Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017 Appraisal Correspondent  HomeReady® Appraisal Analysis: Agency Loan Programs / Improvements Section of the Appraisal Report Appraisal Analysis: Agency Loan Programs / Improvements Section of the Appraisal Report Requirements Section 1.07 Mortgage / Accessory Appraisal- (non-AUS & Non-AUS Non-AUS Units Guideline DU) Note: Below is an EXCERPT only of the guidance from the above referenced section. All other currently published Note: Below is an EXCERPT only of the guidance from the above referenced section. All other currently published  Home guidelines from this section remain the same. guidelines from this section remain the same. Possible®  Accessory Units  Accessory Units Mortgage  Fannie Mae will purchase a one-unit property with an accessory unit. An accessory unit is typically an  Fannie Mae will purchase a one-unit property with an accessory unit. An accessory unit is typically an (LPA) additional living area independent of the primary dwelling unit, and includes a fully functioning additional living area independent of the primary dwelling unit, and includes a fully functioning kitchen and bathroom. Some examples may include a living area over a garage and basement units. kitchen and bathroom. Some examples may include a living area over a garage and basement units. Whether a property is defined as a one-unit property with an accessory unit or a two-unit property Whether a property is defined as a one-unit property with an accessory unit or a two-unit property will be based on the characteristics of the property, which may include, but are not limited to, the will be based on the characteristics of the property, which may include, but are not limited to, the existence of separate utilities, a unique postal address, and whether the unit is rented. The appraiser existence of separate utilities, a unique postal address, and whether the unit is rented. The appraiser is required to provide a description of the accessory unit, and analyze any effect it has on the value or is required to provide a description of the accessory unit, and analyze any effect it has on the value or marketability of the subject property. marketability of the subject property.  If the property contains an accessory unit, the property is eligible under the following conditions:  If the property contains an accessory unit, the property is eligible under the following conditions:  The property is defined as a one-unit property.  The property is defined as a one-unit property.  There is only one accessory unit on the property; multiple accessory units are not permitted.  There is only one accessory unit on the property; multiple accessory units are not permitted.  The appraisal report demonstrates that the improvements are typical for the market through an  The appraisal report demonstrates that the improvements are typical for the market through an analysis of at least one comparable property with the same use. analysis of at least one comparable property with the same use.  The borrower qualifies for the mortgage without considering any rental income from the  The borrower qualifies for the mortgage without considering any rental income from the accessory unit. accessory unit.  If it is determined that the property contains an accessory unit that does not comply with zoning, the property is eligible under the following additional conditions: Reference: See the “Rental Income from a One-Unit Primary Residence with an Accessory Unit”  The lender confirms that the existence will not jeopardize any future property insurance claim subtopic within Section 2.01a: Fannie Mae HomeReady® and Freddie Mac Home Possible® that might need to be filed for the property. Mortgages for an exception to this guideline for HomeReady mortgage loans.  The use conforms to the subject neighborhood and to the market.  The property is appraised based upon its current use.  If it is determined that the property contains an accessory unit that does not comply with zoning, the  The appraisal must report that the improvements represent a use that does not comply with property is eligible under the following additional conditions: zoning.  The lender confirms that the existence will not jeopardize any future property insurance claim  The appraisal report must demonstrate that the improvements are typical for the market that might need to be filed for the property. through an analysis of at least three comparable properties that have the same non-compliant  The use conforms to the subject neighborhood and to the market. zoning use.  The property is appraised based upon its current use.  The appraisal must report that the improvements represent a use that does not comply with Fannie Mae DU zoning. Follow DU requirements, which are the same as non-AUS guidelines.  The appraisal report must demonstrate that the improvements are typical for the market through an analysis of at least three comparable properties that have the same non-compliant Freddie Mac LPA zoning use. Note: Below is an EXCERPT only of the guidance from the above referenced section. All other currently published guidelines from this section remain the same. Fannie Mae DU  Accessory Units Follow DU requirements, which are the same as non-AUS guidelines.  A 1-unit detached property may have an incidental accessory unit that is incidental to the overall value and appearance of the subject property. Examples of such properties include a dwelling with a Freddie Mac LPA unit above a detached garage, a dwelling with a guest apartment, or a dwelling with a basement unit. Note: Below is an EXCERPT only of the guidance from the above referenced section. All other currently published The appraiser must describe the accessory unit, and analyze any effect on the value or marketability guidelines from this section remain the same. of the subject property.  Accessory Units  A 1-unit detached property may have an incidental accessory unit that is incidental to the overall Reference: See “Rental Income From the Subject 1-unit Primary Residence” in the “Rental Income” value and appearance of the subject property. Examples of such properties include a dwelling with a subtopic within Section 2.01 Agency Loan Programs of the Correspondent Seller Guide for additional unit above a detached garage, a dwelling with a guest apartment, or a dwelling with a basement unit. guidance. The appraiser must describe the accessory unit, and analyze any effect on the value or marketability

Last Revision Date: 05/26/2017 (Correspondent) Page 1 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017 of the subject property.

References:  See “Rental Income From the Subject 1-unit Primary Residence” in the “Rental Income” subtopic within Section 2.01 Agency Loan Programs of the Correspondent Seller Guide for additional guidance.  See the “Rental Income from a One-Unit Primary Residence with an Accessory Unit” subtopic within Section 2.01a: Fannie Mae HomeReady® and Freddie Mac Home Possible® Mortgages for additional guidance for Home Possible mortgage loans.

DU Refi Plus / Correspondent  DU Refi Plus™ Overview / Product Summary Overview / Product Summary Ineligible New Section 2.04 Note: Below is an EXCERPT only of the guidance from the above referenced section. All other currently published Note: Below is an EXCERPT only of the guidance from the above referenced section. All other currently published Mortgage DU Refi Plus™ guidelines from this section remain the same. guidelines from this section remain the same. Loan Types Loan Program- Guideline  Eligible loan products available under the DU Refi Plus loan program include the following:  Eligible loan products available under the DU Refi Plus loan program include the following:  Agency Fully Amortizing Fixed Rate,  Agency Fully Amortizing Fixed Rate,  Agency Fully Amortizing 5/1, 7/1 & 10/1 LIBOR ARMs,  Agency Fully Amortizing 5/1, 7/1 & 10/1 LIBOR ARMs,  Agency Plus Fully Amortizing Fixed Rate, and  Agency Plus Fully Amortizing Fixed Rate, and  Agency Plus Fully Amortizing 5/1, 7/1 & 10/1 LIBOR ARMs.  Agency Plus Fully Amortizing 5/1, 7/1 & 10/1 LIBOR ARMs.

Note: 3/1 LIBOR ARMs and Texas 50(a)(6) transactions are NOT eligible. Note: 3/1 LIBOR ARMs , HomeReady Mortgages, Home Possible Mortgages, and Texas 50(a)(6) loans are NOT eligible.

Employer Correspondent  Standard Non-AUS Non-AUS Assistance Section 2.01 Agency (non-  Forms of Employer Assistance  Forms of Employer Assistance Agency Loan AUS, DU &  The employer assistance may be in the form of:  The employer assistance may be in the form of: Programs- LPA)  a grant,  a grant, Guideline  Agency Plus  a direct, fully repayable second mortgage or unsecured loan,  a direct, fully repayable second mortgage or unsecured loan, (DU & LPA)  a forgivable second mortgage or unsecured loan, or  a forgivable second mortgage or unsecured loan, or  HomeReady®  a deferred-payment second mortgage or unsecured loan.  a deferred-payment second mortgage or unsecured loan. Mortgage  A borrower of a mortgage loan secured by a primary residence may use funds provided by an  A borrower of a mortgage loan secured by a primary residence may use funds provided by an (non-AUS & employer to fund all or part of the down payment or closing costs subject to the minimum borrower employer to fund all or part of the down payment or closing costs subject to the minimum borrower DU) contribution requirements. Employer assistance can also be used for financial reserves for all types of contribution requirements. Employer assistance can also be used for financial reserves for all types of  Home assistance with the exception of unsecured loans (which may only be used for the down payment and assistance with the exception of unsecured loans (which may only be used for the down payment and Possible® closing costs). Employer assistance funds are not allowed on a second home or an investment closing costs). Employer assistance funds are not allowed on a second home or an investment Mortgage property. property. (LPA)  See the Minimum Borrower Contribution Requirements section in this product description for  See the “Minimum Borrower Contribution Requirements” subtopic in the applicable product minimum borrower contribution requirements for transactions that contain employer assistance. description for minimum borrower contribution requirements for transactions that contain employer  Funds must come directly from the employer, including through an employer-affiliated credit union. assistance.  When employer assistance is extended as a secured second mortgage, the transaction may be  Funds must come directly from the employer, including through an employer-affiliated credit union. structured as a Community Seconds or it must satisfy the eligibility criteria for mortgages that are  When employer assistance is extended as a secured second mortgage, the transaction may be subject to subordinate financing. structured as a Community Seconds or it must satisfy the eligibility criteria for mortgages that are  If the secured second mortgage or unsecured loan does not require regular payments of either subject to subordinate financing. principal and interest or interest only, the lender does not need to calculate an equivalent payment  If the secured second mortgage or unsecured loan does not require regular payments of either for consideration as part of the borrower’s monthly debt. If regular payments are required for the principal and interest or interest only, the lender does not need to calculate an equivalent payment secured second mortgage, the payments must be included in the calculation of the debt-to-income for consideration as part of the borrower’s monthly debt. If regular payments are required for the ratio. secured second mortgage, the payments must be included in the calculation of the debt-to-income  For SunTrust Mortgage Internal Employees Only: SFC D25 is required for delivery to the GSE. ratio.  Special Feature Code Requirement: SFC D25 is required for delivery to the GSE. Last Revision Date: 05/26/2017 (Correspondent) Page 2 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017  Documentation Requirements  The lender must document:  Documentation Requirements  that the program is an established company program, not just an accommodation developed for  The lender must document: an individual employee.  that the program is an established company program, not just an accommodation developed for  the dollar amount of the employer’s assistance. an individual employee.  an unsecured loan from an employer with an award letter or legal agreement from the note  the dollar amount of the employer’s assistance. holder and must disclose the terms and conditions of the loan.  an unsecured loan from an employer with an award letter or legal agreement from the note  the terms of any other employee assistance being offered to the borrower (such as relocation holder and must disclose the terms and conditions of the loan. benefits or gifts).  the terms of any other employee assistance being offered to the borrower (such as relocation  that the borrower received the employer assistance funds directly from the employer (or benefits or gifts). through the employer-affiliated credit union).  that the borrower received the employer assistance funds directly from the employer (or through the employer-affiliated credit union).  Eligible Repayment Terms for Employer Subordinate Financing  If the subordinate financing is from the borrower’s employer, it does not have to require regular payments  Eligible Repayment Terms for Employer Subordinate Financing of either principal and interest or interest only. Employer subordinate financing may be structured in any of  If the subordinate financing is from the borrower’s employer, it does not have to require regular the following ways: payments of either principal and interest or interest only. Employer subordinate financing may be  fully amortizing level monthly payments, structured in any of the following ways:  deferred payments for some period before changing to fully amortizing level payments,  fully amortizing level monthly payments,  deferred payments over the entire term, or  deferred payments for some period before changing to fully amortizing level payments,  forgiveness of the debt over time.  deferred payments over the entire term, or  The financing terms may provide for the employer to require full repayment of the debt if the borrower’s  forgiveness of the debt over time. employment is terminated (either voluntarily or involuntarily) before the maturity date of the subordinate  The financing terms may provide for the employer to require full repayment of the debt if the financing. borrower’s employment is terminated (either voluntarily or involuntarily) before the maturity date of the subordinate financing. Fannie Mae DU Follow DU requirements, which are the same as non-AUS guidelines. Fannie Mae DU Follow DU requirements, which are the same as non-AUS guidelines. Freddie Mac LPA Note: Below is an EXCERPT only of the guidance from this section. All other currently published LPA guidelines Freddie Mac LPA from this section remain the same. Note: Below is an EXCERPT only of the guidance from this section. All other currently published LPA guidelines from this section remain the same.  Special Feature Code Requirement  For SunTrust Mortgage Internal Employees Only: SFC D25 is required for delivery to the GSE.  Special Feature Code Requirement: SFC D25 is required for delivery to the GSE.

Gifts Correspondent  Standard Non-AUS Non-AUS Section 2.01 Agency (non-  Gift Funds  Gift Funds Agency Loan AUS & DU  A borrower of a mortgage loan secured by a primary residence or second home may use funds  A borrower of a mortgage loan secured by a primary residence or second home may use funds Programs-  Agency Plus received as a personal gift from an acceptable donor. Gift funds may fund all or part of the down received as a personal gift from an acceptable donor. Gift funds may fund all or part of the down Guideline (DU) payment, closing costs, or financial reserves subject to the minimum borrower contribution payment, closing costs, or financial reserves subject to the minimum borrower contribution  HomeReady® requirements. Gifts are not allowed on an investment property. requirements. Gifts are not allowed on an investment property. Mortgage (non-AUS & Reference: See the Minimum Borrower Contribution Requirements subtopic previously presented in Reference: See the “Minimum Borrower Contribution Requirements” subtopic in the applicable DU) this product description for minimum contribution requirements for transactions that contain gifts. product description for minimum borrower contribution requirements for transactions that contain gifts.  Acceptable Donors  A gift can be provided by:  Acceptable Donors  A relative, defined as the borrower’s spouse, child, or other dependent, or by any other  A gift can be provided by: individual who is related to the borrower by blood, marriage, adoption or legal guardianship; or  A relative, defined as the borrower’s spouse, child, or other dependent, or by any other  A fiancé, fiancée, or domestic partner. individual who is related to the borrower by blood, marriage, adoption or legal guardianship; or Last Revision Date: 05/26/2017 (Correspondent) Page 3 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017  The donor may not be, or have any affiliation with, the builder, the developer, the real estate agent,  A fiancé, fiancée, or domestic partner. or any other interested party to the transaction.  The donor may not be, or have any affiliation with, the builder, the developer, the real estate agent, or any other interested party to the transaction.  Documentation Requirements  Gifts must be evidenced by a letter signed by the donor, called a gift letter. The gift letter must:  Documentation Requirements  Specify the dollar amount of the gift;  Gifts must be evidenced by a letter signed by the donor, called a gift letter. The gift letter must:  Specify the date the funds are transferred;  Specify the dollar amount of the gift;  Include the donor’s statement that no repayment is expected; and  Specify the date the funds are transferred;  Indicate the donor’s name, address, telephone number, and relationship to the borrower.  Include the donor’s statement that no repayment is expected; and  When a gift from a relative or domestic partner is being pooled with the borrower’s funds to make up  Indicate the donor’s name, address, telephone number, and relationship to the borrower. the required minimum cash down payment, the following items must also be included:  When a gift from a relative or domestic partner is being pooled with the borrower’s funds to make up  A certification from the donor stating that they have lived with the borrower for the past 12 the required minimum cash down payment, the following items must also be included: months and will continue to do so in the new primary residence.  A certification from the donor stating that they have lived with the borrower for the past 12  Documents that demonstrate a history of borrower and donor shared residency. The donor’s months and will continue to do so in the new primary residence. address must be the same as the borrower’s address. Examples include but are not limited to a  Documents that demonstrate a history of borrower and donor shared residency. The donor’s copy of the driver’s license, a bill, or a bank statement. address must be the same as the borrower’s address. Examples include but are not limited to a copy of the driver’s license, a bill, or a bank statement.  Verifying Donor Availability of Funds and Transfer of Gift Funds  The lender must verify that sufficient funds to cover the gift are either in the donor’s account or have  Verifying Donor Availability of Funds and Transfer of Gift Funds been transferred to the borrower’s account. Acceptable documentation includes the following:  The lender must verify that sufficient funds to cover the gift are either in the donor’s account or have  a copy of the donor’s check and the borrower’s deposit slip, been transferred to the borrower’s account. Acceptable documentation includes the following:  a copy of the donor’s withdrawal slip and the borrower’s deposit slip,  a copy of the donor’s check and the borrower’s deposit slip,  a copy of the donor’s check to the closing agent, or  a copy of the donor’s withdrawal slip and the borrower’s deposit slip,  a settlement statement showing receipt of the donor’s check.  a copy of the donor’s check to the closing agent, or  When the funds are not transferred prior to settlement, the lender must document that the donor  a settlement statement showing receipt of the donor’s check. gave the closing agent the gift funds in the form of a certified check, a cashier’s check, or other official  When the funds are not transferred prior to settlement, the lender must document that the donor check. gave the closing agent the gift funds in the form of a certified check, a cashier’s check, or other official check. Fannie Mae DU  Follow DU requirements, which are the same as non-AUS guidelines, including the following: Fannie Mae DU  It is important that the gift amount is identified separately as a gift even if the funds have already  Follow DU requirements, which are the same as non-AUS guidelines. The following additional requirements been deposited in a liquid asset account owned by the borrower (such as checking or savings apply: account). The balance of the liquid asset account entered in the loan application must be adjusted  The entry of gifts or grants on the online loan application is as follows: accordingly to prevent duplicate entry of funds.  When a gift is entered in Section VI Assets as a gift, the funds are included in available funds. It is important that the gift amount is identified separately as a gift even if the funds have already been deposited in a liquid asset account owned by the borrower (such as a checking or savings account). The balance of the liquid asset account entered in the loan application must be adjusted accordingly to prevent duplicate entry of funds. For example, if the borrower’s verified checking account reflects a balance of $15,000, and $5,000 of that amount was from a gift, the checking account balance should be adjusted to reflect $10,000, and the $5,000 should be entered separately as a gift.  When a gift is entered in Section II as a source of down payment, the funds are not included in the available funds.

Note: Gift funds are considered liquid only when the funds are entered as Gift in Section VI Assets.

Last Revision Date: 05/26/2017 (Correspondent) Page 4 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017 Installment Correspondent  Standard Non-AUS Non-AUS Land Contracts Section 2.01 Agency (non-  When the proceeds of a mortgage loan are used to pay off the outstanding balance on an installment land  When the proceeds of a mortgage loan are used to pay off the outstanding balance on an installment land Agency Loan AUS, DU & contract (also known as contract or bond for deed) that was executed within the 12 months preceding the contract (also known as contract or bond for deed) that was executed less than 12 months preceding the Programs- LPA) date of the loan application, Fannie Mae will consider the mortgage loan to be a purchase money mortgage date of the loan application, Fannie Mae will consider the mortgage loan to be a purchase money mortgage Guideline  Agency Plus loan. loan. (DU & LPA)  The LTV ratio for the mortgage loan must be determined by dividing the new loan amount by the  The LTV ratio for the mortgage loan must be determined by dividing the new loan amount by the  HomeReady® lesser of the total acquisition cost (defined as the purchase price indicated in the land contract, plus lesser of the total acquisition cost (defined as the purchase price indicated in the land contract, plus Mortgage any costs the purchaser incurs for rehabilitation, renovation, or energy conservation improvements) any costs the purchaser incurs for rehabilitation, renovation, or energy conservation improvements) (non-AUS & or the appraised value of the property at the time the new mortgage loan is closed. The expenditures or the appraised value of the property at the time the new mortgage loan is closed. The expenditures DU) included in the total acquisition cost must be fully documented by the borrower. included in the total acquisition cost must be fully documented by the borrower.  Home  When the installment land contract was executed more than 12 months before the date of the loan  When the installment land contract was executed at least 12 months before the date of the loan Possible® application, Fannie Mae will consider the mortgage loan to be a limited cash-out (rate/term) refinance. In application, Fannie Mae will consider the mortgage loan to be a limited cash-out (rate/term) refinance. In (LPA this case, the LTV ratio for the mortgage loan must be determined by dividing the new loan amount by the this case, the LTV ratio for the mortgage loan must be determined by dividing the new loan amount by the appraised value of the property at the time the new mortgage loan is closed. appraised value of the property at the time the new mortgage loan is closed.  Cash-out refinance transactions involving installment land contracts are not eligible.  Cash-out refinance transactions involving installment land contracts are not eligible.

Fannie Mae DU Fannie Mae DU Follow DU requirements, which are the same as non-AUS guidelines. Non-AUS guidelines apply.

Freddie Mac LP Freddie Mac LPA  When the proceeds of a mortgage are used to pay the outstanding balance under a land contract or Follow LPA requirements, which are as follows: contract for deed, the mortgage may be considered either a purchase or a ”no cash out” refinance  When the proceeds of a mortgage are used to pay the outstanding balance under a land contract or mortgage if the requirements in this section are met. contract for deed, the mortgage may be considered either a purchase or a "no cash-out" refinance  A copy of the executed land contract or contract for deed must be included in the mortgage file. mortgage if the requirements in this section are met.  For the transaction to be considered a purchase transaction:  A copy of the executed land contract or contract for deed must be included in the mortgage file.  The land contract or contract for deed must have been executed less than 12 months prior to the  For transactions that involve the payoff of a land contract, the property seller is the vendor on the application received date recorded land contract and the Owner of Record of the subject property; and the borrower is a  All of the loan proceeds must be used to pay the outstanding balance under the land contract or vendee on the recorded land contract. contract for deed and no loan proceeds may be disbursed to the borrower.  For the transaction to be considered a purchase transaction:  The loan-to-value (LTV) ratio must be calculated using the lesser of the following:  The land contract or contract for deed must have been executed less than 12 months prior to the  The current appraised value of the mortgaged premises, or application received date  The total acquisition cost (the purchase price indicated in the original land contract or contract  All of the loan proceeds must be used to pay the outstanding balance under the land contract or for deed, plus any cost the borrower has expended for rehabilitation, renovation, refurbishment contract for deed and no loan proceeds may be disbursed to the borrower. or energy conservation improvements). The mortgage file must contain sufficient  The loan-to-value (LTV) ratio must be calculated using the lesser of the following: documentation on which to calculate the total acquisition cost.  The current appraised value of the mortgaged premises, or  For the transaction to be considered a ”no cash out” refinance transaction:  The total acquisition cost (the purchase price indicated in the original land contract or contract  The land contract or contract for deed must have been executed at least 12 months prior to the for deed, plus any cost the borrower has expended for rehabilitation, renovation, refurbishment application received date or energy conservation improvements). The mortgage file must contain sufficient  The LTV ratio must be calculated using the current appraised value of the mortgaged premises documentation on which to calculate the total acquisition cost.  The mortgage file must include third-party documentation evidencing payments in accordance with  For the transaction to be considered a "no cash-out" refinance transaction: the land contract or contract for deed for the most recent 12-month period.  The land contract or contract for deed must have been executed at least 12 months prior to the  The mortgage must meet the requirements for ”no cash out” refinance mortgages subsequently application received date presented in this document.  The LTV ratio must be calculated using the current appraised value of the mortgaged premises  The mortgage file must include third-party documentation evidencing payments in accordance with the land contract or contract for deed for the most recent 12-month period.  The mortgage must meet the requirements for "no cash-out" refinance mortgages subsequently presented in this document.

Last Revision Date: 05/26/2017 (Correspondent) Page 5 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017 Lender Correspondent  HomeReady™ Eligible Loan Products / Transactions Eligible Loan Products / Transactions Funded Section 2.02 Mortgage Temporary The ARM (non-AUS & The following table shows eligible loan products and transaction types for the ARM Alternative loan program. The following table shows eligible loan products and transaction types for the ARM Alternative loan program. Buydowns / Alternative DU) ARM  Home Loan Product Transaction Type Loan Product Transaction Type Alternative Possible® Agency Fixed Rate Purchase (All Underwriting Methods) Agency Fixed Rate Purchase (All Underwriting Methods) Mortgage Rate/Term Refinance (Non-AUS and DU Only) Rate/Term Refinance (Non-AUS and DU Only) (LPA) Agency Plus Fixed Rate Purchase (DU & LPA) Agency Plus Fixed Rate Purchase (DU & LPA) Rate/Term Refinance (DU Only) Rate/Term Refinance (DU Only) FHA Purchase HomeReady Fixed Rate Purchase VA Purchase Home Possible Fixed Rate Purchase FHA Purchase Note: Credit score requirements apply. VA Purchase

Reference: Refer to the product descriptions for each loan type for additional product requirements. Note: Credit score requirements apply.

Reference: Refer to the product descriptions for each loan type for additional product requirements.

Secondary Correspondent  Standard General General Financing Section 2.01 Agency (non- Agency Loan AUS, DU & Non-AUS Non-AUS Programs- LPA)  Institutional (including Community Seconds® mortgages), privately held, and seller held seconds are  Fannie Mae purchases or securitizes first-lien mortgages that are subject to subordinate financing. Guideline  Agency Plus permitted. Fannie Mae purchases or securitizes first-lien mortgages that are subject to subordinate  Subordinate liens must be recorded and clearly subordinate to Fannie Mae’s first mortgage lien. (DU & LPA) financing.  Lenders must disclose the existence of subordinate financing and the subordinate financing repayment  Texas Cash- terms to Fannie Mae, the appraiser, and the mortgage insurer. Out Refi (DU) Note: “Community Seconds” is Fannie Mae’s terminology for a subsidized second mortgage typically made  If a first mortgage is subject to subordinate financing, the lender must calculate the LTV, TLTV, and HTLTV by a federal, state, or local government agency, a nonprofit organization, or an employer. See the ratios. “Community Seconds/Affordable Seconds” subtopic for additional guidance.  Acceptable Subordinate Financing Types  Subordinate liens must be recorded and clearly subordinate to Fannie Mae’s first mortgage lien.  Acceptable subordinate financing types include the following:  Lenders must disclose the existence of subordinate financing and the subordinate financing repayment  Institutional (including Community Seconds® mortgages), privately held, and seller held seconds terms to Fannie Mae, the appraiser, and the mortgage insurer.  If a first mortgage is subject to subordinate financing, the lender must calculate the LTV, TLTV, and HTLTV Note: “Community Seconds” is Fannie Mae’s terminology for a subsidized second mortgage ratios. typically made by a federal, state, or local government agency, a nonprofit organization, or an employer. See the “Community Seconds® (Fannie Mae) / Affordable Seconds® (Freddie Mac)”  Acceptable Subordinate Financing Types subtopic, subsequently presented in this document for additional guidance.  Variable payment mortgages that comply with the details below.  Mortgages with regular payments that cover at least the interest due so that negative amortization  Variable payment mortgages that comply with the details outlined in the “Eligible Variable does not occur. Payment Terms for Subordinate Financing” section below  Mortgages with deferred payments in connection with employer subordinate financing.  Mortgages with regular payments that cover at least the interest due so that negative amortization does not occur. Reference: See the Employer Assistance guidelines for additional guidance.  Mortgages with deferred payments in connection with employer subordinate financing (see below)  Mortgage terms that require interest at a market rate.  Mortgage terms that require interest at a market rate. Note: If financing provided by the property seller is more than 2% below current standard rates for second mortgages, the subordinate financing must be considered a sales concession and the Note: If financing provided by the property seller is more than 2% below current standard rates subordinate financing amount must be deducted from the sales price. for second mortgages, the subordinate financing must be considered a sales concession and the subordinate financing amount must be deducted from the sales price.  Secondary financing (new or existing) which could impose a penalty for prepayment is acceptable. Last Revision Date: 05/26/2017 (Correspondent) Page 6 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017  Secondary financing (new or existing) which could impose a penalty for prepayment is  Unacceptable Subordinate Financing Terms acceptable.  Mortgages with negative amortization (with the exception of employer subordinate financing and certain community seconds that have deferred payments).  Unacceptable Subordinate Financing Terms  Unacceptable subordinate financing terms include the following: Reference: See the “Community Seconds/Affordable Seconds” subtopic for additional information  Mortgages with negative amortization (with the exception of employer subordinate financing regarding the acceptability of a Community Seconds mortgage with negative amortization. and certain community seconds that have deferred payments).

 Subordinate financing that does not fully amortize under a level monthly payment plan where the Reference: See the “Community Seconds® (Fannie Mae) / Affordable Seconds® (Freddie Mac)” maturity or balloon payment date is less than five years after the note date of the new first mortgage and “Employer Assistance” subtopics, subsequently presented in this document for additional (with the exception of employer subordinate financing that has deferred payments). information regarding the acceptability of a Community Seconds mortgage and employer subordinate financing with negative amortization. Note: Fannie Mae will accept these subordinate financing terms when the amount of the subordinate debt is minimal relative to the borrower's financial assets and/or credit profile. SunTrust Mortgage  Subordinate financing that does not fully amortize under a level monthly payment plan where considers the debt to be minimal when the borrower has sufficient assets available to pay off the the maturity or balloon payment date is less than five years after the note date of the new first outstanding balance in addition to the required funds to complete the transaction. However, mortgage (with the exception of employer subordinate financing that has deferred payments). SunTrust does not require actual payoff of the account. Note: Fannie Mae will accept these subordinate financing terms when the amount of the  Eligible Variable Payment Terms for Subordinate Financing subordinate debt is minimal relative to the borrower's financial assets and/or credit  Fannie Mae permits variable payments for subordinate financing if the following provisions are met: profile. SunTrust Mortgage considers the debt to be minimal when the borrower has sufficient  With the exception of HELOCs, when the repayment terms provide for a variable interest rate, assets available to pay off the outstanding balance in addition to the required funds to complete the monthly payment must remain constant for each 12-month period over the term of the the transaction. However, SunTrust Mortgage does not require actual payoff of the account. subordinate lien mortgage. (For HELOCs, the monthly payment does not have to remain constant.)  Eligible Variable Payment Terms for Subordinate Financing  The monthly payments for all subordinate liens must cover at least the interest due so that  Fannie Mae permits variable payments for subordinate financing if the following provisions are met: negative amortization does not occur (with the exception of employer subordinate financing and  With the exception of HELOCs, when the repayment terms provide for a variable interest rate, certain community seconds that have deferred payments). the monthly payment must remain constant for each 12-month period over the term of the subordinate lien mortgage. (For HELOCs, the monthly payment does not have to remain Reference: See the “Community Seconds/Affordable Seconds” subtopic for additional constant.) information regarding the acceptability of a Community Seconds mortgage with negative  The monthly payments for all subordinate liens must cover at least the interest due so that amortization. negative amortization does not occur (with the exception of employer subordinate financing and certain community seconds that have deferred payments).  Eligible Repayment Terms for Employer Subordinate Financing:  See the Employer Assistance guidelines for additional guidance. Reference: See the “Community Seconds® (Fannie Mae) / Affordable Seconds® (Freddie Mac)” and “Employer Assistance” subtopics, subsequently presented in this document, for additional  Resubordination Requirements for Refinance Transactions information regarding the acceptability of a Community Seconds mortgage and employer  If subordinate financing is left in place in connection with a first mortgage loan refinance transaction, subordinate financing with negative amortization. Fannie Mae requires execution and recordation of a resubordination agreement.  If state law permits subordinate financing to remain in the same subordinate lien position established  Eligible Repayment Terms for Employer Subordinate Financing with the prior first mortgage loan that is being refinanced, Fannie Mae does not require  If the subordinate financing is from the borrower’s employer, it does not have to require regular resubordination. The subordinate lien must satisfy any specified criteria of the applicable statutes. payments of either principal and interest or interest only. Employer subordinate financing may be structured in any of the following ways: Note: Title insurance against the fact that a former junior lien is not properly subordinated to the  fully amortizing level monthly payments, refinance loan does not release lenders from compliance with these resubordination requirements, or  deferred payments for some period before changing to fully amortizing level payments, from Fannie Mae’s requirement that the property is free and clear of all encumbrances and liens  deferred payments over the entire term, or having priority over Fannie Mae’s mortgage loan.  forgiveness of the debt over time.  The financing terms may provide for the employer to require full repayment of the debt if the borrower’s employment is terminated (either voluntarily or involuntarily) before the maturity date of the subordinate financing.

Last Revision Date: 05/26/2017 (Correspondent) Page 7 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017  Defining Refinance Transactions Based on Subordinate Lien Payoff Reference: See the “Employer Assistance” subtopic, subsequently presented in this document, for Refinance transaction includes Then lenders must underwrite Comments additional information. payoff of the first lien and… the transaction as a …  Resubordination Requirements for Refinance Transactions The payoff of a purchase money Limited cash-out refinance N/A  If subordinate financing is left in place in connection with a first mortgage loan refinance transaction, second with no cash out Fannie Mae requires execution and recordation of a resubordination agreement. The payoff of a non-purchase Cash-out refinance N/A  If state law permits subordinate financing to remain in the same subordinate lien position established money second, regardless of with the prior first mortgage loan that is being refinanced, Fannie Mae does not require whether additional cash out is resubordination. The subordinate lien must satisfy any specified criteria of the applicable statutes. taken The subordinate financing is Limited cash-out refinance The subordinate Note: Title insurance against the fact that a former junior lien is not properly subordinated to the being left in place, regardless of lien must be refinance loan does not release lenders from compliance with these resubordination requirements, or whether the subordinate resubordinated to from Fannie Mae’s requirement that the property is free and clear of all encumbrances and liens financing was used to purchase the new first having priority over Fannie Mae’s mortgage loan. the property, and the borrower is mortgage loan. not taking cash out except to the  Defining Refinance Transactions Based on Subordinate Lien Payoff extent permitted for a limited cash-out refinance transaction Refinance transaction includes Then lenders must underwrite Comments The subordinate financing is Cash-out refinance The subordinate payoff of the first lien and… the transaction as a … being left in place, regardless of lien must be The payoff of a purchase Limited cash-out refinance N/A whether the subordinate resubordinated to money second with no cash out financing was used to purchase the new first The payoff of a non-purchase Cash-out refinance N/A the property, and the borrower is mortgage loan. money second, regardless of taking cash out whether additional cash out is taken Fannie Mae DU The subordinate financing is Limited cash-out refinance The subordinate  Follow DU requirements which are the same as non-AUS guidelines, in addition to the following: being left in place, regardless of lien must be  In all cases, the first mortgage data must include secondary financing data so that the accurate TLTV is whether the subordinate resubordinated to evaluated. financing was used to purchase the new first  under the terms of this section. the property, and the borrower mortgage loan. is not taking cash out except to Freddie Mac LPA the extent permitted for a  General requirements limited cash-out refinance  Secondary financing is all financing that is subordinate in lien priority to the first lien mortgage. transaction ®  Institutional (including Affordable Seconds mortgages), privately held, and seller held seconds are The subordinate financing is Cash-out refinance The subordinate permitted. Freddie Mac will purchase first lien mortgages with secondary financing under the terms being left in place, regardless of lien must be of this section. whether the subordinate resubordinated to financing was used to purchase the new first Note: “Affordable Seconds” is Freddie Mac’s terminology for subsidized secondary financing or other the property, and the borrower mortgage loan. type of financial assistance, evidenced in land records, that is provided by an Agency and meets is taking cash out affordable seconds requirements. See the “Community Seconds® (Fannie Mae) /Affordable Seconds® (Freddie Mac)” subtopic for additional guidance. Fannie Mae DU  Follow DU requirements which are the same as non-AUS guidelines, in addition to the following:  Terms of any secondary financing must be disclosed to the appraiser and to the MI company. The  In all cases, the first mortgage data must include secondary financing data so that the accurate TLTV is terms of the secondary financing that must be disclosed include, but are not limited to, the Note Rate evaluated. and the institution or individual providing the financing. The lender may not indicate a value needed to support the transaction, or provide any information to the appraiser about an expected LTV ratio. Freddie Mac LPA  Except as specifically stated in the “Community Seconds® (Fannie Mae) / Affordable Seconds® Follow LPA requirements, which are as follows: Last Revision Date: 05/26/2017 (Correspondent) Page 8 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017 (Freddie Mac)” subtopic (subsequently presented in this topic) with respect to Affordable Seconds®,  General requirements the terms of secondary financing must not permit the provider or another party to share in the  Secondary financing is all financing that is subordinate in lien priority to the first lien mortgage. appreciation of the mortgaged premises (equity sharing).  Institutional (including Affordable Seconds® mortgages), privately held, and seller held seconds are permitted. Freddie Mac will purchase first lien mortgages with secondary financing under the terms  Special requirements for new secondary financing of this section.  Secondary financing originated concurrently with the first lien mortgage (i.e., the first lien mortgage and the junior lien are originated on the same day) must meet the following requirements: Note: “Affordable Seconds” is Freddie Mac’s terminology for subsidized secondary financing or other  Maturity Date: type of financial assistance, evidenced in land records, that is provided by an Agency and meets  The maturity date or amortization basis of the junior lien must not be less than five years affordable seconds requirements. See the “Community Seconds® (Fannie Mae) / Affordable Seconds® after the Note Date of the first lien mortgage delivered to Freddie Mac, unless the junior (Freddie Mac)” subtopic, subsequently presented in this document, for additional guidance. lien is fully amortizing or a Home Equity Line of Credit (HELOC). In addition, the junior lien must not contain a call provision within the five-year period, unless the junior lien is a  Terms of any secondary financing must be disclosed to the appraiser and to the MI company. The HELOC. terms of the secondary financing that must be disclosed include, but are not limited to, the note rate and the institution or individual providing the financing. The lender may not indicate a value needed SunTrust Mortgage Note: With respect to the terms of a HELOC that may provide for a to support the transaction, or provide any information to the appraiser about an expected LTV ratio. balloon or call option within the first five years after the Note Date of the First Lien  Except as specifically stated in the “Community Seconds® (Fannie Mae) / Affordable Seconds® Mortgage, SunTrust Mortgage will accept these subordinate financing terms when the (Freddie Mac)” subtopic (subsequently presented in this topic) with respect to Affordable Seconds®, amount of the subordinate debt is minimal relative to the borrower's financial assets the terms of secondary financing must not permit the provider or another party to share in the and/or credit profile. SunTrust Mortgage considers the debt to be minimal when the appreciation of the mortgaged premises (equity sharing). borrower has sufficient assets available to pay off the outstanding balance in addition to the required funds to complete the transaction. However, SunTrust Mortgage does not  Special requirements for new secondary financing require actual payoff of the account.  Secondary financing originated concurrently with the first lien mortgage (i.e., the first lien mortgage and the junior lien are originated on the same day) must meet the following requirements:  If the secondary financing is an Employer Assisted Homeownership (EAH) Benefit, see the  Maturity Date Employer Assistance subtopic for guidance.  The maturity date or amortization basis of the junior lien must not be less than five years after the note date of the first lien mortgage delivered to Freddie Mac, unless the junior  Scheduled Payments: lien is fully amortizing or a Home Equity Line of Credit (HELOC). In addition, the junior lien  The terms of the secondary financing must provide for regular monthly payments must not contain a call provision within the five-year period, unless the junior lien is a sufficient to meet the interest due; interest may not accrue. HELOC.  If the secondary financing is an EAH Benefit and the monthly payment of principal and interest or interest only begins on or after the 61st monthly payment under the first lien SunTrust Mortgage Note: With respect to the terms of a HELOC that may provide for a mortgage or if repayment of the principal is due only upon sale or default, the amount of balloon or call option within the first five years after the note date of the first lien the monthly payment may be excluded from the monthly housing expense-to-income ratio mortgage, SunTrust Mortgage will accept these subordinate financing terms when the and monthly debt payment-to-income ratio. Otherwise, the required monthly payment amount of the subordinate debt is minimal relative to the borrower's financial assets must be included in both the ratios. and/or credit profile. SunTrust Mortgage considers the debt to be minimal when the borrower has sufficient assets available to pay off the outstanding balance in addition to  Documentation Requirements: the required funds to complete the transaction. However, SunTrust Mortgage does not  The lender must include a copy of the following documentation in the mortgage file: require actual payoff of the account.  Note or other evidence of subordinate lien terms  Settlement/Closing Disclosure Statement that evidences the fees and costs paid by  If the secondary financing is an Employer Assisted Homeownership (EAH) Benefit, the the borrower at closing in connection with the secondary financing terms of the secondary financing must permit the borrower to continue making payments  For HELOCs, the HELOC agreement indicating all fees and costs paid by the borrower on the loan in the event the borrower no longer works for the employer and may not at closing, and the maximum permitted credit advance. require repayment in full unless:  The borrower terminates his or her employment for any reason, or  Special requirements for existing secondary financing  The employer terminates the borrower's employment for any reason other than long-  Freddie Mac will purchase first lien refinance mortgages with existing junior liens (including HELOCs) term disability, the elimination of the employee's position or reduction-in-force that are not paid off from the proceeds of the refinance mortgage provided that:  Evidence of subordination of outstanding secondary financing is retained in the mortgage file.  Scheduled Payments  The junior lien has scheduled payments sufficient to meet the interest due.  The terms of the secondary financing must provide for regular monthly payments

Last Revision Date: 05/26/2017 (Correspondent) Page 9 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017 sufficient to meet the interest due; interest may not accrue.  If the secondary financing is an EAH Benefit and the monthly payment of principal and interest or interest only begins on or after the 61st monthly payment under the first lien mortgage or if repayment of the principal is due only upon sale or default, the amount of the monthly payment may be excluded from the monthly housing expense-to-income ratio and monthly debt payment-to-income ratio. Otherwise, the required monthly payment must be included in both the ratios.

 Documentation Requirements  The lender must include a copy of the following documentation in the mortgage file:  Note or other evidence of subordinate lien terms  Settlement/Closing Disclosure Statement that evidences the fees and costs paid by the borrower at closing in connection with the secondary financing  For HELOCs, the HELOC agreement indicating all fees and costs paid by the borrower at closing, and the maximum permitted credit advance.

 Special requirements for existing secondary financing  Freddie Mac will purchase first lien refinance mortgages with existing junior liens (including HELOCs) that are not paid off from the proceeds of the refinance mortgage provided that:  Evidence of subordination of outstanding secondary financing is retained in the mortgage file.  The junior lien has scheduled payments sufficient to meet the interest due.

Community Seconds® (Fannie Mae) / Affordable Seconds® (Freddie Mac) Community Seconds® (Fannie Mae) / Affordable Seconds® (Freddie Mac)

Note: Below is an EXCERPT only of the non-AUS guidance from the above referenced section. All other currently Note: Below is an EXCERPT only of the non-AUS guidance from the above referenced section. All other currently published non-AUS guidelines remain the same. published non-AUS guidelines remain the same.

Non-AUS Non-AUS  Community Seconds Mortgage Terms/Proceeds  Community Seconds Mortgage Terms/Proceeds  A Community Seconds mortgage may be funded by a municipality, state, county, state or local  A Community Seconds mortgage may be funded by a federal agency, municipality, state, county, state housing finance agency, non-profit organization, a regional Federal Home Loan Bank under one of its or local housing finance agency, non-profit organization, a regional Federal Home Loan Bank under affordable housing programs, or an employer. It may not be funded by the property seller or any one of its affordable housing programs, or an employer. It may not be funded by the property seller other interested party to the transaction; however, a lender may fund a Community Seconds or any other interested party to the transaction; however, a lender may fund a Community Seconds mortgage that an employer guarantees as part of its affordable housing program. mortgage that an employer guarantees as part of its affordable housing program.  The Community Seconds financing must be subordinate to the first mortgage purchased by Fannie  The Community Seconds financing must be subordinate to the first mortgage purchased by Fannie Mae. Mae.  SunTrust Mortgage clarifies that Fannie Mae does not allow a HELOC as a community second or in  SunTrust Mortgage clarifies that Fannie Mae does not allow a HELOC as a community second or in conjunction with a community second. conjunction with a community second.  A borrower of a mortgage loan secured by a principal residence may use funds received from a  A borrower of a mortgage loan secured by a primary residence may use funds received from a Community Seconds mortgage to fund all or part of the down payment or closing costs, renovations Community Seconds mortgage to fund all or part of the down payment or closing costs, renovations to the property, or to fund a permanent interest rate buydown. to the property, or to fund a permanent interest rate buydown.  Community Seconds are not allowed on second homes or investment properties.  Community Seconds are not allowed on second homes or investment properties.

 Minimum Borrower Contribution Requirements  Minimum Borrower Contribution Requirements Currently published guidelines remain the same. Currently published guidelines remain the same.

Last Revision Date: 05/26/2017 (Correspondent) Page 10 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017  Repayment  Repayment Currently published guidelines remain the same. Currently published guidelines remain the same.

 Subsidizing the Sales Price  Subsidizing the Sales Price Not eligible Not eligible

 Provider’s Share in Appreciation in Value  Provider’s Share in Appreciation in Value Currently published guidelines remain the same: Currently published guidelines remain the same.

 For SunTrust Internal Employees Only: SFC 118 must be captured when a first mortgage is originated as  Special Feature Code Requirement: SFC 118 must be captured when a first mortgage is originated as part part of a Community Seconds transaction. All other applicable special feature codes must also get captured of a Community Seconds transaction. All other applicable special feature codes must also get captured accordingly. accordingly.

Fannie Mae DU Fannie Mae DU Follow DU requirements, which are the same as non-AUS guidelines. Follow DU requirements, which are the same as non-AUS guidelines.

Freddie Mac LP Freddie Mac LPA  Affordable Seconds must comply with the “General Requirements” outlined in the “Secondary Financing / Follow LPA requirements, which are as follows: General” topic previously presented in this document and the requirements outlined in this section,  Affordable Seconds must comply with the “General Requirements” outlined in the “Secondary Financing / regardless of whether they are originated concurrently (i.e., the first lien mortgage and the Affordable General” topic previously presented in this document and the requirements outlined in this section, Second are originated on the same day) or are being subordinated to the first lien mortgage in a refinance regardless of whether they are originated concurrently (i.e., the first lien mortgage and the Affordable transaction. Second are originated on the same day) or are being subordinated to the first lien mortgage in a refinance  For SunTrust Internal Employees Only: Use SFC 583 to identify a loan with a subordinate Affordable transaction. Second.  Special Feature Code Requirement: Use SFC 583 to identify a loan with a subordinate Affordable Second.

 Source  Source  An Affordable Second must be provided by an Agency under an established, ongoing, documented  An Affordable Second must be provided by an Agency under an established, ongoing, documented secondary financing or financial assistance program. secondary financing or financial assistance program.  The source of the Affordable Second must not be the property seller or another interested party to  The source of the Affordable Second must not be the property seller or another interested party to the transaction. the transaction.

 Eligible First Lien Mortgages  Eligible First Lien Mortgages  The first lien mortgage must be:  The first lien mortgage must be:  A fixed-rate mortgage or an ARM with an initial fixed-rate period of five years or greater  A fixed-rate mortgage or an ARM with an initial fixed-rate period of five years or greater  A purchase transaction or a "no cash-out" refinance, and  A purchase transaction or a "no cash-out" refinance, and  Secured by a 1- to 4-unit primary residence  Secured by a 1- to 4-unit primary residence

 Maturity date  Maturity date  The terms of the Affordable Second must not require a balloon payment due before the maturity or  The terms of the Affordable Second must not require a balloon payment due before the maturity or payment in full of the first Lien mortgage. payment in full of the first Lien mortgage.  If the Affordable Second is an Employer Assisted Homeownership (EAH) Benefit, the terms of the  If the Affordable Second is an Employer Assisted Homeownership (EAH) Benefit, the terms of the secondary financing must permit the borrower to continue making payments on the loan in the event secondary financing must permit the borrower to continue making payments on the loan in the event the borrower no longer works for the employer and may not require repayment in full unless: the borrower no longer works for the employer and may not require repayment in full unless:  The borrower terminates his or her employment for any reason, or  The borrower terminates his or her employment for any reason, or  The employer terminates the borrower’s employment for any reason other than long-term  The employer terminates the borrower’s employment for any reason other than long-term disability, the elimination of the employee’s position or reduction-in-force. disability, the elimination of the employee’s position or reduction-in-force.

 Scheduled payments  Scheduled payments  The interest rate of the Affordable Second must not be more than 2% higher than the interest rate of  The interest rate of the Affordable Second must not be more than 2% higher than the interest rate of Last Revision Date: 05/26/2017 (Correspondent) Page 11 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017 the first lien mortgage. Interest accruals, which are added to principal, may not increase the total LTV the first lien mortgage. Interest accruals, which are added to principal, may not increase the total LTV (TLTV) ratio beyond the maximum TLTV ratio allowed for the first lien mortgage at any time during the (TLTV) ratio beyond the maximum TLTV ratio allowed for the first lien mortgage at any time during the term of the first lien mortgage. term of the first lien mortgage.  If monthly payments on the Affordable Second are required and begin before the 61st monthly  If monthly payments on the Affordable Second are required and begin before the 61st monthly payment under the First Lien Mortgage, such monthly payments must be included in the Borrower's payment under the first lien mortgage, such monthly payments must be included in the borrower's monthly housing expense-to-income ratio and monthly debt payment-to-income ratio. If monthly monthly housing expense-to-income ratio and monthly debt payment-to-income ratio. If monthly payments on the Affordable Second begin on or after the 61st monthly payment under the First Lien payments on the Affordable Second begin on or after the 61st monthly payment under the first lien Mortgage or if repayment of the entire Affordable Second amount is due only upon sale or default, mortgage or if repayment of the entire Affordable Second amount is due only upon sale or default, the amount of the Affordable Second monthly payment may be excluded from both ratios. the amount of the Affordable Second monthly payment may be excluded from both ratios.

 Participation in appreciation (equity sharing)  Participation in appreciation (equity sharing)  When the terms of an Affordable Second permit the Agency to share in the appreciation of the  When the terms of an Affordable Second permit the Agency to share in the appreciation of the Mortgaged Premises, the following requirements must be met: mortgaged premises, the following requirements must be met:  At the time of origination of the Affordable Second, the Agency's share of appreciation, as a  At the time of origination of the Affordable Second, the Agency's share of appreciation, as a percentage, must not exceed the principal amount of the Affordable Second divided by value, percentage, must not exceed the principal amount of the Affordable Second divided by value, ("the percentage of the Affordable Second"), except as stated below. For example, if the ("the percentage of the Affordable Second"), except as stated below. For example, if the Affordable Second amount is 5% of value, the maximum share of appreciation is 5%. Affordable Second amount is 5% of value, the maximum share of appreciation is 5%.  The terms of the Affordable Second may permit the provider a share of appreciation exceeding  The terms of the Affordable Second may permit the provider a share of appreciation exceeding the percentage of the Affordable Second if all of the following requirements are met: the percentage of the Affordable Second if all of the following requirements are met:  The Agency must not charge interest on the Affordable Second  The Agency must not charge interest on the Affordable Second  The Agency's share of appreciation must not exceed 75%  The Agency's share of appreciation must not exceed 75%  The Agency's share of appreciation must be reduced to the percentage of the Affordable  The Agency's share of appreciation must be reduced to the percentage of the Affordable Second, or below, within the first five years Second, or below, within the first five years  The terms of the Affordable Second must allow the borrower to recover all of the following  The terms of the Affordable Second must allow the borrower to recover all of the following before the Agency is able to share in the appreciation: before the Agency is able to share in the appreciation:  The down payment paid from borrower funds  The down payment paid from borrower funds  Customary costs incurred by the borrower for selling the property  Customary costs incurred by the borrower for selling the property  Costs for improvements to the property that were allowed by the Agency or under  Costs for improvements to the property that were allowed by the Agency or under the Agency's program the Agency's program  The payments of principal of the first lien mortgage  The payments of principal of the first lien mortgage

 Land Use Restrictions  Land Use Restrictions  Any Land Use Restrictions included in the Affordable Second documentation must:  Any land use restrictions included in the Affordable Second documentation must:  Be subject to and subordinate to the first lien mortgage, and  Be subject to and subordinate to the first lien mortgage, and  Terminate upon payment in full of the Affordable Second, or  Terminate upon payment in full of the Affordable Second, or  Satisfy the requirements for properties with resale restrictions.  Satisfy the requirements for properties with resale restrictions.

 Financing structure  Financing structure  The Affordable Second financing cannot be a HELOC.  The Affordable Second financing cannot be a HELOC.

 Documentation requirements  Documentation requirements  The lender must include a copy of the following documentation for the Affordable Second in the  The lender must include a copy of the following documentation for the Affordable Second in the mortgage file: mortgage file:  Note or other evidence of terms for the Affordable Second  Note or other evidence of terms for the Affordable Second  Settlement Statement or equivalent closing statement that evidences the fees and costs paid by  Settlement/Closing Disclosure Statement that evidences the fees and costs paid by the borrower the borrower at closing in connection with a new Affordable Second at closing in connection with a new Affordable Second  For refinance transactions, evidence of subordination of an existing Affordable Second  For refinance transactions, evidence of subordination of an existing Affordable Second

Last Revision Date: 05/26/2017 (Correspondent) Page 12 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017 Underwriting Correspondent  Standard Freddie Mac LPA Loans Freddie Mac LPA Loans the Borrower Section 2.01 Agency (LPA) Note: Below is an EXCERPT only of the LPA guidance from the above referenced section. All other currently Notes: Agency Loan  Agency Plus published LPA guidelines from this section remain the same.  Below is an EXCERPT only of the LPA guidance from the above referenced section. All other currently Programs- (LPA) published LPA guidelines from this section remain the same. Unique additional Home Possible resubmission Guideline  Submission/resubmission requirements requirements are provided in the new Home Possible product description.  The Risk Class and Documentation Level on the Last Feedback Certificate must be based on  SFC 912 requirement is being eliminated. submission of accurate data to Loan Prospector. Resubmission of a Mortgage to Loan Prospector is required if:  Resubmission Requirements/Loan Product Advisor® Tolerances  Information on the previous submission was not true, complete or accurate  A mortgage may be resubmitted to Loan Product Advisor® however, the Risk and/or Documentation  The most recent submission on or before the Note Date (including the date of the Loan Classes might change. Loan Product Advisor minimizes the number of times that the Documentation Prospector credit report(s)) exceeds the date requirements for credit reports; resubmission must Class will change, even if the Risk Class changes. occur on or before the Note Date,  Any information submitted to Loan Prospector changes; however, a change from the previous  Resubmission Required submission involving the following does not require resubmission:  The Risk Class and Documentation Level on the Last Feedback Certificate must be based on  Debts/income: submission of accurate data to Loan Product Advisor. Except as indicated in this section,  The monthly debt payment (including monthly housing expense decreases resubmission of a mortgage to Loan Product Advisor prior to the delivery date is required  The income for any Borrower increases; however, for Home Possible Mortgages, if: resubmission is required if the income used to qualify the Borrower increases  Information on the previous submission was not true, complete or accurate  The income for any Borrower decreases and/or the monthly debt payment (including  The most recent submission on or before the note date, (including the date of the monthly housing expense) increases, and Loan Product Advisor credit report(s)) exceeds the date requirements for credit  The total difference does not change the total debt-to-income ratio by more reports; resubmission must occur on or before the note date than three percentage points, and  Any information submitted to Loan Product Advisor changes, except as indicated  The total debt-to-income ratio on the previous submission did not exceed 45% below  Assets/reserves:  If resubmission of a mortgage to Loan Product Advisor is after the note date, but prior to  The amount of verified assets increases purchase by SunTrust Mortgage, refer to the “Resubmission to Loan Product Advisor After  The amount of verified reserves increases the Note Date” subsection presented below for additional requirements.  The amount of verified reserves decreases to an amount that is no less than the reserves required to be verified on the Feedback Certificate  Resubmission Not Required  Loan amount:  A change from the previous submission involving the following does not require  The loan amount decreases by no more than 1% on a refinance transaction and at the resubmission: time of the most recent Loan Prospector submission mortgage insurance is not  Debts/Income required on the Mortgage  The monthly debt payment (including monthly housing expense decreases  The loan amount decreases by no more than 1% on a refinance transaction and at the  The income for any borrower increases time of the most recent Loan Prospector submission mortgage insurance on the  The income for any borrower decreases and/or the monthly debt payment Mortgage is required, and (including monthly housing expense) increases, and  The change does not impact the amount of the mortgage insurance coverage,  The total difference does not change the total debt-to-income ratio by and more than three percentage points, and  The amount of the mortgage insurance premium collected by the Seller is based  The total debt-to-income ratio on the previous submission did not exceed on the new loan amount and the Seller obtains a new mortgage insurance 45% certificate  Any other changes in the information submitted to Loan Prospector require resubmission.  Assets/Reserves  If a Mortgage is resubmitted to Loan Prospector, the Risk and/or Documentation Classes might  The amount of verified assets increases change. However, Loan Prospector minimizes the number of times that the Documentation Class will  The amount of verified reserves increases change, even if the Risk Class changes.  The amount of verified reserves decreases to an amount that is no less than the reserves required to be verified on the Feedback Certificate  Resubmission to Loan Prospector After the Note Date  The Lender should ensure that the information entered into Loan Prospector on or before the Note  Loan Amount Date, is true, complete, and accurate and matches the terms of the Mortgage. However, if the Lender  The loan amount decreases by no more than 1% on a refinance transaction and determines after the Note Date, that the information entered into Loan Prospector was not true, at the time of the most recent Loan Product Advisor submission mortgage Last Revision Date: 05/26/2017 (Correspondent) Page 13 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017 complete, and accurate and does not match the terms of the Mortgage, unless otherwise prohibited insurance is not required on the mortgage below, the Mortgage must be resubmitted to Loan Prospector after the Note Date, but prior to  The loan amount decreases by no more than 1% on a refinance transaction and purchase by SunTrust Mortgage, Inc. The Lender must select "Post Closing Quality Control" as the at the time of the most recent Loan Product Advisor submission mortgage Loan Processing Stage. A Mortgage cannot be resubmitted to Loan Prospector after the Note Date if: insurance on the mortgage is required, and  Resubmission is more than 120 days after the Loan Prospector Assessment Expiration Date  The change does not impact the amount of the mortgage insurance displayed on the Feedback Certificate in effect as of the Note Date; or coverage, and  A Borrower is being added or deleted, or a change is being made to a Borrower's last name or  The amount of the mortgage insurance premium collected by the lender is Social Security Number; or based on the new loan amount and the lender obtains a new mortgage  A new credit report company needs to be selected; or insurance certificate  The single or joint merged credit report indicator changes; or  The order of Borrowers changes on a joint merged credit request; or  Any other changes in the information submitted to Loan Product Advisor require  The merged credit report number does not match the merged credit report number from the resubmission. most recent complete transaction  For SunTrust Internal Employees Only: SFC 912 must be captured when resubmission is after closing.  Resubmission to Loan Product Advisor After the Note Date  If the lender determines after the note date (but prior to purchase by SunTrust Mortgage) that the Reference: See General Section 1.04: Automated Underwriting and Section 1.05: Underwriting of the information entered into Loan Product Advisor® was not true, complete, and accurate and does not Correspondent Seller Guide, for additional information. match the terms of the mortgage to be delivered to Freddie Mac, except as otherwise permitted in “Resubmission Requirements/Loan Product Advisor Tolerance” section previously presented and unless otherwise prohibited below, the mortgage must be resubmitted to Loan Product Advisor after the note date, but prior to purchase by SunTrust Mortgage.  The lender must select "Post Closing Quality Control" as the Loan Processing Stage.  A mortgage cannot be resubmitted to Loan Product Advisor after the note date if:  Resubmission is more than 120 days after the Loan Product Advisor Assessment Expiration Date displayed on the Feedback Certificate in effect as of the note date; or  A borrower is being added or deleted, or a change is being made to a borrower's last name or Social Security Number; or  A new credit report company needs to be selected; or  The single or joint merged credit report indicator changes; or  The order of borrowers changes on a joint merged credit request; or  The merged credit report number does not match the merged credit report number from the most recent complete transaction

Reference: See General Section 1.04: Automated Underwriting and Section 1.05: Underwriting of the Correspondent Seller Guide, for additional information.

AUS Eligible Correspondent  HomeReady® AUS Eligible Loan Products Matrix AUS Eligible Loan Products Matrix Loan Products Section 1.04 Mortgage Matrix Automated (non-AUS & MORTGAGE PRODUCT DU ELIGIBLE LP ELIGIBLE NON-AUS MORTGAGE PRODUCT DU ELIGIBLE LPA ELIGIBLE NON-AUS Underwriting DU) ELIGIBLE ELIGIBLE  Home Agency 3/1, 5/1, 7/1 & 10/1 X X X Agency 3/1, 5/1, 7/1 & 10/1 ARMs X X X Possible® ARMs Agency Fixed Rate (10-30 Years) – X X X Mortgage Agency Fixed Rate (10-30 Years) – X X X Full Doc (LPA) Full Doc Agency Plus Loan Program X X  Texas Cash- Agency Plus Loan Program X X Agency Texas Section 50(a)(6) Cash- X Out Refi (DU) Fannie Mae DU Refi PlusTM Loan X out Refinance Program Fannie Mae DU Refi PlusTM Loan X FHA – Fixed Rate and FHA Jumbo X X X Program Key Loan Program X Fannie Mae HomeReady® X X VA – Fixed Rate and VA Jumbo X X X Freddie Mac Home Possible® X Last Revision Date: 05/26/2017 (Correspondent) Page 14 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017 FHA – Fixed Rate and FHA Jumbo X X X Key Loan Program X VA – Fixed Rate and VA Jumbo X X X

Conventional Correspondent  HomeReady® Conventional Delegated Underwriting / Delegated Underwriting Classification Conventional Delegated Underwriting / Delegated Underwriting Classification Delegated Section 1.05 Mortgage Underwriting Underwriting (non-AUS & Correspondent lenders who have been approved by SunTrust Mortgage, Inc. for delegated underwriting Correspondent lenders who have been approved by SunTrust Mortgage, Inc. for delegated underwriting DU) authority may underwrite and approve certain loas based on the following delegation levels: authority may underwrite and approve certain loans based on the following delegation levels:  Home Possible® Delegation Delegated Authority Delegation Delegated Authority Mortgage Level II  Eligible: Level II  Eligible: (LPA)  Agency Automated Underwriting Systems (AUS) loans including:  Agency Automated Underwriting Systems (AUS) loans including:  Agency (1-2 units)  Agency (1-2 units)  Agency Plus (1-2 units)  Agency Plus (1-2 units)  DU Refi PlusTM  DU Refi PlusTM  Agency Texas Section 50(a)(6) Cash-out Refinance  Agency Texas Section 50(a)(6) Cash-out Refinance  All eligible loans must receive one of the following eligible AUS  Fannie Mae HomeReady® (1-2 units) recommendations:  Freddie Mac Home Possible® (1-2 units)  Agency and Agency Plus  All eligible loans must receive one of the following eligible AUS  DU “Approve/Eligible” recommendations:  LP “Accept/Eligible”  Agency and Agency Plus  DU Refi PlusTM  DU “Approve/Eligible”  DU Refi Plus “Approve/Eligible”  LPA “Accept/Eligible”  Agency Texas Section 50(a)(6) Cash-out Refinance  DU Refi PlusTM  DU “Approve/Eligible”  DU Refi Plus “Approve/Eligible”  Agency Texas Section 50(a)(6) Cash-out Refinance  Ineligible:  DU “Approve/Eligible”  Non-AUS (Manually Underwritten Transactions)  Fannie Mae HomeReady®  Agency and/or Agency Plus with SunTrust secondary financing/subordinate  DU “Approve/Eligible” financing.  Freddie Mac Home Possible®  Key Loan Program  LPA “Accept/Eligible”  Jumbo Solution Second Mortgage Program  Loans that receive a DU/DO “Refer with Caution” recommendation are not  Ineligible: acceptable.  Non-AUS (Manually Underwritten Transactions)  Agency, Agency Plus, HomeReady and Home Possible mortgages with Reference: See the topic “Loans Underwritten by MI Contract Underwriting Services” SunTrust secondary financing/subordinate financing. within this document for additional requirements for submitting loans to MI Companies  Key Loan Program for underwriting purposes.  Jumbo Solution Second Mortgage Program Expanded  Eligible:  Loans that receive a DU/DO “Refer with Caution” recommendation are not  All loans eligible under Level II Authority acceptable.  Agency3-4 unit, AUS transactions  1-4 unit, non-AUS Reference: See the “Loans Underwritten by MI Contract Underwriting Services” topic  Agency Plus (3-4 units, AUS only) within this document for additional requirements for submitting loans to MI Companies for underwriting purposes.  Ineligible:  Agency and/or Agency Plus with SunTrust secondary financing/subordinate Expanded  Eligible: financing.  All loans eligible under Level II Authority

Last Revision Date: 05/26/2017 (Correspondent) Page 15 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017  Key Loan Program  Agency 3-4 units, AUS transactions  Jumbo Solution Second Mortgage Loan Program  Agency 1-4 units, non-AUS  Agency Plus 3-4 units, AUS only Reference: See the topic “Loans Underwritten by MI Contract Underwriting Services”  Fannie Mae HomeReady® 3-4 units, AUS transactions within this document for additional requirements for submitting loans to MI Companies  Fannie Mae HomeReady® 1-4 units, non-AUS for underwriting purposes.  Freddie Mac Home Possible® 3-4 units, AUS only

Expanded Plus  Eligible:  Ineligible:  All loan eligible under Expanded Authority  Agency, Agency Plus, HomeReady and Home Possible mortgages with  Key Loan Program transactions meeting the following requirements: SunTrust secondary financing/subordinate financing.  Loan Amount

 Ineligible Expanded Plus  Eligible:  Jumbo Solution Second Mortgage Loan Program  All loan eligible under Expanded Authority  Key Loan Program transactions not meeting the above criteria (must be  Key Loan Program transactions meeting the following requirements: underwritten by SunTrust Mortgage)  Loan Amount

Reference: The Correspondent Loan Purchase Agreement and any Purchase Agreement Component Advice  Ineligible notifications specify the lender’s level of delegated underwriting authority. Correspondent lenders are  Jumbo Solution Second Mortgage Loan Program responsible for underwriting loans within their delegated authority as indicated on their Purchase Agreement  Key Loan Program transactions not meeting the above criteria (must be Component Advice. underwritten by SunTrust Mortgage)

Reference: See the “Loans Underwritten by MI Contract Underwriting Services” topic within this document for additional requirements for submitting loans to MI Companies for underwriting purposes.

Reference: The Correspondent Loan Purchase Agreement and any Purchase Agreement Component Advice notifications specify the lender’s level of delegated underwriting authority. Correspondent lenders are responsible for underwriting loans within their delegated authority as indicated on their Purchase Agreement Component Advice.

Funding Correspondent  HomeReady® Funding Process / Funding Formula Funding Process / Funding Formula Formula Section 1.08 Mortgage Loan Delivery (non-AUS &  To derive the amount of purchase funds, the following items are added or subtracted from the loan  To derive the amount of purchase funds, the following items are added or subtracted from the loan and Purchase DU) amount. amount. Review  Home  Accrued interest (calculated on 360 days) from the funding date to the end of the month will be  Accrued interest (calculated on 360 days) from the funding date to the end of the month will be Possible® subtracted from the wire if the loan is funded in the same month as closing. subtracted from the wire if the loan is funded in the same month as closing. Mortgage  If the loan is funded in the month following closing, the interest will be paid to the correspondent.  If the loan is funded in the month following closing, the interest will be paid to the correspondent. Last Revision Date: 05/26/2017 (Correspondent) Page 16 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017 (LPA)  All correspondent loan closings will be charged the following applicable Document Review Fee(s),  All correspondent loan closings will be charged the following applicable Document Review Fee(s), which will be deducted from the wire: which will be deducted from the wire:

Delegated Document Review Fee $250 Delegated Document Review Fee $250 Delegated Document Review Fee Jumbo Surcharge (includes Agency Plus, VA and $130 Delegated Document Review Fee Jumbo Surcharge (includes Agency Plus, $130 FHA Jumbo) HomeReady High-Balance, VA and FHA Jumbo) Non-Delegated Division Document Review Fee* $635 Non-Delegated Division Document Review Fee* $635 Tax Service Fee $84 Tax Service Fee $84 Underwriting Fee (*Underwriting Fee will not be charged in addition to Non- $500 Underwriting Fee (*Underwriting Fee will not be charged in addition to Non- $500 Delegated Division Document Review Fee) Delegated Division Document Review Fee)

 Lenders should not disclose or charge a tax service fee unless they are ordering a tax service directly for  Lenders should not disclose or charge a tax service fee unless they are ordering a tax service directly for themselves. Please discuss the tax service fee with your compliance team for finance charge implications. themselves. Please discuss the tax service fee with your compliance team for finance charge implications.  Escrow deposits as collected on the Settlement Statement will be subtracted from the wire.  Escrow deposits as collected on the Settlement Statement will be subtracted from the wire.

Declining Correspondent  HomeReady® Overview / Guideline Summary Overview / Guideline Summary Market Section 1.09 Mortgage Guidelines Declining (non-AUS & Transaction Declining Market Transaction Declining Market Market DU) Guidelines  Home  Agency (all LTV/TLTVs),  Excluded from the Section 1.09: Declining Market Guidelines.  Agency (all LTV/TLTVs),  Excluded from the Section 1.09: Declining Market Guidelines. Possible®  Agency Plus, and Underwriters should follow Section 1.07: Appraisal  Agency Plus, Underwriters should follow Section 1.07: Appraisal Guidelines TM TM Mortgage  DU Refi Plus Guidelines of the Correspondent Seller Guide and the  DU Refi Plus of the Correspondent Seller Guide and the appraisal guidelines (LPA) appraisal guidelines within the applicable product  Agency Texas Section within the applicable product description.  Texas Cash- description. 50(a)(6) Cash-out Refinance Out Refi (DU)  Fannie Mae HomeReady®, Note: The appropriate level of due diligence should be performed to Note: The appropriate level of due diligence should be performed and ensure that the appraisal and collateral value are well supported. to ensure that the appraisal and collateral value are well  Freddie Mac Home Possible® supported.

2  Key Loan Program For properties located in a declining market, requirements in  Key Loan Program2 For properties located in a declining market, requirements in Section  Jumbo Solution Second Section 1.09: Declining Market Guidelines apply and will require a  Jumbo Solution Second 1.09: Declining Market Guidelines apply and will require a five Mortgage five percent, ten percent, or fifteen percent (5%, 10% or 15%) percent, ten percent, or fifteen percent (5%, 10% or 15%) reduction 1 Mortgage reduction to all LTV/TLTV limits. to all LTV/TLTV limits.1

 FHA, and  Excluded from the LTV/TLTV reduction AND appraisal  FHA, and  Excluded from the LTV/TLTV reduction AND appraisal  VA. requirements of Section 1.09: Declining Market Guidelines.  VA. requirements of Section 1.09: Declining Market Guidelines.  Follow the declining markets requirements set forth by HUD  Follow the declining markets requirements set forth by HUD and VA. and VA.

1 Refer to the SunTrust Mortgage Declining Market Index for applicable LTV/TLTV reduction. If the 1 Refer to the SunTrust Mortgage Declining Market Index for applicable LTV/TLTV reduction. If the property is deemed to be located in a declining market as noted by the appraiser, but the area in which property is deemed to be located in a declining market as noted by the appraiser, but the area in which the property is located is NOT reflected on the SunTrust Mortgage Declining Market Index, a 5% the property is located is NOT reflected on the SunTrust Mortgage Declining Market Index, a 5% reduction to the LTV/TLTV will be required. reduction to the LTV/TLTV will be required. 2 Refer to Section 2.06: Key Loan Program regarding the waiver of declining market reductions to the 2 Refer to Section 2.06: Key Loan Program regarding the waiver of declining market reductions to the maximum LTV/TLTV on rate/term refinances when the borrower’s current loan is a SunTrust portfolio maximum LTV/TLTV on rate/term refinances when the borrower’s current loan is a SunTrust portfolio

product. product.

Last Revision Date: 05/26/2017 (Correspondent) Page 17 of 18 Agency Guideline Revisions Note: SunTrust Mortgage specific overlays are underlined.

Impacted Revised Guidelines Topic Impacted Products Current Guidelines Document Effective Immediately for NEW AND EXISTING Loan Applications ON OR After May 26, 2017 Section 1.18 Correspondent All Loan Products Click here to view the current Section 1.18 document. Section 1.18 Loan Closing Documentation is being eliminated in its entirety. Specific closing documentation Loan Closing Section 1.18 required for each loan program is outlined in the applicable product description. This information will no longer Documenta- Loan Closing be duplicated with the publication of Section 1.18. tion Documentation

Last Revision Date: 05/26/2017 (Correspondent) Page 18 of 18