Advantage Conventiona - PDF document

1 S eptember 16, 20 2 1 Advantage Conv
S eptember 16, 20 2 1 Advantage Conventiona l Eli gibili ty Matr ix P age 1 of 5 WHEDA Advantage Conventi onal Eligibili ty Matrix HFA Preferred TM (MI) Product Includes HomeStyle ® Renovation *WHEDA Advantage C ompliance requirements supersede Fannie Mae’s Standard, HomeReady®, and HomeStyle® Renovation Guidelines. Underwriting Community Le nding Programs and Mortgage Insurance HFA P referred ™ T otal annua l qualifying income ≤ 80% AMI * : Total annual qualifying inco�me 80%AMI * : Charter lever Mortgage In surance ** Coverage applies: o 95 .01 - 97% LTV = 18% coverage o 90.01 - 95% LTV = 16 % coverage o 85.01 - 90% LTV = 12% cover age o 80.01 - 85% LTV = 6% coverage o 80% LT V and lower = N ot r equir ed • Subject to interest rate adjustment , and • Standard Mortgage Insurance ** Coverage applies : o 9 5.0 1% - 97.00% = 3 5% covera ge o 9 0.01 % - 9 5. 00 % = 30 % coverage o 85.01 % - 90.00 % = 25% coverag e o 80.0 1 % - 85. 00 % = 12% coverage o 80% LTV and lower = Not req uired * Tot al Hou se hold Compliance Income must also meet the WHEDA Income Lim its for the appropriate program. ** Mortgage Insurance Company overlays apply for loan amounts� 80% LTV Des ktop Originator ® Desktop Underwriter ® • Desktop Originator® (DO®)/Desktop Under writer® (DU®) submis s ion is mandatory • There may be exceptions to the requireme nts for certain trans a ctions. Refer to the N otes section u nder e ach grid. • When combin i ng H omeReady (HFA) and HomeStyle ® Renovation, the more restr ictive guid eline m ust be applied . Approve/Elig ible Recom mendation Maximum DTI a s determined by D U/DO Transa ction Type Number of Uni ts Maximum LTV /CLTV / HCLTV Credit Score Minimum Reserves Purchase Limited Cash - Out Refinan ce (LCOR) (2) 1 Unit Condominiums FRM 97/105/105 ( 1) Average Median S core of 620 As deter mine d by D U/DO 2 - 4 Units (3) FRM 95/105/105 Average Median S core of 620 6 Manufa ctured FRM 95/105/105 Average Median S core of 620 As determined by DU /DO FRM 90 /105/1 05 (2) (LCOR) Average Median S core of 620 A s determined by DU/DO (1) No credit score, Max im um LTV/CLTV/HCLTV FRM 90/90/90, Maximum DTI 40 %, Reserves det ermi ned by DU/DO (2) Maximum LTV/C LTV/HCLTV FRM 95/ 95/95 with a non - Community Second ; FR M 9 0/90/90 if manufac tured housing ; (3) 2 - 4 unit purchase transaction : a minimum 3% contributio n of borr ow er ’ s own funds is required (5% if utilizing Home Style ® Renovati on ) ; prope r ty must be � 5 years o ld WHEDA Manual Underwrite (4 ) Maximum DTI 36% Maxi mum DTI 45% Purchase Limit ed Ca sh - Out Ref inan ce (LC OR) (6) 1 Unit Condomin iums FRM 95/105/1 05 (5) 680 if � 75% 0 7 20 if� 75% 0 6 4 0 if 75% 6 80 if 75% 620 if ≤ 75% 2 70 �0 if 75% 6 6 60 if� 75% 6 6 6 0 if 75% 2 Unit (7) FRM 95/105/105 680 if� 75% 640 if 75% 6 700 if

2 � 75% 6 8 0 i f 75% 6
� 75% 6 8 0 i f 75% 6 3 - 4 Units (7) FRM 95/105/105 660 6 680 6 (4) Loa n must be submitted through the Broker or Mini - Corr channe l (5) N o c redit score, Maximum LTV/CLTV/HCLTV FRM 95/105/105, Maximum DTI 6%, Minimum reserves per Fannie Mae Selling Guide B3 - 5.4 - 01 Eli gibility requirements for loa ns with non - tradi tional credit (6) Maximum LTV/CLTV/HCLTV FRM 95/95/95 with non - Community Secon ds subordinate financing ; (7) 2 - 4 unit purchase transaction : a minimum 3% borrower contribution is required (5% if utilizing Home Styl e ® Renovation) ; property must be � 5 years old S eptember 16, 20 2 1 Advantage Conventiona l Eli gibili ty Matr ix P age 2 of 5 WHEDA Advantage Conventi onal Eligibili ty Matrix Category WHEDA Compliance Requireme nt COMPLIANCE INCOME Income and Pu rch ase Limit s Must meet WHEDA Income and Purchase Price Limi ts Refer to the Advantage Conventional Underwriting G uide , Section 6.0 Calculating Complian c e Income for additional guidance Household Compliance Income Anticipated in come from all H ouse ho ld Occupants, age 18 or older. • Certification of Zero Income ( F orm 35) o Required for all Househo l d Occupants age 18 or older, not recei ving a ny income • Complian ce I ncome Evaluation (Form 29) o Lender s may submit to WHEDA to have household income certified Hou sehold Oc cupants A ll individuals who int end to occupy property as their primary res idence, r egar dless of their relationship to the borro wer or whether they are an applicant for the loan or not . • Borrower’s Affidavit (Form 2) o B orrower required to complete this form disclosing all h ou sehold occupants , etc Required Income Documentation All Borrowers All Additional Household Occ upants, 18 years or older 2 years tax t ra nscri pts Additional requirements as applicable: • Paystubs, or Verification of Employment, with year - to - date earning s and a minimum of 30 day s of inco me • 2 years W - 2s & 1099 ’ s for all income reflected on transcript s • If self - employed, 2 years complete returns with all schedules • Child Support • Pension • Disability • Social Security Awar d Letter • Certification of Zero Income (Form 35) , if applica ble 1 year complete 1040s with all requi red sched ules Additional requirements as applicable: • Paystubs, or Verification of Employment, with year - to - date earning s and a minimum of 30 day s of inco me • 1 ye ar W - 2 s & 1099 ’ s for all income reflec ted on returns • Child Support • Pension • Disability • Social Security Awar d Letter • Certification of Z ero Income (Form 35) , if applicable In clusions Complia nce Income Inclusions • Earne d income for a ll occupants over the ag e of 18 • Unearned in come for all occup ants under the age of 18 • Social Security • C hild Support • Alimon y • Pension/Retirement • Disability Income • Public Assistance • Inter est and Dividend Income on funds retained after

3 closin g • Self - e mploym ent in
closin g • Self - e mploym ent income • Rental income fro m the subject pr operty be ing used for qualifying on a 2 - 4 unit purchase • Rental income from other Real Estate owned • Mortgage Cred it Cert ificate income being used for qualifying income Exclusions Compliance Income E xclusio ns • Earned income for all oc cupa nts under the ag e of 18 • F oster car e in come • Food Share Wisconsin • One - time signi ng bonus Non - recurr ing payments from: • Inherita nce • Lot tery winning • Insurance se ttle ment s • Capital gains • Gambling winning • Settlements f o r perso nal lo ss S eptember 16, 20 2 1 Advantage Conventiona l Eli gibili ty Matr ix P age 3 of 5 WHEDA Advantage Conventi onal Eligibili ty Matrix Cat egory WHE DA Co mpli ance Requirements Cont ’d GENERAL Loan Term & Amortization 3 0 year , fully amortized fixed rate mortgage (FRM) Occupancy Owner - occupied, primary residence for the life of the loan B orrower • Ca nnot be listed on the W isconsin Child Support Lien Docket • Must be legal U.S . residen t wi th a valid Social Security Numb er Servicing All loans sol d servicing - released to WHED A Subordinate Financing WHEDA - fun ded subordinate financing is elig ible in transactions i nvolvin g a WH EDA - owned property HPML Ineligible INCOME Rental Income Borrowers having less than one - year hi story of receiving rental income or docum ented property management experience , must have a minim um of a 6 - mon th housing paym ent or expense history for re ntal income to b e cons idered . CREDIT Non - Applic ant Spouse Non - applicant spouse’s credit history is re qui red • All outstanding debts mus t be incl uded in the tot al debt - to - income ratio • A n y outstanding judgmen ts inc urred in the i nter est of the marriage m ust b e pa id - i n - full Co - Si gnor, Guarantor, N on - Occu pant Co - Borrower Co - signors, Guar antors and Non - Occupa nt Co - Borrowers are not allowed ASSETS Deposits • Re - occ urring non - payroll deposit s should be explained and/or sourced to de term ine if there are othe r sou rces of income. COLLA TERAL Property Must be loc ated in Wisconsin Title Only bo rrowers approved for the loan can take title , or a no n - applica nt spouse Man ufactured Housing An Appro v e/ Ine ligible recommen dation is permitted on a Manufacture d Home wh en the sole reason for in eligibility is due to the CLTV exceeding 95%. OTHER Home B uyer Education Pre - Pu rch ase Home Buyer Education (HBE ) is requ ired for: • First Time Home Buyer(s) (1) uti l izing any WHEDA Advan tage C onventional lo an p rogram. o Waived if on e bor rowe r is NOT a First T ime Home Buyer • When all bo rrowers are relying solely on non traditional credit to qu alify, ALL borrowers must com plete the education. DU/ DO findings will disclose t he requirement based on the declarations from the loan application . Cos ts s et b y the Home Buy er Education provid er must be included in disclosures See t he WH EDA

4 Advantage Convention a l Underwritin
Advantage Convention a l Underwriting Guide, Section 4.05 for acceptable education source s . (1) A Fi rst - Time Home Buyer is def ined a s a per son who has not had an owner ship interest i n a principal place of residence in the las t thr ee yea rs . Landlord Tra ining • 2 - unit property , LTV/CLTV/HCLT V greater than 85% • 3 - 4 unit property, LTV/CLTV/HCLTV greater than 75% Rates a nd Pricing • Se e WHED A Rate Sheet for current Convention al an d FTHB HFA Preferred (MI ) rates and pricing • HomeStyle Reno vation does not have sep arate pricing . Lender Comp e nsation • Broker Cha nnel – WHEDA - paid c ompensation only. Bor rower - pa id comp ensation is prohibite d. • Mi ni - Corr and Co rrespond e nt Channel – Lender - paid or Borro wer - paid compensation plan s el igib le, determined by WHEDA Participat ing Lender. Fees • $350 WHEDA C omplianc e Review F ee - Correspondent • $500 WHEDA Purchase R eview Fe e – For Broker/M ini - Corr • $65 Tax Service Fee • $3 5 Wire F e e, if appl icable (Note: No fee fo r funds transfe r r ed v ia AC H ) • $ 50 S ubordination Fee, Refinance Only S eptember 16, 20 2 1 Advantage Conventiona l Eli gibili ty Matr ix P age 4 of 5 WHEDA Advantage Conventi onal Eligibili ty Matrix Fi rst Time Home Buyer (FTHB) a n d VALOR General Pr oduct Information FTHB VALOR Income and Purchas e Price Limits FTHB/VALOR Income and P urch ase Pric e Limits Federal Recapture Tax Borrowers who finance their home using FT HB/VALOR p ricing may be subj e ct to a f ederal tax u pon the s ale of the prop erty. WHEDA provides a reim bursement gu a rant y . • A cknowl edgement of Federal Recapture Tax Require ment s (Form 4) . o Signed b y Borr ower(s) to i n form them of tax and WHEDA gu aranty . Exclus ions B orrowe rs who qualify for FTHB or V ALOR progr a m ar e not eligible to receive both the bene fit o f th e pr eferred interest rate and the Mortgage Credit Certificate (MCC) pr o gram. F T HB Borrow er • B orrowers must qualify for a WHEDA A dvantag e Conven tional lo an . • Be a F irs t time Home Buyer defined a s an indivi dual who has not owned principal res idence i n the las t 3 years. ALL borrowers and non - applicant spouses must meet definitio n . o This requiremen t i s waived if a b o rrower is a qualified mili tar y veter an (see V ALOR l oan gu idelines), as defined in th e Conventi o nal Underwriting Guide or is purchas ing a ho me in a f eder ally designated Target Area . VALOR VALOR Eligibility requirements • B orrowe rs must qual if y for a WHEDA Ad v antage Conventional l oan . • Be a Qualif ied Veter an, de fined as a military veteran who s e rved in ac t ive duty as evidenced by Form DD - 21 4 indica ting hono rabl e discharge or release in the Charter of Service * . Only on e Applic a nt mu st meet this d efinition . o NOTE: V A Certificate of Eligi bi lity d oes not replace form D D - 214 . • F irst - time home buyer requi r ement is w aived . HomeStyle Renovation HOMEST YLE RENO VATIO N F

5 T HB/V ALOR/MCC Purchase Price + Total
T HB/V ALOR/MCC Purchase Price + Total Renovation Costs CANNOT exceed the purchas e pr ice limit . Lender Deli very Channel Available only in the Broker or Mini - Correspondent Channel . General Requirements Se e the WHEDA Advantage Conventional Gu ide, Section 3.04 and W HEDA Policy and Procedure Guide, Section 1 0. 1 0 , f or d etai ls . Certified HUD Con sultant Required on all HomeStyle Renovation loans. Contractor Requirements • Dwelling Contractor (if used) must be licensed by the State o f W I . • Non - dwelling co ntractors and /or individual s must be l icen sed by the State of W I . • R e novation Contract (Fo rm 38) E xecuted and sign ed by each C ontractor and th e Borrower . • “Do It You rself” option is not allowable – No exceptio ns . Refi nanc e WHEDA to WHEDA on ly . Renovation Pe riod Propo s ed work must be co m pleted w ithin 6 mo nths of the clo sin g date . Continge ncy Reserve 1 5 % of the total renovation costs must be f unded by : • Adding to th e renovation co s ts , • Additional funds from th e borro w er, or • Gi ft from an e ligible donor Renova tion E scrow Renovation funds to be held by WHEDA . Inspections and Draws • T he use of a Title Company for Inspections and Draw s is require d . • Draw req uests to be submitted to WHEDA by Title Company along wit h copie s of satisfactory inspections. Appraisal M ust b e complet ed “subjec t t o” the proposed sc ope of work . Ineli gi ble Im proveme nts • Swimm ing pools • Ho t Tubs • Structural changes to manu f a ctured homes such as garages or add i ti ons • Appliances that are n ot a part of a substantial change or upgra de to the ro om in whi ch t he appliance would otherwise be placed. S eptember 16, 20 2 1 Advantage Conventiona l Eli gibili ty Matr ix P age 5 of 5 WHEDA Advantage Conventi onal Eligibili ty Matrix Limited Cash o ut Ref inance (LC OR) R EFINANCE Tra nsaction Type WHEDA to WHED A only Cl osing Costs Closing costs and pa yoff of mort gages use d so lely for the ac quisition of the property Subordination • Existin g Communi ty Seconds us ed in the origi n al purchase transacti on may b e subor din ated u p to 105% CL TV • Approve/Ineligible is pe r mitted whe n the loan purpose is “LCOR” and the sole re ason for inel igibilit y is du e to a Non - Community Second, subject to a ma ximum 9 5 % LTV/CL TV/HCLTV Req uired Forms AL L L OANS At application • B orrower’s Affida vit (Form 2) • Re sidential Loan A pplic ation Addendum ( F orm 3 ) • Certification of Zero In come (form 35) – If applicable FTH B /VALOR A t appli cat ion • Acknowledgement of Feder a l Recaptur e Tax Req uirements (Form 4) HOMESTYLE RE NO VATION At application • Renov ation Contract (Form 38) • R enov ation M a ximu m Mortgage Worksheet PURCHAS E ( Form 41 ) At Closing • Renova tion Loan Agreement (Form 39) • Closing Instructions During Renovation peri od • Renovation Multi Di sbursement (F orm 40