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This summary is intended for reference only. All criteria are subject to the formal terms and conditions of the Fannie Mae Selling Guide and Servicing Guide. In the event of any conflict with this document, the Selling Guide and/or Servicing Guide will govern. © 2016 Fannie Mae. Trademarks of Fannie Mae. March 21, 2016 Page 1 of 5
HomeReady® Mortgage
Designed for creditworthy, low- to moderate-income borrowers, with expanded eligibility for financing homes in designated low-income, minority, and disaster-impacted communities. HomeReady lets you lend with confidence while expanding access to credit and supporting sustainable homeownership. Key features:
Simplicity and certainty for lenders
Streamlined pricing and execution
Product features designed to align with today’s buyer demographics and support sustainable homeownership
1-Unit 2- to 4-Unit
Elig
ibili
ty
Loan Purpose Purchase or Limited Cash-out Refinance (LCOR)
Occupancy and
Property Type
1-unit principal residence, including eligible condos, co-ops,
PUDs, and manufactured housing
2- to 4-unit principal residence (no condos, co-ops, or
manufactured housing)
Manufactured
Housing
In accordance with standard MH guidelines (Desktop
Underwriter® [DU®] required; max 95% LTV/CLTV; FRMs or
7/1 and 10/1 ARMs only; no buydowns)
Not applicable
HomeStyle®
Renovation
In accordance with standard HomeStyle Renovation guidelines
(special lender approval; max LTVs/CLTVs per HomeStyle Renovation guidelines)
Borrower Income
Limits
No income limits in low-income census tracts
100% of area median income (AMI) in high-minority census tracts or designated disaster areas
80% of AMI in all other census tracts
Minimum Borrower
Contribution (own
funds)
$0
$0 for LTV/CLTV/HCLTV of 80% or less;
3% for LTV /CLTV/HCLTV > 80%
3% required if sweat equity is being used
Acceptable Sources
of Funds for Down
Payment and Closing
Costs
Gifts, grants, and Community Seconds®. Cash-on-hand for 1-unit properties only.
Any eligible loan may have more than one Community Seconds (i.e., third lien) up to the maximum 105% CLTV
(see Community Seconds fact sheet). Sweat equity is acceptable in accordance with the Selling Guide.
This summary is intended for reference only. All criteria are subject to the formal terms and conditions of the Fannie Mae Selling Guide and Servicing Guide. In the event of any conflict with this document, the Selling Guide and/or Servicing Guide will govern.
© 2016 Fannie Mae. Trademarks of Fannie Mae. March 21, 2016 Page 2 of 5
1-Unit 2- to 4-Unit E
ligib
ility
(co
ntin
ue
d)
Product 10-, 15-, 20-, or 30-year fixed-rate mortgages (FRMs)
5/1 (2/2/5 and 2/2/6 caps only), 7/1, and 10/1 adjustable-rate mortgages (ARMs)
Maximum LTV/CLTV
and Subordinate
Financing
CLTV up to 105% with eligible Community Seconds (Refer to Eligibility Matrix for details)
Other subordinate financing per the Selling Guide
Purchase:
DU Only – 97% (FRM)
DU and manual underwriting to 95% (FRM); 90% (ARM)
LCOR: DU and manual underwriting: 95% FRM; 90% (ARM)
Purchase or LCOR
2-unit: 85% FRM, 75% ARM
3- to 4-unit: 75% FRM only
Ownership of Other
Property Occupant borrower(s) may not have an ownership interest in any other residential property at the time of closing.
Non-Occupant
Borrowers
Non-occupant borrowers permitted to maximum 95% LTV in DU; 90% LTV manual with max 43% DTI for occupying borrower.
Income considered as part of qualifying income and subject to income limits. No limitation on ownership of other property for
non-occupant borrower.
Interest Rate
Buydowns 3-2-1 and 2-1 buydown structures permitted
Mortgage Insurance
(MI) Coverage and
Financed MI
25% MI coverage for LTVs 90.01−97%
Standard MI coverage for LTVs of 90% or less
MI may be financed up to the maximum LTV for the transaction, including the financed MI
(Minimum MI Coverage Option may be used with additional LLPA; the HomeReady LLPA waiver or cap does not apply).
Un
de
rwriting
Desktop
Underwriter® (DU)
(Available in DU:
target Dec 2015)
Based on the census tract and borrower income, DU will notify users when a loan casefile appears to be eligible for
HomeReady but the lender has not underwritten the loan casefile as HomeReady. Resubmit the loan casefile as a
HomeReady loan to obtain the appropriate HomeReady messaging. New Additional Data screen field will allow entering
census tract information if DU is unable to geocode the property address.
DU recommendation of Approve/Eligible required. DU will determine qualifying ratios and reserves.
Eligible in DU if at least one borrower has traditional credit and contributes more than 50% of qualifying income.
Manual Underwriting (Limited waiver of
representations and
warranties does not
apply. LTVs >95% not
Use manual underwriting if (1) the DU recommendation is other than Approve/Eligible, or
(2) there is not at least one borrower with a traditional credit history.
Benchmark qualifying ratio follows Fannie Mae standard Selling Guide (Section B3-6-02) for manual underwriting.
Representative minimum credit scores for manual underwriting (Minimum could be higher for certain reserves and debt-to-income ratios; see the Eligibility Matrix)
620 or higher, per the Eligibility Matrix 640 or higher, per the Eligibility Matrix
This summary is intended for reference only. All criteria are subject to the formal terms and conditions of the Fannie Mae Selling Guide and Servicing Guide. In the event of any conflict with this document, the Selling Guide and/or Servicing Guide will govern.
© 2016 Fannie Mae. Trademarks of Fannie Mae. March 21, 2016 Page 3 of 5
1-Unit 2- to 4-Unit U
nde
rwriting
(co
ntin
ue
d)
eligible for manual
underwriting.) Reserves for manual underwriting
Minimum none or up to 6 months, per the Eligibility Matrix
(based on credit score, DTI ratio, and FRM or ARM)
Minimum none or up to 12 months, per the Eligibility Matrix
(based on credit score, DTI ratio, and FRM or ARM)
Manual Underwriting,
Exceptions to
Minimum Credit
Score Requirements
Borrowers with nontraditional credit are eligible. In addition,
up to 30% of qualifying income may come from a borrower
for which no traditional or nontraditional credit profile can
be established.
If the borrower has a credit score below the minimum
required as a result of an insufficient traditional credit
history (“thin files”) as documented by reason codes on the
credit report, the lender may supplement the thin file with
an acceptable nontraditional credit profile. SFC 818 must
be used to identify loans with supplemented thin files (for
manually underwritten loans only).
If a borrower has a credit score below the minimum
required, but has sufficient traditional credit sources listed
on the credit report, the lender may not establish a
nontraditional credit profile to supplement the borrower’s
traditional credit history.
If the borrower’s credit history was heavily influenced by
credit deficiencies that were the result of documented
extenuating circumstances, the minimum credit score
requirement must be met (per the Eligibility Matrix), or the
credit score must be no less than 620.
Not eligible
Other Income
Boarder income (relatives or non-relatives): Up to 30% of
qualifying income; documentation for at least 9 of the most
recent 12 months (averaged over 12 months) and
documentation of shared residency for the past 12 months.
Not eligible
Accessory dwelling units: Rental income may be considered
in qualifying the borrower per rental income guidelines.
Rental income may be used as qualifying income per rental
income guidelines.
Non-Borrower
Household Income
Permitted as a compensating factor in DU only to allow a debt-to-income (DTI) ratio >45%, up to 50% (non-borrower income
is not considered qualifying income and is not applied to income limits). The following additional requirements apply:
Non-borrower income must total at least 30% of the total monthly qualifying income being used by the borrower(s). (Note:
Income from more than one non-borrower household member may be considered.)
Non-borrower household members may be relatives or non-relatives.
This summary is intended for reference only. All criteria are subject to the formal terms and conditions of the Fannie Mae Selling Guide and Servicing Guide. In the event of any conflict with this document, the Selling Guide and/or Servicing Guide will govern.
© 2016 Fannie Mae. Trademarks of Fannie Mae. March 21, 2016 Page 4 of 5
1-Unit 2- to 4-Unit
Non-borrower household income must be documented in accordance with standard Selling Guide policy based on the
income type.
Non-borrowers must sign a statement of intent to reside with the borrower for a minimum of 12 months. (See optional
Fannie Mae Form 1019.)
The income must be reflected in DU as an Other Income type of “Non-Borrower Household Income” (new income type will
be added with DU implementation). This income will not be included as qualifying income, and would not impact the DTI
ratio used in the risk assessment or displayed on the DU Underwriting Findings report.
Ho
me
ow
ners
hip
Ed
ucatio
n
Prepurchase
Homeownership
Education
Homeownership education required prior to note date for at least one borrower on all transactions (purchase and LCOR).
Must be provided through Framework, an online program approved by Fannie Mae.
$75 fee paid by the borrower to Framework for a simple, accessible online program with email support 7 days a week.
Lenders may choose to provide a credit against closing costs in accordance with Selling Guide section B3-4.1-02 (Lender
Incentives for Borrowers).
Homeownership education certificate must be retained in the mortgage file.
Although one-on-one counseling is optional for HomeReady, Framework will offer borrowers a referral to a HUD-approved
counseling agency for additional assistance. Borrowers also have the option to consult a counselor of their choice.
Post-Purchase
Support
To support sustainability, borrowers will have access to post-purchase homeownership support for the life of the loan through
Framework's homeownership advisor service.
Special Borrower
Considerations
Online education may not be appropriate for all potential home buyers. The presence of a disability, lack of Internet access,
and other issues may indicate that a consumer is better served through other education modes (e.g., in-person classroom
education, telephone conference call, etc.). In these situations, consumers should be directed to Framework’s toll-free
customer service line, from which they can be directed to a HUD-approved counseling agency that can meet their needs.The
counseling agency that handles the referral must provide a certificate of completion, and the lender must retain a copy of the
certificate in the loan file.
Previous Home-
Buyer Education
In lieu of the Framework course, Fannie Mae will allow lenders to accept a certificate of pre-purchase education/counseling
from a HUD-approved counseling agency dated within the previous six months before the loan application date and before
September 30, 2016.
Landlord Education Not Applicable
Landlord education required in accordance with Selling Guide
requirements (not available through Framework)
This summary is intended for reference only. All criteria are subject to the formal terms and conditions of the Fannie Mae Selling Guide and Servicing Guide. In the event of any conflict with this document, the Selling Guide and/or Servicing Guide will govern.
© 2016 Fannie Mae. Trademarks of Fannie Mae. March 21, 2016 Page 5 of 5
1-Unit 2- to 4-Unit
Pricin
g,
Co
mm
ittin
g,
Execu
tion
,
De
live
ry,
and S
erv
icin
g
Loan-Level Price
Adjustments (LLPAs)
Standard risk-based LLPAs waived with an LTV above 80% and a representative credit score equal to or greater than 680;
for loans outside of these parameters, standard LLPAs apply (per the LLPA matrix) with a cap of 1.50%.
(The Minimum MI Coverage Option LLPA is not waived or considered toward the cap if that option is used.)
Whole Loan
Pricing/Committing View live whole loan pricing and make commitments in Fannie Mae’s whole loan committing application
MBS Pricing and
Committing Lender base guaranty fee per MBS contract
Execution Commingle with non−HomeReady loans in whole loan commitments and MBS pools
Delivery Data Special Feature Code 900 required; set ULDD Sort ID 238 – LoanAffordableIndicator – to “True” to capture detailed
counseling information.
Servicing HomeReady loans will be serviced under the requirements for Fannie Mae’s community lending products. These Servicing
Guide requirements are currently under review by Fannie Mae, and we expect to simplify and clarify this policy for our
servicing partners.
LENDER FACT SHEET
HomeReady™ Mortgage Help meet the diverse needs of today’s buyers with HomeReady, Fannie Mae’s enhanced affordable lending product. Overview Designed for creditworthy, low- to moderate-income borrowers, with expanded eligibility for financing homes in designated low-income, minority, and disaster-impacted communities. HomeReady lets you lend with confidence while expanding access to credit and supporting sustainable homeownership.
• Simplicity and certainty for lenders • Improved pricing and execution • Product features designed to align with today’s buyer demographics and support sustainable
homeownership
Lender Benefits Enhanced Simplicity and Certainty
Borrower Benefits Accessible and Sustainable Financing
• Underwrite with confidence. Desktop
Underwriter® (DU®) offers a comprehensive credit risk assessment and eligibility determination, and automated identification of potentially HomeReady–eligible loans.
• Improved and simplified pricing is better than or equal to Fannie Mae standard loan pricing and supports a competitive borrower payment.
• Standard risk-based pricing waived for LTVs >80% with a credit score >=680 (risk-based loan-level price adjustment cap of 150 bps applies for loans outside of these parameters).
• Simplified execution. Ability to commingle standard and HomeReady loans into MBS pools and whole loan commitments.
• Low down payment. Up to 97% financing
for home purchase with many borrower flexibilities.
• Flexible sources of funds can be used for the down payment and closing costs with no minimum contribution required from the borrower’s own funds (1-unit properties).
• Conventional home financing with cancellable monthly MI (per Servicing Guide policy); reduced MI coverage requirement above 90% LTV supports competitive borrower payment.
• Homeownership education helps buyers get ready to buy a home and be prepared for the responsibilities of homeownership. The required training offers an easy-to-use, online course provided by Framework.
See next page for more about product features …
Fannie Mae’s Economic and Strategic Research group reports a “demographic sea change” in the housing market, characterized by the rise of the Millennials, increased diversity, and a growing elderly population; and
new household growth is being driven by traditionally underserved segments.
© 2015 Fannie Mae. Trademarks of Fannie Mae. September 29, 2015 Page 1 of 2
Income Eligibility (Aligned with Fannie Mae’s regulatory housing goals and may help lenders meet applicable Community Reinvestment Act goals)
Product Features
• DU will automatically identify potentially eligible loans. • Underwriting flexibilities include:
Offers an innovative new feature that supports extended family households: will consider income from a non-borrower household member as a compensating factor in DU to allow for a debt-to-income (DTI) ratio >45% to 50%.
Allows non-occupant borrowers, such as a parent. Permits rental income from an accessory dwelling unit (such as a basement apartment). Allows boarder income (updated guidelines provide documentation flexibility).
• Financing up to 97% LTV (DU is required for LTVs >95%). Borrower is not required to be a first-time buyer; purchase of one-unit principal residence (limited cash-out refi up to 95%).
• Lower MI coverage requirement than standard (25% for LTVs >90% to 97%). • Allows for nontraditional credit. • Gifts, grants, Community Seconds®, and cash-on-hand permitted as a source of funds for down
payment and closing costs. • Supports manufactured housing up to 95% and HomeStyle® Renovation (approved lenders) to 95%.
Homeownership Education and Post-Purchase Support Comprehensive homeownership education. Requires online course provided by Framework, and offers additional post-purchase support through the life of the loan to help ensure sustainable homeownership.
• Borrowers will invest 4−6 hours (average) of their time and a modest fee of $75 (paid to Framework) to learn the fundamentals of buying and owning a home, take an online test, and receive a certificate of completion.
• Although one-on-one counseling is optional for HomeReady, Framework will offer borrowers a referral to a HUD-approved counseling agency for additional assistance. Borrowers also have the option to consult a counselor of their choice.
• To further promote sustainability, borrowers will have access to post-purchase homeownership support for the life of the loan through Framework's homeownership advisor service.
Bookmark the HomeReady page for resources and updates: www.FannieMae.com/singlefamily/HomeReady
Borrower Income Eligibility 2015 Eligibility (Fannie Mae analysis using 2015 data)
No income limit: Properties in low-income census tracts 31% of census tracts
100% of AMI: Properties in high-minority census tracts and designated disaster areas 20% of census tracts
80% of AMI: All other properties 49% of all U.S. census tracts
AMI = area median income (AMI data source: FHFA)
© 2015 Fannie Mae. Trademarks of Fannie Mae. September 29, 2015 Page 2 of 2
Freddie Mac Home Possible® Mortgages
A responsible, low down payment mortgage option for first-time homebuyers and low- and moderate-income borrowers
Freddie Mac Home Possible® and Home Possible Advantage® mortgages (collectively referred to as Home Possible mortgages) offer outstanding flexibility and options to meet a variety of borrowers’ needs.
With Home Possible, you’ll capitalize on opportunities to meet the home financing needs of low- and moderate-income borrowers looking for low down payments and flexible sources of funds.
Home Possible Advantage offers more flexibility for maximum financing. This offering adopts the responsible and affordable flexibilities of Home Possible, but with additional requirements.
Purchase and no cash out refinancing.
Maximum 97 percent LTV and 105 percent TLTV ratios for Home Possible Advantage.
Mortgage insurance options.
Loan Product AdvisorSM or manual underwriting.
No reserves required for 1-unit properties.
Delivery fee cap of 0.0 percent or 1.50 percent.
Stable monthly payments with fixed-rate mortgages.
Flexible sources of funds.
Reduced mortgage insurance coverage levels for LTV ratios greater than 90 percent.
Minimum down payment of 3 percent allowed for Home Possible Advantage.
The information in this document is not a replacement or substitute for information found in the Single-Family Seller/
Servicer Guide and/or the terms of your Master Agreement and/or Master Commitment.
Borrower Profile
Publication Number 572 January 2017
Key Features
www.FreddieMac.com
You may offer this mortgage option for:
First-time homebuyers, move-up borrowers, and retirees.
Families in underserved areas.
Very low and low- to moderate-income borrowers.
This fact sheet reflects the changes announced in Single-Family Seller/Servicer Guide Bulletin 2015-21 and Bulletin 2016-8 effective for mortgages with Freddie Mac settlement dates on or after July 1, 2016.
Borrower Benefits
ORIGINATION & UNDERWRITING REQUIREMENTS
Eligible Property Types
Home Possible Home Possible Advantage
1- to 4-unit primary residences 1-unit primary residences only Condos Condos PUD PUDs Manufactured homes (with restrictions) See Guide Section A4501.6(a).
N/A
Eligible Mortgages
Home Possible mortgages eligible for purchase must be first lien mortgages that are fully amortizing. Home Possible mortgages must be conventional, conforming mortgages. Home Possible mortgages, other than mortgages secured by manufactured homes, must have an original maturity
date not greater than 30 years. Home Possible mortgages secured by manufactured homes must have a maximum original maturity not greater than
that specified in Guide Section 5703.3(d).
Home Possible Home Possible Advantage Fixed-rate mortgages Fixed-rate mortgages
7/1 and 10/1 ARMs if secured by a 1- or 2-unit primary residence
N/A
5/1 ARMs if secured by a 1- or 2-unit primary residence other than a manufactured home
N/A
Construction Conversion and Renovation Mortgages originated according to Guide Chapter 4602
Construction Conversion and Renovation Mortgages originated according to Guide Chapter 4602
Mortgages with an RHS Leveraged Second originated according to Guide Section 4205.2.
N/A
Temporary Subsidy Buydowns
Allowed for mortgages secured by 1- to 2-unit properties, other than manufactured homes (See Guide Sections 4501.5 and 4202.4).
If a mortgage with a temporary subsidy buydown plan is subject to secondary financing, including an Affordable Second® that requires repayment to begin before the due date of the 61st monthly payment under the Home Possible mortgage, the secondary financing must have a fixed interest rate.
Maximum LTV/TLTV/HTLTV Ratios
Maximum LTV/TLTV/LTV (Purchase and no cash-out refinance transactions)
Property Type LTV TLTV HTLTV Home Possible
1- to 4-unit 95% 95% 95% Manufactured home See Guide Chapter 5703.3
Home Possible Advantage 1-unit 97% 105% N/A
Minimum Borrower Contribution, and Reserves
Minimum Contribution from Borrower Personal Funds (Purchase transactions only)
Property Type Home Possible LTV/TLTV/HTLTV
ratios <= 80%
Home Possible LTV/TLTV/HTLTV
ratios >80% <= 95%
Home Possible Advantage mortgages
1-unit None None None 2- to 4-unit None 3% N/A Manufactured home None None N/A
Minimum Reserves Property Type Home Possible Home Possible Advantage
1-unit None required None required 2- to 4-units Two months N/A
Permitted Sources of Funds
Use Permitted Sources of Funds
Minimum borrower contribution Borrower personal funds Down payment for purchase transaction (difference between the purchase price and the first lien amount)
Borrower personal funds Other borrower funds
Additional equity if needed for a no-cash-out refinance transaction
Borrower personal funds Other borrower funds
Closing costs, financing costs, prepaids/escrows Borrower personal funds Other borrower funds Flexible sources of funds
Reserves Borrower personal funds Other borrower funds Eligible assets (Guide Section 5501.2)
Secondary Financing
For Home Possible mortgages other than Home Possible Advantage mortgages, any secondary financing that meets Freddie Mac requirements is allowed.
Any secondary financing subordinated to a Home Possible Advantage mortgage must be an Affordable Second®. An Affordable Second that does not require a payment before the due date of the 61st payment under the Home
Possible mortgage may be entered in Loan Product AdvisorSM in the “Total Gift Fund” field. In all other respects, the Affordable Second must be considered as secondary financing.
Credit Underwriting (Loan Product Advisor)
A borrower’s credit reputation is acceptable if the Home Possible mortgage receives a risk class of Accept. A Home Possible mortgage secured by a manufactured home must be submitted to Loan Product Advisor. See
Guide Section 4501.8 for additional requirements. Use Loan Product Advisor Offering Identifier Code “241” for Home Possible Mortgages and “250” for Home Possible
Advantage Mortgages.
Credit Underwriting (Manually Underwritten Mortgages)
The minimum Indicator Scores for manually underwritten mortgages are:
Property/Mortgage Type Minimum Indicator Score
Home Possible 1-unit other than an ARM or a “no cash-out” refinance mortgage 660
1-unit that is an ARM, or a “no cash-out” refinance mortgage 680 2- and 4-unit 700
Manufactured homes 720
Home Possible Advantage 1-unit fixed-rate mortgages that are purchase transactions 660
1-unit fixed-rate mortgages that are “no cash-out refinance transactions 680
See Guide Section 4501.8 (b) for additional underwriting requirements for manually underwritten mortgages.
Mortgage Credit Certificates
Mortgage Credit Certificates (MCCs) may be considered as qualifying income provided the requirements in Guide Section 5202.2 are met.
The amount used as qualifying income must be calculated as follows: (mortgage amount) x (note rate) x (MCC rate %) divided by 12.
The amount used as qualifying income cannot exceed the maximum mortgage interest credit permitted by the IRS. The mortgage file must contain a copy of the:
(i) MCC. (ii) Seller’s calculation of the amount used as qualifying income.
A history of receipt of MCC tax credit is not required.
Eligible Borrowers
All borrowers must occupy the mortgaged premises as a primary residence. The borrower may not, as of the note date or the effective date of the permanent financing for Construction Conversion
and Renovation Mortgages, have any ownership interest in any other residential properties. The borrower must meet income limits. Loan Product Advisor will indicate income eligibility; for non-Loan Product
Advisor mortgages, use the Home Possible Income & Property Eligibility tool on FreddieMac.com. The Seller must attempt to verify all income reported on the Uniform Residential Loan Application. All reported income
that has been verified and that is stable monthly income must be used to qualify the borrower and in determining whether the borrower meets the income limits.
Additional Special Underwriting Requirements
Rental income from a 1-unit primary residence that meets the requirements of Guide Section 4501.9(a) may be considered as stable monthly income.
Rental income from a 2- to 4-unit primary residence that meets Guide Chapter 5306 may be used as qualifying income.
Mortgage Insurance Requirements
The standard required or custom MI coverage levels for Home Possible mortgages are as follows:
Transaction type MI coverage LTV Ratio
>80% & <85% >85% & <90% >90% & <95% >95% & <97%
Home Possible, fixed-rate, term < 20 years
Standard 6% 12% 25% 25%
Custom N/A N/A 16% 18%
Home Possible, fixed-rate, term > 20 years; ARMs; and manufactured homes1
Standard 12% 25% 25% 25%
Custom 6% 12% 16% 18%
1 Manufactured homes are limited to maximum LTV ratios of 95%.
Seller must obtain Freddie Mac's approval to sell mortgages with annual or monthly premium lender-paid mortgage insurance to Freddie Mac.
See Guide Section 4701.1 for additional MI requirements and options including custom MI.
Collateral Evaluation 1-unit primary residences: Use Form 70, Uniform Residential Appraisal Report.
Condominiums: Use Form 465, Individual Condominium Unit Appraisal Report. 2- to 4-unit primary residences: Use Form 72, Small Residential Income Property Appraisal Report.
Manufactured housing: Use Form 70B, Manufactured Home Appraisal Report.
Homebuyer and Landlord Education and Borrower Disclosure
See Guide Section 4501.12 for homeownership education and landlord education requirements related to: Borrower(s) who are all first-time homebuyers. Restrictions on parties that may provide the homeownership education. Homeownership education documentation that must be retained in the mortgage file. Acceptable types of homeownership education, including Freddie Mac CreditSmart® financial education curriculum or
CreditSmart – Steps to Homeownership Tutorial. Borrower disclosure requirements. Landlord education (2- to 4-unit primary residences) requirements for purchase transactions.
DELIVERY REQUIREMENTS
Eligible Executions
Home Possible Home Possible Advantage Servicing-Released Cash Servicing-Released Cash Servicing-Retained Cash Servicing-Retained Cash WAC ARM Cash Fixed-rate Guarantor Fixed-rate Guarantor MultiLender Swap WAC ARM Guarantor MultiLender Swap
Delivery Requirements See Guide Section 6302.14(b) for special delivery instruction for Home Possible mortgages and Guide Section 6304.34 for applicable secondary financing delivery requirements. In addition, Sellers must provide the applicable information, as outlined in Guide Section 6302.14(b), for down payment, closing costs, automated underwriting system, and borrower counseling. Sellers must deliver the following ULDD Data Points: o Loan Affordable Indicator: “true” o Loan Program Identifier: “Home Possible Mortgage” o Loan Program Identifier “Home Possible Advantage Mortgage” if applicable
If applicable, Sellers must deliver the following Investor Feature Identifiers (IFI) in ULDD Data Point IFI:
o IFI 532 (If mortgage satisfies the minimum number of payment reference requirement using noncredit payment references).
o IFI 583 (Home Possible mortgage with an Affordable Second). o IFI G18 (Home Possible mortgage with Affordable Second entered into Loan Product Advisor in "Total Gift Fund"
field).
Pooling Requirements There are no special pooling requirements for Home Possible mortgages. Refer to Guide Chapter 6202 for pooling requirements.
Mortgages may be pooled with non-Home Possible mortgages.
Delivery Fees See Guide Exhibit 19 for details on delivery fee caps and delivery fees applicable to Home Possible mortgages.
Learn more about Home Possible mortgages
Review Chapter 4501 of the Single-Family Seller/Servicer Guide.
Call 800-FREDDIE.
NMLS #176162©2015
Borrower Income Limits
Income and PropertyEligibility
Loan Product
MaximumLTV/CLTV/HCLTV and
Subordinate Financing
HomeReady vs. Home Possible
Acceptable Sources ofFunds for Down Payment
& Closing Costs
® ®
Ownership of OtherProperty
Non-Occupant Co-Borrowers
Underwriting Method
DTI
Rental Income froman Accessory Unit on a
1-unit PrimaryNon-Borrower
Household Income
HomeownershipEducation
Landlord Education
Yes(if the LTV is >95%).
High Balance loans are eligible.
1 unit 97/97/97%2 units 85/85/85%
3-4 units 75/75/75%
Standard subordinate financing ispermitted.
Fannie or Freddie Must BeOwner of Existing Loan
(Refinance transactions)
Must not exceed 100% of the area median income (AMI); no income limits for
properties located in low-income census tracts.
Click here for access to Fannie’s income and property eligibility tool.
No unsecured loans.
Allowed.
Allowed up to 95% LTV.
DU (required for >95% LTV) or manualunderwriting.
DU loan: Up to 50.00% with compensatingfactors.
Manual underwriting: Maximum 36.00% or45.00% with compensating factors.
Allowed.
Allowed as a compensating factor for ahigher DTI up to 50.00%.
Required to be completed by at least oneborrower for all purchase transactions.
Not required.
No.
Must not exceed 100% of the AMI or income multipliers allowed for designated
high-cost areas; no income limits for properties located in underserved areas.
Click here for access to Freddie’s income and property eligibility tool.
Super Conforming loans are ineligible.
1-4 units 95/95/95% for Home Possible(standard subordinate financing is
permitted).
1 unit 97% LTV for Home PossibleAdvantage (no subordinate financing is
permitted).
Unsecured loans are allowed.
Only allowed under specific circumstances.
Not allowed.
LP/LPA only.
As determined by LP/LPA; maximum 50.49%.
Not allowed.
Not allowed.
Required to be completed by at least one borrower if all borrowers are FTHBs.
Required for the purchase of a 2-4 unit.
Program Features Fannie MaeHomeReady
Freddie MacHome Possible®®
The content provided is for internal use only by current or potential Parkside Lending business partners and distribution to the public or any third party is strictly prohibited. Further, all content is for general information only, not intended tobe all-inclusive and subject to change without notice. Any pricing or other examples are for illustrative purposes only and actual rates and costs may vary at time of lock. This does not constitute an offer or approval to extend credit, acommitment to lend, a commitment to buy or sell loans, or investment advice. All loans must satisfy Parkside’s current underwriting guidelines and other applicable guidelines. Please contact your Account Executive or other Parksiderepresentative for more details. Rev 05102017
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