Conventional Lender – Minimal Overlays
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, pay stubs 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.
500 Minimum Credit Score
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 a condition for “Credit supplement to document all mortgages are current with no late payments through the month of closing”.
Income, Employment and Documentation
Pay stubs Only one pay stub showing at least 30 days of YTD earnings is required. This means that a June 15 pay stub with YTD is sufficient. If the pay stub is January 15 and only shows two weeks of YTD pay, then we would require an additional pay stub or the December pay stub 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.
Eligible Occupancies:
Owner Occupied
Second home
Non-Owner Occupied / Investment property
Eligible Property Types
Single Family Residence (SFR)
Manufactured Homes OK
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 Criteria and 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
Underwriter Guideline Highlights
Earnest Money Deposit (EMD) Requirements
Gift funds allowed.
Non-traditional credit (Rent, Utility Bills, etc.) for Streamline Refinance OK
Escrow holdback REO – OK
10% Down Payment OK (90% LTV)
Manual underwrites & Blended Ratios – OK
Escrow Hold Back OK
Conventional Loan Programs
Fannie Mae Home Ready
Freddie Mac Home Possible
Fannie Mae DU Refi Plus
Freddie Mac Relief Refinance
Open Access
Jumbo
$2,500,000 Maximum Loan Amount
700 Credit Score Required
Terms: 30 Fixed Rate, ARM’s: 5/1 ARM, 7/1 ARM, 3/1 ARM
VA
Cash out to 100%
Credit:
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
Non-Agency
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
Terms
30 Fixed Rate, Fully Amortized. 10-year Interest-Only Available
ARM’s
5/1 ARM, Fully Amortized
7/1 ARM, Fully Amortized
3/1 ARM, Fully Amortized
Cash Out
USDA.
Minimum Credit Score 580
100% Maximum LTV
Manual Underwrites Available
No Maximum Loan Amount
USDA Streamlined assist.
Cash Out Available
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.