This document provides guidelines for FHA 15 and 30 year fixed rate manufactured home loans originated by CountryPlace Mortgage (CPM). Key details include:
- Maximum LTVs of 90% for credit scores 620-649 and 96.5% for scores over 650. DUs are required and maximum front/back ratios of 30%/45%.
- Eligible borrowers must be US citizens, permanent resident aliens, or non-permanent resident aliens eligible to work in the US. Non-occupant co-borrowers and foreign nationals are ineligible.
- Minimum credit score is 620. Borrowers must have no mortgage late payments in the last 12 months and satisfactory explanations for
You have just found the most impressive and strategically organized Real Estate Listing Presentation that will help you win listings. This custom listing presentation is easy to use, cost effective, and works great for any real estate agent – experienced or not! Our listing presentation can be fully customized to match any brokerage’s identity and branding, any agent’s business model, and will work in any market.
You have just found the most impressive and strategically organized Real Estate Listing Presentation that will help you win listings. This custom listing presentation is easy to use, cost effective, and works great for any real estate agent – experienced or not! Our listing presentation can be fully customized to match any brokerage’s identity and branding, any agent’s business model, and will work in any market.
Step by step process to buying a home. Everything you need to know from making the offer, to getting the proper inspections, the paperwork, and closing process.
Mike Hall
Http://www.myohiohouse.com
614-937-4162
Luxury Real Estate Listing PresentationGary Grimes
After building four websites for this client, he approached me about creating a luxury listing presentation for his high-end real estate clients on Florida's beautiful Emerald Coast. Here's what I came up with. He was thrilled and so were clients!
Real Estate Sole selling proposal for residential & commercial properties in ...Sunny Bakale
PUNE HOME BUY is a Pune based Sole Selling and brokerage firm. We provide services which include Sales, Marketing & CRM activity for any residential and commercial property in Pune. We are a team of highly trained professionals.
BPO: Business Process Outsourcing. There are many types of third party BPO Services are available which are Data Entry, Transcription, Voice Processing, Telemarketing, 3D Visualization, Virtual Staffing and many more. Contact Alen BPO for any type of BPO Services.
Real estate agents and brokers are providing services that they were trained to do while achieving the license to sell real estate properties. There is a process in which your home may need to undergo if your looking to sell fast, and letting your Realtor handle every part could be the reason your still sitting on the market.
Before you start writing your real estate business plan, spend as much time as you can to reading through some samples of real estate business plans. Not only will that give you a good idea of what it is you’re aiming for, but it will also show you the different sections that different entrepreneurs include and the language they use to write about themselves and their future plans.
We have created a sample real estate business plan example for you to get a good idea about how a perfect real estate business plan should look like and what details you should include in your business plan.
Source: https://upmetrics.co/template/real-estate-business-plan-example
Step by step process to buying a home. Everything you need to know from making the offer, to getting the proper inspections, the paperwork, and closing process.
Mike Hall
Http://www.myohiohouse.com
614-937-4162
Luxury Real Estate Listing PresentationGary Grimes
After building four websites for this client, he approached me about creating a luxury listing presentation for his high-end real estate clients on Florida's beautiful Emerald Coast. Here's what I came up with. He was thrilled and so were clients!
Real Estate Sole selling proposal for residential & commercial properties in ...Sunny Bakale
PUNE HOME BUY is a Pune based Sole Selling and brokerage firm. We provide services which include Sales, Marketing & CRM activity for any residential and commercial property in Pune. We are a team of highly trained professionals.
BPO: Business Process Outsourcing. There are many types of third party BPO Services are available which are Data Entry, Transcription, Voice Processing, Telemarketing, 3D Visualization, Virtual Staffing and many more. Contact Alen BPO for any type of BPO Services.
Real estate agents and brokers are providing services that they were trained to do while achieving the license to sell real estate properties. There is a process in which your home may need to undergo if your looking to sell fast, and letting your Realtor handle every part could be the reason your still sitting on the market.
Before you start writing your real estate business plan, spend as much time as you can to reading through some samples of real estate business plans. Not only will that give you a good idea of what it is you’re aiming for, but it will also show you the different sections that different entrepreneurs include and the language they use to write about themselves and their future plans.
We have created a sample real estate business plan example for you to get a good idea about how a perfect real estate business plan should look like and what details you should include in your business plan.
Source: https://upmetrics.co/template/real-estate-business-plan-example
1. Delegated/Correspondent Underwriting Hot Spots:................................................................................................2
Non-Delegated Correspondent/Broker Hot-Spots: .................................................................................................3
Submission requirements........................................................................................................................................4
CPM Representatives by region: ............................................................................................................................6
FHA 15 & 30 Year Fixed Rate MH Matrix ...............................................................................................................7
Conventional 15 & 30 Year Fixed Rate MH Matrix ...............................................................................................12
Closing Highlights: ................................................................................................................................................18
CPM Title Surrender Fees ....................................................................................................................................19
FHA Site Built 15 & 30 Year Fixed Rate Matrix ....................................................................................................20
Conventional Site Built 15 & 30 Year Fixed Rate .................................................................................................25
FHA 203K(S) 15 & 30 Year Fixed Rate ................................................................................................................30
How to Complete HUD-92700 Maximum Mortgage Worksheet for a Streamlined (k) Loan ................................36
CountryPlace Mortgage partner funded 1X close .................................................................................................38
Page 1 of 38
2. Delegated/Correspondent Underwriting Hot Spots:
Effective 6/17/2011
:
1. Prior to delivery, underwriting questions should be directed to
Wholesaleapplication@CountryPlaceMortgage.Com
2. CPM turn time for reviewing files for purchase:
2 business days for CPM purchase review and conditions
5 business days for file purchase (from time all conditions are cleared)
3. CPM requires original closing documents executed by all appropriate parties
4. If manufactured home title has been retired/eliminated: CPM will require Correspondent to provide proof
the title to the manufactured home has been properly retired upon delivery of loan for purchase
5. If manufactured home title has not been retired/eliminated: CPM will handle title elimination, however,
Correspondent will be responsible for providing the necessary documents CPM will need in order to eliminate
title and Correspondent originators will be required to disclose and collect the necessary fees associated with
title elimination (See title elimination section of this matrix).
Please Note: CPM has specific fees for eliminating title in each state. It is the correspondent’s
responsibility to disclose those fees in the initial disclosures sent to the borrower and to collect those
fees at closing. Fees not collected at closing will still be netted from Correspondent’s funds upon
purchase
6. If using a POA: Power of attorney is allowed for all loans but must be specific to the transaction. This form
must contain the names of the parties involved as well as the property address
Page 2 of 38
3. Non-Delegated Correspondent/Broker Hot-Spots:
7. underwriting questions should be directed to Wholesaleapplication@CountryPlaceMortgage.Com
8. CPM turn time for reviewing files:
2-3 business days for CPM initial underwriting review
1-2 business days for CPM underwriting condition review
1 business day for CPM to release closing instructions
9. CPM requires original closing documents executed by all appropriate parties
10. If using a POA: Power of attorney is allowed for all loans but must be specific to the transaction. This form
must contain the names of the parties involved as well as the property address
11. If manufactured home title has been retired/eliminated: CPM will require Correspondent/broker to
provide proof the title to the manufactured home has been properly retired upon delivery of loan for purchase
12. If manufactured home title has not been retired/eliminated: CPM will handle title elimination, however,
Correspondent/broker will be responsible for providing the necessary documents CPM will need in order to
eliminate title and Correspondent/broker originators will be required to disclose and collect the necessary
fees associated with title elimination (See title elimination section of this matrix).
Please Note: CPM has specific fees for eliminating title in each state. It is the correspondent/Broker’s
responsibility to disclose those fees in the initial disclosures sent to the borrower and to collect those
fees at closing. Fees not collected at closing will still be netted from Correspondent’s funds upon
purchase
Page 3 of 38
4. Submission requirements
1. Submit a complete loan package to:
CountryPlace Mortgage, Ltd.
15305 Dallas Parkway, Suite 800
Addison, TX 75001 ATTN: Purchase Review
Phone: 800-228-1828
2. Submitting Complete loan packages for underwriting to CPM:
- Submit a complete closed loan package (correspondent) and complete loan package (broker)
using the CPM “Closed Loan Purchase Checklist” (Correspondent) and “Product Specification
checklist” (broker) as the coversheet,
- Underwriting or scenario questions should be sent from correspondent’s underwriters to
WholeSaleApplication@CountryPlaceMortgage.Com
Ordering Appraisals
Correspondent will be responsible for ordering the appraisal
CPM will order appraisals on all brokered deals
3. Submitting marginal loans or appraisals for CPM review prior to closing
From time to time your underwriters may have questions in regard to the acceptability of a marginal loan or
appraisal. There may also be specific product questions. A scanned copy of a credit package or appraisal can
be sent via secure mail to CPM at any time. Product questions can be directed to
Wholesaleapplication@CountryPlaceMortgage.Com.
Page 4 of 38
5. CPM reserves the right to amend these guidelines at any time. If amended, CPM will immediately inform
Correspondent of any changes. Application dates after changes to this matrix have been disclosed will
be subject to amended guidelines. All agency guidelines supersede CPM specific guidelines
FHA Not Permitted:
- Single-Wide MFH
- Non-Occupant Co-Borrowers / Co-Signers
- Subordinate Financing
- Loan amounts less than 50K
- Investment Properties
- Second Homes
Conventional Not Permitted
- Single-Wide MFH
- Non-Occupant Co-Borrowers / Co-Signers
- Subordinate Financing
- Loan amounts less than 50K
- Investment Properties
CPM Fees:
Underwriting $550 (Non-Delegated only)
Admin Fee $450 (All Files)
Supplemental Origination fee $350 (Streamline 203K only)
Page 5 of 38
7. FHA 15 & 30 Year Fixed Rate MH Matrix
FHA Manufactured Homes
FHA 15 & 30 Year Fixed Rate
Purchase and Rate & Term Refinance
Maximum Maximum
Maximum
Occupancy Credit Score Front / Back Seller Cash Reserves
LTV
Ratios Contributions
1-Unit 90% 620-649 As per DU unless
O/O Primary 30% / 45% 6% of SP payment shock is
Residence 96.5% >650 present
Program Guidelines:
Loan - Purchase
Purpose - Rate & Term Refinance
- Cash Out Refinance (not permitted in Texas
Occupancy - Owner Occupied, Primary Residence
Doc Type - Full documentation
Geographic - WA, ID, ND, OR, CA, AZ, NM, TX, OK, LA, AR, MS, AL, KS, GA, FL, SC, NC, TN, MN
Availability Note: Look for more states being added in the near future
Loan Type - FHA 15 and 30 year fixed rate program (20 year term available upon request)
and Terms
Prepayment - None
Penalty
Buy down - Bonafide discount points allowed.
Note: A discount point is considered bonafide when an interest rate of .25% higher than the offered rate is
available on the rate card the day the rate is locked
Escrow - Not permitted
Waivers
Assumed - In accordance with FHA guidelines, fixed rate loans are assumable to qualified borrower(s)
Loans
Maximum # - One
of Loans to
one
borrower
Maximum # - It must be determined by the underwriter that the subject property home is being purchased as
of the borrower’s primary residence
Properties Note: Borrower’s applying for an FHA insured mortgage that currently own a home insured by
Financed FHA must meet FHA requirements for owning a second FHA insured home. Proximity to a new
job as well as an increase in family size are two common, acceptable situations
Bankruptcy Bankruptcy:
- CPM requires that a borrower be discharged from bankruptcy for 2 years despite the type of
bankruptcy
- Customer must have three established lines of credit opened after the discharge. Each trade line
must have a 12 month history and must have some activity within the most recent 24 months. At
least one of these trade lines must be an installment account and borrower must have paid the
account down by an amount greater or equal to 10% of the subject loan amount. Rental history
is considered installment and the monthly payment multiplied by the number of months can be
used to meet the installment requirement
- Foreclosure:
- CPM requires that 36 months have passed from the date of the foreclosure sale. A satisfactory
letter of explanation must be included in the file. All standard trade line and payment shock
requirements apply
Age of Credit Documents:
Documents - As determined by DU findings
Page 7 of 38
8. Appraisal :
- 120-days old as of closing date (signing of Note & Mtg.)
AUS Acceptable AUS Determination:
Requirement - All loans must be run through DO/DU
- Approve/Eligible
Eligible All borrowers must have a valid U.S. Social Security number.
and Eligible:
Ineligible 1. U.S. Resident Citizen
Borrowers
2. Permanent Resident Alien
- Same as U.S. Citizen
- Obtain evidence of lawful, permanent residency issued by the Bureau of Citizenship and
Immigration Services (BCIS), formerly the INS.
- Obtain a copy of Alien Registration Receipt Card (Resident Alien card), I-551
3. Non-Permanent Resident Alien
- Must be eligible to work in the U.S.
- Evidence of residency and work status to be obtained through documentation from US Bureau
of Citizenship and Immigration Services (BCIS) formerly INS.
- Copy of the Employment Authorization Card, I-688B. This card carries an expiration date. A
SS card is not acceptable as evidence of work status.
Ineligible:
- Non-Occupant Co-Borrowers
- Co-Signers
- Foreign Nationals
- Non-Resident Canadians
- Borrowers with Diplomatic Immunity
Title Vesting Eligible Vesting / Rights of Ownership:
Rights of - Fee Simple
Ownership - Individual & Joint
Ineligible / No Exceptions:
- Land Trust
- Leasehold Estate
- Real Estate Syndication
- General or Limited Partnerships
- Title in the name of a Corporation
Credit - A tri-merge bureau is required on all loans; the lowest qualifying score of all applicants is used to qualify and
each borrower must have at least two credit scores. The qualifying score is the lower of 2 or the middle of 3
scores and must be reviewed for each borrower.
- For a credit score to be considered valid, the score must be generated from a minimum of three (3) trade
lines that have been evaluated for at least 12 months. The trade lines do not need to be currently active but
require some activity within the last 24 months. At least one of these trade lines must be an
installment account and borrower must have paid the account down by an amount greater or
equal to 10% of the subject loan amount. Rental history is considered installment and the
monthly payment multiplied by the number of months can be used to meet the installment
requirement
Minimum Credit Score:
- 620 (620-649 max LTV 90%, >649 max LTV is 96.5%)
Inquiries and Derogatory Credit:
- When inquiries and/or derogatory credit appear, the borrower must submit a signed credit explanation letter
prior to loan approval. Inquiry letter must cover ALL inquiries in the most recent 90 days from date of credit
report
- Note: Any delinquent accounts shown as “disputed” will result in an automatic downgrade to a
manual underwrite and all manual guidelines will apply. exceptions to this are as follows:
- 1. The disputed account has a zero balance
- 2. The disputed account is marked as "paid in full", or "resolved"
- 3. The disputed account is both a. less than $500, and b. more than 24 months old, based on the
Page 8 of 38
9. date of dispute.
Housing Payment History:
- 0 X 30 in the past 12 months.
- For borrowers with mortgage delinquency beyond the most previous 12 months, it is the underwriter’s
responsibility to carefully review and determine the borrower’s credit worthiness.
Mortgage Payment History/Documentation:
- The mortgage payment history may be documented by a VOM or provide a rating in the credit report.
Rental Payment History/Documentation:
- A rental payment history is required per the AUS findings or underwriter determination and must be
documented by a VOR from a property management company or 12 months cancelled checks if rented
from an individual (If there is payment shock of 25% or more, CPM requires a VOR regardless of what
DU requires)
Employment Salaried:
/ Income Most current paystubs covering a 30-day period with YTD income
Most current and consecutive 2-Years W-2’s
Most current two years tax transcripts (ordered via 4506 on all loans)
Self-Employed:
- Business must be in existence for at least two (2) years prior to subject application date.
- Most current and consecutive (signed) 2-Years Business Tax Returns with all schedules required if
incorporated
- Most current two years personal tax returns for principals of corporations or sole proprietors
- Copy of Business License or a CPA letter proving business still exists.
Overtime/Bonus/Other income
- Overtime income will be considered if employer indicates it is likely to continue and a two year history is
available and averaged
- Bonus income will be considered if employer indicates it is likely to continue and two year history is
available and averaged
- Commission income will be considered if employer indicates it is likely to continue and a two year history is
available and averaged. If commission income is more than 25% of total income, tax returns for two years
will be required to calculate income
Verbal Verification Prior to Closing:
A verbal verification of employment is required for each employer of all borrowers, within 10-days of closing.
This policy applies to all non-self employed income types.
Child Support, Alimony or Maintenance Income:
In order to use as income, child support, alimony or maintenance income, payments must reasonably be
documented to continue for at least a three (3) year period. The following documentation is required:
o Copy of the divorce decree, separation agreement or court order
o Copies of court records, bank statements or cancelled checks evidencing a minimum of three (3)
months receipt of payments.
Rental income:
Rental income must be supported by two years tax returns.
If converting primary residence to rental property and relying on rental income to qualify, 25% equity in the
rental property, as validated through appraisal or difference between original financed amount and current
balance, is required along with a copy of the a 12 month lease agreement and evidence of security deposit
All income must match 1003 and DU findings
Qualifying Maximum Ratios:
Ratios PITI FICO (Front End)
30% Max 620 – 679
35% Max 680+
If gross monthly income is less than 2500 dollars 25% Max Ratio (CPM to review any exceptions)
DTI FICO (Back End)
45% Max 620 – 679
50% Max 680 – 739
55% Max 740+
No exceptions on FICO scores < 650
Exceptions to maximum ratios considered with compensating factors such as minimal payment shock with
substantial reserves, etc. Must keep DO/DU Approved/Eligible
Lease - Not permitted
Option
Rent Credits
Page 9 of 38
10. Payment In all cases, the “existing housing” and the “proposed housing” sections of the 1003 application must be
Shock fully completed
CPM considers payment shock on all loans:
- Payment Shock occurs when the proposed housing expense will be considerably higher than the existing
housing expense and where there are multiple layers of risk. The UW must analyze the borrower’s existing
cash flow as depicted on bank statements and determine the borrower’s capacity for payment shock
Payment Shock Guideline:
620-679 FICO score and payment shock is 50% or more-2 months PITI reserves required
>679 FICO score and payment shock is 50% or more-1 months PITI reserves required
In order to be considered cash reserves for payment shock purposes, the borrowers ending balance on
two consecutive bank statements must consistently show the reserve requirements available in the
account. This shows the borrower has the ability to maintain the reserve levels required to sufficiently
offset payment shock
THIS IS ONE OF THE MOST IMPORTANT FACTORS IN ANALYZING THE BORROWER’S ABILITY TO PAY
Assets Bank Statements:
- Most current and consecutive two (2) months bank statements (all pages). Quarterly Bank statements must
be dated within 90-days of the initial application date and 120 days of closing (signing of note)
Earnest Money:
- Verification and source of funds for EM deposit required.
Stocks, Bonds, Mutual Funds, U.S. Government Securities:
- Copy of the account statement for the most recent 60 days/quarterly statement is required.
All assets must match 1003 and DU findings exactly
Seller Max Concessions:
Contribution - Max seller concession is the lower of 6% of contracted sales price or contracted amount
- Seller contribution is limited to discount points, closing costs and prepaid items
Cash - Cash reserves are not generally a requirement except when cash reserves are used as a compensating
Reserves factor when approving an FHA loan with debt ratios that exceed guidelines or payment shock is present
-Gift funds, cash proceeds from a refinance and equity in another property, are not acceptable sources of
cash reserves.
Gift Funds In accordance with current FHA guidelines:
- 100% gift funds for down payment are only acceptable if the funds are documented by a gift letter that
states the funds are not to be repaid, clear documentation of the donor’s ability to gift the funds and transfer
of funds from donor to the borrower
Gift Letter:
- A gift letter is required and must list the donor’s name, address, city, state and zip, phone number,
relationship to the borrower, and the dollar amount of the gift. The gift letter must indicate that the funds do
not have to be repaid in any way and must be signed and dated by the donor.
Documentation / Track Gift Funds :
- Evidence that gift funds stated in the Gift Letter were withdrawn from the donors account; and,
- Evidence that the same gift funds were received from the donors account to the borrower’s account, prior to
closing.
- When funds are transferred by donor to closing, verification of the transfer of the gift funds from the donors
account must show the donor as the remitter and HUD-1 must clearly indicate the exact amount of the gift
funds received from the donor and the account the funds were drawn from
Subordinate - Not Permitted
Financing
State - Manufactured Homes require a State Administrative Agency to inspect all modifications to manufactured
Requirements homes once they leave the factory. If the appraiser observes changes to the manufactured home such as
an addition, and there is no local agency to inspect the home, obtain an engineer's report indicating that the
structural changes or additions were made in accordance with HUD Manufactured Home Construction and
Safety Standards.
- If the property cannot be inspected by the State Administrative Agency and an Engineer's Report cannot be
obtained, the property is ineligible for financing .
Refinance A Cash-Out Refinance is not permitted in Texas and limited to an 85% in all other states
Page 10 of 38
11. Rate/Term and C/O refinances
- If a refinance, the owner of the MFH must have owned the unit and the land for a minimum of 1-year to be
eligible for financing.
- Properties owned free and clear will be considered a C/O Refi and not eligible for financing in Texas
- The refinance of a manufactured home that is currently financed as personal property and will be
converted to real estate in the transaction is eligible. (See Title “CPM Elimination Fees by State” below)
Special Vacant Properties:
Certification - If the appraiser indicates that the property was vacant at the time of the inspection, the utilities must be
/ Inspections turned on and an “As is” appraisal must be received from appraiser indicating that all utilities are now
functioning properly prior to closing. If vacant and property has a well/septic, a well water test and a septic
certification are needed if vacant more than 12 months.
Flood Determination / Certification:
- Mandatory
- All MFH located in a Flood Zone A or V are eligible
Flood Zone Elevation Certificate
- If the site supporting a manufactured home is within a FEMA designated Special Flood Hazard Area, the
following requirements apply:
Order a FEMA Elevation Certificate to determine if the manufactured home is eligible. The Lowest Adjacent
(finished) Grade (LAG) level beneath a manufactured home must be at or above the 100-Year return
frequency elevation (Base Flood Elevation)
- If the Elevation Certificate indicates that the lowest adjacent grade of the manufactured home is below the
Base Flood Elevation (BFE) level, the loan is not eligible- even if flood insurance is obtained.
Well and/or Septic Systems Certifications:
- Required only when made a condition of the sales contract, inspection report or appraisal, or if property is
vacant more than 12 months or for new construction. When required, the certification(s) may be no more
than 90-days old as of the date of closing (regardless of how old the system is).
NOTE: Shared wells must have a recorded shared well agreement executed by all parties
Foundation The Foundation for the MFH must be inspected by a licensed engineer. Engineer must address, grading,
skirting, and foundation system and state that all comply with FHA standards for a permanent foundation. This
information must be provided on an engineer’s certification that includes the engineer’s seal and signature
Appraisal - A full appraisal is required and must be completed on the Manufactured Home Appraisal Report (1004C)
- The appraiser must verify the location and wording on the “HUD” Tags/Certification Labels of the unit and
clear pictures of these tags must be provided (if HUD tags are not available, a certification from IBITS is
required. If appraiser cannot obtain a clear picture of the HUD label number, and the label is present and
accessible, he must manually insert the label number below the HUD label pictures on the appraisal)
- The appraiser must also use standard single-family residential appraisal techniques when appraising the
manufactured home. Other factory-built housing would provide the most similar comparables so every effort
should be made to obtain such comparables even though their distances from the subject may be greater
than usual. CPM requires that three manufactured home comparables be used to validate the value of the
subject property
Maximum adjustments:
- Maximum line item adjustment is 10%
- Maximum net adjustment is 15%
- Maximum gross adjustment is 25%
NOTE: Appraisals exceeding these maximum adjustments may be acceptable if the appraiser clearly identifies
the reason for exceeding these percentages. This must be clearly justified and within normal appraisal practice.
Page 11 of 38
12. Conventional 15 & 30 Year Fixed Rate MH Matrix
Conventional Manufactured Homes
Conventional 15 & 30 Year Fixed Rate
Purchase and Rate & Term Refinance
Maximum Maximum
Maximum
Occupancy Occupancy Front / Back Seller Cash Reserves
LTV
Ratios Contributions
1-Unit Owner As per DU unless
80% See “Qualifying >90% max 3%
O/O or Second Occupied Ratios” <=90% max 6%
payment shock is
Home 80% Second Home present
- Purchase: Borrower must have a minimum investment of 20% and maintain an 80% LTV after appraisal
- Rate & Term Refi: The current owner must have owned the MFH & land for a minimum of 1-Year prior to the application date.
Manufactured home financed as personal property being paid off in the transaction are eligible but loan must be considered a
cash out refinance and a max 65% LTV is required. (Not permitted in Texas)
- Cash Out Refi
Program Guidelines:
Loan - Purchase
Purpose - Rate & Term Refinance
- Cash Out refinance
Occupancy - Owner Occupied, Primary Residence and Second Homes
Doc Type - Full documentation
Geographic - WA, ID, ND, OR, CA, AZ, NM, TX, OK, LA, AR, MS, AL, KS, GA, FL, SC, NC, TN, MN
Availability Note: Look for more states being added in the near future
Loan Type - Conventional 15 and 30 year fixed rate program
and Terms
Prepayment - None
Penalty
Buy down - Bonafide discount points allowed.
Note: A discount point is considered bonafide when an interest rate of .25% higher than the offered rate is
available on the rate card the day the rate is locked
Escrow - Not permitted
Waivers
Assumed - In accordance with Fannie Mae guidelines, fixed rate loans are assumable to qualified
Loans borrower(s)
Maximum # - One
of Loans to
one
borrower
Maximum # - It must be determined by the underwriter that the subject property home is being purchased as
of the borrower’s primary residence or second home
Properties - Maximum of seven properties financed allowed
Financed
Bankruptcy Bankruptcy:
- CPM requires that a borrower be discharged from bankruptcy for 4 years despite the type of
bankruptcy
- Customer must have three established lines of credit opened after the discharge. Each trade line
must have a 12 month history and must have some activity within the most recent 24 months. At
least one of these trade lines must be an installment account and borrower must have paid the
account down by an amount greater or equal to 10% of the subject loan amount. Rental history
Page 12 of 38
13. is considered installment and the monthly payment multiplied by the number of months can be
used to meet the installment requirement
- Any repossessions within the most recent 3 years will disqualify the borrower
Foreclosure:
4 years from foreclosure sale date
Age of Credit Documents:
Documents - 120-days old at time of closing (signing of Note & Mtg.)
Appraisal :
- 120-days old as of closing date (signing of Note & Mtg.)
AUS Acceptable AUS Determination:
Requirement - All loans must be run through DO/DU
- Approve/Eligible
Eligible All borrowers must have a valid U.S. Social Security number.
and Eligible:
Ineligible 4. U.S. Resident Citizen
Borrowers
5. Permanent Resident Alien
- Same as U.S. Citizen
- Obtain evidence of lawful, permanent residency issued by the Bureau of Citizenship and
Immigration Services (BCIS), formerly the INS.
- Obtain a copy of Alien Registration Receipt Card (Resident Alien card), I-551
6. Non-Permanent Resident Alien
- Must be eligible to work in the U.S.
- Evidence of residency and work status to be obtained through documentation from US Bureau
of Citizenship and Immigration Services (BCIS) formerly INS.
- Copy of the Employment Authorization Card, I-688B. This card carries an expiration date. A
SS card is not acceptable as evidence of work status.
Ineligible:
- Non-Occupant Co-Borrowers
- Co-Signers
- Foreign Nationals
- Non-Resident Canadians
- Borrowers with Diplomatic Immunity
Title Vesting Eligible Vesting / Rights of Ownership:
Rights of - Fee Simple
Ownership - Individual & Joint
Ineligible / No Exceptions:
- Land Trust
- Leasehold Estate
- Real Estate Syndication
- General or Limited Partnerships
- Title in the name of a Corporation
Credit - A tri-merge bureau is required on all loans; the lowest qualifying score of all applicants is used to qualify and
each borrower must have at least two credit scores. The qualifying score is the lower of 2 or the middle of 3
scores and must be reviewed for each borrower.
- For a credit score to be considered valid, the score must be generated from a minimum of three (3) trade
lines that have been evaluated for at least 12 months. The trade lines do not need to be currently active but
require some activity within the last 24 months. At least one of these trade lines must be an
installment account and borrower must have paid the account down by an amount greater or
equal to 10% of the subject loan amount. Rental history is considered installment and the
monthly payment multiplied by the number of months can be used to meet the installment
requirement
Minimum Credit Score:
- 620 (620-649 max LTV 90%, >649 max LTV is 96.5%)
Inquiries and Derogatory Credit:
- When inquiries and/or derogatory credit appear, the borrower must submit a signed credit explanation letter
Page 13 of 38
14. prior to loan approval. Inquiry letter must cover ALL inquiries in the most recent 90 days from date of credit
report
- Note: Any delinquent accounts shown as “disputed” will result in an automatic downgrade to a
manual underwrite and all manual guidelines will apply. exceptions to this are as follows:
- 1. The disputed account has a zero balance
- 2. The disputed account is marked as "paid in full", or "resolved"
- 3. The disputed account is both a. less than $500, and b. more than 24 months old, based on the
date of dispute.
Housing Payment History:
- 0 X 30 in the past 12 months.
- For borrowers with mortgage delinquency beyond the most previous 12 months, it is the underwriter’s
responsibility to carefully review and determine the borrower’s credit worthiness.
Mortgage Payment History/Documentation:
- The mortgage payment history may be documented by a VOM or provide a rating in the credit report.
Rental Payment History/Documentation:
- A rental payment history is required per the AUS findings or underwriter determination and must be
documented by a VOR from a property management company or 12 months cancelled checks if rented
from an individual (If there is payment shock of 25% or more, CPM requires a VOR regardless of what
DU requires)
Employment Salaried:
/ Income Most current pay stubs covering a 30-day period with YTD income
Most current and consecutive 2-Years W-2’s
Most current two years tax transcripts (ordered via 4506 on all loans)
Self-Employed:
- Business must be in existence for at least two (2) years prior to subject application date.
- Most current and consecutive (signed) 2-Years Business Tax Returns with all schedules required if
incorporated
- Most current two years personal tax returns for principals of corporations or sole proprietors
- Copy of Business License or a CPA letter proving business still exists.
Overtime/Bonus/Other income
- Overtime income will be considered if employer indicates it is likely to continue and a two year history is
available and averaged
- Bonus income will be considered if employer indicates it is likely to continue and two year history is
available and averaged
- Commission income will be considered if employer indicates it is likely to continue and a two year history is
available and averaged. If commission income is more than 25% of total income, tax returns for two years
will be required to calculate income
Verbal Verification Prior to Closing:
A verbal verification of employment is required for each employer of all borrowers, within 10-days of closing.
This policy applies to all non-self employed income types.
Child Support, Alimony or Maintenance Income:
In order to use as income, child support, alimony or maintenance income, payments must reasonably be
documented to continue for at least a three (3) year period. The following documentation is required:
o Copy of the divorce decree, separation agreement or court order
o Copies of court records, bank statements or cancelled checks evidencing a minimum of three (3)
months receipt of payments.
Rental income:
Rental income must be supported by two years tax returns.
If converting primary residence to rental property and relying on rental income to qualify, 25% equity in the
rental property, as validated through appraisal or difference between original financed amount and current
balance, is required along with a copy of the a 12 month lease agreement and evidence of security deposit
o All income must match 1003 and DU findings
Qualifying Maximum Ratios:
Ratios PITI FICO (Front End)
30% Max 620 – 679
35% Max 680+
If gross monthly income is less than 2500 dollars 25% Max Ratio (CPM to review any exceptions)
DTI FICO (Back End)
45% Max 620 – 679
50% Max 680 – 739
Page 14 of 38
15. 55% Max 740+
No exceptions on FICO scores < 650
- Exceptions to maximum ratios considered with compensating factors such as minimal payment shock with
substantial reserves, etc. Must keep DO/DU Approved/Eligible
Payment In all cases, the “existing housing” and the “proposed housing” sections of the 1003 application must be
Shock fully completed
CPM considers payment shock on all loans:
- Payment Shock occurs when the proposed housing expense will be considerably higher than the existing
housing expense and where there are multiple layers of risk. The UW must analyze the borrower’s existing
cash flow as depicted on bank statements and determine the borrower’s capacity for payment shock
Payment Shock Guideline:
620-679 FICO score and payment shock is 50% or more-2 months PITI reserves required
>679 FICO score and payment shock is 50% or more-1 months PITI reserves required
In order to be considered cash reserves for payment shock purposes, the borrowers ending balance on
two consecutive bank statements must consistently show the reserve requirements available in the
account. This shows the borrower has the ability to maintain the reserve levels required to sufficiently
offset payment shock
THIS IS ONE OF THE MOST IMPORTANT FACTORS IN ANALYZING THE BORROWER’S ABILITY TO PAY
Assets Bank Statements:
Most current and consecutive two (2) months bank statements (all pages). Quarterly Bank statements must be
dated within 90-days of the initial application date and 120 days of closing (signing of note)
Earnest Money:
- Verification and source of funds for EM deposit required.
Stocks, Bonds, Mutual Funds, U.S. Government Securities:
- Copy of the account statement for the most recent 60 days/quarterly statement is required.
Seller Max Concessions:
Contribution - Max seller concession is the lower of 3% of contracted sales price or contracted amount on loans with an
LTV above 90% and 6% on loans with an LTV of 90% or below
- Seller contribution is limited to discount points, closing costs and prepaid items
Cash - Cash reserves are not generally a requirement except when cash reserves are used as a compensating
Reserves factor when approving a conventional loan with debt ratios that exceed guidelines or payment shock is
present
- Gift funds, cash proceeds from a refinance and equity in another property, are not acceptable sources of
cash reserves.
Gift Funds In accordance with current CPM guidelines:
- 100% gift funds for down payment are only acceptable if the funds are documented by a gift letter that
states the funds are not to be repaid as well as clear documentation of the donor’s ability to gift the funds as
well the transfer of funds from donor to the borrower
- Borrower must have 5% of their own, documented funds contributed if the subject property is a second
home with an LTV greater than 80%
Gift Letter:
- A gift letter is required and must list the donor’s name, address, city, state and zip, phone number,
relationship to the borrower, and the dollar amount of the gift. The gift letter must indicate that the funds do
not have to be repaid in any way and must be signed and dated by the donor.
Documentation / Track Gift Funds :
- Evidence that gift funds stated in the Gift Letter were withdrawn from the donors account; and,
- Evidence that the same gift funds were received from the donors account to the borrower’s account, prior to
closing.
- When funds are transferred by donor to closing, verification of the transfer of the gift funds from the donors
account must show the donor as the remitter and HUD-1 must clearly indicate the exact amount of the gift
funds received from the donor and the account the funds were drawn from
Page 15 of 38
16. Subordinate - Not Permitted
Financing
Property The Manufactured Home (MFH) must be designed and constructed to the Federal Manufactured Construction
Eligibility and Safety Standards and be so labeled.
Home is eligible if it has ever been moved from the original installation site
- Must be a double-wide MFH and have a floor area of not less than 900 square feet; this means that a
single-wide is not eligible for financing.
- Be constructed after June 15, 1976, in conformance with the Federal Manufactured Home Construction and
Safety Standards, as evidenced by an affixed certification label
- Be classified and taxed as real estate; (see “CPM Title Elimination Fees By State” section for
documentation required for CPM to surrender title as well as state specific fee to CPM for elimination of title
for manufactured homes that do not currently have eliminated title)
- The mortgage must cover both the manufactured unit and its site and shall have a term of not more than 30
years from the date amortization begins;
- Must be built and remain on a permanent chassis with all wheels removed and designed to be used as a
residential dwelling, affixed to a permanent foundation as required by Fannie Mae.
- Permanent foundation must meet manufacturer’s specifications for a permanent foundation. Appraiser to
confirm.
- If manufactured home is located in a flood zone, flood insurance will be required
- MFH must meet the National Manufactured Home Construction and Safety Standards. New manufactured
homes (100% complete but never previously occupied);
- The MFH must be used as an O/O primary residence or second home
- Newly Constructed MFH: If the MFH is newly, the following construction documents must be supplied with
the file for purchase: Clear 442 final inspection completed by appraiser
Foundation - Permanent foundation per manufacturer’s specifications.
Systems
State - Manufactured Homes require a State Administrative Agency to inspect all modifications to manufactured
Requirements homes once they leave the factory. If the appraiser observes changes to the manufactured home such as
an addition, and there is no local agency to inspect the home, obtain an engineer's report indicating that the
structural changes or additions were made in accordance with HUD Manufactured Home Construction and
Safety Standards.
- If the property cannot be inspected by the State Administrative Agency and an Engineer's Report cannot be
obtained, the property is ineligible for financing .
Refinance A Cash-Out Refinance is not permitted in Texas and limited to a max 65% LTV in all other states
Rate/Term and C/O refinances
- If a refinance, the owner of the MFH must have owned the unit and the land for a minimum of 1-year to be
eligible for financing.
- Properties owned free and clear will be considered a C/O Refi and not eligible for financing in Texas
- The refinance of a manufactured home that is currently financed as personal property and will be
converted to real estate in the transaction is eligible, however, paying off an installment loan (personal
property loan on manufactured home) requires the loan to be structured as a cash out refinance and all
applicable guidelines and pricing adjustments apply
Special Vacant Properties:
Certification -If the appraiser indicates that the property was vacant at the time of the inspection, the utilities must be
/ Inspections turned on and an “As is” appraisal or 442 final inspection must be received from appraiser indicating that all
utilities are now functioning properly prior to closing.
Page 16 of 38
17. Flood Determination / Certification:
- Mandatory
- All MFH located in a Flood Zone A or V are eligible
Flood Zone Elevation Certificate
- If the site supporting a manufactured home is within a FEMA designated Special Flood Hazard Area, the
following requirements apply:
- Flood Insurance required
Well and/or Septic Systems Certifications:
- Required only when made a condition of the sales contract, inspection report or appraisal.
NOTE: Shared wells must have a recorded shared well agreement executed by all parties
Appraisal - A full appraisal is required and must be completed on the Manufactured Home Appraisal Report (1004C)
- The appraiser must verify the location and wording on the “HUD” Tags/Certification Labels of the unit and
clear pictures of these tags must be provided (if HUD tags are not available, a certification from IBITS* is
required. If appraiser cannot obtain a clear picture of the HUD label number, and the label is present and
accessible, he must manually insert the label number below the HUD label pictures on the appraisal-CPM
does require this on conventional loans)
- The appraiser must also use standard single-family residential appraisal techniques when appraising the
manufactured home. Other factory-built housing would provide the most similar comparables so every effort
should be made to obtain such comparables even though their distances from the subject may be greater
than usual. While CPM would like all MH comparisons, the minimum we will accept are two MH
comparisons and one site built comparison
Maximum adjustments:
- Maximum line item adjustment is 10%
- Maximum net adjustment is 15%
- Maximum gross adjustment is 25%
NOTE: Appraisals exceeding these maximum adjustments may be acceptable if the appraiser clearly identifies
the reason for exceeding these percentages. This must be clearly justified and within normal appraisal practice.
*Please contact your CPM Representative if you would like information on the HUD Tag verification site,
IBITS
Page 17 of 38
18. Closing Highlights:
Power Of - Permitted; however, the POA must be transaction specific
Attorney - May not be an interested party to the transaction, i.e.: real estate agent, seller, closing agent - the Attorney-
In-Fact cannot have any direct or indirect financial interest in the transaction.
- If executed outside of the United States, POA must be notarized at an U.S. Embassy or military installation.
- Must be dated no more than 90-days prior to closing and must be in effect the date of the closing.
Survey - A survey is mandatory in survey states.
- In non-survey states, proof from title that a survey endorsement will be included with the final policy is
required
Interest - Permitted up to the first 10 calendar days of the month.
Credit
Warranty - A certified copy of the “Warranty Deed” is required on Purchase and Refinance transactions.
Deed
Title Policy - Endorsements that are appropriate to the product type are required, in addition to the ALTA 7
Endorsement for Manufactured Homes (environmental, survey, modification if applicable)
- There can be no outstanding survey exceptions, unpaid real estate taxes and/or special assessments
against the property title
- The Title Commitment cannot be issued more than 90 Days prior to the date of closing and vesting must
match both the security instrument and the warranty deed
Closing In addition to the required “standard” FNMA closing documents, the following are required for MFH loans:
Forms Form
If using POA, must be transaction specific
Manufactured Home Rider to Security Instrument
(IDS)
Manufactured Home Borrower Affidavit
Special Surrendering the manufactured home title: See “CPM Title Elimination Fees By State” section below
Closing Purging Title to the Manufactured Home:
Instructions - The title must be purged to ensure that the manufactured home will not revert to being a personal property.
- Once the manufactured home unit is permanently attached to land, filing a request or application to purge
the manufactured home title with the appropriate state or local authority (i.e. Department of Motor Vehicle) is
required. Mortgagees must comply with all state or local requirements for proper purging of the title [chattel
or other equivalent debt instrument] and the subject property must be classified or taxed as real estate.
A Certification of purged title of the manufactured home must be provided to evidence the manufactured
home has been officially converted from chattel to real property. In short, if the original chattel deed or title is
not purged, the property does not have marketable real estate title, and as a result, in the event of a
foreclosure, HUD will not accept a conveyance nor pay a claim.
IMPORTANT
CPM requires the correspondent to provide all documentation needed for CPM to surrender title.
The required documentation is as follows:
New home, never previously occupied and less than 12 months old:
- Original MSO collected at closing and sent with collateral package for purchase
- Title to forward POA executed by manufactured home builder/seller to CPM with tracking number (this is
needed to give CPM authority to surrender title)
- Application to surrender title
Used Home, previously occupied and over 12 months old:
- Original Title to home collected at closing and sent with collateral package for purchase
- If there is currently a lien, that lien must be released and documentation provided
- If original title is not available, correspondent is responsible for obtaining a new title and providing this to
CPM
- Title to forward POA executed by seller
- Buyer executed application to surrender title
Page 18 of 38
19. CPM Title Surrender Fees
$376.00-Double Wide
Alabama $399.00-Triple Wide
Arizona $350.00
Arkansas $300.00
California No fee. Title to record Form 433A
Florida $1100.00 if Real Property tag is not present on home
$700.00 if Real Property tag is currently on home
Georgia $342.00
Louisiana No fee. Title to record Affidavit of immobilization
Mississippi $308.00 for new home with MSO
$300.00 used home
New Mexico $345.50
North No Fee. Title company to prepare and file Declaration of Intent to Affix
Carolina
Oklahoma There are four aspects to surrendering title in Oklahoma:
Tag fee: See chart attached
Excise Tax:
New Home-Take the lesser of the sales price or $75,200 dollars divided by 2 and then multiplied by 3.25%
to calculate the dollar amount for excise tax. This must be disclosed upfront.
Used Home-Take the contract price of the home and divide it by 2, multiply that number by .65 and multiply
that number by 3.25% to calculate the dollar amount for excise tax. This must be disclosed upfront.
Title Elimination: $330.00
Title must collect current year taxes in full and obtain Oklahoma tax Commissioners form 936.
Note: Tag Fee does not apply to used homes. For new homes, all four calculations apply and must be
disclosed, for used homes, all calculations apply, other than the Tag Fee.
Oregon No fee. Title to record an exemption application. Must see fee on settlement
statement showing title company is handling. Do not presume they are, your originator must request
title to do this. LOAN WILL NOT BE PURCHASED IF NOT ON HUD
South $495.00
Carolina
Tennessee New Home-No fee. Title to record New Home Affixation Affidavit
$300.00-Used Home
Texas $375.00
If Texas Department of Housing and Urban Affairs website does not show seller is
currently in title, there is a $55.00 charge for each person that has been in title between
the seller on the subject loan and the person currently showing in title on TDHCA's
website. Please have your originator's confirm the seller on our transaction is the
person currently showing on title with TDHCA (http://www.tdhca.state.tx.us/mh/)
Washington $563.00
Idaho No Fee. Title to record Declaration of Intent to Declare a Manufactured Home as Real Property. If
borrower is not currently in title there is an 8 dollar fee to transfer title
Kansas No fee. Title to record Affidavit to Affix. If borrower is not currently in title there is a 10 dollar fee to
transfer title
North Dakota No fee. Title to record Affidavit of Use for a Manufactured Home. If borrower is not currently in title
there is a 5 dollar fee to transfer title
Minnesota $308.00
Page 19 of 38
20. FHA Site Built 15 & 30 Year Fixed Rate Matrix
FHA Site Built
FHA Site Built 15 & 30 Year Fixed Rate
Purchase and Rate & Term/Cash Out Refinance
Maximum Maximum
Maximum
Occupancy Credit Score Front / Back Seller Cash Reserves
LTV
Ratios Contributions
1-Unit 90% 620-649 As per DU unless
O/O Primary 30% / 45% 6% of SP payment shock is
Residence 96.5% >650 present
- Purchase: Borrower must have a minimum investment of 3.5% and maintain a 96.5% LTV after appraisal
- Rate & Term Refi: The current owner must have owned the subject property for a minimum of 1-Year prior to the application
date
- Cash Out
Program Guidelines:
Loan - Purchase
Purpose - Rate & Term Refinance
- Cash out (ineligible in Texas)
Occupancy - Owner Occupied, Primary Residence
Doc Type - Full documentation
Geographic - WA, ID, ND, OR, CA, AZ, NM, TX, OK, LA, AR, MS, AL, KS, GA, FL, SC, NC, TN, MN
Availability Note: Look for more states being added in the near future
Loan Type - FHA 15 and 30 year fixed rate program
and Terms
Prepayment - None
Penalty
Buy down - Bonafide discount points allowed.
Note: A discount point is considered bonafide when an interest rate of .25% higher than the offered rate is
available on the rate card the day the rate is locked
Escrow - Not permitted
Waivers
Assumed - In accordance with FHA guidelines, fixed rate loans are assumable to qualified borrower(s)
Loans
Maximum # - One
of Loans to
one
borrower
Maximum # - It must be determined by the underwriter that the subject property home is being purchased as
of the borrower’s primary residence
Properties Note: Borrower’s applying for an FHA insured mortgage that currently own a home insured by
Financed FHA must meet FHA requirements for owning a second FHA insured home. Proximity to a new
job as well as an increase in family size are two common, acceptable situations
Bankruptcy:
Bankruptcy - CPM requires that a borrower be discharged from bankruptcy for 2 years despite the type of
bankruptcy
- Customer must have three established lines of credit opened after the discharge. Each trade line
must have a 12 month history and must have some activity within the most recent 24 months. At
least one of these trade lines must be an installment account and borrower must have paid the
account down by an amount greater or equal to 10% of the subject loan amount. Rental history
Page 20 of 38
21. is considered installment and the monthly payment multiplied by the number of months can be
used to meet the installment requirement
- Foreclosure:
- CPM requires that 36 months have passed from the date of the foreclosure sale. A satisfactory
letter of explanation must be included in the file. All standard trade line and payment shock
requirements apply
Age of Credit Documents:
Documents - As per DU findings
Appraisal :
- 120-days old as of closing date (signing of Note & Mtg.)
AUS Acceptable AUS Determination:
Requirement - All loans must be run through DO/DU
- Approve/Eligible
Eligible All borrowers must have a valid U.S. Social Security number.
and Eligible:
Ineligible 7. U.S. Resident Citizen
Borrowers
8. Permanent Resident Alien
- Same as U.S. Citizen
- Obtain evidence of lawful, permanent residency issued by the Bureau of Citizenship and
Immigration Services (BCIS), formerly the INS.
- Obtain a copy of Alien Registration Receipt Card (Resident Alien card), I-551
9. Non-Permanent Resident Alien
- Must be eligible to work in the U.S.
- Evidence of residency and work status to be obtained through documentation from US Bureau
of Citizenship and Immigration Services (BCIS) formerly INS.
- Copy of the Employment Authorization Card, I-688B. This card carries an expiration date. A
SS card is not acceptable as evidence of work status.
Ineligible:
- Non-Occupant Co-Borrowers
- Co-Signers
- Foreign Nationals
- Non-Resident Canadians
- Borrowers with Diplomatic Immunity
Title Vesting Eligible Vesting / Rights of Ownership:
Rights of - Fee Simple
Ownership - Individual & Joint
Ineligible / No Exceptions:
- Land Trust
- Leasehold Estate
- Real Estate Syndication
- General or Limited Partnerships
- Title in the name of a Corporation
Credit - A tri-merge bureau is required on all loans; the lowest qualifying score of all applicants is used to qualify and
each borrower must have at least two credit scores. The qualifying score is the lower of 2 or the middle of 3
scores and must be reviewed for each borrower.
- For a credit score to be considered valid, the score must be generated from a minimum of three (3) trade
lines that have been evaluated for at least 12 months. The trade lines do not need to be currently active but
require some activity within the last 24 months. At least one of these trade lines must be an
installment account and borrower must have paid the account down by an amount greater or
equal to 10% of the subject loan amount. Rental history is considered installment and the
monthly payment multiplied by the number of months can be used to meet the installment
requirement
Minimum Credit Score:
- 620 (620-649 max LTV 90%, >649 max LTV is 96.5%)
Inquiries and Derogatory Credit:
- When inquiries and/or derogatory credit appear, the borrower must submit a signed credit explanation letter
Page 21 of 38
22. prior to loan approval. Inquiry letter must cover ALL inquiries in the most recent 90 days from date of credit
report
- Note: Any delinquent accounts shown as “disputed” will result in an automatic downgrade to a
manual underwrite and all manual guidelines will apply. exceptions to this are as follows:
- 1. The disputed account has a zero balance
- 2. The disputed account is marked as "paid in full", or "resolved"
- 3. The disputed account is both a. less than $500, and b. more than 24 months old, based on the
date of dispute.
Housing Payment History:
- 0 X 30 in the past 12 months.
- For borrowers with mortgage delinquency beyond the most previous 12 months, it is the underwriter’s
responsibility to carefully review and determine the borrower’s credit worthiness.
Mortgage Payment History/Documentation:
- The mortgage payment history may be documented by a VOM or provide a rating in the credit report.
Rental Payment History/Documentation:
- A rental payment history is required per the AUS findings or underwriter determination and must be
documented by a VOR from a property management company or 12 months cancelled checks if rented from
an individual (If there is payment shock of 25% or more, CPM requires a VOR regardless of what DU
requires)
Employment Salaried:
/ Income Most current pay stubs covering a 30-day period with YTD income
Most current and consecutive 2-Years W-2’s
Most current two years tax transcripts (ordered via 4506 on all loans)
Self-Employed:
- Business must be in existence for at least two (2) years prior to subject application date.
- Most current and consecutive (signed) 2-Years Business Tax Returns with all schedules required if
incorporated
- Most current two years personal tax returns for principals of corporations or sole proprietors
- Copy of Business License or a CPA letter proving business still exists.
Overtime/Bonus/Other income
- Overtime income will be considered if employer indicates it is likely to continue and a two year history is
available and averaged
- Bonus income will be considered if employer indicates it is likely to continue and two year history is
available and averaged
- Commission income will be considered if employer indicates it is likely to continue and a two year history is
available and averaged. If commission income is more than 25% of total income, tax returns for two years
will be required to calculate income
Verbal Verification Prior to Closing:
A verbal verification of employment is required for each employer of all borrowers, within 10-days of closing.
This policy applies to all non-self employed income types.
Child Support, Alimony or Maintenance Income:
In order to use as income, child support, alimony or maintenance income, payments must reasonably be
documented to continue for at least a three (3) year period. The following documentation is required:
o Copy of the divorce decree, separation agreement or court order
o Copies of court records, bank statements or cancelled checks evidencing a minimum of three (3)
months receipt of payments.
Rental income:
Rental income must be supported by two years tax returns.
If converting primary residence to rental property and relying on rental income to qualify, 25% equity in the
rental property, as validated through appraisal or difference between original financed amount and current
balance, is required along with a copy of the a 12 month lease agreement and evidence of security deposit
All income must match 1003 and DU findings
Qualifying Maximum Ratios:
Ratios PITI FICO (Front End)
30% Max 620 – 679
35% Max 680+
If gross monthly income is less than 2500 dollars 25% Max Ratio (CPM to review any exceptions)
DTI FICO (Back End)
45% Max 620 – 679
50% Max 680 – 739
Page 22 of 38
23. 55% Max 740+
No exceptions on FICO scores < 650
Exceptions to maximum ratios considered with compensating factors such as minimal payment shock with
substantial reserves, etc. Must keep DO/DU Approved/Eligible
Lease - Not permitted
Option
Rent Credits
Payment In all cases, the “existing housing” and the “proposed housing” sections of the 1003 application must be
Shock fully completed
CPM considers payment shock on all loans:
- Payment Shock occurs when the proposed housing expense will be considerably higher than the existing
housing expense and where there are multiple layers of risk. The UW must analyze the borrower’s existing
cash flow as depicted on bank statements and determine the borrower’s capacity for payment shock
Payment Shock Guideline:
620-679 FICO score and payment shock is 50% or more-2 months PITI reserves required
>679 FICO score and payment shock is 50% or more-1 months PITI reserves required
In order to be considered cash reserves for payment shock purposes, the borrowers ending balance on
two consecutive bank statements must consistently show the reserve requirements available in the
account. This shows the borrower has the ability to maintain the reserve levels required to sufficiently
offset payment shock
THIS IS ONE OF THE MOST IMPORTANT FACTORS IN ANALYZING THE BORROWER’S ABILITY TO PAY
Assets Bank Statements:
- Most current and consecutive two (2) months bank statements (all pages). Quarterly Bank statements must
be dated within 90-days of the initial application date and 120 days of closing (signing of note)
Earnest Money:
- Verification and source of funds for EM deposit required.
Stocks, Bonds, Mutual Funds, U.S. Government Securities:
- Copy of the account statement for the most recent 60 days/quarterly statement is required.
Seller Max Concessions:
Contribution - Max seller concession is the lower of 6% of contracted sales price or contracted amount
- Seller contribution is limited to discount points, closing costs and prepaid items
Cash - Cash reserves are not generally a requirement except when cash reserves are used as a compensating
Reserves factor when approving an FHA loan with debt ratios that exceed guidelines or payment shock is present
- Gift funds, cash proceeds from a refinance and equity in another property, are not acceptable sources of
cash reserves.
Gift Funds In accordance with current FHA guidelines:
- 100% gift funds for down payment are only acceptable if the funds are documented by a gift letter that
states the funds are not to be repaid as well as clear documentation of the donor’s ability to gift the funds as
well the transfer of funds from donor to the borrower
Gift Letter:
- A gift letter is required and must list the donor’s name, address, city, state and zip, phone number,
relationship to the borrower, and the dollar amount of the gift. The gift letter must indicate that the funds do
not have to be repaid in any way and must be signed and dated by the donor.
Documentation / Track Gift Funds :
- Evidence that gift funds stated in the Gift Letter were withdrawn from the donors account; and,
- Evidence that the same gift funds were received from the donors account to the borrower’s account, prior to
closing.
- When funds are transferred by donor to closing, verification of the transfer of the gift funds from the donors
account must show the donor as the remitter and HUD-1 must clearly indicate the exact amount of the gift
funds received from the donor and the account the funds were drawn from
Page 23 of 38
24. Subordinate - Not Permitted
Financing
Property 1-4 Family Residential Properties
Eligibility If new construction less than 12 months old:
Termite soil treatment and HUD form 99A&B (in pest inspection states only)
Well/Septic inspection (if well/septic exist on property)
Final inspection completed by approved FHA fee inspector or “as is” appraisal that
has never been completed “subject to”
Refinance A Cash-Out Refinance is not permitted in Texas and limited to an 85% in all other states
Rate/Term and C/O refinances
- If a refinance, the owner of the property must have owned the unit and the land for a minimum of 1-year to
be eligible for financing.
- Properties owned free and clear will be considered a C/O Refi and not eligible for financing in Texas
Vacant Properties:
- If the appraiser indicates that the property was vacant at the time of the inspection, the utilities must be
Special turned on and an “As is” appraisal must be received from appraiser indicating that all utilities are now
Certification functioning properly prior to closing. If vacant and property has a well/septic, a well water test and a septic
/ certification are needed if vacant more than 12 months.
Inspections Flood Determination / Certification:
- Mandatory
Well and/or Septic Systems Certifications:
- Required only when made a condition of the sales contract, inspection report or appraisal, or if property is
vacant more than 12 months or for new construction. When required, the certification(s) may be no more
than 90-days old as of the date of closing (regardless of how old the system is).
NOTE: Shared wells must have a recorded shared well agreement executed by all parties
Appraisal - A full appraisal is required
- The appraiser must also use standard single-family residential appraisal techniques when appraising the
Property.
Maximum adjustments:
- Maximum line item adjustment is 10%
- Maximum net adjustment is 15%
- Maximum gross adjustment is 25%
NOTE: Appraisals exceeding these maximum adjustments may be acceptable if the appraiser clearly identifies
the reason for exceeding these percentages. This must be clearly justified and within normal appraisal practice.
Power Of - Permitted; however, the POA must be transaction specific
Attorney - May not be an interested party to the transaction, i.e.: real estate agent, seller, closing agent - the Attorney-
In-Fact cannot have any direct or indirect financial interest in the transaction.
- If executed outside of the United States, POA must be notarized at an U.S. Embassy or military installation.
- Must be dated no more than 90-days prior to closing and must be in effect the date of the closing.
Survey - A survey is mandatory in survey states.
- In non-survey states, proof from title that a survey endorsement will be included with the final policy is
required
Interest - Permitted up to the first 10 calendar days of the month.
Credit
Warranty - A certified copy of the “Warranty Deed” is required on Purchase and Refinance transactions.
Deed
Title Policy - Endorsements that are appropriate to the product type are required(environmental, survey, modification if
applicable)
- There can be no outstanding survey exceptions, unpaid real estate taxes and/or special assessments
against the property title
- The Title Commitment cannot be issued more than 90 Days prior to the date of closing and vesting must
match both the security instrument and the warranty deed
Page 24 of 38
25. Conventional Site Built 15 & 30 Year Fixed Rate
Conventional Site Built
Conventional Site built 15 & 30 Year Fixed Rate
Purchase and Rate & Term Refinance
Maximum Maximum
Maximum
Occupancy Occupancy Front / Back Seller PMI
LTV
Ratios Contributions
1-Unit Owner Broker/Correspondent
95% See “Qualifying >90% max 3%
O/O or Second Occupied Ratios” <=90% max 6%
is responsible for
Home 90% Second Home providing PMI cert
- Purchase
- Rate & Term Refi: The current owner must have owned the property for a minimum of 1-Year prior to the application date.
- Cash out
Program Guidelines:
Loan - Purchase
Purpose - Rate & Term Refinance
- Cash Out refinance
Occupancy - Owner Occupied, Primary Residence and Second Homes
Doc Type - Full documentation
Geographic - WA, ID, ND, OR, CA, AZ, NM, TX, OK, LA, AR, MS, AL, KS, GA, FL, SC, NC, TN, MN
Availability Note: Look for more states being added in the near future
Loan Type - Conventional 15 and 30 year fixed rate program
and Terms
Prepayment - None
Penalty
Buy down - Bonafide discount points allowed.
Note: A discount point is considered bonafide when an interest rate of .25% higher than the offered rate is
available on the rate card the day the rate is locked
Escrow - Not permitted
Waivers
Assumed - In accordance with Fannie Mae guidelines, fixed rate loans are assumable to qualified
Loans borrower(s)
Maximum # - One
of Loans to
one
borrower
Maximum # - It must be determined by the underwriter that the subject property home is being purchased as
of the borrower’s primary residence or second home
Properties - Maximum of seven properties financed allowed
Financed
Bankruptcy Bankruptcy:
- CPM requires that a borrower be discharged from bankruptcy for 4 years despite the type of
bankruptcy
- Customer must have three established lines of credit opened after the discharge. Each trade line
must have a 12 month history and must have some activity within the most recent 24 months. .
At least one of these trade lines must be an installment account and borrower must have paid the
account down by an amount greater or equal to 10% of the subject loan amount. Rental history
Page 25 of 38
26. is considered installment and the monthly payment multiplied by the number of months can be
used to meet the installment requirement
- A satisfactory letter of explanation and a copy of the complete discharge papers must be
included in the file
- Any repossessions within the most recent 3 years will disqualify the borrower
Foreclosure:
4 years from foreclosure sale date
Age of Credit Documents:
Documents - Per DU findings
Appraisal :
- 120-days old as of closing date (signing of Note & Mtg.)
AUS Acceptable AUS Determination:
Requiremen - All loans must be run through DO/DU
t - Approve/Eligible
Eligible All borrowers must have a valid U.S. Social Security number.
and Eligible:
Ineligible 10. U.S. Resident Citizen
Borrowers
11. Permanent Resident Alien
- Same as U.S. Citizen
- Obtain evidence of lawful, permanent residency issued by the Bureau of Citizenship and
Immigration Services (BCIS), formerly the INS.
- Obtain a copy of Alien Registration Receipt Card (Resident Alien card), I-551
12. Non-Permanent Resident Alien
- Must be eligible to work in the U.S.
- Evidence of residency and work status to be obtained through documentation from US Bureau
of Citizenship and Immigration Services (BCIS) formerly INS.
- Copy of the Employment Authorization Card, I-688B. This card carries an expiration date. A
SS card is not acceptable as evidence of work status.
Ineligible:
- Non-Occupant Co-Borrowers
- Co-Signers
- Foreign Nationals
- Non-Resident Canadians
- Borrowers with Diplomatic Immunity
Title Vesting Eligible Vesting / Rights of Ownership:
Rights of - Fee Simple
Ownership - Individual & Joint
Ineligible / No Exceptions:
- Land Trust
- Leasehold Estate
- Real Estate Syndication
- General or Limited Partnerships
- Title in the name of a Corporation
Credit - A tri-merge bureau is required on all loans; the lowest qualifying score of all applicants is used to qualify and
each borrower must have at least two credit scores. The qualifying score is the lower of 2 or the middle of 3
scores and must be reviewed for each borrower.
- For a credit score to be considered valid, the score must be generated from a minimum of three (3) trade
lines that have been evaluated for at least 12 months. The trade lines do not need to be currently active but
require some activity within the last 24 months. At least one of these trade lines must be an
installment account and borrower must have paid the account down by an amount greater or
equal to 10% of the subject loan amount. Rental history is considered installment and the
monthly payment multiplied by the number of months can be used to meet the installment
Page 26 of 38
27. requirement
Minimum Credit Score:
- 620 (620-649 max LTV 90%, >649 max LTV is 96.5%)
Inquiries and Derogatory Credit:
- When inquiries and/or derogatory credit appear, the borrower must submit a signed credit explanation letter
prior to loan approval. Inquiry letter must cover ALL inquiries in the most recent 90 days from date of credit
report
- Note: Any delinquent accounts shown as “disputed” will result in an automatic downgrade to a
manual underwrite and all manual guidelines will apply. exceptions to this are as follows:
- 1. The disputed account has a zero balance
- 2. The disputed account is marked as "paid in full", or "resolved"
- 3. The disputed account is both a. less than $500, and b. more than 24 months old, based on the
date of dispute.
Housing Payment History:
- 0 X 30 in the past 12 months.
- For borrowers with mortgage delinquency beyond the most previous 12 months, it is the underwriter’s
responsibility to carefully review and determine the borrower’s credit worthiness.
Mortgage Payment History/Documentation:
- The mortgage payment history may be documented by a VOM or provide a rating in the credit report.
Rental Payment History/Documentation:
- A rental payment history is required per the AUS findings or underwriter determination and must be
documented by a VOR from a property management company or 12 months cancelled checks if rented from
an individual (If there is payment shock of 25% or more, CPM requires a VOR regardless of what DU
requires)
Employment Salaried:
/ Income Most current paystubs covering a 30-day period with YTD income
Most current and consecutive 2-Years W-2’s
Most current two years tax transcripts (ordered via 4506 on all loans)
Self-Employed:
- Business must be in existence for at least two (2) years prior to subject application date.
- Most current and consecutive (signed) 2-Years Business Tax Returns with all schedules required if
incorporated
- Most current two years personal tax returns for principals of corporations or sole proprietors
- Copy of Business License or a CPA letter proving business still exists.
Overtime/Bonus/Other income
- Overtime income will be considered if employer indicates it is likely to continue and a two year history is
available and averaged
- Bonus income will be considered if employer indicates it is likely to continue and two year history is
available and averaged
- Commission income will be considered if employer indicates it is likely to continue and a two year history is
available and averaged. If commission income is more than 25% of total income, tax returns for two years
will be required to calculate income
Verbal Verification Prior to Closing:
A verbal verification of employment is required for each employer of all borrowers, within 10-days of closing.
This policy applies to all non-self employed income types.
Child Support, Alimony or Maintenance Income:
In order to use as income, child support, alimony or maintenance income, payments must reasonably be
documented to continue for at least a three (3) year period. The following documentation is required:
o Copy of the divorce decree, separation agreement or court order
o Copies of court records, bank statements or cancelled checks evidencing a minimum of three (3)
months receipt of payments.
Rental income:
Rental income must be supported by two years tax returns.
If converting primary residence to rental property and relying on rental income to qualify, 25% equity in the
rental property, as validated through appraisal or difference between original financed amount and current
balance, is required along with a copy of the a 12 month lease agreement and evidence of security deposit
All income must match 1003 and DU findings
Qualifying Maximum Ratios:
Ratios PITI FICO (Front End)
Page 27 of 38
28. 30% Max 620 – 679
35% Max 680+
If gross monthly income is less than 2500 dollars 25% Max Ratio (CPM to review any exceptions)
DTI FICO (Back End)
45% Max 620 – 679
50% Max 680 – 739
55% Max 740+
No exceptions on FICO scores < 650
Exceptions to maximum ratios considered with compensating factors such as minimal payment shock with
substantial reserves, etc. Must keep DO/DU Approved/Eligible
Lease - Not permitted
Option
Rent Credits
Payment In all cases, the “existing housing” and the “proposed housing” sections of the 1003 application must be
Shock fully completed
CPM considers payment shock on all loans:
- Payment Shock occurs when the proposed housing expense will be considerably higher than the existing
housing expense and where there are multiple layers of risk. The UW must analyze the borrower’s existing
cash flow as depicted on bank statements and determine the borrower’s capacity for payment shock
Payment Shock Guideline:
620-679 FICO score and payment shock is 50% or more-2 months PITI reserves required
>679 FICO score and payment shock is 50% or more-1 months PITI reserves required
In order to be considered cash reserves for payment shock purposes, the borrowers ending balance on
two consecutive bank statements must consistently show the reserve requirements available in the
account. This shows the borrower has the ability to maintain the reserve levels required to sufficiently
offset payment shock
THIS IS ONE OF THE MOST IMPORTANT FACTORS IN ANALYZING THE BORROWER’S ABILITY TO PAY
Assets Bank Statements:
- Most current and consecutive two (2) months bank statements (all pages). Quarterly Bank statements must
be dated within 90-days or per DU findings
Earnest Money:
- Verification and source of funds for EM deposit required.
Stocks, Bonds, Mutual Funds, U.S. Government Securities:
- Copy of the account statement for the most recent 60 days/quarterly statement is required.
Seller Max Concessions:
Contribution - Max seller concession is the lower of 3% of contracted sales price or contracted amount on loans with an
LTV above 90% and 6% on loans with an LTV of 90% or below
- Seller contribution is limited to discount points, closing costs and prepaid items
Cash - Cash reserves are not generally a requirement except when cash reserves are used as a compensating
Reserves factor when approving an conventional loan with debt ratios that exceed guidelines or payment shock is
present
- Gift funds, cash proceeds from a refinance and equity in another property, are not acceptable sources of
cash reserves.
Gift Funds In accordance with current CPM guidelines:
- 100% gift funds for down payment are only acceptable if the funds are documented by a gift letter that
states the funds are not to be repaid as well as clear documentation of the donor’s ability to gift the funds as
well the transfer of funds from donor to the borrower
Gift Letter:
- A gift letter is required and must list the donor’s name, address, city, state and zip, phone number,
relationship to the borrower, and the dollar amount of the gift. The gift letter must indicate that the funds do
not have to be repaid in any way and must be signed and dated by the donor.
Page 28 of 38