August 20, 2015
CUA 2015-04: Increases to Maximum Loan Amounts – Second Homes to $625,500 and 1-Unit Primary to $1,000,000
Effective August 24, 2015
Effective with mortgage applications received on or after August 24, 2015, United Guaranty is increasing the maximum loan amounts for second homes and 1-unit primary residences for loans underwritten to our standard underwriting requirements (see Section 3 of our Credit Union Underwriting Guide). Loan amounts remain unchanged for CU SwiftClose®. Please see the details below.
The maximum loan amount for second homes will be increased to $625,500 (previously $417,000).
- This increased loan amount will be available for both full-file and delegated submissions and for all eligible loan types.
- All other second home underwriting requirements remain the same.
1-Unit Primary Residence
The maximum loan amount for 1-unit primary residences will be increased to $1,000,000 (previously $850,000). Loan amounts $850,001 to $1,000,000 are eligible for insurance when all of the following requirements are met. Exceptions to underwriting requirements are not allowed, including the credit score and DTI ratio variances.
- LTV/Loan Amount/Credit Score/DTI Requirements1:
|Occupancy||Transaction Type||Property Type||Maximum LTV/CLTV2||Loan Amount||Minimum Credit Score||Maximum DTI|
|Primary Residence Only||Purchase & Rate/Term Refinance||1-Unit, SFD/SFA, & Condos||90%||$850,001–$1,000,000||740||43%|
1 See information below for first-time home buyer requirements.
2 New subordinate financing is ineligible.
- Submission Type:
- Full-file submission is required.
- Loan Type:
- Fixed-rate/fixed-payment and ARMs with initial fixed-rate periods of 5 years or greater.
- ARMs with initial fixed-rate periods < 5 years, buydowns, balloon mortgages, and bi-weekly mortgages are ineligible.
- A full Uniform Residential Appraisal Report (URAR), with interior and exterior inspections, and a third-party field review appraisal are required.
- The Agencies’ manual underwriting documentation requirements for income and assets must be followed. In addition:
- If a VOE is used to document income, it must be accompanied with a current paystub.
- If a VOD is used to document assets, it must be accompanied with one month’s bank statement.
- If the borrower has a previous housing history (mortgage or rent), the most recent 12 months’ history must be documented with no late payments. If the history is shorter than 12 months, the entire history must be documented. If no borrower on the loan has owned a residential property in the past 36 months see the first-time home buyer requirements below.
- All foreclosures, deeds-in-lieu of foreclosure, pre-foreclosure sales (short sales), mortgage debt discharged through bankruptcy, and charged-off mortgages require 7 years’ seasoning from the completion date, and satisfactory re-established credit must be verified.
- Bankruptcies require 7 years’ seasoning from the discharge or dismissal date, and satisfactory re-established credit must be verified.
- Previously restructured mortgages (as defined in section 3.12.04.03 of the Credit Union Underwriting Guide) require 7 years’ seasoning from the restructure date, and satisfactory re-established credit must be verified.
- 4 years’ seasoning is required from the completion date of credit counseling due to derogatory credit.
- Open judgments, garnishments, and all outstanding liens (including tax liens), must be paid off at or prior to closing.
- Borrowers with collections and charge-offs of non-mortgage accounts are considered on a case-by-case basis.
- A refinance that includes the restructure of the current mortgage loan (as defined in section 3.12.04.03 of the Underwriting Requirements Guide) is ineligible.
- All funds must come from the borrower’s own funds. Gifts/grants are ineligible.
- Employer assistance programs and trade equity may not be used as a source of assets.
- Maximum interested-party contribution: 3%.
- 9 months' PITIA reserves are required regardless of transaction type.
- 6 months' additional reserves are required for each additional property owned by the borrower (including a retained primary residence, regardless of the amount of equity).
- Maximum condominium investor concentration: 30% (for both established and new projects).
- Modular, panelized, and prefabricated homes.
- Geodesic homes.
- Group homes.
- Log homes.
- Any property type that is ineligible for sale to the Agencies.
- Properties flipped within 180 days that result in a price increase
- Properties with resale (deed) restrictions.
- First-Time Home Buyer:
- A first-time home buyer is defined as a borrower who has not owned a residential property in the last 36 months.
- When all borrowers on the loan are first-time home buyers, the following requirements apply:
- Maximum LTV: 85%.
- Minimum credit score: 740.
- Maximum DTI: 38%.
- 12 months’ reserves required.
- The most recent 12 months’ rental history must be documented with no late payments. Borrowers with shorter rental histories are ineligible.
- Non-occupant co-borrower/co-signer.
- Non-permanent resident aliens.
- Rate/Term Refinance LTV Calculation:
- For a rate/term refinance, when the property has been owned less than 12 months, the LTV is calculated using the lesser of the purchase price or appraised value (except when the property is located in New York where the appraised value must be used). The 12 months is measured from the note date of the purchase to the application date of the refinance.
- Transaction Type:
- Construction-to-permanent loans.
- Renovation mortgages.
- The refinance of the permanent financing of construction-to-permanent loan in which less than 12 months of fully amortizing payments have been made.
- Installment land contracts.
- All other United Guaranty underwriting requirements apply
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.
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