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					U.S. Bank Home Mortgage                                                    FHA PRODUCT
Wholesale Product Guidelines:                                              Plan #: 1018 30 Yr 3/1 ARM 2.0 Margin


Several states and local municipalities have enacted legislation which define High Cost loans based on APR and fee thresholds which
may or may not relate to the HOEPA thresholds. These types of loans typically have various restrictions. It is the policy of U.S. Bank
Home Mortgage not to purchase any loan defined as “high cost” under any federal or state law/regulation or local ordinances and any
subsequent amendments thereto.


PRODUCT                       30 Year Amortization                              FOOTNOTES

Description                   Adjustable-rate mortgage with the rate and payment fixed for the first three-years and annual interest
                              and payment adjustments thereafter.
Purchase                      Owner Occupants                          -    Allowable closing costs plus down payment covers 3%
                                                                            Statutory investment - Contact FHA Homeownership
                              See HUD Mortgagee Letter 98-29 for            Center with jurisdiction over the property.
                              all maximum mortgage calculations.       -    FHA determines Maximum Loan amounts per county of
                                                                            each state. This can be found on the FHA Connection or
                                                                            though the Homeownership Centers.
Rate/Term Refi                 See HUD 4155 - 1-10 and 1-11a.          -    All instructions remain in effect for No Cash Out and
                                                                            Streamline refinances as per 4155.1 REV 5 except for
                                                                            the following modifications and additions: (Mtgee letter
(continued on next page)                                                    05-043)
                                                                                 The mortgage being refinanced must be current for
                                                                                 the month due.

                                                                                In determining the existing debt as part of the
                                                                                mortgage amount calculation, the Mortgage may
                                                                                include accrued late charges and escrow shortages.

                                                                                At closing, the borrower may not receive cash back
                                                                                in excess of $500.

                                                                                Prepaid expenses may include the per diem to the
                                                                                end of the month on the new Loan, hazard
                                                                                insurance premium deposits, monthly insurance
                                                                                premiums and any real estate tax deposits needed
                                                                                to establish the escrow account regardless whether
                                                                                the mortgagee refinancing the existing loan is also
                                                                                servicing lender for that mortgage.

                                                                                Shortening the Term: Previous instructions provide
                                                                                for an allowance of $50 before triggering a credit
                                                                                review when a borrower shortens the term of the
                                                                                mortgage. In light of the increase in mortgage
                                                                                amounts over the past several years this is not a
                                                                                realistic threshold.  A mortgage on a principal
                                                                                residence may be refinanced to a shorter-term
                                                                                mortgage, provided the monthly principal and
                                                                                interest increases no more than 20 percent. This
                                                                                should allow more borrowers to shorten the term of
                                                                                their mortgage without the need for a full
                                                                                underwriting.




11/09/05
U.S. Bank Home Mortgage                                                      FHA PRODUCT
Wholesale Product Guidelines:                                                Plan #: 1018 30 Yr 3/1 ARM 2.0 Margin



Rate/Term Refi                       See HUD 4155 - 1-10 and 1-11a.               Refinancing a FHA-Hybrid ARM to a Fixed Rate: A
                                                                                  Hybrid-ARM (3,5,7 or 10 year mortgage) may be
                                                                                  streamline refinanced to a fixed rate mortgage, with
(continued from previous page)                                                    or without an appraisal, provided the payment will
                                                                                  not increase by more than 20 percent and all
                                                                                  mortgage payments must have been made within
                                                                                  the month due for the past 12 months or the period
                                                                                  the mortgage has been in force, if less than 12
                                                                                  months.
Cash Out Refi                    See HUD 4155 - 1-11B                    All other terms and conditions for a cash out refinance apply
                                                                         per 4155.1 REV-5 with the exception of the following
Cashout Refinances not                                                   changes for a cash out refinance up to 95% of the appraisers
available in Texas                                                       estimate of value.
                                                                         The following eligibility conditions that must be met include:
                                                                         (Mtg 05-43)
                                                                                The subject property must have been owned by the
                                                                                borrower as his or her principal residence for at least 12
                                                                                months preceding the date of the loan application.


                                                                                If the subject property is encumbered by a mortgage,
                                                                                the borrower must have made all of his/her mortgage
                                                                                payments within the month due for the previous 12
                                                                                months, i.e. no payment may have been more than 30
                                                                                days late and is current for the month due.


                                                                                The property that is the security for the refinanced
                                                                                mortgage must be a 1 or 2 unit dwelling.
                                                                                Subordinate financing may remain in place, but
                                                                                    subordinate to the FHA insured first mortgage,
                                                                                regardless of the total indebtedness or combined loan-
                                                                                to-value, provided the homeowner qualifies for making
                                                                                the scheduled payments on all items.
                                                                                Any co-borrower or co-signer being added to the note
                                                                                must be an occupant of the property. Non-occupant
                                                                                owners may not be added in order to meet FHA’s credit
                                                                                underwriting guidelines for the mortgage.
                                 -                                 1,3   1
                                        1 unit primary residence             May be new construction or existing. If new construction
Eligible Properties              -      2-4 unit owner occupied
                                                                   3         (end loan) must have FHA inspections during construction
                                                   2,3                       and 1 year warranty or provide 10 yr. warranty from builder
                                 -      PUD unit                             or max LTV 90% with new construction exhibits or building
                                                     2,3
                                 -      Condo Unit                           permit & Certificate of Occupancy (all other construction
                                                                             exhibits are still required).
                                                                         2
                                                                             Condos must have the Homeowners in control of the
                                                                             association. Condos must also be 51% owner occupied.
                                                                             Must be FHA approved.
                                                                         3
                                                                             Resale properties must be owned by current Seller for
                                                                             more than 181 days. New construction, HUD Repos and
                                                                             relocation sales are EXEMPT. See Mortgagee Letter
                                                                             2003-7



11/09/05
U.S. Bank Home Mortgage                                                FHA PRODUCT
Wholesale Product Guidelines:                                          Plan #: 1018 30 Yr 3/1 ARM 2.0 Margin


                          Not available in Alaska and Hawaii. Correspondent must have met all appropriate license requirements
Eligible States           for each state. Correspondent must obtain an approval for each state from U.S. Bank Home
                          Mortgage’s Wholesale Department prior to registering and locking loans. A copy of such licenses must
                          be provided to U.S. Bank Home Mortgage on an annual basis. Periodically, U.S. Bank Home Mortgage
                          may identify certain areas as "Soft Market" areas, which may result in applying restrictive program
                          strategies to minimize this risk. Please contact your registration desk for further details. Dade and
                          Broward counties in Florida are not eligible counties.

                                - Refer to Manufactured Homes Section and Predatory Lending Section at the beginning
                                  of this chapter for additional states or program restrictions.
Qualifying Ratios         31/43                                      With Loan Prospector “Accept”, ratios can be exceeded.
                          33/45 Energy Efficient homes
Qualifying Rate           - Qualify at Note rate

Adjustment Cap            - 1% up or down
Maximum Adjustment        - Maximum adjustment cap is 5.0% up or down over initial rate.
Cap
Margin                    - Plan # 1018:        2.00% margin
Index                     - Weekly average yield of U.S. Treasury Securities adjusted to a constant maturity of one-year, as
                            shown on Federal Reserve Statistical Release H.15 (519)
Negative Amortization     - None.
Mortgage Insurance        30 year
Premium                   UpFront MIP is financed at 1.50%
                          Monthly is .50% annually.
                          Condos closed after 12-30-05 require 1.50% Upfront MIP
                          Monthly also applies to Condos (mtg ltr 05-38)
                           -    Standard documentation.
Processing Options         -    Alternative documentation.
                           -    Loan Prospector defined documentation.
Underwriting Submission   If lender has been approved by HUD as Loan Correspondent whereby they have received HUD’s
                          approval to utilize U.S. Bank Home Mortgage’s Direct Endorsement Underwriting, lender must submit
                          loans for underwriting to U.S. Bank Home Mortgage’s Wholesale Underwriting Department. The
                          exception to this would be those correspondents that have been approved by HUD as a Direct
                          Endorsement Lender.
                          Acceptable sources of funds to close:
Funds to close
                           - Gift from a relative or closely defined friend – refer to Mortgagee Letter 00-27.
                           - USBHM approved down payment assistance (max. allowable is 3%)
                           - Funds from 6% seller contribution can include prepaids.
                           - Loan from family member.
                           - Borrower's own funds.
                           - Unsecured Loan from family members – see Mortgagee Letter 96-58.
                           - Standard documentation or LP “Accept” documentation.
Community Property        The debts of the non-purchasing spouse must be considered in the qualifying ratios if the borrower and
                          the property to be insured is in a Community Property State.
                           Citizen; Non resident alien with social security card stating ok to work with INS authorization and
                            US
Citizenship                 a copy of the valid work visa or work authorization card.
                          - Resident Aliens holding a green card are acceptable.
Co-Mortgagors             - Must be on note and deed
                          - Must consider all income and debt.
Non-Occupant              Must be on note - must be a blood relative
Co-Mortgagors             - NO qualifying ratios required for occupant borrowers (i.e., Kiddie Condo) 1 unit only

11/09/05
U.S. Bank Home Mortgage                                              FHA PRODUCT
Wholesale Product Guidelines:                                        Plan #: 1018 30 Yr 3/1 ARM 2.0 Margin


Non-Borrowing Spouse     Acceptable but must release dower rights. Purchase money mortgage also.
                         Appraiser must certify that property complies with HUD minimum property standards.
Appraisal Requirements
                            -Appraiser must complete inspection report for all existing properties and Notice to Homebuyer
                            Summary. See 4145.1 and 4150.2.
                            -Appraiser must provide 3 year sale history of subject property.
Survey Requirements            Required for all property types except condominiums.
                               In areas where surveys are not customary, the title insurance policy must insure over matters
                          of survey.
                         Weather-related items only. (Exterior)
Completion Escrows       The minimum escrow amount is $1000 - 1 1/2 times estimated cost provided by appraiser inspection
                           but not less than $1000.
                         - Repair escrows may be limited to certain months of the year.
                         -   Termite/Pest inspections are required in geographic markets where termite/pest infestation is a
Termite Inspection
                             known phenomenon.
                         -   The appraiser should have a VC requirement for termite/pest inspections and on the Notice to
                             Homebuyer Summary.
                         -   FHA Pest Control Tip Zones by state can be found at: http://www.hud.gov/offices/hsg/sfh/ref/sfh1-
                             23a.cfm
Temporary Buydowns       - Not allowed.
Contributions by         6% of the lesser of sales price or appraised value.
Interested Parties
Subordinated Financing   Allowed. See HUD 4155 for allowable sources.
Assumable                Yes, but in most cases the one assuming must credit qualify. See 4155 - Chapter 4.
Prepayment Penalty       None.
Late Charges             4% or the highest amount allowed by state law.
                         -    HUD/VA Addendum to URLA
Required FHA Exhibits    -    Important Notice to Homebuyer (92900B)
                         -    Assumption Notification
                         -    FHA Purchase Contract / Agreement that includes the Amendatory Language & Real Estate
                              Certification. If not included in the agreement then separate/individual Amendatory Language &
                              RE Cert will need to be Provided signed by all parties.
                         -    MI Consumer Choices Notification
                         -    For Your Protection: Get a Home Inspection (92564-CN) signed by borrowers prior to the
                              execution of purchase contract or at the same time the purchase contract is executed.
                         -    Clear CAIVRS
                         -    LDP/GSA
                         -    Consent Form
                         -    Notice to homebuyer Summary from Appraisal.
                         All of the above documents are to be executed by borrower, seller, and loan officer (as applicable) and
                         in the loan file prior to submission to underwriting.
Title Insurance          - Standard coverage in the amount of the mortgage, including the following endorsements:
                           - ALTA 4 Condo Endorsement (if applicable)
                           - ALTA 5 PUD Endorsement (if applicable)
                           - ALTA 8.1 Environmental Protection Lien Endorsement (all loans)
                           - ALTA 9 Comprehensive Endorsement (if survey exception on title policy)
                           - Any other endorsements required by state law or regulation



11/09/05
U.S. Bank Home Mortgage                                            FHA PRODUCT
Wholesale Product Guidelines:                                      Plan #: 1018 30 Yr 3/1 ARM 2.0 Margin


Homeownership         -   ATLANTA REGIONAL HUD OFFICE: http://www.hud.gov/local/atl/atlhoc.html
Web Sites             -   DENVER REGIONAL HUD OFFICE: http://www.hud.gov/fha/sfh/hoc/den/den_hoc.html
                      -   PHILADELPHIA REGIONAL HUD OFFICE: http://www.hud.gov/fha/sfh/hoc/phi/phi_hoc.html
                      -   SANTA ANA REGIONAL HUD OFFICE: http://www.hud.gov/hoc/sna/snathome.html
                      -   HUD WASHINGTON: http://www.hud.gov/index.html
                      -   HUD CLIPS: http://www.hudclips.org/cgi/index_cliphome.cgi
                      Please use the FHA MRI Guide, FHA Credit Manual 4155.1; AllRegs, HUD memorandums can be
                      found on the web page called HUD Clips as well as the Homeownership web sites.
Approved Condo List   -   Approved condo list can be obtained from HUD's website: www.Hud.gov or
                          www.https://entp.hud.gov/clas/
                      -   Make sure, that before ordering a case number, that you go to the FHA Connection/Echo + and go
                          to the condo section. After selecting appropriate state, city and project name you should receive a
                          message that states "Condominiums successfully completed". On this screen is a box that states
                          "Details"; go into this screen and receive a detailed printout on the project. The project ID number
                          will be needed to order the case numbers. This also shows if the project is approved and eligible
                          for High Ratio insuring. Please read this screen carefully and print it out and include in underwriting
                          package. If the project is not approved or not eligible for High Ratio and insuring then processing
                          should be stopped until the situation can be rectified with HUD or another property found.
                      -   51% Owner Occupancy requirement is for both new and existing construction.
                      -   Underwriters should not approve these loans until the branch has provided verification that the
                          project is approved and we can get the loan insured.
Disclosures           - ARM disclosure (ARM-FHA-VA-028)
                      Note:
Closing Documents     -   FHA Adjustable Rate Note - Multi-state or state specific (VMP-590)
                      Riders:
                      -   FHA Multi-state or state specific Condominium Rider (VMP-586)
                      -   FHA Multi-state or state specific Planned Unit Development Rider (VMP-589)
                      -   FHA Multi-state Adjustable Rate Rider (VMP-591U)
                      Security Instrument
                      -   In all states, use the state specific FHA Mortgage or Deed of Trust




11/09/05

				
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