genworth underwriting guideline updates... · home possible/home possible advantage simply...

Genworth Mortgage Insurance

Genworth Mortgage Insurance Credit Policy December 10, 2018

Bulletin 2018-11

Genworth Underwriting Guideline Updates

Effective today, our Underwriting Guidelines have been updated to align with recent GSE changes. All changes

are effective for mortgage insurance applications received on or after December 10, 2018.

Simply UnderwriteSM and Standard Guideline changes include:

o The eligibility criteria for 3-4 Unit Primary/ Purchase/ Rate-Term Refinance transactions has expanded to allow: 95% / 700/ DTI per AUS/ FHFA High Cost Loan Limit (up to $1MM)

o Clarified the guidelines for sweat equity eligibility: For HomeReady® and Home Possible® loans: ▪ The maximum LTV is 95% ▪ Minimum borrower contribution is 3% borrower own funds and 2% sweat equity

Simply UnderwriteSM Guideline changes include:

o Simply Underwrite loan amounts have been expanded to support Freddie Mac’s Home Possible Super Conforming loan product eligibility.

Standard Guideline Changes include:

o Cash out refinances for primary residences have been expanded to allow a loan amounts up to $500,000 with a 90%/ 700/ 45% DTI

o Construction Permanent – Genworth’s maximum eligible construction loan limit has increased to $1MM; Additional restrictions apply see full underwriting guidelines.

o Loan Amount, Credit Score and DTI Updates: As FHFA has updated the GSE loan limits for 2019, Genworth has also made some changes to Standard guideline loan limits and in some instances minimum credit scores and DTIs. ▪ Standard Guideline Eligibility guidelines have been divided into guidelines for loan amounts < $750,000

and guidelines for loan amounts > $750,000 ▪ Loan amounts < $750,000 now have DTIs that are either 45% or 50% ▪ For all loan amounts > $750,000 the maximum DTI has increased from 38% or 41% to 43%

Please distribute this information to your organization. For assistance, contact your Genworth representative or

the ActionCenter® at 800 444.5664. As always, we appreciate your business.

Home Possible® is a registered trademark of Freddie Mac. HomeReady® is a registered trademark of Fannie Mae.

This summary is intended for reference only and is subject to the complete terms and conditions of Genworth’s Underwriting Guidelines. In case of differences with this document, the Underwriting Guidelines will govern. Genworth Mortgage Insurance © 2018 Genworth Financial, Inc. All Rights Reserved Underwriting Guidelines Change Summary for December 10, 2018 Page 1 of 3

Genworth Mortgage Insurance Underwriting Guidelines Changes and Clarifications Summary

December 10, 2018 The following guideline changes and clarifications will be effective for MI applications received on or after December 10, 2018 unless otherwise specified. The Underwriting Guidelines with complete details will be updated and available on our website, new.mi.genworth.com on December 10, 2018.

Topic Old Guideline New Guidelines

Cash-out Refinance Transactions

Standard Guidelines: For primary residences, the maximum LTV is 85%.

Standard Guidelines: For primary residences, expanding the maximum LTV to 90% with the following:

• Maximum Loan Amount - $500,000

• Maximum 45% DTI

• Minimum credit score 700

Construction-to-Permanent (CTP) Loans

Standard Guidelines: Maximum loan amount $850,000.

Standard Guidelines: Expanding maximum loan amount to $1,000,000.

3 – 4 unit Properties Simply Underwrite and Standard Guidelines: Minimum credit score - 720

Simply Underwrite and Standard Guidelines: Lowering minimum credit score to 700

Super conforming Mortgages

Simply Underwrite Guidelines: Super conforming Mortgages are ineligible

Simply Underwrite Guidelines: Expanding guidelines to permit super conforming Mortgages for Home Possible loans receiving an Accept Risk Class.

GSE 2019 Conforming Loan Limits

Not addressed Simply Underwrite: Updating Genworth guidelines to align with GSE 2019 conforming loan limits with the following exception:

• The maximum loan amount for 3 – 4 unit properties in AK & HI will remain at $1,000,000.

Standard Guidelines: Several changes have been made to simplify our Standard Guideline matrices. Refer to the referenced sections for complete details.

Minimum credit score for loans with DTI > 45%

Simply Underwrite and Standard Guidelines: A representative credit score of 700 or greater is required for all loans with DTI greater than 45%.

Simply Underwrite and Standard Guidelines: A representative credit score of 700 or greater is no longer required for loans with DTI greater than 45%.

Minimum Borrower Contribution

Standard Guidelines:

• < $700,000: 3%

• $700,001 - $850,000: 5%

• $850,000 - $1,000,000: 10%

• > $1,000,000/90% LTV: 10%

• > $1,000,000/85% LTV: 15%

Standard Guidelines: Several changes have been made to our minimum borrower contributions based on loan amount. Refer to the referenced sections for complete details.

https://new.mi.genworth.com/



Reserves Standard Guidelines:

• < $700,000: 2 months

• $700,001 or > FHFA in HI - $850,000: 6 months

• $850,001 - $1,000,000: 9 months

• $1,000,001 - $1,500,000: 12 months

• > $1,500,000: 24 months

Standard Guidelines:

• < $750,000 – 2 months

• $750,001 - $1,000,000: 6 months

• $1,000,001 - $1,500,000: 12 months

• > $1,500,000: 24 months

DTI Calculation Not addressed Simply Underwrite and Standard Guidelines: Adding guidance for DTI calculation for pricing purposes

Borrower Eligibility Not address Simply Underwrite and Standard Guidelines: Adding clarity regarding Deferred Action for Childhood Arrival (DACA) eligibility.

Fannie Mae’s Rural High Needs Appraisal Waiver

Not addressed Simply Underwrite and Standard Guidelines: Fannie Mae’s Rural High Needs Appraisal Waiver is ineligible

Fannie Mae’s High LTV Refinance and Freddie Mac’s Enhanced Relief Refinance Mortgages

Not addressed Simply Underwrite and Standard Guidelines: Adding requirements for Fannie Mae’s High LTV Refinance and Freddie Mac’s Enhanced Relief Refinance Mortgages

Fannie Mae’s Collateral Underwriter (CU)

Not addressed Simply Underwrite and Standard Guidelines: Adding acceptance of Fannie Mae’s Collateral Underwriter (CU)

Sweat Equity Simply Underwrite and Standard Guidelines: Sweat equity is not allowed, however, it is allowed if associated with a HomeReady loan.

Simply Underwrite and Standard Guidelines: Clarifying policy for loans with sweat equity. Sweat equity is permitted for HomeReady and Home Possible loans with the following:

• Maximum 95% LTV

• Minimum borrower contribution 3% borrower own funds, 2% sweat equity

Rate/Term Refinance Transactions

Simply Underwrite and Standard Guidelines: Funds for the borrower’s use may not exceed 2% of the principal amount of the new loan amount or $2,000, whichever is less.

Simply Underwrite and Standard Guidelines: For Freddie Mac’s no cash out refinance Mortgage, Genworth will allow the greater of 1% or $2,000 cash back.

Freddie Mac Condo Project Advisor

Not addressed Simply Underwrite and Standard Guidelines: Loan files containing a Condo Project Advisor feedback certificate in which a Project Waiver Request (PWR) has been granted may be submitted to Genworth for consideration on a case-by-case basis.



Community Land Trusts and Deed/Resale Restrictions

Not addressed Simply Underwrite and Standard Guidelines: Genworth will insure Community Land Trust Mortgages and properties with Deed or Resale Restrictions per GSE guidelines.

Home Possible/Home Possible Advantage

Simply Underwrite and Standard Guidelines: Home Possible Advantage allowed for HFA and Affordable Housing loans

Simply Underwrite and Standard Guidelines: Removing references to Home Possible Advantage as a result of Freddie Mac’s Home Possible updates.

Appraisal Documentation

Simply Underwrite and Standard Guidelines: The appraisal form and applicable addenda, such as 1004MC/Form 71, must meet GSE requirements.

Simply Underwrite and Standard Guidelines: Removing references to Form 1004MC/Form 71 – Appraisal Market Conditions Addendum as no longer a GSE requirement.

Appraisal Waivers Simply Underwrite: Property Inspection Waiver (PIW)

Simply Underwrite: Updating references to DU property inspection waivers (PIWs) to appraisal waiver.

Simply UnderwriteSM

Eligibility RecapSimply Underwrite applies to eligible loans with a Desktop Underwriter® recommendation or Loan Product Advisor® risk classification. Contact your sales representative or the ActionCenter® at 800 444.5664 with any questions.

Primary Residence — Purchase, Rate/Term Refinance and Construction-to-Permanent1

Property Type Max LTV Max Loan Amount Min Credit Score Max DTI2

Single family (detached & attached), Condominiums, Cooperatives, Manufactured Housing

97% Agency Base Conforming

620Per DU & Loan

Product Advisor

95% FHFA High Cost

2 units 95% FHFA High Cost

3 units 95% FHFA High Cost up to $1,000,000700

4 units 95% FHFA High Cost up to $1,000,000

Second Home — Purchase, Rate/Term Refinance and Construction-to-PermanentSingle family (detached & attached), Condominiums, Cooperatives, Manufactured Housing

90% FHFA High Cost 620Per DU & Loan

Product Advisor

Investment Property — Purchase and Rate/Term Refinance

Single family (detached & attached), Condominiums

85% FHFA High Cost 700Per DU & Loan

Product Advisor

Desktop Underwriter®, DU®, HomePath® Properties, HomeReady® and HomeStyle® Renovation are registered trademarks of Fannie Mae. DU Refi Plus™ is a trademark of Fannie Mae. Loan Product AdvisorSM, Freddie Mac Relief Refinance — Open AccessSM and Freddie Mac Enhanced Relief RefinanceSM are service marks of Freddie Mac. Home Possible® is a registered trademark of Freddie Mac. This summary is intended for reference only and is subject to the complete terms and conditions of Genworth’s Underwriting Guidelines at new.mi.genworth.com. In case of differences with this document, the Underwriting Guidelines will govern.

1 Construction-to-Permanent is ineligible with property types other than single family (detached) or Manufactured Housing.2 Genworth utilizes the DTI excluding the mortgage insurance for pricing purposes, the total DTI including mortgage insurance is used for guideline eligibility.

Eligibility In addition to Approve/Eligible and Accept/Eligible loans, the following GSE AUS recommendations or risk classifications may be eligible for Simply Underwrite:• Approve/Ineligible for HomePath® Property• See Simply Underwrite sections 4.1 and 6.1 in the Underwriting Guidelines for complete details • HomeReady® and Home Possible® are eligible for Simply Underwrite. For more information, see section 4.2 in our Underwriting Guidelines.

Exclusions from Simply Underwrite

• Fannie Mae High LTV Refinance Option and Freddie Mac Enhanced Relief Refinance MortgageSM

• DU Refi PlusTM and Freddie Mac Relief RefinanceSM — Open Access• Lender–negotiated guideline variances, waivers or programs unless approved by Genworth. However, Fannie Mae’s published HomeStyle® Renovation Mortgages and cooperative share mortgages are eligible for Simply Underwrite.

Other Underwriting Requirements

• Genworth does not insure the following: Properties located in Guam, Puerto Rico and Virgin Islands• Follow Sections 4.1 and 6.1 Simply Underwrite requirements in our Underwriting Guidelines• Appraisal waivers are eligible when offered by DU for rate/term refinance transactions receiving a DU Approve/Eligible recommendation

NoteReferences to FHFA (Federal Housing Finance Agency) pertain to HERA High–Cost Areas Loan Limits which can be found at FHFA Loan Limits.

Effective December 10, 2018

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©2018 Genworth Financial, Inc. All rights reserved.Genworth Mortgage Insurance Corporation

http://new.mortgageinsurance.genworth.com

http://www.fhfa.gov/datatools/downloads/pages/conforming-loan-limits.aspx


Property TypeMax LTV Max Loan Amount Min Credit Score

Max DTIDelegated Non–Delegated

Single family (detached & attached), Condominiums, Cooperatives

97% $500,0001 620 50%

97% $700,000 720 45%

95% $750,000 620 50%

Manufactured Housing 95% $500,0001 620 50%

2 units1 95% $620,200 620 45% 50%

3 units1 95% $749,650 700 45%

4 units1 95% $931,600 700 45%

Primary Residence — Cash-Out Refinance


90% $500,0001 700 45%

85% $500,0001 620 45% 50%

85% $750,000 720 45%

Second Home — Purchase, Rate/Term Refinance and Construction-to-Permanent2


90% $500,0001 620 45% 50%

90% $750,000 700 45%

Manufactured Housing 90% $500,0001 620 45% 50%

Second Home — Cash–Out Refinance


85% $750,000 740 45%

Investment Property — Purchase and Rate/Term RefinanceSingle family (detached & attached), Condominiums

85% $750,000 700 45%

1 Maximum loan amounts in AK & HI are $726,525 for 1 unit, $930,300 for 2 units and $1,000,000 for 3 — 4 units. 2 Construction–to–Permanent is ineligible with property types other than Single family (detached) or Manufactured Housing.


• Loans may be underwritten using delegated underwriting authority, as allowed, or submitted for Genworth underwriting • Maximum cash–out amount: $200,000 • ARM loan types with initial fixed period less than 3 years are ineligible with 2 units; all ARM loan types are ineligible for 3–4 units.

NoteReferences to FHFA (Federal Housing Finance Agency) pertain to HERA High–Cost Areas Loan Limits which can be found at FHFA Loan Limits.

This summary is intended for reference only and is subject to the complete terms and conditions of Genworth’s Underwriting Guidelines at new.mi.genworth.com. In case of differences with this document, the Underwriting Guidelines will govern.

Standard GuidelinesEligibility RecapStandard Guidelines apply to loans that are not eligible for Simply Underwrite. Contact your sales representative or the ActionCenter® at 800 444.5664 with any questions.


9859396.1218


http://www.fhfa.gov/datatools/downloads/pages/conforming-loan-limits.aspx


Simply UnderwriteSM

Eligibility Recap for Housing Finance AgenciesSimply Underwrite applies to eligible loans with a Desktop Underwriter® recommendation or Loan Product Advisor® risk classification. Contact your sales representative or the ActionCenter® at 800 444.5664 with any questions.


Property Type Max LTV/CLTV Max Loan Amount Min Credit Score Max DTI2

Single family (detached & attached), Condominiums, Cooperatives, Manufactured Housing

97% / 105% Agency Base Conforming

620Per DU &

Loan Product Advisor95% / 105% FHFA High Cost

2 units 95% / 105% FHFA High Cost

3 units95% / 105%

FHFA High Cost up to $1,000,000700 45%

4 units FHFA High Cost up to $1,000,0001 Construction-to-Permanent is ineligible with property types other than Single family (detached) or Manufactured Housing. 2 Genworth utilizes the DTI excluding the mortgage insurance for pricing purposes, the total DTI including mortgage insurance is used for guideline eligibility.

Eligibility In addition to Approve/Eligible and Accept/Eligible loans, the following GSE AUS recommendations or risk classifications are eligible for Simply Underwrite:• Approve/Ineligible for HomePath® Property• See Simply Underwrite sections 4.2 and 6.1 of the Underwriting Guidelines for complete details

Desktop Underwriter:HFA Preferred™ or HomeReady®

• Loan must be processed in DU® as either HFA Preferred™ or HomeReady®, according to Fannie Mae’s directions• Follow Fannie Mae’s published program guidelines for HFA Preferred or HomeReady through DU and Exclusions from Simply Underwrite for HFAs found in this chart.

Loan Product Advisor:Home Possible®, or HFA Advantage®

• Loan must be processed in Loan Product Advisor with the applicable Home Possible®, Home Possible Advantage® or HFA Advantage® offering identifiers• Follow Freddie Mac’s published Home Possible, Home Possible Advantage or HFA Advantage program guidelines and Exclusions from Simply Underwrite for HFAs found in this chart.

Eligibility Exclusions

• Fannie Mae High LTV Refinance Option and Freddie Mac Enhanced Relief Refinance MortgageSM • DU Refi PlusTM & Freddie Mac Relief RefinanceSM — Open Access• Lender–negotiated guideline variances, waivers or programs unless approved by Genworth. However, Fannie Mae’s published HomeStyle® Renovation Mortgages and cooperative share mortgages, HFA Preferred and HFA Advantage are eligible for Simply Underwrite.


• Genworth does not insure the following: Properties located in Guam, Puerto Rico and Virgin Islands • Follow sections 4.2 and 6.1 Simply Underwrite in our Underwriting Guidelines for complete details• Appraisal waivers are eligible when offered by DU for rate/term refinance transactions receiving a DU Approve/Eligible recommendation.

Note References to FHFA (Federal Housing Finance Agency) pertain to HERA High–Cost Areas Loan Limits which can be found at FHFA Loan Limits.


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Desktop Underwriter®, DU®, HomePath® Properties, HomeStyle® Renovation, and Community Seconds®, and HomeReady® are registered trademarks of Fannie Mae. DU Refi PlusTM, HFA PreferredTM are trademarks of Fannie Mae. Home Possible®, Affordable Seconds®, Home Possible Advantage®, HFA Advantage®, and Loan Product Advisor® are registered trademarks of Freddie Mac. Freddie Mac Relief RefinanceSM is a service marks of Freddie Mac. This summary is intended for reference only and is subject to the complete terms and conditions of Genworth’s Underwriting Guidelines at new.mi.genworth.com. In case of differences with this document, the Underwriting Guidelines will govern.

http://www.fhfa.gov/DataTools/Downloads/Pages/Conforming-Loan-Limits.aspx


Standard Guidelines Eligibility Recap for Housing Finance AgenciesStandard Guidelines apply to eligible loans that are not eligible for HFA Simply Underwrite. Contact your sales representative or the ActionCenter® at 800 444.5664 with any questions.


Property Type Max LTV/CLTV Max Loan Amount1 Min Credit ScoreMax DTI3

Delegated Non–Delegated


97% / 105% $500,0001 620 50%

Manufactured Housing 95% / 105% $500,0001 620 50%

2 units1 95% / 105% $620,200 620 45% 50%

3 units1 95% / 105% $749,650 700 45%

4 units1 95% / 105% $931,600 700 45%1 Maximum loan amounts in AK & HI are $726,525 for 1 unit, $930,300 for 2 units and $1,000,000 for 3 – 4 units.2 Construction–to–Permanent is ineligible with property types other than Single Family (detached) or Manufactured Housing. 3 Genworth utilizes the DTI excluding the mortgage insurance for pricing purposes, the total DTI including mortgage insurance is used for guideline eligibility.

HFA Preferred or HomeReady Follow Fannie Mae’s published program guidelines for manually underwritten HFA Preferred or HomeReady loans

Home Possible or HFA Advantage Mortgages

Follow Freddie Mac’s published Home Possible or HFA Advantage program guidelines for manual underwriting

This summary is intended for reference only and is subject to the complete terms and conditions of Genworth’s Underwriting Guidelines at new.mi.genworth.com. In case of differences with this document, the Underwriting Guidelines will govern.

For loans other than HomeReady, HFA Preferred or Home Possible or HFA Advantage that are eligible through an HFA program, follow the LTV/Loan Limit/Score eligibility grid above and the remaining guidelines below.

Documentation Full documentation for credit, income, employment and assets

Minimum Borrower Contribution

• 1 unit & DTI ≤ 45%: 1% minimum borrower contribution• 1 unit & DTI > 45%: 3% minimum borrower contribution Notes: • Borrower’s minimum contribution can be met by acceptable sources per GSE guidelines, including personal gifts, gifts of equity, donations from entities, funds from employer assistance programs and Community Seconds®/ Affordable Seconds®. • Sweat Equity is permitted for one-unit properties with a minimum 5% down payment. The borrower must contribute at least 3% of their own funds (2% sweat equity). The maximum LTV is 95% for HomeReady and Home Possible loans. (Genworth overlay for Home Possible loans). • 2 – 4 units: Minimum 3% borrower contribution

Subordinate Financing • Subordinate financing must meet Fannie Mae’s Community Second or Freddie Mac’s Affordable Seconds guidelines

Reserves• 2 months reserves• Genworth underwrite: 0 months reserves are eligible for 1 unit with a score ≥ 660 and DTI ≤ 45%• For 2 – 4 units, reserves may not be gifted

Loan Type

• Fixed rate/fixed payment• Fully amortizing ARMs, with initial adjustments ≥ 5 yrs • Temporary buydowns (3–2–1 or 2–1 structures buydown structures permitted)• Ineligible: Balloons and ARM loan types for 3 – 4 unit properties

Valid Credit Score• Minimum of three (3) tradelines / credit references, open or closed, that have been evaluated at least 12 months • Credit references may be a combination of tradelines, traditional or nontraditional credit• At least one borrower on the loan must have a valid credit score. See section 7.5 of Underwriting Guidelines.

Nontraditional Credit Maximum 95%/105% LTV/CLTV. Max 41% DTI. 1 unit. Nontraditional credit must be underwritten by Genworth.

Standard Guidelines

• Applies to loans that are not eligible for Simply Underwrite, including manually underwritten loans without a GSE automated underwriting system recommendation/risk classification• May be underwritten as delegated, as allowed, or submitted for Genworth underwriting• Must meet the underwriting criteria found within our Underwriting Guidelines


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