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CMG MI Program Guideline Changes for All Programs – Effective 1/8/10
Effective January 8, 2010, CMG Mortgage Insurance Company (CMG MI) is making changes to our program guidelines.
Please note that CMG MI is also introducing new guidelines on insuring Construction-to-Perm loans that become effective 1/8/10 as well.
Please click here to see our complete Conforming & Non-Conforming Guidelines, effective 1/8/10.
Please click here to see the new guidelines on insuring Construction-to-Perm loans.
Please review Credit Risk Bulletin #1-10 for more details of the 1/8/10 changes.
Please read our Guidelines Comparison for additional information on the 1/8/10 changes or visit www.cmgmi.com/guidelines.
For CMG MI’s Comparable Credit Criteria, please click here.
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
- LTV/Loan Amount – For loan amounts greater than $417,000
- Owner-Occupied
- 90% LTV to $625,500
- Minimum 720 loan representative credit score
- 85% LTV to $729,750
- Minimum 720 loan representative credit score
- CMG Single Premium Payment Plan
- Minimum 700 loan representative score
- Ineligible: Second Home and Investment Property
- Loan Type – Clarification that CMG MI will NOT insure ARMs with a fixed period of less than 1 year
- Short Term ARMs (1 to 3 years fixed period)
- Purchase Only
- Owner-Occupied
- Minimum 700 loan representative credit score
- Ineligible: Short Term ARMs less than 1 year fixed period, Loan Amounts > $417,000
- Loan Purpose
- Rehabilitation – loan that provides the borrower with funds to cover the costs to renovate, remodel or repair a property. The loan purpose may either be a purchase or a rate/term refinance
- Loan must meet CMG MI’s current guidelines in addition to Fannie Mae’s Selling Guide and Freddie Mac Seller Guide guidelines and documentation for rehabilitation loans with these additional criteria:
- Maximum 95% LTV to $417,000
- Owner-Occupied
- Purchase and Rate/Term Refinance
- 1-unit single-family detached and attached
- The borrower must be an individual; no corporations, not-for-profits, or agencies allowed
- The borrower may not be the contractor or provide repairs as a “do-it-yourself” option
- A recertification of the property value by an appraiser is required in addition to the certificate of completion. The recertification of value must be added to the loan file documentation
- 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 700 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
- Ineligible – Removed reference to Construction-To-Perm as ineligible
- Existing first lien was refinanced within the last 12 months as a cash out transaction
- Eligible Borrowers
- Non-permanent Resident Aliens (the right to live and work in the US temporarily verified by a valid permit/Visa) are eligible, subject to:
- Maximum 95% LTV to $417,000
- Owner-Occupied
- Purchase and Rate/Term Refinance
- 1-unit single-family detached and attached
- Minimum 2 years’ established history of residency, employment and credit within the US
- Heavy emphasis will be placed on employment and likelihood of continuation
- Assets for down payment, closing costs and reserves should be verified on deposit in a US financial institution for at least 6 months
- The credit union must have acceptable documentation in the loan file to verify the non-permanent resident alien status
- Employment History
- Self-Employed
- Minimum 24 months’ history of self-employment verified by most recent 2 years’ personal and business tax returns
- Business tax returns are not required if the borrower meets all of the following:
- The borrower has been self-employed in the same business for at least five years
- The borrower’s individual tax returns show an increase in income from self-employment in the past two years
- All down payment and closing costs are from the borrower’s personal funds; funds from business account(s) cannot be used
- 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. Borrowers who have a lengthy and in-depth credit history (multiple years and multiple active, inactive and closed accounts) do not have a credit score validity issue, although the minimum loan representative credit scores specified in these guidelines nonetheless apply
- Comparable Credit Criteria (available at www.cmgmi.com) may be used in lieu of credit score to determine eligibility only if one of the following conditions apply:
- Property is located in New York
- The credit score is unusable due to inaccurate information
Loans using the Comparable Credit Criteria must be submitted to the CMG MI Underwriting Network for review
- Debt Ratios
- Maximum 45%, regardless of DU or LP recommendations
NOTE: Loans that exceed the above debt-to-income ratio criteria are not eligible for delivery via the CMG MI delegated channel and must be submitted to the CMG MI Underwriting Network for review
- Liquid Assets
- Verification of Deposit with a two month average balance provided, or
- Two months’ current bank statements per account, reporting all transactions and end balances, and satisfactory explanation for any large deposits or increases
- Eligible Properties
- Owner-Occupied
- 1-unit single-family detached and attached
- 2-units
- Maximum 95% LTV to $533,850
- Minimum 680 loan representative credit score
- Condominiums
- Maximum 95% LTV to $417,000
- Minimum 680 loan representative credit score
- Maximum 85% LTV to $625,500
- Minimum 700 loan representative credit score
- Must be Fannie Mae/Freddie Mac warrantable
- Ineligible: Short Term ARMs (1 to 3 years fixed period)
- Co-ops subject to the CMG MI Cooperative Housing Master Policy filed with state
- Maximum 90% LTV to $417,000
- Minimum 680 loan representative credit score
- Ineligible: Short Term ARMs (1 to 3 years fixed period)
- Manufactured Homes
- Maximum 90% LTV to $417,000
- Minimum 680 loan representative credit score
- Ineligible: Single-Wide Manufactured Homes
- Ineligible: 3-4 units, condotels, timeshare/interval ownership, mixed use, builder inventory and spec homes
- 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
- 2-Unit Properties -- The Small Residential Income Property appraisal Report (Fannie Mae Form 1025/Freddie Mac Form 1072 dated March 2005) and The Operating Income Statement (Fannie Mae Form 216); OR
- Manufactured Homes -- Manufactured Home Appraisal Report, Form 1004C/70B; 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 1004MC/Freddie Mac Form 71, dated March 2009)
Changes to CMG MI’s Distressed Markets – Effective January 8, 2010
The 1/8/10 changes include significant updates to CMG MI’s Distressed Markets Tier 1 and Tier 2 Policies and List.
Questions? Please contact your CMG MI Account Executive. |