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Wells Fargo Seller Guides / Quick Reference Product Guides / Prime Lending Product Guides / HomePath Program - Prior Approval
HomePath Program - Prior Approval Effective May 17, 2010 Contents:
Product Description: Loan Type: Temporary Buydowns: Product Parameters: Loan Limits: Maximum Loan Amount: LTVs/CLTVs/HCLTVs: Secondary Financing: Interest Only: Occupancy: Transaction Type: Property Eligibility Underwriting Criteria: Underwriting Guidelines: Credit: Documentation Type: Borrower Eligibility: Qualifying Ratios: Assets: Seller Contributions: Appraisal Requirements:
Product Description: The HomePath Program is a special financing program to provide financing for purchasers of Fannie Mae Real Estate Owned (REO) properties that Fannie Mae has deemed eligible for HomePath Mortgage financing. Note: WFWL does not offer the HomePath Renovation Program.
Loan Type: This program is available with the following conforming products: 15, 20 and 30 Year Fixed Rate products (Section 905) 3/1 ARM (LIBOR-indexed) (Section 919) 5/1 ARM (LIBOR-indexed) (Section 920) 7/1 ARM (LIBOR-indexed) (Section 921) 10/1 ARM (LIBOR-indexed) (Section 922)
Temporary Buydowns: Allowed
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Product Parameters: Loan Limits: Maximum Loan Amount: Conforming and High Balance Conforming
LTVs/CLTVs/HCLTVs: Standard Conforming Loan Program High Balance Conforming Loan Program
Secondary Financing: Allowed
Interest Only: Allowed
Occupancy:
Primary residence
Second Home
Investment Property
Loans must meet the underlying product/program, occupancy and property type requirements.
Transaction Type: Purchase
Property Eligibility Loans must be secured by properties designated as eligible for HomePath financing by Fannie Mae on the www.homepath.com website.
Single-Family detached or attached
Manufactured housing is not permitted
PUD
Condominium
Cooperative
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Leaseholds and Resale Deed Restrictions are not allowed.
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Underwriting Criteria:
Underwriting Guidelines: Allowed:
Wells Fargo Funding Prior Approval
Not Allowed:
Delegated Underwriting
Third Party Contract Underwriting
The use of Desktop Underwriter (DU) is required. This program requires the following:
Desktop Underwriter (DU)Findings with an “Approve/Eligible” recommendation, or
DU Findings with an “Approve/Ineligible” recommendation where the only reason for ineligibility is:
LTV greater than 85% for 1- unit investment properties; or
LTV greater than 75% for 2-unit investment properties.
Credit: Please note: Non-traditional credit is not allowed with the HomePath Program. Minimum Loan Score requirements:
660 required for LTV greater than 80%
620 required for LTV less than or equal to 80%
Loans using the HomePath Program in combination with the High Balance Conforming Loan Program must meet the credit score requirements as detailed in the LTV matrices. Documentation Type: Full documentation of assets and income is required. Borrower Eligibility: Non-occupant co-borrowers are allowed:
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For loans with CLTV greater than 95%, all borrowers must occupy the property as their primary residence. •
For loans with LTV/CLTV less than or equal to 95%, follow standard parameters for nonoccupant co-borrowers.
Qualifying Ratios: DU will determine the maximum allowable debt-to income ratio based on the overall risk assessment of the Loan. A maximum allowable total expense ratio of 45% will be applied, with flexibilities offered up to 50% for certain loans with strong compensating factors. Assets: Standard minimum down payment requirements apply.
For loans with LTV/CLTV from 80.01-95%, the occupant borrower must provide 5% of purchase price as a down payment
For loans with LTV/CLTV > 95% there is no minimum contribution requirement from the borrower’s own funds.
Eligible Source of Down Payment for Loans with LTV/CLTV > 95%: Refer to Section 842.05 for details. Seller Contributions: Maximum Seller Contributions: The maximum allowable contributions from interested parties based upon the contract sales price are:
Property Type
CLTV
Limit
Primary Residence and Second Home
> 75%
6%
< 75%
9%
All CLTVs
2%
Investment Property
Appraisal Requirements: No appraisal is required. Determination of Property Value Property value for purposes of loan delivery and for determining LTV/CLTV/HCLTV is the sales price of the property as evidenced by the sales contract between Fannie Mae and the buyer/borrower (“Contract Sales Price”).
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