Underwriting Guideline Matrix

Subject to Change Without Notice – Valid as of: 

06/10/2014 

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Underwriting Guideline Matrix

Fannie Mae DU Refi Plus

NEWLEAF 

Fannie Mae DU Refi Plus 

Product Codes:  W130, W132

This program is for existing Fannie Mae owned mortgage and eligibility is determined by DU. Please

refer to fanniemae.com for guidelines not included in this document

Transaction Parameters

All Occupancy Types

(Second Homes Limited to 1 Unit)

# Units Maximum Loan Amount Hawaii Properties Maximum _LTV/TLTV Min FICO

1 417,000 625,500 125%/Unlimited TLTV 620 2 533,850 800,775 3 645,330 967,950 4 801,950 $1,202,925

General Guidelines

The mortgage being refinanced:

 Must have a Note Date on or before May 31, 2009

 Must be a 1st _{Lien, Conventional mortgage currently owned by Fannie Mae}

 Must result in at least one of the following borrower benefits: o Reduction in the interest rate of the first lien mortgage,

o Replacement of an ARM, Initial Interest® Mortgage (or any mortgage with an interest-only period) or a balloon/reset mortgage with a fixed-rate, fully amortizing mortgage, or o Reduction in the amortization term of the first lien mortgage, or

o Reduction in the monthly principal and interest (P&I) payment of the first-lien mortgage  There is no limitation on the amount of the increase in the Borrower’s principal and interest payment

 Program expires on December 31, 2016

 The new DU Refi Plus and the existing mortgage do not have to represent the same occupancy. The

occupancy of the subject property may have changed by the time of the new mortgage transaction

Minimum Loan

Amount  $75,000 Maximum Loan

Amount 

Conforming: Agency loan limits

 High Balance: Not allowed

Eligible States  AZ, CA, CO, CT, FL, GA, HI, ID, NM, OR, TN, TX, UT, WA & WA

Eligible Terms and

Product Codes 

15 year Fixed – W132



Underwriting

Method 

DU determines if loan is eligible for DU Refi Plus

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Underwriting Guideline Matrix

Fannie Mae DU Refi Plus

Loan

Purpose/Proceeds

 Limited Cash-out only

 If guidelines not specified in this document, follow Fannie Mae’s standard limited cash-out guidelines

 The new loan can include:

o Payoff of the unpaid principal balance on the existing mortgage

o The financing of closing costs, prepaid items and points (junk fees on the payoff demand)

o Cash back to the borrower cannot exceed $250

o Any access funds at closing must be applied as a principal curtailment and reflected on the final HUD-1

Eligible Borrowers

 Borrower(s) may be removed from the new refinance, provided that at least one of the original borrowers is retained on the new loan

 Borrower(s) may be added to the new loan provided the existing borrower(s) is retained

 Citizens & Permanent and Non-Permanent Resident Aliens are allowed with a valid Social Security number.

 Non-Resident aliens (foreign nationals) are not allowed

Property Types

 Eligible: SFR, 2-4 Units, Condo, PUD, Leasehold

 Ineligible: Non-Warrantable Condos, Hotel/Resort Projects, Manufactured Homes , Co-ops, Farms

& Ranches, Dome Homes, Earth Homes, Timeshares, Condo Hotels, Log Homes or other unique properties. Income producing properties are ineligible.

 Refer to max acreage section and to the Geographic restrictions section for more details.

Geographic

Restrictions   Texas a(6) mortgages are not eligible Florida condos - Primary Residences only up to 80% LTV max

Mortgage Insurance

 If existing mortgage does not have MI, MI is not required regardless of the new refinance LTV  If existing mortgage has MI and the new DU Refi Plus loan being refinanced is > 80%:

o Same % of coverage must be maintained

o MI must be transferred with existing MI company

 The following MI types are permitted and Certification must be transferred to NewLeaf:

o Borrower Paid MI including Financed premiums

 Lender Paid MI not permitted on new loan – Must be converted to Borrower Paid Monthly MI

Qualifying Ratios  Determined by DU

Qualifying Rate  Note Rate

Subordinate Financing

 Existing subordinate financing can remain in place as long as it is resubordinated to the new DU Refi Plus mortgage loan

 An increase in the current unpaid principal amount of any junior lien is prohibited to curtail the DU Refi Plus refinance

 New subordinate financing is only permitted if it replaces existing subordinate financing  Closed End subordinate financing that is not fully amortized and has a maturity date or balloon

payment due in less than five years is ineligible

 HELOCs with maturity or call date within 5 years are eligible

No. of Financed

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Underwriting Guideline Matrix

Fannie Mae DU Refi Plus

Impounds

CA:

 <90% LTV/CLTV – Impounds are not required even if the original loan being paid off had impounds

 >90% LTV/CLTV – Impounds are required only when the original loan being paid off had impounds

Other States:

 >80% LTV/CLTV – Impounds are required only when the original loan being paid off had impounds

Income

Employment History  There is no requirement for minimum history of receiving income or to make a determination that the income used to qualify can be expected to continue for at least the next 3 years. However, below income documentation requirements must be met.

Income

Documentation

VVOE is required for all employment types and must be obtained no more than 10 business days prior to the note date. Self Employed borrowers require third party verification of business existence.

Income Documentation Requirements:

 For Employed Income (Base pay, Bonus and Overtime Income):

o One paystub

o Applies to primary employment, secondary employment (second job and multiple jobs) and

seasonal income

 Commission Income:

o One paystub or one year personal tax returns

o Applies without regard to the percentage of commission earnings

 For Self Employed Income:

o One year personal tax returns

o Applies to primary and secondary self-employment

 Alimony or Child Support Income:

o Copy of divorce decree, separation agreement, court order or equivalent documentation,

and

o One month documentation of receipt

 Retirement, Pension and Social Security Income: One of the following is required:

o Award letter, or

o One year personal tax returns, or

o W-2 or 1099 form or SSA-1099 form, or

o One month bank statement reflecting direct deposit

 Rental Income:

o Lease or one year personal tax return

o Applies to rental income from subject or other properties owned

o 1007 not required

 Temporary Leave Income:

o The borrower’s written confirmation of his/her intent to return to work, and

o Evidence or information from the borrower’s employer indicating that the borrower does have the right to return to work after the leave period

 All Other Income Types:

o Appropriate documentation determined by the Underwriter

Credit

Minimum Trade

Lines  No minimum tradelines required

Mortgage History 

Determined by DU

 If an open mortgage is not reported on the credit report, a 12 month rating must be obtained reflecting 0X30

Significant Derogatory

 Waiting period and re-establishment of credit requirements are not required for DU Refi Plus loans  DU will issue a message when a significant derogatory credit event is identified that indicates the loan

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Underwriting Guideline Matrix

Fannie Mae DU Refi Plus

Assets

 Most recent bank statement verifying sufficient funds needed to close  Source of large deposits and proof of liquidation not required

 Gifts funds are allowed

Collateral

Property Valuation

Option 1: Property Inspection Waiver (PIW)

 PIW is eligible as determined by DU

 $75.00 fee is required

 Property Inspection Waiver Disclosure form is required

Option 2: New appraisal

 If DU does not offer a PIW, a full appraisal is required

 Appraisal cannot be more than 90 days old from the note date

Properties Listed

For Sale  There is no requirement to confirm if the property is listed for sale Maximum Acreage  Site size must be typical for the area and supported by comps.

 Maximum 20 acres as long as the subject property is residential in nature and there is a demonstrated market.

 Income producing properties are ineligible.

Condominiums

 Condo review is not required. Newleaf must confirm project is not a condo-hotel, motel or timeshare

 All insurance requirements must be met