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Delegated/Correspondent Underwriting Hot Spots:................................................................................................2
Non-Delegated Correspondent/Broker Hot-Spots: .................................................................................................3
Submission requirements........................................................................................................................................4
CPM Representatives by region: ............................................................................................................................6
FHA 15 & 30 Year Fixed Rate MH Matrix ...............................................................................................................7
Conventional 15 & 30 Year Fixed Rate MH Matrix ...............................................................................................12
Closing Highlights: ................................................................................................................................................18
CPM Title Surrender Fees ....................................................................................................................................19
FHA Site Built 15 & 30 Year Fixed Rate Matrix ....................................................................................................20
Conventional Site Built 15 & 30 Year Fixed Rate .................................................................................................25
FHA 203K(S) 15 & 30 Year Fixed Rate ................................................................................................................30
How to Complete HUD-92700 Maximum Mortgage Worksheet for a Streamlined (k) Loan ................................36
CountryPlace Mortgage partner funded 1X close .................................................................................................38




                                                                          Page 1 of 38
Delegated/Correspondent Underwriting Hot Spots:


Effective 6/17/2011
:

1. Prior to delivery, underwriting questions should be directed to
   Wholesaleapplication@CountryPlaceMortgage.Com

2. CPM turn time for reviewing files for purchase:

       2 business days for CPM purchase review and conditions
       5 business days for file purchase (from time all conditions are cleared)

3. CPM requires original closing documents executed by all appropriate parties

4. If manufactured home title has been retired/eliminated: CPM will require Correspondent to provide proof
   the title to the manufactured home has been properly retired upon delivery of loan for purchase

5. If manufactured home title has not been retired/eliminated: CPM will handle title elimination, however,
   Correspondent will be responsible for providing the necessary documents CPM will need in order to eliminate
   title and Correspondent originators will be required to disclose and collect the necessary fees associated with
   title elimination (See title elimination section of this matrix).

Please Note: CPM has specific fees for eliminating title in each state. It is the correspondent’s
responsibility to disclose those fees in the initial disclosures sent to the borrower and to collect those
fees at closing. Fees not collected at closing will still be netted from Correspondent’s funds upon
purchase

6. If using a POA: Power of attorney is allowed for all loans but must be specific to the transaction. This form
   must contain the names of the parties involved as well as the property address




                                                     Page 2 of 38
Non-Delegated Correspondent/Broker Hot-Spots:

7. underwriting questions should be directed to Wholesaleapplication@CountryPlaceMortgage.Com

8. CPM turn time for reviewing files:

       2-3 business days for CPM initial underwriting review
       1-2 business days for CPM underwriting condition review
       1 business day for CPM to release closing instructions

9. CPM requires original closing documents executed by all appropriate parties

10. If using a POA: Power of attorney is allowed for all loans but must be specific to the transaction. This form
    must contain the names of the parties involved as well as the property address

11. If manufactured home title has been retired/eliminated: CPM will require Correspondent/broker to
    provide proof the title to the manufactured home has been properly retired upon delivery of loan for purchase

12. If manufactured home title has not been retired/eliminated: CPM will handle title elimination, however,
    Correspondent/broker will be responsible for providing the necessary documents CPM will need in order to
    eliminate title and Correspondent/broker originators will be required to disclose and collect the necessary
    fees associated with title elimination (See title elimination section of this matrix).

Please Note: CPM has specific fees for eliminating title in each state. It is the correspondent/Broker’s
responsibility to disclose those fees in the initial disclosures sent to the borrower and to collect those
fees at closing. Fees not collected at closing will still be netted from Correspondent’s funds upon
purchase




                                                   Page 3 of 38
Submission requirements


   1. Submit a complete loan package to:

               CountryPlace Mortgage, Ltd.
               15305 Dallas Parkway, Suite 800
               Addison, TX 75001 ATTN: Purchase Review
               Phone: 800-228-1828



   2. Submitting Complete loan packages for underwriting to CPM:

           -   Submit a complete closed loan package (correspondent) and complete loan package (broker)
               using the CPM “Closed Loan Purchase Checklist” (Correspondent) and “Product Specification
               checklist” (broker) as the coversheet,
           -   Underwriting or scenario questions should be sent from correspondent’s underwriters to
               WholeSaleApplication@CountryPlaceMortgage.Com

               Ordering Appraisals
               Correspondent will be responsible for ordering the appraisal
               CPM will order appraisals on all brokered deals



   3. Submitting marginal loans or appraisals for CPM review prior to closing

From time to time your underwriters may have questions in regard to the acceptability of a marginal loan or
appraisal. There may also be specific product questions. A scanned copy of a credit package or appraisal can
be sent via secure mail to CPM at any time. Product questions can be directed to
Wholesaleapplication@CountryPlaceMortgage.Com.




                                                Page 4 of 38
CPM reserves the right to amend these guidelines at any time. If amended, CPM will immediately inform
Correspondent of any changes. Application dates after changes to this matrix have been disclosed will
be subject to amended guidelines. All agency guidelines supersede CPM specific guidelines

FHA Not Permitted:
   - Single-Wide MFH
   - Non-Occupant Co-Borrowers / Co-Signers
   - Subordinate Financing
   - Loan amounts less than 50K
   -  Investment Properties
   -  Second Homes
Conventional Not Permitted
   - Single-Wide MFH
   - Non-Occupant Co-Borrowers / Co-Signers
   - Subordinate Financing
   - Loan amounts less than 50K
   -  Investment Properties

CPM Fees:

Underwriting $550 (Non-Delegated only)

Admin Fee $450 (All Files)

Supplemental Origination fee $350 (Streamline 203K only)




                                              Page 5 of 38
CPM Representatives by region:

Bryan Chamberlain National Marketing Manager (Corporate Office)
Phone: 469-865-5064 Email: Bchamberlain@CountryPlaceMortgage.Com

John Manley Strategic Accounts Manager (High Springs, Florida)
Phone: 352-284-1407 Email: JManley@CountryPlaceMortgage.Com

Carly Brophy National Accounts Manager (Corporate Office)
Phone: 972-764-9224 Email: CBrophy@CountryPlaceMortgage.Com

David Bumpers-Cornelius, North Carolina-NorthEast Regional Account Executive-North Carolina, South
Carolina, Tennessee
Phone: 888-677-7484 Email: DBumpers@CountryPlaceMortgage.Com

Brad Smith-Jacksonville, Florida-SouthEast Regional Account Executive-Mississippi, Alabama, Georgia, Florida
Phone: 800-918-2045 Email: BCSmith@CountryPlaceMortgage.Com

Bryan Chamberlain-Dallas, Texas-South Regional Account Executive-Texas, Oklahoma, Louisianna, Arkansas,
Kansas, Minnesota
Phone: 469-865-5064 Email: Bchamberlain@CountryPlaceMortgage.Com

Kory Beickel-Pheonix, Arizona-West Regional Account Executive-Arizona, California, New Mexico
Phone: 928-453-4000 Email: KBeickel@CountryPlaceMortgage.Com

Brett Pierce-Olympia, Washington
NorthWest Regional Account Executive-Washington, Oregon, Idaho
Phone: 360-709-9191 Email: BPierce@CountryPlaceMortgage.Com


HOI Mortgagee Clause:
CountryPlace Mortgage, LTD, ISAOA
PO Box 246
Amelia, OH 45102

PCL/ICL Mortgagee Clause
Conventional:
CountryPlace Mortgage, LTD, ATIMA
15305 Dallas Pkwy, Suite 800
Addison, TX 75001
FHA:
CountryPlace Mortgage, LTD, ISAOA
15305 Dallas Pkwy, Suite 800
Addison, TX 75001




                                                Page 6 of 38
FHA 15 & 30 Year Fixed Rate MH Matrix
FHA Manufactured Homes

                                            FHA 15 & 30 Year Fixed Rate
                                        Purchase and Rate & Term Refinance
                                                           Maximum          Maximum
                    Maximum
Occupancy                               Credit Score      Front / Back        Seller                          Cash Reserves
                      LTV
                                                             Ratios        Contributions
    1-Unit               90%              620-649                                                            As per DU unless
 O/O Primary                                                     30% / 45%                6% of SP           payment shock is
  Residence              96.5%               >650                                                                present
Program Guidelines:
Loan            -    Purchase
Purpose         -    Rate & Term Refinance
                -    Cash Out Refinance (not permitted in Texas
Occupancy       -   Owner Occupied, Primary Residence
Doc Type        -   Full documentation
Geographic      -   WA, ID, ND, OR, CA, AZ, NM, TX, OK, LA, AR, MS, AL, KS, GA, FL, SC, NC, TN, MN
Availability        Note: Look for more states being added in the near future
Loan Type       -   FHA 15 and 30 year fixed rate program (20 year term available upon request)
and Terms
Prepayment      -   None
Penalty
Buy down        -   Bonafide discount points allowed.
                    Note: A discount point is considered bonafide when an interest rate of .25% higher than the offered rate is
                    available on the rate card the day the rate is locked
Escrow          -   Not permitted
Waivers
Assumed         -   In accordance with FHA guidelines, fixed rate loans are assumable to qualified borrower(s)
Loans
Maximum #       -   One
of Loans to
one
borrower
Maximum #       -   It must be determined by the underwriter that the subject property home is being purchased as
of                  the borrower’s primary residence
Properties          Note: Borrower’s applying for an FHA insured mortgage that currently own a home insured by
Financed            FHA must meet FHA requirements for owning a second FHA insured home. Proximity to a new
                    job as well as an increase in family size are two common, acceptable situations
Bankruptcy     Bankruptcy:
                -   CPM requires that a borrower be discharged from bankruptcy for 2 years despite the type of
                    bankruptcy
                -   Customer must have three established lines of credit opened after the discharge. Each trade line
                    must have a 12 month history and must have some activity within the most recent 24 months. At
                    least one of these trade lines must be an installment account and borrower must have paid the
                    account down by an amount greater or equal to 10% of the subject loan amount. Rental history
                    is considered installment and the monthly payment multiplied by the number of months can be
                    used to meet the installment requirement
                -   Foreclosure:
                -   CPM requires that 36 months have passed from the date of the foreclosure sale. A satisfactory
                    letter of explanation must be included in the file. All standard trade line and payment shock
                    requirements apply
Age of         Credit Documents:
Documents       - As determined by DU findings

                                                      Page 7 of 38
Appraisal :
                 - 120-days old as of closing date (signing of Note & Mtg.)
AUS             Acceptable AUS Determination:
Requirement      - All loans must be run through DO/DU
                 - Approve/Eligible
Eligible        All borrowers must have a valid U.S. Social Security number.
and             Eligible:
Ineligible                1. U.S. Resident Citizen
Borrowers
                         2.   Permanent Resident Alien
                               -  Same as U.S. Citizen
                               -  Obtain evidence of lawful, permanent residency issued by the Bureau of Citizenship and
                                  Immigration Services (BCIS), formerly the INS.
                               -  Obtain a copy of Alien Registration Receipt Card (Resident Alien card), I-551

                         3.   Non-Permanent Resident Alien
                              -  Must be eligible to work in the U.S.
                              -  Evidence of residency and work status to be obtained through documentation from US Bureau
                                 of Citizenship and Immigration Services (BCIS) formerly INS.
                              -  Copy of the Employment Authorization Card, I-688B. This card carries an expiration date. A
                                 SS card is not acceptable as evidence of work status.
                Ineligible:
                 - Non-Occupant Co-Borrowers
                 - Co-Signers
                 - Foreign Nationals
                 - Non-Resident Canadians
                 - Borrowers with Diplomatic Immunity
Title Vesting   Eligible Vesting / Rights of Ownership:
Rights of        - Fee Simple
Ownership        - Individual & Joint

                Ineligible / No Exceptions:
                 - Land Trust
                 - Leasehold Estate
                 - Real Estate Syndication
                 - General or Limited Partnerships
                 - Title in the name of a Corporation
Credit           - A tri-merge bureau is required on all loans; the lowest qualifying score of all applicants is used to qualify and
                     each borrower must have at least two credit scores. The qualifying score is the lower of 2 or the middle of 3
                     scores and must be reviewed for each borrower.

                -   For a credit score to be considered valid, the score must be generated from a minimum of three (3) trade
                    lines that have been evaluated for at least 12 months. The trade lines do not need to be currently active but
                    require some activity within the last 24 months. At least one of these trade lines must be an
                    installment account and borrower must have paid the account down by an amount greater or
                    equal to 10% of the subject loan amount. Rental history is considered installment and the
                    monthly payment multiplied by the number of months can be used to meet the installment
                    requirement

                Minimum Credit Score:
                 - 620 (620-649 max LTV 90%, >649 max LTV is 96.5%)
                Inquiries and Derogatory Credit:
                 - When inquiries and/or derogatory credit appear, the borrower must submit a signed credit explanation letter
                    prior to loan approval. Inquiry letter must cover ALL inquiries in the most recent 90 days from date of credit
                    report
                 - Note: Any delinquent accounts shown as “disputed” will result in an automatic downgrade to a
                    manual underwrite and all manual guidelines will apply. exceptions to this are as follows:
                 - 1. The disputed account has a zero balance
                 - 2. The disputed account is marked as "paid in full", or "resolved"
                 - 3. The disputed account is both a. less than $500, and b. more than 24 months old, based on the


                                                       Page 8 of 38
date of dispute.
               Housing Payment History:
                - 0 X 30 in the past 12 months.
                - For borrowers with mortgage delinquency beyond the most previous 12 months, it is the underwriter’s
                   responsibility to carefully review and determine the borrower’s credit worthiness.
               Mortgage Payment History/Documentation:
                - The mortgage payment history may be documented by a VOM or provide a rating in the credit report.
               Rental Payment History/Documentation:
                - A rental payment history is required per the AUS findings or underwriter determination and must be
                   documented by a VOR from a property management company or 12 months cancelled checks if rented
                   from an individual (If there is payment shock of 25% or more, CPM requires a VOR regardless of what
                   DU requires)
Employment     Salaried:
/ Income         Most current paystubs covering a 30-day period with YTD income
                 Most current and consecutive 2-Years W-2’s
                 Most current two years tax transcripts (ordered via 4506 on all loans)
               Self-Employed:
                - Business must be in existence for at least two (2) years prior to subject application date.
                - Most current and consecutive (signed) 2-Years Business Tax Returns with all schedules required if
                   incorporated
                - Most current two years personal tax returns for principals of corporations or sole proprietors
                - Copy of Business License or a CPA letter proving business still exists.
               Overtime/Bonus/Other income
                - Overtime income will be considered if employer indicates it is likely to continue and a two year history is
                   available and averaged
                - Bonus income will be considered if employer indicates it is likely to continue and two year history is
                   available and averaged
                - Commission income will be considered if employer indicates it is likely to continue and a two year history is
                   available and averaged. If commission income is more than 25% of total income, tax returns for two years
                   will be required to calculate income
               Verbal Verification Prior to Closing:
                 A verbal verification of employment is required for each employer of all borrowers, within 10-days of closing.
                   This policy applies to all non-self employed income types.
               Child Support, Alimony or Maintenance Income:
                 In order to use as income, child support, alimony or maintenance income, payments must reasonably be
                   documented to continue for at least a three (3) year period. The following documentation is required:
                   o Copy of the divorce decree, separation agreement or court order
                   o Copies of court records, bank statements or cancelled checks evidencing a minimum of three (3)
                         months receipt of payments.
               Rental income:
                 Rental income must be supported by two years tax returns.
                 If converting primary residence to rental property and relying on rental income to qualify, 25% equity in the
                   rental property, as validated through appraisal or difference between original financed amount and current
                   balance, is required along with a copy of the a 12 month lease agreement and evidence of security deposit

               All income must match 1003 and DU findings
Qualifying     Maximum Ratios:
Ratios         PITI FICO (Front End)
                 30% Max 620 – 679
                 35% Max 680+
                 If gross monthly income is less than 2500 dollars 25% Max Ratio (CPM to review any exceptions)
               DTI FICO (Back End)
                 45% Max 620 – 679
                 50% Max 680 – 739
                 55% Max 740+
               No exceptions on FICO scores < 650
               Exceptions to maximum ratios considered with compensating factors such as minimal payment shock with
               substantial reserves, etc. Must keep DO/DU Approved/Eligible
Lease          - Not permitted
Option
Rent Credits

                                                     Page 9 of 38
Payment        In all cases, the “existing housing” and the “proposed housing” sections of the 1003 application must be
Shock          fully completed


               CPM considers payment shock on all loans:
                - Payment Shock occurs when the proposed housing expense will be considerably higher than the existing
                  housing expense and where there are multiple layers of risk. The UW must analyze the borrower’s existing
                  cash flow as depicted on bank statements and determine the borrower’s capacity for payment shock
               Payment Shock Guideline:
                     620-679 FICO score and payment shock is 50% or more-2 months PITI reserves required
                     >679 FICO score and payment shock is 50% or more-1 months PITI reserves required

               In order to be considered cash reserves for payment shock purposes, the borrowers ending balance on
               two consecutive bank statements must consistently show the reserve requirements available in the
               account. This shows the borrower has the ability to maintain the reserve levels required to sufficiently
               offset payment shock

               THIS IS ONE OF THE MOST IMPORTANT FACTORS IN ANALYZING THE BORROWER’S ABILITY TO PAY
Assets         Bank Statements:
                - Most current and consecutive two (2) months bank statements (all pages). Quarterly Bank statements must
                   be dated within 90-days of the initial application date and 120 days of closing (signing of note)
               Earnest Money:
                - Verification and source of funds for EM deposit required.
               Stocks, Bonds, Mutual Funds, U.S. Government Securities:
                - Copy of the account statement for the most recent 60 days/quarterly statement is required.

               All assets must match 1003 and DU findings exactly
Seller          Max Concessions:
Contribution    - Max seller concession is the lower of 6% of contracted sales price or contracted amount
                - Seller contribution is limited to discount points, closing costs and prepaid items
Cash            - Cash reserves are not generally a requirement except when cash reserves are used as a compensating
Reserves            factor when approving an FHA loan with debt ratios that exceed guidelines or payment shock is present

                   -Gift funds, cash proceeds from a refinance and equity in another property, are not acceptable sources of
                    cash reserves.
Gift Funds      In accordance with current FHA guidelines:
                - 100% gift funds for down payment are only acceptable if the funds are documented by a gift letter that
                    states the funds are not to be repaid, clear documentation of the donor’s ability to gift the funds and transfer
                    of funds from donor to the borrower
               Gift Letter:
                - A gift letter is required and must list the donor’s name, address, city, state and zip, phone number,
                    relationship to the borrower, and the dollar amount of the gift. The gift letter must indicate that the funds do
                    not have to be repaid in any way and must be signed and dated by the donor.

               Documentation / Track Gift Funds :
                - Evidence that gift funds stated in the Gift Letter were withdrawn from the donors account; and,
                - Evidence that the same gift funds were received from the donors account to the borrower’s account, prior to
                  closing.
                - When funds are transferred by donor to closing, verification of the transfer of the gift funds from the donors
                  account must show the donor as the remitter and HUD-1 must clearly indicate the exact amount of the gift
                  funds received from the donor and the account the funds were drawn from
Subordinate     - Not Permitted
Financing
State          -   Manufactured Homes require a State Administrative Agency to inspect all modifications to manufactured
Requirements       homes once they leave the factory. If the appraiser observes changes to the manufactured home such as
                   an addition, and there is no local agency to inspect the home, obtain an engineer's report indicating that the
                   structural changes or additions were made in accordance with HUD Manufactured Home Construction and
                   Safety Standards.
               - If the property cannot be inspected by the State Administrative Agency and an Engineer's Report cannot be
                   obtained, the property is ineligible for financing .
Refinance       A Cash-Out Refinance is not permitted in Texas and limited to an 85% in all other states


                                                      Page 10 of 38
Rate/Term and C/O refinances
                 -   If a refinance, the owner of the MFH must have owned the unit and the land for a minimum of 1-year to be
                     eligible for financing.
                 -   Properties owned free and clear will be considered a C/O Refi and not eligible for financing in Texas
                 -   The refinance of a manufactured home that is currently financed as personal property and will be
                     converted to real estate in the transaction is eligible. (See Title “CPM Elimination Fees by State” below)
Special         Vacant Properties:
Certification    -   If the appraiser indicates that the property was vacant at the time of the inspection, the utilities must be
/ Inspections       turned on and an “As is” appraisal must be received from appraiser indicating that all utilities are now
                    functioning properly prior to closing. If vacant and property has a well/septic, a well water test and a septic
                    certification are needed if vacant more than 12 months.
                Flood Determination / Certification:
                 -   Mandatory
                 -   All MFH located in a Flood Zone A or V are eligible
                Flood Zone Elevation Certificate

                -   If the site supporting a manufactured home is within a FEMA designated Special Flood Hazard Area, the
                    following requirements apply:

                    Order a FEMA Elevation Certificate to determine if the manufactured home is eligible. The Lowest Adjacent
                    (finished) Grade (LAG) level beneath a manufactured home must be at or above the 100-Year return
                    frequency elevation (Base Flood Elevation)

                -     If the Elevation Certificate indicates that the lowest adjacent grade of the manufactured home is below the
                      Base Flood Elevation (BFE) level, the loan is not eligible- even if flood insurance is obtained.
                Well and/or Septic Systems Certifications:
                -     Required only when made a condition of the sales contract, inspection report or appraisal, or if property is
                      vacant more than 12 months or for new construction. When required, the certification(s) may be no more
                      than 90-days old as of the date of closing (regardless of how old the system is).
                NOTE: Shared wells must have a recorded shared well agreement executed by all parties
Foundation      The Foundation for the MFH must be inspected by a licensed engineer. Engineer must address, grading,
                skirting, and foundation system and state that all comply with FHA standards for a permanent foundation. This
                information must be provided on an engineer’s certification that includes the engineer’s seal and signature
Appraisal       -     A full appraisal is required and must be completed on the Manufactured Home Appraisal Report (1004C)

                -   The appraiser must verify the location and wording on the “HUD” Tags/Certification Labels of the unit and
                    clear pictures of these tags must be provided (if HUD tags are not available, a certification from IBITS is
                    required. If appraiser cannot obtain a clear picture of the HUD label number, and the label is present and
                    accessible, he must manually insert the label number below the HUD label pictures on the appraisal)

                -  The appraiser must also use standard single-family residential appraisal techniques when appraising the
                   manufactured home. Other factory-built housing would provide the most similar comparables so every effort
                   should be made to obtain such comparables even though their distances from the subject may be greater
                   than usual. CPM requires that three manufactured home comparables be used to validate the value of the
                   subject property
                Maximum adjustments:

                -   Maximum line item adjustment is 10%

                -   Maximum net adjustment is 15%

                -    Maximum gross adjustment is 25%
                NOTE: Appraisals exceeding these maximum adjustments may be acceptable if the appraiser clearly identifies
                the reason for exceeding these percentages. This must be clearly justified and within normal appraisal practice.




                                                       Page 11 of 38
Conventional 15 & 30 Year Fixed Rate MH Matrix
    Conventional Manufactured Homes

                                              Conventional 15 & 30 Year Fixed Rate
                                              Purchase and Rate & Term Refinance
                                                                 Maximum             Maximum
                         Maximum
    Occupancy                                 Occupancy         Front / Back           Seller                      Cash Reserves
                           LTV
                                                                   Ratios           Contributions
    1-Unit                                       Owner                                                            As per DU unless
                            80%                                 See “Qualifying   >90% max 3%
O/O or Second                                  Occupied            Ratios”        <=90% max 6%
                                                                                                                  payment shock is
    Home                    80%               Second Home                                                             present

-      Purchase: Borrower must have a minimum investment of 20% and maintain an 80% LTV after appraisal
-      Rate & Term Refi: The current owner must have owned the MFH & land for a minimum of 1-Year prior to the application date.
       Manufactured home financed as personal property being paid off in the transaction are eligible but loan must be considered a
       cash out refinance and a max 65% LTV is required. (Not permitted in Texas)
-      Cash Out Refi

    Program Guidelines:
Loan                 -    Purchase
Purpose              -    Rate & Term Refinance
                     -    Cash Out refinance

Occupancy            -   Owner Occupied, Primary Residence and Second Homes

Doc Type             -   Full documentation

Geographic           -   WA, ID, ND, OR, CA, AZ, NM, TX, OK, LA, AR, MS, AL, KS, GA, FL, SC, NC, TN, MN
Availability             Note: Look for more states being added in the near future
Loan Type            -   Conventional 15 and 30 year fixed rate program
and Terms
Prepayment           -   None
Penalty
Buy down             -   Bonafide discount points allowed.
                         Note: A discount point is considered bonafide when an interest rate of .25% higher than the offered rate is
                         available on the rate card the day the rate is locked
Escrow               -   Not permitted
Waivers
Assumed              -   In accordance with Fannie Mae guidelines, fixed rate loans are assumable to qualified
Loans                    borrower(s)
Maximum #            -   One
of Loans to
one
borrower

Maximum #            -   It must be determined by the underwriter that the subject property home is being purchased as
of                       the borrower’s primary residence or second home
Properties           -   Maximum of seven properties financed allowed
Financed
Bankruptcy          Bankruptcy:
                     -   CPM requires that a borrower be discharged from bankruptcy for 4 years despite the type of
                         bankruptcy
                     -   Customer must have three established lines of credit opened after the discharge. Each trade line
                         must have a 12 month history and must have some activity within the most recent 24 months. At
                         least one of these trade lines must be an installment account and borrower must have paid the
                         account down by an amount greater or equal to 10% of the subject loan amount. Rental history

                                                          Page 12 of 38
is considered installment and the monthly payment multiplied by the number of months can be
                    used to meet the installment requirement
                -   Any repossessions within the most recent 3 years will disqualify the borrower
                Foreclosure:
                4 years from foreclosure sale date

Age of          Credit Documents:
Documents        - 120-days old at time of closing (signing of Note & Mtg.)
                Appraisal :
                 - 120-days old as of closing date (signing of Note & Mtg.)
AUS             Acceptable AUS Determination:
Requirement      - All loans must be run through DO/DU
                 - Approve/Eligible
Eligible        All borrowers must have a valid U.S. Social Security number.
and             Eligible:
Ineligible                4. U.S. Resident Citizen
Borrowers
                         5.   Permanent Resident Alien
                               -  Same as U.S. Citizen
                               -  Obtain evidence of lawful, permanent residency issued by the Bureau of Citizenship and
                                  Immigration Services (BCIS), formerly the INS.
                               -  Obtain a copy of Alien Registration Receipt Card (Resident Alien card), I-551

                         6.   Non-Permanent Resident Alien
                              -  Must be eligible to work in the U.S.
                              -  Evidence of residency and work status to be obtained through documentation from US Bureau
                                 of Citizenship and Immigration Services (BCIS) formerly INS.
                              -  Copy of the Employment Authorization Card, I-688B. This card carries an expiration date. A
                                 SS card is not acceptable as evidence of work status.
                Ineligible:
                 - Non-Occupant Co-Borrowers
                 - Co-Signers
                 - Foreign Nationals
                 - Non-Resident Canadians
                 - Borrowers with Diplomatic Immunity
Title Vesting   Eligible Vesting / Rights of Ownership:
Rights of        - Fee Simple
Ownership        - Individual & Joint
                Ineligible / No Exceptions:
                 - Land Trust
                 - Leasehold Estate
                 - Real Estate Syndication
                 - General or Limited Partnerships
                 - Title in the name of a Corporation
Credit           - A tri-merge bureau is required on all loans; the lowest qualifying score of all applicants is used to qualify and
                     each borrower must have at least two credit scores. The qualifying score is the lower of 2 or the middle of 3
                     scores and must be reviewed for each borrower.

                -   For a credit score to be considered valid, the score must be generated from a minimum of three (3) trade
                    lines that have been evaluated for at least 12 months. The trade lines do not need to be currently active but
                    require some activity within the last 24 months. At least one of these trade lines must be an
                    installment account and borrower must have paid the account down by an amount greater or
                    equal to 10% of the subject loan amount. Rental history is considered installment and the
                    monthly payment multiplied by the number of months can be used to meet the installment
                    requirement

                Minimum Credit Score:
                 - 620 (620-649 max LTV 90%, >649 max LTV is 96.5%)
                Inquiries and Derogatory Credit:
                 - When inquiries and/or derogatory credit appear, the borrower must submit a signed credit explanation letter


                                                       Page 13 of 38
prior to loan approval. Inquiry letter must cover ALL inquiries in the most recent 90 days from date of credit
                 report
             -   Note: Any delinquent accounts shown as “disputed” will result in an automatic downgrade to a
                 manual underwrite and all manual guidelines will apply. exceptions to this are as follows:
             -   1. The disputed account has a zero balance
             -   2. The disputed account is marked as "paid in full", or "resolved"
             -   3. The disputed account is both a. less than $500, and b. more than 24 months old, based on the
                 date of dispute.
             Housing Payment History:
              - 0 X 30 in the past 12 months.
              - For borrowers with mortgage delinquency beyond the most previous 12 months, it is the underwriter’s
                 responsibility to carefully review and determine the borrower’s credit worthiness.
             Mortgage Payment History/Documentation:
              - The mortgage payment history may be documented by a VOM or provide a rating in the credit report.
             Rental Payment History/Documentation:
              - A rental payment history is required per the AUS findings or underwriter determination and must be
                 documented by a VOR from a property management company or 12 months cancelled checks if rented
                 from an individual (If there is payment shock of 25% or more, CPM requires a VOR regardless of what
                 DU requires)
Employment   Salaried:
/ Income       Most current pay stubs covering a 30-day period with YTD income
               Most current and consecutive 2-Years W-2’s
               Most current two years tax transcripts (ordered via 4506 on all loans)
             Self-Employed:
              - Business must be in existence for at least two (2) years prior to subject application date.
              - Most current and consecutive (signed) 2-Years Business Tax Returns with all schedules required if
                 incorporated
              - Most current two years personal tax returns for principals of corporations or sole proprietors
              - Copy of Business License or a CPA letter proving business still exists.
             Overtime/Bonus/Other income
              - Overtime income will be considered if employer indicates it is likely to continue and a two year history is
                 available and averaged
              - Bonus income will be considered if employer indicates it is likely to continue and two year history is
                 available and averaged
              - Commission income will be considered if employer indicates it is likely to continue and a two year history is
                 available and averaged. If commission income is more than 25% of total income, tax returns for two years
                 will be required to calculate income
             Verbal Verification Prior to Closing:
               A verbal verification of employment is required for each employer of all borrowers, within 10-days of closing.
                 This policy applies to all non-self employed income types.
             Child Support, Alimony or Maintenance Income:
               In order to use as income, child support, alimony or maintenance income, payments must reasonably be
                 documented to continue for at least a three (3) year period. The following documentation is required:
                 o Copy of the divorce decree, separation agreement or court order
                 o Copies of court records, bank statements or cancelled checks evidencing a minimum of three (3)
                       months receipt of payments.
             Rental income:
               Rental income must be supported by two years tax returns.
               If converting primary residence to rental property and relying on rental income to qualify, 25% equity in the
                 rental property, as validated through appraisal or difference between original financed amount and current
                 balance, is required along with a copy of the a 12 month lease agreement and evidence of security deposit

                  o All income must match 1003 and DU findings
Qualifying   Maximum Ratios:
Ratios       PITI FICO (Front End)
               30% Max 620 – 679
               35% Max 680+
               If gross monthly income is less than 2500 dollars 25% Max Ratio (CPM to review any exceptions)
             DTI FICO (Back End)
               45% Max 620 – 679
               50% Max 680 – 739

                                                   Page 14 of 38
   55% Max 740+
               No exceptions on FICO scores < 650
               -     Exceptions to maximum ratios considered with compensating factors such as minimal payment shock with
                     substantial reserves, etc. Must keep DO/DU Approved/Eligible
Payment        In all cases, the “existing housing” and the “proposed housing” sections of the 1003 application must be
Shock          fully completed


               CPM considers payment shock on all loans:
                - Payment Shock occurs when the proposed housing expense will be considerably higher than the existing
                  housing expense and where there are multiple layers of risk. The UW must analyze the borrower’s existing
                  cash flow as depicted on bank statements and determine the borrower’s capacity for payment shock
               Payment Shock Guideline:
                     620-679 FICO score and payment shock is 50% or more-2 months PITI reserves required
                     >679 FICO score and payment shock is 50% or more-1 months PITI reserves required

               In order to be considered cash reserves for payment shock purposes, the borrowers ending balance on
               two consecutive bank statements must consistently show the reserve requirements available in the
               account. This shows the borrower has the ability to maintain the reserve levels required to sufficiently
               offset payment shock

               THIS IS ONE OF THE MOST IMPORTANT FACTORS IN ANALYZING THE BORROWER’S ABILITY TO PAY
Assets         Bank Statements:
               Most current and consecutive two (2) months bank statements (all pages). Quarterly Bank statements must be
               dated within 90-days of the initial application date and 120 days of closing (signing of note)
               Earnest Money:
                - Verification and source of funds for EM deposit required.

               Stocks, Bonds, Mutual Funds, U.S. Government Securities:
                - Copy of the account statement for the most recent 60 days/quarterly statement is required.

Seller         Max Concessions:
Contribution   - Max seller concession is the lower of 3% of contracted sales price or contracted amount on loans with an
                 LTV above 90% and 6% on loans with an LTV of 90% or below
               - Seller contribution is limited to discount points, closing costs and prepaid items

Cash           -   Cash reserves are not generally a requirement except when cash reserves are used as a compensating
Reserves           factor when approving a conventional loan with debt ratios that exceed guidelines or payment shock is
                   present

               -   Gift funds, cash proceeds from a refinance and equity in another property, are not acceptable sources of
                   cash reserves.

Gift Funds      In accordance with current CPM guidelines:
                - 100% gift funds for down payment are only acceptable if the funds are documented by a gift letter that
                    states the funds are not to be repaid as well as clear documentation of the donor’s ability to gift the funds as
                    well the transfer of funds from donor to the borrower
                - Borrower must have 5% of their own, documented funds contributed if the subject property is a second
                    home with an LTV greater than 80%
               Gift Letter:
                - A gift letter is required and must list the donor’s name, address, city, state and zip, phone number,
                    relationship to the borrower, and the dollar amount of the gift. The gift letter must indicate that the funds do
                    not have to be repaid in any way and must be signed and dated by the donor.

               Documentation / Track Gift Funds :
                - Evidence that gift funds stated in the Gift Letter were withdrawn from the donors account; and,
                - Evidence that the same gift funds were received from the donors account to the borrower’s account, prior to
                  closing.
                - When funds are transferred by donor to closing, verification of the transfer of the gift funds from the donors
                  account must show the donor as the remitter and HUD-1 must clearly indicate the exact amount of the gift
                  funds received from the donor and the account the funds were drawn from


                                                      Page 15 of 38
Subordinate         -   Not Permitted
Financing
Property        The Manufactured Home (MFH) must be designed and constructed to the Federal Manufactured Construction
Eligibility     and Safety Standards and be so labeled.

                Home is eligible if it has ever been moved from the original installation site

                    -   Must be a double-wide MFH and have a floor area of not less than 900 square feet; this means that a
                        single-wide is not eligible for financing.

                    -   Be constructed after June 15, 1976, in conformance with the Federal Manufactured Home Construction and
                        Safety Standards, as evidenced by an affixed certification label

                    -   Be classified and taxed as real estate; (see “CPM Title Elimination Fees By State” section for
                        documentation required for CPM to surrender title as well as state specific fee to CPM for elimination of title
                        for manufactured homes that do not currently have eliminated title)

                    -   The mortgage must cover both the manufactured unit and its site and shall have a term of not more than 30
                        years from the date amortization begins;

                    -   Must be built and remain on a permanent chassis with all wheels removed and designed to be used as a
                        residential dwelling, affixed to a permanent foundation as required by Fannie Mae.

                    -   Permanent foundation must meet manufacturer’s specifications for a permanent foundation. Appraiser to
                        confirm.

                    -   If manufactured home is located in a flood zone, flood insurance will be required

                    -   MFH must meet the National Manufactured Home Construction and Safety Standards. New manufactured
                        homes (100% complete but never previously occupied);

                    -   The MFH must be used as an O/O primary residence or second home

                    -   Newly Constructed MFH: If the MFH is newly, the following construction documents must be supplied with
                        the file for purchase: Clear 442 final inspection completed by appraiser

Foundation      -       Permanent foundation per manufacturer’s specifications.
Systems
State           -       Manufactured Homes require a State Administrative Agency to inspect all modifications to manufactured
Requirements            homes once they leave the factory. If the appraiser observes changes to the manufactured home such as
                        an addition, and there is no local agency to inspect the home, obtain an engineer's report indicating that the
                        structural changes or additions were made in accordance with HUD Manufactured Home Construction and
                        Safety Standards.
                -       If the property cannot be inspected by the State Administrative Agency and an Engineer's Report cannot be
                        obtained, the property is ineligible for financing .


Refinance        A Cash-Out Refinance is not permitted in Texas and limited to a max 65% LTV in all other states
                Rate/Term and C/O refinances
                 -   If a refinance, the owner of the MFH must have owned the unit and the land for a minimum of 1-year to be
                     eligible for financing.
                 -   Properties owned free and clear will be considered a C/O Refi and not eligible for financing in Texas
                 -   The refinance of a manufactured home that is currently financed as personal property and will be
                     converted to real estate in the transaction is eligible, however, paying off an installment loan (personal
                     property loan on manufactured home) requires the loan to be structured as a cash out refinance and all
                     applicable guidelines and pricing adjustments apply
Special         Vacant Properties:
Certification       -If the appraiser indicates that the property was vacant at the time of the inspection, the utilities must be
/ Inspections       turned on and an “As is” appraisal or 442 final inspection must be received from appraiser indicating that all
                    utilities are now functioning properly prior to closing.



                                                          Page 16 of 38
Flood Determination / Certification:
             -   Mandatory
             -   All MFH located in a Flood Zone A or V are eligible

                Flood Zone Elevation Certificate

            -   If the site supporting a manufactured home is within a FEMA designated Special Flood Hazard Area, the
                following requirements apply:
            -   Flood Insurance required

            Well and/or Septic Systems Certifications:

            -  Required only when made a condition of the sales contract, inspection report or appraisal.
            NOTE: Shared wells must have a recorded shared well agreement executed by all parties
Appraisal   -  A full appraisal is required and must be completed on the Manufactured Home Appraisal Report (1004C)

            -   The appraiser must verify the location and wording on the “HUD” Tags/Certification Labels of the unit and
                clear pictures of these tags must be provided (if HUD tags are not available, a certification from IBITS* is
                required. If appraiser cannot obtain a clear picture of the HUD label number, and the label is present and
                accessible, he must manually insert the label number below the HUD label pictures on the appraisal-CPM
                does require this on conventional loans)

            -   The appraiser must also use standard single-family residential appraisal techniques when appraising the
                manufactured home. Other factory-built housing would provide the most similar comparables so every effort
                should be made to obtain such comparables even though their distances from the subject may be greater
                than usual. While CPM would like all MH comparisons, the minimum we will accept are two MH
                comparisons and one site built comparison

            Maximum adjustments:

            -   Maximum line item adjustment is 10%

            -   Maximum net adjustment is 15%

            -   Maximum gross adjustment is 25%

            NOTE: Appraisals exceeding these maximum adjustments may be acceptable if the appraiser clearly identifies
            the reason for exceeding these percentages. This must be clearly justified and within normal appraisal practice.

            *Please contact your CPM Representative if you would like information on the HUD Tag verification site,
            IBITS




                                                  Page 17 of 38
Closing Highlights:
Power Of       -   Permitted; however, the POA must be transaction specific
Attorney       -   May not be an interested party to the transaction, i.e.: real estate agent, seller, closing agent - the Attorney-
                   In-Fact cannot have any direct or indirect financial interest in the transaction.
               -   If executed outside of the United States, POA must be notarized at an U.S. Embassy or military installation.
               -   Must be dated no more than 90-days prior to closing and must be in effect the date of the closing.
Survey         -   A survey is mandatory in survey states.
               -   In non-survey states, proof from title that a survey endorsement will be included with the final policy is
                   required
Interest       -   Permitted up to the first 10 calendar days of the month.
Credit
Warranty       -     A certified copy of the “Warranty Deed” is required on Purchase and Refinance transactions.
Deed
Title Policy   -   Endorsements that are appropriate to the product type are required, in addition to the ALTA 7
                   Endorsement for Manufactured Homes (environmental, survey, modification if applicable)
               -   There can be no outstanding survey exceptions, unpaid real estate taxes and/or special assessments
                   against the property title
               -   The Title Commitment cannot be issued more than 90 Days prior to the date of closing and vesting must
                   match both the security instrument and the warranty deed
  Closing      In addition to the required “standard” FNMA closing documents, the following are required for MFH loans:
  Forms                                Form
               If using POA, must be transaction specific
               Manufactured Home Rider to Security Instrument
               (IDS)
               Manufactured Home Borrower Affidavit
  Special      Surrendering the manufactured home title: See “CPM Title Elimination Fees By State” section below
  Closing      Purging Title to the Manufactured Home:
Instructions   -   The title must be purged to ensure that the manufactured home will not revert to being a personal property.
               -   Once the manufactured home unit is permanently attached to land, filing a request or application to purge
                   the manufactured home title with the appropriate state or local authority (i.e. Department of Motor Vehicle) is
                   required. Mortgagees must comply with all state or local requirements for proper purging of the title [chattel
                   or other equivalent debt instrument] and the subject property must be classified or taxed as real estate.
                   A Certification of purged title of the manufactured home must be provided to evidence the manufactured
                   home has been officially converted from chattel to real property. In short, if the original chattel deed or title is
                   not purged, the property does not have marketable real estate title, and as a result, in the event of a
                   foreclosure, HUD will not accept a conveyance nor pay a claim.

               IMPORTANT

                  CPM requires the correspondent to provide all documentation needed for CPM to surrender title.
                  The required documentation is as follows:
               New home, never previously occupied and less than 12 months old:
               -  Original MSO collected at closing and sent with collateral package for purchase
               -  Title to forward POA executed by manufactured home builder/seller to CPM with tracking number (this is
                  needed to give CPM authority to surrender title)
               -  Application to surrender title
               Used Home, previously occupied and over 12 months old:
               -  Original Title to home collected at closing and sent with collateral package for purchase
               -  If there is currently a lien, that lien must be released and documentation provided
               -  If original title is not available, correspondent is responsible for obtaining a new title and providing this to
                  CPM
               -  Title to forward POA executed by seller
               -  Buyer executed application to surrender title




                                                       Page 18 of 38
CPM Title Surrender Fees

               $376.00-Double Wide

Alabama        $399.00-Triple Wide
Arizona        $350.00
Arkansas       $300.00
California     No fee. Title to record Form 433A
Florida        $1100.00 if Real Property tag is not present on home

               $700.00 if Real Property tag is currently on home
Georgia        $342.00
Louisiana      No fee. Title to record Affidavit of immobilization
Mississippi    $308.00 for new home with MSO

               $300.00 used home
New Mexico     $345.50
North          No Fee. Title company to prepare and file Declaration of Intent to Affix
Carolina
Oklahoma       There are four aspects to surrendering title in Oklahoma:
                       Tag fee: See chart attached
                       Excise Tax:
                   New Home-Take the lesser of the sales price or $75,200 dollars divided by 2 and then multiplied by 3.25%
                   to calculate the dollar amount for excise tax. This must be disclosed upfront.
                   Used Home-Take the contract price of the home and divide it by 2, multiply that number by .65 and multiply
                   that number by 3.25% to calculate the dollar amount for excise tax. This must be disclosed upfront.
                       Title Elimination: $330.00
                       Title must collect current year taxes in full and obtain Oklahoma tax Commissioners form 936.

               Note: Tag Fee does not apply to used homes. For new homes, all four calculations apply and must be
               disclosed, for used homes, all calculations apply, other than the Tag Fee.
Oregon         No fee. Title to record an exemption application. Must see fee on settlement
               statement showing title company is handling. Do not presume they are, your originator must request
               title to do this. LOAN WILL NOT BE PURCHASED IF NOT ON HUD
South          $495.00
Carolina
Tennessee      New Home-No fee. Title to record New Home Affixation Affidavit

               $300.00-Used Home
Texas          $375.00

               If Texas Department of Housing and Urban Affairs website does not show seller is
               currently in title, there is a $55.00 charge for each person that has been in title between
               the seller on the subject loan and the person currently showing in title on TDHCA's
               website. Please have your originator's confirm the seller on our transaction is the
               person currently showing on title with TDHCA (http://www.tdhca.state.tx.us/mh/)
Washington     $563.00
Idaho          No Fee. Title to record Declaration of Intent to Declare a Manufactured Home as Real Property. If
               borrower is not currently in title there is an 8 dollar fee to transfer title
Kansas         No fee. Title to record Affidavit to Affix. If borrower is not currently in title there is a 10 dollar fee to
               transfer title
North Dakota   No fee. Title to record Affidavit of Use for a Manufactured Home. If borrower is not currently in title
               there is a 5 dollar fee to transfer title
Minnesota      $308.00

                                                    Page 19 of 38
FHA Site Built 15 & 30 Year Fixed Rate Matrix
    FHA Site Built

                                            FHA Site Built 15 & 30 Year Fixed Rate
                                        Purchase and Rate & Term/Cash Out Refinance
                                                                 Maximum            Maximum
                         Maximum
    Occupancy                               Credit Score        Front / Back          Seller                       Cash Reserves
                           LTV
                                                                   Ratios          Contributions
       1-Unit               90%               620-649                                                             As per DU unless
    O/O Primary                                                       30% / 45%                6% of SP           payment shock is
     Residence              96.5%                  >650                                                               present

-       Purchase: Borrower must have a minimum investment of 3.5% and maintain a 96.5% LTV after appraisal
-       Rate & Term Refi: The current owner must have owned the subject property for a minimum of 1-Year prior to the application
        date
-       Cash Out

    Program Guidelines:
Loan                 -    Purchase
Purpose              -    Rate & Term Refinance
                     -    Cash out (ineligible in Texas)

Occupancy            -   Owner Occupied, Primary Residence

Doc Type             -   Full documentation

Geographic           -   WA, ID, ND, OR, CA, AZ, NM, TX, OK, LA, AR, MS, AL, KS, GA, FL, SC, NC, TN, MN
Availability             Note: Look for more states being added in the near future
Loan Type            -   FHA 15 and 30 year fixed rate program
and Terms
Prepayment           -   None
Penalty
Buy down             -   Bonafide discount points allowed.
                         Note: A discount point is considered bonafide when an interest rate of .25% higher than the offered rate is
                         available on the rate card the day the rate is locked
Escrow               -   Not permitted
Waivers
Assumed              -   In accordance with FHA guidelines, fixed rate loans are assumable to qualified borrower(s)
Loans
Maximum #            -   One
of Loans to
one
borrower
Maximum #            -   It must be determined by the underwriter that the subject property home is being purchased as
of                       the borrower’s primary residence
Properties               Note: Borrower’s applying for an FHA insured mortgage that currently own a home insured by
Financed                 FHA must meet FHA requirements for owning a second FHA insured home. Proximity to a new
                         job as well as an increase in family size are two common, acceptable situations
                     Bankruptcy:
Bankruptcy           -   CPM requires that a borrower be discharged from bankruptcy for 2 years despite the type of
                         bankruptcy
                     -   Customer must have three established lines of credit opened after the discharge. Each trade line
                         must have a 12 month history and must have some activity within the most recent 24 months. At
                         least one of these trade lines must be an installment account and borrower must have paid the
                         account down by an amount greater or equal to 10% of the subject loan amount. Rental history

                                                           Page 20 of 38
is considered installment and the monthly payment multiplied by the number of months can be
                    used to meet the installment requirement
                -   Foreclosure:
                -   CPM requires that 36 months have passed from the date of the foreclosure sale. A satisfactory
                    letter of explanation must be included in the file. All standard trade line and payment shock
                    requirements apply
Age of          Credit Documents:
Documents        - As per DU findings
                Appraisal :
                 - 120-days old as of closing date (signing of Note & Mtg.)
AUS             Acceptable AUS Determination:
Requirement      - All loans must be run through DO/DU
                 - Approve/Eligible
Eligible        All borrowers must have a valid U.S. Social Security number.
and             Eligible:
Ineligible                7. U.S. Resident Citizen
Borrowers
                         8.   Permanent Resident Alien
                               -  Same as U.S. Citizen
                               -  Obtain evidence of lawful, permanent residency issued by the Bureau of Citizenship and
                                  Immigration Services (BCIS), formerly the INS.
                               -  Obtain a copy of Alien Registration Receipt Card (Resident Alien card), I-551

                         9.   Non-Permanent Resident Alien
                              -  Must be eligible to work in the U.S.
                              -  Evidence of residency and work status to be obtained through documentation from US Bureau
                                 of Citizenship and Immigration Services (BCIS) formerly INS.
                              -  Copy of the Employment Authorization Card, I-688B. This card carries an expiration date. A
                                 SS card is not acceptable as evidence of work status.
                Ineligible:
                 - Non-Occupant Co-Borrowers
                 - Co-Signers
                 - Foreign Nationals
                 - Non-Resident Canadians
                 - Borrowers with Diplomatic Immunity
Title Vesting   Eligible Vesting / Rights of Ownership:
Rights of        - Fee Simple
Ownership        - Individual & Joint
                Ineligible / No Exceptions:
                 - Land Trust
                 - Leasehold Estate
                 - Real Estate Syndication
                 - General or Limited Partnerships
                 - Title in the name of a Corporation
Credit           - A tri-merge bureau is required on all loans; the lowest qualifying score of all applicants is used to qualify and
                     each borrower must have at least two credit scores. The qualifying score is the lower of 2 or the middle of 3
                     scores and must be reviewed for each borrower.

                -   For a credit score to be considered valid, the score must be generated from a minimum of three (3) trade
                    lines that have been evaluated for at least 12 months. The trade lines do not need to be currently active but
                    require some activity within the last 24 months. At least one of these trade lines must be an
                    installment account and borrower must have paid the account down by an amount greater or
                    equal to 10% of the subject loan amount. Rental history is considered installment and the
                    monthly payment multiplied by the number of months can be used to meet the installment
                    requirement

                Minimum Credit Score:
                 - 620 (620-649 max LTV 90%, >649 max LTV is 96.5%)
                Inquiries and Derogatory Credit:
                 - When inquiries and/or derogatory credit appear, the borrower must submit a signed credit explanation letter


                                                       Page 21 of 38
prior to loan approval. Inquiry letter must cover ALL inquiries in the most recent 90 days from date of credit
                 report
             -   Note: Any delinquent accounts shown as “disputed” will result in an automatic downgrade to a
                 manual underwrite and all manual guidelines will apply. exceptions to this are as follows:
             -   1. The disputed account has a zero balance
             -   2. The disputed account is marked as "paid in full", or "resolved"
             -   3. The disputed account is both a. less than $500, and b. more than 24 months old, based on the
                 date of dispute.
             Housing Payment History:
              - 0 X 30 in the past 12 months.
              - For borrowers with mortgage delinquency beyond the most previous 12 months, it is the underwriter’s
                 responsibility to carefully review and determine the borrower’s credit worthiness.
             Mortgage Payment History/Documentation:
              - The mortgage payment history may be documented by a VOM or provide a rating in the credit report.
             Rental Payment History/Documentation:
              - A rental payment history is required per the AUS findings or underwriter determination and must be
                 documented by a VOR from a property management company or 12 months cancelled checks if rented from
                 an individual (If there is payment shock of 25% or more, CPM requires a VOR regardless of what DU
                 requires)
Employment   Salaried:
/ Income       Most current pay stubs covering a 30-day period with YTD income
               Most current and consecutive 2-Years W-2’s
               Most current two years tax transcripts (ordered via 4506 on all loans)
             Self-Employed:
              - Business must be in existence for at least two (2) years prior to subject application date.
              - Most current and consecutive (signed) 2-Years Business Tax Returns with all schedules required if
                 incorporated
              - Most current two years personal tax returns for principals of corporations or sole proprietors
              - Copy of Business License or a CPA letter proving business still exists.
             Overtime/Bonus/Other income
              - Overtime income will be considered if employer indicates it is likely to continue and a two year history is
                 available and averaged
              - Bonus income will be considered if employer indicates it is likely to continue and two year history is
                 available and averaged
              - Commission income will be considered if employer indicates it is likely to continue and a two year history is
                 available and averaged. If commission income is more than 25% of total income, tax returns for two years
                 will be required to calculate income
             Verbal Verification Prior to Closing:
               A verbal verification of employment is required for each employer of all borrowers, within 10-days of closing.
                 This policy applies to all non-self employed income types.
             Child Support, Alimony or Maintenance Income:
               In order to use as income, child support, alimony or maintenance income, payments must reasonably be
                 documented to continue for at least a three (3) year period. The following documentation is required:
                 o Copy of the divorce decree, separation agreement or court order
                 o Copies of court records, bank statements or cancelled checks evidencing a minimum of three (3)
                       months receipt of payments.
             Rental income:
               Rental income must be supported by two years tax returns.
               If converting primary residence to rental property and relying on rental income to qualify, 25% equity in the
                 rental property, as validated through appraisal or difference between original financed amount and current
                 balance, is required along with a copy of the a 12 month lease agreement and evidence of security deposit

             All income must match 1003 and DU findings
Qualifying   Maximum Ratios:
Ratios       PITI FICO (Front End)
               30% Max 620 – 679
               35% Max 680+
               If gross monthly income is less than 2500 dollars 25% Max Ratio (CPM to review any exceptions)
             DTI FICO (Back End)
               45% Max 620 – 679
               50% Max 680 – 739

                                                   Page 22 of 38
   55% Max 740+
               No exceptions on FICO scores < 650
               Exceptions to maximum ratios considered with compensating factors such as minimal payment shock with
               substantial reserves, etc. Must keep DO/DU Approved/Eligible
Lease          - Not permitted
Option
Rent Credits
Payment        In all cases, the “existing housing” and the “proposed housing” sections of the 1003 application must be
Shock          fully completed


               CPM considers payment shock on all loans:
                - Payment Shock occurs when the proposed housing expense will be considerably higher than the existing
                  housing expense and where there are multiple layers of risk. The UW must analyze the borrower’s existing
                  cash flow as depicted on bank statements and determine the borrower’s capacity for payment shock
               Payment Shock Guideline:
                     620-679 FICO score and payment shock is 50% or more-2 months PITI reserves required
                     >679 FICO score and payment shock is 50% or more-1 months PITI reserves required

               In order to be considered cash reserves for payment shock purposes, the borrowers ending balance on
               two consecutive bank statements must consistently show the reserve requirements available in the
               account. This shows the borrower has the ability to maintain the reserve levels required to sufficiently
               offset payment shock

               THIS IS ONE OF THE MOST IMPORTANT FACTORS IN ANALYZING THE BORROWER’S ABILITY TO PAY
Assets         Bank Statements:
                - Most current and consecutive two (2) months bank statements (all pages). Quarterly Bank statements must
                   be dated within 90-days of the initial application date and 120 days of closing (signing of note)

               Earnest Money:
                - Verification and source of funds for EM deposit required.

               Stocks, Bonds, Mutual Funds, U.S. Government Securities:
                - Copy of the account statement for the most recent 60 days/quarterly statement is required.

Seller         Max Concessions:
Contribution   - Max seller concession is the lower of 6% of contracted sales price or contracted amount
               - Seller contribution is limited to discount points, closing costs and prepaid items

Cash           -   Cash reserves are not generally a requirement except when cash reserves are used as a compensating
Reserves           factor when approving an FHA loan with debt ratios that exceed guidelines or payment shock is present

               -   Gift funds, cash proceeds from a refinance and equity in another property, are not acceptable sources of
                   cash reserves.

Gift Funds      In accordance with current FHA guidelines:
                - 100% gift funds for down payment are only acceptable if the funds are documented by a gift letter that
                    states the funds are not to be repaid as well as clear documentation of the donor’s ability to gift the funds as
                    well the transfer of funds from donor to the borrower
               Gift Letter:
                - A gift letter is required and must list the donor’s name, address, city, state and zip, phone number,
                    relationship to the borrower, and the dollar amount of the gift. The gift letter must indicate that the funds do
                    not have to be repaid in any way and must be signed and dated by the donor.

               Documentation / Track Gift Funds :
                - Evidence that gift funds stated in the Gift Letter were withdrawn from the donors account; and,
                - Evidence that the same gift funds were received from the donors account to the borrower’s account, prior to
                  closing.
                - When funds are transferred by donor to closing, verification of the transfer of the gift funds from the donors
                  account must show the donor as the remitter and HUD-1 must clearly indicate the exact amount of the gift
                  funds received from the donor and the account the funds were drawn from


                                                      Page 23 of 38
Subordinate         -   Not Permitted
Financing
Property            1-4 Family Residential Properties
Eligibility         If new construction less than 12 months old:

                                    Termite soil treatment and HUD form 99A&B (in pest inspection states only)
                                    Well/Septic inspection (if well/septic exist on property)
                                    Final inspection completed by approved FHA fee inspector or “as is” appraisal that
                                     has never been completed “subject to”
Refinance        A Cash-Out Refinance is not permitted in Texas and limited to an 85% in all other states
                Rate/Term and C/O refinances
                 -   If a refinance, the owner of the property must have owned the unit and the land for a minimum of 1-year to
                     be eligible for financing.
                 -   Properties owned free and clear will be considered a C/O Refi and not eligible for financing in Texas
                Vacant Properties:
                 -   If the appraiser indicates that the property was vacant at the time of the inspection, the utilities must be
Special             turned on and an “As is” appraisal must be received from appraiser indicating that all utilities are now
Certification       functioning properly prior to closing. If vacant and property has a well/septic, a well water test and a septic
/                   certification are needed if vacant more than 12 months.
Inspections         Flood Determination / Certification:
                    -   Mandatory

                Well and/or Septic Systems Certifications:

                -   Required only when made a condition of the sales contract, inspection report or appraisal, or if property is
                    vacant more than 12 months or for new construction. When required, the certification(s) may be no more
                    than 90-days old as of the date of closing (regardless of how old the system is).
                  NOTE: Shared wells must have a recorded shared well agreement executed by all parties
Appraisal       -   A full appraisal is required

                -  The appraiser must also use standard single-family residential appraisal techniques when appraising the
                   Property.
                Maximum adjustments:

                -       Maximum line item adjustment is 10%

                -       Maximum net adjustment is 15%

                -       Maximum gross adjustment is 25%

                NOTE: Appraisals exceeding these maximum adjustments may be acceptable if the appraiser clearly identifies
                the reason for exceeding these percentages. This must be clearly justified and within normal appraisal practice.
Power Of        -    Permitted; however, the POA must be transaction specific
Attorney        -    May not be an interested party to the transaction, i.e.: real estate agent, seller, closing agent - the Attorney-
                     In-Fact cannot have any direct or indirect financial interest in the transaction.
                -    If executed outside of the United States, POA must be notarized at an U.S. Embassy or military installation.
                -    Must be dated no more than 90-days prior to closing and must be in effect the date of the closing.
Survey          -    A survey is mandatory in survey states.
                -    In non-survey states, proof from title that a survey endorsement will be included with the final policy is
                     required
Interest        -    Permitted up to the first 10 calendar days of the month.
Credit
Warranty        -        A certified copy of the “Warranty Deed” is required on Purchase and Refinance transactions.
Deed
Title Policy    -       Endorsements that are appropriate to the product type are required(environmental, survey, modification if
                        applicable)
                -       There can be no outstanding survey exceptions, unpaid real estate taxes and/or special assessments
                        against the property title
                -       The Title Commitment cannot be issued more than 90 Days prior to the date of closing and vesting must
                        match both the security instrument and the warranty deed


                                                          Page 24 of 38
Conventional Site Built 15 & 30 Year Fixed Rate
    Conventional Site Built

                                             Conventional Site built 15 & 30 Year Fixed Rate
                                                Purchase and Rate & Term Refinance
                                                                      Maximum            Maximum
                              Maximum
    Occupancy                                   Occupancy           Front / Back           Seller                            PMI
                                LTV
                                                                       Ratios          Contributions
    1-Unit                                        Owner                                                             Broker/Correspondent
                                 95%                               See “Qualifying    >90% max 3%
O/O or Second                                    Occupied              Ratios”        <=90% max 6%
                                                                                                                      is responsible for
    Home                         90%               Second Home                                                        providing PMI cert

-       Purchase
-       Rate & Term Refi: The current owner must have owned the property for a minimum of 1-Year prior to the application date.
-       Cash out

    Program Guidelines:
Loan                    -     Purchase
Purpose                 -     Rate & Term Refinance
                        -     Cash Out refinance

Occupancy               -     Owner Occupied, Primary Residence and Second Homes

Doc Type                -     Full documentation

Geographic              -     WA, ID, ND, OR, CA, AZ, NM, TX, OK, LA, AR, MS, AL, KS, GA, FL, SC, NC, TN, MN
Availability                  Note: Look for more states being added in the near future
Loan Type               -     Conventional 15 and 30 year fixed rate program
and Terms
Prepayment              -     None
Penalty
Buy down                -     Bonafide discount points allowed.
                              Note: A discount point is considered bonafide when an interest rate of .25% higher than the offered rate is
                              available on the rate card the day the rate is locked
Escrow                  -     Not permitted
Waivers
Assumed                 -     In accordance with Fannie Mae guidelines, fixed rate loans are assumable to qualified
Loans                         borrower(s)
Maximum #               -     One
of Loans to
one
borrower

Maximum #               -     It must be determined by the underwriter that the subject property home is being purchased as
of                            the borrower’s primary residence or second home
Properties              -     Maximum of seven properties financed allowed
Financed
Bankruptcy             Bankruptcy:
                        -     CPM requires that a borrower be discharged from bankruptcy for 4 years despite the type of
                              bankruptcy
                        -     Customer must have three established lines of credit opened after the discharge. Each trade line
                              must have a 12 month history and must have some activity within the most recent 24 months. .
                              At least one of these trade lines must be an installment account and borrower must have paid the
                              account down by an amount greater or equal to 10% of the subject loan amount. Rental history


                                                               Page 25 of 38
is considered installment and the monthly payment multiplied by the number of months can be
                    used to meet the installment requirement
                -     A satisfactory letter of explanation and a copy of the complete discharge papers must be
                    included in the file
                -   Any repossessions within the most recent 3 years will disqualify the borrower
                Foreclosure:
                4 years from foreclosure sale date

Age of          Credit Documents:
Documents        - Per DU findings
                Appraisal :
                 - 120-days old as of closing date (signing of Note & Mtg.)
AUS             Acceptable AUS Determination:
Requiremen       - All loans must be run through DO/DU
t                - Approve/Eligible

Eligible        All borrowers must have a valid U.S. Social Security number.
and             Eligible:
Ineligible                10. U.S. Resident Citizen
Borrowers
                        11. Permanent Resident Alien
                             -  Same as U.S. Citizen
                             -  Obtain evidence of lawful, permanent residency issued by the Bureau of Citizenship and
                                Immigration Services (BCIS), formerly the INS.
                             -  Obtain a copy of Alien Registration Receipt Card (Resident Alien card), I-551

                         12. Non-Permanent Resident Alien
                             -  Must be eligible to work in the U.S.
                             -  Evidence of residency and work status to be obtained through documentation from US Bureau
                                of Citizenship and Immigration Services (BCIS) formerly INS.
                             -  Copy of the Employment Authorization Card, I-688B. This card carries an expiration date. A
                                SS card is not acceptable as evidence of work status.
                Ineligible:
                 - Non-Occupant Co-Borrowers
                 - Co-Signers
                 - Foreign Nationals
                 - Non-Resident Canadians
                 - Borrowers with Diplomatic Immunity

Title Vesting   Eligible Vesting / Rights of Ownership:
Rights of        - Fee Simple
Ownership        - Individual & Joint

                Ineligible / No Exceptions:
                 - Land Trust
                 - Leasehold Estate
                 - Real Estate Syndication
                 - General or Limited Partnerships
                 - Title in the name of a Corporation

Credit          -   A tri-merge bureau is required on all loans; the lowest qualifying score of all applicants is used to qualify and
                    each borrower must have at least two credit scores. The qualifying score is the lower of 2 or the middle of 3
                    scores and must be reviewed for each borrower.

                -   For a credit score to be considered valid, the score must be generated from a minimum of three (3) trade
                    lines that have been evaluated for at least 12 months. The trade lines do not need to be currently active but
                    require some activity within the last 24 months. At least one of these trade lines must be an
                    installment account and borrower must have paid the account down by an amount greater or
                    equal to 10% of the subject loan amount. Rental history is considered installment and the
                    monthly payment multiplied by the number of months can be used to meet the installment

                                                        Page 26 of 38
requirement

             Minimum Credit Score:
              - 620 (620-649 max LTV 90%, >649 max LTV is 96.5%)
             Inquiries and Derogatory Credit:
              - When inquiries and/or derogatory credit appear, the borrower must submit a signed credit explanation letter
                 prior to loan approval. Inquiry letter must cover ALL inquiries in the most recent 90 days from date of credit
                 report
              - Note: Any delinquent accounts shown as “disputed” will result in an automatic downgrade to a
                 manual underwrite and all manual guidelines will apply. exceptions to this are as follows:
              - 1. The disputed account has a zero balance
              - 2. The disputed account is marked as "paid in full", or "resolved"
              - 3. The disputed account is both a. less than $500, and b. more than 24 months old, based on the
                 date of dispute.
             Housing Payment History:
              - 0 X 30 in the past 12 months.
              - For borrowers with mortgage delinquency beyond the most previous 12 months, it is the underwriter’s
                 responsibility to carefully review and determine the borrower’s credit worthiness.
             Mortgage Payment History/Documentation:
              - The mortgage payment history may be documented by a VOM or provide a rating in the credit report.
             Rental Payment History/Documentation:
              - A rental payment history is required per the AUS findings or underwriter determination and must be
                 documented by a VOR from a property management company or 12 months cancelled checks if rented from
                 an individual (If there is payment shock of 25% or more, CPM requires a VOR regardless of what DU
                 requires)
Employment   Salaried:
/ Income       Most current paystubs covering a 30-day period with YTD income
               Most current and consecutive 2-Years W-2’s
               Most current two years tax transcripts (ordered via 4506 on all loans)
             Self-Employed:
              - Business must be in existence for at least two (2) years prior to subject application date.
              - Most current and consecutive (signed) 2-Years Business Tax Returns with all schedules required if
                 incorporated
              - Most current two years personal tax returns for principals of corporations or sole proprietors
              - Copy of Business License or a CPA letter proving business still exists.
             Overtime/Bonus/Other income
              - Overtime income will be considered if employer indicates it is likely to continue and a two year history is
                 available and averaged
              - Bonus income will be considered if employer indicates it is likely to continue and two year history is
                 available and averaged
              - Commission income will be considered if employer indicates it is likely to continue and a two year history is
                 available and averaged. If commission income is more than 25% of total income, tax returns for two years
                 will be required to calculate income
             Verbal Verification Prior to Closing:
               A verbal verification of employment is required for each employer of all borrowers, within 10-days of closing.
                 This policy applies to all non-self employed income types.
             Child Support, Alimony or Maintenance Income:
               In order to use as income, child support, alimony or maintenance income, payments must reasonably be
                 documented to continue for at least a three (3) year period. The following documentation is required:
                 o Copy of the divorce decree, separation agreement or court order
                 o Copies of court records, bank statements or cancelled checks evidencing a minimum of three (3)
                       months receipt of payments.
             Rental income:
               Rental income must be supported by two years tax returns.
               If converting primary residence to rental property and relying on rental income to qualify, 25% equity in the
                 rental property, as validated through appraisal or difference between original financed amount and current
                 balance, is required along with a copy of the a 12 month lease agreement and evidence of security deposit

             All income must match 1003 and DU findings
Qualifying   Maximum Ratios:
Ratios       PITI FICO (Front End)


                                                   Page 27 of 38
 30% Max 620 – 679
                 35% Max 680+
                 If gross monthly income is less than 2500 dollars 25% Max Ratio (CPM to review any exceptions)
               DTI FICO (Back End)
                 45% Max 620 – 679
                 50% Max 680 – 739
                 55% Max 740+
               No exceptions on FICO scores < 650
               Exceptions to maximum ratios considered with compensating factors such as minimal payment shock with
               substantial reserves, etc. Must keep DO/DU Approved/Eligible
Lease          - Not permitted
Option
Rent Credits
Payment        In all cases, the “existing housing” and the “proposed housing” sections of the 1003 application must be
Shock          fully completed


               CPM considers payment shock on all loans:
                - Payment Shock occurs when the proposed housing expense will be considerably higher than the existing
                  housing expense and where there are multiple layers of risk. The UW must analyze the borrower’s existing
                  cash flow as depicted on bank statements and determine the borrower’s capacity for payment shock
               Payment Shock Guideline:
                     620-679 FICO score and payment shock is 50% or more-2 months PITI reserves required
                     >679 FICO score and payment shock is 50% or more-1 months PITI reserves required

               In order to be considered cash reserves for payment shock purposes, the borrowers ending balance on
               two consecutive bank statements must consistently show the reserve requirements available in the
               account. This shows the borrower has the ability to maintain the reserve levels required to sufficiently
               offset payment shock

               THIS IS ONE OF THE MOST IMPORTANT FACTORS IN ANALYZING THE BORROWER’S ABILITY TO PAY
Assets         Bank Statements:
                - Most current and consecutive two (2) months bank statements (all pages). Quarterly Bank statements must
                   be dated within 90-days or per DU findings

               Earnest Money:
                - Verification and source of funds for EM deposit required.

               Stocks, Bonds, Mutual Funds, U.S. Government Securities:
                - Copy of the account statement for the most recent 60 days/quarterly statement is required.

Seller         Max Concessions:
Contribution   - Max seller concession is the lower of 3% of contracted sales price or contracted amount on loans with an
                 LTV above 90% and 6% on loans with an LTV of 90% or below
               - Seller contribution is limited to discount points, closing costs and prepaid items

Cash           -   Cash reserves are not generally a requirement except when cash reserves are used as a compensating
Reserves           factor when approving an conventional loan with debt ratios that exceed guidelines or payment shock is
                   present

               -   Gift funds, cash proceeds from a refinance and equity in another property, are not acceptable sources of
                   cash reserves.

Gift Funds      In accordance with current CPM guidelines:
                - 100% gift funds for down payment are only acceptable if the funds are documented by a gift letter that
                    states the funds are not to be repaid as well as clear documentation of the donor’s ability to gift the funds as
                    well the transfer of funds from donor to the borrower
               Gift Letter:
                - A gift letter is required and must list the donor’s name, address, city, state and zip, phone number,
                    relationship to the borrower, and the dollar amount of the gift. The gift letter must indicate that the funds do
                    not have to be repaid in any way and must be signed and dated by the donor.

                                                      Page 28 of 38
CountryPlace Mortgage Product guidelines
CountryPlace Mortgage Product guidelines
CountryPlace Mortgage Product guidelines
CountryPlace Mortgage Product guidelines
CountryPlace Mortgage Product guidelines
CountryPlace Mortgage Product guidelines
CountryPlace Mortgage Product guidelines
CountryPlace Mortgage Product guidelines
CountryPlace Mortgage Product guidelines
CountryPlace Mortgage Product guidelines

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CountryPlace Mortgage Product guidelines

  • 1. Delegated/Correspondent Underwriting Hot Spots:................................................................................................2 Non-Delegated Correspondent/Broker Hot-Spots: .................................................................................................3 Submission requirements........................................................................................................................................4 CPM Representatives by region: ............................................................................................................................6 FHA 15 & 30 Year Fixed Rate MH Matrix ...............................................................................................................7 Conventional 15 & 30 Year Fixed Rate MH Matrix ...............................................................................................12 Closing Highlights: ................................................................................................................................................18 CPM Title Surrender Fees ....................................................................................................................................19 FHA Site Built 15 & 30 Year Fixed Rate Matrix ....................................................................................................20 Conventional Site Built 15 & 30 Year Fixed Rate .................................................................................................25 FHA 203K(S) 15 & 30 Year Fixed Rate ................................................................................................................30 How to Complete HUD-92700 Maximum Mortgage Worksheet for a Streamlined (k) Loan ................................36 CountryPlace Mortgage partner funded 1X close .................................................................................................38 Page 1 of 38
  • 2. Delegated/Correspondent Underwriting Hot Spots: Effective 6/17/2011 : 1. Prior to delivery, underwriting questions should be directed to Wholesaleapplication@CountryPlaceMortgage.Com 2. CPM turn time for reviewing files for purchase:  2 business days for CPM purchase review and conditions  5 business days for file purchase (from time all conditions are cleared) 3. CPM requires original closing documents executed by all appropriate parties 4. If manufactured home title has been retired/eliminated: CPM will require Correspondent to provide proof the title to the manufactured home has been properly retired upon delivery of loan for purchase 5. If manufactured home title has not been retired/eliminated: CPM will handle title elimination, however, Correspondent will be responsible for providing the necessary documents CPM will need in order to eliminate title and Correspondent originators will be required to disclose and collect the necessary fees associated with title elimination (See title elimination section of this matrix). Please Note: CPM has specific fees for eliminating title in each state. It is the correspondent’s responsibility to disclose those fees in the initial disclosures sent to the borrower and to collect those fees at closing. Fees not collected at closing will still be netted from Correspondent’s funds upon purchase 6. If using a POA: Power of attorney is allowed for all loans but must be specific to the transaction. This form must contain the names of the parties involved as well as the property address Page 2 of 38
  • 3. Non-Delegated Correspondent/Broker Hot-Spots: 7. underwriting questions should be directed to Wholesaleapplication@CountryPlaceMortgage.Com 8. CPM turn time for reviewing files:  2-3 business days for CPM initial underwriting review  1-2 business days for CPM underwriting condition review  1 business day for CPM to release closing instructions 9. CPM requires original closing documents executed by all appropriate parties 10. If using a POA: Power of attorney is allowed for all loans but must be specific to the transaction. This form must contain the names of the parties involved as well as the property address 11. If manufactured home title has been retired/eliminated: CPM will require Correspondent/broker to provide proof the title to the manufactured home has been properly retired upon delivery of loan for purchase 12. If manufactured home title has not been retired/eliminated: CPM will handle title elimination, however, Correspondent/broker will be responsible for providing the necessary documents CPM will need in order to eliminate title and Correspondent/broker originators will be required to disclose and collect the necessary fees associated with title elimination (See title elimination section of this matrix). Please Note: CPM has specific fees for eliminating title in each state. It is the correspondent/Broker’s responsibility to disclose those fees in the initial disclosures sent to the borrower and to collect those fees at closing. Fees not collected at closing will still be netted from Correspondent’s funds upon purchase Page 3 of 38
  • 4. Submission requirements 1. Submit a complete loan package to: CountryPlace Mortgage, Ltd. 15305 Dallas Parkway, Suite 800 Addison, TX 75001 ATTN: Purchase Review Phone: 800-228-1828 2. Submitting Complete loan packages for underwriting to CPM: - Submit a complete closed loan package (correspondent) and complete loan package (broker) using the CPM “Closed Loan Purchase Checklist” (Correspondent) and “Product Specification checklist” (broker) as the coversheet, - Underwriting or scenario questions should be sent from correspondent’s underwriters to WholeSaleApplication@CountryPlaceMortgage.Com Ordering Appraisals Correspondent will be responsible for ordering the appraisal CPM will order appraisals on all brokered deals 3. Submitting marginal loans or appraisals for CPM review prior to closing From time to time your underwriters may have questions in regard to the acceptability of a marginal loan or appraisal. There may also be specific product questions. A scanned copy of a credit package or appraisal can be sent via secure mail to CPM at any time. Product questions can be directed to Wholesaleapplication@CountryPlaceMortgage.Com. Page 4 of 38
  • 5. CPM reserves the right to amend these guidelines at any time. If amended, CPM will immediately inform Correspondent of any changes. Application dates after changes to this matrix have been disclosed will be subject to amended guidelines. All agency guidelines supersede CPM specific guidelines FHA Not Permitted: - Single-Wide MFH - Non-Occupant Co-Borrowers / Co-Signers - Subordinate Financing - Loan amounts less than 50K - Investment Properties - Second Homes Conventional Not Permitted - Single-Wide MFH - Non-Occupant Co-Borrowers / Co-Signers - Subordinate Financing - Loan amounts less than 50K - Investment Properties CPM Fees: Underwriting $550 (Non-Delegated only) Admin Fee $450 (All Files) Supplemental Origination fee $350 (Streamline 203K only) Page 5 of 38
  • 6. CPM Representatives by region: Bryan Chamberlain National Marketing Manager (Corporate Office) Phone: 469-865-5064 Email: Bchamberlain@CountryPlaceMortgage.Com John Manley Strategic Accounts Manager (High Springs, Florida) Phone: 352-284-1407 Email: JManley@CountryPlaceMortgage.Com Carly Brophy National Accounts Manager (Corporate Office) Phone: 972-764-9224 Email: CBrophy@CountryPlaceMortgage.Com David Bumpers-Cornelius, North Carolina-NorthEast Regional Account Executive-North Carolina, South Carolina, Tennessee Phone: 888-677-7484 Email: DBumpers@CountryPlaceMortgage.Com Brad Smith-Jacksonville, Florida-SouthEast Regional Account Executive-Mississippi, Alabama, Georgia, Florida Phone: 800-918-2045 Email: BCSmith@CountryPlaceMortgage.Com Bryan Chamberlain-Dallas, Texas-South Regional Account Executive-Texas, Oklahoma, Louisianna, Arkansas, Kansas, Minnesota Phone: 469-865-5064 Email: Bchamberlain@CountryPlaceMortgage.Com Kory Beickel-Pheonix, Arizona-West Regional Account Executive-Arizona, California, New Mexico Phone: 928-453-4000 Email: KBeickel@CountryPlaceMortgage.Com Brett Pierce-Olympia, Washington NorthWest Regional Account Executive-Washington, Oregon, Idaho Phone: 360-709-9191 Email: BPierce@CountryPlaceMortgage.Com HOI Mortgagee Clause: CountryPlace Mortgage, LTD, ISAOA PO Box 246 Amelia, OH 45102 PCL/ICL Mortgagee Clause Conventional: CountryPlace Mortgage, LTD, ATIMA 15305 Dallas Pkwy, Suite 800 Addison, TX 75001 FHA: CountryPlace Mortgage, LTD, ISAOA 15305 Dallas Pkwy, Suite 800 Addison, TX 75001 Page 6 of 38
  • 7. FHA 15 & 30 Year Fixed Rate MH Matrix FHA Manufactured Homes FHA 15 & 30 Year Fixed Rate Purchase and Rate & Term Refinance Maximum Maximum Maximum Occupancy Credit Score Front / Back Seller Cash Reserves LTV Ratios Contributions 1-Unit 90% 620-649 As per DU unless O/O Primary 30% / 45% 6% of SP payment shock is Residence 96.5% >650 present Program Guidelines: Loan - Purchase Purpose - Rate & Term Refinance - Cash Out Refinance (not permitted in Texas Occupancy - Owner Occupied, Primary Residence Doc Type - Full documentation Geographic - WA, ID, ND, OR, CA, AZ, NM, TX, OK, LA, AR, MS, AL, KS, GA, FL, SC, NC, TN, MN Availability Note: Look for more states being added in the near future Loan Type - FHA 15 and 30 year fixed rate program (20 year term available upon request) and Terms Prepayment - None Penalty Buy down - Bonafide discount points allowed. Note: A discount point is considered bonafide when an interest rate of .25% higher than the offered rate is available on the rate card the day the rate is locked Escrow - Not permitted Waivers Assumed - In accordance with FHA guidelines, fixed rate loans are assumable to qualified borrower(s) Loans Maximum # - One of Loans to one borrower Maximum # - It must be determined by the underwriter that the subject property home is being purchased as of the borrower’s primary residence Properties Note: Borrower’s applying for an FHA insured mortgage that currently own a home insured by Financed FHA must meet FHA requirements for owning a second FHA insured home. Proximity to a new job as well as an increase in family size are two common, acceptable situations Bankruptcy Bankruptcy: - CPM requires that a borrower be discharged from bankruptcy for 2 years despite the type of bankruptcy - Customer must have three established lines of credit opened after the discharge. Each trade line must have a 12 month history and must have some activity within the most recent 24 months. At least one of these trade lines must be an installment account and borrower must have paid the account down by an amount greater or equal to 10% of the subject loan amount. Rental history is considered installment and the monthly payment multiplied by the number of months can be used to meet the installment requirement - Foreclosure: - CPM requires that 36 months have passed from the date of the foreclosure sale. A satisfactory letter of explanation must be included in the file. All standard trade line and payment shock requirements apply Age of Credit Documents: Documents - As determined by DU findings Page 7 of 38
  • 8. Appraisal : - 120-days old as of closing date (signing of Note & Mtg.) AUS Acceptable AUS Determination: Requirement - All loans must be run through DO/DU - Approve/Eligible Eligible All borrowers must have a valid U.S. Social Security number. and Eligible: Ineligible 1. U.S. Resident Citizen Borrowers 2. Permanent Resident Alien - Same as U.S. Citizen - Obtain evidence of lawful, permanent residency issued by the Bureau of Citizenship and Immigration Services (BCIS), formerly the INS. - Obtain a copy of Alien Registration Receipt Card (Resident Alien card), I-551 3. Non-Permanent Resident Alien - Must be eligible to work in the U.S. - Evidence of residency and work status to be obtained through documentation from US Bureau of Citizenship and Immigration Services (BCIS) formerly INS. - Copy of the Employment Authorization Card, I-688B. This card carries an expiration date. A SS card is not acceptable as evidence of work status. Ineligible: - Non-Occupant Co-Borrowers - Co-Signers - Foreign Nationals - Non-Resident Canadians - Borrowers with Diplomatic Immunity Title Vesting Eligible Vesting / Rights of Ownership: Rights of - Fee Simple Ownership - Individual & Joint Ineligible / No Exceptions: - Land Trust - Leasehold Estate - Real Estate Syndication - General or Limited Partnerships - Title in the name of a Corporation Credit - A tri-merge bureau is required on all loans; the lowest qualifying score of all applicants is used to qualify and each borrower must have at least two credit scores. The qualifying score is the lower of 2 or the middle of 3 scores and must be reviewed for each borrower. - For a credit score to be considered valid, the score must be generated from a minimum of three (3) trade lines that have been evaluated for at least 12 months. The trade lines do not need to be currently active but require some activity within the last 24 months. At least one of these trade lines must be an installment account and borrower must have paid the account down by an amount greater or equal to 10% of the subject loan amount. Rental history is considered installment and the monthly payment multiplied by the number of months can be used to meet the installment requirement Minimum Credit Score: - 620 (620-649 max LTV 90%, >649 max LTV is 96.5%) Inquiries and Derogatory Credit: - When inquiries and/or derogatory credit appear, the borrower must submit a signed credit explanation letter prior to loan approval. Inquiry letter must cover ALL inquiries in the most recent 90 days from date of credit report - Note: Any delinquent accounts shown as “disputed” will result in an automatic downgrade to a manual underwrite and all manual guidelines will apply. exceptions to this are as follows: - 1. The disputed account has a zero balance - 2. The disputed account is marked as "paid in full", or "resolved" - 3. The disputed account is both a. less than $500, and b. more than 24 months old, based on the Page 8 of 38
  • 9. date of dispute. Housing Payment History: - 0 X 30 in the past 12 months. - For borrowers with mortgage delinquency beyond the most previous 12 months, it is the underwriter’s responsibility to carefully review and determine the borrower’s credit worthiness. Mortgage Payment History/Documentation: - The mortgage payment history may be documented by a VOM or provide a rating in the credit report. Rental Payment History/Documentation: - A rental payment history is required per the AUS findings or underwriter determination and must be documented by a VOR from a property management company or 12 months cancelled checks if rented from an individual (If there is payment shock of 25% or more, CPM requires a VOR regardless of what DU requires) Employment Salaried: / Income  Most current paystubs covering a 30-day period with YTD income  Most current and consecutive 2-Years W-2’s  Most current two years tax transcripts (ordered via 4506 on all loans) Self-Employed: - Business must be in existence for at least two (2) years prior to subject application date. - Most current and consecutive (signed) 2-Years Business Tax Returns with all schedules required if incorporated - Most current two years personal tax returns for principals of corporations or sole proprietors - Copy of Business License or a CPA letter proving business still exists. Overtime/Bonus/Other income - Overtime income will be considered if employer indicates it is likely to continue and a two year history is available and averaged - Bonus income will be considered if employer indicates it is likely to continue and two year history is available and averaged - Commission income will be considered if employer indicates it is likely to continue and a two year history is available and averaged. If commission income is more than 25% of total income, tax returns for two years will be required to calculate income Verbal Verification Prior to Closing:  A verbal verification of employment is required for each employer of all borrowers, within 10-days of closing. This policy applies to all non-self employed income types. Child Support, Alimony or Maintenance Income:  In order to use as income, child support, alimony or maintenance income, payments must reasonably be documented to continue for at least a three (3) year period. The following documentation is required: o Copy of the divorce decree, separation agreement or court order o Copies of court records, bank statements or cancelled checks evidencing a minimum of three (3) months receipt of payments. Rental income:  Rental income must be supported by two years tax returns.  If converting primary residence to rental property and relying on rental income to qualify, 25% equity in the rental property, as validated through appraisal or difference between original financed amount and current balance, is required along with a copy of the a 12 month lease agreement and evidence of security deposit All income must match 1003 and DU findings Qualifying Maximum Ratios: Ratios PITI FICO (Front End)  30% Max 620 – 679  35% Max 680+  If gross monthly income is less than 2500 dollars 25% Max Ratio (CPM to review any exceptions) DTI FICO (Back End)  45% Max 620 – 679  50% Max 680 – 739  55% Max 740+ No exceptions on FICO scores < 650 Exceptions to maximum ratios considered with compensating factors such as minimal payment shock with substantial reserves, etc. Must keep DO/DU Approved/Eligible Lease - Not permitted Option Rent Credits Page 9 of 38
  • 10. Payment In all cases, the “existing housing” and the “proposed housing” sections of the 1003 application must be Shock fully completed CPM considers payment shock on all loans: - Payment Shock occurs when the proposed housing expense will be considerably higher than the existing housing expense and where there are multiple layers of risk. The UW must analyze the borrower’s existing cash flow as depicted on bank statements and determine the borrower’s capacity for payment shock Payment Shock Guideline:  620-679 FICO score and payment shock is 50% or more-2 months PITI reserves required  >679 FICO score and payment shock is 50% or more-1 months PITI reserves required In order to be considered cash reserves for payment shock purposes, the borrowers ending balance on two consecutive bank statements must consistently show the reserve requirements available in the account. This shows the borrower has the ability to maintain the reserve levels required to sufficiently offset payment shock THIS IS ONE OF THE MOST IMPORTANT FACTORS IN ANALYZING THE BORROWER’S ABILITY TO PAY Assets Bank Statements: - Most current and consecutive two (2) months bank statements (all pages). Quarterly Bank statements must be dated within 90-days of the initial application date and 120 days of closing (signing of note) Earnest Money: - Verification and source of funds for EM deposit required. Stocks, Bonds, Mutual Funds, U.S. Government Securities: - Copy of the account statement for the most recent 60 days/quarterly statement is required. All assets must match 1003 and DU findings exactly Seller Max Concessions: Contribution - Max seller concession is the lower of 6% of contracted sales price or contracted amount - Seller contribution is limited to discount points, closing costs and prepaid items Cash - Cash reserves are not generally a requirement except when cash reserves are used as a compensating Reserves factor when approving an FHA loan with debt ratios that exceed guidelines or payment shock is present -Gift funds, cash proceeds from a refinance and equity in another property, are not acceptable sources of cash reserves. Gift Funds In accordance with current FHA guidelines: - 100% gift funds for down payment are only acceptable if the funds are documented by a gift letter that states the funds are not to be repaid, clear documentation of the donor’s ability to gift the funds and transfer of funds from donor to the borrower Gift Letter: - A gift letter is required and must list the donor’s name, address, city, state and zip, phone number, relationship to the borrower, and the dollar amount of the gift. The gift letter must indicate that the funds do not have to be repaid in any way and must be signed and dated by the donor. Documentation / Track Gift Funds : - Evidence that gift funds stated in the Gift Letter were withdrawn from the donors account; and, - Evidence that the same gift funds were received from the donors account to the borrower’s account, prior to closing. - When funds are transferred by donor to closing, verification of the transfer of the gift funds from the donors account must show the donor as the remitter and HUD-1 must clearly indicate the exact amount of the gift funds received from the donor and the account the funds were drawn from Subordinate - Not Permitted Financing State - Manufactured Homes require a State Administrative Agency to inspect all modifications to manufactured Requirements homes once they leave the factory. If the appraiser observes changes to the manufactured home such as an addition, and there is no local agency to inspect the home, obtain an engineer's report indicating that the structural changes or additions were made in accordance with HUD Manufactured Home Construction and Safety Standards. - If the property cannot be inspected by the State Administrative Agency and an Engineer's Report cannot be obtained, the property is ineligible for financing . Refinance A Cash-Out Refinance is not permitted in Texas and limited to an 85% in all other states Page 10 of 38
  • 11. Rate/Term and C/O refinances - If a refinance, the owner of the MFH must have owned the unit and the land for a minimum of 1-year to be eligible for financing. - Properties owned free and clear will be considered a C/O Refi and not eligible for financing in Texas - The refinance of a manufactured home that is currently financed as personal property and will be converted to real estate in the transaction is eligible. (See Title “CPM Elimination Fees by State” below) Special Vacant Properties: Certification - If the appraiser indicates that the property was vacant at the time of the inspection, the utilities must be / Inspections turned on and an “As is” appraisal must be received from appraiser indicating that all utilities are now functioning properly prior to closing. If vacant and property has a well/septic, a well water test and a septic certification are needed if vacant more than 12 months. Flood Determination / Certification: - Mandatory - All MFH located in a Flood Zone A or V are eligible Flood Zone Elevation Certificate - If the site supporting a manufactured home is within a FEMA designated Special Flood Hazard Area, the following requirements apply: Order a FEMA Elevation Certificate to determine if the manufactured home is eligible. The Lowest Adjacent (finished) Grade (LAG) level beneath a manufactured home must be at or above the 100-Year return frequency elevation (Base Flood Elevation) - If the Elevation Certificate indicates that the lowest adjacent grade of the manufactured home is below the Base Flood Elevation (BFE) level, the loan is not eligible- even if flood insurance is obtained. Well and/or Septic Systems Certifications: - Required only when made a condition of the sales contract, inspection report or appraisal, or if property is vacant more than 12 months or for new construction. When required, the certification(s) may be no more than 90-days old as of the date of closing (regardless of how old the system is). NOTE: Shared wells must have a recorded shared well agreement executed by all parties Foundation The Foundation for the MFH must be inspected by a licensed engineer. Engineer must address, grading, skirting, and foundation system and state that all comply with FHA standards for a permanent foundation. This information must be provided on an engineer’s certification that includes the engineer’s seal and signature Appraisal - A full appraisal is required and must be completed on the Manufactured Home Appraisal Report (1004C) - The appraiser must verify the location and wording on the “HUD” Tags/Certification Labels of the unit and clear pictures of these tags must be provided (if HUD tags are not available, a certification from IBITS is required. If appraiser cannot obtain a clear picture of the HUD label number, and the label is present and accessible, he must manually insert the label number below the HUD label pictures on the appraisal) - The appraiser must also use standard single-family residential appraisal techniques when appraising the manufactured home. Other factory-built housing would provide the most similar comparables so every effort should be made to obtain such comparables even though their distances from the subject may be greater than usual. CPM requires that three manufactured home comparables be used to validate the value of the subject property Maximum adjustments: - Maximum line item adjustment is 10% - Maximum net adjustment is 15% - Maximum gross adjustment is 25% NOTE: Appraisals exceeding these maximum adjustments may be acceptable if the appraiser clearly identifies the reason for exceeding these percentages. This must be clearly justified and within normal appraisal practice. Page 11 of 38
  • 12. Conventional 15 & 30 Year Fixed Rate MH Matrix Conventional Manufactured Homes Conventional 15 & 30 Year Fixed Rate Purchase and Rate & Term Refinance Maximum Maximum Maximum Occupancy Occupancy Front / Back Seller Cash Reserves LTV Ratios Contributions 1-Unit Owner As per DU unless 80% See “Qualifying >90% max 3% O/O or Second Occupied Ratios” <=90% max 6% payment shock is Home 80% Second Home present - Purchase: Borrower must have a minimum investment of 20% and maintain an 80% LTV after appraisal - Rate & Term Refi: The current owner must have owned the MFH & land for a minimum of 1-Year prior to the application date. Manufactured home financed as personal property being paid off in the transaction are eligible but loan must be considered a cash out refinance and a max 65% LTV is required. (Not permitted in Texas) - Cash Out Refi Program Guidelines: Loan - Purchase Purpose - Rate & Term Refinance - Cash Out refinance Occupancy - Owner Occupied, Primary Residence and Second Homes Doc Type - Full documentation Geographic - WA, ID, ND, OR, CA, AZ, NM, TX, OK, LA, AR, MS, AL, KS, GA, FL, SC, NC, TN, MN Availability Note: Look for more states being added in the near future Loan Type - Conventional 15 and 30 year fixed rate program and Terms Prepayment - None Penalty Buy down - Bonafide discount points allowed. Note: A discount point is considered bonafide when an interest rate of .25% higher than the offered rate is available on the rate card the day the rate is locked Escrow - Not permitted Waivers Assumed - In accordance with Fannie Mae guidelines, fixed rate loans are assumable to qualified Loans borrower(s) Maximum # - One of Loans to one borrower Maximum # - It must be determined by the underwriter that the subject property home is being purchased as of the borrower’s primary residence or second home Properties - Maximum of seven properties financed allowed Financed Bankruptcy Bankruptcy: - CPM requires that a borrower be discharged from bankruptcy for 4 years despite the type of bankruptcy - Customer must have three established lines of credit opened after the discharge. Each trade line must have a 12 month history and must have some activity within the most recent 24 months. At least one of these trade lines must be an installment account and borrower must have paid the account down by an amount greater or equal to 10% of the subject loan amount. Rental history Page 12 of 38
  • 13. is considered installment and the monthly payment multiplied by the number of months can be used to meet the installment requirement - Any repossessions within the most recent 3 years will disqualify the borrower Foreclosure: 4 years from foreclosure sale date Age of Credit Documents: Documents - 120-days old at time of closing (signing of Note & Mtg.) Appraisal : - 120-days old as of closing date (signing of Note & Mtg.) AUS Acceptable AUS Determination: Requirement - All loans must be run through DO/DU - Approve/Eligible Eligible All borrowers must have a valid U.S. Social Security number. and Eligible: Ineligible 4. U.S. Resident Citizen Borrowers 5. Permanent Resident Alien - Same as U.S. Citizen - Obtain evidence of lawful, permanent residency issued by the Bureau of Citizenship and Immigration Services (BCIS), formerly the INS. - Obtain a copy of Alien Registration Receipt Card (Resident Alien card), I-551 6. Non-Permanent Resident Alien - Must be eligible to work in the U.S. - Evidence of residency and work status to be obtained through documentation from US Bureau of Citizenship and Immigration Services (BCIS) formerly INS. - Copy of the Employment Authorization Card, I-688B. This card carries an expiration date. A SS card is not acceptable as evidence of work status. Ineligible: - Non-Occupant Co-Borrowers - Co-Signers - Foreign Nationals - Non-Resident Canadians - Borrowers with Diplomatic Immunity Title Vesting Eligible Vesting / Rights of Ownership: Rights of - Fee Simple Ownership - Individual & Joint Ineligible / No Exceptions: - Land Trust - Leasehold Estate - Real Estate Syndication - General or Limited Partnerships - Title in the name of a Corporation Credit - A tri-merge bureau is required on all loans; the lowest qualifying score of all applicants is used to qualify and each borrower must have at least two credit scores. The qualifying score is the lower of 2 or the middle of 3 scores and must be reviewed for each borrower. - For a credit score to be considered valid, the score must be generated from a minimum of three (3) trade lines that have been evaluated for at least 12 months. The trade lines do not need to be currently active but require some activity within the last 24 months. At least one of these trade lines must be an installment account and borrower must have paid the account down by an amount greater or equal to 10% of the subject loan amount. Rental history is considered installment and the monthly payment multiplied by the number of months can be used to meet the installment requirement Minimum Credit Score: - 620 (620-649 max LTV 90%, >649 max LTV is 96.5%) Inquiries and Derogatory Credit: - When inquiries and/or derogatory credit appear, the borrower must submit a signed credit explanation letter Page 13 of 38
  • 14. prior to loan approval. Inquiry letter must cover ALL inquiries in the most recent 90 days from date of credit report - Note: Any delinquent accounts shown as “disputed” will result in an automatic downgrade to a manual underwrite and all manual guidelines will apply. exceptions to this are as follows: - 1. The disputed account has a zero balance - 2. The disputed account is marked as "paid in full", or "resolved" - 3. The disputed account is both a. less than $500, and b. more than 24 months old, based on the date of dispute. Housing Payment History: - 0 X 30 in the past 12 months. - For borrowers with mortgage delinquency beyond the most previous 12 months, it is the underwriter’s responsibility to carefully review and determine the borrower’s credit worthiness. Mortgage Payment History/Documentation: - The mortgage payment history may be documented by a VOM or provide a rating in the credit report. Rental Payment History/Documentation: - A rental payment history is required per the AUS findings or underwriter determination and must be documented by a VOR from a property management company or 12 months cancelled checks if rented from an individual (If there is payment shock of 25% or more, CPM requires a VOR regardless of what DU requires) Employment Salaried: / Income  Most current pay stubs covering a 30-day period with YTD income  Most current and consecutive 2-Years W-2’s  Most current two years tax transcripts (ordered via 4506 on all loans) Self-Employed: - Business must be in existence for at least two (2) years prior to subject application date. - Most current and consecutive (signed) 2-Years Business Tax Returns with all schedules required if incorporated - Most current two years personal tax returns for principals of corporations or sole proprietors - Copy of Business License or a CPA letter proving business still exists. Overtime/Bonus/Other income - Overtime income will be considered if employer indicates it is likely to continue and a two year history is available and averaged - Bonus income will be considered if employer indicates it is likely to continue and two year history is available and averaged - Commission income will be considered if employer indicates it is likely to continue and a two year history is available and averaged. If commission income is more than 25% of total income, tax returns for two years will be required to calculate income Verbal Verification Prior to Closing:  A verbal verification of employment is required for each employer of all borrowers, within 10-days of closing. This policy applies to all non-self employed income types. Child Support, Alimony or Maintenance Income:  In order to use as income, child support, alimony or maintenance income, payments must reasonably be documented to continue for at least a three (3) year period. The following documentation is required: o Copy of the divorce decree, separation agreement or court order o Copies of court records, bank statements or cancelled checks evidencing a minimum of three (3) months receipt of payments. Rental income:  Rental income must be supported by two years tax returns.  If converting primary residence to rental property and relying on rental income to qualify, 25% equity in the rental property, as validated through appraisal or difference between original financed amount and current balance, is required along with a copy of the a 12 month lease agreement and evidence of security deposit o All income must match 1003 and DU findings Qualifying Maximum Ratios: Ratios PITI FICO (Front End)  30% Max 620 – 679  35% Max 680+  If gross monthly income is less than 2500 dollars 25% Max Ratio (CPM to review any exceptions) DTI FICO (Back End)  45% Max 620 – 679  50% Max 680 – 739 Page 14 of 38
  • 15. 55% Max 740+ No exceptions on FICO scores < 650 - Exceptions to maximum ratios considered with compensating factors such as minimal payment shock with substantial reserves, etc. Must keep DO/DU Approved/Eligible Payment In all cases, the “existing housing” and the “proposed housing” sections of the 1003 application must be Shock fully completed CPM considers payment shock on all loans: - Payment Shock occurs when the proposed housing expense will be considerably higher than the existing housing expense and where there are multiple layers of risk. The UW must analyze the borrower’s existing cash flow as depicted on bank statements and determine the borrower’s capacity for payment shock Payment Shock Guideline:  620-679 FICO score and payment shock is 50% or more-2 months PITI reserves required  >679 FICO score and payment shock is 50% or more-1 months PITI reserves required In order to be considered cash reserves for payment shock purposes, the borrowers ending balance on two consecutive bank statements must consistently show the reserve requirements available in the account. This shows the borrower has the ability to maintain the reserve levels required to sufficiently offset payment shock THIS IS ONE OF THE MOST IMPORTANT FACTORS IN ANALYZING THE BORROWER’S ABILITY TO PAY Assets Bank Statements: Most current and consecutive two (2) months bank statements (all pages). Quarterly Bank statements must be dated within 90-days of the initial application date and 120 days of closing (signing of note) Earnest Money: - Verification and source of funds for EM deposit required. Stocks, Bonds, Mutual Funds, U.S. Government Securities: - Copy of the account statement for the most recent 60 days/quarterly statement is required. Seller Max Concessions: Contribution - Max seller concession is the lower of 3% of contracted sales price or contracted amount on loans with an LTV above 90% and 6% on loans with an LTV of 90% or below - Seller contribution is limited to discount points, closing costs and prepaid items Cash - Cash reserves are not generally a requirement except when cash reserves are used as a compensating Reserves factor when approving a conventional loan with debt ratios that exceed guidelines or payment shock is present - Gift funds, cash proceeds from a refinance and equity in another property, are not acceptable sources of cash reserves. Gift Funds In accordance with current CPM guidelines: - 100% gift funds for down payment are only acceptable if the funds are documented by a gift letter that states the funds are not to be repaid as well as clear documentation of the donor’s ability to gift the funds as well the transfer of funds from donor to the borrower - Borrower must have 5% of their own, documented funds contributed if the subject property is a second home with an LTV greater than 80% Gift Letter: - A gift letter is required and must list the donor’s name, address, city, state and zip, phone number, relationship to the borrower, and the dollar amount of the gift. The gift letter must indicate that the funds do not have to be repaid in any way and must be signed and dated by the donor. Documentation / Track Gift Funds : - Evidence that gift funds stated in the Gift Letter were withdrawn from the donors account; and, - Evidence that the same gift funds were received from the donors account to the borrower’s account, prior to closing. - When funds are transferred by donor to closing, verification of the transfer of the gift funds from the donors account must show the donor as the remitter and HUD-1 must clearly indicate the exact amount of the gift funds received from the donor and the account the funds were drawn from Page 15 of 38
  • 16. Subordinate - Not Permitted Financing Property The Manufactured Home (MFH) must be designed and constructed to the Federal Manufactured Construction Eligibility and Safety Standards and be so labeled. Home is eligible if it has ever been moved from the original installation site - Must be a double-wide MFH and have a floor area of not less than 900 square feet; this means that a single-wide is not eligible for financing. - Be constructed after June 15, 1976, in conformance with the Federal Manufactured Home Construction and Safety Standards, as evidenced by an affixed certification label - Be classified and taxed as real estate; (see “CPM Title Elimination Fees By State” section for documentation required for CPM to surrender title as well as state specific fee to CPM for elimination of title for manufactured homes that do not currently have eliminated title) - The mortgage must cover both the manufactured unit and its site and shall have a term of not more than 30 years from the date amortization begins; - Must be built and remain on a permanent chassis with all wheels removed and designed to be used as a residential dwelling, affixed to a permanent foundation as required by Fannie Mae. - Permanent foundation must meet manufacturer’s specifications for a permanent foundation. Appraiser to confirm. - If manufactured home is located in a flood zone, flood insurance will be required - MFH must meet the National Manufactured Home Construction and Safety Standards. New manufactured homes (100% complete but never previously occupied); - The MFH must be used as an O/O primary residence or second home - Newly Constructed MFH: If the MFH is newly, the following construction documents must be supplied with the file for purchase: Clear 442 final inspection completed by appraiser Foundation - Permanent foundation per manufacturer’s specifications. Systems State - Manufactured Homes require a State Administrative Agency to inspect all modifications to manufactured Requirements homes once they leave the factory. If the appraiser observes changes to the manufactured home such as an addition, and there is no local agency to inspect the home, obtain an engineer's report indicating that the structural changes or additions were made in accordance with HUD Manufactured Home Construction and Safety Standards. - If the property cannot be inspected by the State Administrative Agency and an Engineer's Report cannot be obtained, the property is ineligible for financing . Refinance A Cash-Out Refinance is not permitted in Texas and limited to a max 65% LTV in all other states Rate/Term and C/O refinances - If a refinance, the owner of the MFH must have owned the unit and the land for a minimum of 1-year to be eligible for financing. - Properties owned free and clear will be considered a C/O Refi and not eligible for financing in Texas - The refinance of a manufactured home that is currently financed as personal property and will be converted to real estate in the transaction is eligible, however, paying off an installment loan (personal property loan on manufactured home) requires the loan to be structured as a cash out refinance and all applicable guidelines and pricing adjustments apply Special Vacant Properties: Certification -If the appraiser indicates that the property was vacant at the time of the inspection, the utilities must be / Inspections turned on and an “As is” appraisal or 442 final inspection must be received from appraiser indicating that all utilities are now functioning properly prior to closing. Page 16 of 38
  • 17. Flood Determination / Certification: - Mandatory - All MFH located in a Flood Zone A or V are eligible Flood Zone Elevation Certificate - If the site supporting a manufactured home is within a FEMA designated Special Flood Hazard Area, the following requirements apply: - Flood Insurance required Well and/or Septic Systems Certifications: - Required only when made a condition of the sales contract, inspection report or appraisal. NOTE: Shared wells must have a recorded shared well agreement executed by all parties Appraisal - A full appraisal is required and must be completed on the Manufactured Home Appraisal Report (1004C) - The appraiser must verify the location and wording on the “HUD” Tags/Certification Labels of the unit and clear pictures of these tags must be provided (if HUD tags are not available, a certification from IBITS* is required. If appraiser cannot obtain a clear picture of the HUD label number, and the label is present and accessible, he must manually insert the label number below the HUD label pictures on the appraisal-CPM does require this on conventional loans) - The appraiser must also use standard single-family residential appraisal techniques when appraising the manufactured home. Other factory-built housing would provide the most similar comparables so every effort should be made to obtain such comparables even though their distances from the subject may be greater than usual. While CPM would like all MH comparisons, the minimum we will accept are two MH comparisons and one site built comparison Maximum adjustments: - Maximum line item adjustment is 10% - Maximum net adjustment is 15% - Maximum gross adjustment is 25% NOTE: Appraisals exceeding these maximum adjustments may be acceptable if the appraiser clearly identifies the reason for exceeding these percentages. This must be clearly justified and within normal appraisal practice. *Please contact your CPM Representative if you would like information on the HUD Tag verification site, IBITS Page 17 of 38
  • 18. Closing Highlights: Power Of - Permitted; however, the POA must be transaction specific Attorney - May not be an interested party to the transaction, i.e.: real estate agent, seller, closing agent - the Attorney- In-Fact cannot have any direct or indirect financial interest in the transaction. - If executed outside of the United States, POA must be notarized at an U.S. Embassy or military installation. - Must be dated no more than 90-days prior to closing and must be in effect the date of the closing. Survey - A survey is mandatory in survey states. - In non-survey states, proof from title that a survey endorsement will be included with the final policy is required Interest - Permitted up to the first 10 calendar days of the month. Credit Warranty - A certified copy of the “Warranty Deed” is required on Purchase and Refinance transactions. Deed Title Policy - Endorsements that are appropriate to the product type are required, in addition to the ALTA 7 Endorsement for Manufactured Homes (environmental, survey, modification if applicable) - There can be no outstanding survey exceptions, unpaid real estate taxes and/or special assessments against the property title - The Title Commitment cannot be issued more than 90 Days prior to the date of closing and vesting must match both the security instrument and the warranty deed Closing In addition to the required “standard” FNMA closing documents, the following are required for MFH loans: Forms Form If using POA, must be transaction specific Manufactured Home Rider to Security Instrument (IDS) Manufactured Home Borrower Affidavit Special Surrendering the manufactured home title: See “CPM Title Elimination Fees By State” section below Closing Purging Title to the Manufactured Home: Instructions - The title must be purged to ensure that the manufactured home will not revert to being a personal property. - Once the manufactured home unit is permanently attached to land, filing a request or application to purge the manufactured home title with the appropriate state or local authority (i.e. Department of Motor Vehicle) is required. Mortgagees must comply with all state or local requirements for proper purging of the title [chattel or other equivalent debt instrument] and the subject property must be classified or taxed as real estate. A Certification of purged title of the manufactured home must be provided to evidence the manufactured home has been officially converted from chattel to real property. In short, if the original chattel deed or title is not purged, the property does not have marketable real estate title, and as a result, in the event of a foreclosure, HUD will not accept a conveyance nor pay a claim. IMPORTANT CPM requires the correspondent to provide all documentation needed for CPM to surrender title. The required documentation is as follows: New home, never previously occupied and less than 12 months old: - Original MSO collected at closing and sent with collateral package for purchase - Title to forward POA executed by manufactured home builder/seller to CPM with tracking number (this is needed to give CPM authority to surrender title) - Application to surrender title Used Home, previously occupied and over 12 months old: - Original Title to home collected at closing and sent with collateral package for purchase - If there is currently a lien, that lien must be released and documentation provided - If original title is not available, correspondent is responsible for obtaining a new title and providing this to CPM - Title to forward POA executed by seller - Buyer executed application to surrender title Page 18 of 38
  • 19. CPM Title Surrender Fees $376.00-Double Wide Alabama $399.00-Triple Wide Arizona $350.00 Arkansas $300.00 California No fee. Title to record Form 433A Florida $1100.00 if Real Property tag is not present on home $700.00 if Real Property tag is currently on home Georgia $342.00 Louisiana No fee. Title to record Affidavit of immobilization Mississippi $308.00 for new home with MSO $300.00 used home New Mexico $345.50 North No Fee. Title company to prepare and file Declaration of Intent to Affix Carolina Oklahoma There are four aspects to surrendering title in Oklahoma:  Tag fee: See chart attached  Excise Tax: New Home-Take the lesser of the sales price or $75,200 dollars divided by 2 and then multiplied by 3.25% to calculate the dollar amount for excise tax. This must be disclosed upfront. Used Home-Take the contract price of the home and divide it by 2, multiply that number by .65 and multiply that number by 3.25% to calculate the dollar amount for excise tax. This must be disclosed upfront.  Title Elimination: $330.00  Title must collect current year taxes in full and obtain Oklahoma tax Commissioners form 936. Note: Tag Fee does not apply to used homes. For new homes, all four calculations apply and must be disclosed, for used homes, all calculations apply, other than the Tag Fee. Oregon No fee. Title to record an exemption application. Must see fee on settlement statement showing title company is handling. Do not presume they are, your originator must request title to do this. LOAN WILL NOT BE PURCHASED IF NOT ON HUD South $495.00 Carolina Tennessee New Home-No fee. Title to record New Home Affixation Affidavit $300.00-Used Home Texas $375.00 If Texas Department of Housing and Urban Affairs website does not show seller is currently in title, there is a $55.00 charge for each person that has been in title between the seller on the subject loan and the person currently showing in title on TDHCA's website. Please have your originator's confirm the seller on our transaction is the person currently showing on title with TDHCA (http://www.tdhca.state.tx.us/mh/) Washington $563.00 Idaho No Fee. Title to record Declaration of Intent to Declare a Manufactured Home as Real Property. If borrower is not currently in title there is an 8 dollar fee to transfer title Kansas No fee. Title to record Affidavit to Affix. If borrower is not currently in title there is a 10 dollar fee to transfer title North Dakota No fee. Title to record Affidavit of Use for a Manufactured Home. If borrower is not currently in title there is a 5 dollar fee to transfer title Minnesota $308.00 Page 19 of 38
  • 20. FHA Site Built 15 & 30 Year Fixed Rate Matrix FHA Site Built FHA Site Built 15 & 30 Year Fixed Rate Purchase and Rate & Term/Cash Out Refinance Maximum Maximum Maximum Occupancy Credit Score Front / Back Seller Cash Reserves LTV Ratios Contributions 1-Unit 90% 620-649 As per DU unless O/O Primary 30% / 45% 6% of SP payment shock is Residence 96.5% >650 present - Purchase: Borrower must have a minimum investment of 3.5% and maintain a 96.5% LTV after appraisal - Rate & Term Refi: The current owner must have owned the subject property for a minimum of 1-Year prior to the application date - Cash Out Program Guidelines: Loan - Purchase Purpose - Rate & Term Refinance - Cash out (ineligible in Texas) Occupancy - Owner Occupied, Primary Residence Doc Type - Full documentation Geographic - WA, ID, ND, OR, CA, AZ, NM, TX, OK, LA, AR, MS, AL, KS, GA, FL, SC, NC, TN, MN Availability Note: Look for more states being added in the near future Loan Type - FHA 15 and 30 year fixed rate program and Terms Prepayment - None Penalty Buy down - Bonafide discount points allowed. Note: A discount point is considered bonafide when an interest rate of .25% higher than the offered rate is available on the rate card the day the rate is locked Escrow - Not permitted Waivers Assumed - In accordance with FHA guidelines, fixed rate loans are assumable to qualified borrower(s) Loans Maximum # - One of Loans to one borrower Maximum # - It must be determined by the underwriter that the subject property home is being purchased as of the borrower’s primary residence Properties Note: Borrower’s applying for an FHA insured mortgage that currently own a home insured by Financed FHA must meet FHA requirements for owning a second FHA insured home. Proximity to a new job as well as an increase in family size are two common, acceptable situations Bankruptcy: Bankruptcy - CPM requires that a borrower be discharged from bankruptcy for 2 years despite the type of bankruptcy - Customer must have three established lines of credit opened after the discharge. Each trade line must have a 12 month history and must have some activity within the most recent 24 months. At least one of these trade lines must be an installment account and borrower must have paid the account down by an amount greater or equal to 10% of the subject loan amount. Rental history Page 20 of 38
  • 21. is considered installment and the monthly payment multiplied by the number of months can be used to meet the installment requirement - Foreclosure: - CPM requires that 36 months have passed from the date of the foreclosure sale. A satisfactory letter of explanation must be included in the file. All standard trade line and payment shock requirements apply Age of Credit Documents: Documents - As per DU findings Appraisal : - 120-days old as of closing date (signing of Note & Mtg.) AUS Acceptable AUS Determination: Requirement - All loans must be run through DO/DU - Approve/Eligible Eligible All borrowers must have a valid U.S. Social Security number. and Eligible: Ineligible 7. U.S. Resident Citizen Borrowers 8. Permanent Resident Alien - Same as U.S. Citizen - Obtain evidence of lawful, permanent residency issued by the Bureau of Citizenship and Immigration Services (BCIS), formerly the INS. - Obtain a copy of Alien Registration Receipt Card (Resident Alien card), I-551 9. Non-Permanent Resident Alien - Must be eligible to work in the U.S. - Evidence of residency and work status to be obtained through documentation from US Bureau of Citizenship and Immigration Services (BCIS) formerly INS. - Copy of the Employment Authorization Card, I-688B. This card carries an expiration date. A SS card is not acceptable as evidence of work status. Ineligible: - Non-Occupant Co-Borrowers - Co-Signers - Foreign Nationals - Non-Resident Canadians - Borrowers with Diplomatic Immunity Title Vesting Eligible Vesting / Rights of Ownership: Rights of - Fee Simple Ownership - Individual & Joint Ineligible / No Exceptions: - Land Trust - Leasehold Estate - Real Estate Syndication - General or Limited Partnerships - Title in the name of a Corporation Credit - A tri-merge bureau is required on all loans; the lowest qualifying score of all applicants is used to qualify and each borrower must have at least two credit scores. The qualifying score is the lower of 2 or the middle of 3 scores and must be reviewed for each borrower. - For a credit score to be considered valid, the score must be generated from a minimum of three (3) trade lines that have been evaluated for at least 12 months. The trade lines do not need to be currently active but require some activity within the last 24 months. At least one of these trade lines must be an installment account and borrower must have paid the account down by an amount greater or equal to 10% of the subject loan amount. Rental history is considered installment and the monthly payment multiplied by the number of months can be used to meet the installment requirement Minimum Credit Score: - 620 (620-649 max LTV 90%, >649 max LTV is 96.5%) Inquiries and Derogatory Credit: - When inquiries and/or derogatory credit appear, the borrower must submit a signed credit explanation letter Page 21 of 38
  • 22. prior to loan approval. Inquiry letter must cover ALL inquiries in the most recent 90 days from date of credit report - Note: Any delinquent accounts shown as “disputed” will result in an automatic downgrade to a manual underwrite and all manual guidelines will apply. exceptions to this are as follows: - 1. The disputed account has a zero balance - 2. The disputed account is marked as "paid in full", or "resolved" - 3. The disputed account is both a. less than $500, and b. more than 24 months old, based on the date of dispute. Housing Payment History: - 0 X 30 in the past 12 months. - For borrowers with mortgage delinquency beyond the most previous 12 months, it is the underwriter’s responsibility to carefully review and determine the borrower’s credit worthiness. Mortgage Payment History/Documentation: - The mortgage payment history may be documented by a VOM or provide a rating in the credit report. Rental Payment History/Documentation: - A rental payment history is required per the AUS findings or underwriter determination and must be documented by a VOR from a property management company or 12 months cancelled checks if rented from an individual (If there is payment shock of 25% or more, CPM requires a VOR regardless of what DU requires) Employment Salaried: / Income  Most current pay stubs covering a 30-day period with YTD income  Most current and consecutive 2-Years W-2’s  Most current two years tax transcripts (ordered via 4506 on all loans) Self-Employed: - Business must be in existence for at least two (2) years prior to subject application date. - Most current and consecutive (signed) 2-Years Business Tax Returns with all schedules required if incorporated - Most current two years personal tax returns for principals of corporations or sole proprietors - Copy of Business License or a CPA letter proving business still exists. Overtime/Bonus/Other income - Overtime income will be considered if employer indicates it is likely to continue and a two year history is available and averaged - Bonus income will be considered if employer indicates it is likely to continue and two year history is available and averaged - Commission income will be considered if employer indicates it is likely to continue and a two year history is available and averaged. If commission income is more than 25% of total income, tax returns for two years will be required to calculate income Verbal Verification Prior to Closing:  A verbal verification of employment is required for each employer of all borrowers, within 10-days of closing. This policy applies to all non-self employed income types. Child Support, Alimony or Maintenance Income:  In order to use as income, child support, alimony or maintenance income, payments must reasonably be documented to continue for at least a three (3) year period. The following documentation is required: o Copy of the divorce decree, separation agreement or court order o Copies of court records, bank statements or cancelled checks evidencing a minimum of three (3) months receipt of payments. Rental income:  Rental income must be supported by two years tax returns.  If converting primary residence to rental property and relying on rental income to qualify, 25% equity in the rental property, as validated through appraisal or difference between original financed amount and current balance, is required along with a copy of the a 12 month lease agreement and evidence of security deposit All income must match 1003 and DU findings Qualifying Maximum Ratios: Ratios PITI FICO (Front End)  30% Max 620 – 679  35% Max 680+  If gross monthly income is less than 2500 dollars 25% Max Ratio (CPM to review any exceptions) DTI FICO (Back End)  45% Max 620 – 679  50% Max 680 – 739 Page 22 of 38
  • 23. 55% Max 740+ No exceptions on FICO scores < 650 Exceptions to maximum ratios considered with compensating factors such as minimal payment shock with substantial reserves, etc. Must keep DO/DU Approved/Eligible Lease - Not permitted Option Rent Credits Payment In all cases, the “existing housing” and the “proposed housing” sections of the 1003 application must be Shock fully completed CPM considers payment shock on all loans: - Payment Shock occurs when the proposed housing expense will be considerably higher than the existing housing expense and where there are multiple layers of risk. The UW must analyze the borrower’s existing cash flow as depicted on bank statements and determine the borrower’s capacity for payment shock Payment Shock Guideline:  620-679 FICO score and payment shock is 50% or more-2 months PITI reserves required  >679 FICO score and payment shock is 50% or more-1 months PITI reserves required In order to be considered cash reserves for payment shock purposes, the borrowers ending balance on two consecutive bank statements must consistently show the reserve requirements available in the account. This shows the borrower has the ability to maintain the reserve levels required to sufficiently offset payment shock THIS IS ONE OF THE MOST IMPORTANT FACTORS IN ANALYZING THE BORROWER’S ABILITY TO PAY Assets Bank Statements: - Most current and consecutive two (2) months bank statements (all pages). Quarterly Bank statements must be dated within 90-days of the initial application date and 120 days of closing (signing of note) Earnest Money: - Verification and source of funds for EM deposit required. Stocks, Bonds, Mutual Funds, U.S. Government Securities: - Copy of the account statement for the most recent 60 days/quarterly statement is required. Seller Max Concessions: Contribution - Max seller concession is the lower of 6% of contracted sales price or contracted amount - Seller contribution is limited to discount points, closing costs and prepaid items Cash - Cash reserves are not generally a requirement except when cash reserves are used as a compensating Reserves factor when approving an FHA loan with debt ratios that exceed guidelines or payment shock is present - Gift funds, cash proceeds from a refinance and equity in another property, are not acceptable sources of cash reserves. Gift Funds In accordance with current FHA guidelines: - 100% gift funds for down payment are only acceptable if the funds are documented by a gift letter that states the funds are not to be repaid as well as clear documentation of the donor’s ability to gift the funds as well the transfer of funds from donor to the borrower Gift Letter: - A gift letter is required and must list the donor’s name, address, city, state and zip, phone number, relationship to the borrower, and the dollar amount of the gift. The gift letter must indicate that the funds do not have to be repaid in any way and must be signed and dated by the donor. Documentation / Track Gift Funds : - Evidence that gift funds stated in the Gift Letter were withdrawn from the donors account; and, - Evidence that the same gift funds were received from the donors account to the borrower’s account, prior to closing. - When funds are transferred by donor to closing, verification of the transfer of the gift funds from the donors account must show the donor as the remitter and HUD-1 must clearly indicate the exact amount of the gift funds received from the donor and the account the funds were drawn from Page 23 of 38
  • 24. Subordinate - Not Permitted Financing Property 1-4 Family Residential Properties Eligibility If new construction less than 12 months old:  Termite soil treatment and HUD form 99A&B (in pest inspection states only)  Well/Septic inspection (if well/septic exist on property)  Final inspection completed by approved FHA fee inspector or “as is” appraisal that has never been completed “subject to” Refinance A Cash-Out Refinance is not permitted in Texas and limited to an 85% in all other states Rate/Term and C/O refinances - If a refinance, the owner of the property must have owned the unit and the land for a minimum of 1-year to be eligible for financing. - Properties owned free and clear will be considered a C/O Refi and not eligible for financing in Texas Vacant Properties: - If the appraiser indicates that the property was vacant at the time of the inspection, the utilities must be Special turned on and an “As is” appraisal must be received from appraiser indicating that all utilities are now Certification functioning properly prior to closing. If vacant and property has a well/septic, a well water test and a septic / certification are needed if vacant more than 12 months. Inspections Flood Determination / Certification: - Mandatory Well and/or Septic Systems Certifications: - Required only when made a condition of the sales contract, inspection report or appraisal, or if property is vacant more than 12 months or for new construction. When required, the certification(s) may be no more than 90-days old as of the date of closing (regardless of how old the system is). NOTE: Shared wells must have a recorded shared well agreement executed by all parties Appraisal - A full appraisal is required - The appraiser must also use standard single-family residential appraisal techniques when appraising the Property. Maximum adjustments: - Maximum line item adjustment is 10% - Maximum net adjustment is 15% - Maximum gross adjustment is 25% NOTE: Appraisals exceeding these maximum adjustments may be acceptable if the appraiser clearly identifies the reason for exceeding these percentages. This must be clearly justified and within normal appraisal practice. Power Of - Permitted; however, the POA must be transaction specific Attorney - May not be an interested party to the transaction, i.e.: real estate agent, seller, closing agent - the Attorney- In-Fact cannot have any direct or indirect financial interest in the transaction. - If executed outside of the United States, POA must be notarized at an U.S. Embassy or military installation. - Must be dated no more than 90-days prior to closing and must be in effect the date of the closing. Survey - A survey is mandatory in survey states. - In non-survey states, proof from title that a survey endorsement will be included with the final policy is required Interest - Permitted up to the first 10 calendar days of the month. Credit Warranty - A certified copy of the “Warranty Deed” is required on Purchase and Refinance transactions. Deed Title Policy - Endorsements that are appropriate to the product type are required(environmental, survey, modification if applicable) - There can be no outstanding survey exceptions, unpaid real estate taxes and/or special assessments against the property title - The Title Commitment cannot be issued more than 90 Days prior to the date of closing and vesting must match both the security instrument and the warranty deed Page 24 of 38
  • 25. Conventional Site Built 15 & 30 Year Fixed Rate Conventional Site Built Conventional Site built 15 & 30 Year Fixed Rate Purchase and Rate & Term Refinance Maximum Maximum Maximum Occupancy Occupancy Front / Back Seller PMI LTV Ratios Contributions 1-Unit Owner Broker/Correspondent 95% See “Qualifying >90% max 3% O/O or Second Occupied Ratios” <=90% max 6% is responsible for Home 90% Second Home providing PMI cert - Purchase - Rate & Term Refi: The current owner must have owned the property for a minimum of 1-Year prior to the application date. - Cash out Program Guidelines: Loan - Purchase Purpose - Rate & Term Refinance - Cash Out refinance Occupancy - Owner Occupied, Primary Residence and Second Homes Doc Type - Full documentation Geographic - WA, ID, ND, OR, CA, AZ, NM, TX, OK, LA, AR, MS, AL, KS, GA, FL, SC, NC, TN, MN Availability Note: Look for more states being added in the near future Loan Type - Conventional 15 and 30 year fixed rate program and Terms Prepayment - None Penalty Buy down - Bonafide discount points allowed. Note: A discount point is considered bonafide when an interest rate of .25% higher than the offered rate is available on the rate card the day the rate is locked Escrow - Not permitted Waivers Assumed - In accordance with Fannie Mae guidelines, fixed rate loans are assumable to qualified Loans borrower(s) Maximum # - One of Loans to one borrower Maximum # - It must be determined by the underwriter that the subject property home is being purchased as of the borrower’s primary residence or second home Properties - Maximum of seven properties financed allowed Financed Bankruptcy Bankruptcy: - CPM requires that a borrower be discharged from bankruptcy for 4 years despite the type of bankruptcy - Customer must have three established lines of credit opened after the discharge. Each trade line must have a 12 month history and must have some activity within the most recent 24 months. . At least one of these trade lines must be an installment account and borrower must have paid the account down by an amount greater or equal to 10% of the subject loan amount. Rental history Page 25 of 38
  • 26. is considered installment and the monthly payment multiplied by the number of months can be used to meet the installment requirement - A satisfactory letter of explanation and a copy of the complete discharge papers must be included in the file - Any repossessions within the most recent 3 years will disqualify the borrower Foreclosure: 4 years from foreclosure sale date Age of Credit Documents: Documents - Per DU findings Appraisal : - 120-days old as of closing date (signing of Note & Mtg.) AUS Acceptable AUS Determination: Requiremen - All loans must be run through DO/DU t - Approve/Eligible Eligible All borrowers must have a valid U.S. Social Security number. and Eligible: Ineligible 10. U.S. Resident Citizen Borrowers 11. Permanent Resident Alien - Same as U.S. Citizen - Obtain evidence of lawful, permanent residency issued by the Bureau of Citizenship and Immigration Services (BCIS), formerly the INS. - Obtain a copy of Alien Registration Receipt Card (Resident Alien card), I-551 12. Non-Permanent Resident Alien - Must be eligible to work in the U.S. - Evidence of residency and work status to be obtained through documentation from US Bureau of Citizenship and Immigration Services (BCIS) formerly INS. - Copy of the Employment Authorization Card, I-688B. This card carries an expiration date. A SS card is not acceptable as evidence of work status. Ineligible: - Non-Occupant Co-Borrowers - Co-Signers - Foreign Nationals - Non-Resident Canadians - Borrowers with Diplomatic Immunity Title Vesting Eligible Vesting / Rights of Ownership: Rights of - Fee Simple Ownership - Individual & Joint Ineligible / No Exceptions: - Land Trust - Leasehold Estate - Real Estate Syndication - General or Limited Partnerships - Title in the name of a Corporation Credit - A tri-merge bureau is required on all loans; the lowest qualifying score of all applicants is used to qualify and each borrower must have at least two credit scores. The qualifying score is the lower of 2 or the middle of 3 scores and must be reviewed for each borrower. - For a credit score to be considered valid, the score must be generated from a minimum of three (3) trade lines that have been evaluated for at least 12 months. The trade lines do not need to be currently active but require some activity within the last 24 months. At least one of these trade lines must be an installment account and borrower must have paid the account down by an amount greater or equal to 10% of the subject loan amount. Rental history is considered installment and the monthly payment multiplied by the number of months can be used to meet the installment Page 26 of 38
  • 27. requirement Minimum Credit Score: - 620 (620-649 max LTV 90%, >649 max LTV is 96.5%) Inquiries and Derogatory Credit: - When inquiries and/or derogatory credit appear, the borrower must submit a signed credit explanation letter prior to loan approval. Inquiry letter must cover ALL inquiries in the most recent 90 days from date of credit report - Note: Any delinquent accounts shown as “disputed” will result in an automatic downgrade to a manual underwrite and all manual guidelines will apply. exceptions to this are as follows: - 1. The disputed account has a zero balance - 2. The disputed account is marked as "paid in full", or "resolved" - 3. The disputed account is both a. less than $500, and b. more than 24 months old, based on the date of dispute. Housing Payment History: - 0 X 30 in the past 12 months. - For borrowers with mortgage delinquency beyond the most previous 12 months, it is the underwriter’s responsibility to carefully review and determine the borrower’s credit worthiness. Mortgage Payment History/Documentation: - The mortgage payment history may be documented by a VOM or provide a rating in the credit report. Rental Payment History/Documentation: - A rental payment history is required per the AUS findings or underwriter determination and must be documented by a VOR from a property management company or 12 months cancelled checks if rented from an individual (If there is payment shock of 25% or more, CPM requires a VOR regardless of what DU requires) Employment Salaried: / Income  Most current paystubs covering a 30-day period with YTD income  Most current and consecutive 2-Years W-2’s  Most current two years tax transcripts (ordered via 4506 on all loans) Self-Employed: - Business must be in existence for at least two (2) years prior to subject application date. - Most current and consecutive (signed) 2-Years Business Tax Returns with all schedules required if incorporated - Most current two years personal tax returns for principals of corporations or sole proprietors - Copy of Business License or a CPA letter proving business still exists. Overtime/Bonus/Other income - Overtime income will be considered if employer indicates it is likely to continue and a two year history is available and averaged - Bonus income will be considered if employer indicates it is likely to continue and two year history is available and averaged - Commission income will be considered if employer indicates it is likely to continue and a two year history is available and averaged. If commission income is more than 25% of total income, tax returns for two years will be required to calculate income Verbal Verification Prior to Closing:  A verbal verification of employment is required for each employer of all borrowers, within 10-days of closing. This policy applies to all non-self employed income types. Child Support, Alimony or Maintenance Income:  In order to use as income, child support, alimony or maintenance income, payments must reasonably be documented to continue for at least a three (3) year period. The following documentation is required: o Copy of the divorce decree, separation agreement or court order o Copies of court records, bank statements or cancelled checks evidencing a minimum of three (3) months receipt of payments. Rental income:  Rental income must be supported by two years tax returns.  If converting primary residence to rental property and relying on rental income to qualify, 25% equity in the rental property, as validated through appraisal or difference between original financed amount and current balance, is required along with a copy of the a 12 month lease agreement and evidence of security deposit All income must match 1003 and DU findings Qualifying Maximum Ratios: Ratios PITI FICO (Front End) Page 27 of 38
  • 28.  30% Max 620 – 679  35% Max 680+  If gross monthly income is less than 2500 dollars 25% Max Ratio (CPM to review any exceptions) DTI FICO (Back End)  45% Max 620 – 679  50% Max 680 – 739  55% Max 740+ No exceptions on FICO scores < 650 Exceptions to maximum ratios considered with compensating factors such as minimal payment shock with substantial reserves, etc. Must keep DO/DU Approved/Eligible Lease - Not permitted Option Rent Credits Payment In all cases, the “existing housing” and the “proposed housing” sections of the 1003 application must be Shock fully completed CPM considers payment shock on all loans: - Payment Shock occurs when the proposed housing expense will be considerably higher than the existing housing expense and where there are multiple layers of risk. The UW must analyze the borrower’s existing cash flow as depicted on bank statements and determine the borrower’s capacity for payment shock Payment Shock Guideline:  620-679 FICO score and payment shock is 50% or more-2 months PITI reserves required  >679 FICO score and payment shock is 50% or more-1 months PITI reserves required In order to be considered cash reserves for payment shock purposes, the borrowers ending balance on two consecutive bank statements must consistently show the reserve requirements available in the account. This shows the borrower has the ability to maintain the reserve levels required to sufficiently offset payment shock THIS IS ONE OF THE MOST IMPORTANT FACTORS IN ANALYZING THE BORROWER’S ABILITY TO PAY Assets Bank Statements: - Most current and consecutive two (2) months bank statements (all pages). Quarterly Bank statements must be dated within 90-days or per DU findings Earnest Money: - Verification and source of funds for EM deposit required. Stocks, Bonds, Mutual Funds, U.S. Government Securities: - Copy of the account statement for the most recent 60 days/quarterly statement is required. Seller Max Concessions: Contribution - Max seller concession is the lower of 3% of contracted sales price or contracted amount on loans with an LTV above 90% and 6% on loans with an LTV of 90% or below - Seller contribution is limited to discount points, closing costs and prepaid items Cash - Cash reserves are not generally a requirement except when cash reserves are used as a compensating Reserves factor when approving an conventional loan with debt ratios that exceed guidelines or payment shock is present - Gift funds, cash proceeds from a refinance and equity in another property, are not acceptable sources of cash reserves. Gift Funds In accordance with current CPM guidelines: - 100% gift funds for down payment are only acceptable if the funds are documented by a gift letter that states the funds are not to be repaid as well as clear documentation of the donor’s ability to gift the funds as well the transfer of funds from donor to the borrower Gift Letter: - A gift letter is required and must list the donor’s name, address, city, state and zip, phone number, relationship to the borrower, and the dollar amount of the gift. The gift letter must indicate that the funds do not have to be repaid in any way and must be signed and dated by the donor. Page 28 of 38