florida


PRODUCT GUIDELINES

FHA STANDARD and HIGH BALANCE PROGRAM
PROGRAM CODES: F30F, F15F, F25F, F20F, F10F

PURCHASE

Maximum LTV

Max Loan Amount

Max Ratios

Mortgage/Rental History

MINIMUM FICO 550

90.00%

1-4 UNITS. PER FHA MAX COUNTY LIMITS FOR STANDARD PROGRAM.

43%

0 x 30 past 12 months

MINIMUM FICO 580

96.50%

1-4 UNITS. PER FHA MAX COUNTY LIMITS FOR STANDARD PROGRAM.

43%*

0 x 30 past 12 months

INIMUM FICO 620

96.50%

1-4 UNITS. PER FHA MAX COUNTY LIMITS FOR STANDARD PROGRAM.

Per AUS

Evaluated by AUS**

*DTI may exceed 43% with compensating factors documented in the file and manual underwrite. Refer to AUS Section for additional information. **Refer to mortgage rating section below for additional information.

Loan may exceed 100% CLTV when a CMS approved Down Payment Assistance program is used in conjunction with the transaction - up to 110%.

NON ARMS LENGTH (Identity of Interest) TRANSACTION

Maximum LTV

Max Loan Amount

Max Ratios

Mortgage/Rental History

MINIMUM FICO 550

85.00%

1-4 UNITS. PER FHA MAX COUNTY LIMITS FOR STANDARD PROGRAM.

43%

0 x 30 past 12 months

MINIMUM FICO 620

85.00%

1-4 UNITS. PER FHA MAX COUNTY LIMITS FOR STANDARD PROGRAM.

Per AUS

Evaluated by AUS**

**Refer to mortgage rating section below for additional information.

RATE/TERM REFINANCE (NON-STREAMLINED)

Maximum LTV

Max Loan Amount

Max Ratios

Mortgage/Rental History

MINIMUM FICO 550

90.00%

1-4 UNITS. Per FHA Max County Limits See Loan Amount Matrix Below

43%

0 x 30 past 12 months

MINIMUM FICO 580

97.75%

1-4 UNITS. Per FHA Max County Limits See Loan Amount Matrix Below

43%*

0 x 30 past 12 months

 MINIMUM FICO 620

97.75%

1-4 UNITS. PER FHA MAX COUNTY LIMITS FOR STANDARD PROGRAM.

Per AUS

Evaluated by AUS**

**Refer to mortgage rating section below for additional information.

CASH OUT REFINANCE

Maximum LTV

Max Loan Amount

Max Ratios

Mortgage/Rental History

MINIMUM FICO 550

85.00%

1-4 UNITS. Per FHA Max County Limits See Loan Amount Matrix Below

43%

0 x 30 past 12 months

MINIMUM FICO 620

85.00%

1-4 UNITS. PER FHA MAX COUNTY LIMITS FOR STANDARD PROGRAM.

Per AUS

0 x 30 past 12 months


PRODUCT GUIDELINES
FHA STANDARD and HIGH BALANCE PROGRAM

PROGRAM CODES: F30F, F15F, F25F, F20F, F10F

Underwriting Guidelines Requirements

(All loan amounts must be submitted through Total Score Card. Refer to AUS Section for manual underwrite.)

MAXIMUM LOAN AMOUNTS

Continental U.S.

# of Units

Lowest Maximum ("Floor") For All Loan Amounts

Highest Maximum ("Ceiling") For STANDARD Loan Amounts

Highest Maximum ("Ceiling") For High Balance Loan Amounts

1 Unit

$271,050

$417,000

$625,500

2 Units

$347,000

$533,850

$800,775

3 Units

$419,425

$645,300

$967,950

4 Units

$521,250

$801,950

$1,000,000

Maximum Loan Amt (Base)

Max Base Loan Amount cannot exceed the FHA Statutory Mortgage Limits for each county and under no circumstances will a county's mortgage limit be less than the "floor" or greater than the "ceiling" as outlined in the 4155.1.

COLLATERAL

Condos

Must be current FHA-approved condominium complex and meet all HUD requirements (51% occupancy, 15% delinquencies). All condos and attached PUD's require 100% 'walls-in' HO6 coverage. Site condos do not require FHA HRAP/DELRAP approval. Refer to the FHA Condominium Project Matrix located in CMS FHA Underwriting Guidelines for more detail.

Eligible Collateral

Owner Occupied Only. 1-4 Units. PUD's, FHA approved condominium projects, land contracts, manufactured homes permanently affixed to the foundation, built on or after June 15, 1976, and meet all HUD requirements. Refer to the CMS FHA Lending Guide for additional details regarding manufactured housing.

Ineligible Collateral

Mobile homes, co-ops, Single-wide manufactured homes, commercial or industrial zoned properties, mixed-use, State-approved medical marijuana producing properties, working farms, construction to permanent, properties listed for sale in the past 6 mos., properties located in the area of Wrightwood, CA, properties located within designated Costal Barrier Resource System (BRS) areas, properties located on Tribal Lands, properties with cisterns, properties serviced by hauled water, and/or any other ineligible properties as defined by HUD Handbook 4150.2.

HUD REO Appraisal and

Property Requirements

Appraisals may only be performed by an appraiser listed on the FHA roster. Obtain an "as-is" appraisal and the appraisal must be marked as "Insurable". HUD's REO appraisal may be available at no charge. If the original HUD REO appraisal is available, a new appraisal may not be ordered when the sales price exceeds the "as-is" value specified on the M&M's appraisal. If the M&M Contractor's appraisal is more than 120 days old, the lender may order an updated "as-is" appraisal. The original appraisal must be used if a valid sales contract was executed prior to the expiration date of the appraisal. A second appraisal may only be ordered under the following circumstances: if the current HUD REO appraisal has expired, if there are material deficiencies with the current appraisal as determined by the DE Underwriter, or the original HUD REO appraisal is not made available by the M&M Contractor. Refer to HUD REO appraisal requirements listed below. Note: The case # on the HUD M&M appraisal should not be changed if the original HUD REO appraisal was used. The borrower must pay the difference when the sales price exceeds the appraised value or the original listing price. Note: If the statement of insurability is marked "insurable with repairs", the file must be converted to the HUD REO Repair Escrow program. Refer to HUD REO Repair Escrow matrix for additional guidance.

HUD REO Appraisal Requirements – If Original HUD REO Appraisal is not Available

An "as-is" appraisal is required with a statement of insurability. The statement of insurability on the appraisal must be marked as "insurable". The Property Condition Report (PCR) must be provided to the appraiser prior to inspection. In addition, the Listing History must be included in the file with the original list price. The property listing may be located at: www.HUD.GOV/hudhomes. If the listing history is not present, the M&M Contractor may provide. The sales contract must indicate standard FHA financing.

HUD REO Lead-Based Paint Appraisal Requirements

HUD will complete a lead-based inspection on properties built before 1978 and provide a cost estimate of the repairs. 1) If lead-based paint was identified, HUD will perform the repairs if the cost is $4,000 or less. 2) If cost is greater than $4,000, the borrower may either A) cancel the contract, or B) change to 203(k) financing.

Defective Paint Surfaces

An automatic correction is required to all defective paint surfaces in or on structures and/or property improvements built before January 1, 1978. Contractors who perform the repair must be certified and must follow specific work practices to prevent lead contamination. A copy of the EPA or state-lead training certificate in the name of the party who performed the work must be provided. FHA Roster Appraisers & Inspectors as well as other independent third parties may perform inspections to verify if painting repairs have been performed as required. Inspections are to determine completion of the repairs only, and may be not be used as evidence of compliance. If the repair was made by the homeowner, they must provide a letter stating that they personally made the repair. FHA Roster Appraiser and Inspector as well as other independent third parties may inspect the work to verify completion of the repair is required.

FHA Flips

Resales<= 90 days are ineligible. Flips must be 91 days or greater to be eligible. Resales between 91-180 days with a sales price exceeding 100% of the previous sales price require 2 full appraisals.  Seasoning is determined by Seller Acquisition Date & earlier of final Contract Acceptance Date or Application Date. All flips require a 12 month chain of title, contain no pattern of previous flipping or assignment of interest & evidence the property was marketed openly & fairly is required. HPML loans may require second appraisal.

PRODUCT GUIDELINES

FHA STANDARD and HIGH BALANCE PROGRAM

PROGRAM CODES: F30F, F15F, F25F, F20F, F10F

CREDIT

Bankruptcy

AUS Approve - Chapter 7 must be > 2 years since date of discharge and borrower must have re-established good credit, or chosen not to incur new credit obligations. If < 2 years, but not < 12 months, may be acceptable, if borrower can show that bankruptcy was caused by extenuating circumstances (must be approved by Underwriter Manager), and has exhibited a documented ability to manage his/her financial affairs. AUS Approve - Chapter 13 must document the following: 1) 1 year of the pay-out period under the bankruptcy has elapsed. 2) All borrower's payments have been made on time. 3) Borrower has received written permission from court to enter into mortgage transaction. If the Chapter 13 bankruptcy has not been discharged for a minimum period of two years, the loan must be down-graded to a Refer and evaluated by DE Underwriter.

Consumer Credit Counseling

1 year of the pay-out has elapsed under the plan, borrower's payment performance has been satisfactory with all required payments made timely and borrower has received written permission from the counseling agency to enter into the mortgage transaction.

Social Security Numbers

Required for ALL borrowers.

Capacity Analysis

Includes the following:

- Prior to closing, the collection account is paid in full. Verification of acceptable sources of funds is required.

- Payment arrangements have been made with the creditor. The monthly payment must be included in the DTI and documentation is required.

- 5% of the outstanding balance of each collection will be used as the monthly payment and will be included in the DTI.

- Repos are treated as charge offs unless specifically notated that the account was sent to collections. 5% monthly payment on this account isnot required in the DTI Ratio.

Collections / Charge Offs

AUS Approve/Eligible - The Underwriter must complete a capacity analysis off collection accounts with an aggregate balance >= $2,000. Non- purchasing spouse's collections are included in the combined balances for community property states. Monthly payments must be included in the DTI when cumulative balances are >= $2,000. Manually underwritten loans, reason for approving a loan when the borrower has collection accounts regardless of the amount must be documented. The Underwriter must determine if the collection was result of disregard for financial obligations, inability to manage debt, or extenuating circumstances. The borrower must provide a letter of explanation with supporting documentation for each collection and charge off. Charge offs are not required to be paid off but must be considered in the credit analysis.

Judgments / Liens

All outstanding judgments and liens must be paid prior to or at closing except when the borrower has an agreement with the creditor to make regular and timely payments. Copy of the agreement and a minimum of 1 month scheduled payment made is required prior to credit approval. This includes non-purchasing spouses in community property states. Borrowers may not prepay scheduled payments in order to meet the 1 month requirement. Payment is included in the DTI. Manually underwritten loans, reason for approving a loan when the borrower has judgment(s) regardless of the amount must be documented. The Underwriter must determine if the judgment was result of disregard for financial obligations, inability to manage debt, or extenuating circumstances. The borrower must provide a letter of explanation with supporting documentation for each outstanding judgment.

Foreclosure / Deed-in-lieu

Must be >3yrs from date of trustee's deed or FHA claim (CAIVRS-if applicable). Borrower(s) with prior CMS Foreclosure or Deed in Lieu are not permitted.

Short Sale / Short Refi/Modification

A borrower is not eligible for a new FHA insured mortgage if a short sale was pursued to take advantage of declining market conditions and purchase a similar or superior property within reasonable commuting distance of prior residence. A borrower in default at time of short sale/restructure or pre-foreclosure is not eligible for a new FHA insured mortgage for 3 yrs from date of pre-foreclosure sale. Borrower's current at time of short sale must have 0x30 mortgage and installment debt pay history for the preceding 12 month period. Borrower(s) with prior CMS Short Sale are not permitted.

Extenuating Circumstances - Back to Work and Economic Event

Borrowers with a prior bankruptcy, foreclosure, deed-in-lieu, or short sale may be eligible for an FHA insured loan if the bankruptcy, foreclosure, deed-in-lieu, short sale was the result of a documented extenuating circumstance. Borrowers may also be eligible for an FHA insured loan on a purchase transaction after 12 months from the completion, discharge, trustee's sale if the borrower meets the requirements for extenuating circumstances - Economic Event. Refer to the CMS FHA Lending Guide for complete information.

Disputed Accounts

Disputed derogatory accounts >= $1,000 cumulative must be downgraded to "Refer" manual underwrite. Medical and accounts resulting from identity and credit card theft or unauthorized use are excluded. A letter from the creditor, police report, etc. are required. Disputed non-derogatory accounts are excluded from the $1000 cumulative total which includes accounts with zero balance, accounts with late payments aged 24 months or older, or disputed accounts that are current and paid as agreed.

FICO

Minimum of 1 reported credit score required for borrowers with traditional and insufficient credit history. Borrowers with non-traditional credit will not have a credit score.

Minimum Payment

Greater of 5% or $10 of outstanding balance for revolving accounts if no payment is indicated.

Minimum Tradelines

Borrowers must have sufficient credit history to generate a valid FICO score, or borrowers must meet the non-traditional or insufficient credit guidelines listed below. Generally, an acceptable credit history does not have late housing, installment debt or major derogatory revolving payments. Authorized tradelines are not acceptable for establishing a credit history and may invalidate the FICO score.

Non-Traditional Credit

Borrowers who have no established traditional credit references may be eligible using non-traditional credit references. A minimum of 3 credit references each rated for 12 months is required. There can be no housing lates and maximum 1x30 day late payment with the other credit references in the previous 12 months. There can be no major adverse or public records filed in the last 12 months. Non-traditional credit references may not be used to offset derogatory pay histories on traditional credit. Non-traditional credit may not be used to enhance the credit history of a borrower with derogatory pay histories. Refer to CMS FHA Lending Guides for additional information regarding the use of non- traditional trade references. All loans with non-traditional credit require a manual underwrite, max LTV allowed per program guidelines, maximum ratios of 31%/43%, 1 month PITI reserves required (must be borrower's own funds), gift funds allowed for down payment and closing costs, 2 years tax returns and tax transcripts required, and must follow standard FHA guidelines as outlined in the CMS FHA Lending Guide.

 

PRODUCT GUIDELINES

FHA STANDARD and HIGH BALANCE PROGRAM

PROGRAM CODES: F30F, F15F, F25F, F20F, F10F

CREDIT (continued)

Insufficient Credit History

Borrowers with insufficient credit history do not meet guidelines for non traditional credit because they lack either three non-traditional rated tradelines, or they do not have a housing tradeline. Non-traditional trade references may not be used to overcome poor pay histories of traditional credit. Loans with insufficient credit history are to be run through the AUS. At the DE's discretion, the loan may be downgraded to a manual underwrite. Additional trade references or asset documentation may be required regardless of the AUS Findings. The max ratios for borrowers with insufficient credit history is 31%/43%. Compensating factors for higher ratios are not applicable. 1 month reserve requirement for 1-2 Unit properties. 3 month reserve requirement for 3-4 Unit properties. Gift funds may not be used for reserves, down payment, or closing costs. Non- occupying co-borrowers are not permitted.

Mortgage/Rental History*

PER AUS approved/accept and 0x30 in previous 12 months for manually underwritten loans. *Loan will be ineligible if mortgage is rated one or more 1X60, 1X90, 1X120 or 1X150 days or greater within 12 months of the date of the credit report.

Non Purchasing Spouse

Credit report required in community property states. Debts must be added to DTI Ratio and Credit History may be considered. Non-purchasing spouse may be added to title on a purchase transaction or may remain on title when refinancing. No other party other than the borrower or their spouse may be permitted to have a vested interest to the property.

Other Requirements

NSF activity, private mortgage lates, delinquent CAIVRS, LDP or GSA findings, mortgage lates not reporting on the credit bureau, significant delinquencies after bankruptcy, and any other credit delinquencies will supersede any "approved/eligible" finding.

INCOME/ASSETS

Debt Ratio

Loans with AUS Approve/Eligible - follow AUS decision. Loans with AUS Approve/Eligible and DTI > 53% require a minimum of 2 compensating factors. Manually underwritten loans with FICO score > 580 may exceed 31%/43% ratios with acceptable compensating factors. Manually underwritten loans with FICO score 550 - 579 or non-traditional/insufficient credit may not exceed 31%/43% ratios regardless of compensating factors. Refer to CMS Lending Guide for maximum ratios for manually underwritten loans.

Residual Income

All loans with case numbers on or after 1/10/14 must have >= $800. Follow VA calculations.

Non-Taxable Income

Nontaxable income such as Social Security, Pension, Workers Comp and Disability Retirement income must be grossed up.

Income

All types of income must have been received for the most recent two consecutive years including overtime, bonus, second job, part-time, commission, and self-employment.

Assets

Minimum cash investment from borrowers own funds and/or gift (no cash on hand allowed when borrower uses traditional banking sources and has traditional credit history). Any deposit 2% and greater of the sales price must be sourced and seasoned. An aggregate of deposits 2% and greater of the sales price must be sourced and seasoned. A single deposit or aggregate of deposits less than 2% of the sales price generally is not required to be sourced and seasoned. However, any atypical deposits and /or multiple deposits outside of regular payroll may require source and seasoning when the funds are required for closing and/or reserves as this may be excessive based on the borrower's history. This is regardless of the aggregate of deposits > 2% of the sales price. Refer to CMS FHA Guidelines for more information.

Gifts

Allowed. Gifts or excess gift funds are not acceptable as reserves.

Documentation/4506T or 2907 Puerto Rico Tax Returns

Full income documentation loans only. IRS Form 4506T must be processed and income validated for most recent 2 years. Borrowers with income from Puerto Rico must: Sign form Modelo SC 2907 to obtain tax transcripts, returned Modelo SC 2903 transcripts for 2 years, and transcripts must be translated to English and notarized by 3rd party. The 4506T must be in the file with confirmation that states "no records found" when using Puerto Rico tax returns. The confirmation must be from the IRS website and contain the borrowers name and SSN.

Minimum Reserves

1-2 Units: None. 3-4 Units: 3 Mos. PITI. Reserves cannot be gift funds, must be borrower's own.

Reserve Requirement – Manually Underwritten Loans

1-2 Units: 1 Month. 3-4 Units: 3 Months

Non Occupant co borrower

1 Unit properties only. Max mortgage is limited to 75% LTV unless non occupying co- borrower's meet FHA definition of 'immediate family member'. Seller cannot be non occupant co-borrower. Non occupant co borrowers may be added to improve ratios. Non occupant co-borrowers cannot be used to overcome or offset borrower's derogatory credit. The non occupying borrower arrangement may never be used to develop a portfolio of rental properties. The financial contribution by the non-occupying co-borrower and the number of properties owned may indicate family members are acting as 'straw buyers.' CMS will not lend on transactions with non occupying co-borrowers that fit the above scenario. Non- occupant co-borrowers are not eligible on cash out transactions.

PRODUCT GUIDELINES
FHA STANDARD and HIGH BALANCE PROGRAM
PROGRAM CODES: F30F, F15F, F25F, F20F, F10F

 TYPES OF FINANCING

Rate Term Refinance

If property acquired less than 12 months, the maximum mortgage is 97.75% of the lesser of the original sales price or current appraised value. A copy of the existing Note and final HUD-1 from the prior transaction is required. 12 months is measured from the Note date of the current loan to the application date of the new loan. Does not apply to FHA insured mortgages.

Cash-out Refinance

If the property was acquired less than 12 months prior to the date of application, the max LTV is based on the lessor of the appraised value or original sales price. 12 months is measured from the Note date of the current loan to the application date of the new loan. At least one borrower must hold title to subject property for a minimum of 6 months. <620 FICO max cash-out is limited to $50,000, >620 FICO is unlimited up to the max LTV allowed per the program. Borrowers with mortgage delinquencies within past 12 months are not eligible for cash out refinances. High balance cash out loans with a Bankruptcy and/or Foreclosure in the most recent 4 years will be evaluated case-by-case.

Down Payment Assistance

Down Payment Assistance programs are permitted. Please refer to the CMS Down Payment Assistance approved list and webpage for program details and requirements. http://carringtonhome.corp.int/mortgage/lending/Pages/Down-Payment-Assistance-Programs.aspx

Adding Borrowers

Adding borrowers is allowed if currently occupying subject as primary residence for previous 6 months.

Deleting Borrowers

Deleting borrowers is allowed provided at least one borrower has been on title and original mortgage for a minimum of 6 months.

Buyer Contribution

Minimum investment of 3.5% required. All down payment funds and cash to close must be documented and verified.

Seller Contribution

Max contributions limited to 6%. Contributions include (not limited to): Discount, Closing Costs, Prepaids and Up Front MIP.

 GENERAL

AUS Approval & Manual Underwriting

All loans require an AUS decision with the exception of loans with non-traditional credit references. Loans receiving an AUS Approve/Eligible may follow AUS Findings except as noted otherwise in CMS FHA Lending Guide and program matrix. Regardless of the AUS Findings, CMS is required to evaluate the loan for data integrity and ensure a sound underwriting decision is rendered. Loans receiving a Refer/Ineligible are not eligible. Loans receiving a Refer/Eligible may be eligible for a downgrade to a manual underwrite. Manually underwritten loans must follow standard FHA guidelines as outlined in CMS FHA Lending Guide. Documentation waivers are not acceptable on manually underwritten loans. All manually underwritten loans require compensating factors supporting loan decision. All manual underwrites require an AUS to be run and “refer eligible” findings uploaded into the LOS. The AUS findings must be uploaded even when the Underwriter knows the loan will be manually underwritten upfront or the loan will be downgraded to a manual underwrite.

Ineligible

Escrow waivers, Temporary Buydowns, Energy Efficient Mortgages (EEM), Mortgage Credit Certificate (MCC) / Section 8 Voucher.

Loan Terms Available

15 Year, 20 Year, 25 Year and 30 Year Fixed

Qualifying Fixed Products

Qualify at Note Rate

Minnesota

Qualify at Note Rate

State Specific

Texas = cash-out refinance not allowed

Prepayment Penalty

Not permitted

Maximum # of Properties

There is no maximum number of CMS financed properties.

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CREDIT REQUIREMENTS

FHA MORTGAGE

550 MIN FICO

PORTFOLIO MORTGAGE

NO MINIMUM

VA MORTGAGE

550 MIN FICO SCORE 

USDA LOANS

580 MIN FICO SCORE 

FANNIE MAE.

620 MIN FICO SCORE 

FREDDIE MAC

620 MIN FICO SCORE 

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