Homebridge is updating the Simple Access guidelines with significant improvements and some general clarifications.
General highlights of the improvements follow:
- 90% LTV eligible for primary residence purchase transactions (previous max 85% LTV)
- 660 minimum credit score, and
- Maximum $1,000,000 loan amount, and
- And additional 6 months PITIA reserves required
- The maximum loan amount has been increased to $2,500,000 on all documentation options (previously $2,000,000)
- Expanded LTV options and lower credit scores
- Maximum cash-out has been enhanced
- LTV ≤ 65%: No limit to cash-out (previously limited to $500,000 regardless of LTV)
- LTV > 65%: Maximum cash-out $500,000
- The maximum LTV for purchase transactions and the property is located in Connecticut, New Jersey, and New York has increased to 85% (previously 75%)
- Maximum DTI 50% (previously certain transactions limited to 43%) except as noted below
- DTI 50.01% to 55% eligible with Homebridge management approval and the following requirements are met:
- Minimum 680 credit score, and
- Maximum 70% LTV, and
- Purchase and rate/term refinance transaction, and
- Borrower has a minimum residual income of the greater of .5% of the loan amount or $2,000, or
- In the event the borrower does not meet the residual income requirement the borrower must have a minimum $1500 residual income and an additional 6 months PITIA in reserves
- Asset eligibility has been updated as follows:
- Marketable securities eligible up to 80% (previously 70%)
- Retirement assets eligible:
- Borrower is not of retirement age (< 59 ½): 70% of assets (previously 60%)
- Borrower is of retirement age (≥ 59 ½): 80% of assets (previously 70%)
- Asset documentation expiration has been extended to 90 days (previously 60 days)
- Receipt of rents must be documented with 60 days of the Note date (previously 30 days)
- The limitation of transactions with a credit score of 620-659 to the Full Doc option only has been removed; all documentation options are now eligible down to a 620 credit score
- Reserve requirement updates:
- Cash-out proceeds eligible to meet reserve requirements with an LTV of ≤ 75% (previously ≤ 65% LTV) on the Full Doc, Bank Statement, 1099 Only, and ICF options
- Asset Qualifier option no longer has separate reserve requirements
- The appraisal topic has been updated as follows:
- Loan amount ≤ $2,000,000: One (1) full appraisal required (previously ≤ $1,500,000)
- Loan amount > $2,000,000: Two (2) full appraisals required (previously > $1,500,000)
- Refinance transactions where the property has been owned < 12 months to use the current appraised value provided the CDA supports the appraisal (CDA variance must be ≤ 10%). This option is not available for properties located in a declining market or properties in the 5 counties of NYC
- When a primary residence is being converted to a second home or investment property, an AVM is now an eligible option to document equity
- First time home buyers living rent free are now eligible up to 75% LTV (previously 70%) and gift funds now eligible after 10% borrower own funds requirement (previously gift funds ineligible). As a reminder, first time home buyers/rent free are not eligible on the ICF option
- Updated the requirements when title will be held in the name of an LLC or partnership/corporation as follows:
- Partnership/corporations now limit the number of shareholders/partners/members to 4 which aligns with LLC requirements (previously not limited)
- Both LLCs and partnership/corporations now only require one member/shareholder to qualify for the loan. The borrowers on the transaction must have a combined ownership > 50%. A 6 month lookback from the application date will be required and any member/partner whose ownership was reduced to below 50% during the lookback period will require that member/partner to be added to the loan
- Updated the Disputed Accounts topic to clarify the guidance applies to the 2-years preceding the credit report date
- 120 day or more mortgage late was added as a significant derogatory event and removed from the mortgage late topic (0x120x48)
- Mortgage forbearance accounts are now eligible with > 3 missed payments (previously > 3 missed payments ineligible) subject to the forbearance plan being withdrawn, closed, or cancelled and a minimum of 3 payments have been made on time after completion of forbearance and prior to the loan application date. Missed payments may be added to the loan amount
- Non-mortgage forbearance accounts may remain in forbearance; the payment must be included in the DTI calculation (previously only considered on case-by-case)
- The Bank Statement option when using the Uniform Expense Ratio is 50% expense factor now eligible for all LTVS (previously > 80% LTV required 75% expense factor)
- Asset Qualifier option has been updated as follows:
- Asset balances must be verified within 60 days of the Note date
- Additional methods for qualifying have been added (previously only one method was allowed)
- Method One: Total post-closing assets must equal 125% of all outstanding mortgage debt for which the borrower is personally liable
- Method Two: Total post-closing assets must equal 120% of the subject property loan amount plus 30% of all other outstanding debt (mortgage and consumer debt)
Investor Cash Flow Option
- A minimum DSCR requirement will not apply subject to:
- The LTV is ≤ 70%, AND
- The minimum credit score is ≥ 700, AND
- An additional 6 months PITIA reserves required (6 months more than standard reserve requirements for the transaction)
NOTE: If the above requirements are not met, the current minimum 1.000 DSCR continues to apply
- Interest-only transactions may now be qualified using a 30 year amortization (previously amortized over 20 years)
- The interest-only payment now eligible to calculate the DSCR subject to:
- The LTV must be ≤ 70%, AND
- A minimum 680 credit score required, AND
- The taxes, insurance, and HOA (if applicable), the “TIA
