Conventional
Guidelines
All loans must be underwritten by the Fannie Mae desktop underwriter system or the Freddie Mac Loan prospector advisor and receive an Approve/Eligible (Fannie Mae) or an Accept/Eligible (Freddie Mac)
– Manual underwriting not permitted
– Purchase | Rate and Term refinance | Cash-out refinance
– Minimum Credit score of 620
Salaried | Hourly Borrowers
– Two-year employment history must be documented via the two most recent tax returns
– Previous two years W-2s
– Recent paystubs to illustrate earnings for the previous 30 days
Self-Employed
– Business must have been in existence for at least two years
– Personal signed individual tax returns as well as the corporate or partnership tax returns for the two most recent tax periods
Multiple Financed Properties
– Primary residence loan- No limits to the number of financed properties
– 2nd Home | Investment property- maximum 10 financed properties
Student Loans
– Underwriting may use the payment on a current credit report or a recent statement for qualifying purposes
– Otherwise 0.5% of the outstanding loan balance reported on the credit report will be calculated to determine the monthly obligation
Qualifying Ratios
– Current guidelines refer to the Fannie Mae or Freddie Mac automated underwriting response
– Traditional guidelines are typically capped at 45-50%% maximum debt to income
Rental Income
– Will be determined by the supplemental income/loss reported on the respective Schedule E from the two previous tax periods
Reserves
– Based upon the Fannie Mae or Freddie Mac automated underwriting response
– Typical reserves is 0-6 months for Owner occupied, 6 months for 2nd Home and Investment
Appraisal
– All loans will require a traditional Fannie Mae form 1073 | Freddie Mac form 465 appraisal report, unless the automated underwriting indicates that a valuation documentation will not be required with what is commonly know as an appraisal waiver or property inspection waiver
Purchase | Rate and Term Refinance
Number of Units | Loan to Value | Credit Score Fixed | Occupancy |
---|---|---|---|
1 | 95% | 620 | Primary Residence |
2 | 85% | 620 | Primary Residence |
3-4 | 80% | 620 | Primary Residence |
1 | 90% | 620 | Second Home |
1 | 85% | 620 | Investment Property |
2-4 | 75% | 620 | Investment Property |