The following updates are effective immediately, for all loans in pipeline or locked loans.
The following updates are effective immediately, for all loans in pipeline or locked loans.
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Current Guideline |
New Guideline |
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Conventional Conforming Guideline Updates |
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Primary Residence · Purchase and Rate & Term Refi: 660 credit score · Cash-out Refi: 680 credit score |
· Purchase and Rate & Term Refi: 640 credit score · Cash-out Refi: 660 credit score |
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Second Home · Purchase and Rate & Term Refi: 660 credit score · Cash-out Refi: not eligible |
· Purchase and Rate & Term Refi: 640 credit score · Cash-out Refi: 660 credit score |
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Manufactured Home · Cash-out Refi: 680 credit score |
660 credit score |
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Co-ops Primary Residence · Primary Residence and Rate & Term Refi: 660 credit score · Cash-out Refi: 680 credit score |
· Primary Residence and Rate & Term Refi: credit score 640 · Cash-out Refi: credit score 660 |
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Texas · Rate & Term Refi: 660 credit score · Cash-out Refi: 680 credit score |
· Rate & Term Refi: 640 credit score · Cash-out Refi: 660 credit score |
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· Employees of Brokers not eligible · Principal/Owners not eligible |
· Employees of Brokers eligible · Principal/Owners remain ineligible |
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Subject Investment Properties · Rental income from the subject investment property cannot be used for loan qualification · Six months reserves are required in addition to standard reserve requirements per the product |
· For purchase transactions, when rental income from the subject investment property is used for loan qualification, a vacancy factor of 50% must be applied to the rental income · Refinance transactions require evidence of the most recent two months receipt of rental income is required · Three months reserves are required in addition to standard reserve requirements per the product |
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Rental Income from Other Real Estate Owned (REO) · The use of rental income from other REO requires evidence of the most recent two months receipt of rental income for each rental property owned · Six months reserves required for each rental property owned in addition to standard reserve requirements per product if rental income is used to qualify |
Rental Income from Other Real Estate Owned (REO) · The use of rental income from other REO requires evidence of the most recent two months receipt of rental income for each rental property owned · Three months reserves required for each rental property owned in addition to standard reserve requirements per product if rental income is used to qualify |
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Rate & Term Refi may not finance the payment of real estate taxes for the subject property in the loan amount and waive escrows |
Removed guideline |
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Escrow waiver policy for investment properties in properties in CA: LTV < 90% |
LTV ≤ 80% for investment property |
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FHA Guideline Updates |
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· Employees of Brokers not eligible · Principal/Owners not eligible |
· Employees of Brokers are eligible · Principal/Owners remain ineligible |
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Purchase, Rate & Term and Simple Refi · 700 credit score to 55% DTI · 660 credit score to 50% DTI |
· 680 credit score to 55% DTI · 640 credit score to 50% DTI |
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Cash-out Refi: 680 credit score to 43% DTI |
660 credit score to 45% DTI |
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Manufactured Homes · Purchase, Rate & Term, Simple Refi and Portfolio Refi: 680 credit score to 45% DTI |
Purchase, Rate & Term and Simple Refi: 660 credit score to 45% DTI |
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Credit Qualifying – Portfolio: 660 credit score to 50% DTI |
620 credit score to 50% DTI |
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Non-Credit Qualifying – Portfolio: 660 credit score |
620 credit score |
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Non-Credit Qualifying – Non-Portfolio: 640 credit score |
640 credit score |
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Rental Income from Other Real Estate Owned · The use of rental income from other real estate owned requires evidence of the most recent two (2) months receipt of rental income for each rental property owned · Six (6) months reserves required for each rental property owned in addition to the standard VA reserve requirements if rental income is used to qualify |
· The use of rental income from other real estate owned requires evidence of the most recent two (2) months receipt of rental income for each rental property owned · Three (3) months reserves required for each rental property owned in addition to the standard VA reserve requirements if rental income is used to qualify |
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VA Guideline Updates |
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· Employees of Brokers not eligible · Principal/Owners not eligible |
· Employees of Brokers are eligible · Principal/Owners remain ineligible |
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Purchase · $510,400 with 660 credit score to 55% DTI · $1,000,000 with 680 credit score to 55% DTI · DTI greater than 45% requires 2 additional months reserves |
$1,000,000 with 640 credit score to 55% DTI |
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Cash-out Refi: 700 credit score to 50% DTI |
640 credit score |
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Manufactured Home · Maximum loan amount $510,400 · Purchase: 680 credit score to 45% DTI · Cash-out Refi not permitted · IRRRL not permitted |
· Maximum loan amount $510,400 remains · Purchase: 640 credit score to 50% DTI · Cash-out Refi: 640 credit score to 50% DTI · IRRRL max loan amount $510,400 · Portfolio: 620 to 100% LTV to 55% DTI · Non-Portfolio: 640 to 100% LTV to 50% DTI |
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IRRRL · Portfolio o $1,000,000 loan amount o 660 credit score to Unlimited LTV/CLTV to 50% DTI · Non-Portfolio o $1,000,000 loan amount o 680 credit score to 45% DTI |
· Portfolio o $1,000,000 loan amount o 620 credit score to 100% LTV/CLTV to 55% DTI · Non-Portfolio o $1,000,000 loan amount o 640 credit score to 50% DTI |
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VA existing mortgage added clarification |
The existing VA mortgage must be current at time of application and closing with evidence that existing mortgage is current for month of IRRRL closing and disbursement |
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Rental Income from Other Real Estate Owned · The use of rental income from other real estate owned requires evidence of the most recent two (2) months receipt of rental income for each rental property owned · Six (6) months reserves required for each rental property owned in addition to the standard VA reserve requirements if rental income is used to qualify |
· The use of rental income from other real estate owned requires evidence of the most recent two (2) months receipt of rental income for each rental property owned · Three (3) months reserves required for each rental property owned in addition to the standard VA reserve requirements if rental income is used to qualify |
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USDA Guideline Updates |
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· Employees of Brokers not eligible · Principal/Owners not eligible |
· Employees eligible · Principal/Owners remain ineligible |
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Purchase Standard Rate & Term Refi: 41% DTI |
44% DTI |
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Streamlined Refi: 41% DTI |
44% DTI |
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Streamlined Assist Refi: 43% DTI |
32/44% DTI |
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Rental Income from Other Real Estate Owned · The use of rental income from other real estate owned requires evidence of the most recent two (2) months receipt of rental income for each rental property owned · Six (6) months reserves required for each rental property owned in addition to the standard VA reserve requirements if rental income is used to qualify |
· The use of rental income from other real estate owned requires evidence of the most recent two (2) months receipt of rental income for each rental property owned · Three (3) months reserves required for each rental property owned in addition to the standard VA reserve requirements if rental income is used to qualify |
|
Current Guideline |
New Guideline |
|
Conventional Conforming Guideline Updates |
|
|
Primary Residence · Purchase and Rate & Term Refi: 660 credit score · Cash-out Refi: 680 credit score |
· Purchase and Rate & Term Refi: 640 credit score · Cash-out Refi: 660 credit score |
|
Second Home · Purchase and Rate & Term Refi: 660 credit score · Cash-out Refi: not eligible |
· Purchase and Rate & Term Refi: 640 credit score · Cash-out Refi: 660 credit score |
|
Manufactured Home · Cash-out Refi: 680 credit score |
660 credit score |
|
Co-ops Primary Residence · Primary Residence and Rate & Term Refi: 660 credit score · Cash-out Refi: 680 credit score |
· Primary Residence and Rate & Term Refi: credit score 640 · Cash-out Refi: credit score 660 |
|
Texas · Rate & Term Refi: 660 credit score · Cash-out Refi: 680 credit score |
· Rate & Term Refi: 640 credit score · Cash-out Refi: 660 credit score |
|
· Employees of Brokers not eligible · Principal/Owners not eligible |
· Employees of Brokers eligible · Principal/Owners remain ineligible |
|
Subject Investment Properties · Rental income from the subject investment property cannot be used for loan qualification · Six months reserves are required in addition to standard reserve requirements per the product |
· For purchase transactions, when rental income from the subject investment property is used for loan qualification, a vacancy factor of 50% must be applied to the rental income · Refinance transactions require evidence of the most recent two months receipt of rental income is required · Three months reserves are required in addition to standard reserve requirements per the product |
|
Rental Income from Other Real Estate Owned (REO) · The use of rental income from other REO requires evidence of the most recent two months receipt of rental income for each rental property owned · Six months reserves required for each rental property owned in addition to standard reserve requirements per product if rental income is used to qualify |
Rental Income from Other Real Estate Owned (REO) · The use of rental income from other REO requires evidence of the most recent two months receipt of rental income for each rental property owned · Three months reserves required for each rental property owned in addition to standard reserve requirements per product if rental income is used to qualify |
|
Rate & Term Refi may not finance the payment of real estate taxes for the subject property in the loan amount and waive escrows |
Removed guideline |
|
Escrow waiver policy for investment properties in properties in CA: LTV < 90% |
LTV ≤ 80% for investment property |
|
FHA Guideline Updates |
|
|
· Employees of Brokers not eligible · Principal/Owners not eligible |
· Employees of Brokers are eligible · Principal/Owners remain ineligible |
|
Purchase, Rate & Term and Simple Refi · 700 credit score to 55% DTI · 660 credit score to 50% DTI |
· 680 credit score to 55% DTI · 640 credit score to 50% DTI |
|
Cash-out Refi: 680 credit score to 43% DTI |
660 credit score to 45% DTI |
|
Manufactured Homes · Purchase, Rate & Term, Simple Refi and Portfolio Refi: 680 credit score to 45% DTI |
Purchase, Rate & Term and Simple Refi: 660 credit score to 45% DTI |
|
Credit Qualifying – Portfolio: 660 credit score to 50% DTI |
620 credit score to 50% DTI |
|
Non-Credit Qualifying – Portfolio: 660 credit score |
620 credit score |
|
Non-Credit Qualifying – Non-Portfolio: 640 credit score |
640 credit score |
|
Rental Income from Other Real Estate Owned · The use of rental income from other real estate owned requires evidence of the most recent two (2) months receipt of rental income for each rental property owned · Six (6) months reserves required for each rental property owned in addition to the standard VA reserve requirements if rental income is used to qualify |
· The use of rental income from other real estate owned requires evidence of the most recent two (2) months receipt of rental income for each rental property owned · Three (3) months reserves required for each rental property owned in addition to the standard VA reserve requirements if rental income is used to qualify |
|
VA Guideline Updates |
|
|
· Employees of Brokers not eligible · Principal/Owners not eligible |
· Employees of Brokers are eligible · Principal/Owners remain ineligible |
|
Purchase · $510,400 with 660 credit score to 55% DTI · $1,000,000 with 680 credit score to 55% DTI · DTI greater than 45% requires 2 additional months reserves |
$1,000,000 with 640 credit score to 55% DTI |
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Cash-out Refi: 700 credit score to 50% DTI |
640 credit score |
|
Manufactured Home · Maximum loan amount $510,400 · Purchase: 680 credit score to 45% DTI · Cash-out Refi not permitted · IRRRL not permitted |
· Maximum loan amount $510,400 remains · Purchase: 640 credit score to 50% DTI · Cash-out Refi: 640 credit score to 50% DTI · IRRRL max loan amount $510,400 · Portfolio: 620 to 100% LTV to 55% DTI · Non-Portfolio: 640 to 100% LTV to 50% DTI |
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IRRRL · Portfolio o $1,000,000 loan amount o 660 credit score to Unlimited LTV/CLTV to 50% DTI · Non-Portfolio o $1,000,000 loan amount o 680 credit score to 45% DTI |
· Portfolio o $1,000,000 loan amount o 620 credit score to 100% LTV/CLTV to 55% DTI · Non-Portfolio o $1,000,000 loan amount o 640 credit score to 50% DTI |
|
VA existing mortgage added clarification |
The existing VA mortgage must be current at time of application and closing with evidence that existing mortgage is current for month of IRRRL closing and disbursement |
|
Rental Income from Other Real Estate Owned · The use of rental income from other real estate owned requires evidence of the most recent two (2) months receipt of rental income for each rental property owned · Six (6) months reserves required for each rental property owned in addition to the standard VA reserve requirements if rental income is used to qualify |
· The use of rental income from other real estate owned requires evidence of the most recent two (2) months receipt of rental income for each rental property owned · Three (3) months reserves required for each rental property owned in addition to the standard VA reserve requirements if rental income is used to qualify |
|
USDA Guideline Updates |
|
|
· Employees of Brokers not eligible · Principal/Owners not eligible |
· Employees eligible · Principal/Owners remain ineligible |
|
Purchase Standard Rate & Term Refi: 41% DTI |
44% DTI |
|
Streamlined Refi: 41% DTI |
44% DTI |
|
Streamlined Assist Refi: 43% DTI |
32/44% DTI |
|
Rental Income from Other Real Estate Owned · The use of rental income from other real estate owned requires evidence of the most recent two (2) months receipt of rental income for each rental property owned · Six (6) months reserves required for each rental property owned in addition to the standard VA reserve requirements if rental income is used to qualify |
· The use of rental income from other real estate owned requires evidence of the most recent two (2) months receipt of rental income for each rental property owned · Three (3) months reserves required for each rental property owned in addition to the standard VA reserve requirements if rental income is used to qualify |
As a reminder, 2019 tax returns must be filed by July 15, 2020. For application dates and/or note dates after July 15, 2020, if tax returns are required for loan qualification and the borrower has not filed their tax return, a Copy of Application for Automatic Extension of Time to File 2019 U.S. Individual Income Tax Return (IRS Form 4868) is required through October 15, 2020. After October 15, 2020, tax returns are required. See the Policy and Procedures Manual and substitute April 15, 2020 with July 15, 2020.