Jumbo FUEL Product Guidelines

Product Training January 2020

JANUARY 2021 TRAINING OVERVIEW - JUMBO AUS

Welcome to Orion Lending’s Jumbo AUS product introduction.

The intention of the training is to explore the key highlights and benefits of this Conventional, 30 year Fixed, Jumbo, Automated Underwriting System (AUS) - Desktop Underwriting (DU) product.

Orion Lending's vision is to be the leading lender in this Jumbo AUS loan product, by providing the best products and best practices. Orion Lending will provide and deliver an unprecedented value to our customers. INTRODUCTION TO JUMBO AUS SECTION 1 INTRODUCTION – JUMBO AUS

This Conventional 30-year fixed jumbo loan is a mortgage that exceeds the limit set by the FHFA for a given area by $1.

In most of the U.S., the 2021 maximum conforming loan limit for one-unit is $510,400. PRODUCT ELIGIBILITY SECTION 2 PRODUCT ELIGIBILITY – OVERVIEW

Overlays and Appendix - refer to the Fannie Mae Seller Guide for specific information concerning qualification requirements that are not specifically referenced in this high-level training materials.

All loans must be underwritten by Fannie Mae DU (DU) only.

DU Approved/Ineligible findings only. The Ineligible must be for Loan Amount exceeding the County Loan limit.

Manually underwritten loans and LP loans not permitted. PRODUCT ELIGIBILITY – AVAILABLE PRODUCTS

PURCHASE / RATE TERM REFINANCE - 30 YR FIXED

MIN CREDIT MIN OCCUPANCY NUMBER OF UNITS MAX LOAN AMOUNT LTV/CLTV MAX DTI SCORE RESERVES

1 Unit 80/80 Primary Residence $1,500,000 700 2 Unit 75/75 See Product 43% $1,000,000 80/80 720 Guidelines Second Home 1 Unit $1,500,000 80/80 740 PRODUCT ELIGIBILITY – AVAILABLE PRODUCTS

CASH OUT REFINANCE - 30 YR FIXED

MIN CREDIT MIN OCCUPANCY NUMBER OF UNITS MAX LOAN AMOUNT LTV/CLTV MAX DTI SCORE RESERVES

Primary Residence 75/75 700

See 1 Unit $1,000,000 Product 38% 70/70 740 Guidelines Second Home 65/65 720 BORROWER ELIGIBILITY SECTION 3 BORROWER ELIGIBILITY

GUIDELINES

• U.S. Citizen.

• Permanent Resident Aliens (card must be included in loan file).

• Non-permanent Resident Aliens (see section 5.1.2 of the product guide).

• Inter-Vivos (living) Revocable Trust.

• Non-Occupant Co-Borrowers allowed per AUS.

• All borrowers must have a valid social security number. OCCUPANCY ELIGIBILITY SECTION 4 OCCUPANCY ELIGIBILITY

GUIDELINES

• 1 - 2 units Primary • PUD Residence • Eligible Condominiums

• 1 unit • PUD • Eligible Condominiums Second Home may not be a time share, subject to a rental agreement or other shared ownership arrangements. TRANSACTION ELIGIBILITY SECTION 5 TRANSACTION ELIGIBILITY

PURCHASE TRANSACTIONS

• Must adhere to Agency guidelines.

• LTV/CLTV is calculated using the lesser of the subject property purchase price or the appraised value.

• Seller - must be on title to the subject property a minimum of 90 days prior to the date of sales contract.

• Personal property may not be included in the purchase agreement/sales contract. TRANSACTION ELIGIBILITY - CONTINUED

RATE AND TERM REFINANCE

• A minimum of 6 months, must have elapsed if the previous refinance transaction combined a first and a non-purchase money subordinate lien into a new first lien. • Properties listed for sale must have the listing withdrawn (or expired) prior to the date of . • Second lien being paid off must be a purchase money second lien. • The Jumbo Mortgage amount may include the: • Pay off the existing liens. • Pay off a co-owner pursuant to a written agreement. • Financing of the payment of prepaid items and . • Pay off subordinate financing only to the extent that such financing was used to acquire the property. • Cash back to the borrower is limited to the lesser of $2,000 or 2% of the new loan. • Subordinate Financing is allowed up to maximum CLTV per Matrix. Must conform to Agency requirements. TRANSACTION ELIGIBILITY - CONTINUED

CASH OUT REFINANCE

• Borrower must have held title for a minimum of 6 months from disbursement date.

• Properties listed for sale are ineligible for refinance unless the listing was withdrawn (or expired) prior to the date of closing. CREDIT ELIGIBILITY SECTION 6 CREDIT ELIGIBILITY

GUIDELINES

• A tri-merged, 120-day credit report from all three repositories is required. Credit Report Detail • All inquiries within 120 days of the credit report date require a letter of explanation.

• All three repositories must be requested (Equifax, Experian and TransUnion).

• Multiple borrowers - the lowest score of all representative credit scores, is used. Credit Scores • If only one credit score or no credit score is reported, the borrower is not eligible.

• A minimum of two credit scores is required. CREDIT ELIGIBILITY - CONTINUED GUIDELINES

• Minimum credit requirements as determined by AUS.

• Nontraditional credit not allowed. Credit Report • Collections/Charge offs - Determined by AUS. Requirements • Credit rescores are not allowed for improved pricing

• Borrower may payoff debts to qualify with borrower’s own funds.

Foreclosure, - In-Lieu of • At least 7 years must have elapsed are measured from the date of completion to , the date of brokers application. Bankruptcy and Short Sales CREDIT ELIGIBILITY - CONTINUED GUIDELINES

• Primary Residence or the subject of the refinance • 24 Month seasoning after exiting forbearance. • If a borrower entered forbearance and all the payments were timely, the Forbearance verbiage would need to be removed from the credit report to avoid waiting period. • Investment Purchase/Second Home (not subject property) • No waiting period required • If a monthly loan payment is provided on the credit report, that amount may be used for qualifying purposes if reasonable. If the credit report does not reflect the correct monthly payment, the monthly payment from the most recent student loan statement may be to qualify the borrower Student Loans • For deferred loans or loans in forbearance, the lender may calculate a payment equal to 1% of the outstanding student loan balance (even if this amount is lower than the actual fully amortizing payment), or a fully amortizing payment using the documented loan repayment terms • Income based repayment plans are not allowed INCOME REQUIREMENTS SECTION 7 INCOME REQUIREMENTS

GUIDELINES

Income Analysis form detailing income calculations is required.

• Non-taxable income: Social Security income, VA benefits, Pensions and Annuity Source and income may be grossed-up 25%. Calculations • Foreign income - most recent 2 Years U.S. tax returns.

• Unreimbursed business expenses - must be deducted from income.

Minimum 2 years employment and income history. Employment • Gaps - 30 days during a 2-year period require a letter of explanation. Stability • All income must be a minimum of 6 months to qualify, if there is a gap of employment. INCOME REQUIREMENTS - CONTINUED

GUIDELINES

Verbal VOE dated within 5 business days prior to closing documented in writing.

• Must cover 24 months of employment. Verbal Verification of • If the borrower changed jobs within 2 years, start and end dates for each job, is required. Employment • Any employment gaps exceeding 30 days must be addressed, require a letter of explanation. INCOME ELIGIBILITY - CONTINUED

GUIDELINES

Income Analysis form detailing income calculations is required.

• Completed, signed and dated final Uniform Residential Mortgage Application. • W-2’s from all employers for the past 2 years: • If the borrower was in school a copy of the school transcript is required. • Most recent paystubs, covering a 30-day period with YTD earnings. Salaried • Tax returns are not required for salaried borrowers. • Unreimbursed business expenses - must be deducted from income. • Employed by a family business - must provide a CPA letter proving no ownership, business and personal tax returns required. • Signed IRS Form 4506T. • 2 years tax transcripts are required. INCOME ELIGIBILITY - CONTINUED

GUIDELINES

• Rental income - most recent signed federal income tax return, include Schedule E.

• are required for all properties where rental income is being used to qualify.

• Proposed rental income from the comparable rent schedule may be used for qualifying.

• Properties with expired leases - convert to month to month, bank statements are required Rental Income for the lesser of 12 months or the time period after the expired.

• A 25% vacancy factor must be applied to the gross rent. Multiply the gross rent by 75% and subtract the PITI.

• Commercial properties owned - Schedule E must be documented with evidence that the primary use and of the property is commercial. INCOME ELIGIBILITY - CONTINUED

GUIDELINES

• Copy of the Social Security Administrations award letter.

• Copies of last 2 months bank statements to document deposit of payments.

• Distributions from a retirement account (401K, IRA, Keogh, SEP) must be documented with a distribution letter and copies of last two (2) months bank statements to document the Social Security regular deposit of payments • If distributions are increased, at least two (2) months of consistent receipt of the higher income is required.

• Benefits must have a minimum continuance of 3 years from the date of the application to be considered as qualifying income.

Alimony and • Allowed as a source of income with proof of a minimum of 3-year continuance. Child Support DEBTS AND LIABILITIES SECTION 8 DEBTS AND LIABILITIES

GUIDELINES

• Installment debt - must include car lease payments.

• Installment debt - paid by another entity such as the borrower’s business must be included Installment Debt unless the business entity (not the borrower) is the primary obligor.

• Co-signed debt - may be excluded with proof timely payments for the last 12 months were made by the primary obligor.

Revolving Debt • Follow AUS requirements. DEBTS AND LIABILITIES - CONTINUED

GUIDELINES

If the current primary residence is pending sale the following applies: • The current PITI of the property pending sale and the proposed PITI payment of the subject loan must be included in the debt ratio used to qualify.

Departing If the current primary residence is being converted to an investment property: Residence • Rental income - may be used if, LTV is 75% or less, evidenced by either: • An Exterior Only appraisal (2055) - less than 6 months old from application date: or • An automated valuation model (AVM), listing sales price minus outstanding liens as evidenced by a mortgage statement or credit report reference. • A 25% expense/vacancy deduction must be applied to all rental income. • Reserves of 6 months of PITI must be documented. ASSETS AND SOURCE OF FUNDS SECTION 9 ASSETS AND SOURCE OF FUNDS

GUIDELINES • Follow AUS requirements. • Gift Funds from an acceptable source – Gift of Equity is not allowed • Business funds can be used for down payment. Person and business tax returns for the entity the funds are being withdrawn from and a year-to-date P&L and balance sheet are required. Business funds may not be counted towards cash reserves. Source of Funds o A letter from an accountant verifying the following is also required: o The amount of business assets that can be used must correspond to the borrower’s percentage of ownership in the business. o Funds are not a loan o Withdrawal of the funds will not negatively impact the business • AUS reserve or the reserve requirements are available in the Product Matrix.

• Reserves must be verified and comprised of liquid assets that borrower can readily access. Cash Reserves • Equity lines of credit, gift funds, and cash out from the subject property on a refinance transaction are not acceptable sources to meet the reserve requirement. ASSETS AND SOURCE OF FUNDS

GUIDELINES

• AUS reserve or the reserve requirements are available in the Product Matrix.

• Reserves must be verified and comprised of liquid assets that borrower can readily access. Cash Reserves • Equity lines of credit, gift funds, and cash out from the subject property on a refinance transaction are not acceptable sources to meet the reserve requirement.

• Business assets are not allowed to be used as reserves and cannot be transferred to a Business Assets personal account and treated as reserves unless the deposit can be documented as one of the borrower’s normal distributions from the s/e business. PROPERTY REQUIREMENTS SECTION 10 PROPERTY REQUIREMENTS

GUIDELINES

• 1-2 units Primary Residence properties. 1 unit Second home properties. • Low/mid/high-rise warrantable condominiums. Condominiums with HOA in litigation are Eligible Properties ineligible unless it meets FNMA guidelines for acceptable litigation. • Planned Unit Development (PUD). • Maximum lot size 20 acres. Properties > 10 acres need 3 comparable with similar acreage.

• Properties located in a FEMA declared disaster area: • A re-inspection is required, by the original appraiser. Properties in a • A written certification is required from the appraiser to no impacted by the disaster. Disaster Area • FEMA declared natural disasters; the inspections must be dated after the disaster end date is declared by FEMA. https://inciweb.nwcg.gov PROPERTY REQUIREMENTS - CONTINUED

GUIDELINES

• All appraisals must be completed on the most current Agency Appraisal forms. • Property Inspection Waiver (PIW) not allowed. • Properties must be appraised within 12 months that precede the Note and Mortgage. Appraisal • Appraisals must not be over 120 days old from the date of the Note. If appraisal is over 120 days old a recertification of value needs to be performed. • Transferred Appraisals Allowed - Must be AIR compliant. • SSR’s are required for values over 2.5 mil MISCELLEANOUS GUIDELINE REQUIREMENTS SECTION 11 MISCELLANOUS GUIDELINE REQUIREMENTS GUIDELINES

• All transactions require a minimum 12-month . Chain of Title • For purchase transactions - seller must have taken title to the subject property a minimum of 90 days prior to the date of sales contract.

Balloon Mortgage, Recasting, Re Amortizing, Temporary • Not permitted. Buydowns and Prepayment Penalties • Interested party contributions may only be used for closing costs and prepaid expenses: • LTV between 75.01% - 80%, max 6% contribution allowed. • LTV ≤ 75%, max 9% contribution allowed. Interested Party or Seller • Seller contributions in excess of the interested party contribution limits or Contributions contributions not being used for prepaid expenses or closing costs are considered seller concessions. The amount of the seller concession must be deducted from the purchase price and appraised value to determine the LTV. JUMBO AUS - Product Overview

• Conventional – 30 Yr Fixed • 80% Max LTV • MIN FICO 700 • Primary and 2nd Homes • Loan Amounts up to 1.5 Mil • Purchase, Rate/Term & Cash Out • Credit Tradelines TBD by AUS • Housing History TBD by AUS • Reserves TBD by AUS • Collections and Charge Offs TBD by AUS • Non-Occupying Co-Borrowers Welcome • Non-Permanent Resident Aliens Allowed • Previous Foreclosure, DIL, BK, and Short Sales Allowed • Follow AUS Findings QUESTIONS?

Contact Your Orion Account Executive for More Info!

Marketing Materials are available in the STAR Studio