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FHA Matrix


  • pg 1
									                                                                                                                                               Eligible States: AZ, CA, CO, CT,
                                                                                                                                              DC, DE, GA, HI, IL, IN, KY, MD, MN,
                                                                                                                                              NM,NV, NJ, OH, OK, OR, PA, SC, TN,
                                                                                                                                                      TX, UT, VA,WA, WI

                                                                        FHA Matrix
                                                                                     As of April 9, 2012

                                                           Fixed Rate and Fixed Period ARMs

                                                Purchase                                         No Cash-out Refinance                         Cash-Out Refinance
                                     Maximum LTV                    Min Fico               Maximum LTV                    Min Fico        Maximum LTV              Min Fico
            1 Unit                      96.50%                        640                       97.75%                      640               85.00%                640

            2 units
                it                      96.50%
                                        96 50%                        640                       97.75%
                                                                                                97 75%                      640
           3-4 units                    96.50%                        640                       97.75%                      640

                         Conforming Loan Limits                                                     High Balance (Please check HUD link for High Cost Areas)
                 (Case number assigned on or after Nov. 18, 2011)                                       Loan amounts exceeding the below must be priced High Balance

                           1 unit       2 units       3 units         4 units                            Loan Limits           1 Unit    2 Unit        3 Unit    4 Unit
     Loan Limits

     Low Cost Areas       $271,050      $347,000      $419,425        $521,250
                                                                                                         48 States            $417,000   $533,850   $645,300    $801,950
                                                                                                       (Excluding HI)
     High Cost Areas      $729,750      $934,200     $1,129,250      $1,403,400                               Hawaii          $625,500   $800,775   $967,950    $1,202,925

                                    FHA Mortgage limits for all areas:

    Minimum Credit score is 660 for FHA High Balance Cash-out Refinance Transactions.

Texas: Cash out refinance transactions are not eligible in Texas.

                                                                                 FHA 00, FHA 00‐HB, FHA 0/1, FHA 0/1‐HB
                                                                                                                                                                      Eligible States: AZ, CA, CO, CT, DC, 
                                                                                                                                                                      DE, GA, HI, IL, IN, KY, MD, MN, NM, 
                                                                                                                                                                      NV, NJ, OH, OK, OR, PA, SC, TN, TX, 
                                                                                                                                                                                 UT,VA, WA, WI
                                                                                    As of April 9, 2012

                                                                FHA General Guidelines
Loan Terms                 ∙  Fixed: 15 or 30 Year for Standard FHA,

                           ∙  30 yr only for FHA High Balance

                           ∙  ARM: 5/1 ARM

                           ∙  Purchase, No Cash-out Refinance, Cash-out Refinance, Streamline Refinance
Loan Purpose

                           ∙  SFR, PUD, Condos, 2-4 units
Property Types

                           ∙  Modular/Manufactured, Co-ops, Mixed Use, Timeshare, Construction to Permanent, Condotel, Non-warrantable Condos, Deed restricted properties, Hawaii
Ineligible Property Type
                              properties in lava zone 1 or 2.

Underwriting Method        ∙  DU only (Manual Underwrite not allowed).

                           ∙  All loans (except streamline refinance) must be decisioned through FHA TOTAL scorecard by DU.
                           ∙  A "Full" credit report with will be used for streamline refinances.

Max DTI Ratio              ·   55% (see rate sheet for price adjustments above 50%)

MI Premium
                                    MI Premiums Based on Term
                                    (See mortgagee Letter 12-4)
                                    The following tables list the MIP amounts based on the term of the loan for                The below table is for MIP amounts for FHA case numbers assigned 
                                    case numbers assigned on or AFTER April 9, 2012.                                           PRIOR to April 9th, 2012

                                    Up-Front and Annual Mortgage Insurance Premium                                             Up-Front and Annual Mortgage Insurance Premium
                                    Mortgage Term Greater Than 15 Years                                                        Mortgage Term Greater Than 15 Years

                                         LTV         Purchase & Refi          Streamline Refi                                      LTV           Purchase & Refit         Streamline Refi
                                         >95%         1.75% / 1.25%           1.75% / 1.25%                                        >95%           1.00% / 1.15%           1.00% / 1.15%
                                         ≤ 95%        1.75% / 1.20%           1.75% / 1.200%                                       ≤ 95%          1.00% / 1.10%           1.00% / 1.10%

                                    Up-Front and Annual Mortgage Insurance Premium                                             Up-Front and Annual Mortgage Insurance Premium
                                    Mortgage Term Less Than or Equal to 15 Years (ML 12-4)                                     Mortgage Term Less Than or Equal to 15 Years (ML 11-35)

                                        LTV          Purchase & Refi          Streamline Refi                                       LTV          Purchase & Refi          Streamline Refi
                                       >90%           1.75% / 0.60%           1.75% / 0.60%                                        >90%           1.00% / 0.50%           1.00% / 0.50%
                                     78.01-90%        1.75% / 0.35%           1.75% / 0.35%                                      78.01-90%        1.00% / 0.25%           1.00% / 0.25%
                                       ≤ 78%          1.75% / 0.00%           1.75% / 0.00%                                        ≤ 78%          1.00% / 0.00%           1.00% / 0.00%

Number of Property
                           ∙    PMAC may finance up to Four (4) financed properties, including primary residence (include Joint or Total ownership)
PMAC will Finance
                           ·   PMAC limits the maximum number of properties financed for FHA borrowers with all lenders at four (4), including PMAC. The maximum of four financed
                               properties includes the subjet property along with any other financed mortgages, conventional, or government.

                           ·   Credit documents cannot be older than 60 days from the funding date. These documents include credit report, employment, income, and asset. (Appraisal and
Age of Credit Documents
                               prelim are good for 120 days).

Credit                     ·   Credit:
                                -   Primary occupant must have a minimum of 640 credit scores (Co-borrower may have NO score, as long as at least one occupant borrower has a 640 credit
                                -   All borrowers must have a minimum 640 credit score on streamline refinances.
                                -   All borrowers must have a minimum 660 credit score on FHA High Balance Cash-out Refinances.

                           ∙   Trade lines: Underwriter must compare information from the credit report for the loan data used by DU to evaluate the loan to ensure the DU recommendation was
                               based on complete and accurate information. If the DU approval is based on authorized user accounts, there must be a minimum of 3 tradelines, excluding authorized
                               user account (1 open & 2 can be closed), excluding authorized user account, rated for 12 months, regardless of DU.

                           ∙   Judgments: Judgments must be paid off at or prior to closing, regardless of credit score or AUS approval.
                           ∙   Collections / Charge-off accounts:
                                -   Total outstanding balance of all collections/chg offs equal to or greater than $1,000 must be resolved (regardless of AUS) (e.g.-enter into payment arrangements
                                    with a min of 3 months verified payments-paid as agreed or must be paid in full at the time of or prior to closing. (If less than $1000 total, borrower is not required
                                    to pay off) *FHA Streamlines excluded*

                                                                                                Page 1 of 4
                                                                           FHA General Guidelines
Non-Purchasing Spouse                 ∙   A credit report is required on a non-purchasing spouse in a community property state.
                                      ∙   Non purchasing                                                                    debt to income              borrower
                                          Non-purchasing spouse's credit history must be obtained in order to determine the debt-to-income ratio of the borrower.
                                      ∙   Judgments/Collections: Judgments must be paid off at or prior to closing, regardless of credit score or AUS approval. Collections are treated same as occupant
                                          borrower guidelines under "credit"
                                      ∙   Community Property States: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin.

Disputed Accounts                     ∙   If AUS Accepts under total scorecard, U/W does not need to request payoff unless:
                                          The total outstanding balance of all disputed credit accounts or collections are less than $1000 and are aged two years from the date of last activity on credit report.
                                          These accounts will need to be resolved (proof of pmt arrangements w/minimum of 3 mths verified payments as agreed) or paid in full prior to or at the time of closing.
                                          *Note-Paying down balances to reduce the cumalative balance below $1000 to qualify is not accepted*
                                          If disputed accounts are a result of identity theft or unauthorized use, they may be exluded from the $1000 limit pending evidence to support)

      p y                             ∙      p                y                 g
                                          Chapter 7 or 11 - 2 years from discharge date
                                      ∙   Chapter 13 - 1 year from discharge/dismissal date.
                                      ∙   Multiple Bankruptcy within 7 years - DE underwriter's discretion.

                                      ∙   Bankruptcies: 7 years for High Balance Cash-out Refinance transactions.

Foreclosure                           ∙   3 years from completion, or
                                      ∙   7 years for High Balance Cash-out Refinance transaction

Deed in Lieu, Pre-
                                      ·   2-3 years from completion date or settlement
Foreclosure, Short Sale

                                      ∙   Per DU Findings - however the following is required:
                                      ∙   Pay stubs ‐ most recent 30 day period with YTD earnings and 2 years W2's
Income                                ∙   4506-T from all borrowers at both application and closing. Validation for all loans will be a 1040 transcript.

                                      ∙   If the most recent signed personal tax return cannot be provided and validated due to a filing of an extension, the following documentation must be
                                          provided (Required After April 15th): *Note- to use 2011 income for a self employed borrower, the income must validate *
                                           -   Copy of the most recent federal tax extension, proof of payment (PMAC will pull the tax transcript reflecting "No Record Filed")
                                           -   A copy of the previous year's tax returns (W2 for salaried borrowers)
                                      ∙    -   P & L for 2011
                                      ∙   Self Employed
                                          P & L and balance sheet required if more than a calendar quarter has elapsed since date of most recent calendar or fiscal-yr end tax return was filed by borrower

Asset                                 ∙   Bank statements or computer generated VOD's must be provided (handwritten VOD's not allowed).
                                      ∙   Stocks, bonds, mutual funds may use 70% of the value for reserves.
                                      ∙   Retirement accounts may use 60% of the vested value.
                                      ·   Business Funds:
                                           ·   When used for down payment, a cash flow analysis on the business is required.
                                           ·   Along with evidence that the borrower has full use of the funds and no repayment is required.
                                           ·   Also, evidence is required that the funds are not an advancement against future earnings or future cash distributions.

Reserves                               ∙  Owner occupied - per DU
                                       ∙  3-4 unit properties: 3 months cash reserves PITI required (may not come from gift)

Gift Funds                            ·   Allowed for purchase and refinance transaction.
                                      ·   Gift donor must be blood or legal relative, domestic partner, or fiancé.
                                      ·   Gift letter must contain the amount of the gift, donor's name, address, phone number and relationship.
                                      ·   The donor should state that repayment is not expected.
                                      ·   Donor's ability and paper trail of transfer of funds are required.

Interested Party Contribution (IPC)   ·   Maximum allowable contribution from seller, builder, realtor, broker, or an affiliate who may benefit from the sale of the property is 6%.

Property Listed for Sale              ·   Properties listed for sale must be taken off the market at least one day prior to loan application date to be eligible for rate/term. Cash out refinances are limited to 70%
                                          LTV unless the listing cancellation was cancelled 6 months prior to loan application date.

                                      ·   Project must be HUD approved and not expired.
                                      ·   Occupancy rate must be at least 51%
                                      ·   Delinquencies may not exceed 15%
Condo Project                         ·   No single entity may own more than 10% of the total units
                                      ·   No more than 20% commercial/non-residential usage
                                      ·   Pending or current litigation not eligible in a project.
                                      ·   Additional Requirements apply for new projects or Condo conversions.

                                                                                                           Page 2 of 4
                                                                     FHA General Guidelines
Appraisal Requirements           ·   All appraisals must be completed by HUD-approved appraisers.
                                 ·   Second appraisal policies tied to FHA property flipping requirements.
                                 ·   FHA appraisal practices for properties located in a declining market (Market Conditions Addendum, etc)
                                 ·   When a 2nd appraisal is required, the appraisal must be ordered from a different, HUD-approved appriaiser; if the value of the 2nd appraisal is more than 5% below
                                     the original appraisal, the lesser value must be used.

Current Principal Residence is   ·   Both the current and proposed mortgage payments must be used to qualify the borrower for the new transaction.
a Pending Sale

Conversion to 2nd Home           ·   Both the current and proposed mortgage payments must be used to qualify the borrower for the new transaction.

Conversion to Investment         ·   Up to 85% (check HUD jurisdiction) of the rental income may be used to offset the mortgage for qualifying including documented > 25% equity in the existing property
Property                             (appraisal).
                                 ·   Rental income must be documented with: copy of the fully executed lease agreement and the receipt of a security deposit into the borrowers account. If the 25%
                                     equity cannot be documented, rental income may not be used to offset the mortgage payment and both the current and proposed mortgage must be used to
                                     qualify (reserves may be required).

                                 ∙   6 month title seasoning and payment history are required.
Cash Out Refinance                   If the property was purchased by the borrower within the 6 months preceding the application for new financing, the borrower is ineligible for a cash-out refinance.
                                 ∙   The LTV calculation for a Cash-out refinance:
                                     6 to 12 months will use the lesser of the sales price or current value.
                                     More than 12 months will use the current appraised value.
                                 ∙   Existing subordinate financing may remain in place if the CLTV is 85% or less.
                                 ∙   New subordinate financing is limited to 85% CLTV.
                                 ∙   Co-borrowers or co-signers added to the note or currently on the note must occupy the subject property.
                                     Non-occupant co-borrowers or co-signers may not be added to meet credit underwriting guidelines.
                                 ∙   Properties owned free and clear may be financed as cash-out transactions.

No Cash-out Refinance            ·   No seasoning required. If any portion of the funds of an equity line of credit in excess of $1,000 was advanced within 12 months and was used for purposes other
                                                                            property,                                                                  refinance.
                                     than repairs and rehabilitation of the property the line of credit is not eligible for inclusion in a no cash-out refinance
                                 ·   The maximum insurable mortgage is the lesser of 97.75% of the appraised value of the property or the total amount of the applicable items below, any UFMIP
                                     refund must then be subtracted.
                                 ·   Existing 1st lien, any purchase money 2nd lien, any junior liens over 12 mos old, borrower paid closing costs, prepaid expenses, borrower paid repairs (if required),
                                     discount points
                                 ·   The existing 1st lien may include up to 60 days interest, but may not include delinquent interest.
                                 ·   Prepaid expenses may include per diem interest, hazard/mortgage insurance, and real estate taxes needed to establish the escrow account.
                                 ·   If the property was acquired < 12 months before the loan application and is not currently FHA-insured, original sales price (rather than appraised value) must be used
                                     to determine the max. mortgage.
                                     Repairs and rehab. Incurred after purchase of the property may be added to the original sales price when calculating the max. mortgage amount.
                                 ·   Existing b di t fi       i           i i l          th       i 97 75% l
                                     E i ti subordinate financing may remain in place if the CLTV is 97.75% or less.
                                 ·   New subordinate financing is limited to 97.75%.
                                 ·   $500 max. cash back allowed for minor adjustments in estimated versus final closing costs.

Streamline Refinances            ·   With or without an appraisal available.
                                 ·   Both Credit qualifying and Non-credit qualifying streamline refinances are eligible.
                                 ·   Current employment must be verified. Asset will be verified only when the borrower requires to bring funds to close.
                                 ·   Requires a "Full" credit report with a minimum of 640 FICO.
                                 ·   On the date of FHA case number assignment, the borrower must have made at least 6 payments on the FHA insured mortgage being refinanced:
                                      · At least six full months must have passed since the first payment due date of the refinanced mortgage, and
                                      · At least 210 days have passed from the closing date of the mortgage being financed.
                                 ·   Mortgage history: 0x30 in the most recent 12 months.
                                 ·   Must meet Net Tangible Benefit requirements: (The worksheet can be found on "resources" )
                                      - 5% reduction to the principal and interest of the mortgage payment plus the annual MIP, or
                                      - Refinancing from an ARM to a Fixed Rate (see ML 2011-11 for examples of acceptable net tangible benefits )
                                 ·   Existing subordinate financing may remain in place if the CLTV is 100% or less.
                                 ·   $500 max. cash back allowed for minor adjustments in estimated versus final closing costs.
                                 ·   The maximum insurable mortgage may not exceed the outstanding principal balance minus the applicable refund of the UFMIP plus the new UFMIP that will be
                                     charged. An appraisal may not be used to increase the insurable mortgage balance beyond the sum of the outstanding principal balance and the new UFMIP.

                                                                                                       Page 3 of 4
                                                                           FHA General Guidelines
Property Resale / FHA Flip Waiver   ·   Resale less than or equal to 90 days: Eligible
                                         · Resale less than or equal to 90 days is eligible, as long as the loan meets the requirements of FHA Flip Waiver [24 CFR 203.37a(b)(2)].
                                            ·   Transactions where the property is selling for a 20% or greater increase,
                                                 -   A 2nd Full Appraisal must be ordered by PMAC. Contact your account manager to order the appraisal through RELS
                                                 -   Borrower may not be charged for 2nd appraisal. Brokers cannot be reimbursed for the appraisal payment from the borrower.
                                                 -   Property / Home Inspection is required and it may be paid by the borrower.
                                                 -   Any structural or health & safety issues must be satified prior to closing.
                                            ·   If the second appraised value is more than 5% less than the first appraised value, the value from the 2nd appraisal must be used.
                                            ·   All transactions must be arms length; no identity of interest between buyer, property seller or third parties.
                                            ·   If the property is sold by FHA or a FDIC Insured bank, the transaction is not subject to the 90 day restriction.
                                    ·   Resale greater than 90 days:
                                            ·   Loans with resale dates greater than 90 days and up to 180 days will be subject to a 2nd appraisal and additional documentation if the resale price
                                                is greater than or equal to 100%.

Funding into the Month              ·   Allowed through the 5th calendar day of the following month.

Escrow Hold Backs                   ·   Eligible for HUD REO's with a Repair Escrow Only

                                    ·   A power of attorney is acceptable provided it is "specific" and meets the following:
Power of Attorney                       * Reference the subject property address (in addition to a legal description)
                                        * Authorize the attorney-in-fact to enter into a real estate transaction and indicates that the mortgagor specifically appoints that specific person
                                        * Match the legal name(s) on POA to the typed name(s) & signature(s) for the borrower. If legal signature is different from typed,a notarized name affidavit required
                                        * Borrowers must sign and date the POA and it must be notarized
                                        * Must be recorded prior to, or concurrent with, the date of the securoty instrument
                                        * Must not contain any blank fields and is approved by the title company

                                    ∙   On ALL transactions, the initial application must contain signatures of all borrowers (Not the POA) to the transaction unless the following occur:
                                        * Military Personnel- Lender needs to obtain the absent borrowers signature on the application by mail or fax
                                        * Incapacitated Borrowers: The lender must provide evidence the signer has authority to encumber the property and to obligate the borrower. * The incapacitated
                                        borrower must occupy thr property. (Evidence Example= A durable power of attorney specifically designed to survive incapacity and avoid the need for court

Approved States                     ∙   AZ, CA, CO, CT, DC, DE, GA, HI1, IL, IN, KY, MD, MN, NM, NV, NJ, OH, OK, OR, PA, SC, TN, TX2, UT, VA, WA, WI
                                            Hawaii: Properties in Lava zone 1 or 2 are not eligible in Hawaii.
                                            Texas: Cash out refinance transactions are not eligible in Texas.

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