product guidelines fha standard and high balance program · 2015-06-22 · product guidelines fha...

PRODUCT GUIDELINESFHA STANDARD and HIGH BALANCE PROGRAM

*DTI may exceed 43% with compensating factors documented in the file and manual underwrite. Refer to AUS Section for additional information.

Maximum LTV

Maximum LTV

Maximum LTV

Maximum LTV

0 x 30 past 12 months

Max Loan Amount

97.75% 1-2 UNITS ONLY. Per FHA Max County LimitsSee Loan Amount Matrix Below 43%*

Mortgage/Rental History

97.75% 3-4 UNITS ONLY. PER FHA MAX COUNTY LIMITS FOR STANDARD PROGRAM. Evaluated by AUS**Per AUS

Max Ratios

MINIMUM FICO 600

43%* 0 x 30 past 12 months

MAXIMUM LOAN AMOUNTS

Continental U.S.

3-4 UNITS ONLY. PER FHA MAX COUNTY LIMITS FOR STANDARD PROGRAM.

$934,200

85.00% 1-2 UNITS ONLY. PER FHA MAX COUNTY LIMITS FOR STANDARD PROGRAM.

0 46 OCIF MUMINIM

MINIMUM FICO 600

0 46 OCIF MUMINIM

85.00%

Maximum Loan Amt (Base) Max Base Loan Amount cannot exceed the FHA Statutory Mortgage Limits for each county and under no circumstances will a county's mortgage limit be less than the "floor" or greater than the "ceiling" as outlined in the 4155.1.

Underwriting Guidelines Requirements (All loan amounts must be submitted through Total Score Card. Refer to AUS Section for manual underwrite.)

3-4 UNITS ONLY. PER FHA MAX COUNTY LIMITS FOR STANDARD PROGRAM. Evaluated by AUS**

MINIMUM FICO 600

Per AUS

Max Ratios

$1,000,000

$1,000,000

85.00% 1-2 UNITS ONLY. Per FHA Max County LimitsSee Loan Amount Matrix Below

*DTI may exceed 43% with compensating factors documented in the file and manual underwrite. Refer to AUS Section for additional information.**Refer to mortgage rating section below for additional information.


Max Loan Amount

PURCHASE

640 OCIF MUMINIM

MINIMUM FICO 600

Max Loan Amount Mortgage/Rental History

RATE/TERM REFINANCE (NON-STREAMLINED)

0 x 30 past 12 months

85.00%

96.50% 1-2 UNITS ONLY. PER FHA MAX COUNTY LIMITS FOR STANDARD PROGRAM. 0 x 30 past 12 months

Max Ratios

43%*

640 OCIF MUMINIM

Max Ratios

43%*

96.50% 3-4 UNITS ONLY. PER FHA MAX COUNTY LIMITS FOR STANDARD PROGRAM. Evaluated by AUS**Per AUS


NON ARMS LENGTH (Identity of Interest) TRANSACTION

Max Loan Amount Mortgage/Rental History

Mortgage/Rental History

2 Units

3 Units

4 Units

$533,850

$645,300

$801,950

$419,425

$521,250

Highest Maximum("Ceiling")

for STANDARD Loan Amounts

$417,000

Lowest Maximum("Floor")

for All Loan Amounts

$271,050

$347,000

# of Units

Highest Maximum("Ceiling")

for High Balance Loan Amounts

$729,750

0 x 30 past 12 months Per AUS

1 Unit

CASH OUT REFINANCE

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Minimum Payment

Minimum Tradelines

Resales within first 90 days require second appraisal and full property inspection report if the sales price is 20% or greater above the previous transaction sales price. Resales between 91-180 days with a sales price exceeding 100% of the previous sales price require 2 full appraisals. Seasoning is determined by Seller Acquisition Date & earlier of final Contract Acceptance Date or Application Date . All <=90 days flips must be arms-length with no identity of interest between the buyer & seller or other parties participating in the transaction. All flips require a 12 month chain of title, contain no pattern of previous flipping or assignment of interest & evidence the property was marketed openly & fairly is required.

Greater of 5% or $10 of outstanding balance for revolving accounts if no payment is indicated.

Borrowers must have sufficient credit history to generate a valid FICO score. Generally, an acceptable credit history does not have late housing, installment debt or major derogatory revolving payments. Authorized tradelines are not acceptable for establishing a credit history and may invalidate the FICO score.

Must be current FHA-approved condominium complex and meet all HUD requirements (51% occupancy, 15% delinquencies). All condos and attached PUD's require 100% 'walls-in' HO6 coverage. Site condos do not require FHA HRAP/DELRAP approval.

Mobile homes, co-ops, commercial or industrial zoned properties, mixed-used, working farms, construction to permanent, properties listed for sale in the past 6 mos., properties located in the area of Wrightwood, CA, properties located within designated Costal Barrier Resource System (BRS) areas, and/or any other ineligible properties as defined by HUD Handbook 4150.2.

Owner Occupied Only. 1-4 Units. PUD's, FHA approved condominium projects, land contracts, manufactured homes permanently affixed to the foundation, built on or after June 15, 1976, and meet all HUD requirements. Refer to the PBM FHA Lending Guide for additional details regarding manufactured housing.

AUS Approve/Eligible - Medical collections are not required to be paid off unless required by AUS. Non-medical collections > $7500 may be required to be paid regardless of DU Findings.Manually underwritten loans - typically medical collections are not required to be paid. PBM may require non-medical collections with an aggregate balance > $7500 to be paid prior to or at closing. Loans with collections require a minimum of 2 compensating factors when the DTI > 43%.For both AUS Approve/Eligible and manually underwritten loans, the DE underwriter must document the current HUD requirement when approving loans with collections. For manually underwritten loans, follow PBM Lending Guide and HUD guidelines.

A borrower is not eligible for a new FHA insured mortgage if a short sale was pursued to take advantage of declining market conditions and purchase a similar or superior property within reasonable commuting distance of prior residence. A borrower in default at time of short sale/restructure or pre-foreclosure is not eligible for a new FHA insured mortgage for 3 yrs from date of pre-foreclosure sale. Borrower's current at time of short sale must have 0x30 mortgage and installment debt pay history for the preceding 12 month period.

Condos

Eligible Collateral

Ineligible Collateral

FHA Flips

Prior Bankruptcy must be discharged for at least 2 years. During this time the borrower must have re-established good credit or chosen not to incur new credit obligations.

COLLATERAL

CREDIT

1 year of the pay-out has elapsed under the plan, borrower's payment performance has been satisfactory with all required payments made timely and borrower has received written permission from the counseling agency to enter into the mortgage transaction.

Extenuating Circumstances - Back to Work and Economic Event

All outstanding judgments and liens must be paid prior to or at closing. Includes judgments and tax liens of non-purchasing spouse.

Consumer Credit Counseling

Bankruptcy

Disputed Accounts

Social Security Numbers

Collections/Charge Offs

Judgments/Liens

Foreclosure / Deed-in-lieu

Short Sale/Short Refi/Modification

Non-Traditional Credit

Borrowers with a prior bankruptcy, foreclosure, deed-in-lieu, or short sale may be eligible for an FHA insured loan if the bankruptcy, foreclosure, deed-in-lieu, short sale was the result of a documented extenuating circumstance. Borrowers may also be eligible for an FHA insured loan on a purchase transaction after 12 months from the completion, discharge, trustee's sale if the borrower meets the requirements for extenuating circumstances - Economic Event. Refer to the PBM FHA Lending Guide for complete information.

Required for ALL borrowers.

Must be >3yrs from date of trustee's deed or FHA claim (CAIVRS-if applicable).

FICO Minimum of 1 reported credit score required for borrowers with traditional and insufficient credit history. Borrowers with non-traditional credit will not have a credit score.

Must have zero balance or marked as 'paid in full' or 'resolved. OR is both less than $500 and more than 24 months old.

Borrowers who have no established credit references may be eligible using non-traditional credit references. A minimum of 3 credit references each rated for 12 months is required. There can be no housing lates and maximum 1x30 day late payment with the other credit references in the previous 12 months. There can be no major adverse or public records filed in the last 12 months. Non-traditional credit references may not be used to offset derogatory pay histories on traditional credit. Non-traditional credit may not be used to manufacture credit for borrowers with no credit history or enhance a credit history of a borrower with derogatory pay histories. Refer to PBM FHA Lending Guides for additional information regarding the use of non-traditional trade references. All loans with non-traditional credit require a manual underwrite, max LTV allowed per program guidelines, maximum ratios of 31%/43%, 2 months PITI reserves required (must be borrower's own funds), gift funds allowed for down payment and closing costs, 2 years tax returns and tax transcripts required, and must follow standard FHA guidelines as outlined in the PBM FHA Lending Guide.

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Deleting Borrowers

Minimum Reserves 1-2 Units: None. 3-4 Units: 3 Mos. PITI. Reserves cannot be gift funds, must be borrower's own.

1 Unit properties only. Max mortgage is limited to 75% LTV unless non occupying co- borrower's meet FHA definition of 'immediate family member'. Seller cannot be non occupant co-borrower. Non occupant co-borrowers may be added to improve ratios. Non occupant co-borrowers cannot be used to overcome or offset borrower's derogatory credit. The non-occupying borrower arrangement may never be used to develop a portfolio of rental properties. The financial contribution by the non-occupying co-borrower and the number of properties owned may indicate family members are acting as 'straw buyers.' PBM will not lend on transactions with non occupying co-borrowers that fit the above scenario.

Minimum investment of 3.5% required. All down payment funds and cash to close must be documented and verified.

Max contributions limited to 6%. Contributions include (not limited to): Discount, Closing Costs, Prepaids and Up Front MIP.

If the property was acquired less than 12 months prior to the date of application, the max LTV is based on the lessor of the appraised value or original sales price. 12 months is measured from the Note date of the current loan to the application date of the new loan. All borrowers must hold title to subject property for a minimum of 6 months. <620 FICO max cash-out is limited to $50,000, >620 FICO is unlimited up to the max LTV allowed per the program. Borrower's with mortgage delinquencies within past 12 months are not eligible for cash out refinances. High balance cash out loans with a Bankruptcy and/or Foreclosure in the most recent 4 years will be evaluated case-by-case.

TYPES OF FINANCINGIf property acquired less than 12 months, the maximum mortgage is 97.75% of the original sales price or appraised value. A copy of the existing Note and final HUD-1 from the prior transaction is required. 12 months is measured from the Note date of the current loan to the application date of the new loan.

Adding borrowers is allowed if currently occupying subject as primary residence for previous 6 months.

Deleting borrowers is allowed provided at least one borrower has been on title and original mortgage for a minimum of 6 months.

Cash-out Refinance

Adding Borrowers

Other Requirements

Debt Ratio

Non-Taxable Income

Income

Assets

CREDIT (continued)Insufficient Credit History Borrowers with insufficient credit history may be eligible with adding non-traditional trade references. Non-traditional trade references may not be

used to overcome poor pay histories of traditional credit. When using non-traditional trades to supplement an insufficient credit history, a minimum of 3 trade references rated for 12 months is required. Loans with insufficient credit history are to be run through the AUS. At the DE's discretion, the loan may be downgraded to a manual underwrite. Additional trade references or asset documentation may be required regardless of the AUS Findings. The max ratios for borrowers with insufficient credit history is 31%/43%. Compensating factors for higher ratios are not applicable. 2 months PITi reserves after closing are required. Gift funds may not be used for reserves.

Rate Term Refinance

Buyer Contribution

PER AUS approved/accept and 0x30 in previous 12 months for manually underwritten loans. *Loan will be ineligible if mortgage is rated one or more 1X60, 1X90, 1X120 or 1X150 days or greater within 12 months of the date of the credit report.

Credit report required in community property states. Debts must be added to DTI Ratio and Credit History may be considered.

NSF activity, private mortgage lates, delinquent CAIVRS, LDP or GSA findings, mortgage lates not reporting on the credit bureau, significant delinquencies after bankruptcy, and any other credit delinquencies will supersede any "approved/eligible" finding.

Loans with AUS Approve/Eligible - follow AUS decision. Loans with AUS Approve/Eligible and DTI > 53% require a minimum of 2compensating factors.Manually underwritten loans - max ratios are 31%/43%. Ratios exceeding 31%/43% may be eligible with compensating factors.Manually underwritten loans with credit score > 620 and ratios > 31%/43% require the following: - Housing ratio > 35% = 2 compensating factors - DTI > 43% - 53% = minimum 2 compensating factors - DTI > 53% = minimum 3 compensating factors - DTI > 55% requires minimum 3 compensating factors and UW Manager second signManually underwritten loans with FTHB living rent free and FICO score < 620 = 33%/45% with 2 compensating factors.Manually underwritten loans with credit score > 600 and <= 640 -Max ratios = 38%/50% with minimum 2 compensating factors.Refer to PBM Lending Guide for a list of FHA acceptable compensating factors.

Nontaxable income such as Social Security, Pension, Workers Comp and Disability Retirement income must be grossed up.

All types of income must have been received for the most recent two consecutive years including overtime, bonus, second job, part-time, commission, self employment.

Minimum cash investment from borrowers own funds and/or gift (no cash on hand allowed when borrower uses traditional banking sources and has traditional credit history). Any deposit 2% and greater of the sales price must be sourced and seasoned. An aggregate of deposits 2% and greater of the sales price must be sourced and seasoned. A single deposit or aggregate of deposits less than 2% of the sales price generally is not required to be sourced and seasoned. However, any atypical deposits and /or multiple deposits outside of regular payroll may require source and seasoning when the funds are required for closing and/or reserves as this may be excessive based on the borrower's history. This is regardless of the aggregate of deposits > 2% of the sales price.

Allowed.

Full income documentation loans only. IRS Form 4506T must be processed and income validated for most recent 2 years. Borrowers with income from Puerto Rico must: Sign form Modelo SC 2907 to obtain tax transcripts, returned Modelo SC 2903 transcripts for 2 years, and transcripts must be translated to English and notarized by 3rd party.

INCOME/ASSETS

Gifts

Documentation/4506T or 2907 Puerto Rico Tax Returns

Non Occupant co borrower

Seller Contribution

Mortgage/Rental History*

Non Purchasing Spouse

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Minnesota

State Specific

Maximum # of Properties

Qualify at the greater of fully indexed, fully amortized rate or the Note RateFull-indexed rate = Index+Margin rounded to the nearest 1/8th percent.1) Index = Wall Street Journal 1-year CMT2) Margin = 2.00%3) Terms available = 5/1 Treasury ARM4) Caps (initial/periodic/lifetime): 1/1/5

The maximum number of PBM properties financed for all borrower's is 4, including the subject property.

Texas = cash-out refinance not allowed

Escrow waivers, Temporary Buydowns, Energy Efficient Mortgages (EEM), Mortgage Credit Certificate (MCC) / Section 8 Voucher.

15 Year, 20 Year, 25 Year and 30 Year Fixed. 5/1 ARM

Qualify at Note Rate

Qualify at Note Rate

GENERAL

Ineligible

Loan Terms Available

Qualifying Fixed Products

Qualifying ARM Products

All loans require an AUS decision with the exception of loans with non-traditional credit references. Loans receiving an AUS Approve/Eligible may follow AUS Findings except as noted otherwise in PBM FHA Lending Guide and program matrix. Regardless of the AUS Findings, PBM is required to evaluate the loan for data integrity and ensure a sound underwriting decision is rendered. Loans receiving a Refer/Ineligible are not eligible. Loans receiving a Refer/Eligible may be eligible for a downgrade to a manual underwrite. Manually underwritten loans must follow standard FHA guidelines as outlined in PBM FHA Lending Guide. Documentation waivers are not acceptable on manually underwritten loans. All manually underwritten loans require compensating factors supporting loan decision.

AUS Approval & Manual Underwriting

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product guidelines fha standard and high balance program · 2015-06-22 · product guidelines fha...

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