Chapter 3 Mortgage Loan Products and Product Matrix Contents Fixed-Rate Mortgage Loans ............................................................................................................................ 2 CONVENTIONAL CONFORMING LOANS ................................................................................................... 2 Construction to Permanent Loans ................................................................................................................. 3 Manufactured Housing .................................................................................................................................... 4 MANUFACTURED HOUSING-FANNIE MAE ................................................................................................ 4 MANUFACTURED HOUSING-FREDDIE MAC ............................................................................................. 5 Manufactured Housing Land & Home Ownership Requirements ............................................................. 6 Rural Development Guaranteed Loans .......................................................................................................... 6 Rural Development (RD) Program ............................................................................................................. 7 Fannie Mae Only .............................................................................................................................................. 9 DU Refi Plus-Fannie Mae Only .................................................................................................................... 9 Fannie Mae High LTV Refinance Option ..................................................................................................... 9 Fannie Mae High LTV Refinance Option ..................................................................................................... 9 HomeReady Mortgage ............................................................................................................................... 10 HomeReady ™ Mortgage ........................................................................................................................... 10 HomeStyle Energy Mortgage Matrix ......................................................................................................... 11 Freddie Mac Only ........................................................................................................................................... 12 Adjustable Rate Mortgage Loans (ARM) .................................................................................................. 12 Open Access – Freddie Mac Relief Refinance ......................................................................................... 13 Freddie Mac Enhanced Relief Refinance .................................................................................................. 13 Freddie Mac Enhanced Relief Refinance .................................................................................................. 13 Home Possible ........................................................................................................................................... 14 HOME POSSIBLE® PROGRAM .................................................................................................................. 14 Investor guidelines and related bulletins supersedes information contained in this document. Revised 1/12/19 1 Chapter 3 Mortgage Loan Products and Product Matrix Fixed-Rate Mortgage Loans Features Fannie Mae and Freddie Mac purchase a variety of fixed-rate mortgages (new originations and seasoned loans) for borrowers who want a stable monthly payment over the life of their loan. Fixed- rate mortgages protect borrowers from interest rate increases and provide a predictable payment and amortization schedule. Available from a 10-year amortization up to a 30-year amortization, it gives the borrower the option of a 10- 15- or 20-year mortgage to build equity more quickly or take advantage of the lower monthly payment with a 30-year mortgage. CONVENTIONAL CONFORMING LOANS Excludes HARP loans, manufactured, Home Possible, and HomeReady FANNIE MAE FREDDIE MAC 10 - 30 YEAR FIXED, Approve/Eligible 10 – 30 YEAR FIXED, Accept (LP) (DU) $484,350 - 1 unit $484,350 - 1 unit $620,200 - 2 unit $620,200 - 2 unit LOAN LIMITS $749,650 - 3 unit $749,650 - 3 unit $931,600 - 4 unit $931,600 - 4 unit PRIMARY RESIDENCE 1 UNIT Owner occupied only HOME ONE MORTGAGE nd 95.01-97% LTV/CLTV/HCLTV Effective with DU version 9.2 97%LTV/105%CLTV (105% CLTV if Affordable 2 ) 12/13/14 97% PURCHASE & st Fixed-rate only • At least 1 borrower must be a 1 -time buyer LIMITED CASH OUT (DU) • 1 UNIT Owner occupied only • Refi of existing Fannie Mae loans only • NO CASH OUT (LPA) (Restrictions NO MANUFACTURED HOMES • Loan must be fixed-rate only • apply) Income must not exceed 100% of area median income limits • No minimum borrower contribution required • Homeownership education required if all borrowers are first time • MANUFACTURED HOMES- See MH Advantage home buyers (Purchase only) Matrix • No income limits • Must be approve/eligible in DO/DU 1 UNIT 1 UNIT 95% LTV/CLTV/HCLTV PURCHASE & 95% LTV/CLTV/HCLTV 2 UNIT 2-4 UNIT LIMITED CASH OUT (DU) 85% LTV/CLTV/HCLTV 80% LTV/CLTV/HCLTV NO CASH OUT (LPA) 3-4 UNIT 75% CLTV / HCLTV 1 UNIT 1 UNIT 80% LTV/CLTV/HCLTV 80% LTV/CLTV/HCLTV CASH OUT REFINANCE 2-4 UNITS 2-4 UNITS 75% LTV/CLTV/HCLTV 75% LTV/CLTV/HCLTV SECOND HOME **1 UNIT ONLY** PURCHASE & 90% LTV/CLTV/HCLTV 1 UNIT ONLY 85% LTV/CLTV/HCLTV 1 UNIT ONLY LIMITED/NO CASH OUT CASH OUT REFINANCE 75% LTV / 75% CLTV / HCLTV 1 UNIT ONLY 75% LTV/CLTV/HCLTV 1 UNIT ONLY INVESTMENT PROPERTY 1 UNIT PURCHASE 1 UNIT PURCHASE 85%LTV/85% CLTV / HCLTV 85%LTV/CLTV/HCLTV PURCHASE 2-4 UNIT PURCHASE 2 UNIT 75% LTV/75% CLTV / HCLTV 75% LTV/CLTV/HCLTV LIMITED/NO CASH-OUT & 1-4 UNIT 1-4 UNIT NO-CASH OUT 75%LTV/ 75% CLTV / HCLTV 75%LTV/CLTV/HCLTV 1 UNIT 1 UNIT 75% LTV / 75% CLTV / HCLTV 75% LTV/CLTV/HCLTV CASH OUT REFINANCE 2-4 UNITS 2-4 UNITS 70% LTV / 70% CLTV 2-4 units 70% LTV/CLTV/HCLTV ALL LOANS CONDOS, PUDS Must meet Specific Condo Project Consideration Must meet FHLMC project guidelines Note: FL condos – Please refer to guidelines Geographic Specific condo project [email protected] Investor guidelines and related bulletins supersedes information contained in this document. Revised 1/12/19 2 Chapter 3 Mortgage Loan Products and Product Matrix >20 yrs ≤20 yrs >20 yrs ≤20 yrs STANDARD MORTGAGE INSURANCE >95.01-97% 35% >95 35% >90.00≤95% 30% 25% >90.00≤95% 30% 25% COVERAGE >85.00≤90% 25% 12% >85.00≤90% 25% 12% >80.00≤85% 12% 6% >80.00≤85% 12% 6% U.S. Citizens U.S. Citizens ELIGIBLE BORROWERS Permanent Resident Aliens Permanent Resident Aliens Non-Permanent Resident Aliens Non-Permanent Resident Aliens LOAN LEVEL PRICE ADJUSTMENTS (LLPA) CUMULATIVE See Chapter 4 of the online manual See Chapter 4 of the online manual ALL PRODUCTS PURCHASE ESSENTIALS LTV < 80% = 0% MINIMUM BORROWER 5% of the sales price is required if LTV is > 80% and LTV > 80: CONTRIBUTION property is a 2 unit primary residence or 2nd home. 0% of the sales price (1 unit primary residence) 5% of the sales price (2 unit primary residence and 2nd homes) INTERESTED PARTY/SELLER Can cover closing costs and/or prepaid subject to Fannie Can cover closing costs and/or prepaid subject to CONTRIBUTION Limits FHLMC limits All Loan Level Price Adjustments may be found in Chapter 4, LTV and LLPA charts. See Fannie Selling Guide and Freddie Seller Servicer Guide for detailed information. Construction to Permanent Loans Two-Closing Transactions All Loan Level Price Adjustments may be found in Chapter 4, LTV and LLPA charts. See Fannie Selling Guide and Freddie Seller Servicer Guide for detailed information. Two-closing construction to permanent mortgage transactions utilize two separate loan closings. The first closing is for the construction financing which is originated, disbursed, and held at the originating bank; and the second is the end loan used to pay off the interim construction loan. The permanent financing can be closed as a limited cash-out or a cash-out refinance transaction. The end loan will be serviced by Merchants. The borrower must have held title to the lot for at least six months prior to the closing of the permanent mortgage for cash-out transactions. • Mortgages must be submitted as “construction-permanent” through Desktop Underwriter and receive an “Approve/Eligible” recommendation, or through LPA as a no cash-out or cash-out and receive an “Accept/Eligible”. • The appraised value will be used to determine the LTV. • The subject property should be listed in the REO section of the application and should show “refi of current residence” for primary residences or “subject of the loan” for a second home. • Verification documents are good for 120 days. • The construction of the subject property must be completed prior to delivery of the mortgage. • A copy of the construction CD should be provided with the end loan to verify all short-term financing guidelines have been met. Ineligible loans: *Manufactured Homes *Condominiums *Investment Properties *One-time closing transactions See Construction Examples and Tips in the Manuals tab on the Merchant Bank landing page. Investor guidelines and related bulletins supersedes information contained in this document. Revised 1/12/19 3 Chapter 3 Mortgage Loan Products and Product Matrix Manufactured Housing A manufactured home is defined as any dwelling unit built on