Conventional and Government Program Overlays HomeBridge Overlays ALL PROGRAMS 4506-T Requirements If TRV reveals “C” or “E” losses and/or unreimbursed expenses, 2 years of tax transcripts will be required regardless of DU findings. If business funds are used for qualifying the borrower, transcripts for the business tax returns are required. Credit Inquiries Address all inquiries on credit report within previous 120 days (not required on FHA non-credit qualify Streamline and USDA Pilot Refinance program) Delinquent Child Support Must be paid current or in a payment plan Financed Properties HomeBridge exposure limited to maximum 2 loans to one borrower, one must be primary residence Minimum Loan Amount $60,000 Power of Attorney Allowed for active duty military personnel, military contractors, extenuating circumstances, and documented medical conditions. Rent Back The maximum number of days a property seller may rent back the subject property from the buyer (borrower) after loan closing is 30 days. Square Footage Single family residences require a minimum of 650 square feet. State Restrictions Massachusetts and Nevada Texas OO, C/O Refi’s Not allowed 1 3/3/14 Conventional and Government Program Overlays CONVENTIONAL CONFORMING AND HIGH BALANCE Borrower Debt Certification* Borrower must certify no new debt incurred from the time the credit report used to u/w loan was pulled to loan closing. One of the following required: “Soft pull” credit report, or Borrower Debt Affidavit (sample on HomeBridge website), signed by borrowers, or letter written and signed by borrower stating no new credit obtained. Escrow Holdbacks Escrow holdback must have been funded and work completed prior to purchase Flip Transactions Properties re-sold ≤ 90 days from acquisition require HomeBridge prior approval. Ineligible Transactions • • • • Inter Vivos Trusts Eligible subject to Fannie Mae guidelines on owner-occupied and second home transactions only. Ineligible on investment transactions. S/E Borrower Borrower filed extension, a current YTD P&L including prior year must be provided Manual underwrite Non-traditional credit Home Path Home Path Renovation *This is not a HomeBridge overlay; it is a requirement of Fannie Mae under LQI. This information is provided on this overlay document as a courtesy reminder for Sellers 2 3/3/14 Conventional and Government Program Overlays DU REFI PLUS AUS Decision Approve/Eligible Only Appraisal • Credit Score Minimum Minimum 620 regardless of DU Findings Derogatory Credit Fannie Mae standard waiting periods for foreclosure, bankruptcy, pre-foreclosure/short sale apply regardless of DU Findings. Exceptions may be granted on case-by-case basis. Escrow Holdbacks Not allowed Escrow/Impound Account Required regardless of LTV unless prohibited by state law Inter Vivos Trusts Eligible subject to Fannie Mae guidelines on owner-occupied and second home transactions only. Ineligible on investment transactions. Maximum LTV • • MI Transfer Eligible with: • Genworth • MGIC • Radian • United Guaranty **Lender Paid Mortgage Insurance: Single premium only** Mortgage History 0 x 30 past 12 months S/E Borrower Borrower filed extension, a current YTD P&L including prior year must be provided Per DU Findings. The value provided on the 1003 must be entered in DU. The value on the 1003 and the value entered in DU must match. 150% LTV for primary residence and second home 125% LTV for investment property 3 3/3/14 Conventional and Government Program Overlays Government Programs Overlays FHA Standard Back to Work – Extenuating Circumstances Minimum 640 credit score required Conversion of Current Residence (Borrower Vacating 2-4 unit O/O Prop) Rental income from the units rented, excluding owner-occupied units the borrower is vacating, may be used for qualifying Credit Score Minimum • Minimum 620 credit score • Minimum 660 credit score for 2-4 unit high balance transactions If the subject property is located in Alabama, Arkansas, Connecticut, Delaware, Georgia, Illinois, Indiana, Iowa, Louisiana, Maryland, Missouri, New Jersey, New Mexico, New York, Oklahoma, South Carolina, and Tennessee, AND the borrower has a credit score of 620-639, the following applies: Credit Scores 620-639 • No major derogatory credit in the past 24 months(judgments, tax liens, non-medical collections, 60 day+ installment/revolving) • Gifts are not permitted. Grants and DPA program funds are eligible. • 0x30 in past 12 months housing history required • Borrowers without prior 12 months housing history maximum 90% LTV. Borrowers with multiple residences in previous 12 months, a VOR is acceptable from a previous landlord only; current housing must be documented with checks/money orders NOTE: The additional requirements detailed above do not apply to borrowers with a credit score ≥ 640 even if the property is located in one of the states identified above or to borrowers with a 620-639 credit score and the subject property is not in one of the states above. DTI • • • Manual Downgrade Credit Score: 620 – 639: maximum 45% (based on occupant borrower only) Maximum DTI for loans with a credit score of 640 – 659 is 45% however 45% DTI may be exceeded, up to a maximum 49.99% if the following criteria is met: - Loan received a DU/Total ScoreCard “Approve/Eligible” - Maximum 50% payment shock. For rental payments, a copy of a cancelled rent check/ money order dated prior to the loan application is required to determine payment shock; for mortgage use the payment amount from the Note or credit report to calculate payment shock. Loans downgraded to manual underwrite maximum DTI is 31%/43% unless strong compensating factors Compensating factors are required on all loans downgraded to a manual underwrite. 4 3/3/14 Conventional and Government Program Overlays Government Programs Overlays FHA Standard (cont.) Property Flips • • • 1-4 unit properties are eligible (Illinois 1-unit only; New Jersey/New York 1-2 units only) subject to the following: - Properties re-sold ≤ 90 days from acquisition require HomeBridge prior approval - Regardless of the increase in value HomeBridge requires two appraisals, documentation/ receipts of improvements and a property inspection. The lower of the value of the two appraisals must be used. Refer to the HomeBridge Seller Guide Chapter 6 – Loan Eligibility, Property Re-sold 0-90 Days from Acquisition topic for detailed requirements. 2-4 units regardless of geographic region: - Properties subject to a Short Sale Agreement are required to be listed on an MLS for a minimum of 30 days prior to the execution of the sales contract. Properties listed as an “Exclusive Listing” are ineligible for a flip transaction. Illinois 2-4 units and New Jersey / New York 3-4 units subject to the following: - One full calendar year since acquisition date (closing date) to application date must have elapsed for the property to be eligible and there can be no relationship between the seller and borrower. (Does not apply when the seller is bank, government agency, etc.), - The subject property must not be in foreclosure, and - Signed affidavit required stating no relationship between buyer and seller, and - Max DTI 45%, and - If > 90% LTV, no gifts are grants allowed. Additional State Restrictions • Purchase Transactions Max CLTV 100% of cost to acquire with the 2 Insufficient Credit History Minimum 2 months cash reserves from the borrowers own funds required Illinois 2-4 units and New Jersey / New York 3-4 units subject to the following: - One full calendar year since acquisition date (closing date) to application date must have elapsed for the property to be eligible and there can be no relationship between the seller and borrower. (Does not apply when the seller is bank, government agency, etc.), - The subject property must not be in foreclosure, and - Signed affidavit required stating no relationship between buyer and seller, and - Max DTI 45%, and - If > 90% LTV, no gifts are grants allowed. nd 5 from Government Entity 3/3/14 Conventional and Government Program Overlays Government Programs Overlays FHA Streamline Credit Score Non-Credit Qualifying: • 660 minimum credit score required in the following states: Arizona, California, Colorado, District of Columbia, Florida, Hawaii, Idaho, Kansas, Kentucky, Maine, Michigan, Minnesota, Mississippi, Montana, Nebraska, New Hampshire, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming • 680 minimum credit score required in the following states: Alabama, Arkansas, Connecticut, Delaware, Georgia, Illinois, Indiana, Iowa, Louisiana, Maryland, Missouri, New Jersey, New Mexico, New York, Oklahoma, South Carolina, and Tennessee. Credit Qualifying: • Minimum 620 Credit Qual w/ Appraisal Borrower must be receiving benefit of reduced annual MIP or CLTV for credit qual with appraisal Streamline; if not, loan should be processed as a rate/term refinance and have valid DU/Total Scorecard “Approve/ Eligible” Finding Maximum CLTV 125% Non-Credit Qualifying Mortgage History/Seasoning • • Occupancy Owner-occupied only Property 1-unit only Mortgage history requires 0x30 in past 24 months or since loan inception. A minimum 12 month payment history on the subject property is required. 6 3/3/14 Conventional and Government Program Overlays Government Program Overlays VA Standard ≥ 95% Cash-Out • • • • • 100% LTV is eligible for payoff of mortgage(s) only; maximum $500 cash to borrower. Cash to the borrower is allowed at 95% LTV Conforming loan amount only; no high balance Minimum 680 credit score 30 year fixed rate Minimal residual income requirements apply: AUS Loans must be run through DU. HomeBridge accepts: • “Approve/Eligible” Finding, or • “Refer/Eligible”. “Refer/Eligible” requires manual underwriting. Manual underwriting allowed on exception basis only. • An “Approve/Eligible” Finding requires a downgrade to manual underwriting for any of the following: - Mortgage history indicates 1x30 in 12 months - Disputed tradelines - Subject loan was previously restructured/modified mortgage. - A minimum of 12 months of 0x30 payments have been made on the modified loan - If mortgage was in default at the time of modification it is not eligible. Credit Score • • Collections Minimum 600 credit score Minimum 680 with cash-out and ≥ 95% LTV At underwriter discretion, collections may be required to be paid off (based on type and amount) 7 3/3/14 Conventional and Government Program Overlays Government Program Overlays VA Standard (cont.) Comparable Sales • The source of closed comparable sales must be from a Multiple Listing Service (MLS) or MRIS at www.mris.com, Midwest Real Estate Date (MRED) at www.mredllc.com, or North Texas Real Estate Information Systems, Inc. (NTREIS) at www.ntreis.net or San Antonio Board of Realtors at www.sabor.com. • Vermont and Maine - allowed to use another independent public source as MLS/MRIS are not common Delinquent Child Support Must be paid current or in a payment plan DTI • • • Eligible Borrowers Max DTI 31%/43% with a 600-619 credit score Max DTI 45% with a 620-639 credit score however a DTI > 41% requires additional documentation/justification unless: - The ratio is > 41% is due solely to the existence of tax-free income, or - Residual income exceeds the guidelines by at least 20% File must include justification including all compensating factors. Per DU Findings with a ≥ 640 credit score up to a maximum 50% Only the veteran and the veteran’s spouse are eligible. Loans defined as “joint loans” by VA are not eligible. Property Listed for Sale If the property was listed for sale within the prior 12 months but is not currently listed for sale: • Cash-out only eligible if the listing is expired/cancelled or withdrawn 180 days prior to the application date • The appraised value should be at least 10% below the lowest listing price. If the appraised value is not at least 10% less than the lowest list price the underwriter must address the variance satisfactorily. • The borrower must provide written confirmation of their intent to occupy as their primary residence. LTV/CLTV Maximum 90% LTV for cash-out transactions (see ≥ 95% cash-out topic above for exception) Maximum Loan Amount $1,000,000 in all states except Hawaii; max $1,500,000 in the state of Hawaii Rural Properties Maximum 10 acres Short Sale 2-4 unit properties subject to a Short Sale Agreement must have been listed on the MLS for a minimum of 30 days prior to the execution of the sales contract. Properties designated as an “Exclusive Listing” are ineligible. 8 3/3/14 Conventional and Government Program Overlays Government Program Overlays VA Standard (cont.) State Restrictions Illinois 2-4 units, New Jersey and New York 3-4 units are subject to the following: - At least one full calendar year must have elapsed between the seller’s acquisition of title and the execution of the sales contract (does not apply if the seller is a government agency, bank or bank subsidiary), and - The subject property must not currently be in foreclosure, and - The borrower and seller will be required to sign an Identity of Interest Certification stating that there is no relationship between them other than the transaction, and - Max DTI 45%, and - If LTV is > 90% no gifts or grants permitted. 9 3/3/14 Conventional and Government Program Overlays Government Program Overlays VA IRRRL >$417,000 Loan Amount • (Alaska/Hawaii $625,500 or • $750,000 Honolulu county, • Hawaii) • • • Appraisal Credit score 600- 719 requires full credit qualification Credit score ≥ 720 non-credit qualifying eligible. Maximum LTV is 100% Full appraisal required Full credit report required for both credit and non-credit qualifying to verify mortgage history Mortgage history 0x30 in12 months for credit qualifying 0x30 in 24 months for non-credit qualifying • ≤ 125% LTV and ≤ $417,000 (Alaska/Hawaii $625,500 or $750,000 in Honolulu county, HI) an AVM or 2055 is required. - A CoreLogic GeoAVM with a standard deviation ≤ 18 . If standard deviation > 18, a 2055 will be required; or ProTeck AVM with a confidence score of 80% or more. If confidence score is < 80% a 2055 will be required; or 2055 • $417,000 full appraisal required ($625,500 Alaska/Hawaii or $750,000 in Honolulu county, HI) full appraisal required from HomeBridge approved AMC. Maximum 100% LTV Insurance HO-6 (walls-in) insurance required Credit Score • Minimum 600 credit qualifying IRRRL • Minimum 640 credit score for non-credit qualifying IRRRL with a conforming loan amount • Minimum 720 credit score for non-credit qualifying IRRRL with a high balance loan amount • Maximum 125% LTV/Unlimited CLTV with AVM ≤ $417,000 loan amount • Maximum 100% LTV/Unlimited CLTV on loan amounts > $417,000 ($625,500 Alaska/Hawaii or $750,000 in Honolulu Maximum Loan Amount $1,000,000 in) all states except Hawaii; max. $1,500,000 in the state of Hawaii. LTV/CLTV Property 1 unit only 10 3/3/14 Conventional and Government Program Overlays Government Programs Overlays USDA Appraisal A 2055 is required on Streamlined and Pilot Refi programs AUS Findings A GUS “Accept/Eligible” Finding is required on purchase and non-streamlined refinance transactions CLTV Maximum 110% CLTV on Streamlined and Pilot refinance transactions Credit Score Minimum 640 DTI Purchase and non-streamlined transactions maximum 45%. Seller Contributions Maximum 6% 11 3/3/14
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