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Home » Less Than 5% Down » 5% Down High Balance Conventional Loan » Guideline
Conventional High Balance Loans.
Down Payments As Low As 5%!
High Cost Areas, with Low Down Payment Loan Requirements
Conventional HomeStyle Renovation Loan Program Guidelines
Loan Purpose
- Purchase
- Refinance: Limited Cash Out Refinance
Credit Profile
- 620 minimum middle credit score for all borrowers on the loan with a DU Approve/Eligible finding
- 700 minimum middle credit score with less than 20% down AND a debt-to-income ratio over 45%
- Desktop Underwriting findings must be “Approved/Eligible”
- Waiting period after a major negative credit event:
High Balance Conventional Loan Type | BK – Chapter 7 | BK – Chapter 13 Discharged | BK – Chapter 13 Dismissal | Foreclosure* | Short Sale, Deed-In-Lieu, Pre-Foreclosure* | Modified Mortgage* |
---|---|---|---|---|---|---|
Standard | 4 years | 2 years | 4 years | 7 years | 4 years | 2 years |
With Extenuating Circumstance | 2 years | 2 years | 4 years | 3 years (requires 10% down) | 4 years | No waiting period |
* If a property was included AND surrendered (i.e. property wasn’t retained and the debt wasn’t reaffirmed) in a Chapter 7 Bankruptcy, the borrower may potentially be able to defer to the Chapter 7 waiting period Vs. the Foreclosure waiting period.
Loan Amount and Down Payments
- Loan amount must exceed 2018 high balance conventional loan limits of $766,550
- Minimum down payment based on property type:
- Primary residence:
- 1 Unit – 5% down
- 2 Unit – 15% down
- 3-4 Units – 25% down
- 2nd Home: 10% down
- Non-owner Occupant:
- 1 Unit – 15% down
- 2-4 Unit – 25% down
- Primary residence:
Ratios
- As determined by Automated Underwriting System. Requires a Desktop Underwriter “Approved/Eligible”
Property Type
- Eligible property types:
- Owner-occupied only
- 1 to 4 unit properties
- Fannie Mae/Freddie Mac approved condos
- PUD’s (i.e. Townhomes)
- Hobby Farms permitted. Call for details
- Log cabin homes provided Appraisal Report lists other comparable log cabin homes that have recently sold in the area
- Ineligible property types:
- Condotels
- Timeshares
- Cooperatives
- Commercial property types
- Land
- Manufactured housing
Co-signers
- Non-occupant co-signers are permitted for primary residence purchases
Gifts/Down Payment
- Owner occupied 1 unit property – entire down payment can come from a gift
- Owner occupied 2 to 4 unit property and 2nd home – minimum 5% down payment must come from the borrowers own funds
- Owner occupied and 2nd home – if gift is 20% or more, then there is no minimum borrower down payment requirement
- Non-owner occupied properties – no gift giving allowed
- Gift of equity permitted for primary and 2nd home purchase
Seller Closing Cost Assist
- Owner occupied and Second Homes:
- Less than 10% down – 3% max seller assist
- More than 10% down – 6% max seller assist
- More than 25% down – 9% max seller assist
- Non-owner occupied:
- 2% max seller assist
Documentation
- All loans must be fully documented per Agency Guidelines
- For Self Employed borrowers, in addition to Agency Guidelines, two years of the tax returns (personal and business) along with a year-to-date profit and loss (unaudited)
Terms
- Amortization period: 30, 25, 20, 15, 10 year fixed rate and 10, 7, 5, 3 year adjustable rate