FHA Loan Programs - Quick Reference Guide Wholesale Lending Program Highlights

Transcription

FHA Loan Programs - Quick Reference Guide
Wholesale Lending
Program Highlights
LTV/CLTV Matrices
Occupancy
Eligible Products
 See Product Codes topic for code details.
Primary
Residence
FHA Standard


15 year Fixed Rate – Conforming Balance only

5/1 fully amortizing 30 year Hybrid ARM with 1/1/5 caps
20, 25 and 30 year Fixed Rate – Conforming and High
Balance
FHA Specialty
1.


15 year Fixed Rate – Conforming Balance only
20, 25 and 30 year Fixed Rate – Conforming and High
Balance
2.

ARMS are not allowed
3.
Program Features








Credit scores as low as 560 on Specialty product
All products are Fully-Amortizing
No credit score streamline refinances allowed
HUD REOs with repair escrows allowed
4.
5.
6.
7.
Purpose
Units
Base LTV
CLTV
Purchase,
1-4
96.5%5,6
/96.5%1,5,6
Rate/Term
1-4
97.75%
97.75%
Cash-Out
1-4
85%
2
85%2
Streamline
1-4
97.75%3
125%
with Appraisal
Streamline
All4,7
1-4
100%3,4
125%4
without Appraisal
In some cases (subordinate financing provided by a family member, private
individuals, a borrower > 60 years of age, etc.) subordinate financing may be as
high as 100% CLTV. Subordinate financing provided by a governmental entity may
exceed 100% CLTV by the “cost to acquire the property”.
Maximum LTV/CLTV is 80% if Conforming Specialty or 75% if High Balance
Specialty.
Non-Credit Qualifying Streamlines: New base loan amount may not exceed the
current outstanding principal balance.
Streamline without appraisal: The original appraised value must be used to
calculate the maximum LTV/CLTV.
Maximum 110% LTV/CLTV for HUD REO with escrow repair transactions.
Maximum 100% LTV/CLTV for HUD REO $100 Down Payment program
transactions.
ARMs not allowed for second homes or investment properties.
Low down payment requirements
Manual Underwriting allowed
Gift funds allowed for down payment and closing costs
No temporary buydowns
FHA Quick Reference Guide - Wholesale
page 1 of 8
10/20/2014
For business and professional use only. Not for consumer distribution. This document is not an advertisement as defined in 12 CFR 226.2 (a) (2). All products are subject
to credit and property approval. Other restrictions and limitations may apply. California DOC CFL 6053971,CRMLA # 4150081, #NMLS-2221, Pacific Union Financial, LLC. Subject
to change without notice. All rights reserved. Equal Housing Opportunity.
Loan Limits
The maximum base loan amount (excluding UFMIP) cannot exceed the FHA Statutory Mortgage Limits for the applicable county.
All Eligible States, except Alaska and Hawaii
1
Conforming Balance
(to Maximum)
$417,000
High Balance
(Minimum to Maximum)
$417,001 to FHA County Limit
2
$533,850
3
$645,300
4
$801,950
Units
Minimum Credit Scores
Feature
Purchase, Rate/Term
Credit Qualifying
Streamline Refinance
Standard
Specialty
620



580 if LTV >90% - Conforming Balance
600 if LTV >90% - High Balance
560 if LTV ≤90% - Conforming Balance and High Balance
620




560 – Conforming Balance
600 if LTV >90% - High Balance
560 if LTV ≤90% - High Balance
Non-Credit Qualifying
Streamline
620 for
pricing only
Score not required but may be used for improved pricing. If score is not
provided, loan will be priced assuming lowest score permitted per scenario.
All Borrowers Without A
Valid Credit Score
Not eligible


Assume 580
Assume 600 for pricing if High Balance

Conforming Balance:

600 if LTV >75% to ≤80%

560 if LTV≤75%
High Balance:

600 if LTV ≤75%
Cash Out Refinance
620

page 2 of 8
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FHA Program Overlays
Pacific Union Financial follows the policies outlined in the HUD handbooks and applicable Mortgagee Letters. This table highlights
Pacific Union Financial restrictions and overlays. Note: Loans that do not receive a TOTAL Scorecard credit approval via DU or LP
may not be re-resubmitted to the other automated underwriting system.
Topic
Guideline Overview/Details
Assets

Borrower
Employee Loan
Policy
Credit
Documentation
DTI Maximum
If there is a large increase in the borrower’s account or if the account was recently opened, the borrower must provide a credible
explanation and documentation to source large deposits for all transactions. A large deposit is considered the lesser of:
 A deposit that resulted in an increase greater than 25% of the borrower’s gross monthly income; or
 A deposit that is more than 2% of the sales price.
 See Geographic Restrictions for New Jersey 2-4 unit properties cash reserve requirements.
 Title may not be taken in the name of a trust.
 Loans to the originating Broker and/or their employees are allowed subject to a Second Level Review and approval by a Credit
Risk Underwriter.
•
Minimum credit score must comply with the minimum in the matrix above.
•
Unpaid paid tax liens and unpaid taxes without a lien recorded require a minimum three months repayment history with no late
payments, no exceptions allowed. The monthly payment must be included in the borrowers DTI ratios.

If payment arrangements have not been made, the tax lien must be paid in full.

IRS tax liens do not require a subordination agreement unless, there is evidence that the IRS has demanded a first lien
position.
 IRS Form 4506-T:

The 4506-T must be executed if tax returns are used to calculate income.

Income reported on the transcript must support the income entered in the AUS system.

Any major discrepancies between the income verified in the file and tax transcripts must be reasonable and supported by
documentation in the file.
 Verbal VOE (VVOE)

Pacific Union completed verbal VOE is required within 5 business days of closing on all loans.
 All borrowers must have a valid social security number and SS# must be documented in the file.
Effective for case numbers assigned on or after April 21, 2014:
 TOTAL Scorecard Approve/Accept Eligible loans with ≥620 credit score:
 55% max DTI.
 See Geographic Restrictions for New Jersey 2-4 unit properties debt-to-income requirements.
 Refer/Eligible transactions, loans for borrowers with no credit score (non-traditional credit or insufficient credit), manually
downgraded Approve/Accept Eligible transactions or Approve/Accept Eligible with scores <620 with DTIs >43%:
 Credit decision scores <580 and no credit scores (non-traditional/insufficient credit):
page 3 of 8
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Topic

Maximum DTI is 31/41%, no compensating factors or exceptions allowed
 Credit decision scores ≥ 580:




Geographic
Restrictions
Gift Funds
High Balance
Loans
Judgments
Loan Features
No compensating factors - max DTI is 31/43%
1 compensating factor - max DTI is 37/47%
2 compensating factors - max DTI is 40/50%
6 month housing payment history and revolving credit that has been paid off monthly during the most recent six month
period (discretionary debt) – max 40/40% DTI
 See Geographic Restrictions for New Jersey 2-4 unit properties debt-to-income requirements.
 See HUD Mortgagee Letter 2014-2 for compensating factor requirements.
 Note: Second Level Risk Review required when ratios exceed 33/45%.
 No Texas Home Equity loans.
 New Jersey 2-4 unit transactions: Maximum 50% DTI for TOTAL Scorecard Approve/Eligible recommendations. No exceptions
allowed. See below for additional requirements.
 Not allowed in AK, HI, KS, MO, MS, MT, NE, NY, WV, WY
 New Jersey transactions:
 For all 2-4 unit transactions, the following cash reserves are required regardless of underwriting type:
♦
2 unit = 3 months PITI required
♦
3 – 4 unit = 6 months PITI required
♦
Satisfactory 12 months housing expense must be verified by credit report or cancelled checks. Borrowers living rentfree during the most recent 12 months are not eligible.
♦
Maximum 50% DTI for TOTAL Scorecard Approve/Accept Eligible recommendations. No exceptions allowed.
Effective prior to April 21, 2014:
 New Jersey 2-4 units properties:
 2 unit = 3 months PITI cash reserves
 3 – 4 unit = 6 months PITI cash reserves
 Maximum 43% DTI for TOTAL Scorecard Refer/Eligible and Manual Underwritten loans. No exceptions allowed.
 Satisfactory 12 months housing expense must be verified by credit report or cancelled checks. Borrowers living rent-free
during the most recent 12 months are not eligible
 A Pacific Union Financial gift letter must be included in the file when the transaction includes gift funds.

20, 25 and 30 year terms only
Judgments must be paid in full prior to loan approval, with the exception of court ordered judgments with payment arrangements
in which three months scheduled payments were made prior to loan approval.
The following programs are not allowed:
 203(k) Rehabilitation Mortgage
 Energy Efficient Mortgage (EEM)
 Good Neighbor Next Door Program
•
page 4 of 8
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Topic
Mortgage/Rental
History –
Property





203(h) Disaster Victim Program
Reverse mortgages
Texas Home Equity
Temporary buydowns
See Geographic Restrictions for New Jersey 2-4 unit properties mortgage/rental history requirements.

Manufactured homes are allowed. Eligible states include: AZ, CA, CO, FL, IL, MN, NC, NV (not allowed for CVF), OK, SC, TX, and
UT.

Refer to the Manufactured Home Loan Program Guide for additional requirements.
Modular homes are eligible.
HUD REO with repair escrows allowed.
An escrow account is allowed for repairs that could not be completed prior to closing due to a weather related delay. Refer to the
Escrow Holdback Policy for additional details.
 No cooperative properties
 No leaseholds
 Eligible for Rate/Term Refinance and Streamlines if listing was expired or cancelled prior to application date.
 Eligible for Cash-Out Refinance if listing was expired or cancelled >90 days prior to application date.
Streamline Refinances
 Non-Credit Qualifying Streamlines:
 An abbreviated 1003 is allowed.
 For Non-Credit Qualifying transactions with an Appraisal, the appraisal may not be used to increase the new loan amount.
 Mortgage history must be verified as follows:
 Mortgage only credit report; or
 Cancelled checks (front and back); or
 VOM directly from the current servicer; or
 Payment history from servicers website provided by the borrower that includes the following:



Property Listed
For Sale
Refinance
Transactions







The servicers name in the header.


A complete loan application.
At minimum, the last four digits of the mortgage account number.
A verifiable URL that includes the mortgage servicers name.
The monthly payment amount.
The date payments were made.
The date the document was printed.
HPMLs are eligible provided they comply with HPMLs are eligible provided they comply with the Federal Higher Priced Mortgage
Loan requirements (no prepayment penalties, ARMs are qualified at the higher of the note rate or fully indexed rate, etc.).
 The borrower’s ability to repay must be satisfied as follows:
Fully documented income and asset.
page 5 of 8
10/20/2014
Topic


The payment must be equal to or lower than the existing payment.
If a credit report is provided, the report will only be used to validate the mortgage payment history and if applicable,
improve pricing.


Note: Other information on the credit report will not be used in the underwriting analysis.
HPML refinances are eligible when one of the following apply:



The mortgage payment history complies with the mortgage payment history requirements.
The DTI on the new loan is congruent with or lower than the DTI on the loan being paid off.
Verification that the new payment is equal to or lower than the existing payment.
 HPML Hybrid ARM transactions must be qualified at the higher of the note rate or the fully indexed rate.
•
Loans that have been previously modified or restructured must meet agency requirements and have no late payments within the
13-24 month payment history immediately after the modification/restructure. The 24 month payment history requirement will be
waived for loans currently serviced by Pacific Union.
page 6 of 8
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Product and ADP Codes
Product Codes
Product Description
15-Year
20-Year
25-Year
30-Year
5/1 Treasury ARM
Streamline 15-Year
Streamline 20-Year
Streamline 25-Year
Streamline 30-Year
5/1 Treasury ARM Streamline
Flipping Waiver
Standard
Conforming Balance
High Balance
F15
N/A
F20
F20HB
F25
FJ25
F30
FJ30
F51T
F51THB
F15 SL
N/A
F20 S
F20 HB
F25 SL
FJ25 SL
F30 SL
FJ30 SL
F51T S
F51THB S
F30 FLP
FJ30 FLP
Specialty
Conforming Balance
G15
FP20
G25
G30
N/A
N/A
FP20 S
G25 SL
G30 SL
N/A
G30 FLP
High Balance
N/A
FP20HB
G25HB
G30 HB
N/A
N/A
FP20HB S
G25 HB SL
G30 HB SL
N/A
G30HB FLP
ADP Codes
Eligible Section of the Act
DE ADP Code
203(b)
203(b)
203(b)
203(b)
203 (b)
234(c)
234(c)
703
729
734
731
821
734
831
Brief Description
Fixed Rate
Adjustable Rate Mortgage
Fixed Rate Site Condominium
Adjustable Rate Mortgage Condominium
Refinance of Borrower in Negative Equity Position (Non-condo)
Fixed Rate Attached Condos
Refinance of Borrower in Negative Equity Position (Condo)
page 7 of 8
10/20/2014
FHA ARM Adjustment Date Matrix
The first interest rate adjustment and payment adjustments for the 5/1 CMT ARM will be as follows:
Closing
First Pymt Date
5/1 ARM First Interest Rate
Change Date
Number of Months Until
st
1 change
09/02 - 10/01
11/01
01/01
63
10/02 - 11/01
12/01
01/01
62
11/02 - 12/01
01/01
01/01
61
12/02 – 01/01
02/01
04/01
63
01/02 – 02/01
03/01
04/01
62
02/02 – 03/01
04/01
04/01
61
03/02 – 04/01
05/01
07/01
63
04/02 – 05/01
06/01
07/01
62
05/02 – 06/01
07/01
07/01
61
06/02 – 07/01
08/01
10/01
63
07/02 - 08/01
09/01
10/01
62
08/02 - 09/01
10/01
10/01
61
page 8 of 8
10/20/2014

FHA Loan Programs - Quick Reference Guide Wholesale Lending Program Highlights

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