Amended Tax Returns The Original filed return with the amended return is required. Tax returns must have been amended prior to the application and execution of purchase contract. Evidence of payment (if any) is required. CANNOT BE AMENDED TO QUALIFY.
Assets / Reserves Follow A.U.S. Additional documentation at Underwriter discretion
Bonus, Overtime, and
Commission Income
Borrower must have a two-year consecutive history of receiving bonus/overtime/commission, and the income must be likely to continue.
CHDAP Maximum CLTV 103%, Maximum DTI 43%; Homebuyer education must be completed by at least one occupying borrower.
— The homebuyer education course must be taken by either:
—— Online via the eHomeAmerica website. http://ehomeamerica.org/
—— In-person through NeighborWorks America.
—— Typically, the homebuyer education course cost $125.00, is an eight hour course and is monitored by the counseling agency from start to finish.
–One Year Warranty Required. Borrower must complete “CalHFA Borrower & Lender Affidavit of Loan Analysis Comparison” form.
–Minimum FICO 640 and 660 for Manufactured Homes.
• Borrower contribution no longer required by CalHFA, however, borrower must meet the minimum down payment requirement for FHA. Example: FHA requires a minimum of 3.5% down payment, therefore, three percent (3%)
from CHDAP and .5% borrower’s own funds, i.e. gift, checking/savings, etc.
–Three years tax returns are required.
—–Effective March 16, 2015, CalHFA requires borrowers to meet citizenship, alienage and immigration status eligibility as outlined on CalHFA Citizenship, Immigration checklist. This form is located in FAST under InfoCenter
(Forms). Note: the more restrictive of the first or second TD requirements apply.
Employed by Family Member Requires full documentation regardless of AUS. Two (2) years tax returns, W-2’s and one full months of paystubs, WVOE and evidence borrower owns no more than 25% interest in the company.
Gifts Permitted Donor must be immediate family member, fiancé or domestic partner or as allowed by HUD FHA guidelines.
Gift Equity A gift of equity is acceptable. The donor must provide a gift letter. Only family members may provide a gift of equity. ML 2012-3: Child, Parent or Grandparent; Spouse, legally adopted son or daughter, including a child who is placed with the borrower by an authorized agency for legal adoption, Foster child; Brother, Stepbrother, Sister, Stepsister, Uncle, and Aunt. Note: In-laws are NOT acceptable donors for gifts of equity.
Income documentation Follow AUS findings report. For manually UW loans- full 30 days’ paystubs, 2 years W-2 and written VOE.
Joint Accounts If an account is held jointly a letter will be required from the joint account holder to verify our borrower has 100% access to those funds. This is required regardless of the relationship.
Large Deposits AUS and Manual Underwriting: Total unverifiable cumulative deposits exceeding $1,000 or twenty-five (25%) percent of borrower’s gross income per month may be requested by the underwriter to explain and source.
If the source of the deposit is readily identifiable on the account statement(s), such as a direct deposit from an employer (payroll), the Social Security Administration, or IRS or state income tax refund, or a transfer of funds between verified accounts, no further explanation or documentation is required.
LIPA (City of Los Angeles Down Payment Assistance)
The City of Los Angeles Housing and Community Investment Department (HCIDLA) offers purchase assistance financing to eligible first-time, low income homebuyers seeking to purchase a home in the City of Los Angeles. HCIDLA provides assistance in the form of a deferred loan for purchase assistance which includes down payment, closing costs and acquisition financing, Up to $60,000 for purchase assistance, down payment and closing cost (loan funds may be used to cover closing costs up to five percent (5%) of the purchase price). NOTE: LIPA loan may not be greater than the First Mortgage. Minimum FICO score 620. Refer to Residential Bancorp’s FHA guidelines for additional requirements. Loan Officers who want to originate the LIPA program must have attend the training program through the City of Los Angeles and submit evidence of attendance in the underwriting loan package.
Rental Income Requires 2 year’s rental history with filed Sch E on 1040’s; exception may be given if property was purchased after the latest filed tax return. An executed lease agreement will be required with evidence of current month’s rent
deposit.
Verification of Assets For DU approved loans, 1 month bank statement or VOD with an average balance. For Manually UW loans, 2 months consecutive bank statements or VOD with 1 current bank statement.