Click here for full FHA credit policy manual

Effective on all loans Registered and/or Locked on or after 4/8/2008

This information is to be provided exclusively to mortgage professionals/referral sources and is not intended for public use. This is not an advertisement to extend consumer credit as defined in Regulation Z, §226.2. All loans are subject to credit and property approval. Programs, rates, terms and conditions are subject to change without notice. Not all products are available in all states or for all loan amounts. Other restrictions apply.

GUIDELINES

• US Citizens, Permanent and Non-Permanent Resident Aliens, Non-

Occupant Co-Borrowers

• Owner Occupied Primary Residence only (Investment Property only

allowed on Streamline without an appraisal)

• 15 and 30 Year Fixed Rate Mortgages and 1 Year 3/1 and 5/1

Adjustable Rate Mortgages

DOCUMENTATION

• Refer to automated findings, Credit Policy Manual or the 4155.1 REV-5.

RATIOS

• Manual underwriting on existing properties over one year the maximum

ratio is 31/43%

• With automated underwriting these ratios may be exceeded

PROPERTY FLIPPING

• 90 days or less since property was last sold - Property is NOT eligible

for FHA financing.

• 91 days to 180 days since property was last sold - If the current sales

price is the same or higher than the sales price when the seller acquired

the property, then need a second appraisal completed by a different

appraiser, and the second appraisal cannot be charged to the borrower

(it must be paid by the seller or broker). If the current sales price is less

than the sales price when the seller acquired the property, then do not

need any additional documentation and one appraisal will be sufficient.

203(h) - DISASTER RELIEF

• Up to 100% financing available for qualified borrowers that meet

specific requirements as outlined in Credit Policy Manual.

FHA SECURE INITIATIVE

• All FHASecure mortgages must comply with HUD Mortgagee Letter

2007-11 in it's entirety

FHA JUMBO 2ND APPRAISAL REQUIREMENTS

• The Base Loan Amount (excluding UFMIP) will exceed $417,000; AND

• The LTV (Base Loan Amount) equals of exceeds 95%; AND

• The property is determined to be in a declining market based on

appraisal or Declining Market Zip Code Search

• http://www.taylorbeanonline.com/RateSheets/Newsletter/decliningmarkets.xls

• Selected from FHA roster and ordered by Lender's FHA/VA Liaison

Dept

• Underwriter must complete FHA 2nd Appraisal Request Form and

complete as directed

• No second case number is to be requested

• Underwriter is to add the appraisal fee to closing costs to be passed on

to borrower.

• Exterior Only appraisal allowed on 1 Unit Detached only (Form 2055)

• Repairs as noted on original FHA appraisal must be completed

• If second appraisal has an estimated value more than 5% lower than

the original value, then the maximum mortgage is based on the lower of

the two appraisals.

REFINANCE

• The LTV limitations used for purchases, or

• Principal balance on existing first lien + prepayment penalties + up to

one month monthly MIP + the Mtg. Pmt. (PITI) that was due on the 1st

(if not already paid) + up to 30 days interest for the current month + late

charges + escrow shortages, subtract MIP refund (if applicable) +

borrower pd closing costs + property-related liens for acquisition, repair

or rehab seasoned at least 1 year, + prepaid expenses (per diem

interest to end of month on new loan + hazard ins deposits + real estate

tax deposits + reasonable discount pts.)

• May not receive cash back in excess of $500.00

Refinance (Cash-Out)

• If the Base Loan Amount exceeds $417,000, the maximum LTV on

• 95 percent of the appraised value provided the property has been

owned by the borrower for at least one year. If the property was

purchased less than one year preceding the loan application, the LTV

may not exceed 85% of the original purchase price or appraised value,

whichever is less.

• Any co-borrower or co-signer being added to the note must be an

occupant of the property. Non-occupant owners may not be added in

order to meet FHA's credit underwriting guidelines for the mortgage

• The following restrictions apply to Cash Out Refinance:

transactions above 85 percent allowance

• The subject property must have been owned by the borrower as

their principal residence for at least 12 months preceding the date

of the loan application.

• If subject property is encumbered by a mortgage, the borrower

must have made all mortgage payments within the month due for

the previous 12 months (no payment may be more than 30 days

late and is current for the month due).

• The subject property must be a 1 or 2 unit dwelling.

• Subordinate financing may remain in place, but subordinate to the

FHA insured first mortgage, regardless of the total indebtedness

or combined LTV ratio, provided the homeowner qualifies for

making scheduled payments on all liens.

Refinance (Streamline without an appraisal) - the lower of:

• Original principal balance (from the Refinance Authorization screen in

the FHA Connection), or

• Principal bal on existing first lien + up to one month monthly MIP + the

Mtg pmt. (PITI) that was due on the 1st (if not already paid) + up to 30

days interest for the current month + late charges + escrow shortages,

minus MIP refund(if applicable), + borrower-paid closing costs + prepaid

expenses (per diem interest to end of month on new loan + hazard ins

deposits + real estate tax deposits + reasonable discount pts)

• May not receive cash back in excess of $500.00.

Refinance (Streamline with an appraisal) - the lower of:

• The LTV limitation used for purchases, or

• Principal balance on existing 1st lien + up to one month monthly MIP +

the Mtg Pmt (PITI) that was due on the 1st (if not already paid) in

addition up to 30 days interest for the current month + late charges +

escrow shortages, minus MIP refund (if applicable) + borrower-paid

closing costs, + prepaid expenses (per diem interest to end of month on

new loan + hazard ins deposits + real estate tax deposits + reasonable

discount pts.)

• May not receive cash back in excess of $500.00

STANDARD MORTGAGE LIMITS

Low Cost $271,050 $347,000 $419,400 $521,250

High Cost $729,750 $934,200 $1,129,250 $1,403,400

AK,HI,GU,VI $1,094,625 $1,401,300 $1,693,875 $2,105,100

LTV LIMITATIONS

Low Closing Cost 98.75 97.65 97.15

High Closing Cost 98.75 97.75 97.75

UPFRONT AND ANNUAL MIP

90.0=> 1.5% .50% .25% See Note

<90.0 1.5% .50% None NA

• Note: Years will be determined when the loan balance equals 78%,

provided the borrower has paid the annual MIP for at least 5 years

(scheduled or actual).

• Loan Amount multiplied by Annual premium is divided by 12

• FHA 203(b) loans, fixed rate and adjustable will have both the monthly

and upfront premiums.

• The financed UFMIP is not included in the statutory loan limit. When

the UFMIP is financed, the loan amount is to be rounded down to the

next dollar.

• Properties in Military Impact Areas (Georgia counties: Bryan, Camden,

and Liberty) do not have upfront MIP only annual MIP.

HUD CASE NUMBERS / SUFFIX CODES

Fixed Rate 203(b) 703 234(c) 734

Buydown 203(b) 796 203(c) 797

ARM 203(b) 729 234(c) 731

months to equal monthly MIP

Cash Out Refinance is 85% (where case number is issued on or

after April 1, 2008).

Second Appraisal and Appraiser Requirements