All policy changes and updates are referenced below to the appropriate section of the CLG. These policy changes are effective 07/28/2021 unless otherwise noted.
To review the program guidelines changes made July 15, 2021, or earlier, please follow this link to the archived Correspondent Lending Guides.
In 5.16 (Alternative Qualification Requirements), the paragraphs regarding exceptions have been changed to the following:
An exception request is not required if alternative qualifications are used to qualify a loan under Chenoa Fund™ requirements. Gift funds may not be used to meet the PITI reserves alternative requirement. All borrowers on a loan must meet alternative qualification requirements if alternative qualification requirements are used to qualify for a Chenoa Fund™ product. Reach out to our Scenario Desk if you have questions about whether a specific loan meets alternative qualifications.
New section 5.16.1 (Exceptions), has been added:
All Programs: Exceptions may be considered on a case-by-case basis by our Exceptions Team if alternative qualifications or switching DPA products is not sufficient to help a loan qualify for Chenoa Fund™. Exception requests should be submitted while registering a loan on the client site; instructions on how to do this are available in our Training Series under the “Miscellaneous” category. For loans already registered, email firstname.lastname@example.org and include the following in a secure email:
- CBCMA Loan Number
- A detailed description of the exception and compensating factors
- The following documents:
- 1st mortgage 1003/URLA (completed with Lender information)
- Credit Report
- VA Residual Income
(While the loan is not a VA loan, this document is used to determine risk in our exception review process. You may find an Excel sheet to help you complete a Residual Income test on the Documents and Tools page of our website.)
Exceptions place a non-cumulative hit of 0.25 on loans where the borrower has a FICO score ranging from 600–659. Exception requests will not be considered for loans where the qualifying credit score is less than 620 and there is no present housing payment. Loans must be registered in our lender portal for an exception request to be considered valid; responses to exceptions not registered in our lender portal are considered hypothetical until the loan has been registered and the exception recorded.
Section 5.35 (Mortgage Credit Certificates [MCC]) accidentally duplicated the text of another section of the guidelines. It has been restored to its original text:
All Programs: Allowed. No longer required to be pre-approved prior to submission. All MCCs must be calculated according to FHA guidelines by adding the credit as income, not a payment reduction.