WHOLESALELENDING
ANNOUNCEMENT
Lending Brief #11-22
April 11, 2011
Attention: All Wholesale Lending Partners
Guideline Updates: FHA Products
The following are updates to our FHA product guidelines. Please review these updated guidelines
carefully. The guideline changes will be effective for all mortgage applications submitted on or after April
12, 2011.
Mortgage Insurance Premium Change
The annual Mortgage Insurance Premium (MIP) is increasing by 25 bps for all case numbers assigned on
or after April 18, 2011. Kinecta will update internally systems on April 12, 2011 to accommodate the new
values. The Upfront MIP remains unchanged.
When requesting a case number through FHA Connection, certification of the borrower and subject
property will be required. In addition, HUD will automatically cancel any uninsured case numbers where
there has been no activity for 6 months in FHA Connection.
If you have any questions, please refer to (Mortgage Letter 2011-10).
CLTV/HCLTV
The percentage for maximum CLTV/HCLTV has been added. Maximum CLTV/HCLTV varies based on
the transaction type. The Eligibility Matrix has been updated to reflect the following:
• Purchase: Maximum CLTV/HCLTV is 96.5% to 100% depending on secondary financing source.
• Rate and Term Refinance: Maximum CLTV/HCLTV is 97.75%.
• Cash-Out Refinance: Maximum CLTV/HCLTV is 85%.
• Streamline Refinance: Maximum CLTV/HCLTV is 100%.
States
Arizona, California, Idaho, Nevada, Oregon, Utah, and Washington have been added to the FHA Matrix
for Wholesale Business Partners.
Information is intended for Mortgage Professionals only and not intended for consumer use as defined by Section 226.2 of Regulation Z, which implements the
Truth-In-Lending Act. The guidelines are subject to change without notice and are subject to Kinecta Federal Credit Union underwriting guidelines and all applicable
federal and state rules and regulations.
Approval Documentation for FHA TPO Sponsorship
Existing Kinecta approved mortgage brokers seeking FHA TPO Sponsorship approval with Kinecta will be
required to submit the documentation listed below and receive approval before FHA applications can be
submitted:
• Resume of person in charge of FHA day-to-day operations
• 2 Yrs previous FHA experience
• Neighborhood Watch ratio equal to or less than 150%
• Updated P&L dated within the past 90 days
• Signed FHA Addendum
All items need to be submitted to Broker Administration for review and approval. After review of the items,
the Account Executive will be notified of the result; subsequently communicating that information to their
broker.
3-4 Unit Properties- All Refinances
New guidance for 3-4 unit refinance transactions:
• Self-Sufficient ratio cap is 100%
• Borrower must sign the Respect to Hotel and Transient use of Property agreement
Streamline Refinances
• Clarification has been added regarding seasoning:
o 7 months or 210 days must have passed from the closing date of the mortgage being
refinanced.
• Maximum Refund of the UFMIP:
o Maximum refund is limited to the lesser of 1% UFMIP on the new loan or the actual
UFMIP refund.
o Any UFMIP refund amount over 1% due to the borrower will be refunded by FHA after
closing.
o The HUD1 should show the entire financed UFMIP for the new loan and the refund from
the prior FHA loan.
Debt-to-Income
• Maximum DTI is 50%. DTI in excess of 50% will require FHA TOTAL Scorecard Approve/Accept
findings with compensating factors.
If you have any questions regarding the above changes, please contact your account executive.