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Us Bank Home Mortgages document sample
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Product Guidelines
Nebraska Investment Finance Authority
Product Code 5353NB
Fannie Mae - MyCommunityMortgage (MCM)
Several states and local municipalities have enacted legislation that 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 1-4 Family Dwellings
Description Fixed rate, fully amortizing with level payment for the life of the loan. DU will underwrite to the most
flexible MCM loan. Lenders must have the MCM modular turned on in DU to process these loans.
Lenders must enter through the Community Lending Screen (free submission through DU). No Loan
Level Price Adjustment. DU is preferred but not required. Manual underwriting is permitted. *The
loan file must comply with the Bond program guidelines for income limits, sales price limits, property
types, locations and other program parameters. FNMA accepts NIFA's Income limits in place of the
MSA limits built into the FNMA MCM loan parameters
Maximum Loan Amount Fannie Mae accepts NIFA's maximum sales price limits.
Eligible Properties Primary Residence only:
1 unit: Condo or PUD * NO Manufactured homes
2-4 units: No Condos, Cooperatives or Manufactured Housing
Eligible Transactions Purchase, Owner-Occupied Only
Eligible Mortgage Fixed Rate, Mortgage Revenue Bond Program- First Mortgage Loan
Min / Max LTV 1 Unit: Max LTV 97 or 100% Max CLTV 105% (with approved Community Seconds)
2 Units Max LTV 97% Max CLTV 105% (with an approved community second)
3-4 Units Max LTV 95% Max CLTV 105% (with an approved community second)
Subordinate Financing Fannie Mae Community Seconds Only. Proceeds from seconds may be used for closing costs,
downpayment and prepaids.
(** 2-4 unit: 3% of the down payment MUST be from the borrowers own funds)
*The Fannie Mae Community Seconds program guidelines dictate the appropriate use for the funds.
*Funding Agency name must be in source of funds column on front of loan application. Documentation
of 2nd mortgage funding source must be in the loan file -- use Fannie Mae Approved Community
Seconds Only.
The Lender is responsible for approving the Community Second unless the loan is being underwritten
by the US Bank MRBP underwriting Department.
Eligible Borrowers The borrower must meet the Bond Program eligibility requirements.
Minimum FICO Score If you are using DU, DU will provide the proper findings to you.
Follow the credit score requirements for MCM manually underwritten files:
Manual Underwrite: (Full Documentation)
1 unit: LTV not greater than 97% - 600
1 unit: LTV above 97% - 620
2 unit: (Max LTV 97%) Minimum 620
3-4 unit: (Max LTV 95%) Minimum 660
** If credit scores are not available, the loan must be underwritten per the nontraditional credit
guidelines of chapter 10 in the Fannie Mae Selling Guide
Revised 5/07/2007 US Bank Home Mortgage MRBP Division Page 1 of 4
Homebuyer Education 1. Pre-purchase Counseling is required for all first-time homebuyers from one of the following forms:
Face-to-face homebuyer education, Classroom or workshop sessions, Telephone education / counseling
program by a recognized mortgage insurer company sponsored by the lender or internet training given
by a recognized MI Company.
2. Post-Purchase early delinquency counseling must be offered the 1st time the borrower is delinquent
and must be in place for the 1st 7 years of the mortgage Note: documentation of completed Homebuyer
Education must be included in the loan file.
Landlord Counseling All borrowers MUST participate in a landlord counseling program conducted by a recognized
2-4 Unit Dwellings community counseling organization. Lenders may also provide the service but they must use Fannie
Mae's publication, Becoming a Landlord: Rewards, Risks and Responsibilities and follow all Fannie
Mae Guidelines related to the landlord counseling.
Qualifying Rate Current rate of the NIFA’s Single Family Mortgage Revenue Bond Program
Minimum Borrower 1 unit: $0 from borrowers own funds
Funds 2-4 Units 3% from borrowers own funds. Cash on hand may NOT be used.
Mortgage Insurance 1 Unit Primary Residence LTV Limits Coverage LTV Limits Coverage
97.01% - 100% 20% 85.01%- 90% 12%
95.01% - 97% 18% 80.01% - 85% 6%
90.01% - 95% 16%
2 Units Primary Residence 95.01% - 97% 18% 90.01% - 95% 16%
85.01% - 90% 12% 80.01% - 85% 6%
3-4 Units Primary Residence 90.01% - 95% 16% 85.01%- 90% 12%
80.01% - 85% 6%
Closing Costs / Prepaids Closing Costs / Prepaids may be paid by any of the following:
Borrower’s own funds, Verified Gifts and Seller Contribution, MCM products ONLY are allowed up to
6% of the sales price or appraised value, which ever is less. Standard FNMA products follow normal
seller Contribution guidelines according to downpayment.
**Community Seconds**: Due to the different types of structuring of Community Seconds, Fannie
Mae is developing a methodology in DU to distinguish between Communty Seconds that have deferred
payments and other types of Community Seconds. At this time, Fannie Mae will permit lenders to enter
certain Community Seconds in DU as a gift, rather than a subordinate mortgage lien. To qualify for
such treatment, the Community Second must meet Fannie Mae eligibility per the Selling Guide and
provide for deferred payments of at least 5 years ( with no repayment required from the borrower during
that time).
Reserve Requirements 1 Unit: $0
2 Units: Lender Must verify liquid assets in reserves at closing equal to at least Two (2) mortgage
payments (PITI). The required reserves MAY include funds received from any form of a gift, which
includes; a relative or church, municipality, or nonprofit organization.
3-4 Units: Lender Must verify liquid assets in reserves at closing equal to at least Two (2) Mortgage
Payments (PITI). The required reserves May NOT include funds received from ANY form of a gift.
General Guidelines for Note: Lenders must be ‘turned on’ to “My Community” in DU in order to evaluate this product. Click
entering a loan into DU ‘yes’ in the Community Lending on the Additional Data screen in DU (this is a free submission) Click
on Community Lending Screen * In the Community Lending Screen, select the county or MSA in which
the property is located *Choose “My Community Mortgage” from the product drop down menu. *Give
the appropriate response for Fannie Neighbors and Community Seconds * Use the Community Lending
income limit or use the adjustment factor *Submit the loan for underwriting *Use of DU not required,
but strongly encouraged *Always check for the Area Median Income, 100% of Area (see Income
Limits for exceptions) ****Many Bond Programs have limits over 100% of median ***ALWAYS
CHECK!!! * Limits may be adjusted to match the MRB limits
Revised 5/07/2007 US Bank Home Mortgage MRBP Division Page 2 of 4
MCM General Property must be a 1 unit : single-family primary residence. Up to 100% LTV 2 Units: up to 97% LTV
Underwriting Guidelines 3-4 Units: up to 95% LTV and (all) 105% CLTV with a Fannie Mae approved Community Second,
Borrowers with nontraditional credit histories allowed, 30% of income from a co-borrower without a
credit history. Section 8 homeownership vouchers can be grossed up 25%. Boarder income and income
from co-borrowers without traditional credit scores are allowed, Recommendations Approve/Eligible,
Expanded Approval Levels I and II/Eligible (No LLPAs) (Refer with Caution: Follow standard
DU Refer policies) . 6% seller contributions allowed (limited to closing costs and prepaid items).
Boarder Income from a non-related third party may be included. Cash on Hand is an acceptable source
of funds.
Enhancements for My The income non-occupant co-signer may be aggregated with the income of the occupant-borrower in
Community Mortgages underwriting the MCM loan subject to the following; (1) Lender may ignore the following
processed using DU messaging: This case is ineligible because the subject property must be the principal residence for all
borrowers when the loan is a Community Lending Product. The Lender may determine if this case is
eligible for delivery under Community HomeChoice. The Lender must then follow all guidelines for
Community HomeCHoice outlined in the MyCommunityMortgage Terms and Conditions AND (2)
Lender MUST manually calculate the single qualifying ratio, considering only the income of the
occupant-borrower, and such ratio may not exceed 55%
Appraisals Full appraisals are recommended. If the US Bank, MRBP Department underwrites the loan file, the
Lender MUST submit a full appraisal report. Loans submitted through DU, Form 2055 or 2075: are
acceptable as long as they show a property VALUE.
Manual Underwrite Refer to Chapter 10 Fannie Mae Selling Guide * -LTV 97% minimum credit score 600 * LTV up to
100%, minimum credit score 620 *If the borrower has credit scores below the minimum; the loan
should be underwritten per the Fannie Mae guidelines.*Or does not have a FICO, then the loan may be
underwritten using the Nontraditional credit guidelines in the Fannie Mae Selling Guide, except (The
borrower must have a minimum of three sources of credit). *May use 30% of income from co-borrower
without a traditional or nontraditional credit profileMCM Purchase – 1 Unit Property, Primary
Residence, Fixed rate only, per bond program Max LTV/CLTV100% LTV/ 105% CLTV w/Community
Seconds®Min CLTV 95% Min Borrower Contribution $0 from borrower’s own funds. Eligible
Property Types Single-Family attached, detached, PUDs, condos permitted. Manufactured homes/Co-
ops not permitted. ** Home-Buyer Education Pre-Purchase and Early Delinquency Counseling
mandatory.
Enhancements for The Maximum underwriting ratio shall be 45% for the total-expenses-to-income ratio ("Single
Manually Underwriting qualifying" ratio, rather then separate housing-expense-to-income and total-expenses-to-income ratios)
My Community The Income of a non-occupant co-signer may be aggregated with the income of the occupant-
Mortgages borrower, subject to lender performing both of the following tests. (1) In considering the income of only
the occupant-borrower, the maximum underwriting ratio shall be 55% for the single qualifying ratio:
and (2) In considering the aggregate of the income of the occupant-borrower and the income of the non-
occupant co-borrower or non-occupant co-signer, the maximum underwriting ratio shall be 45% for the
single qualifying ratio.
Underwriting MCM MCM COMMUNITY SOLUTIONS – 1 UNIT Available for Full-time:* Employees of public or private
Community Solutions schools, kindergarten through post-secondary schools (including college); * Employees of a law
1UNIT ONLY enforcement agency or fire department, or other sworn officers responsible for crime prevention,
emergency responses or terrorism; * Certified, accredited, or licensed health care workers such as
nurses, medical residents, pharmacists, therapists, technicians, and technologists.
MCM Community MCM Community Solutions -97... Conventional fixed-rate, fully amortizing mortgage with a term of 30
Solutions -97 years *Owner-occupied, one-unit principal residence, including condos and PUDs *97% LTV; 105%
1 UNIT ONLY CLTV with Community Seconds , *(6% interested party contribution allowed after borrower’s own
minimum) *45% single back-end qualifying ratio; up to 50% with strong compensating factors
*Minimum 600 credit score (or less with documented extenuating circumstances) or enhanced credit
evaluation for borrowers with traditional or nontraditional credit histories as set forth in Selling Guide
(Part X) *One month’s reserves (gifted); two months’ reserves for backend ratio of 50% *35%
mortgage insurance coverage *Special Feature Code 481
Revised 5/07/2007 US Bank Home Mortgage MRBP Division Page 3 of 4
MCM Community MCM Community Solutions 100 * Conventional fixed-rate, fully amortizing mortgage with a term of 30
Solutions 100 years * Owner-occupied, one-unit principal residence, including condos and PUDs * 100% LTV; 105%
1 UNIT ONLY CLTV with Community Seconds * (6% interested party contribution allowed after borrower’s
minimum) * 45% single back-end qualifying ratio * Minimum 620 credit score (or less with
documented extenuating circumstances) or enhanced credit evaluation for borrowers with traditional or
nontraditional credit histories as set forth in Selling Guide (Part X) * One month’s reserves (gifted) *
35% mortgage insurance coverage * Special Feature Code: 481
MCM HomeChoice Loans designed to meet the mortgage underwriting needs of low-to-moderate income, people with
1 UNIT ONLY *Have a family member who lives with borrower who is handicapped
MCM Community HomeChoice
MCM is Not a credit score driven product. If you are using DU, DU will provide the proper findings to
you. Follow the credit score requirements for MCM manually underwritten files:
Manual Underwrite: (Full Documentation)
LTV not greater than 97% - 600
LTV above 97% - 620 ** If credit scores are not available, the loan must be underwritten per the
nontraditional credit guidelines of chapter 10 in the Fannie Mae Selling Guide
*1-unit properties, 100% LTV
*Borrower income per NIFA limits
*105% CLTV; up to 120% CLTV to fund renovation or access modifications and with forgivable
Community Seconds combined with Community Renovation® for renovations/access modifications
(lender authorized for Community Renovation loans)
*Qualifying ratios per DU or
*45% single qualifying ratio
50% with two months’ reserves, budget-based qualifying, maximum 97% LTV
**33%/38% with non-occupant co-borrower
Reserve Requirement:
*45% ratio = 1 month
*50% ratio = 2 months
Delivery: SFC 222 (manual underwrite)
Special Feature Codes MCM 97 460
MCM 100 480
MCM Community Solutions 97 or 100 481
MCM HomeChoice 97 or 100 222 (manual) 325 (DU)
Community Second 118
MCM LTV > 90% & Third Party > than 3% 207
Note (Always refer to the Fannie Mae Selling Guide and Announcements for Underwriting changes and/or
updates)
Revised 5/07/2007 US Bank Home Mortgage MRBP Division Page 4 of 4
Product Guidelines
United States Department of
Agriculture/Guaranteed Rural Housing
Program/ RHS /RD
Nebraska Investment Finance Authority
Fixed-Rate 30 year Product Code 5400NE
Several states and local municipalities have enacted legislation that 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
A zero down payment program geared to low and moderate income borrowers in rural areas. Borrowers
Description must be "first-time" homebuyers, unless purchasing in a designated targeted area.
- Borrower may finance closing costs, prepaids or repairs as long as the value
LTV
Purchase is supported by the appraisal. (Borrowers cannot receive any cash back.
100%
Discount points cannot be financed.)
Property Location - Property must be located in rural area. Two acre limitation.
Requirement - Maps delineating eligible rural areas are available from GRH County or State Offices.
- Generally, use urban growth boundary lines in establishing community eligibility.
- 1 unit primary May be existing or end loan.
residence
Eligible Properties - PUD unit Please refer to RD AN #4111 dated 10-4-05 for PUD guidelines & requirements
- Condo unit Please refer to RD AN #4196 dated 7-10-06 for Condo guidelines and requirements
- Manufactured
Housing Must be new construction only and built by RD approved contractors.
Contact your local RD office for list of approved contractors.
- Per Bond Program Guidelines
Lending Area
Qualifying Ratios 29 and 41 Please refer to RD AN #4163 in which Rural Housing explains process for Debt
Ratio waivers
Qualifying Rate Note rate or at the Temporary Buydown Rate. 2% Maximum Buydown
- Funds reservation is done at the Branch level.
- Contact local GRH office after application to reserve funding authority. Use "Reservation of Funds" Form
Funds Reservation RD 1980-86 (rev.10/03)
- If local GRH office has run out of funds, file cannot be price locked or closed until new funding authority
becomes available.
2.00% of the loan amount. Can be paid by borrower or seller or financed.
Guarantee Fee
Homebuyer Education - If required by Housing Finance Authority in bond program
- If required by RD at time of submission for insuring
Underwriting - Lenders are fully responsible to underwrite RD loans according to the guidelines presented by GRH.
Guidelines Lenders are responsible to review RD AN # 4162 dated 3-29-06 in which RD provides a process to
determine payment shock and support each file accordingly.
- Must comply with Bond Program Income parameters.
Income
- Lenders are responsible to properly document each loan file with proper documentation to support the
income used for qualifying. RD AN # 4179, dared 4-28-06 provides a complete overview of their allowable
Alternative documentation to verify employment income.
Rural Housing has provided several announcements giving lenders the needed guidance for accessing
Credit/Credit Scores credit and credit scores. The following announcements will help lenders in that analysis.
RD AN #4174, dated 4-20-06 will help lenders analyze the treatment of collection accounts
RD AN #4171, dated 4-13-06 will help lenders review the utilization for credit scores.
RD AN #4170, dated 4-14-06 will help lenders with guidance on credit history verification.
05/03/2007 USDA/RHS/RD
Page 1 of 4
Funds to Close Acceptable sources of funds to close:
- Gift from a relative - provide acceptable gift letter standard documentation to evidence withdrawal
from donor and transfer to borrower.
- Borrower's own funds.
- No minimum borrower investment required.
- Borrowers cannot receive any cash back.
- US Citizen.
Citizenship
- Resident Aliens holding a green card are acceptable.
- Eligible Non-U.S. Citizens per AN No. 3913
(The AN’s [Administrative Notices] can be obtained through Allregs)
- Must be on note and deed.
Co-Borrowers
- Must consider all income and debt.
- Must occupy property.
Non-Borrowing
Acceptable - but all income must be used in maximum income guidelines.
Spouse
- Full URAR for new construction due to cost approach
Appraisal - 2055 interior/exterior for existing properties
Requirements - HUD VC sheets must be used for existing properties. The notice to homebuyer IS NOT TO BE
completed.
- Condos require the 465 appraisal form; no 2055’s
- TWO acre limitation
- Required for all property types except condominiums.
Survey requirements - In areas where surveys are not customary, the title insurance policy must insure over matters of survey.
- Property must meet FHA minimum property standards including lead paint and health/safety issues.
Property Standards - Water tests always required for properties with wells
- Septic tests only required if appraiser notes problems on the appraisal
- Weather-related items only.
Completion Escrows - The minimum escrow amount is $1,000.
- Repair escrows may be limited to certain months of the year.
Termite Inspection Required for existing properties located in areas prone to termite infestation. Termite inspection must be
in the credit package at time of underwriting.
Temporary Buydown 2-1 Buydowns Allowed. Use FHA 2-1 Buydown disclosures.
MUST also Comply with Bond Program Guide-lines
Contributions by - No limitation on seller concession, May be restricted by Secondary Market guidelines
Interested Parties - At no time can the seller pay more than what actual costs are for closing costs, prepaid, discount and
G Fee.
Subordinate Not allowed.
Financing
Assumable Yes. Subject to new borrowers being approved by USDA/GRH. Assuming
Borrower(s) must meet the same first time homebuyer criteria as original
borrower(s).
Escrow Waivers Not Allowed.
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 7 Manufactured House Endorsement (if applicable)
- ALTA 8.1 Environmental Protection Lien Endorsement (all loans)
- ALTA 9 Comprehensive Endorsement (all Loans)
- Any other endorsements required by state law and or regulations
Prepayment Penalty None.
05/03/2007 USDA/RHS/RD
Page 2 of 4
Late Charges 4% or the highest amount allowed by state law.
- All USDA/GRH compliance disclosures found in the USDA/GRH Handbook under "Forms":
1. RD 1980-86 (rev 10/03): Request for Reservation of Funds
2. Confirmation of reservation of funds (comes from GRH state office)
3. RD 1980-21 (rev.6/06): Request for Single Family Housing Loan Guaranty (4 pages)
4. CAIVRS form with clear CAIVRS numbers for all borrowers
Loan Disclosures 5. Flood Cert
6. Termite Inspection
-For New Construction:
1. RD 1924-25 (rev.7/99) Plan Certification
2. RD 1924-19 (rev.1/00) Builder’s Warranty (signed at closing)
3. 10 year Warranty: HBW/210 or RWC Requires: Final Inspection
4. 1 year Warranty Requires: 3 inspections from governing body (city or county). Foundation,
Framing and CO.
5. RD 400-3 (rev 2/99) Notice to Contractors and Applicants
-If the New Construction Involves a Construction Loan
1. RD 400-1 (rev 5/00) Equal Opportunity Agreement
2. RD 400-6 (rev 4/00) Compliance Statement
3. AD 1048 (rev 1/92) Certification Regarding Debarment
4. RD 1924-25 (rev.7/99) Plan Certification
5. RD 1924-19 (rev.1/00) Builder’s Warranty (signed at closing)
6. 10 year Warranty: HBW/210 or RWC Requires: Final Inspection
7. 1 year Warranty Requires: 3 inspections from governing body (city or county). Foundation,
Framing and CO.
- For Exiting Construction:
1. HUD VC sheets (No Notice to homebuyer)
2. Existing Housing Inspection (thermal requirements). Each state office has their own form.
- Manufactured Housing:
1. Same for NC above plus….
2. Rural Development Dealer-Contractor Certification (rev.4/25/01). Builder signs at closing.
3. Copies of Foundation and Final construction Inspections with and occupancy permit (with no
exceptions indicated).
The manufactured units must be purchased from a GRH approved dealer. Each state keeps at list of
approved dealers. Check the most recent list
Note:
- Fixed Rate Note - Multi-state or state specific (VMP-1R Series)
Riders:
- FHA Multi-state or state specific Condominium Rider
- FHA Multi-state or state specific Planned Unit Development Rider
Closing Documents Security Instrument
- In all states, use the state specific FHA Mortgage or Deed of Trust
- Tax Exempt Rider
05/03/2007 USDA/RHS/RD
Page 3 of 4
Manufactured homes must meet the following minimum requirements for loan to be eligible for
sale to U.S. Bank Home Mortgage:
- Must be multi-width unit – no single width homes allowed.
- Minimum of at least 600 square feet gross living area and minimum of 12’ wide.
Must be constructed in conformance with the Federal Manufactured Home Construction and Safety
Standards, as evidenced by an affixed Certification label, according to 24CFR3280.8. Only homes
produced after June 15, 1976 will bear that seal. Loans on mobile/manufactured homes produced before
that date are unacceptable.
- The manufactured home must have a pitched roof and assume the characteristics of site-built
housing, including permanent utilities.
- Must be a one-family dwelling that is legally classified as real property, and taxed as real
estate by the local taxing authority. The towing hitch, wheels, and axles must be removed
(including tongues, axles, brakes, wheels, and lights) and the dwelling must assume the
characteristics of site built housing. The land on which the manufactured home is situated
must be owned by the borrower in fee simple, unless the manufactured home is located in a
cooperative or condominium project. Mortgages secured by manufactured homes located on
leasehold estates are not eligible.
- Must be permanently connected to a septic tank or sewage system and to other utilities in
Additional
accordance with local and state requirements.
Manufactured Housing
- All improvements must be completed prior to closing. Specifically, the following must be
Requirements
completed: site preparation for delivery of the manufactured home, attachment of the
manufactured home to the permanent foundation system, permanent connection to all
necessary utilities (water, electricity, gas service, etc.). Exceptions to the foregoing may be
only for minor items that do not affect the ability to obtain an occupancy permit (e.g.
landscaping, a driveway, a walkway, etc.). Mortgages secured by existing manufactured
homes that have incomplete items, such as a partially completed addition or renovation, or
defects, or needed repairs that affect livability, are not allowed until the necessary work is
completed.
- The mortgage amount cannot include the financing of furniture or mortgage life insurance.
The value of appliances, air conditioning and carpeting normally included in the value of site
built homes may be included in the appraised value. At least two comparable sales used in
the appraisal must be similar permanently attached manufactured housing units.
- The security instrument must accurately describe both the land and the manufactured unit in
such a way as to be considered a fixture filing under the UCC. At a minimum, the unit
description should include the Manufacturer’s Name, Model Year, Model Name, Model
Number, Serial Number and the length and width of the unit.
- Any Certificate of Title must be surrendered to the state. Documentation must be included in
the loan file showing that the Certificate of Title has been surrendered. If the Certificate of
Title has not been surrendered, the loan is not eligible for sale to U.S. Bank Home Mortgage.
- The title policy must identify the manufactured unit as part of the real property and contain an
ALTA Form 7 or equivalent endorsement.
- The borrower must sign a written statement (such as Affidavit of Affixation) to acknowledge
their intent that the manufactured home is a part of the real property that secures the
mortgage.
- Insured Closing Protection letter unless prohibited by state law or regulation.
Note: This is a brief synopsis of the requirements for GRH loan files. Please refer to your GRH
handbooks and GRH AN’s for more detailed information. Call your Regional Underwriting
Centers for any help with any particular question you may have.
05/03/2007 USDA/RHS/RD
Page 4 of 4
Product Guidelines
Nebraska Investment Finance Authority
FHLMC Home Possible Fixed Rate Program
Home Possible 97% LTV PRODUCT CODE 5504NE
Home Possible 100% LTV PRODUCT CODE 5504NE
Home Possible Neighborhood Solution 97% LTV PRODUCT CODE 5367NE
Home Possible Neighborhood Solution 100% LTV PRODUCT CODE 5367NE
Several states and local municipalities have enacted legislation that 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.
30 Yr.
PRODUCT Amortization FOOTNOTES
Fixed rate, fully amortizing with level payments for life of loan. This purchase product is for low-to-
moderate income borrowers who need low down payment options and credit flexibility. Primary residence
Description
only.
Max. Loan Amount Financed amount must be within the parameters of bond program acquisition limits
Purchase Home Possible 100 & Home Possible Neighborhood Solution 100
Min. Borrower
Primary 1- Unit LTV TLTV Contribution*
100% 105% -0-
Home Possible 97 & Home Possible Neighborhood Solution 97
Min. Borrower
Primary 1- Unit LTV TLTV Contribution*
97% 105% -0-
-A Minus loans -A Minus Loans Are NOT allowable in the NIFA program
1-4 Unit
Subordinate
Financing Secondary financing can be an affordable second
- Affordable seconds can be submitted to Loan Prospector as long as the Affordable Second amount is
entered in the “Total Gift Fund” field rather than the “Subordinate Amount” field. The Affordable second
st
cannot require a payment due prior to the due date of the 61 monthly payment under the Home
Possible Mortgage.
Appraisal - Full Uniform Residential Appraisals are required.
- Loans that receive a Loan Prospector Accept: Determined by Loan Prospector.
Qualifying Ratios - Manually underwritten Home Possible Loans: 43% Debt-to-income ratio
- Manually underwritten Home Possible Neighborhood Solution Loans: 45% Debt-to-income ratio
- Note Rate
Qualifying Rate - If Trailing Spouse income is used to qualify and the mortgage is subject to a temporary buydown, then
the Note rate must be used to qualify
Co-Borrowers - Occupant borrowers ONLY, Non-Occupant co-borrowers are not allowed.
06/06/07 Home Possible 97% LTV & 100% LTV
Page 1of 7 Home Possible Neighborhood Solutions 97% LTV & 100% LTV
1 Unit Primary Residence • May be detached, semi-detached or attached units.
Eligible Properties: PUD’s / Townhome’s • PUD’s must conform to current Fannie Mae (FNMA) requirements.
Condominium’s • Condominium units must conform to one of Fannie Mae’s
2-4 Unit Primary Residence (FNMA’s) eligible Condo type’s
NO PUD’s / Townhome’s or
Condominium’s Please Note: PUD’s / Townhome’s and Condominium’s
MUST MEET Fannie Mae (FNMA) requirements
No dome homes, earth homes, • Maximum Acreage: Refer to Agency requirements.
time shares, condotels, or
other unique properties.
Manufactured Homes are
NOT permitted in the
program.
Closing Costs:
Closing Costs / - Down payment Second Mortgages / Grants (DPA) may be used towards the downpayment and the
Prepaids closing costs on the loan. Borrowers cannot receive any residual assistance funds as cash-back.
Additional funds must be used to pay down the principal.
Prepaids:
Either the borrower, the borrower’s employer or the seller may pay the following prepaid items:
• Real estate taxes for the period after the settlement date.
• Hazard insurance premium (annual premium and escrow accruals).
- Any payment of prepaid items by the borrower’s employer, or the seller must be
included with seller-paid items in the calculation of maximum financing concessions.
Processing / - Loans may utilize LP designated Documentation Class of Standard or Streamline if allowed by LP.
Documentation
Options
Homeownership Education is required for borrowers on All loans by NIFA.
Homebuyer 1. Pre-purchase Counseling is required for all first-time homebuyers from one of the following forms:
Education Face-to-face homebuyer education, Classroom or workshop sessions, Telephone education /
counseling program by a recognized mortgage insurer company sponsored by the lender or internet
training given by a recognized MI Company.
2. Note: documentation of completed Homebuyer Education must be included in ALL NIFA loan files.
Homeownership Education is required by Freddie Mac for all first-time buyers on 2-4 family units
Also, Landlord Education is required for 2-4 units.
- To ensure that the borrower understands the home buying process and is prepared
for the added responsibilities of homeownership, Borrowers are required to
participate in pre-purchase homebuyer education and counseling prior to mortgage
closing. The following FHLMC Web Site Training Tool: “The Homebuyer’s Readiness Check” is an
authorized alternative borrower education source to complete required Counseling. If borrowers use
this website a copy of the printed completion certificate must be provided to Underwriting PRIOR TO
CLOSING!!! http://www.FreddieMac.com/hrc
For ALL Loans
• Post-Purchase early delinquency counseling is offered by US Bank, the 1st time the borrower is
delinquent and is in place for the 1st 7 years of the mortgage.
• Note: documentation required by the originating lender; FNMA's "Authorization for Borrower
Counseling" form must be included in the loan file. Is available on efanniemae.com or by USBHM
06/06/07 Home Possible 97% LTV & 100% LTV
Page 2of 7 Home Possible Neighborhood Solutions 97% LTV & 100% LTV
A. This product is Loan Prospector (LP) eligible and should be LP processed whenever possible.
General Underwriting LP Accept
Guidelines
B. Home Possible Mortgages receiving one of the following LP results or Evaluation Status reports must
be manually underwritten mortgages:
- Invalid
- Ineligible
- Incomplete
C. Manually underwritten mortgages using Indicator Scores.
1. Using Indicator Scores:
- Must be at least one usable Credit Score determined per FHLMC guidelines.
Minimum Indicator Score
Home Possible 100* Home Possible 97*
Primary 1-Unit 620 600
*Minimum indicator score applies to both Home Possible and Home Possible Neighborhood
Solution products.
Although, minimum FICO Scores are set, the underwriter still needs to determine a reasonable
expectation that the borrower has the ability and willingness to repay the loan. Extenuating
circumstances should be documented to the extent possible and a reasonable determination that
the situation is corrected.
For those loans that must be manually underwritten, the Freddie Mac website that contains a “Look-
up” Median Income Tool may be found at:
http://ww3.freddiemac.com/ds2/sell/affgold.nsf/frmHomePage?OpenForm
D. Individual Borrower with no credit history is considered to have an acceptable credit reputation if
satisfactory non-payment credit references can be provided per FHLMC guidelines.
Product Desc Offering Identifier Code Applicable LTV's
Home Possible 100 240 LTV 97.01 & above
Required Freddie
Mac Offering
Identifier Codes Home Possible 97 244 LTV 97% (3% down
payment from Borrower
Personal Funds)
Home Possible
Neighborhood Solution 97 245 LTV 97% (3% down
payment from Borrower
Personal Funds)
Home Possible 97 241 LTV 97.0 & lower
Home Possible
Neighborhood Solutions 100 242 LTV 97.01 & above
Home Possible
Neighborhood Solutions 97 243 LTV 97.0 & lower
If the loan is submitted through LP, one of the above Offering Identifier Codes must be included in
the submission. The LP response will confirm the loan was transmitted as a Home Possible &
indicate any applicable delivery fees.
06/06/07 Home Possible 97% LTV & 100% LTV
Page 3of 7 Home Possible Neighborhood Solutions 97% LTV & 100% LTV
- To be determined by Underwriter:
Required Freddie Loan Characteristic SCC Code
Mac Special
Characteristic Codes Use of Non traditional Credit References 532
(SCC’s) Using cash on hand as borrower Funds or Borrower Personal Funds 547
Delinquency Post Purchase Counseling
Counseling - USBHM will provide post-purchase counseling, including early intervention in the event of a
delinquency, at no cost to the Borrower. Counseling services will be available to all Borrowers who
experience problems meeting their Mortgage payment obligations. USBHM will send the Borrower a
letter advising him/her of the availability of free counseling. If the borrower becomes delinquent,
USBHM will contact a nonprofit counseling center to act as an independent credit counselor to assist
the Borrower in managing his or her personal finances.
- Lenders must have the borrower sign an Authorization form for Counseling and include it in the loan
purchase package. The FNMA Form Borrowers Authorization form for Counseling is acceptable.
100% of a Trailing Co-Borrower’s income may be used as stable monthly income when all of the following
Trailing Co-Borrower conditions are met:
Income The amount of Trailing Co-Borrower income used does not exceed 33% of the total qualifying
income for the Mortgage
The income is not from self-employment
The Trailing Co-Borrower was continuously employed in the same occupation for two years
immediately preceding the relocation
The Trailing Co-Borrower provides a statement of intent to work in the new location and
describes the occupation for which he or she intends to seek employment
Based upon a review of the job market in the new location, USBHM reasonably determines that
employment opportunities and earning potential for the Trailing Co-Borrower are comparable or
better than the opportunities in the former location
Tax Exempt Income - Tax exempt income may be grossed up by 25%.
Borrower(s) Income - Income used to qualify (including any co-borrower) cannot exceed 100% of area median income.
Limitations*
* Mortgages being underwritten through LP with a Borrower whose stable monthly income is above the
requirements for Home Possible Mortgages may get a purchase restriction message; Seller may
ignore the purchase restriction messages as long as the Borrower meets the income limits of the NIFA
*HFA Program Program.
Income Limits
Supersede Freddie - The Freddie Mac website that contains a “Look-up” Median Income Tool may be found at:
Mac’s http://ww3.freddiemac.com/ds2/sell/affgold.nsf/frmHomePage?OpenForm
- Income limits are waived if property located in an Underserved Area as defined by FHLMC
guidelines.
1. Must be documented according to FHLMC guidelines.
Borrower Income 2. For manually underwritten mortgages, income contributed by a Borrower with no credit history may
be considered, provided the amount contributed does not exceed 30% of the total qualifying income.
3. Boarder / Rental Income:
- 1-Unit Primary Residence – Eligible rental income from a 1-unit Primary residence that meets
FHLMC guidelines may be considered as stable monthly income; however, the income need not
come from a related person.
06/06/07 Home Possible 97% LTV & 100% LTV
Page 4of 7 Home Possible Neighborhood Solutions 97% LTV & 100% LTV
- Home Possible Neighborhood Solution mortgages require the Borrower(s) to be an employee who
Employment Status satisfies one of the following descriptions:
1. An employee of an accredited or state-recognized private or public school; certified teacher or
administrator in an education agency; or an employee of a post-secondary level educational
institution; or
2. An employee of a law enforcement agency or fire department administered by an agency or
subdivision of a state or local government, or a sworn law enforcement officer responsible for crime
prevention and detection, law enforcement, or criminal incarceration; or a sworn member of a fire
department involved in fire suppression or prevention, emergency medical response, hazardous
materials incident response, or management or response to terrorism, or
3. A certified, accredited, or licensed health care worker who is a medical resident or fellow; a nurse,
nursing assistant, pharmacist, pharmacy technician, physician’s assistant or medical technician,
technologist or therapist.
- Documentation such as a paystub, W-2, letter from the Borrower’s employer, or other documentation
that provides comparable information evidencing the Borrower meets the employment requirements for
a Home Possible Neighborhood Solution mortgage must be maintained in the mortgage file.
Home Possible Home Possible
Reserves
Neighborhood Neighborhood
# of Units Home Possible 100 Solution 100 Home Possible 97 Solution 97
1-Unit None required One month None required One month
The following source of funds are permitted as defined by FHLMC guidelines:
Source of Funds Use Permitted Source of Funds
Down payment for Purchase Transaction Borrower Personal Funds / Other Borrower Funds
Closing Costs / Fin. Costs / Prepds / Escrows Borrower Personal Funds / Other Borrower Funds /
Flexible Sources of Funds
- Reserves for Home Possible Neighborhood Solution do not allow gifts funds.
Borrower’s Personal Funds
Source of Funds 1. Funds on deposit in the Borrower’s checking, savings, money market or certificate of deposit account
Definitions or other depository account.
2. Proceeds of a loan fully secured by the Borrower’s own assets.
3. Proceeds from the sale of the Borrower’s assets.
4. Verifiable cash deposit towards purchase.
Other Borrower Funds
1. Gifts from a related person per FHLMC guidelines except that there is no requirement that there be a
down payment of 5% from other sources of cash or other Equity.
2. Gifts or grants from An Agency per FHLMC guidelines.
3. Gift or grant from the Seller as the originating lender per FHLMC guidelines.
4. Sweat equity that is fully explained and verifiable for labor performed or material furnished by the
Borrower on the Mortgages Premises as per FHLMC guidelines including the requirement that the
Borrower has at least 5% down payment in cash or other types of other Equity.
6. Funds pooled by a group of related Persons per FHLMC guidelines.
7. Funds representing the matching funds provided by An Agency to an IDA as per FHLMC guidelines.
8. Proceeds from an unsecured loan from An Agency as per FHLMC guidelines.
9. Proceeds from an unsecured loan from a Related Person as per FHLMC guidelines.
10. Proceeds from an Affordable Second as per FHLMC guidelines.
Flexible Sources of Funds
1. Seller concessions per FHLMC guidelines 90% LTV or greater 3%.
- Primary Residences
-
Contributions By LTV < 75%: 9% of the lesser of sales price or appraised value.
Interested Parties LTV > 75% < 90%: 6% of the lesser of sales price or appraised value.
LTV > 90%: 3% of the lesser of sales price or appraised value.
06/06/07 Home Possible 97% LTV & 100% LTV
Page 5of 7 Home Possible Neighborhood Solutions 97% LTV & 100% LTV
Mortgage Insurance All property types: - MI Premiums paid monthly
LTV Coverage - initial and one-time MI premiums may be
97.01-100.0% 20% paid by seller
95.01- 97.0% 18% - Custom, Reduced or Financed MI not
90.01- 95.0% 16% allowed.
85.01- 90.0% 12%
80.01- 85.0% 6%
A satisfactory water test/well water certification indicating compliance with acceptable local standard
Well and Septic and/or a satisfactory septic certification from a local health authority will only be required if:
Requirements 1. The appraiser recommends or requires a test, or
2. The Purchase Agreement requires a test.
Termite Inspections are only required in geographic markets where termite infestation is a known
phenomenon, and if:
Termite Inspection
a) Purchase Agreement requires, or
b) Appraiser requires as a condition of the appraisal, or
c) Underwriter discretion if documentation in the file warrants confirmation there is not a termite
problem.
Assumability* - Not assumable. *N/A for Bond Loans. Tax Exempt Rider MUST contain Assumption language.
Amortization - 30 year amortization. No negative amortization.
Prepayment Penalty - None.
Late Charges - 5% or the highest allowed by state law.
Loan Disclosures - Authorization Agreement For Homeownership Counseling Agency Referral form (ZCounseling
Agreement 6/2005)
Escrows for incomplete exterior work not completed due to inclement weather are allowed subject to the
Work Completion following requirements:
Escrows • Appraiser must indicate remaining work to be completed.
• Provide an estimate or bid for completion of the required work from the Builder or a licensed
contractor qualified to complete the work.
• Establish an escrow of the greater of a minimum of $1,000 or 1.5 times the bid to complete the work.
• An estimated completion date of 90 days after weather permits work must be established.
• Funds will be released upon satisfactory completion of the work and a clear, final inspection has
been provided.
• Escrows exceeding 5% of the loan amount must be prior approved by USBHM Underwriting.
Escrows for well/septic, other health/safety issues or interior work will be considered on an exception
basis only and requires USBHM Underwriting approval.
- Living Trust
Trust Ownership A Living Trust is an eligible mortgage borrower if it meets all the conditions and requirements listed in
the FHLMC/FNMA Seller/Servicer Guide (as applicable).
To determine whether or not the Trust meets all the criteria required by FHLMC or FNMA, we require
either of the following:
• An attorney’s opinion stating that the Trust does meet all the secondary marketing
requirements as set forth by FHLMC/FNMA and all State requirements.
• A Trust summary/certification evidencing compliance with all secondary marketing requirements
as set forth by FHLMC/FNMA and all State requirements.
One of the above documents MUST be submitted in the underwriting package along with a complete
copy of the Trust Document itself.
06/06/07 Home Possible 97% LTV & 100% LTV
Page 6of 7 Home Possible Neighborhood Solutions 97% LTV & 100% LTV
- Standard coverage in the amount of the mortgage, including the following endorsements:
Title Insurance - 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 (all loans).
- Any other endorsements required by state law or regulation.
Note:
Closing Documents - Fixed Rate Note FNMA/FHLMC 3200 (VMP 5N)
Rider to Mortgage:
- PUD units only - FNMA/FHLMC 3150 Planned Unit Development Rider (VMP 7R).
- For Condominiums, FNMA/FHLMC 3140 Condominium Rider (VMP 8R).
- For Investment and Two – Four Unit Properties - FNMA/FHLMC 3170 One-to-Four Family
Rider (VMP 57R).
- Tax Exempt Rider (Per Bond Program)
Security Instrument:
- In all states, use state-specific FNMA/FHLMC Mortgage/Deed of Trust
- Tax Exempt Rider (per Bond Program)
06/06/07 Home Possible 97% LTV & 100% LTV
Page 7of 7 Home Possible Neighborhood Solutions 97% LTV & 100% LTV
Product Guidelines
Nebraska Investment Finance Authority
FHA 30 Year Fixed Rate Product Code 1001NB
FHA 2-1 Buy Down Product Code 1004NB
Several states and local municipalities have enacted legislation that 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 (Fixed Rate) FOOTNOTES
Description A minimum investment of 3% that can include down payment and allowable closing costs for owner
occupied borrowers.
Purchase Owner Occupants - Allowable closing costs plus down payment covers 3% statutory
investment - Contact FHA Homeownership Center with jurisdiction
See HUD Mortgagee Letter over the property.
98-29 for all maximum - FHA determines Maximum Loan amounts per county of each
mortgage calculations. state. This can be found on the FHA Connection or though the
Homeownership Centers.
1,3 1
- 1 unit primary residence May be new construction or existing. If new construction (end loan)
- 2-4 Units Owner Occupied
1,3,5 must have FHA inspections during construction and 1 year warranty
Eligible Properties or provide 10 yr. warranty from builder or max LTV 90% with new
2,3
- PUD unit construction exhibits or building permit & Certificate of Occupancy (all
2,3 other construction exhibits are still required). This does not apply to
- Condo Unit
4 manufactured housing or condos.
- Manufactured Housing 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 91
days. New construction, HUD Repos and relocation sales are
EXEMPT. See Mortgagee Letter 2003-7
4
Manufactured Housing MUST comply with the FHA Guidelines for
Manufactured Homes.
5
Other unit(s) rental income MUST be used in BOND Income
Calculations
• Neighborhoods must be at least 25% developed.
Lending Area • LTV ratios may be reduced for non-metropolitan areas.
Qualifying Ratios 31/43 With Loan Prospector “Accept” or Desktop Underwriter
33/45 Energy Efficient Homes “Approve/Eligible”, ratios can be exceeded.
Qualifying Rate - Fixed rate loans at Note rate
- Buydown loans at Note Rate
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 - Desktop Underwriter defined documentation.
- Loan Prospector defined documentation.
Rev. 5/01/07 FHA 30 Year Fixed Rate Bond Loans
FHA 2-1 Buy downs
Page 1 of 4
Acceptable sources of funds to close:
Funds to close - Gift from a relative or closely defined friend – refer to Mortgagee Letter 00-27
- Agency approved down payment assistance
- Funds from 6% seller contribution can include prepaids, not downpayment.
- Loan from family member.
- Borrower's own funds.
- Unsecured Loan from family members – see Mortgagee Letter 96-58.
- Standard documentation or LP/ DU “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.
US Citizen; Non resident alien with social security card stating ok to work with INS authorization and a
Citizenship 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
Co-Signors - NO qualifying ratios required for Co-Signor 1 unit only
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. See 4145.1 and 4150.2.
Appraiser must provide 3 year sale history of subject property.
TWO acre limitation.
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 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.
- FHA Pest Control Tip Zones by state can be found at: http://www.hud.gov/offices/hsg/sfh/ref/sfh1-
23a.cfm
*Temporary Buydowns - See HUD 4155.1. 2-1 buydowns allowed only. Must qualify at note rate.
Contributions by 6% of the lesser of sales price or appraised value.
Interested Parties
Subordinated Financing Allowed. See HUD 4155.1 for allowable sources.
Assumable Yes, but borrower’s must meet same income and sales price/first time homebuyer requirements as
original borrower.
Prepayment Penalty None.
Late Charges 4% or the highest amount allowed by state law.
Escrow Waivers Not Allowed.
Rev. 5/01/07 FHA 30 Year Fixed Rate Bond Loans
FHA 2-1 Buy downs
Page 2 of 4
- 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 and 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
- Buydown Agreement
- Consent Form
The above documents (excluding Notice to Homebuyer Summary) are to be executed by borrower,
seller, and loan officer (as applicable) and in the loan file prior to submission to underwriting.
Note:
Closing Documents - Fixed Rate Note - Multi-state or state specific (VMP-1R Series)
Riders:
- FHA Multi-state or state specific Condominium Rider
- FHA Multi-state or state specific Planned Unit Development Rider
Security Instrument
- In all states, use the state specific FHA Mortgage or Deed of Trust
- Tax Exempt Rider
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
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 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.
Rev. 5/01/07 FHA 30 Year Fixed Rate Bond Loans
FHA 2-1 Buy downs
Page 3 of 4
Manufactured homes must meet the following minimum requirements for loan to be
eligible for sale to U.S. Bank Home Mortgage:
- Must be multi-width unit – no single width homes allowed.
- Minimum of at least 600 square feet gross living area and minimum of 12’ wide.
Must be constructed in conformance with the Federal Manufactured Home Construction and
Safety Standards, as evidenced by an affixed Certification label, according to 24CFR3280.8.
Only homes produced after June 15, 1976 will bear that seal. Loans on mobile/manufactured
homes produced before that date are unacceptable.
- The manufactured home must have a pitched roof and assume the characteristics of site-built
housing, including permanent utilities.
- Must be a one-family dwelling that is legally classified as real property, and taxed as real
estate by the local taxing authority. The towing hitch, wheels, and axles must be removed
(including tongues, axles, brakes, wheels, and lights) and the dwelling must assume the
characteristics of site built housing. The land on which the manufactured home is situated
must be owned by the borrower in fee simple, unless the manufactured home is located in a
cooperative or condominium project. Mortgages secured by manufactured homes located on
leasehold estates are not eligible.
- Must be permanently connected to a septic tank or sewage system and to other utilities in
Additional
accordance with local and state requirements.
Manufactured - All improvements must be completed prior to closing. Specifically, the following must be
Housing completed: site preparation for delivery of the manufactured home, attachment of the
Requirements manufactured home to the permanent foundation system, permanent connection to all
necessary utilities (water, electricity, gas service, etc.). Exceptions to the foregoing may be
only for minor items that do not affect the ability to obtain an occupancy permit (e.g.
landscaping, a driveway, a walkway, etc.). Mortgages secured by existing manufactured
homes that have incomplete items, such as a partially completed addition or renovation, or
defects, or needed repairs that affect livability, are not allowed until the necessary work is
completed.
- The mortgage amount cannot include the financing of furniture or mortgage life insurance.
The value of appliances, air conditioning and carpeting normally included in the value of site
built homes may be included in the appraised value. At least two comparable sales used in
the appraisal must be similar permanently attached manufactured housing units.
- The security instrument must accurately describe both the land and the manufactured unit in
such a way as to be considered a fixture filing under the UCC. At a minimum, the unit
description should include the Manufacturer’s Name, Model Year, Model Name, Model
Number, Serial Number and the length and width of the unit.
- Any Certificate of Title must be surrendered to the state. Documentation must be included in
the loan file showing that the Certificate of Title has been surrendered. If the Certificate of
Title has not been surrendered, the loan is not eligible for sale to U.S. Bank Home Mortgage.
- The title policy must identify the manufactured unit as part of the real property and contain an
ALTA Form 7 or equivalent endorsement.
- The borrower must sign a written statement (such as Affidavit of Affixation) to acknowledge
their intent that the manufactured home is a part of the real property that secures the
mortgage.
- Insured Closing Protection letter unless prohibited by state law or regulation.
Rev. 5/01/07 FHA 30 Year Fixed Rate Bond Loans
FHA 2-1 Buy downs
Page 4 of 4
Product Guidelines
Nebraska Investment Finance Authority
Product Code 3501NB
Several states and local municipalities have enacted legislation that 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.
Fannie Mae – Standard Conventional Guidelines
Product Fixed Rate 30 Yr. Amortization – Purchase Only
This Fannie Mae program provides another option for MRB borrowers who are not eligible
Description for any of the Community Lending Products. The borrowers have sufficient cash assets to
contribute an amount greater than 5% of their own funds to the mortgage transaction.
Maximum Loan Financed amount must be within the parameters of the bond program acquisition limits
Amount
New and Existing 1 Unit
Eligible Properties 1 Unit Primary Residence • May be detached, or attached units
1 Unit PUD/Townhomes • PUDs
1 Unit Condominiums • Condominium Refer to Fannie announcement 05-03 &
Manufactured Housing is and further updates
NOT permitted
LTV / CLTV Max LTV Max CLTV
95% 95%
Subordinate • Non-Community Seconds – Repayment terms must provide for fixed level payments
Financing that cover at least the interest due so that negative amortization will not occur, and must
permit repayment at any time.
• HELOCs are not permitted
• Lenders (other than Correspondents for whom USBHM underwrites) are responsible for
ensuring that any subordinate financing meets Fannie Mae/HUD criteria.
Eligible Borrowers The borrower must meet the Bond Program eligibility requirements
Credit Scores Credit scores approved in D.U.
(Refer to the Fannie Mae Selling Guide or CRA (Credit Risk Assessment) for details)
Homebuyer Homebuyer Education for First Time Homebuyers is encouraged but not required for
Education Standard Conventional Loans
Qualifying Ratios approved in DU
Qualifying Ratios Standard Benchmark Guideline Ratios – 28/36.
Note: Underwriters may use higher ratios than the benchmark guideline, as long as its
assessment of the risk for the mortgage identifies and documents factors that justify the
higher ratio. Follow Fannie Mae Guidelines.
Qualifying Rate Bond Program published rates
Rev. 5/01/07 Fannie Mae Standard Conventional Bond Loans
Mortgage 90.01-95.00 – 30%
Insurance 85.01-90.00 – 25%
80.01-85.00 – 12%
*NOTE: Lower MI options offered by DU are NOT permitted to be used.
Maximum Seller 3% for closing costs and prepaids, if the LTV is greater than 90%
Contributions 6% for closing costs and prepaids, if the LTV is 90% or less
Closing Costs / Per Fannie Mae allowable sources and/or per Bond Program parameters
Prepaids
General
Underwriting Generally, Fannie Mae requires the borrower to use his or her savings or other liquid assets
Guidelines to make a minimum cash down payment of 5%. Once the minimum down payment from the
borrower’s own funds requirement has been satisfied, the remainder of a larger down
payment may come from other acceptable sources. These sources include gifts (or grant),
trade equity, rent credit, a disaster relief grant or loan, an individual development account, an
employer, premium proceeds from a mortgage revenue bond.
Mortgages may be determined to be eligible for delivery under the Standard Eligibility
Criteria in DU
Loan Disclosures All applicable Fannie Mae disclosures and Bond Program disclosures
DISCLAIMER (The information contained in this product description does not modify, replace or
substitute information in the Fannie Mae Selling and Desktop Underwriting Guides
and or related release notes or supplements. Always check the Fannie Mae Selling
Guide , DU Release Notes and Announcements for current underwriting guidelines
,changes and/or updates)
Rev. 5/01/07 Fannie Mae Standard Conventional Bond Loans
Product Guidelines
Nebraska Investment Finance Authority
VA 30 Year Fixed Rate Product Code 2001NB
VA 30 Year Buydown Product Code 2001BNB
Several states and local municipalities have enacted legislation that 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 A zero down payment program for Military Service Veterans or current active duty service or their
surviving spouses.
Purchase Maximum loan amount INCLUDING funding fee is $417,000. For home purchase, construction, and
condominium loans in excess of $144,000, the maximum entitlement is increased to an amount equal
to 25% of the Freddie Mac conforming loan limit for a single family residence.
1
- 1 unit primary - May be new construction or existing
1 - 2
Eligible Properties PUD unit - Condos must be VA approved
- Manufactured Homes
2
- Condo unit
Qualifying Rate Note Rate
Qualifying Ratios 41% Ratio can exceed 41% with compensating factors (such as
high residual income). With Loan Prospector “Accept” and
Desktop Underwriter “Approve/Eligible”, ratios can be
exceeded.
Qualifying Residual See VA Lenders Handbook Chapter 8.
Check Residual Chart
VA Funding Fee - Can be financed or paid in cash.
- Varies based upon First Time or Subsequent Use of Loan Guaranty Benefits Reservist have
- See VA Lenders Handbook Chapter 8.
Processing Options - Standard documentation.
- Loan Prospector or Desktop Underwriter defined documentation.
Funds to Close Acceptable sources of funds to close:
- Gift from relative: provide acceptable gift letter standard documentation to evidence withdrawal
from donor and transfer to borrower
- Funds from 4% Seller Contribution.
- Borrower’s own funds
- No minimum borrower investment required
Buyers cannot receive any cash back but may receive refunds of what they actually paid.
If loan exceeds $417,000 the veteran has to come up with downpayment on a purchase, it cannot be
gifted funds.
Rev. 5-1-07 Page 1 of 5 VA 30
Year Fixed Rate
Co-Borrowers - Must be on note
- Must consider all income and debt
- Non married borrowers or 2 veterans/active service personal borrowers
- Down payment could be required to assure sufficient coverage.
Non-Borrowing Spouse - Acceptable on Purchase Money Mortgages. Homestead and dower rights must be released.
Appraisal Requirements - Appraiser must certify that property complies with VA minimum property requirements.
- Utilize VA LAPP procedures whenever possible.
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.
Completion Escrows - Weather-related items only.
- Repair escrows may be limited to certain months of the year.
Termite Inspection Required for all properties located in areas prone to termite infestation.
Temporary Buy downs 2-1 Buy Downs permitted, qualify at note rate. See VA guideline for other Buy Down features.
Contributions by 4% of the lesser of sales price or appraised value and above any discounts points paid by seller.
Interested Parties
Assumable Yes Subject to credit qualifying. Borrowers must meet same income and sales
price/first time homebuyer requirements as original borrower.
Escrow Waivers Not Allowed.
Guarantee All loans require 25% guarantee.
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
Prepayment Penalty None.
Late Charges 4% or the highest amount allowed by state law.
Rev. 5-1-07 Page 2 of 5 VA 30
Year Fixed Rate
- HUD/VA Addendum to URLA
Required Exhibits - Notice to Veterans : Assumption Notice
- Interest Rate and Discount Disclosure Statement
- Amendatory Clause; if not in purchase agreement.
- Federal Collection Policy Notice (Required only when VA addendum to URLA not executed).
- Counseling Checklist for Military Homebuyers
- 26-8937 Related Indebtedness Form - only with "yes" answered to 4 specific questions
- Original Certificate of Eligibility = green for regular service; yellow for Reservists/National Guard
only
- Clear CAIVRS all borrowers (Required on all VA loan types).
- Debt Questionnaire (Required only when VA addendum to URLA not executed).
- Child Care Expense Statement.
- Consent Form
- If Veteran does not have a Certificate of Eligibility or needs one updated, the following will need to
be completed and submitted: 26-1880 (1/05) and DD214
All of the above documents are to be executed by borrowers, Seller, and Loan Officer (as applicable)
and in the loan file prior to submission to Underwriting.
Closing Documents See VA Lenders Handbook Chapter 9.
Note:
- Fixed Rate Note - Multi-state or state specific (VMP-5V Series)
Riders:
- VA Guaranteed Loan and Assumption Policy Rider (VMP-538)
- Tax Exempt Rider
Security Instrument
- In all states, use the state specific VA Mortgage or Deed of Trust (VMP–6V Series)
- VA Form 26-1820 – Report and Certification of Loan Disbursement.
Miscellaneous Issues See VA Lenders Handbook
- Chapter 3 – Maximum Guaranty Computation
- Chapter 8 – Allowable Fees and Charges
- Chapter 8 – Funding Fee Requirements
- Chapters 10 through 15 – Appraisal Issues/Procedures
- Maintenance and Utilities calculated at .14 per square foot
- VA Website / Lender Handbook: http://www.warms.vba.va.gov/pam26_7.html
Rev. 5-1-07 Page 3 of 5 VA 30
Year Fixed Rate
Manufactured homes must meet the following minimum requirements for loan to be eligible for
sale to U.S. Bank Home Mortgage:
- Must be multi-width unit – no single width homes allowed.
- Minimum of at least 600 square feet gross living area and minimum of 12’ wide.
Must be constructed in conformance with the Federal Manufactured Home Construction and Safety
Standards, as evidenced by an affixed Certification label, according to 24CFR3280.8. Only homes
produced after June 15, 1976 will bear that seal. Loans on mobile/manufactured homes produced
before that date are unacceptable.
- The manufactured home must have a pitched roof and assume the characteristics of site-built
housing, including permanent utilities.
- Must be a one-family dwelling that is legally classified as real property, and taxed as real
estate by the local taxing authority. The towing hitch, wheels, and axles must be removed
(including tongues, axles, brakes, wheels, and lights) and the dwelling must assume the
characteristics of site built housing. The land on which the manufactured home is situated
must be owned by the borrower in fee simple, unless the manufactured home is located in a
cooperative or condominium project. Mortgages secured by manufactured homes located on
leasehold estates are not eligible.
- Must be permanently connected to a septic tank or sewage system and to other utilities in
Additional accordance with local and state requirements.
Manufactured Housing - All improvements must be completed prior to closing. Specifically, the following must be
Requirements completed: site preparation for delivery of the manufactured home, attachment of the
manufactured home to the permanent foundation system, permanent connection to all
necessary utilities (water, electricity, gas service, etc.). Exceptions to the foregoing may be
only for minor items that do not affect the ability to obtain an occupancy permit (e.g.
landscaping, a driveway, a walkway, etc.). Mortgages secured by existing manufactured
homes that have incomplete items, such as a partially completed addition or renovation, or
defects, or needed repairs that affect livability, are not allowed until the necessary work is
completed.
- The mortgage amount cannot include the financing of furniture or mortgage life insurance.
The value of appliances, air conditioning and carpeting normally included in the value of site
built homes may be included in the appraised value. At least two comparable sales used in
the appraisal must be similar permanently attached manufactured housing units.
- The security instrument must accurately describe both the land and the manufactured unit in
such a way as to be considered a fixture filing under the UCC. At a minimum, the unit
description should include the Manufacturer’s Name, Model Year, Model Name, Model
Number, Serial Number and the length and width of the unit.
- Any Certificate of Title must be surrendered to the state. Documentation must be included in
the loan file showing that the Certificate of Title has been surrendered. If the Certificate of
Title has not been surrendered, the loan is not eligible for sale to U.S. Bank Home Mortgage.
- The title policy must identify the manufactured unit as part of the real property and contain an
ALTA Form 7 or equivalent endorsement.
- The borrower must sign a written statement (such as Affidavit of Affixation) to acknowledge
their intent that the manufactured home is a part of the real property that secures the
mortgage.
- Insured Closing Protection letter unless prohibited by state law or regulation.
Rev. 5-1-07 Page 4 of 5 VA 30
Year Fixed Rate
EXHIBIT A
VA FUNDING FEE: CIRCULAR 26-03-09 12/17/03
Private mortgage insurance is not required on VA loans, however a Funding Fee is required in most cases.
The VA Funding Fee may be added to the maximum loan as long as the loan does not exceed $417,000
Federal law requires all Veterans to pay a Funding Fee, with the following exceptions:
Loans made to veterans receiving compensation for service-connected disabilities or
Veterans who, but for receipt of retirement pay, would be entitled to receive compensation for service-connected
disabilities, or
Loans to surviving spouse of veterans who died in service or from service-connected disabilities.
VA form 26-8937 Verification of VA Benefit-Related Indebtedness must be completed by the VA for Veterans exempt
from the Funding Fee
The Funding Fee may be paid in cash or financed, or a combination of the two.
Calculation
The funding fee is calculated based upon the loan amount and whether the Veteran is first time or subsequent user. Depending on
the amount of Eligibility the Veteran has, the loan amount may be for 100% of sales price of the property (or appraised value if
lesser) or the sales price/appraised value less any down payment.
VA FUNDING FEE
CIRCULAR 26-03-09 12/17/03
Loan Type Use Down Payment Active Duty or Veteran National Guard/Reservist
10/01/04 to 09/30/2011 10/01/04 to 09/30/2011
Purchase Initial 0%
2.15 2.40
Purchase Subsequent 0%
3.30 3.30
Purchase Initial & > = 5% & <10% DP
Subsequent 1.50 1.75
Purchase Initial & > = 10% DP
Subsequent 1.25 1.50
Assumptions N/A N/A
.50 .50
Rev. 5-1-07 Page 5 of 5 VA 30
Year Fixed Rate
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