1. THE CONVENTIONAL ADVANTAGE
June

2. Product Facts Products 97/100% Conventional 97/100% Home Ready
Loan purpose
Purchase
Same
Amount of Assistance on 2nd:
3% of s/p or a/v whichever is less
1st:
Conforming Conventional limits
2nd:
Rate will be 2% over the 1st TD rate. Amort. 10 years.
A payment is counted in DTI.
Occupancy and Property type:
Owner occupied, 1 unit SFR, Condo or PUD,
no manufactured homes
Minimum Fico
640
Borrower Contribution 0%
Seller Contributions
Up to 3% on a 95%+ LTV
Gifts – Family Members
Okay No need for borrower’s own contribution
June

3. How do the products differ?
97/100% Conventional
97/100% Home Ready
Income Limits
None
8033% of AMI or none if in low income census tracts
Other Income
Normal FNMA guidelines
Boarder or Accessory Dwelling units – see more info on the following screens
First Time Homebuyer (FTHB)
At least 1 borrower must be a FTHB
Not Required
Non Occupant Co Borrowers
N/O/O permitted to max 95% LTV with max 43% DTI for occupying borrower (no income limits)
Same as Conventional but income for N/O/O will be considered in income limits
June

4. More differences: Product 97/100% Conventional 97/100% Home Ready
Ownership of other Property
Both occupant and N/O/O MAY NOT have ownership in other property
Both occupant and N/O/O MAY have ownership in other property
Homeownership Education
At least one borrower one must do one of the following: complete the Framework
homeownership education course ($75 fee paid by the borrower to Framework) prior to closing; or receive housing counseling from a HUD-approved nonprofit housing counseling agency (as evidenced by a signed Certificate of Completion of Housing Counseling (Form 1017))
Mortgage Insurance %
35% MI Coverage
25% Coverage (LTV’s 90.01% to 97.00%)
June

5. Sample Rate Sheet Always check for the most current pricing – see page 8 of rate sheet
June

6. Major “pricing benefits” when using Home Ready
Agency fee hits for Condos and FICO HITS are limited based on FICO
FICO 680+ capped at 0% for agency hits
FICO – capped at 1.50% for agency hits
Example: You have a 682 FICO + Condo Normally: Pricing Hits: 682 (1.50%) condo (.75%)
Home Ready you would be capped at 0% fee hits – a saving 2.25%
Example: You have a 644 FICO + Condo
Normally the hits would be 2.75% for FICO and .75% for Condo
Home Ready you would be capped at 1.50% fee hits – a savings 2%
June

7. Home Ready Other Income
Boarder income (relatives or non-relatives):
Up to 30% of qualifying income
Documentation for at least 9 out of the most recent 12 months
Averaged over 12 months
Proof of shared residency for the past 12 months
Accessory Dwelling Units: Rental income can be used if the appraiser can provide comps that support the value of it and provide comparable rental data. It does not necessarily have to be permitted.
June

8. Homeowner Education
At least one borrower on each Home Ready purchase mortgage must do one of the following:
Complete:
$75.00 fee(paid by the borrower to Framework – prior to closing; or
Receive housing counseling from a HUD approved non profit housing counselling agency (as evidenced by a signed Certificate of Completion of housing Counseling (Form 1017) prior to the borrower signing a purchase contract.
June

9. Screen shot on how to show 2nd on 1003 and DU - 97% conventional & 97% Home Ready
Be sure you to indicate on the 1003 on details of transaction that you have a 2nd. Also on your Declaration Questions on the 1003.
DU details:
June

10. Sample MI Chart
June

11. Submit – Fees – Product Codes
Upload a 1st and 2nd – two loan numbers
On the 1st package – we need complete credit package & submission sheet.
On the 2nd package – only need submission sheet
Fee for the 1st is $1350
Fee for the 2nd is $250
If using Contract Processor, max $1125 and indicate on submission sheet, include billing (not counted on the 3% max points and fees)
Product Codes
Conventional 1st 1030CH 2nd: 4030CHC
Home Ready 1ST 1030HRCH 2nd: 4030HRCH
June

12. Locking your loan PLEASE CALL YOUR AE WITH ANY QUESTIONS
This is a MANUAL LOCK. This will not price thru the Broker Connect.
Loan must have an approval and underwriter must have reviewed the appraisal.
Loan must be locked by 1:00 PST.
When you have reviewed the rate sheet and you are ready to lock,
PLEASE CALL YOUR AE WITH ANY QUESTIONS
THANK YOU FOR CHOOSING ESSEX MORTGAGE
June