June 3, 2014
Underwriting Requirement Changes—Clarifications and Guide Update Effective June 8, 2015

Effective June 8, 2015, United Guaranty is updating its Underwriting Requirements Guide (the Guide) with the changes that went into effect on May 8, 2015, as previously announced in CA 2015-01:

The following additional underwriting requirement changes and clarifications will be effective June 8, 2015, and will be included in the Guide updates.

Expansion of Existing Requirements

97–100% CLTV—Existing Subordinate Financing for a Rate/Term Refinance

Rate/term refinance transactions with existing subordinate financing being re-subordinated will be allowed to a maximum 100% CLTV when the existing subordinate financing meets Fannie Mae's Community Seconds® or Freddie Mac's Affordable Seconds® requirements and all of the following are met:

Occupancy Transaction Type Property Type Maximum LTV/CLTV Maximum Loan Amount Minimum Credit Score Maximum DTI
Primary Residence (only) Rate/Term Refinance 1-Unit, Detached, Attached, Condos, Co-ops 97%/100% $417,000 620 45%

Non-Occupant Co-Borrower/Co-Signer Loans and Gift/Grants

Gifts/Grants will be allowed to satisfy the occupant borrower's minimum contribution requirement for non-occupant co-borrower/co-signer transactions when all of the following are met:

Combining Fannie Mae and Freddie Mac Requirements

When we align with the Agencies' requirements, we will allow the use of a combination of both Fannie Mae and Freddie Mac's requirements within the same loan file (previously this was not allowed).

As always, when United Guaranty requirements differ from the Agencies', our requirements supersede Agency requirements.

HOA Fees Eligible as Interested-Party Contributions—Financing Concession

The payment of up to 12 months of Homeowners Association fees by an interested party to the transaction (previously considered an ineligible payment abatement) will be allowed as an acceptable financing concession and must be included in the maximum interested-party contribution percentage.


97.01 to 100% CLTV:

We are clarifying throughout the Guide that in order for a maximum 100% CLTV to be allowed, the subordinate financing must meet Fannie Mae's Community Seconds or Freddie Mac's Affordable Seconds requirements. We will also clarify that the loan must be identified as an Affordable Housing loan within the MI submission (due to the presence of a Community or Affordable Second).

Previously, the Guide stated:

Age of Documentation:

All age of documentation requirements will be measured against the insurance effective date (no more than 120 days old). Currently our Guides use both insurance effective date and Note date (in some instances aligning with the Agencies).

The insurance effective date and the Note date will be the same in all transactions except for one-time close construction-to-permanent loans where we already use the insurance effective/activation date.

Desktop Underwriter® (DU®)—Ineligible Purchase Decision for "No First-Time Home Buyer"

When the only reason for a DU "Ineligible" purchase decision is due to not having any first-time home buyers on the loan, we will treat the loan as an "Eligible" purchase decision, as we do not have any first-time home buyer requirements.

Qualifying Rate for ARMs with an Initial Fixed-Rate Period > 5 Years

Our minimum qualifying rate for ARMs with an initial fixed-rate period greater than five years is the Note Rate.

Individual Development Accounts (IDA)—Matching Funds

IDA matching funds may be used to satisfy the borrower's minimum contribution when all of the following are met:

Employer Assistance

Employer assistance may be used to satisfy the borrower's minimum contribution when all of the following are met:

Multiple Bankruptcies

Please contact your United Guaranty Account Representative if you have questions concerning this announcement. For questions regarding underwriting requirements or submissions, contact our Underwriting Customer Service Team at 877.MI.CHOICE (877.642.4642) or email UGC:customerservice.

© United Guaranty Corporation 2015. All rights reserved. United Guaranty is a registered mark. United Guaranty is a marketing term for United Guaranty Residential Insurance Company and United Guaranty Mortgage Indemnity Company. Coverage is available through admitted company only. Community Seconds, Desktop Underwriter, and DU are registered marks of Fannie Mae. Affordable Seconds is a registered mark of Freddie Mac.


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