NEW Conventional Conforming Plus Product
FYI Number: 08-0078
Issue Date: 03/17/08
Applicable to Tiers: 1, 2, 4
Providing Financing for the American Dream.
Introducing a New 30-Year Fixed Conforming Plus Product
Effective Wednesday, March 19, 2008, PHH will be releasing a new conventional jumbo-conforming product that will be available for new registrations, as well as floating loans registered on or after January 1, 2008.
Note for pipeline loans: Effective Friday, March 21, 2008, the new product will be available for any locked or rate protected loan registered on or after January 1, 2008.
The Conforming Plus product was created to accommodate the Economic Stimulus Act of 2008, which will temporarily increase conforming loan amounts in high cost areas that have been defined by the Department of Housing and Urban Development (HUD). Reference FYI 08-0066 Stimulus Bill Update for details.
New Conforming Plus Product
Product Term | Principal & Interest |
30-year Fixed | R02 |
Eligibility Parameters
Occupancy | Purchase | Rate Term Refinances | Max Loan Amount | Property Type | ||||||||||||
Max LTV(3) | Max CLTV (1, 3) | Max LTV(3) | Max CLTV (3) | |||||||||||||
Owner Occupied | 90% | 90% | 75% | 95% | (2) | 1 Unit, SFD/SFA, Condos and PUDs | ||||||||||
Second Home | 60% | 60% | 60% | 60% | (2) | |||||||||||
Investor | 60% | 60% | 60% | 60% | (2) | |||||||||||
(1) | 1-unit: Maximum LTV with subordinate financing is 80%. | |||||||||||||||
(2) | Maximum financing will be based on the following calculation: 125% of HUD Median House Price based on Metropolitan Statistical Area (MSA) up to 175% of the current conforming limit, never to exceed $729,750 for a single family. Refer to HUD Maximum Financing Table for FHA Maximum Loan Limits calculation ~ select Limit Type = Fannie/Freddie. | |||||||||||||||
(3) | Declining markets policy will apply ~ 5% reduction to LTV/CLTV will be required if property is in a declining market unless LTV/CLTV is =< 75% (these loans will be exempt from the declining markets policy) | |||||||||||||||
Note: | Minimum Loan Amount - $417,001 | |||||||||||||||
Page 2 of 2 Contact your Account Manager or the Underwriting Solutions Desk with any questions
Additional Product Highlights
- • All loans will be manually underwritten (no automated scoring at this time)
- • Minimum recommended credit scores based on LTVs:
- o LTV > 80% = 700
- o LTV ≤ 80% = 660
- • 0 X 30 payment history on all housing debts for the last 12 months (required for all mortgages and rental payments)
- • Property type limited to one unit located on an individual lot or in a condominium or PUD
- • Maximum 45% Debt-to-Income Ratio
- • Full project review required on condominiums
- • Appraisal with interior and exterior inspection is required; a field review will be required if the property value is > $1,000,000 and LTV/CLTV > 75%
- • Manufactured homes are not permitted
Loan Limits
The new loan limits for the entire country can be accessed from HUD's Website. To filter your search results, go to the Limit Type drop-down box and select Fannie/Freddie and click send.
Pipeline Details
Loans in the pipeline that were registered between January 1, 2008 and March 18, 2008, may take advantage of the new Conforming Plus product, provided the loan qualifies.
- • Team players can select the available products in the system
- • Loans will need to be sent to the Scenario Desk for review
- • Scenario will review for eligibility
- • If eligible, then Scenario will approve and notify processor
- • If not eligible, then Scenario will notify processor and product change will be required out of ‘R' product
Pricing and Rate Sheets
Rate sheets will be updated on Wednesday, March 19 with the new Conforming Plus product. The product will be priced higher than standard conforming conventional products. Also, a point add-on of 0.250% will apply, in addition to the existing standard conforming conventional pricing adjustments.
Criteria | Point Add-on |
30-year Conforming Plus Fixed (R02) | 0.250% |
Maximum lock length permitted will be 90 days. Longer term lock periods will not be permitted.
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