The FHA 203(b) Loan Program - STM Partners

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Loan Terms, Continued Maximum Loan Amount and LTV, (continued) Refinances 1 * The table below reflects the allowable LTV or other methods used in the maximum mortgage calculations. Credit Qualifying Streamline Refinances with an Appraisal Credit Qualifying Streamline Refinances without an Appraisal Rate/Term Refinance Transactions Cash Out Transactions Primary Residences STM to STM Transactions 97.75% / 105% Non-STM to STM Transactions 97.75% / 100% STM to STM Transactions 97.75% / 105% Non-STM to STM Transactions. 97.75% / 100% 97.75% LTV / 97.75% TLTV 85% LTV 2 / 85% TLTV 1 to 4 Unit properties 1 See the topic Refinances for further information 2 Other limitations may apply; see the subtopic Cash-Out Refinances in the topic Refinances for additional information. Minimum Loan Amount None. Continued on next page Section 2.22 July 27, 2012 FHA 203(b) Loan Program Page 14 of 217 Correspondent Seller Guide
Loan Terms, Continued Transactions Affecting Maximum Mortgage Calculations Transactions that Affect Maximum Mortgage Calculations Various transaction types or relationships may affect the allowable LTV or other methods used in the maximum mortgage calculations. Identity of Interest Transactions • Identity of Interest Transactions are transactions between family members, business partners or other business affiliates. Identity-of-interest transactions are restricted to a maximum LTV of 85%. However, maximum financing above 85% is permissible under the following circumstances: • family member purchasing another family member’s principal residence, • employee of builder purchasing home from builder, • current tenant purchasing home she has rented for at least six (6) months predating the sales contract, (with lease or other written evidence), and • sales by corporations purchasing an employee’s home and reselling to another employee. Notes: • For identity-of-interest transactions, a family member includes a child, parent, grandparent (biological, foster or step), sister, step-sister, brother, step-brother, legally adopted son or daughter, a child who is a member of the borrower’s household due to placement by an authorized agency for legal adoption, aunt, or uncle. • A full appraisal is required and must include verification of the purchase price, last sale date, and recent listing of the subject property regardless of the feedback provided in the AUS Messaging. Non-Occupying Co-Borrowers • Non Occupying Co-Borrowers are restricted to a maximum LTV of 75%. However, maximum financing above 75% is permissible under the following circumstances: • borrowers are related by blood, marriage, or law, or • unrelated individuals that can document evidence of a family-type, longstanding and substantial relationship not arising out of the loan transaction, and • the property is a one (1) unit dwelling. • Below are other requirements for a non-occupying co-borrower. • All borrowers, regardless of occupancy status, must sign the security instrument and the mortgage note. • If a parent is selling to a child, the parent cannot be the co-borrower with the child on the new mortgage, unless the LTV is 75% of less. • Non-occupant co-borrowers are not permitted on cash-out transactions. References: • See Maximum Number of FHA Loans per Borrower subsequently presented in this topic for additional information. • See the topic Eligible Borrowers for additional information. Continued on next page Section 2.22 July 27, 2012 FHA 203(b) Loan Program Page 15 of 217 Correspondent Seller Guide
Page 1 and 2: In This Product Description Section
Page 3 and 4: Overview, Continued Product Summary
Page 5 and 6: Overview, Continued Case Number Ass
Page 7 and 8: Overview, Continued Helpful Website
Page 9 and 10: Related Bulletins General Related b
Page 11 and 12: Loan Terms, Continued Assumptions,
Page 13: Loan Terms, Continued Maximum Loan
Page 17 and 18: Loan Terms, Continued Transactions
Page 19 and 20: Loan Terms, Continued Maximum Numbe
Page 21 and 22: FHA Jumbo, Continued Underwriting M
Page 23 and 24: FHA Jumbo, Continued Down Payment A
Page 25 and 26: Eligible Transactions, Continued Te
Page 27 and 28: New Construction, Continued General
Page 29 and 30: New Construction, Continued HUD Spe
Page 31 and 32: New Construction, Continued Archite
Page 33 and 34: New Construction, Continued Archite
Page 35 and 36: New Construction, Continued 10 Year
Page 37 and 38: New Construction, Continued Affirma
Page 39 and 40: New Construction, Continued Propert
Page 41 and 42: Ease-In Payment Reduction Feature,
Page 43 and 44: Energy Efficient Mortgage (EEM) Pro
Page 45 and 46: Refinances, Continued FHA Refinance
Page 47 and 48: Cash-Out Refinances General • HUD
Page 49 and 50: Cash-Out Refinances, Continued Maxi
Page 51 and 52: No Cash-Out with an Appraisal (Rate
Page 53 and 54: Streamline Refinances, continued Ma
Page 55 and 56: Streamline Refinances, continued Ne
Page 57 and 58: Streamline Refinances, continued Em
Page 59 and 60: Secondary Financing General • Any
Page 61 and 62: Secondary Financing, Continued Fede
Page 63 and 64: Secondary Financing, Continued Othe
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Secondary Financing, Continued SunT
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Geographic Restrictions Introductio
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Occupancy/Property Types, Continued
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Eligible Borrowers AUS Information
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Eligible Borrowers, Continued First
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Eligible Borrowers, Continued Non-P
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Eligible Borrowers, Continued Perma
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Income, Continued General, (continu
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Income, Continued Automobile Allowa
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Income, Continued Section 8 Home Ow
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Income, Continued Part-Time Income
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Income, Continued Rental Income, (c
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Income, Continued Self-Employed Bor
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Income, Continued Temporary Leave a
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Income, Continued Borrowers on Stri
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Liabilities and Qualifying Ratios A
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Liabilities and Qualifying Ratios,
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Credit Requirements, Continued Bank
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Credit Requirements, Continued Coll
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Credit Requirements, Continued Cred
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Credit Requirements, Continued Cred
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Credit Requirements, Continued Debt
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Credit Requirements, Continued Mort
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Credit Requirements, Continued Rece
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FHA Social Security Number Validati
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Cash Requirements General In all ca
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Cash Requirements, Continued Cash o
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Cash Requirements, Continued Large
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Cash Requirements, Continued Gift/G
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Cash Requirements, Continued Gift/G
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Cash Requirements, Continued Loans
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Cash Requirements, Continued Real E
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Cash Requirements, Continued Saving
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Contributions by Interested Parties
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Contributions by Interested Parties
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HUD Allowable Closing Costs, Contin
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Mortgage Insurance General An annua
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Mortgage Insurance, Continued MIP P
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Mortgage Insurance, Continued MIP P
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Mortgage Insurance, Continued UFMIP
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Appraisal Requirements General •
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Appraisal Requirements, Continued A
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Appraisal Requirements, Continued M
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Appraisal Requirements, Continued C
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Appraisal Requirements, Continued A
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Appraisal Requirements, Continued S
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Appraisal Requirements, Continued C
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Appraisal Requirements, Continued F
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Appraisal Requirements, Continued S
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Appraisal Requirements, Continued M
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Appraisal Requirements, Continued R
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Appraisal Requirements, Continued R
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Prohibition of Property Flipping, C
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Prohibition of Property Flipping, C
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Automated Underwriting Systems (AUS
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Rate, Points & Lock-Ins, Continued
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Application, Disclosures and Consum
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Application, Disclosures and Consum
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Underwriting and Loan Submission Ge
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Underwriting and Loan Submission, C
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Closing and Loan Settlement Documen
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The FHA 203(b) Loan Program - STM Partners

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