2010 FHA Condominium Guideline Revisions and Updates

CONDOMINIUM PROJECT APPROVAL

I. Approval Processing Options

A. Lenders will have two condominium project approval processing options. The applicable documentation requirements will be the same for each option:

1. HUD Review and Approval Process (HRAP).

2. Direct Endorsement Lender Review and Approval Process (DELRAP), outlined in this Mortgagee Letter. This option is only available to lenders who have unconditional Direct Endorsement authority and staff with knowledge and expertise in reviewing and approving condominium projects.

Under DELRAP, lenders must provide the condominium approval or denial documents to FHA within five (5) business days of final disposition. These documents must be uploaded using pdf format through FHA Connection. 2

B. The processing options stated above will be applicable to condominium developments that are:

1. Proposed or Under Construction;

2. Existing Construction; or

3. Conversions.

C. Lenders who are eligible to and do process condominium approvals under DELRAP may exercise the option, at their discretion, to submit a condominium project for approval under the HRAP.  

II. Eligible Projects

The Condominium Project has been declared and exists in full compliance with applicable State law requirements of the jurisdiction in which the condominium project is located, and with all other applicable laws and regulations.

III. Ineligible Projects

A. Condominium Hotel or "Condotels"

B. Timeshares or segmented ownership projects

C. Houseboat projects

D. Multi-dwelling unit condominiums [
i.e. more than one dwelling per condominium unit]

E. All projects not deemed to be used primarily as residential

F. Those that do not meet prescribed minimum standards

IV. General Requirements

A. Site Condominiums (effective June 12, 2009)

Condominium project approval is
not required for Site Condominiums. Site Condominiums are defined as single family totally detached dwellings (no shared garages or any other attached buildings) encumbered by a declaration of condominium covenants or condominium form of ownership. Site Condominiums that do not meet this definition will require project approval. See Loan Approval section for processing and documentation requirements for unit financing of Site Condominiums. • Manufactured Housing Condominium Projects (MHCPs) may not be treated as Site Condominiums; these projects require approval under HRAP.

• Modular homes are processed as single family homes for insurance purposes and are eligible to be treated as Site Condominiums as long as they meet the stated definition for site condominiums.

B. Environmental Review Requirements

If a lender elects to use the HRAP option, then environmental reviews will not be required for projects that, at the time that condominium project approval is requested, have progressed beyond a stage of construction where HUD has any influence over the remaining uncompleted construction. This occurs when:

• a condominium plat or similar development plan and any phases delineated therein have been reviewed and approved by the local jurisdiction and, if applicable, recorded in the land records,
and the construction of the project’s infrastructure (streets, stormwater management, water and sewage systems, utilities), and facilities (e.g., parking lots, community building, swimming pools, golf course, playground, etc.) and buildings containing the condominium units has proceeded to a point that precludes any major changes.

Environmental reviews will not be required for condominium projects approved using the DELRAP option. If the appraiser identifies an environmental condition or the lender is aware of an existing environmental condition through remarks provided on the Builder’s Certification, Form HUD-92541, the appraisal or other known documentation, the lender must avoid or determine that there are mitigants to address the following conditions before completing its review process:

1. The project is located in a Special Flood Hazard Area designated on a Federal Emergency Management Agency flood map.

2. Potential noise issues, where the property is located within 1000 feet of a highway, freeway, or heavily traveled road, within 3000 feet of a railroad, or within one mile of an airport or five miles of a military airfield.

3. The property has an unobstructed view, or is located within 2000 feet, of any facility handling or storing explosive or fire-prone materials.

4. The property is located within 3000 feet of a dump or landfill, or of a site on an EPA Superfund (NPL) list or equivalent state list, or a Phase I Environmental Site Assessment indicates the presence of a Recognized Environmental Condition or recommends further (Phase II) assessment for the presence of contaminants that could affect the site.

5. The property has any hazards or adverse conditions listed in Section 1.f. of the Builder’s Certification, including, but not limited to, high ground water levels, unstable soils, or earth fill.

6. The project is located in a wetland designated on National Wetlands Inventory maps or designated by State or local authorities.

7. The project is on the National Register of Historic Places or is within a historic district listed on the Register.

8. The appraiser or DE lender is aware of any other condition that could adversely affect the health or safety of the residents of the project.

V. Project Eligibility Requirements

The following requirements apply to all Condominium Project approvals:

1. Minimum number of units: Projects must consist of two or more units.

2. Insurance Coverage: Projects must be covered by hazard and liability insurance and, when applicable, flood and fidelity insurance (See Section VI, Insurance Requirements).

3. Right of First Refusal: Right of first refusal is permitted unless it violates discriminatory conduct under the Fair Housing Act regulation at 24 CFR part100.

4. Commercial Space: No more than 25 percent of the property’s total floor area in a project can be used for commercial purposes. The commercial portion of the project must be of a nature that is homogenous with residential use, which is free of adverse conditions to the occupants of the individual condominium units.

5. Investor Ownership: No more than 10 percent of the units may be owned by one investor. This limitation also applies to developers/builders that subsequently rent vacant and unsold units. For condominium projects with ten or fewer units, no single entity may own more than one unit within the project; all units, common elements, and facilities within the project must be 100 percent complete.

6. Delinquent Home Owners Association (HOA) Dues: No more than 15 percent of the total units can be in arrears (more than 30 days past due) of their condominium association fee payments.

7. Pre-sales: At least 50 percent of the total units must be sold prior to endorsement of a mortgage on any unit. Valid presales include:

• Copies of sales agreements and evidence that a mortgagee is willing to make the loan1; • Evidence that units have closed and are occupied; OR

Information from a developer/builder that lists all of the units already sold, under contract, or closed (e.g. a spreadsheet, chart, or listing used for the company’s own tracking purposes) that is accompanied by a signed certification from the developer (Attachment F).

1 Secondary residences can only be included if it meets the requirements of 24 CFR 203.18(f)(2). 5

8. Owner-occupancy Ratios: At least 50 percent of the units of a project must be owner-occupied or sold to owners who intend to occupy the units.2 For proposed, under construction or projects still in their initial marketing phase, FHA will allow a minimum owner occupancy amount equal to 50 percent of the number of presold units (the minimum presales requirement of 50 percent still applies).

2 Units sold to owners who intend to occupy the units must follow the requirements of a valid presale.

9. Legal Phasing: Legal phasing is permitted for condominium processing. It is recommended that developers submit all known phases for initial project approval. FHA will not accept market phasing in lieu of legal phasing.

For vertical buildings, legal phasing is acceptable if:

a. The floors are legally phased in groupings of no less than five floors;

b. At least a temporary certificate of occupancy has been obtained and all common areas and amenities have been completed; AND

c. A third party completion bond has been obtained.

For purposes of calculating the owner-occupancy percentage and FHA concentration:

a. On multi-phased projects the owner-occupancy percentage is calculated on the first declared phase and cumulatively on subsequent phases if the ownership of the condominium project remains the same.

b. If multi-phasing includes separate ownership per phase, each phase is calculated individually.

c. In single-phase condominium project approval requests, all units are used in the denominator when calculating the 50 percent owner-occupancy percentage.

10.
FHA Concentration: FHA will display the concentration information for each

approved condominium development on the approved condominium listing, which

can be found on both FHA Connection and on the public website at www.hud.gov.

The concentration level will be based on case numbers assigned on units in a

project; FHA will not issue new case numbers once the 30 percent concentration

level (plus a small tolerance to accommodate for some fall-out) has been reached in

any particular development.

a. Projects consisting of three or fewer units will have no more than one unit encumbered with FHA insurance.

b. Projects consisting of four or more units will have no more than 30 percent of the total units encumbered with FHA insurance.

c. Calculation of the level of FHA concentration in a project declared with legal phases will follow the same methodology as owner-occupancy, described above.

11. Budget Review: Mortgagees must review the homeowners’ association budget (the actual budget for established projects or the projected budget for new projects) for all projects. This review must determine that the budget is adequate and:

• Includes allocations/line items to ensure sufficient funds are available to maintain and preserve all amenities and features unique to the condominium project;

• Provides for the funding of replacement reserves for capital expenditures and deferred maintenance in an account representing at least 10% of the budget; and

• Provides adequate funding for insurance coverage and deductibles (see Section VI, Insurance Requirements).

In cases where the budget documents do not meet these standards, the mortgagee may request a reserve study to assess the financial stability of the project. The reserve study cannot be more than 12 months old. When reviewing the reserve study, consideration must be given to items that have been replaced after the time that the reserve study was completed.

In lieu of the actual budget documents, mortgagees may request and rely on Fannie Mae form 1073a, Analysis of Annual Income and Expenses – Operating Budget, executed by an authorized representative of the seller/servicer, owners association, or management agent.

VI. Insurance Requirements

A. The condominium project must be covered by hazard, flood, liability and other insurance required by state or local condominium laws or acceptable to FHA as defined below:

• Hazard Insurance: The homeowners association (HOA) is required to maintain adequate "master or blanket" property insurance in an amount equal to 100% of current replacement cost of the condominium exclusive of land, foundation, excavation and other items normally excluded from coverage. If the HOA does not maintain 100% coverage, the unit owner may not obtain "gap" coverage to meet this requirement.

• HO-6 Coverage: In cases where the master policy does not include interior unit coverage, including replacement of interior improvements and betterment coverage to insure improvements that the borrower may have made to the unit, the borrower must obtain a "walls-in" coverage policy (HO-6 policy).

• Liability Insurance: The HOA is required to maintain comprehensive general liability insurance covering all of the common elements, commercial space owned and leased by the owner’s association, and public ways of the condominium project.

• Fidelity Bond/Fidelity Insurance: Fidelity Bond/Fidelity Insurance is required for new and established condominium projects with 20 or more units. The HOA must maintain this insurance for all officers, directors, and employees of the association and all other persons handling or responsible for funds administered by the association. The coverage must be no less than a sum equal to three months aggregate assessments on all units plus reserve funds.

• Flood Insurance: Insurance coverage equal to the replacement cost of the project less land costs or up to the National Flood Insurance Program (NFIP) standard of $250,000 per unit, whichever is less. In the insuring of a residential condominium building in a regular program community, the maximum limit of building coverage is $250,000 times the number of units in the building (not to exceed the building’s replacement cost). The HOA, not the borrower or individual unit owner, is responsible for obtaining and maintaining adequate flood insurance under the NFIP on buildings located in a Special Flood Hazard Area (SFHA). The flood insurance coverage must protect the interest of borrowers who hold title to an individual unit as well as the common areas of the condominium project. If the FHA Roster Appraiser reports that buildings in a condominium project are located in a SFHA the lender is responsible for ensuring that the HOA obtains and maintains adequate flood insurance on buildings located within the SFHA, per Mortgagee Letter 2009-37.

B. Determining Need for Flood Insurance

Mortgagees must determine whether the property improvements (dwelling and related structures/equipment essential to the value of the property and subject to flood damage) are located in a 100-year flood plain. If the property is in a 100-year flood plain, flood insurance is required, per Mortgagee Letter 2009-37. To demonstrate and document that the property is not located in a 100-year flood plain and not subject to flood insurance requirements, the mortgagee must obtain:

• A final Letter of Map Amendment (LOMA) or

• A final Letter of Map Revision (LOMR)

VII. Manufactured Housing Condominium Projects (MHCP)

(effective June 12, 2009)

Pursuant to HERA, manufactured housing condominium projects are now eligible for FHA mortgage insurance. All outstanding and current FHA Manufactured Housing individual unit requirements remain applicable for both Home Equity Conversion Mortgages (HECM) and forward mortgages, including elevations in flood zones and foundation requirements. MHCPs must be submitted to the applicable Homeownership Center (HOC) for review and approval (HRAP). MHCPs are ineligible for DELRAP processing and may not be processed as site condominiums.

See Loan Approval section for appraisal reporting requirements. 8

VIII. Condominium Conversions

Conversion to condominiums occurs in those projects which involve changing the title of an existing structure generally under one title, to property that is separated into units so that the title to most units can be held separately. Changes to condominium conversion requirements are defined below:

1. The one-year waiting period requirement for conversions is eliminated;

2. In the event that FHA is insuring a mortgage on a unit and an undivided interest in the common elements on a project undergoing remodeling or rehabilitation, the entire condominium project, including the common facilities, must be 100 percent completely built before any mortgage may be endorsed. Escrow provisions will be permitted for weather related delays for common areas only.

3. Conversions of properties from non-residential or from rental, whether tenant- occupied or vacant, will be treated as new construction.

IX. Condominium New Construction Pre-approval and Inspection Requirements

This Mortgagee Letter now permits condominium processing consistent with guidance described in Mortgagee Letter 2001-27.

A. In cases where a building permit and a certificate of occupancy (or its equivalent) are issued by a local jurisdiction that performs a minimum of three inspections (typically the footing, framing and final) neither an Early Start Letter nor a HUD approved ten-year warranty plan is required. For those jurisdictions that do not issue a building permit (or its equivalent) prior to construction and a Certificate of Occupancy (or its equivalent) upon completion of construction, a condominium unit that is one year old or less must have either an Early Start Letter (with a minimum of three inspections by an FHA Roster Inspector) or be covered by a HUD-approved ten-year warranty plan (with a final inspection by a FHA Roster Inspector) to be eligible for high-ratio mortgage insurance. Projects are still required to be on the FHA-approved condominium list.

B. FHA will require the completion and retention of the following documents when processing new construction condominium project approvals:

• Builder’s Certification of Plans, Specifications and Site, form HUD-92541

• Builder’s Warranty, form HUD-92544

• Building Permit (or its equivalent)

• Final Certificate of Occupancy (or its equivalent)

C. FHA will accept a temporary/conditional Certificate of Occupancy for new construction and conversions that require substantial rehabilitation under the following circumstances:

• All common areas and amenities for the project must be completed.

• The temporary/conditional Certificate of Occupancy that was issued clearly indicates that the unit is habitable and eligible for immediate occupancy.

• The jurisdiction that is issuing the temporary/conditional Certificates of Occupancy has in place a standard protocol whereby permanent certificates are issued and maintained.

X. General Processing Steps for DELRAP or HRAP

A. Determine acceptability of the site and location of the project. Refer to Attachment A, Condominium Project Approval Matrix for the list of documents that the project review package must contain.

B. Review the project’s financial and legal documents; if acceptable, authorized personnel will sign and date the Lender Certification of Condominium Requirements (Attachment B).

• While FHA expects lenders to submit recorded documents with the condominium project approval package, unrecorded properly executed documents are acceptable in the initial request for project approval.

• If unrecorded documents are utilized, no loan can be
insured in the project until the recorded documents have been received and the applicable approval data updated.

• Unrecorded documents for conversions will be acceptable if the conversion was a non-occupied rental building (i.e., warehouse or vacant building converted to a condominium regime) that meets all applicable requirements.

• Whenever unrecorded documents are submitted, the lender (for HRAP), DELRAP lender or builder/developer must provide a certification with the final recorded documents and description of any changes from original unrecorded documents.

C. Determine the project’s budget is adequate or meets the alternative standards in Project Approval Section, V, 11.

D. Retain and maintain all documents used to review and approve the project for a period of three years from the date of project approval.

E. If a project is listed as Rejected or Withdrawn on the FHA-approved condominium list, the project will not be eligible for reconsideration unless the request meets the following:

• Project was rejected or withdrawn < 12 months: new/additional information may be submitted to HUD for reconsideration only under HRAP processing based on the rejection or withdrawal date;

• Project was rejected or withdrawn > 12 months: new/additional information may be submitted to HUD for processing under HRAP or may be considered by the lender (and ultimately transmitted to HUD) in the case of projects undergoing DELRAP review.

NOTE: If a project is no longer approved or does not meet approval criteria, then only a FHA-to-FHA streamline refinance without an appraisal is allowed. 10

F. Second and subsequent lenders that submit a unit for insurance in a project that is listed on the FHA-approved condominium list are not required to complete any further approval process. However, as part of loan-level review, FHA will require the lender to certify (Attachment C) it has no knowledge of circumstances or conditions that might have an adverse effect on the project or cause a mortgage secured by a unit in the project to become delinquent. FHA will also require the lender to certify (Attachment C) that it has reviewed and verified the condominium project’s continued compliance with the initial approval requirements regarding investor ownership, percentage of owners in arrears for condominium association fees, owner-occupancy rate and FHA loan concentration rate, and the lender certifies (Attachment C) that the condominium project continues to comply with FHA requirements.

G. Subsequent phases being approved by a different lender must follow the general procedures listed under this Section of the ML. The original lender must also follow these general procedures but will have already satisfied some of the steps listed.

H. All required certifications, as applicable, must be included in the FHA case binder submitted for insurance endorsement.

I. For both new construction and conversions the developer should complete form HUD-92541, Builder’s Certification of Plans, Specification and Site. If the developer/builder intends to market five or more units within the next 12 months with FHA mortgage insurance and block 11"a, b, c, or d" is not checked, the developer/builder is required to complete Form HUD-935.2C, Affirmative Fair Housing Marketing Plan – Condominium or Cooperatives. This completed form must be submitted to the Director of the Processing and Underwriting Division in the jurisdictional HOC for approval (prior to project approval).

J. Environmental reviews will be required only for proposed and under construction project approvals submitted under the HRAP option consistent with the Environmental Review Requirements listed in Project Approval section, numeral IV, B. Environmental review is not required under DELRAP, but the lender
must take necessary actions to avoid or determine that there are mitigants to addressing identified environmental conditions prior to completing its project review.

K. Transfer of control of the Homeowners Association shall pass to the unit owners within the project no later than the latest of the following:

1. 120 days after the date by which 75 percent of the units have been conveyed to the unit purchasers;

2. Three years after completion of the project evidenced by the first conveyance to a unit purchaser; OR

3. The time frame established under state or local condominium laws if specific provisions regarding transfer of control exist.

11

XI. Certification for Initial Project Approval

A. Lender Certification

Lenders must provide certifications on company letterhead signed by a company authorized representative (signature stamps or electronic signatures are not authorized) that:

1. The eligible condominium project complies with applicable FHA requirements addressed within this ML;

2. All condominium legal documents meet HUD regulations, state and local condominium laws; and

3. Pre-sale, owner occupancy and FHA concentration ratios are met.

B. Developer Certification

The developer/builder must provide a certification (Attachment E) on company letterhead signed and dated by an authorized representative of the developer/builder (signature stamps or electronic signatures are not authorized) which states that:

1. The eligible condominium project complies with all applicable FHA requirements addressed in this ML; and

2. All condominium documents meet all HUD requirements, and state and local requirements.

NOTE: FHA will not require an attorney's certification. However, lenders and developers/builders may obtain this as part of their own due diligence process. Lenders as well as developers/builders are reminded that this document will not replace other required condominium certifications they are required to execute (e.g., Applicable Appendices B, C, E and F of this Mortgagee Letter).

XII. Recertification of Project Approvals

Condominium Project approvals will expire two years from the date of placement on the list of approved condominiums. Further participation in the program after this two-year period has expired will require recertification to determine that the project is still in compliance with HUD’s owner-occupancy requirement and that no conditions currently exist which would present an unacceptable risk to FHA. Items that must be given consideration are:

1. Pending special assessments,

2. Pending legal action against the condominium association, or its officers or directors, and

3. Adequate hazard, liability insurance, and when applicable, flood insurance coverage.

12

LOAN APPROVAL

I. Mortgage Insurance for Individual Unit Financing

All applicable, outstanding and any additional FHA mortgage insurance requirements not defined in this ML must be satisfied for individual units.

II. Recordation of Documents

If unrecorded documents were submitted along with other required documentation for initial project approval, no loan can be insured in the project until the recorded documents are received and the applicable approval data updated.

III. Insurance Requirements

 

A. Hazard Insurance

For forward mortgages, in cases where the master policy does not include interior unit coverage, including replacement of interior improvements and betterment coverage to insure improvements that the borrower may have made to the unit, the borrower must obtain a "walls-in" coverage policy (HO-6 policy).

For Home Equity Conversion Mortgages (reverse mortgages), the borrower must obtain and maintain hazard insurance equal to the value of insurable property improvements, per Handbook 4235, REV 1, Chapter 6.

B. Flood Insurance

For both forward and reverse mortgages, lenders must ensure that the Homeowners Association (HOA), not the individual owner, obtains and maintains adequate flood insurance under the National Flood Insurance Program on buildings located within a Special Flood Hazard Area. The insurance coverage must protect the interest of borrowers who hold title to an individual unit as well as the common areas. See Section VI, Insurance Requirements.

IV. Certifications

If a project has been previously approved, the lender must certify that it has reviewed and verified the condominium project’s continued compliance with the initial approval requirements regarding investor ownership, percentage of owners in arrears for condominium association fees, owner-occupancy rate and FHA loan concentration rate, and the Lender certifies that the condominium project continues to comply with FHA requirements. 13

V. FHA-to-FHA Transactions

Project Approval is not required for:

a. FHA-to-FHA streamline refinance transactions or

b. FHA/HUD Real Estate Owned (REO).

 

VI. Site Condominiums

Although processed as Section 203(b) loans, the applicable ADP codes for Site Condominiums are 731 (Adjustable Rate Mortgages) and 734.

Appraisal data is collected and reported on Fannie Mae form 1004, in accordance with the Valuation Protocols, Appendix D of HUD Handbook 4150.2.

The Condominium Rider (Attachment D) must be included in the FHA case binder submitted for insurance endorsement.

VII. Manufactured Housing Condominium

The appraisal reporting requirements for condominium manufactured homes are:

1. Appraisal must be reported on the Manufactured Home Appraisal Report (Fannie Mae Form 1004C).

2. Subject condominium project must be inspected and the Project Information section of the Individual Condominium Unit Appraisal Report (Fannie Mae Form 1073) must be completed and included as an addendum to the appraisal report.

3. Comparable sales must be condominium manufactured homes. Detailed explanations must be provided when search parameters are expanded due to the lack of comparable sales in subject market area.

 

VIII. "Spot Loan" Approval Process

The Spot Loan Approval Process as defined in Mortgage Letter 1996-41 is eliminated. The DELRAP and HRAP have been streamlined to allow for uncomplicated condominium project approvals eliminating the need to approve units on a "spot loan" basis. 14

LIABILITIES AND MONITORING

I. Mortgagee Liability

Mortgagees who issue condominium project approvals using the DELRAP process are responsible for material deficiencies associated with the project approval and any loan they originate and/or underwrite using the applicable project approval.

Mortgagees who rely upon a condominium project approval issued by another mortgagee are responsible for the loan level certification (Attachment C). With this certification, the lender is confirming that the company has no knowledge of circumstances or conditions that might have an adverse effect on the project or cause a mortgage secured by a unit in the project to become delinquent. The lender is also certifying that it has reviewed and verified the condominium project’s continued compliance with the initial approval requirements regarding investor ownership, percentage of owners in arrears for condominium association fees, owner-occupancy rate and FHA loan concentration rate, and it certifies that the condominium project continues to comply with FHA requirements.

II. Quality Assurance

Monitoring the condominium approval process is critical to the success of the program. Lenders who approve condominium projects utilizing the DELRAP option will be required to submit a copy of the complete condominium project approval package to the applicable Homeownership Center within five (5) business days of approval. Lenders are required to submit the first five DELRAP approvals for review. Further, to manage FHA’s risk, and ensure compliance with all condominium project policy requirements, additional condominium project approvals will be selected for review. The criteria for selection of the additional approvals will be determined and lenders will be notified in future guidance.

III. False Certifications

Title 18 U.S.C. 1014, provides in part that whoever knowingly and willfully makes or uses a document containing any false, fictitious, or fraudulent statement or entry, in any matter in the jurisdiction of any department or agency of the United States, shall be fined not more than $1,000,000 or imprisoned for not more than 30 years or both. In addition, violation of this or others may result in debarment and civil liability for damages suffered by the Department. 15

TRANSITION STRATEGY

FHA will move all currently approved condominium projects to the new approval list and FHA Connection database. The following requirements are applicable based on the date of the initial project approval. Additional guidance on new data entry requirements will be issued in a separate ML.

• Projects that received approval prior to October 1, 2008, will require recertification on or before December 7, 2010.

 

• Projects that received approval between October 1, 2008 through December 7, 2009, will follow the recertification requirements defined in the Project Approval Section, XIII.

Recertification of approved condominium projects may be processed by HUD using HRAP or by a mortgagee under DELRAP. The DELRAP option is only available to lenders who have unconditional Direct Endorsement authority and staff with knowledge and expertise in reviewing and approving condominium projects.

If you have questions regarding this Mortgagee Letter, please call the FHA’s Resource Center at 1-800-CALL-FHA (1-800-225-5342). Persons with hearing or speech impairments may access this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483).

Sincerely,

David H. Stevens

Assistant Secretary for Housing-

Federal Housing Commissioner

Attachments 16

Attachment A

Condominium Project Approval Matrix

Proposed/UC

Existing

Conversion

1

All Condominium Legal Documents

x

x

x

a

Recorded Plat Map indicating Legal Description

x

x

x

b

Recorded Covenants, Conditions and Restrictions (CC&R’s)

x

x

x

c

Signed and Adopted Bylaws

x

x

x

d

Articles of Incorporation filed with th

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7 How can the Making Home Affordable Program help me avoid foreclosure on my FHA loan?
8 Does FHA allow dug wells?
9 Is it true that FHA no longer accepts applications from state- licensed appraisers and I must upgrade to state-certified general or residential to qualify for placement on the FHA Appraiser Roster?
10 Why are licensed appraisers not grandfathered to stay on the appraiser roster?
11 Can you tell me when more HERA information will be available for licensed roster appraisers?
12 Must I upgrade to certified general or residential to be placed on the FHA appraiser roster?
13 What if the appraiser roster system does not recognize the user ID that was provided to me?
14 How can I reset my appraiser roster password?
15 How can I resolve a sanctions issue and become eligible for placement on the FHA appraiser roster?
16 How can I get help applying or maintaining my appraiser listing on the FHA roster?
17 Can you tell me how the HERA law effects licensed appraisers on the FHA roster?
18 How do I become a state-certified appraiser?
19 Can I perform appraisals in one state if I am sanctioned in another?
20 How can I become an active appraiser if I allowed my status to lapse?

FHA Foreclosures Rising

Rising FHA default rate foreshadows a crush of foreclosures

David H. Stevens
David H. Stevens (Andrew Harrer - Bloomberg)

Washington Post Staff Writer
Tuesday, February 2, 2010

 

The share of borrowers who are falling seriously behind on loans backed by the Federal Housing Administration jumped by more than a third in the past year, foreshadowing a crush of foreclosures that could further buffet an agency vital to the housing market's recovery.

About 9.1 percent of FHA borrowers had missed at least three payments as of December, up from 6.5 percent a year ago, the agency's figures show.

Although the FHA's default rate has been climbing for months and eating into the agency's cash, the latest figures show that the FHA's woes are getting worse even as the housing market shows signs of improvement. The problems are rooted in FHA mortgages made in 2007 and 2008. Those loans are now maturing into their worst years because failures most often occur two to three years after a mortgage is made.

If the trend continues and the FHA's cash reserves are exhausted, the federal government would automatically use taxpayer money to cover the losses -- a first for the agency, which has always used the fees it charges borrowers to pay for its losses.

As these loans from 2007 and 2008 go bad and clear off of the FHA's books, agency officials said, losses are expected to taper off, aided by the housing market's anticipated recovery and an influx of more creditworthy borrowers, who have flocked to the FHA's home-buying program in the past year.

Agency officials said they have cracked down on poorly performing lenders and announced higher qualifying fees for borrowers. On Monday, the agency projected that the fees should generate $5.8 billion in fiscal 2011, up from $2 billion this year. That would fatten the FHA's cash cushion, used to cover unexpected losses.

Cash / Mattress Money is a Deal Killer

- Cash / Mattress Money is a Deal Killer-

AHEAD OF THE CURVE ARTICLE BELOW

Below is a list of my top programs that should be in every agents resource
folder:

-FHA closed on time: [http://www.realestateloans.com/fhadonewell.pdf]
[http://www.realestateloans.com/fhadonewell.pdf]
www.realestateloans.com/fhadonewell.pdf

-100% Rural Development: [http://www.realestateloans.com/usda.pdf]
[http://www.realestateloans.com/usda.pdf] www.realestateloans.com/usda.pdf

-$100 down for HUD owned homes:
[http://www.realestateloans.com/100hudhome.pdf]
[http://www.realestateloans.com/100hudhome.pdf]
www.realestateloans.com/100hudhome.pdf

-Deferred maintenance homes:
[http://www.realestateloans.com/uglyhomes.pdf]
[http://www.realestateloans.com/uglyhomes.pdf]
www.realestateloans.com/uglyhomes.pdf

-100% pre-approval to closing ratio:
[http://www.realestateloans.com/concierge.pdf]
[http://www.realestateloans.com/concierge.pdf]
www.realestateloans.com/concierge.pdf

-VA 100% financing:  [http://www.realestateloans.com/va.pdf]
www.realestateloans.com/va.pdf

-Home Buyer job protection mortgage:
[http://www.realestateloans.com/rainydays.pdf]
www.realestateloans.com/rainydays.pdf

CASH IS KILLING DEALS:

I recently had a borrower call me and state she deposited $6000 into her
bank account from an unsecured loan. Without telling the Realtor or myself
she used this money for the contract deposit. Some form of outside monies
has been interjected into four of the last ten deals I've done and the
borrowers did it after reading
[http://gilkerk.realestateloans.com/condominiums/2009/05/07/i-need-to-make-a-home-loan-application-help.html]
my home purchase introduction link which clearly states that cash and large
deposits should be avoided.

Why isn't cash allowed into a transaction? It's the borrowers money right?
Several obvious reasons: Patriot Act/Banking Laws, Drug Money, Cash
Laundering, Straw Buyer considerations, Under the Table Seller Concessions,
Realtor or Loan Office contribution, Unsecured/unreported loan, Gift from
an unacceptable source, etc..

Loan officers and Realtors should never allow or encourage customers to
deposit or use cash for ANY part of the transaction nor turn a blind eye if
they know a client is borrowing money from credit cards or personal loans.
This type of mistake will certainly cause problems and create needless
tension. Now more than ever, loan files are being looked at with a fine
tooth comb. More and more careful verifications are being done a day before
closing- be prepared and don't let your deal die for dumb reasons.

Remember, FHA case numbers follow these loans. If one underwriter declines
a loan, the disposition will follow that loan. Realtors and Loan Officers
must work closely to prevent problems from day one.

Please call me at (847) 873-7295 to discuss nuances. Here to help you get
homes financed.

Is your loan officer less responsive than you'd like? Cut yourself free
from bad service, poor communication and start enjoying incredible support
today.

Could your team use an updated presentation to get agents up-to-speed on
loan program changes? Lending is a huge part of transactional business,
consider  scheduling my lunch and learn for your team.

Gil Kerbashian

Mortgage Lending Since 1997

Gil's Loan Answer Hotline: (847) 873-7295

FANNIE MAE'S NEW DEBT TO INCOME RATIO'S

Ahead of the Curve
For Active Real Estate Marketing Professionals...
Fannie Mae has implemented the new debt to income ratio for borrowers in conventional loans: Starting December 1st or thereabouts for most lenders, conventional loan total debt to income ratio's have been brought down to 45%. Up to this point the average TDTI has averaged in the low 50's.
NOW: 45% is the guideline for borrowers that put down 20% or more. For conventional loans with less than 20% down the ratio is restricted to 41%. Please see my above article on debt to income ratios for clarification of what a DTI is.
Why is this change important to real estate professionals? You have pending offers, pre-approvals and deals in the pipeline that currently have ratios above 45%. These deal may have problems closing. Take a moment to inquire about these offers or pre-approvals and make sure the home buyers will be able to close.
Please call me at (847) 873-7295 to discuss nuances. Here to help you get homes financed. 

USDA Homeownership Website Links

Subscribe to receive Single Family Housing News for GUS & GRH: http://www.rdlist.sc.egov.usda.gov/listserv/mainservlet

USDA Rural Housing Home Page: http://www.rurdev.usda.gov/RHS/

Rural Development Contacts Page:
http://www.rurdev.usda.gov/RHS/Admin/contact.htm

Rural Development Regulations Page: http://www.rurdev.usda.gov/regs/

Rural Development FAQ Page: http://www.rurdev.usda.gov/rd/faqs.html

Rural Development Income & Property Eligibility Site: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

Single Family Housing Guaranteed Loan Income Limits: http://www.rurdev.usda.gov/rhs/sfh/sfh%20guaranteed%20loan%20income%20limits.htm

Loan Application Package Checklist: http://www.rurdev.usda.gov/regs/an/an4470.pdf

Rural Development Regulations:
http://www.rurdev.usda.gov/regs/

Rural Housing Origination Handbook 1980-D: http://www.rurdev.usda.gov/regs/regs/pdf/1980d.pdf

GUS Lender User Guide 2008: https://usdalinc.sc.egov.usda.gov/docs/rd/sfh/gus/lender/GUSLenderUserGuide.pdf
GUS Login Page: https://pws.sc.egov.usda.gov/login/login.aspx?TYPE=33554433&REALMOID=06-f8405ea7-471f-474d-8a4e-731f76f1e536&GUID=&SMAUTHREASON=0&METHOD=GET&SMAGENTNAME=-SM-S3%2fpukYCkOnlZ%2feImVktFvcBZTmcxsBEbQyvAIf2sN6XculadBu%2f5WF4TmWxHg2x&TARGET=-SM-HTTPS%3a%2f%2fgus.sc.egov.usda.gov%2faus%2findex.jsp%3fcallingPath%3dusdalinc.sc.egov.usda.gov%2fRHShome.do

Administrative Notices for Loan Origination and Underwriting: http://www.rurdev.usda.gov/wi/programs/rhs/sfhg/handbook/originating/ans.htm
USDA Rural Development Forms Library: http://www.rurdev.usda.gov/regs/formstoc.html

Rural Development State Office/Service Center Locator:
http://www.rurdev.usda.gov/recd_map.html

USDA Live WebEx Training Schedule: https://rurdev.webex.com/mw0305l/mywebex/default.do?siteurl=rurdev&service=7

USDA LINC Training and Resource Library: https://usdalinc.sc.egov.usda.gov/USDALincTrainingResourceLib.do
Guaranteed Rural Housing Consumer Marketing Brochure: http://www.rurdev.usda.gov/RHS/sfh/GSFH_Information/Common/09_2009_Website_%20Hooray%20For%20Housing%20GRH%20Brochure.pdf

Guaranteed Rural Housing Consumer Marketing Booklet: http://www.rurdev.usda.gov/rd/pubs/pa1501.pdf

Rural Development Lender Information Page: http://www.rurdev.usda.gov/rhs/sfh/GSFH_Information/lenders.htm

Digital Rights and Copyright


Most information presented on Rural Development's website is considered public domain information. Public domain information may be freely distributed or copied, but use of appropriate byline/photo/image credits is requested. Attribution may be cited as follows: "USDA Rural Development."
Some materials on the Rural Development site are protected by copyright, trademark, or patent, and/or are provided for personal use only. Such materials are used by Rural Development with permission, and they have made every attempt to identify and clearly label them. You may need to obtain permission from the copyright, trademark or patent holder to acquire, use, reproduce or distribute these materials.

Fannie Mae New Debt to Income Ratio Requirement

Ahead of the Curve
For Active Real Estate Marketing Professionals...
Fannie Mae has implemented the new debt to income ratio for borrowers in conventional loans: Starting December 1st or thereabouts for most lenders, conventional loan total debt to income ratio's have been brought down to 45%. Up to this point the average TDTI has averaged in the low 50's.
NOW: 45% is the guideline for borrowers that put down 20% or more. For conventional loans with less than 20% down the ratio is restricted to 41%. Please see my above article on debt to income ratios for clarification of what a DTI is.
Why is this change important to real estate professionals? You have pending offers, pre-approvals and deals in the pipeline that currently have ratios above 45%. These deal may have problems closing. Take a moment to inquire about these offers or pre-approvals and make sure the home buyers will be able to close.
Please call me at (847) 873-7295 to discuss nuances. Here to help you get homes financed. 

FHA 203ks

Ahead of the Curve

For Active Real Estate Marketing Professionals...

Distressed Homes.. How do we finance these homes so that Realtors can
actually sell them?:  I'd like to offer this website if you would like to
learn more about securing financing to sell homes with difficiencies:
[http://www.203kspro.com] www.203kspro.com

Many, many, many (almost an understatement) Realtors and buyers are
contending with properties that have been damaged through the foreclosure
process or neglected due to a distressed sale situation.

FHA has introduced a safe and streamlined mortgage program that I offer
which will provide the buyer the money to purchase the home AND receive an
additional $5,000, $10,000, $20,000 up to $35,000 for upgrades and
difficiency correction. This is a very safe loan offered today with a 30
year fixed term in the mid 5% interest rate range.

I enjoy doing this loan and have done many of them in the past two years.
This is a wonderful program for Realtors to help their sellers and buyers
with. Agents use the same purchase contract and there are no additional
addendums. The process has recently been streamlined so that buyers aren't
burdened with a complicated process. Its truly a deal saver!

Please take a moment to look at the above website for more details or call
me at (847) 873-7295 to discuss nuances. Here to help you write them up.

FHA Condo Updates

Here is some insight as to what you might expect to see in the way of condo requirements. The final HUD condo requirements have not been finalized yet.

1. FHA concentration will remain at 50 percent.
a. In "well established" project, the concentration may go up to 100 percent.
b. "Well established" buildings show clear financial stability, including a minimum of 10 percent reserves, owner occupancy of 50 percent, and a transfer of title.
c. In the ML, HUD will provide an explicit definition of "established."

2. Owner Occupancy will remain at 50 percent.
a. REOs will be excluded altogether from calculation.

3. Pre-sale requirement will be 50 percent.
a. FHA will accept a spreadsheet from the developer as certification under the pre-sale requirement.
b. Additionally, FHA has created a specific document that developers must sign to certify that all of the information is accurate.

4. Temporary Certificate of Occupancies will be accepted.

5. All 40,000 + condo projects currently approved will remain approved

6. HUD Review and Approval Process (HRAP) is permissible in Florida.

7. The ML will clarify that under Direct Endorsement Lender Review and Approval Process (DELRAP), a lender is not responsible for another lender's approval process (specifically, additional project review is not required).

8. New ML will clarify that reserves should be at 10 percent, if not then a lender can request a reserve study.

9. New ML will add specific guidance on insurance (specifically, gap insurance).

10. Transfer of control requirements will be dictated by the state and local requirements.

11. New ML will clarify the definition of site condos.

12. New ML will clarify phasing requirements.

Courtesy of Stacey Sprain

F

Condominiums Hit Hard by Mortgage Insurance and Risk Based Pricing

Condominium buyers are charged an additional .75 point for conventional loans with less than 25% down payment. Also, most mortgage insurance companies at this writing won't cover a condo with less that 15% down payment.

FHA will require the condo complex be on their approved list. 

 

Loan To Value 75.01 - 80.00% 80.01 - 85.00% 85.01 - 90.00% 90.01 - 95.00% 95.01 - 97.00%

Condominiums

Fee Add - Points

-.750 -.750 -.750 -.750 -.750
High or Low Rise ONLY APPLIES TO LOAN TERMS GREATER THAN 180 MONTHS  

I need to make a home loan application - help!

** IMPORTANT **

Please print this article and use it as a checklist, note pad and also to have my contact information always at hand. Write your service provider information below:

Your Realtors Phone:________________________________________

Your Attorney's Phone:______________________________________

Gils Phone:_______(847) 873-7295____Fax: (847) 770-4850_______

In the next few days or weeks you'll be looking at a handful of homes, one will catch your eye and you'll want to be completely prepared to make a strong offer. Most sellers give the highest priority to buyers that have secured a full home loan preapproval certificate versus those that have been "prequalified" over the phone. A full preapproval certificate with asset and income verification is the highest level or preparedness. The application process below is oriented toward a successful full preapproval certification.

Regarding the home loan process: How much of a committment would you ask of someone you were lending $100,000, $200,000, $300,000 or $500,000 to? Most people would not lend that much money to anyone unless the borrower signed over Fort Knox as collateral. Why would anyone expect that a lender to handover that much money with minimul effort and documentation on the part of a borrower? The lending climate has gotten much more serious and anyone telling you different is not being honest. Yes, it's a serious and very detailed process but it doesn't have to be a difficult one. As long as we work together and commit to doing things correctly all the way through to the day of transaction closing!

Commit yourself for the next 30-60 days to being very detail oriented and supplying all the needed paperwork when requested. There is no standard loan package, different underwriters require or want different items. Some underwriters require more paperwork than others, that's the underwriters perogative and they do so to protect their license to underwrite loans. We'll work closely together to make sure your file is correctly submitted for approval.

At the bottom of this letter you'll find an internet link to a basic home loan application for you to complete. Please click on it after you read this letter. Always call if you have any questions. I enjoy helping my customers and look forward to helping you, your friends, co-workers and family. Referrals are always appreciated.

Do's and don'ts quick list:
  1. PLEASE DO NOT MOVE ANY MONEY AROUND UNTIL YOUR LOAN CLOSES.  If a bank verification shows a recent increase in your accounts an explanation of the increase will be required and may cause delays. No "cash or non-applicant money" should be introduced into any part of the transaction.
  2. Postpone ANY LARGE PURCHASES until after your loan closes.  If a re-verification of credit shows you have recently bought a car, or your charge account balances have increased, it could jeopardize your loan approval.
  3. Do not quit your job. Notify me immediately in the event there is a job change.
  4. Don't take any Cash Advances on your credit card(s) or personal loans.
  5. Don't allow any additional inquiries (credit checks) on your credit.
  6. Do not open or close any credit or bank accounts.
  7. Continue to make ALL of your payments as agreed.
  8. Quickly return all documents from the lender or settlement company. Send them to me also for review immediately.
  9. Your loan will be underwritten to nationally accepted investor guidelines. The investor is lending a great deal of money, please don't "self-underwrite" your loan. Be prepared to offer all paperwork that is asked of you all the way to the day of close. A lot of money and trust is being conveyed to you- don't take the loan or process for granted. Gathering paperwork is a cheap trade for all this money.
  10. Once a contract has been accepted your mortgage rate and terms need to be locked. You must email or call me directly after the accepted contract to discuss where rates have settled on this day. If you don't call, I may lock your terms the day I receive the fully executed contract at then market rates.

For most borrowers the following items are redundant, but I have to mention them because occasionally people neglect the obvious and sabotage themselves: please pay all monthly bills on-time, avoid opening up new charge accounts or increasing debt (NO credit inquiries) until after close of loan, continue building savings and keep income stable. If anything changes with your personal profile or the aforementioned items, please let me know immediately.

Your rate can be locked or it can float, this is your choice. My recommendation will be to lock unless you think rates will be going down. Either way you should let me know as soon as you have an accepted purchase contract. Rates change daily and sometimes twice a day depending on the financial markets.

Be mindful that all mortgage underwriters can choose to conduct quality control measures. This could mean calling to verify your employment or savings. Please note: ALL funds to close must come from verifiable sources- always avoid cash deposits or unexplainable deposits. Due to new fraud avoidance measures industry wide, underwriters are now required to question ANYTHING that seems "out of place". ASSUME THAT EVERYTHING WILL BE CAREFULLY REVIEWED.

Closing funds required over and above any seller credits will need to be paid with a bank cashiers check drawn on a bank account listed on your loan application. Funds from outside sources MUST be reviewed and documented early on by an underwriter***.

Closing cashiers check: You'll want to obtain a cashiers check one business day prior to closing made out to yourself to be endorsed over at closing. Please bring your drivers license(s), checkbook and a second form of ID to closing.

***Are you receiving down payment assistance from an outside source? Please be prepared to document all non-payroll deposits. If the source is a gift from a close relation, you'll need: Gift letter, donors bank statement, copy of the original gift check made out to you, copy of deposit slip going into your account, bank statement to show the deposit was captured to your account and copy of the gift check post deposit front and back from donor showing it went through the bank processing center. Each underwriting entity may differ in their requests, please be prepared to fully document deposits, gifts and downpayments funds. NO cash or loans for closing funds.

Two weeks prior to closing you will want to call your insurance agent if any insurance coverage is needed and pay for a full policy and have them fax the policy to me. You will also want to call the utility, telephone and cable companies, banks, credit card companies, family, friends and postal service (usps.com) to inform them of your new address. Stay flexible in your closing timeline in case something gets delayed. Have a plan B for movers and such.

If you see any issues arising that may hinder the transaction in anyway; property difficiencies or questions, job, savings, vacations, etc.. you must call me immediately to discuss. Help me help you!
 
Once the purchase contract is accepted by the seller we will need to order a property appraisal. Appraisals require payment directly to the appraisal company in advance. The cost of the appraisal will be credited to you at closing. As soon as you put a deposit on the home as part of the offer, you'll need to call the bank and request a copy of the canceled purchase contract deposit check -front and back- as quickly as possible. Most, if not all lenders will want to verify that the deposit funds actually cleared the bank.

Shortly after we start processing your loan, the package will be placed with a designated mortgage underwriter matching your credit requirements. This underwriter may or may not send out their own "paper wasting" compliance disclosure package. This package is standard procedure and is usually generic in nature, which means that the information in it probably won't reflect your terms ( typically a generic loan model and numbers ). Disregard this package as it has no bearing on your loan and is only used to stay regulatory compliant.

After all that nuts and bolts boring stuff what really matters is... The season to enjoy your own home is coming and what a wonderful time to make the transition!!! Please call if you have any questions.

Your referrals are valuable, please keep me in mind to help friends, family and coworkers.

Thank you.

Cordially Yours, Gil Kerbashian
Cellular: (847) 873-7295
Fax: (847) 770-4850

Dr. Rick Thomas:
Gil was thorough and knowledgeable. He was their to answer questions whenever I needed and he never detached from the process. I was very happy with the support and service.

The loan application has a very important list of items at the bottom that I will need to gather in order to issue strong pre-approval. Again, please call if you have any questions. Once you print the application, you can complete it, fax it or we can meet quickly to go over it together and make sure you feel comfortable with the process.

Loan application: www.realestateloans.com/gilsapp.pdf

Closing cost basics: www.realestateloans.com/gfe.pdf 

If you are applying for a purchase and rehab loan (203ks) to obtain money to purchase and fix up the property please click on this link also.

Please feel free to comment below about the service you've received from me. Thank you. Referrals are always appreciated!

Mortgage Rates Now a-la-carte

Mortgage rates have gotten sliced and diced in very narrow catagories and credit score ranges. Last year we were able to pool 700 ficos with 650.. this doesn't hold true any longer. I've included the MAIN FANNIE MAE AND FREDDIE MAC matrix below for what we as mortgage lenders have to look at before we price a loan. There is also matrices for cash-out refinances, condo's, investment properties and 2nd homes.

Don't expect any of the mortgage rates you see in the paper or online to hold true. The mortgage rates you see online are "base" rates and are only offered to a very small percentage of the population with the highest credits scores and largest down payments.

With declining property values, high loan defaults and lower credit scores so common now you will be better served working with a mortgage person you can first trust and one that has access to many lenders. Access to many lenders will help you find the right rate and approval for your particular needs.

As you can see on the below matrix 720 credit scores with lots of equity home owners are getting the best rates. This matrix applies to conventional loans only not FHA or VA loans. FHA and VA loans offer there own risk based adjustments. Guideline changes have been almost non stop since the end of 2007 due to the disrupted nature of mortgage lending.

Below adjustments are strictly for addtional points added for risk based add-ons. 1 point equals 1% of the loan amount. EX: 1 point for a $100,000 loan is $1,000, 2 points for a $100,000 loan is $2,000, and so on.

A borrower that doesn't want to pay risk based 'points' can typically increase their rate to absorb points. It usually costs a .25% increase in rate to eliminate 1 point.

Example: .25% increase in rate may eliminate a 1 point charge, .50% in rate may eliminate a 2 point charge. A 5.0% rate may have a 2 point charge or the client may pay 5.5% rate with 0 points.

The below risk based point adds are national guidelines that apply to all conventional mortgage lenders. Some lenders can add on their own additional "regional" risk premiums.

Clients can choose to incur the below addtional points or a higher rate to offset any additional points that must be charged due to additional risk.  

Fanne Freddie Conventional Conforming Adjusters       Increase rates or charge borrower below points or a combination of point/rate
LTV%     <=60% 60.01-<=70% 70.01-75% 75.01-80% 80.01-85% 85.01-90% 90.01-95% 95.01-97%
LTV / FICO Adjusters: All Products w/Terms > 15 Yrs            
>=740   FIXED/ARM (0.250) 0.000 0.000 0.000 0.000 0.000 0.000 n/a
720 - 739   FIXED/ARM (0.250) 0.000 0.000 0.250 0.000 0.000 0.000 n/a
700 - 719   FIXED/ARM (0.250) 0.500 0.500 0.750 n/a n/a n/a n/a
680 - 699   FIXED/ARM 0.000 0.500 1.000 1.500 n/a n/a n/a n/a
660 - 679   FIXED/ARM 0.000 1.000 2.000 2.500 n/a n/a n/a n/a
640 - 659   FIXED/ARM 0.500 1.250 2.500 3.000 n/a n/a n/a n/a
620 - 639   FIXED/ARM 0.500 1.500 3.000 3.000 n/a n/a n/a n/a
<620   FIXED/ARM n/a n/a n/a n/a n/a n/a n/a n/a

ADDITIONAL CONVENTIONAL CONFORMING ADJUSTERS

CHARGE A HIGHER RATE OR BORROWER MUST PAY ADDITIONAL BELOW POINTS

     
   
LTV > 90% <= 95% 0.250
15 -year FRM w/ 120-month term 0.250
Investment Property LTV <= 75% 1.750
Investment Property LTV >75% <= 80% 3.000
Investment Property LTV >80% <= 90% n/a
2 Unit Property 1.000
2 Unit Second Home Cash-Out refi <= 75% 0.500
3 & 4 Unit Property 1.000
Secondary Financing  
   75/20/5 LTV>65%/CLTV>90<=95% & FICO>=720 0.250
   75/20/5 LTV>65%/CLTV>90<=95% & FICO<720 0.500
   80/10/10 0.250
   All Other LTV>75% & FICO>=720 0.250
   All Other LTV>75% & FICO<720 0.500
Non-escrowed (except CA, IA, IL, MN, NJ, NY, OR) 0.250
Temporary buydowns >80% LTV w/no MI 1.000
Condo > 75% LTV         ALL PRODUCTS W/ TERMS > 15 YRS 0.750

Low Loan Size Adjuster  
$0 - $49,999 0.500
$50,000 - $99,999 0.250