Title goes here

Introduction to Ginnie Mae

FHA Product Mix including

No Credit Score/Non-Traditional Credit

Requirements

Credit Policy 10/12/2015

Session Agenda

Please Note: We are covering only the basics in this session with special emphasis on the new option to originate loans for borrowers with no credit scores who meet non-traditional tradeline and manual underwriting requirements! Effective Dates & Considerations Benefits of Ginnie Mae Direct Product Basic overview of main product characteristics Credit Score Requirements Credit Reports with No Scores Requirements for No Credit Score Pricing Non-traditional account requirements Requirements for adding non-traditional trades to credit report Requirements for individual creditor verifications Definition of Satisfactory/Acceptable Credit Max allowable DTI ratios Reserve Requirements Tips for File Assembly Fairway FHA Resources HUD FHA Resources Fairway Contacts FAQs

Effective Date

As was announced on Fridays companywide call 10/08, our new Ginnie Mae FHA product mix is available this morning 10/12 for pricing a rate locks!

Youll find the new Ginnie Mae FHA product matrix on the intranet.

You will also find our Ginnie Mae FHA FAQs helpful!

A few important items to point out about the new product:

You will no longer see pricing for the FIMC Custom FHA product as of this morning. You may lock all of your new FHA loans under the new Ginnie Mae Direct Products effective as of this morning!

If the FHA case assignment date is prior to 09/14/2015, your loan must meet product requirements and restrictions of the FIMC Custom FHA Product Matrix and guidelines of the Handbook 4155.

If the FHA case assignment date is on or after 09/14/2015, the loan must meet all product requirements and restrictions of the new Ginnie Mae FHA product matrix and guidelines of the Handbook 4000.1.

FHA loans in your pipeline already locked under FIMC Custom FHA product must meet product requirements and restrictions of the FIMC Custom product Matrix and will be underwritten to either the 4155 or 4000.1 guidelines dependent upon the case assignment date.

https://external.fairwaymc.com/Fairway FHA Custom Product/FHA Ginnie Mae Purchase, No Cash Out Refinance Product Matrix.aspxhttps://my.fairwaymc.com/creditpolicy/Miscellaneous Wiki Pages/New Ginnie Mae FHA Product Tip Drip.aspxhttps://external.fairwaymc.com/Fairway FHA Custom Product/FHA FIMC Custom Product Matrix.aspxhttps://external.fairwaymc.com/Fairway FHA Custom Product/FHA Ginnie Mae Purchase, No Cash Out Refinance Product Matrix.aspxhttps://external.fairwaymc.com/Fairway FHA Custom Product/FHA FIMC Custom Product Matrix.aspx

Why Ginnie Mae Direct?

Pricing

Easier to maintain product matrix & guidelines (not as many investors to consider)

Control of overlays- More efficient underwriting directly to FHA Handbook guidelines with minimal managed Fairway Policy overlays

NOTE: We will GRADUALLY remove some of the existing FIMC product overlays (Realistically we cant remove them ALL today but we will be working over time to add more product features and remove more overlays)

Product Overview

This product at time of rollout will have the EXACT same overlays and restrictions as the existing FIMC Custom FHA Product EXCEPT we have incorporated your ability to originate loans for borrowers with no credit scores!

Thats right! The new product will allow you to serve borrowers who have no credit/no scores as long as they can meet non-traditional credit requirements! More about those specific details a bit later in the presentation

Lets Review

General Product Standards

Amortization Terms

Standard Loan Limits: 30, 20, 15 year fixed

High Balance Loan Limits: 30 year fixed

ARMS not eligible.

Temporary buydowns not eligible.

Loan Purpose

Purchase Existing Construction New Construction Under 1 Year Old Under Construction Proposed Construction

No Cash Out Refinance which consists of: Rate Term Refinance Simple Refinance

Cash Out Refinance Note: The FHA Streamline Refinance Product is already available as Ginnie Mae Direct so this training will not cover the FHA streamlines.

Ineligible Characteristics

Assumptions Construction financing Construction to Permanent Mortgage Program Concurrent Short Sales Cooperative Properties Deed restricted properties Down-payment Assistance EEM- Energy Efficient Mortgage Gift from Non-profit Organizations Good Neighbor Next Door Program Grants GPM- Graduated Payment Mortgage Hawaiian Homelands High Cost (Section 32) Loans Hope for Homeowners Program Home Equity Conversion Mortgage (HECM) Investment Occupancy Manufactured Housing Military Impact Area Loans Officer/Teacher/Good Neighbor Next Door Program

Negative Equity Refinance Program New Secondary Financing Refinance of Section 235 Mortgage Resale Restrictions Restructured Mortgage Payoff Secondary Residence Occupancy Section 8 Housing Vouchers. Section 184-Indian Tribal Lands Section 223(e) Urban Areas Section 238(c) Military Impact Zones Section 251-Adjustable Rate Mortgages (ARMs) Section 203(h) Disaster Victims Section 203(k) Rehabilitation Section 247-Hawaiian Homelands Section 255-Home Equity Conversion Mortgages (HECM) Shared Equity Loans Short Refinance Streamline Refinances (separate product matrix) Temporary Buydowns Texas 50 (a) (6) Unexpired foreclosure redemption Urban Renewal

The following characteristics are not eligible under our Ginnie Mae product at initial rollout:

https://external.fairwaymc.com/FHA Guide Loan Terms/Assumptions.aspxhttps://external.fairwaymc.com/Retail FHA Guide Loan Purpose/Construction to Permanent Financing.aspxhttps://external.fairwaymc.com/Retail FHA Guide Property/Deed Restrictions and Resale Restrictions.aspxhttps://external.fairwaymc.com/Retail FHA Guide Assets Downpayment Reserves/Downpayment Assistance, Grants.aspxhttps://external.fairwaymc.com/Retail FHA Guide Assets Downpayment Reserves/Downpayment Assistance, Grants.aspxhttps://external.fairwaymc.com/Retail FHA Guide Assets Downpayment Reserves/Downpayment Assistance, Grants.aspxhttps://external.fairwaymc.com/FHA Specialty Products Guidelines/EEM-Energy Efficient Mortgage.aspxhttps://external.fairwaymc.com/FHA Specialty Products Guidelines/EEM-Energy Efficient Mortgage.aspxhttps://external.fairwaymc.com/FHA Specialty Products Guidelines/EEM-Energy Efficient Mortgage.aspxhttps://external.fairwaymc.com/FHA Specialty Products Guidelines/EEM-Energy Efficient Mortgage.aspxhttps://external.fairwaymc.com/FHA Specialty Products Guidelines/Good Neighbor Next Door.aspxhttps://external.fairwaymc.com/Retail FHA Guide Assets Downpayment Reserves/Downpayment Assistance, Grants.aspxhttps://external.fairwaymc.com/Retail FHA Guide Property/Manufactured Housing.aspxhttps://external.fairwaymc.com/FHA Specialty Products Guidelines/Good Neighbor Next Door.aspxhttps://external.fairwaymc.com/Retail FHA Guide Property/Deed Restrictions and Resale Restrictions.aspxhttps://external.fairwaymc.com/FHA Guide Loan Terms/Temporary Buydowns.aspx

Loan Limits Minimum: No minimum required.

Maximum: For most products, the maximum loan amount is the lesser of the maximum allowable loan purpose calculation OR the maximum loan limit for the area.

Number of Units Low Cost Areas High Cost Areas Alaska & Hawaii

The FHA national low cost area

mortgage limits, which are

currently set at 65 percent of the

national conforming limit of

$417,000 for a one-unit Property,

are, by property unit number, as

follows:

For areas designated as high

cost areas, the maximum FHA-

insured mortgage limits (ceiling)

by property unit number are as

follows:

Mortgage limits for the special

exception areas of Alaska (AK),

Hawaii (HI) are adjusted by FHA

to account for higher costs of

construction. These four special

exception areas have a higher

ceiling as follows:

One Unit $271,050 $625,500 $938,250

Two Unit $347,000 $800,775 $1,201,150

Three Unit $419,425 $967,950 $1,451,925

Four Unit $521,250 $1,202,925 $1,804,375

Purchases 96.5 of the adjusted value for standard max LTV/CLTV

85% of the adjusted value for Identity of Interest

85% of the adjusted value for Tenant/Landlord Transactions

75% of the adjusted value for Non-related non-occupant co-borrower .

75% of the adjusted value for Non-occupant co-borrower for 2-4 unit property.

The maximum LTV ratios vary depending upon the type of Borrower, type of transaction (purchase or refinance), program type, and stage of construction. The maximum mortgage amount that FHA will insure on a purchase is calculated by multiplying the appropriate LTV percentage by the Adjusted Value. For purchases, the Adjusted Value is the lesser of purchase price less any inducements to purchase or the Property Value.

Maximum Loan Amount-Purchases of New Construction: The maximum LTV is determined in accordance with New Construction program specific requirements.

Simple Refinance

97.75 percent for Principal Residences

For refinance transactions, the maximum loan amount is determined in accordance with refinance program-specific requirements.

LTV/CLTV

https://external.fairwaymc.com/Retail FHA Guide Property/Identity of Interest Transactions.aspxhttps://external.fairwaymc.com/Retail FHA Guide Property/Identity of Intere