Correspondent Agency Credit Overlays

Correspondent Lending
Agency Overlays Matrix
SunTrust Mortgage, Inc. Agency Overlays – as of January 30, 2015
Agency Plus
DU
Standard Agency
LP
Overlay Description
Texas Cash-Out Refi
50(a)(6) - DU
Topic
Products
Standard Agency
DU
In order to mitigate the risk on the loans we purchase, SunTrust Mortgage has overlays in our guidelines in addition to Agency investor
(i.e., Fannie Mae and Freddie Mac) requirements. This summary of overlays is being provided as a reference tool for AUS (DU and LP)
processed loans; it is not intended to replace our detailed product guideline documents. An “X” under a product column indicates that
the overlay applies for that product. For complete product guidelines and for overlays (denoted by an underline) that apply for
traditionally underwritten (i.e., non-AUS) loan transactions, please refer to the applicable product description on the STMPartners.com
website.
Age of Appraisal
Documentation
For new construction and existing properties, the appraisal report cannot be more than 120 days old as
of the date of the note and mortgage. See the “Appraisal Update” topic in this matrix for additional
information.
X
X
X
Age of Credit
Documentation
For all mortgage loans (existing and new construction), credit documentation (credit reports and
employment, income, and asset documentation) must be dated no more than 120 days as of the note
date).
X
X
X
Alimony, Child Support,
and Maintenance
Payments
Appraisal Update
Voluntary payments (with more than 10 months of payments remaining) must be included in the
borrower’s monthly debt payment.
X
X
X
The appraisal update must occur within the 120 days that precede the date of the note and mortgage.
X
X
X
X
X
AUS Eligibility
X
An appraisal update reported on Form 442, Appraisal Update and/or Completion Report or reported on
a new appraisal based on an exterior only inspection must at a minimum, have a photograph of the
front of the subject property.
X
A-minus transactions are not eligible.
X
LP processing is not eligible.
Construction-Lending: See the “Construction Lending: Single-Closings” and “Construction-Lending TwoClosings” topics in this matrix for additional information regarding LP processing.
Cash Reserve
Requirements
Standard Agency - 2-4 unit Primary Residences: 6 months PITIA reserves (must be manually calculated
outside of DU)
X
X
Agency Plus – 1-2 Unit Primary Residences: 6 months PITIA reserves (must be manually calculated
outside of DU)
Standard Agency and Agency Plus - Second Homes: 2 months PITIA reserves (must be manually
calculated outside of DU)
X
Standard Agency - 1-4 Unit Investment Properties: 6 months PITIA reserves (must be manually
calculated outside of DU)
X
X
X
Agency Plus - 1 Unit Investment Properties: 6 months PITIA reserves (must be manually calculated
outside of DU)
X
Construction-Lending:
Single-Closings
Not eligible for LP.
Construction-Lending:
Two-Closings
Continuity of Obligation
Not eligible for LP.
Co-Signed Debt
The primary obligor should have been making payments on the debt for at least 12 months.
X
Co-Signer
Co-signers/guarantors are not eligible.
X
Court Assigned Debt
Documentation must be provided on any transfer of ownership (if applicable).
X
X
X
Credit History
Bankruptcy / Foreclosure: For loans with a bankruptcy or foreclosure that has not cleared the waiting
period as of the credit report date, the loan may not be resubmitted to DU after closing to obtain an
"Approve/Eligible."
X
X
X
All borrowers must have at least one credit score.
X
X
X
X
Standard Agency - Primary Residences

Purchase and Limited Cash-Out Refinance: minimum 640 credit score

Cash-Out Refinance: minimum 660 credit score
X
X
Standard Agency – Second Homes:

Purchase and Limited Cash-Out Refinances:

minimum 640 credit score for LTVs </= 80%

minimum 660 credit score for LTVs > 80%

Cash-Out Refinance: minimum 660 credit score
X
X
Standard Agency - Investment Properties:

Purchase:

minimum 640 credit score for LTVs </= 80%

minimum 660 credit score for LTVs > 80%

Limited Cash-Out Refinances: minimum 640 credit score

Cash-Out Refinance: minimum 660 credit score
X
X
Credit Score
Requirements
X
Log homes are not eligible.
X
X
X
Non-AUS guidelines apply. Refer to the continuity of obligation guidelines outlined in the applicable
guideline document for additional information.
X
X
X
X
Agency Plus - Primary Residences:

minimum 640 credit score for 1-unit, purchase and limited cash-out refinance transactions

minimum 660 credit score for the following:

1-unit, cash-out refinance transactions

2-units (all transactions)
X
Agency Plus - Second Home and Investment Properties: minimum 740 credit score (all transactions)
X
Texas Cash-Out Refinance: minimum 660 credit score
Page 1 of 3
Last Revision Date: 01/30/2015 (Correspondent)

X
X
Correspondent Lending
Agency Overlays Matrix
DU Property Inspection
Waiver (PIW)
If the transaction is eligible for a PIW, the PIW must be exercised, regardless if geographic restrictions
apply and/or an appraisal has been ordered.
X
Employer Assistance
If the financing terms provide for the employer to require full repayment of the debt if the borrower’s
employment is terminated (either voluntarily or involuntarily) before the maturity date of the
subordinate financing, the borrower must have sufficient assets to pay off the outstanding balance of
the employer subordinate financing in addition to the required funds to complete the transaction. If
this requirement is not met, the employer subordinate financing is not eligible.
X
Employment Start Date
Salaried or Hourly Wage Earner: Borrowers must start their new employment before closing.
X
Escrow Waivers
Escrow waivers are only permitted on loans with LTVs 80.00% or less (unless a higher LTV is permitted
by state law).
X
X
X
Leasehold estate ground rent, when the ground lease agreement is in the name of the borrower, is not
eligible for an escrow waiver.
X
X
X
Loans secured by investment properties are not eligible for an escrow waiver.
X
X
X
Flood Insurance: NonResidential Detached
Structures
Geographic Restrictions
If detached structure is attached to the land and serves as part of the security for the mortgage, flood
insurance is required for the detached structure.
X
X
X
X
X
Higher Priced Covered
Transactions
SunTrust Mortgage will not purchase or fund loans for the purchase or refinance of a second home or
cash out refinances for investment properties that fail the HPCT test.
X
X
Income Documentation
LP Streamlined Accept Documentation: For the following types of income/employment, obtain the
most recent two years of signed federal tax returns filed with the IRS: clients employed by a family
member, the property seller, or real estate broker; contracting income; self-employed income (soleproprietor, s-corporation, partnership, corporation).
Mortgage Credit Certificates (MCCs) are not eligible.
Individual Taxpayer
Identification Number
Interested Party
Contribution
An individual taxpayer identification number is not allowed in lieu of a valid SSN.
The calculation to determine the maximum allowable interested party contribution is based on the
lesser of the sales price or appraised value of the subject property.
X
Inter Vivos (Living) Trust
Institutional trustees are not permitted.
X
X
X
X
X
X
X
X
X
X
X
Fixed Rate, 2-unit, Purchase and Limited Cash-Out Refinance: max 80% LTV/TLTV/HTLTV
X
X
X
X
Fixed Rate and ARM: 3-4 units, Purchase and Limited Cash-Out Refinance: Not eligible
X
ARM, 1-unit, Purchase and Limited Cash-Out Refinance: max 90% LTV/TLTV/HTLTV
X
ARM, 2-unit, Purchase and Limited Cash-Out Refinance: max 75% LTV/TLTV/HTLTV
X
ARM, 3-4 units, Purchase and Limited Cash-Out Refinance: max 65% LTV/TLTV/HTLTV
X
ARM, 1-unit, Cash-Out Refinance: max 75% LTV/TLTV/HTLTV
X
ARM, 2-4 units, Cash-Out Refinance: max 65% LTV/TLTV/HTLTV
Maximum Number of
Financed Properties and
Borrower Exposure
X
X
X
ARM, 1-unit, Purchase and Limited Cash-Out Refinance: max 80% LTV/TLTV/HTLTV
X
ARM, 1-unit, Cash-Out Refinance: max 65% LTV/TLTV/HTLTV
X
Fixed Rate and ARM: 2-4 units, Purchase and Limited Cash-Out Refinance: Not eligible
Fixed Rate and ARM, 3-4 units, Cash-Out Refinance: Not eligible
X
X
Fixed Rate, 1-unit, Purchase and Limited Cash-Out Refinance: max 95% LTV/TLTV/HTLTV
Fixed Rate, 3-4 units, Purchase and Limited Cash-Out Refinance: max 75% LTV/TLTV/HTLTV
Maximum
LTV/TLTV/HTLTV
(Investment Property)
X
X
All trustees must sign the note, security instrument, and associated riders.
Florida: Fixed Rate, 1-unit, Purchase and Limited Cash-Out Refinance: max 80% LTV/TLTV/HTLTV.
X
X
Income Type
Maximum
LTV/TLTV/HTLTV
(Second Home)
X
X
Michigan, Nevada, New Jersey: See the “Maximum LTV/TLTV/HTLTV (Primary Residence)” topic in this
matrix.
Michigan, Nevada, New Jersey: Fixed Rate, 1-unit, Purchase and Limited Cash-Out Refinance: max
90% LTV/TLTV/HTLTV.
X
X
Florida: See the “Maximum LTV/TLTV/HTLTV (Second Home)” topic in this matrix.
Maximum
LTV/TLTV/HTLTV
(Primary Residence)
Texas Cash-Out Refi
50(a)(6) - DU
Agency Plus
DU
Overlay Description
Standard Agency
LP
Topic
Standard Agency
DU
Products
X
X
X
ARM, 1-unit, Purchase: max 75% LTV/TLTV/HTLTV
X
ARM, 1-unit, Limited Cash-Out Refinance: max 65% LTV/TLTV/HTLTV
X
ARM, 2-4 units, Purchase and Limited Cash-Out Refinance: max 65% LTV/TLTV/HTLTV
X
ARM, 1-unit, Cash-Out Refinance: max 65% LTV/TLTV/HTLTV
X
ARM, 2-unit, Cash-Out Refinance: max 60% LTV/TLTV/HTLTV
X
Borrower Exposure - Primary Residence, Second Home, and Investment Properties: Maximum total
exposure of $2.5 million dollars on all SunTrust balance sheet (Portfolio) loans. No more than four real
estate residential secured loans on the STI balance sheet (Portfolio). Only one of the four loans on the
STI balance sheet can be for an investment property.
X
X
X
X
Primary Residences: Maximum number of financed properties is four.
X
X
X
X
Page 2 of 3
Last Revision Date: 01/30/2015 (Correspondent)

Correspondent Lending
Agency Overlays Matrix
Maximum Number of
Financed Properties and
Borrower Exposure,
(continued)
Non-Permanent
Resident Aliens
Second Home & Investment Properties: Maximum number of financed properties is four.
Power of Attorney
X
Second home and investment property transactions are not eligible.
X
X
X
Cash-Out Refinance transactions are not eligible.
X
X
X
A power of attorney may not be used to facilitate a closing via a recorded, interactive session conducted
via the Internet.
X
X
X
X
Properties Listed for Sale
Non-AUS guidelines apply. Refer to the properties listed for sale guidelines outlined in the applicable
guideline document for additional information.
X
Property Assessed Clean
Energy (PACE) Loans
PACE loans are not eligible for subordination
X
All PACE loans must be paid off as a condition to obtaining a new mortgage loan.
X
Proceeds of a standard limited cash-out refinance may not be used to pay off a PACE loan.
Group homes are not eligible.
X
X
X
X
X
X
X
X
X
Manufactured housing is not eligible.
X
X
Modular homes must follow non-AUS guidelines. Refer to the modular home guidelines outlined in the
applicable guideline document for additional information
X
On-frame modular construction is not eligible.
X
Qualifying Rate
For 7/1 and 10/1 ARM transactions, including 7/1 and 10/1 ARMs subject to a temporary buydown,
borrowers qualify at the greater of the note rate or the fully indexed (index + margin) rate.
X
Qualifying Ratio
Maximum 50% DTI
X
DTIs 45.01-50% are permitted when all borrowers have a minimum 720 credit score AND a maximum
80% LTV. If these requirements are not met, the maximum DTI is 45%.
X
X
For all transactions (regardless of LTV): maximum 45% DTI
Secondary Financing
X
X
Leasehold estate transactions are not eligible.
Restructured Loans
Texas Cash-Out Refi
50(a)(6) - DU
X
Cash-out refinance transactions are not allowed.
Property Types
Agency Plus
DU
Overlay Description
Standard Agency
LP
Topic
Standard Agency
DU
Products
X
X
Transactions that involve refinancing of a non-STM mortgage that has previously been restructured are
not eligible for refinancing with SunTrust Mortgage.
X
STM to STM loans: SunTrust does not permit originations of loans with a previously restructured
mortgage in the credit history.
X
X
X
X
X
X
Community Second mortgages are not eligible.
X
X
Housing Finance Agency (HFA) secondary financing is not eligible.
X
X
Secondary financing (new or existing) which imposes a penalty for prepayment is only acceptable if
certain requirements are met. Refer to the secondary financing guidelines outlined in the applicable
guideline document for additional information.
X
Subordinate financing (closed-end second or HELOC) that has a balloon payment due less than five years
after the note date of the first lien is acceptable if the borrower has assets available to pay off the
outstanding balance of the subordinate financing in addition to the required funds to complete the
transaction. Actual payoff of the account is not required.
X
Spousal/Partner Buy-Out
A spousal/partner buy-out transaction is not eligible.
X
Temporary Buydowns
Temporary buydowns are not eligible.
X
X
Borrower-paid temporary buydowns are not eligible.
Page 3 of 3
Last Revision Date: 01/30/2015 (Correspondent)

X
X
X

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