CORRESPONDENT SIERRA DIRECT- Conventional Loan Products Featured Topics

Standard Fixed Rate Products: T300FD-30 yr, T301FD-15yr, T304FD-20yr and T305FD- 10yr

Standard ARM products: A341FD- 5/1 and A342FD- 7/1 Adjustable Rate

Jumbo products: T300JFD-30 yr Fixed, T301JFD-15 yr Fixed, A341JFD-5/1 ARM and A342JFD-7/1ARM

DU 9.0 STANDARD CONFORMING FIXED 1
CORRESPONDENT BUSINESS CHANNEL ONLY
PRIMARY HOME PURCHASE & RATE/TERM REFI
Property Type 2 / Max LTV/
CLTV /HCLTV 3,5 / Min.
FICO / Max DTI
1-Unit / 974/97 / DU/620 / DU
2 Unit / 854/85
3-4 Unit / 75/75
SECOND HOME PURCHASE & RATE/TERM REFI 6
1-Unit / 904/90 / DU/620 / DU
INVESTMENT PURCHASE
1 Unit / 854/85 / DU/620 / DU
2- 4 Unit / 75/75 / DU/620 / DU
INVESTMENT RATE/TERM REFI6
1 Unit OR 2-4 Unit / 75/75 / DU/620 / DU
CASH OUT REFI 6,7
1 Unit Primary / 854/855 / DU/620 / DU
2- 4 Units Primary / 75/75 / DU/620
1- Unit 2nd Home / 75/75 / DU/620
1 Units Investment / 75/75 / DU/620
2-4 Units Investment / 70/70 / DU/620

1. This matrix is applicable to all standard conventional Fixed Rate loans- Loan Amount $417,000- decisioned in DU version 9.0 release.

2. Attached PUD restrictions apply to Florida condominiums and Attached PUD’s refer to FL location topic for specifics

3. Maximum LTV/CLTV/HCLTV are the same. If Second is HELOC, loan amt + line amt cannot exceed the CLTV/HCLTV

4. Loans >80% LTV are subject to additional M.I. company requirements in addition to LTV/CLTV parameters and other criteria stated in this product guide, SPM P&P requirements must also be met and could potentially supersede applicable M.I. company’s guidelines for loans requiring M.I. Nevada condo’s >80% LTV are not permitted (either attached or detached)

5. Community or Affordable/Subsidy Secondary programs sponsored by govt. entities or affordable housing entities are allowed: E.G. Down payment Assistance (DAPS), Up-Front Cost Assistance (UCAP) and Housing Assistance Programs. Please refer to Resale Deed Restriction topic

6. Applicable COO requirements apply as stated in Continuity of Obligation section

7. Special restrictions apply for Delayed Financing scenarios as stated in Delayed Financing topic.

DU 9.0 STANDARD CONFORMING ARM 1
PRIMARY HOME PURCHASE & RATE/TERM REFINANCE 4
Property Type 2 / Max LTV
(same as CLTV /HCLTV ) 3 / Min.
FICO / Max DTI
1-Unit / 905/90 / DU/620 / DU
2 Unit / 75/75
3-4 Unit / 65/65
SECOND HOME PURCHASE & RATE/TERM REFINANCE 4
1-Unit / 80/80 / DU/620 / DU
INVESTMENT PURCHASE
1 Unit / 75/75 / DU/620 / DU
2- 4 Unit / 65/65 / DU/620
INVESTMENT RATE/TERM REFINANCE 4
1 Unit OR 2-4 Unit / 65/65 / DU/620 / DU
CASH OUT REFINANCE 4,5
1 Unit Primary / 75/75 / DU/620 / DU
2- 4 Units Primary / 65/65 / DU/620 / DU
1- Unit 2nd Home / 65/65 / DU/620 / DU
1 Units Investment / 65/65 / DU/620 / DU
2-4 Units Investment / 60/60 / DU/620 / DU

1.  This matrix applies to all standard conventional ARM loans Loan Amount $417,000, decisioned in DU version 9.0 release

2.  Eligibility matrix does NOT apply to condo and attached PUD projects located in Florida. Please refer to specific condo/attached PUD projects- Florida location topic for applicable LTV/CLTV/FICO and eligibility criteria.

3.  HCLTV = CLTV: If Second is HELOC, loan amt + line amt cannot exceed the CLTV/HCLTV

4.  Continuity of Obligation requirements apply as stated in COO topic

5.  Transactions >80% LTV where M.I. is required may have additional criteria regarding Condo/PUD properties, declining markets, Min. FICO, Max DTI, cash reserves, etc. Please refer to individual M.I. company requirements. Condo’s in the state of Nevada >80% LTV are not permitted (either attached or detached)

6.  Six months’ ownership seasoning is required unless Delayed Financing requirements are met.

Note: Investor and Second home transactions with 5 to 10 financed properties – Refer to Fannie Mae guides B-2-2-03 for additional requirements and

restrictions.

DU 9.0 JUMBO/HIGH BAL FIXED 1
PRIMARY HOME PURCHASE & RATE/TERM REFINANCE
Property Type 2 / Max LTV
(CLTV /HCLTV) 3 / Min.
FICO / Max DTI
1-Unit / 904/90 / 660 / DU
2-4 Unit / 75/75 / 660
SECOND HOME PURCHASE & RATE/TERM REFINANCE5
1-Unit / 65/65 / 660 / DU
INVESTMENT PURCHASE& RATE/TERM REFINANCE 5
1 Unit OR 2- 4 Unit / 65/65 / 660 / DU
CASH OUT REFINANCE 5, 6
1 Unit Primary / 60/60 / 660 / DU
2- 4 Units Primary OR
1- Unit 2nd Home OR
1 Units Investment OR
2-4 Units Investment / N/A / N/A / N/A

1. This matrix is applicable to all Jumbo/High Bal conventional Fixed Rate loans decisioned in DU version 9.0 released the weekend of Oct. 20, 2012 with loan amounts >$417,000. (E. G. The minimum loan amount is $417,001). Maximum loan limits are subject to FannieMae High Balance County limits.

2. Condo/Attached PUD restrictions apply to Florida condominiums and Attached PUD’s refer to FL location topic for specifics

3. Maximum LTV/CLTV/HCLTV are the same. If Second is HELOC, loan amt + line amt cannot exceed the CLTV/HCLTV

4. Loans >80% LTV are subject to additional M.I. company requirements in addition to LTV/CLTV parameters and other criteria stated in this product guide, SPM P&P requirements must also be met and could potentially supersede applicable M.I. company’s guidelines for loans requiring M.I. Nevada condo’s >80% LTV are not permitted (either attached or detached)

5. Applicable COO requirements apply as stated in Continuity of Obligation section.

6. Special restrictions apply for Delayed Financing scenarios as stated in Delayed Financing topic. Maximum cash in hand refi proceeds to Borrower is $250,000 max for transactions not qualifying under Delayed Financing.

Note: Investor and Second home transactions with 5 to 10 financed properties – Refer to Fannie Mae guides B-2-2-03 for additional

requirements and restrictions.

DU 9.0 JUMBO/HIGH BAL ARM 1
PRIMARY HOME PURCHASE & RATE/TERM REFINANCE 4
Property Type 2 / Max LTV
(CLTV /HCLTV)3 / Min.
FICO / Max DTI
1-Unit / 75/75 / 660 / DU
2-4 Unit / 65/65
SECOND HOME PURCHASE & RATE/TERM REFINANCE4
1-Unit / 65/65 / 660 / DU
INVESTMENT PURCHASE& RATE/TERM REFINANCE4
1 Unit OR 2- 4 Unit / 65/65 / 660 / DU
CASH OUT REFINANCE 4,5
1 Unit Primary / 60/60 / 660 / DU
2- 4 Units Primary OR
1- Unit 2nd Home OR
1 Units Investment OR
2-4 Units Investment / N/A / N/A / N/A

1. This matrix is applicable to all Jumbo/High Bal conventional ARM loans decisioned in DU version 9.0 scheduled for release the weekend of Oct. 20,2012 with loan amounts >$417,000. (E. G. The minimum loan amount is $417,001). Maximum loan limits are subject to FannieMae High Balance County limits.

2. Condo/Attached PUD restrictions apply to Florida condominiums and Attached PUD’s refer to FL location topic for specifics

3. Maximum LTV/CLTV/HCLTV are the same. If Second is HELOC, loan amt + line amt cannot exceed the CLTV/HCLTV

4. Applicable COO requirements apply as stated in Continuity of Obligation section.

5. Special restrictions apply for Delayed Financing scenarios as stated in Delayed Financing topic. Maximum cash in hand refi proceeds to Borrower is $250,000 max for transactions not qualifying under Delayed Financing.

Note: Investor and Second home transactions with 5 to 10 financed properties – Refer to Fannie Mae guides B-2-2-03 for additional

requirements and restrictions.

AIT / AIT (At interest Transactions) are permitted unless otherwise states such as Flipping policy requirements.
See Non-Arms length transactions topic for complete NAL definitions relative to this product guide.
APPRAISAL / ·  Assigned appraisal reports are not acceptable.
·  Appraisal report documentation requirements follow standard FannieMae policies including but not limited to the appraisal age, recertification of value, etc.
·  DU findings permitting reduced appraisal reports including Property Inspection Waiver (PIW) will be allowed providing that the specific loan scenario or property does not otherwise require a full appraisal report. The following requirements apply:
o  Specific transactions requiring full appraisals such as those subject to Hobby Farm properties, condos in litigation, Geographic Restriction, Disaster policies are not eligible for reduced appraisal reports.
§  Also ineligible: Tax Returns (or other file information) indicates subject property is a Mixed Use property
o  DU Accept/Eligible finding must reflect PIW, #2055 or #2075 eligibility on FINAL DU report
o  A fee of $75.00 is due when exercising the DU option of a PIW (Property Inspection Waiver)
o  When Desktop Underwriter recommends an exterior-only inspection (2055), an upgrade to interior and exterior inspection is required when:
§  The appraiser cannot adequately view the property from the street
§  The property does not conform to the neighborhood
§  There are apparent adverse physical deficiencies or environmental conditions
§  Data sources do not provide sufficient information about the property to perform the appraisal
§  Purchase transactions when the transaction is the result of the sale of an REO property
§  The last transaction on the property being purchased was a foreclosure
§  The condition rating is C5 or C6 based on the UAD and the data sources used to develop the appraisal or the appraiser's observations during the exterior-only property inspection
§  The quality rating is Q6 based on the UAD and the data sources used to develop the appraisal or the appraiser's observations during the exterior-only inspection
o  When DU recommends a 2075 Property Inspection, an upgrade to interior & exterior inspection is required when:
§  The appraiser cannot adequately view the property from the street
§  The property does not conform to the neighborhood
§  Apparent adverse physical deficiencies or environmental conditions are observed
§  The appraiser needs additional information about the physical conditions of the property
§  Purchase transactions when the transaction is the result of the sale of an REO property
§  The last transaction on the property being purchased was a foreclosure
o  When Desktop Underwriter recommends a Property Inspection Waiver, an upgrade to interior and exterior inspection is required when:
§  The subject property does not conform to the neighborhood
§  There are apparent adverse physical deficiencies or environmental conditions
§  The property consists of new or proposed construction. Escrows for postponed improvements are not permitted.
§  Home inspection report or other information in the file indicates the presence of adverse condition and/or marketability factors
§  Purchase transactions when the transaction is the result of the sale of an REO property
·  The last transaction on the property being purchased was a foreclosure
Age of Credit
Documents / ·  Appraisals are good for 4 months old on the date of the note and mortgage (B4-1.2-01)
·  Credit documents include credit reports, and employment, income, and assets documentation must be no more than four months old on the date the note is signed (B1-1-03)
AUTOMATED
UNDERWRITING / ·  DU Accept/Eligible findings only. Final DU certificates indicating anything less than Accept/Eligible will not be permitted
· Manual Underwriting is not permitted under any circumstance.
ASSETS / ·  All funds used for down payment, funds to close and reserves must be an acceptable liquid asset, sourced and documented as per standard FannieMae guidelines and/or DU findings. (E.G. VOD’s are acceptable sources of asset documentation providing FannieMae requirements are met).
·  Uniform Trust for Minor accounts: Funds held in a custodial account for the benefit of a minor (E.G. UTMA, UGMA, etc) may be considered a liquid asset providing the following criteria is met:
o  Tax consequences must be taken into consideration.
o  Ownership of funds:
§  Borrower must be listed as the custodian on the account
§  Applicable state laws will apply: Some state laws dictate that these funds automatically become the child's funds at the age of 18, others at age of 21. Copy of birth certificate is required.
o  Funds must be liquidated and file documentation must include applicable paper trail for liquidation of funds, etc.
·  Gift funds: are NOT acceptable for Second Home or Investment property transactions Gift funds may not be used to meet reserve requirements.
o  For Primary residences,
· Business funds: may be utilized for down payment. closing costs or reserves subject to the following requirements:
o  Borrower must own 100% of business or receive written authorization from other owners that funds will be accessible to Borrower
o  Underwriter must complete business cash flow analysis to determine there is no negative impact to the business operation resulting from the withdrawal of funds.
BORROWER MINIMUM CONTRIBUTION / LTV/CLTV/or HCLTV Ratio / Occupancy & Property Type / Minium Borrower Contribution Requirement from Borrower’s Own Funds
> 80% / 1 Unit Principal Residence $417,000 / No Minimum Borrower own funds required. All funds can come from an allowable gift donor
2-4 Unit Principal Residence
High-Balance Mortgage Loans -
(Ln Amt > $417,000) / 5% Borrower’s own funds minimum contribution required.
80% / 1-4 Unit Principal Residence / No Minimum Borrower own funds required. All Funds can come from an allowable gift donor.
FEATURED TOPIC / CRITERIA
BORROWER
ELIGIBILITY / ·  Standard SPM Borrower vesting and Social Security Number policies apply.
·  Citizenship/Residency requirements: U.S. citizens, Permanent Resident Aliens and Non-Permanent Resident Aliens.
Oh
Borrower
Residency Documentation / ·  Permanent Resident Aliens and Non-Permanent Resident Aliens financing terms are same as U.S. Citizens/ E.G. they may purchase Primary, Second Home or Investment properties
·  Individuals classified under Diplomatic Immunity, Temporary Protected Status, Deferred Enforced Departure or Humanitarian Parole are not eligible
·  Eligible Expanded Residency Documentation Policy options: UW may approve Permanent or Non-Permanent Resident Aliens unable to meet standard SPM citizenship/ residency policy if the following documentation requirements are met:
Expanded Permanent Resident Documentation
Type / Documentation requirements
Pass port / Documentation evidencing the Borrower is currently applying for the green card and hasunexpired passport stamped “processed for I-551, Temporary evidence of lawful admission for permanent residence. Valid until______. Employment authorized”