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Conventional Mortgage Niches

Conventional Lender Minimal Over-Lays

Ernest Money Deposit (EMD) Requirements

The condition “Purchase: Source & season Earnest Money Deposit in the amount of $XXXX is usually not required.

Stock and Mutual Funds Accounts one recent monthly or quarterly statement is required. There is no requirement for a 2-month history if the most recent one-month statement is provided.

Large Deposits on a Refinance Documentation or explanation for large deposits is not required, however, the lender remains responsible for ensuring that any borrowed funds, including any related liability, are considered.

Condo Detached and 2 to 4 Unit Projects FNMA does not require a project review for detached condo units or units in small projects of 2-4 units.

Credit & Letters of Explanation (LOE)

Address LOE If there is an address variation on the credit report there is no requirement for an LOE. If W2s, paystubs or other file data show a different address when the subject is owner-occupied that would warrant further investigation.

Cash Out LOE Not required. The Seller Guide Section B2-1.2-03 contains this verbiage “acceptable uses for cash out refinance transactions: taking equity out of the subject property that may be used for any purpose.

Inquiry LOE Not required for the submitting broker or their credit agency. Also not required for any new debts that appear on the credit report. Inquiries from utility companies do not need to be addressed.

Sales Price vs. Appraised Value LOE A letter from the borrower addressing the purchase of a property that has an appraised value less than the purchase price is NOT required.

Mortgage Ratings If the mortgage is rated on the credit report within 45 days of the application date, we DO NOT need condition for “Credit supplement to document all mortgages are current with no late payments through the month of closing”.


Paystubs Only one paystub showing at least 30 days of YTD earnings is required. This means that a June 15 paystub with YTD is sufficient. If the paystub is January 15 and only shows two weeks of YTD pay, then we would require an additional paystub or the December paystub with the full year reflected.

P & L / Balance Sheets Not required unless we need to document income stability, such as the end of a negative income trend, these are an underwriter discretion. A Balance Sheet should never be required.

Signed 1040s or Signed Business Returns Signed tax returns are not required if tax transcripts are obtained. If we are using a “no record found” then signed returns are required for that year.

Teachers If a teacher qualifies with nine months of income divided over 12 months, then a written VOE to verify annual salary & number of months paid is not required.

Real Estate Owned

Non-Subject REO If the mortgage statement is recent and includes impounds, we do not need hazard and tax statements. OK to use the impound amount on the mortgage statement. Tax and HOI statements are always required on the subject property.

FHA (Federal Housing Administration)

Not all FHA Loans are Created Equally.

A government loan is an FHA USDA. All FHA lenders require a minimum 600 middle credit score, this program does not. This program does not have a Tradeline (credit report accounts) overlay or Debt-to-Income (DTI) overlay and does require Form 4506-T (IRS Transcripts) for W-2 Wage Earners. Cash Out OK to 85% Loan-to-Value (LTV).

Credit Scores

Minimum credit scores

500 with Automated Approval – 1 Credit Score OK for Primary Borrower

560 with Manual Underwrite – 1 Credit Score OK for Primary Borrower

Gift funds allowed.

Property Types

Single Family Residence (SFR)

Manufactured Homes OK

Non-traditional credit (Rent, Utility Bills, etc.) for Streamline Refinance OK

Escrow holdback REO – OK

Down payment

Closing cost

Manual underwrites & Blended Ratios – OK


Fannie Mae Home Ready

Freddie Mac Home Possible

Fannie Mae DU Refi Plus

Freddie Mac Relief Refinance

Open access.

Escrow holdback allowed.


$2,500,000 Maximum Loan Amount

700 Credit Score Required


30 Fixed Rate, Fully Amortized


5/1 ARM, Fully Amortized

7/1 ARM, Fully Amortized

3/1 ARM, Fully Amortized


Cash out to 100%

Manufactured Homes OK


500 Minimum credit score with Automated Approval

560 Minimum credit score with Manual Underwrite Approval

Foreclosures – 2 Years Seasoned

Short Sales – 2 Years Seasoned

Bankruptcy – 2 Years Seasoned



Alternative income documentation OK

560 Minimum Credit Score

Foreclosures – 1 Year Seasoned

Short Sales – 1 Year Seasoned

Bankruptcy – 1 Year Seasoned

Loan Modification – 1 Year Seasoned


30 Fixed Rate, Fully Amortized. 10-year Interest-Only Available


5/1 ARM, Fully Amortized

7/1 ARM, Fully Amortized

3/1 ARM, Fully Amortized

Cash Out

Owner Occupied

Second home

Non-Owner Occupied / Investment property.


Minimum Credit Score 580

100% Maximum LTV

Manual Underwrites Available

No Maximum Loan Amount

USDA Streamlined assist.

Cash Out Available

Manufactured Homes OK

Mortgage Pre-Qualification Form – Credit Check Not Required

We are not in any way affiliated with FHA, VA, Fannie Mae, Freddie Mac, etc. However, if you need help with your down payment, here is a link to the official HUD (Housing of Urban Development) website for a list of down payment assistance programs for each and all states.

Available in the Following States:

Alabama, Arizona, California, Colorado, Florida, Georgia, Hawaii, Illinois, Nevada, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, Texas, Utah, Virginia, Washington, and Wisconsin.

Alternative Income Documentation

Contact a Loan Officer

Non-Qualified Lending

Non-Qualified Lenders

Unconventional Lenders