February 7, 2013
Performance Premium RAP Underwriting Requirement Changes for Reserves and Acreage — Effective February 11, 2013

What is changing?

As part of our ongoing risk management analysis, United Guaranty is changing the following Performance Premium® RAP® underwriting requirements effective February 11, 2013. All changes will be added to the Performance Premium RAP Underwriting Guide (the "Guide").

Reserves (Guide Section 11.02)

United Guaranty will align with the Agencies' requirements for reserves when the loan receives a DU® Approve/Eligible or LP® Accept/Eligible recommendation for the following transaction types:

The following table presents a summary of United Guaranty's reserve requirements effective February 11, 2013.

# Units Occupancy Loan Purpose DU Approve/Eligible or LP Accept/Eligible All Other Loans
1-unit Primary* Purchase (Loan Amounts up to $625,500) Align with DU/LP reserve requirements 2 months PITIA
Purchase (Loan Amounts $625,501–$850,000) 6 months PITIA
Rate/Term Refinance Align with DU/LP reserve requirements None
Cash-out Refinance Align with DU/LP reserve requirements 2 months PITIA
2–4 units Primary Purchase & Rate/Term Refinance 6 months PITIA
1-unit 2nd Home Purchase & Rate/Term Refinance Align with DU/LP reserve requirements** 6 months PITIA (subject property only)
1-unit Investment Purchase & Rate/Term Refinance Align with DU/LP reserve requirements** 6 months PITIA (subject property only)
1–4 units Primary Purchase—Borrower is retaining current primary residence (pending sale or converting to second home or investment property). Align with DU/LP reserve requirements*** 6 months PITIA for both properties, unless:
30% equity is documented (see Guide for details), then 2 months PITIA for both properties.

Note:

* Insurance applications using the expanded Performance Premium HFA requirements continue to require two months reserves.

** DU and LP are unable to account for additional Agency reserve requirements for second homes and investment properties when the borrower owns other financed second homes and/or investment properties. In these instances the lender must manually apply additional reserve requirements per the Fannie Mae and Freddie Mac Seller Guides.

*** DU and LP are unable to account for additional Agency reserve requirements when the borrower is retaining their current primary residence. In these instances the lender must manually apply additional reserve requirements per the Fannie Mae and Freddie Mac Seller Guides.

Maximum Acreage (Guide Section 14.06)
The maximum acreage allowed for loans submitted via RAP (RAPid Link®, EDI, LOS, etc.) has been increased to 15 acres. Properties with more than 15 acres must be submitted full file.

Please contact your United Guaranty Account Representative with any questions about this announcement. A lender must already have an agreement in place with United Guaranty to use RAP.

CA2013-02

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