Broker Bulletin Attention Broker Correspondents March

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					Broker Bulletin: 2012-1067
Attention: Broker Correspondents                                            March 9, 2012

Topic: USDA Rural Refinance Pilot Program


The United States Department of Agriculture (USDA) Rural Development (RD) is now offering
the opportunity for current USDA Section 502 Direct and Guaranteed borrowers to refinance
their existing USDA loans through the recently announced Rural Refinance Pilot program. The
Rural Refinance Pilot program allows borrowers in 19 states to take advantage of the historically
low interest rates with reduced documentation requirements.

UNM Wholesale is proud to support this program introduced by the USDA, and we are pleased
to assist current USDA Section 502 Guaranteed and Direct homeowners in taking advantage of
current refinance opportunities.

When processing and submitting your USDA Rural Refinance Pilot loans for sale to UNM
Wholesale, as outlined in Administrative Notice (AN) 4615, the closed loan file does not require:
a new appraisal, the HUD Handbook certifications, or any additional property inspections.

However, Lenders must be able to document that the borrower’s existing mortgage has been
current for the previous 12 months. Lenders may utilize a Verification of Mortgage (VOM) for
evidence of mortgage payment history. However, UNM Wholesale will pull a current copy of
the borrower’s credit report to assess the proper risk based scoring pricing adjustments. The tri-
merge credit report must be dated within 30 days of application and is used to validate the clean
mortgage history and credit scoring for pricing. No further review of the credit report will be
required, except for review of the borrower’s credit score and mortgage history.

*Only the mortgage liability needs to populate the liabilities section.

Components of the USDA Rural Refinance Pilot program include:

    • The interest rate on the new loan must be a minimum of 1.00% lower than the existing
      USDA loan.

    • UNM Wholesale Pilot States: CA, FL, IN, KY, MI, NC, OH & TN.

                               Broker Bulletin 2012- 1067
• All Rural Refinance Pilot loans must be manually underwritten. GUS is not available for
  the Rural Refinance Pilot loans.

• The new term of the refinance loan must be 30 years.

• The upfront USDA guarantee fee will be 1.50%.

• The applicable Annual Fee will be .30%.

• The new loan may only include the principal balance of the existing loan plus the upfront
  guarantee fee (accrued interest, prepaid interest, closing costs, and funds required to
  establish an escrow account may not be financed into the new loan). *Your current
  balance is the loan amount, nothing else including pre-paid interest can be
  financed, which is standard for RD Refinances. *You do not need asset statements
  for the file.

• No cash out is permitted.

• Reasonable and customary closing costs and other fees may be collected from the
  borrower by the originating lender. However, the origination fee charged to the
  borrower may not exceed one percent of the total loan amount. As a reminder, none
  of these charges may be financed into the new loan amount. *The loan origination fee
  cannot exceed 1% in any instance, not to be confused with lender charges on the
  RESPA GFE which can exceed 1% with underwriting, employment verification,

• A fully executed RD Form 1980-21 “Request for Single Family Housing Loan
  Guarantee” is required.

• Income verification for all adult household members is required for income eligibility
  determination. Household income is necessary for determining program eligibility only,
  not for determining repayment ability. Therefore, ratio waivers are not required.
  *Standard income information is required to determine eligibility (Tax Returns,
  Pay-Stubs, etc.) but will not be factored into underwriting, that’s purely for USDA
  eligibility. *The borrower’s employment and income is listed on the 1003, any
  family income must be documented and when the party is not an applicant, listed
  in detail in General Comments.

• UNM Wholesale will require all borrowers to be employed at the time of the closing on
  the refinance transaction or have alternate sources of income, such as: retirement
  income, social security income, disability income, alimony or child support.

• *All loans will require a full commitment from USDA.

                         Broker Bulletin 2012- 1067
*The main benefit of the program is the lack of an appraisal and lack of
income and debt ratio qualifying. The credit is graded by the mortgage
history solely (and credit score for pricing).
In order to clearly identify your Rural Refinance Pilot loans, please clearly mark the U M
Wholesale Loan Submission Form as a Rural Refinance Pilot Loan upon submission.

Please contact your locally assigned Account Executive with any questions.

Loans sold to Union ational Mortgage Co. Wholesale must comply with all federal and state regulations as
well as Union ational Mortgage Co. Wholesale guidelines. This information is for guidance purposes only
and should not replace consultation with your Legal and Compliance resources.

Equal Housing Lender: Union National Mortgage Co. Wholesale. Corporate Office: 8241 Dow Circle West, Strongsville, OH 44136. All rates
and programs are subject to change at any time without notice. Please contact UNM Wholesale Underwriting for further clarification of any
Underwriting related topics or your Account Executive about other topics addressed in this bulletin. This information should not be considered as
all-inclusive Guidelines.

      For mortgage originating professionals only; not authorized for distribution to consumers.

                                              Broker Bulletin 2012- 1067

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