10% Down Florida Non Warrantable Condo Lenders

4. Loan Terms

• Minimum Line Amount: $20,000 for Piggybacks
• Minimum Utilization (draw amount): 75% of the line amount
• After the initial draw at closing, the minimum proceeding draw is $1,000.
• HELOC is subject to 90 90-day lock-out period after the initial draw at closing.
• Index: Prime
• Cap: 18% unless otherwise limited by state or regulatory requirements.
• Margin: Subject to rate sheet
• Floor: 4%
• Qualifying Rate: Index + Margin + 2%
• Monthly reset

5. Occupancy

Primary residences, second home transactions, and investment properties are permitted. Second home 2-4 units are ineligible. Non-occupying co-borrowers are permitted on primary transactions.

 

6. Ineligible Property Types:

• Properties listed for sale within the last six months as of the application date
• Condo hotels and condotels
• Unique properties (such as log homes)
• Properties with more than ten (10) acres
• Manufactured homes
• Mobile homes
• Cooperatives
• Leaseholds
• Non-Fannie Warrantable Condominiums
• Commercial, farms/working farms, and churches
• Mixed-use properties
• Rural properties (indicated as “rural” on the appraisal or has rural zoning on the appraisal)
• Properties with agricultural zoning or characteristics

7. Ineligible Transactions

• Escrow holdbacks
• Temporary buydowns (the first mortgage is permitted to have a temporary buydown)
• Community seconds
• Negative amortization
• Assumable loans
• Reverse 1^st lien mortgages
• High-Cost Mortgage Loans
• Power of Attorney (not permitted when the first lien is a DU cash-out transaction)

8. Ineligible Borrowers

• Trust Estates
• LLC, Corporation, or Partnership
• Foreign Nationals
• Borrowers with diplomatic immunity or otherwise excluded from US jurisdiction

9. Everything Else 

Credit

Defer to first lien AUS requirements regarding credit, but at least two credit scores are required per borrower. The lower of the two scores will be the qualifying FICO for the borrower.

Mortgage Payment History

No late payments are allowed for any mortgage in the most recent twelve months (0x30x12) unless during a COVID-19 forbearance. Missed payments during the forbearance period would not be considered late. Any mortgage loan currently in forbearance must be removed before the loan application date. All mortgages must be current and no more than 45 days may have elapsed since the last paid installment date to the loan application date.

Derogatory Credit

Follow AUS in the primary loan (DU or LP) for waiting period requirements. Extenuating circumstances are not permitted.

Real Estate Owned (REO) Expenses

If tax returns are being utilized to document the taxes and insurance for non-subject properties, the returns must be for the most recent calendar year. If the borrower has not filed the most recent calendar year of tax returns, current documentation must be provided. Property tax and insurance documentation from the current calendar year must always be used, when provided.

Example: A loan closing in 2024 has an REO. The mortgage statement for the REO, indicates that taxes and insurance are not escrowed. Additionally, rental income is being used from the same REO. The borrower has filed an extension for the 2023 tax returns and provides the 2022 tax returns to calculate the income. The 1040s from 2022 are NOT acceptable for documenting current expenses. More current documentation from 2023/2024 is required.

Income Restrictions

Income produced, or about, cannabis, hemp, or the adult entertainment industry is not permitted.

Title Requirements

A full title report is required. Additionally, all borrowers must be vested on title at the time of the loan application. The subject property cannot be owned free and clear. There must be a mortgage payment for the subject property and the subject HELOC must be in second lien position. Subordinate financing (i.e. a mortgage subordinated to the subject loan) is not permitted. Additional subordinate mortgage liens must be paid off and/or closed.

HOI Replacement Cost

For Piggyback HELOC  a Replacement Cost Estimator (or equivalent) is required. The dwelling coverage must cover the replacement cost if the replacement cost is less than the loan amount. If the replacement cost is more than the loan amount, the dwelling coverage must cover the greater of 1) 80% of the replacement cost OR 2) the loan amount (loan amount refers to the outstanding balance of the first lien combined with the total line amount from the HELOC). 

Property Valuation Requirements

Total Line Amount Less Than or Equal to (≤) $400K

A full appraisal OR an Automated Valuation Model (AVM) obtained by UWM may be used as the primary valuation of the subject property.  An AVM may only be used as the primary valuation if the primary loan receives an eligible appraisal waiver/ACE, Freddie Mac ACE + PDR, or Fannie Mae Value Acceptance + PDC.

• • AVM must be completed within one month of the note date.
  • If the subject property already has a full appraisal provided, an AVM value cannot be used (the value from a full un-expired appraisal would supersede the AVM’s valuation). 

Total Line Amount Greater than (>) $400K

A full appraisal completed within 4 months of the note date is required. Appraisal waivers or an AVM in lieu of an appraisal are not permitted.

Desktop appraisals may be accepted as an appraisal alternative so long as the AUS requirements are met in the primary loan.

Freddie Mac ACE + PDR, Fannie Mae Value Acceptance + PDC, or any other appraisal alternatives will not be permitted.

GENERAL TERMS

Note Rate – The interest rate the loan closes on

Draw – Dollar amount the borrower pulls from against the available line of credit

Initial Draw Amount – The dollar amount the borrower pulls from the available credit line at closing

Draw Period – Timeframe in which the borrower is able to withdraw funds from the available line of credit. 3-year and 5-year options available.

Repayment Period – The timeframe in which the borrower repays the balance owed. Once the repayment period begins draws are no longer permitted. The outstanding balance becomes the loan amount.

Max Loan Amount – The maximum dollar amount that can be financed (borrowed) with a HELOC

Total Line Amount/Max Loan Amount – The highest balance that can be drawn on the HELOC

CLTV – Combined Loan to Value

1st Lien Mortgage + 2nd Lien Mortgage Balance / Appraised Value = CLTV

Ex. Owe $300,000 on 1st mortgage, drew $75,000 on HELOC. Appraised Value is $550,000. $375,000 / $550,000 = 68.18% CLTV

HCLTV – High Combined Loan to Value or Home Equity Combined Loan to Value

1st Lien Mortgage + 2nd Line Total Line Amount / Appraised Value = HCLTV

Ex. Owe $300,000 on 1st mortgage. Total line amount (the highest balance available) is $100,000. Appraised Value $550,000. $400,000 / $550,000 = 72.73% HCLTV

Interest-Only Payment – Monthly interest payment borrowers will pay during first 10 years of the HELOC.

Fully Amortized Payment – Monthly payment that will apply towards principal and interest during repayment period of the loan.

GENERAL PARAMETERS

Rate Cap: 18% unless otherwise limited by state or regulatory requirements

Floor: 4%

Index: Prime Rate (resets monthly)

Margin: Subject to the rate sheet

Note Rate: Prime Rate + Margin

Qualifying Rate: Note Rate + 2%

Qualifying Payment: Qualifying rate over amortizing repayment period

• EX: 20-year HELOC at 8.5% rate. Qualifying payment = 10.5% over the 10-year fully amortization period.

AUS: No AUS run on Standalone or Piggyback HELOCs.

• Standalone – must follow Fannie Mae guidelines

• Piggyback – must follow the AUS ran on the 1^st Lien Mortgage

Underwriting Fee:

• Standalone – $1,195 underwriting fee
• Piggyback – $535 additional underwriting fee (on top of the underwriting fee for the 1^st lien)

Pre-payment Penalties: None

Correspondent Eligibility: HELOCs cannot be correspondent loans, HELOCs must be closed in UWMs name

HELOC PARAMETERS STANDALONE

• 30-year

• First 10 years = interest-only payment
• Year 11 – 30 = payment is amortized over 20 years

• 20-year

• First 10 years = interest-only payment
• Years 11 – 20 = payment is amortized over 10 years

• 3-year or 5-year draw

• Primary, second home, and investment properties – 1-4 units 

• Max loan amount = $500,000

• Min line amount = $25,000

• Min initial draw amount = 75% of the line amount

• Subject to a 90-day lock-out period after the initial draw at closing

• Max CLTV/HCLTV = 90%

• Min FICO = 680

• Max DTI = 50%

• 2^nd Lien Positions Only

• 1^st lien can be any product type or channel
• Standalone must be conventional or high balance

• Manual underwrite required

• Temporary rate buydowns, manufactured homes and co-ops are not permitted

• Not available in Texas, Vermont and Iowa

• Mortgage payment history: zero 30-day lates allowed in the last 12 months