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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

Guidelines

Calculators

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 $806,500
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

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