Out Refinance 1-2 Unit, PUD, Condo

Max Loan Amount Max LTV/CLTV Min Credit Score $1,000,000 80/80% 720 $1,500,000 70/70% 720 $1,000,000 65/65% 700 $2,000,000 65/65% 720 3-4 Unit

Max Loan Amount Max LTV/CLTV Min Credit Score

$1,000,000 65/65% 740

$1,500,000 60/60% 740

Cash-Out Refinance 1-2 Unit, PUD, Condo

$1,000,000 70/70% 740

$1,500,000 65/65% 740

 Max Cash Back in hand $250,000

 3-4 Unit not eligible for cash-out refinance Maximum LTV/CLTV

Secondary Residence Purchase/No-Cash Out Refinance 1 Unit, PUD, Condo

Max Loan Amount Max LTV/CLTV Min Credit Score

$1,000,000 80/80% 740

 Second Home not eligible for cash-out refinance

Maximum LTV/CLTV Non-Owner Occupied

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(NC/SC Flagship Jumbo ARMs) Eligible States of

Origination

NC & SC

Escrow Waiver Available with fee

Assumable No

Convertible No

Buy-downs Not Available

Subordinate Financing  Must meet LTV/CLTV Restrictions stated above

 If the subordinate lien is an equity line of credit, use the line limit to calculate the CLTV

Credit History  Minimum two years established credit history is required

 3 active trade lines (activity dates less than or equal to 12 months from current date) with 12 months satisfactory history on each trade.  A minimum credit risk score is required. See the LTV/CLTV & Loan

Amount topic for minimum score requirements.

 Borrower(s) must have a minimum of two credit scores.  Follow any additional automated underwriting guidance

Bankruptcy & Foreclosure

Eligible under specific conditions. Bankruptcy

 48 months from discharge or dismissal date with re-establishment of acceptable credit

Foreclosure

 84 months must have passed with re-establishment of acceptable credit Deed-in-Lieu of Foreclosure & Short Sale/Modification

(33)

(NC/SC Flagship Jumbo ARMs) Refinance

(Cash-Out)

 Primary Residence only  Loan amount limited to:

 Current unpaid principal balance, plus  Pay off of any junior liens, plus  Closing costs and prepaid items, plus  Maximum cash-out limit

 If the existing first mortgage was originated within 6 months of the application date and was a cash-out transaction, loan must be treated as cash-out

 Max cash back in hand to borrower is $250,000

 6 month ownership of subject property required for cash-out refinance.  Properties listed for sale within 6 months prior to application are

ineligible

Refinance (No Cash-Out)  Proceeds used to pay off current first mortgage.

 If the existing first mortgage was originated within 6 months of the application date and was a cash-out transaction, loan must be treated as cash-out

 Proceeds may be used to pay off junior liens with 12 months seasoning, no draws on home equity lines of credit, unless documentation can be provided to show it was incurred as part of acquisition of home.  The lesser of one percent (1%) or $5,000 incidental cash may be

received back by the borrower.

 If owned less than 6 months, LTV is based on lesser of the current appraised value or the original purchase price plus the cost of any documented improvements.

 Property may not be listed for sale at time of application

Documentation Full Documentation Required – AUS Recommendation Not Applicable  2 months asset statements required

 For Self-Employed Borrowers a minimum of 2 years personal and business returns (if applicable), signed by the borrower, including all schedules, K-1s, and statements

 A year-to-date profit and loss statement may be required for any self-employed borrower whose application date is more than 120 days after the end of the business’ tax year.

 Fully processed 4506-T with Tax Transcripts required for all borrowers, personal and business if applicable

Eligible Funds  Down Payment may be from borrower’s own funds or gift  Gifts permitted for Primary Residence only

 Required 5% minimum contribution from borrower’s own funds before gift may be used

(34)

(NC/SC Flagship Jumbo ARMs) Reserves

Loan Amount Months of PITI ≤ $1, 000,000 6 Months Liquid

> $1,000,000 12 Months Liquid

 Liquid assets are those that are readily available to a borrower after the mortgage closes

 Exclusive of 401k/SEP accounts, cash out funds, business assets

Eligible Borrowers US Citizens

Permanent Resident Aliens

Non-Permanent Aliens (max LTV of 75%)

Occupancy Primary Residence & Second Home

Eligible Property Types 1 – 4 Unit SFD, PUD, & Established Condominium  New condominium projects not eligible  Full Review Only

Maximum of four mortgaged residential properties, regardless of occupancy.

(35)

(NC/SC Flagship Jumbo ARMs) Conversion of

Principal Residence

Second Home

Escrows for Completion Escrows for completion are not allowed

Appraisal Full Interior-Exterior 1004 / 1073 (Condo) required  Market Conditions Addendum 1004MC required  > $1,000,000 loan amount requires 2 appraisals

Refinance – Permanent Financing for an Existing Construction Loan

Cash-Out Refinance

(36)

(NC/SC Flagship Jumbo ARMs) Caps

Product Max First Adjustment Max Subsequent Adjustment Max Life Adjustment 3/1 Libor Jumbo 2% 2% 6% 5/1 Libor Jumbo 5% 2% 5% 7/1 Libor Jumbo 5% 2% 5% 10/1 Libor Jumbo 5% 2% 5% Margin 2.25%

Index One Year WSJ Libor

Disclosures Appropriate ARM Disclosure is required.

Qualifying Ratios Follow Desktop Underwriter (DU) Findings – Not to exceed 43% Initial fixed rate period 3 years

 Greater of the note rate plus 6% or the fully indexed rate Initial fixed rate period 5 years

 Greater of the note rate plus 5% or the fully indexed rate Initial fixed rate period greater than 5 years

 Note rate or fully indexed rate

Underwriting  Loans must be evaluated by Fannie Mae Desktop Underwriter (DU)  South State Program Guideline supersedes DU findings

 Accept/Ineligible required – Ineligible findings are acceptable for reasons in alliance with this guideline

 For items not addressed in these guides, Fannie Mae Selling and DU Findings are to be utilized