All policy changes and updates are referenced below to the appropriate section of the CLG. These policy changes are effective 06/22/2021 unless otherwise noted.
CBCMA has compiled all of its announcements related to COVID-19 into one section immediately following the Recent Updates and Announcements section of the Correspondent Lending Guide.
To review the program guidelines changes made June 3, 2021, or earlier, please follow this link to the archived Correspondent Lending Guides.
CBC Mortgage Agency would like to remind its correspondents that exception requests need to be submitted prior to closing. Please ensure that your loan meets Chenoa Fund overlays and, if necessary, submit an exception request prior to closing. (It is preferred that exception requests be submitted through the online lender portal [where documents can easily be uploaded securely] either during registration or afterward, but exceptions may also be submitted to email@example.com.) Exception requests may require a pricing adjustment.
Account executives are always happy to provide training or to discuss specific loans to help determine whether an exception is needed on a loan. Feel free to reach out to your account executive or to firstname.lastname@example.org to be connected with your account executive.
Program Guidelines Changes
In 5.17 (Present Housing Expense & Verification of Housing Payment), it has been clarified that rental documentation requirements (a CBCMA overlay) will be determined by the occupying borrower with the higher FICO score. Note that this only applies to rental documentation requirements—all other requirements will still be based off the borrower with the lower FICO score. (As an example, consider a loan with two occupying borrowers, one with a FICO of 620 and no present housing payment, and the other with a FICO of 640 and a present housing payment, and the DPA is the DPA Edge Repayable Second. The rental documentation requirements will be determined by the borrower with the higher FICO, which in this case means that only a verification of rent will be required. The rest of the requirements will be as normal for a borrower with a 620 FICO score.)
All Programs: All applications should contain a “present housing payment” unless the borrower is not currently making a housing payment. Present housing expense verification requirements are determined by the occupying borrower with the highest FICO score—all other requirements are determined by the occupying borrower with the lowest FICO score.
Occupying borrowers in the 620–639 FICO range making a present housing payment in the form of rent at the time of application: A twelve-month verification of housing payment is required to document rent paid. This is regardless of the program. However, borrowers renting from relatives or individuals (i.e. not LLCs or management companies) must provide twelve (12) months of cancelled checks or bank statements to document the payment history.
Occupying borrowers in the 620–639 FICO range and making a housing payment may have a housing gap of up to ninety (90) calendar days before closing. (This gap may be included in the 12-month verification of housing payment or expense.) A letter of explanation will be required if the housing gap is larger than thirty (30) calendar days. For example, a borrower may have left a previous rental agreement and then lived rent-free with family in preparation for closing on a new home.
Occupying borrowers in the 640–659 FICO range making a present housing payment in the form of rent at the time of application: Only verification of the amount of the current housing expense is required. Acceptable forms of documentation may include, but are not limited to, a copy of the rent/lease agreement, a bank statement and/or a cancelled check tracking payments for the amount of reported rent, a letter from the landlord, or a filled-out VOR (if a VOR is provided, the rental history will be used in credit qualification).
Occupying borrowers in the 620–639 FICO band not making a present housing payment: A Verification of Rent will be required to be completed by the landlord or homeowner which must document that no rent is required to be paid.
Occupying borrowers in the 660+ FICO band: A VOR is not required unless AUS findings require it.
These guidelines are intended to ensure that CBCMA can analyze payment shock and its potential impact on future default mitigation overlays that CBCMA may implement.
In 5.27 (Maximum LTV/CLTV and Subordinate Financing), language has been clarified. CBCMA will only accept DU on FNMA loans and the LTV amount may be 90–97%:
- Only DU® may be used:
- LTV 90–97%
- CLTV to 105%
Up to 105% only if the subordinate financing meets the requirements in Fannie Mae’s Selling Guide for loans with higher CLTVs.
The maximum DPA financing is 3.5% of the purchase price or appraised value, whichever is lower. Borrowers may increase their minimum required investment (down payment) by putting down additional funds above and beyond the assistance received through the Chenoa Fund program as long as the loan-to-value ratio does not go below 90%.