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CMG MI Program Guideline Changes for All Programs – Effective 11/6/09
Effective November 6, 2009, CMG Mortgage Insurance Company (CMG MI) is making a change to our program guidelines.
Changes to CMG MI’s Conforming & Non-Conforming Guidelines, Effective 11/6/09
- LTV/Loan Amount – For loan amounts up to $417,000
- Second Home
- 90% LTV to $417,000
- Minimum 720 loan representative credit score
- Loan Type
- Short Term ARMs (1 to 3 years fixed period)
- Purchase Only
- Owner-Occupied
- Minimum 700 loan representative credit score
- Ineligible: Loan Amounts > $417,000
- Balloons
- Owner-Occupied/Second Home: Term ≥ 5 years
- Subordinate Financing
- Second Home – new subordinate lien must be fully amortized
- Loan Purpose
- Cash-Out Refinance– loan where the proceeds exceed the outstanding principal balance of existing lien plus reasonable and customary closing costs; pay off or subordinate a junior lien which is seasoned less than 12 months whether or not the borrower received any cash from the transaction; all debt consolidation is treated as Cash-Out
- Owner-Occupied
- Maximum 85% LTV to $417,000
- Minimum 720 loan representative credit score
- Maximum $75,000 cash back to borrower at close
- Ineligible: Property listed for sale in the last 12 months, property purchased within the last 12 months, Second Home, Investment Property, Condominium, Co-op, Third Party Originations, Short Term ARMs (1 to 3 years fixed period), and Self-Employed Borrower
- Rate/Term Refinance
- Ineligible: Short Term ARMs (1 to 3 years fixed period)
- Credit History
- Although a credit score can be generated with one trade line, CMG MI does not consider the credit score valid unless at least three open and active trade lines are evaluated for a minimum of 12 months
- If the minimum payment for a revolving debt is not stated on the credit report, five percent (5%) of the outstanding balance must be used when calculating the debt ratio or supporting documentation must be provided to support actual minimum payment
- If the minimum payment for an installment debt or student loan is not stated on the credit report, a copy of the contract or payment letter must be provided to support actual payment
- Qualifying Rate
- Short Term ARMs (1 to 3 years fixed period) qualify using the greater of the initial rate or the Fully Indexed Accrual Rate (FIAR)
- Minimum Down Payment
- Second Home
- Minimum 10% of borrower funds must be verified as part of the transaction
- Maximum Interested Party/Seller Contributions & Concessions
- Second Home
- Maximum 6% not to exceed the lesser of the property’s sales price or appraised value
- Eligible Properties
- Owner-Occupied
- Condominiums
- Maximum 95% LTV to $417,000
- Minimum 700 loan representative credit score
- Ineligible: Short Term ARMs (1 to 3 years fixed period)
- Co-ops
- Ineligible: Short Term ARMs (1 to 3 years fixed period)
- Second Home
- 1-unit single-family detached and attached
- Ineligible: Condominiums, co-ops, 2-4 units, manufactured homes, condotels, timeshare/interval ownership, mixed use, builder inventory and spec homes, and third party originations
- Multiple Loans to a Borrower – Remove from Second Home "currently insured with CMG MI"
- Within the 3 loans to a borrower limit, CMG MI will only accept the maximum amount on the following:
- Primary Home – 1 loan maximum
- Second Home – 1 loan maximum
- Investment Property – 1 loan maximum (currently insured with CMG MI)
- Appraisal – Clarification on requirements
- All appraisals must be in writing or electronic. Standard format is as follows:
- Single-family and Detached PUDs – Uniform Residential Appraisal Form (Fannie Mae Form 1004/Freddie Mac Form 70, dated 2005); OR
- Condominiums – Individual Condominium or PUD Unit Form (Fannie Mae Form 1073/Freddie Mac Form 465, dated March 2005); OR
- Cooperative Housing Units – Individual Cooperative Interest Appraisal Report – Fannie Mae Form 2090 and the Exterior-Only Individual Cooperative Interest Appraisal Report – Fannie Mae Form 2095; AND
- Market Conditions Addendum to the Appraisal Report – Uniform Residential Appraisal Form (Fannie Mae Form 1004 MC/Freddie Mac Form 71, dated March 2009)
The following should be noted:
- Changes supersede previously issued CMG MI approved program variations
- Changes apply regardless of submission channel to CMG MI
- Changes apply regardless of any Automated Underwriting System (AUS) recommendation or decision
For more information, please see the links below:
Changes to CMG MI’s Distressed Markets – Effective November 6, 2009
The 11/6/09 changes include significant updates to CMG MI’s Distressed Markets Policy and List.
Questions? Please contact your CMG MI Account Executive. |