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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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