PRODUCT CODES

10 Yr:  920     15Yr:  919     30/15:  922

PROGRAM CODES

R

ELIGIBLE STATES

The following state restrictions apply:

·          Financing not permitted in Hawaii, Alaska and South Carolina.

·          Loans $100,000 or less which have an APR of 4% over the 30 year fixed rate are not permitted in MN.

·          Minimum loan amount is $15,001 in Kentucky.

·          Minimum loan amount is $25,001 in Iowa, Pennsylvania, and Wisconsin.

·          APR must not exceed 10% in Oklahoma, and Wyoming.

·          Interest rate (simple interest) must not exceed 12% in Kansas and Washington; and 10% in Texas.

·          APR must not exceed 15% in Montana.

·          Minimum loan amount for balloon mortgages is $10,100 in Arizona.

·          Balloon loans are not permitted in Maine, Vermont, and West Virginia. 

·          Maximum loan term is 15 years in Tennessee.

·          Stated Value is not available in New York State as an acceptable method of establishing property value.

·          High-rise Condos (>8 stories) are restricted to the metropolitan areas of New York, Washington D.C., Chicago, San Francisco, and Los Angeles. 

MINIMUM LOAN AMOUNT

$10,000.  Subject loan must be in a second lien position.

MAXIMUM LOAN AMOUNT

Primary Residence:

§          1-2 unit, Condo (< 8 stories) and PUD:  $200,000

§          3-4 units:  $50,000

§          High-rise Condo (>8 stories): $100,000

§          Stated Value Option (1-2 unit, Condo [ < 8 stories], and PUDs):  $30,000

Second/Vacation Home

§          1-unit, Condo (< 8 stories), PUD:  $50,000

§          2-4 units:  Not allowed.

Coops/Investment:  Not allowed.

MAXIMUM CLTV

Refer to Minimum Credit Score, Credit History, and Qualifying Ratios Sections for additional requirements.

Primary Residence

1. A3 Credit score- maximum 45% DTI, however 50% DTI allowed when monthly residual income is at least $3,000.

2. A1 Credit score required & $3,000 residual income required.   

3. $3,000 residual income required. 

4. Three to four unit homes are not allowed in areas with declining property values.

1. High-rise Condos (>8 stories) must meet eligible state requirement (Please see above).

MAXIMUM CLTV

(CONTINUED)

Refer to Minimum Credit Score, Credit History, and Qualifying Ratios Sections for additional requirements.

Second/Vacation Home

1. Second/vacation homes are not allowed in areas with declining property values.

Stated Value-Primary Residence

1. Minimum monthly residual income of $1,500 is required for Stated Value Program.

PURCHASE – PROPERTY

Investor R requires that the home-seller is the owner of record.  If the home-seller is a corporation, partnership or any other business entity, all owners of that entity must be documented in the file.

The following restrictions also apply:

·          A property that is sold within 90 days after acquisition by the home-seller is not eligible.

·          A property that is sold within 91 to 180 days after acquisition by the home-seller is eligible with the following restriction:

·          If the sale price of the property is more than 50% of the home-seller's purchase price, the appraiser must address the difference, including any improvements that were made.

REFINANCE – PROPERTY

·          Properties listed for sale within the last six months are not eligible for financing.

·          If the property was purchased within the last 12 months, the CLTV must be the lesser of the purchase price plus the added value of any documented improvements or the current appraised value.  The HUD-1 will be required to establish property value.

·          If the property was purchased more than 12 months ago, The CLTV is determined by the current appraisal, or the original HUD-1 if purchased within the last 24 months. 

·          Stated Value- Requires seasoning of greater than 12 months from the Note date on current mortgage.

REFINANCE – LIMITED C/O

·          There are no limitations on the amount of closing costs that may be financed as part of a home equity mortgage, except for those imposed by applicable state laws or by a simultaneous first mortgage lender.

·          Texas Properties:  Must comply with applicable state law and Investor R guidelines.

REFINANCE – CASH-OUT

Unlimited cash-out is allowed up to Maximum CLTV parameters.  Not permitted in Texas.

SPECIAL PROPERTY TYPES

Modular, Panelized, and Pre-cut Homes: Follow standard FNMA/FHLMC requirements

Rural Properties:  Follow standard FNMA/FHLMC requirements.  Property must have less than 10 acres. 

Manufactured Housing:  Not allowed.

Leasehold Estates: Follow standard FNMA/FHLMC guidelines. 

PREPAYMENT PENALTY OPTION

No

CONVERSION OPTION

No

LOAN TERMS

See Amortization

AMORTIZATION

Fully Amortized Fixed Rate: 10 and 15 year fixed principal and interest repayment terms.

15 Year Balloon: 15-year term with a 30-year amortization period is available.

RECAST OPTION

No

BUYDOWN, TEMPORARY

Not allowed.

SPECIAL FEATURES

Revocable Inter-Vivos Trust: Follow standard FNMA/FHLMC guidelines:

§          This program also allows for the Inter-Vivos Trust to be non-revocable.  Must follow all other standard FNMA/FHLMC guidelines.

§          The Borrower with respect to a trust loan must include all the beneficiaries of the trust.  The note evidencing the trust loan must be executed by all the beneficiaries as well. 

Construction to Permanent Financing: Follow standard FNMA/FHLMC guidelines. 

Non-Arm’s Length Transactions:  Allowed on a case-by-case basis per Program R’s approval.  (i.e. when a parent sells a house to a child.)

ESCROW WAIVER

N/A

ASSUMABILITY

No

UNDERWRITING PROCEDURE

Level 3 submit to Assetwise.  Must receive an approval from Assetwise. 

Note: Loans in the state of MN with interest rates greater than 9% submit to level 5.

DOCUMENTATION REQUIREMENTS

Full/Alternative documentation is required:  Loans must receive approval from Asset Wise.

MINIMUM CREDIT SCORES

Refer to Maximum CLTV and Qualifying Ratios Sections for additional requirements

Selecting Credit Score

Select the lower of the two credit scores or the middle score of the three scores.  Once the score is selected for each Borrower, it is used for loan qualification as follows: For full income documentation loans, the primary Borrower’s score is used.  Primary Borrower is the Borrower with highest verified income. 

Credit Grade requirements are as follows:

·          A1:  Minimum 720 credit score required;

·          A2:  Minimum 680 credit score required;

·          A3:  Minimum 620 credit score required.

CREDIT HISTORY

Minimum Credit History

·          See “maximum loan amount and CLTV” for credit score guidelines; 

·          Two- year credit history with a minimum of four rated trade lines;

·          One trade reported in the past six months;

·          Minimum one-year previous mortgage/rental payment history is required.

MORTGAGE INSURANCE

N/A

PROJECT ELIGIBILITY

Condominiums:

·          Condo Projects that are 1-8 stories must meet FHLMC Class I, II or III OR FNMA Type A, B, or C requirements;

·          Condo Projects that are greater than 8 stories must meet FHLMC Class III OR FNMA Type A requirements and must be located in metropolitan areas (Please see eligible states);

·          Less than 10 units are acceptable if common to area & the HOA By-Laws contain an arbitration clause.

PUDS:

·          Detached PUDS are treated as single-family residences;

·          Attached PUDS must meet FNMA type E or F classification requirements; A single entity may not own more than 10% of the project units – if the project is new construction, the developer is excluded from this limitation.

APPRAISAL

One full appraisal report or the following options:

Less than or equal to $150,000 -  (Single family (1 Unit); Condo 1 to 8 stories, High-rise Condo (> 8 stories) maximum loan amount $100,000; PUDs; Second/Vacation home) A 2055 exterior-only inspection report is acceptable. 

Greater than $150,000 - (Single family (1 Unit); Condo 1 to 8 stories and PUDs) A 2055 interior and exterior inspection report is required.

2-4 Units: Requires one full appraisal (form 1025 or 72).

Properties Located in Declining Value Areas:  Maximum CLTV 75%

Stated Value:

Not required.  Value stated on the loan application is used to calculate the CLTV.

FIRST MORTGAGE ELIGIBILITY

Ineligible First Mortgages:

·          Contract for deed, contract for purchase, or land contract;

·          Privately held 1^st mortgage; a loan that has a provision that prohibits the placement of an additional lien on the subject property;

·          A Cal-Vet loan; and a loan that allows for future advances;

·          If the first mortgage is a balloon loan without a reset option, the term of the 2^nd mortgage home equity loan cannot exceed the balloon date.

·          The first mortgage loan may not have negative amortization, allow for future advances, or contain any other provision that may affect the CLTV.

QUALIFYING RATIOS

See Maximum CLTV, Minimum Credit Score, and Credit History Sections for additional information.

Qualifying Ratios:

Refer to maximum CLTV Section: Constraints due to DTI, credit scores, and maximum dollar amounts. 

Qualifying Ratios: State Value Option

Maximum total debt-to-income ratio is 45%.

First Mortgage Payment Calculation:

·          ARM 1^st Mortgages & 1^st Mortgages subject to a Buy Down:  Qualify the borrower at the maximum interest rate that could be in effect at the beginning of the 2^nd year of the mortgage term.  If the 1^st mortgage is seasoned more than one year, use the current interest rate.

CONTRIBUTIONS TO CLOSING COSTS

Follow first mortgage loan guidelines.

GIFT RULES

Follow first mortgage loan guidelines.

RESERVES

Follow first mortgage loan guidelines with the following exceptions:  Residual income of $3,000 is required for:

§          Credit Grades of A1 and A2 with 90% CLTV and Max Loan of $150,000.

§          All Credit Grades of A3 when utilizing DTI of 50%.

§          Credit Grade of A1 with a DTI of 55% maximum loan amount $100,000

DOWN PAYMENT ASSISTANCE PROGRAMS

NA

NON-OCCUPYING CO-BORROWER

Not allowed.

TRAILING CO-BORROWER

§          A Maximum of 50% of the trailing or relocating co-borrower’s income may be considered.

§          Self-employed income is not permitted.

FOREIGN BORROWER

Eligible:  Permanent Resident Aliens under the same terms as a U.S. citizen. 

Ineligible:  Non-permanent Resident Aliens, Foreign Nationals, and borrowers with diplomatic immunity.

MULTIPLE PROPERTY OWNERSHIP

No restrictions.

MULTIPLE LOANS TO ONE BORROWER

Maximum 4 outstanding loans and may not exceed an aggregate current outstanding principal balance of $2MM.