1. THE CONVENTIONAL ADVANTAGE
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2. Product Facts Products 97/100% Conventional 97/100% Home Ready
Loan purpose
Purchase
Same
Amount of Assistance on 2nd:
3% of s/p or a/v whichever is less
1st:
Conforming Conventional limits
2nd:
Rate will be 2% over the 1st TD rate. Amort. 10 years.
A payment is counted in DTI.
Occupancy and Property type:
Owner occupied, 1 unit SFR, Condo or PUD,
no manufactured homes
Minimum Fico
640
Borrower Contribution 0%
Seller Contributions
Up to 3% on a 95%+ LTV
Gifts – Family Members
Okay No need for borrower’s own contribution
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3. How do the products differ?
97/100% Conventional
97/100% Home Ready
Income Limits
None
100% of AMI or none if in low income census tracts
Other Income
Normal FNMA guidelines
Boarder or Accessory Dwelling units – see more info on the following screens
First Time Homebuyer (FTHB)
At least 1 borrower must be a FTHB
Not Required
Non Occupant Co Borrowers
N/O/O permitted to max 95% LTV with max 43% DTI for occupying borrower (no income limits)
Same as Conventional but income for N/O/O will be considered in income limits
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4. More differences…. Product 97/100% Conventional 97/100% Home Ready
Ownership of other Property
Both occupant and N/O/O MAY NOT have ownership in other property
Both occupant and N/O/O MAY have ownership in other property
Homeownership Education
Not required
At least one borrower has to complete Framework Homeownership Education Course - $75.00 fee or recent HUD approved nonprofit counseling agency prior to signing a purchase contract.
Mortgage Insurance %
35% MI Coverage
25% Coverage (LTV’s 90.01% to 97.00%)
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5. Sample Rate Sheet Always check for the most current pricing – see page 8 of rate sheet
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6. Major “pricing benefits” when using Home Ready
Agency fee hits for Condos and FICO HITS are limited based on FICO
FICO 680+ capped at 0% for agency hits
FICO – capped at 1.50% for agency hits
Example: You have a 682 FICO + Condo Normally: Pricing Hits: 682 (1.50%) condo (.75%)
Home Ready you would be capped at 0% fee hits – a saving 2.25%
Example: You have a 644 FICO + Condo
Normally the hits would be 2.75% for FICO and .75% for Condo
Home Ready you would be capped at 1.50% fee hits – a savings 2%
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7. Home Ready Other Income
Boarder income (relatives or non-relatives):
Up to 30% of qualifying income
Documentation for at least 9 out of the most recent 12 months
Averaged over 12 months
Proof of shared residency for the past 12 months
Accessory Dwelling Units: Rental income can be used if the appraiser can provide comps that support the value of it and provide comparable rental data. It does not necessarily have to be permitted.
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8. Homeowner Education
At least one borrower on each Home Ready purchase mortgage must do one of the following:
Complete:
$75.00 fee(paid by the borrower to Framework – prior to closing; or
Receive housing counseling from a HUD approved non profit housing counselling agency (as evidenced by a signed Certificate of Completion of housing Counseling (Form 1017) prior to the borrower signing a purchase contract.
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9. Screen shot on how to show 2nd on 1003 and DU - 97% conventional & 97% Home Ready
Be sure you to indicate on the 1003 on details of transaction that you have a 2nd. Also on your Declaration Questions on the 1003.
DU details:
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10. Sample MI Chart
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11. Submit – Fees – Product Codes
Upload a 1st and 2nd – two loan numbers
On the 1st package – we need complete credit package & submission sheet.
On the 2nd package – only need submission sheet
Fee for the 1st is $1350
Fee for the 2nd is $250
If using Contract Processor, max $1125 and indicate on submission sheet, include billing (not counted on the 3% max points and fees)
Product Codes
Conventional 1st 1030CH 2nd: 4030CHC
Home Ready 1ST 1030HRCH 2nd: 4030HRCH
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12. Locking your loan PLEASE CALL YOUR AE WITH ANY QUESTIONS
This is a MANUAL LOCK. This will not price thru the Broker Connect.
Loan must have an approval and underwriter must have reviewed the appraisal.
Loan must be locked by 1:00 PST.
When you have reviewed the rate sheet and you are ready to lock,
PLEASE CALL YOUR AE WITH ANY QUESTIONS
THANK YOU FOR CHOOSING ESSEX MORTGAGE
5/16/2019