bank statement, foreign national, asset depletion loan requirements

Document	Document date	Verified unchanged
carringtoncorrespondent.com-CMS-Correspondent-Seller-Guide.pdf	2026-07-16 inferred	—
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf	2026-08-06 inferred	—
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf	2026-08-25 inferred	—
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf	2026-08-25 inferred	—
carringtoncorrespondent.com-Carrington-Investor-Advantage-Program-Matrix.pdf	2026-08-06 inferred	—
carringtoncorrespondent.com-Carrington-Investor-Advantage-Program-Underwriting-Guidelines.pdf	2026-08-06 inferred	—
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Matrix.pdf	2026-08-06 inferred	—
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Underwriting-Guidelines.pdf	2026-08-06 inferred	—

Maximum Loan Amount

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · 2026-08-25

				A			B			C			Program Requirements Minimum Loan Amount(1) $100,000 Maximum Loan Amount $1,500,000 $500,000 ≤ 60% LTV Maximum Cash Out(2) $250,000 > 60% LTV Residual Income(3) $1,500 Tradelines(2) Std/Ltd (1) NY loans: Primary Residence and Second Homes must pass the NY Subprime test. (2) See Additional Program Requirements for details Max Property Type Requirements LTV Single Family/PUD/Condo 80% 2-4 Unit 75% Modular Homes 80% Rural – Purchase and Rate/Term 75% Rural – Cash-Out 70% Condotel - Purchase & Rate/Term 75% Condotel - Cash Out 65%		Program Requirements
Loan Amount	Reserves	FICO	Purchase & R/T		Cash Out	Purchase & R/T		Cash Out	Purchase & R/T		Cash Out			Minimum Loan Amount(1)		$100,000
≤ $750,000	3 Months	640	80%		70%	75%		70%	60%		55%			Maximum Loan Amount		$1,500,000
		620	75%		70%	70%		65%	60%		55%			Maximum Cash Out(2)		$500,000 ≤ 60% LTV $250,000 > 60% LTV
		580	70%		65%	70%		60%	60%		55%
		550	65%		60%	65%		60%	60%		55%			Residual Income(3)		$1,500
> $750,000 up to $1,500,000	6 Months	640	75%		65%	70%		60%		-		-		Tradelines(2)		Std/Ltd
		620	70%		65%	65%		60%		-		-
		580	65%		60%	60%		55%		-		-
		550	60%		55%	55%		55%	-		-			Property Type Requirements			Max
																	LTV
Most recent 12-months Mortgage/Rental History			0x60x12			0x120x12			0x30 since event						Single Family/PUD/Condo		80%
															2-4 Unit		75%
FC/SS/DIL/Mod/1x120 Seasoning			24 Months			12 Months			Settled						Modular Homes		80%

Investment Properties

50% DTI

• Grades A & B Matrix LTVs less 5%

• FICO ≥ 620 • Grade A and B Only

• FICO ≥ 620

• 6 Months Reserves

• Grade A and B Only

• No Subordinate Financing

• Standard Tradelines

• First Time Investors: Min 620 FICO

• Business Purpose Loans

Interest-Only

• Grade A Only

• FICO ≥ 620

• Not available in West Virginia

• Retail Loans Only: Refer to Illinois section for additional restrictions

Std/Ltd

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · 2026-08-25

				A			B			C			Program Requirements Minimum Loan Amount(1) $100,000 Maximum Loan Amount $1,500,000 $500,000 ≤ 60% LTV Maximum Cash Out(2) $250,000 > 60% LTV Residual Income(3) $1,500 Tradelines(2) Std/Ltd (1) NY loans: Primary Residence and Second Homes must pass the NY Subprime test. (2) See Additional Program Requirements for details Max Property Type Requirements LTV Single Family/PUD/Condo 80% 2-4 Unit 75% Modular Homes 80% Rural – Purchase and Rate/Term 75% Rural – Cash-Out 70% Condotel - Purchase & Rate/Term 75% Condotel - Cash Out 65%		Program Requirements
Loan Amount	Reserves	FICO	Purchase & R/T		Cash Out	Purchase & R/T		Cash Out	Purchase & R/T		Cash Out			Minimum Loan Amount(1)		$100,000
≤ $750,000	3 Months	640	80%		70%	75%		70%	60%		55%			Maximum Loan Amount		$1,500,000
		620	75%		70%	70%		65%	60%		55%			Maximum Cash Out(2)		$500,000 ≤ 60% LTV $250,000 > 60% LTV
		580	70%		65%	70%		60%	60%		55%
		550	65%		60%	65%		60%	60%		55%			Residual Income(3)		$1,500
> $750,000 up to $1,500,000	6 Months	640	75%		65%	70%		60%		-		-		Tradelines(2)		Std/Ltd
		620	70%		65%	65%		60%		-		-
		580	65%		60%	60%		55%		-		-
		550	60%		55%	55%		55%	-		-			Property Type Requirements			Max
																	LTV
Most recent 12-months Mortgage/Rental History			0x60x12			0x120x12			0x30 since event						Single Family/PUD/Condo		80%
															2-4 Unit		75%
FC/SS/DIL/Mod/1x120 Seasoning			24 Months			12 Months			Settled						Modular Homes		80%

Investment Properties

50% DTI

• Grades A & B Matrix LTVs less 5%

• FICO ≥ 620 • Grade A and B Only

• FICO ≥ 620

• 6 Months Reserves

• Grade A and B Only

• No Subordinate Financing

• Standard Tradelines

• First Time Investors: Min 620 FICO

• Business Purpose Loans

Interest-Only

• Grade A Only

• FICO ≥ 620

• Not available in West Virginia

• Retail Loans Only: Refer to Illinois section for additional restrictions

No Seasoning

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · 2026-08-25

				A			B			C			Program Requirements Minimum Loan Amount(1) $100,000 Maximum Loan Amount $1,500,000 $500,000 ≤ 60% LTV Maximum Cash Out(2) $250,000 > 60% LTV Residual Income(3) $1,500 Tradelines(2) Std/Ltd (1) NY loans: Primary Residence and Second Homes must pass the NY Subprime test. (2) See Additional Program Requirements for details Max Property Type Requirements LTV Single Family/PUD/Condo 80% 2-4 Unit 75% Modular Homes 80% Rural – Purchase and Rate/Term 75% Rural – Cash-Out 70% Condotel - Purchase & Rate/Term 75% Condotel - Cash Out 65%		Program Requirements
Loan Amount	Reserves	FICO	Purchase & R/T		Cash Out	Purchase & R/T		Cash Out	Purchase & R/T		Cash Out			Minimum Loan Amount(1)		$100,000
≤ $750,000	3 Months	640	80%		70%	75%		70%	60%		55%			Maximum Loan Amount		$1,500,000
		620	75%		70%	70%		65%	60%		55%			Maximum Cash Out(2)		$500,000 ≤ 60% LTV $250,000 > 60% LTV
		580	70%		65%	70%		60%	60%		55%
		550	65%		60%	65%		60%	60%		55%			Residual Income(3)		$1,500
> $750,000 up to $1,500,000	6 Months	640	75%		65%	70%		60%		-		-		Tradelines(2)		Std/Ltd
		620	70%		65%	65%		60%		-		-
		580	65%		60%	60%		55%		-		-
		550	60%		55%	55%		55%	-		-			Property Type Requirements			Max
																	LTV
Most recent 12-months Mortgage/Rental History			0x60x12			0x120x12			0x30 since event						Single Family/PUD/Condo		80%
															2-4 Unit		75%
FC/SS/DIL/Mod/1x120 Seasoning			24 Months			12 Months			Settled						Modular Homes		80%

Investment Properties

50% DTI

• Grades A & B Matrix LTVs less 5%

• FICO ≥ 620 • Grade A and B Only

• FICO ≥ 620

• 6 Months Reserves

• Grade A and B Only

• No Subordinate Financing

• Standard Tradelines

• First Time Investors: Min 620 FICO

• Business Purpose Loans

Interest-Only

• Grade A Only

• FICO ≥ 620

• Not available in West Virginia

• Retail Loans Only: Refer to Illinois section for additional restrictions

Alternative Income Documentation Types Include

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · 2026-08-25

				A			B			C			Program Requirements Minimum Loan Amount(1) $100,000 Maximum Loan Amount $1,500,000 $500,000 ≤ 60% LTV Maximum Cash Out(2) $250,000 > 60% LTV Residual Income(3) $1,500 Tradelines(2) Std/Ltd (1) NY loans: Primary Residence and Second Homes must pass the NY Subprime test. (2) See Additional Program Requirements for details Max Property Type Requirements LTV Single Family/PUD/Condo 80% 2-4 Unit 75% Modular Homes 80% Rural – Purchase and Rate/Term 75% Rural – Cash-Out 70% Condotel - Purchase & Rate/Term 75% Condotel - Cash Out 65%		Program Requirements
Loan Amount	Reserves	FICO	Purchase & R/T		Cash Out	Purchase & R/T		Cash Out	Purchase & R/T		Cash Out			Minimum Loan Amount(1)		$100,000
≤ $750,000	3 Months	640	80%		70%	75%		70%	60%		55%			Maximum Loan Amount		$1,500,000
		620	75%		70%	70%		65%	60%		55%			Maximum Cash Out(2)		$500,000 ≤ 60% LTV $250,000 > 60% LTV
		580	70%		65%	70%		60%	60%		55%
		550	65%		60%	65%		60%	60%		55%			Residual Income(3)		$1,500
> $750,000 up to $1,500,000	6 Months	640	75%		65%	70%		60%		-		-		Tradelines(2)		Std/Ltd
		620	70%		65%	65%		60%		-		-
		580	65%		60%	60%		55%		-		-
		550	60%		55%	55%		55%	-		-			Property Type Requirements			Max
																	LTV
Most recent 12-months Mortgage/Rental History			0x60x12			0x120x12			0x30 since event						Single Family/PUD/Condo		80%
															2-4 Unit		75%
FC/SS/DIL/Mod/1x120 Seasoning			24 Months			12 Months			Settled						Modular Homes		80%

Investment Properties

50% DTI

• Grades A & B Matrix LTVs less 5%

• FICO ≥ 620 • Grade A and B Only

• FICO ≥ 620

• 6 Months Reserves

• Grade A and B Only

• No Subordinate Financing

• Standard Tradelines

• First Time Investors: Min 620 FICO

• Business Purpose Loans

Interest-Only

• Grade A Only

• FICO ≥ 620

• Not available in West Virginia

• Retail Loans Only: Refer to Illinois section for additional restrictions

Date

carringtoncorrespondent.com-CMS-Correspondent-Seller-Guide.pdf · 2026-07-16

Date

Version

Description of Change

07/16/26

6.2

• Revised Rate Locks for Non-Delegated to state "Loans can be locked after they are approved." (formerly stated Loans can be locked prior to, or after submission.) • Revised Guaranty requirements for investment property loans closing in an LLC.

03/02/26

6.1

Updated Section 9.17 - MERS Requirements to reflect 3 days for MERS transfers (formerly 48 hours).

10/16/25 (12/15/25) (01/05/26)

6.0

Major revisions throughout guide to update with current practices and add Delegated Seller requirements. Updated Carrington corporate address to 500 North State College Boulevard, Suites 1030, 1300 & 1400 Orange, CA 92868. Updated the footer Copyright date to 2026.

05/01/25

5.9

Revised Section 12 - Schedule of Fees to reduce Tax Service Fee to $85 (was $99).

03/17/25

5.8

Revised Seller Guide throughout to remove Agency (Conventional), Government (FHA, USDA and VA) and Delegated Seller requirements.

01/27/25

5.7

• Updated Section 12 - Schedule of Fees with fees effective 2/23/25. • Added Texas Attorney Fee requirements.

10/28/24

5.6

Added Section 5.5 - New York CEMA Transactions and program requirements.

10/21/24

5.5

Revised Section 5. Underwriting > Non-Delegated to remove Carrington Closed End Second Lien loan product as an eligible program.

08/26/24

5.4

Revised Section 5. Underwriting > Non-Delegated to add Carrington Closed End Second Lien loan product as eligible.

07/02/24

5.3

• Revised Section 12 - Schedule of Fees to updated Tax Service Fee to $99. • Added Section 12-2 - Seller Generated Closing Documents.

03/22/24

5.2

Revised 3.1 Rate Locks - Pair-Off Fees requirements to add examples of the calculations.

03/18/24

5.1

• Added new section 10.13 - Loans Closing in a Limited Liability Company (LLC) and requirements table. • Revised section 11.10 – Purchasing to reflect 10 calendar days (formerly business days).

03/14/24

5.0

Revised 3.1 Rate Locks - Pair-Off Fees requirements.

01/08/24

4.9

Revised Lock Expiration to add note: Locks which have been expired for more than 30 days and not delivered for purchase review, are subject to current pricing.

Date

Version

Description of Change

11/15/21

3.9

Added Section 12.3 Early Payment Default Fees.

07/12/21

3.8

Revised section 10.15 - Electronic Signatures to allow e-signing with the exception of the Note, Deed of Trust/Mortgage and Consummation CD which must be wet signed.

06/25/21

3.7

• Updated 1.8 Holiday Schedule to add Juneteenth National Independence Day • Updated Delegated Fee Type table to add USDA fees. Revised Federal Holiday tables to add Juneteenth National Independence Day.

06/16/21

3.6

Added section 5.6 – Loans for Correspondent, Owners, Partners, or Employees.

05/03/21

3.5

Changes throughout to add Delegated Seller requirements.

01/01/21

3.4

Revised section 12.1 – Loan Purchase Fee Table with new fee schedule (NQM $750.00 and Conforming Conventional & Government $600) effective 2/1/20.

10/16/20

3.3

• Added Relock Pricing requirements. • Revised Impound/Escrow Accounts starting escrow balance requirements.

06/16/20

3.2

Revised Loan Payment Mailing Address throughout.

06/03/20

3.1

Revised section 9.3 – Trailing Collateral Documents to update address to Anaheim Records Management.

04/13/20

3.0

• Revised section 5.5 - Ineligible Loan Programs to add New Manufactured Properties • Revised sections 11.10 Purchasing and 11.11 Purchasing into the Month to clarify loan amortization by purchase date.

03/17/20

2.9

Updated section 5.1 – Approved Property Origination States to remove North Dakota.

02/03/20

2.8

• Updated Section 2 Participation Requirements – Approval Process subsections 2.3 - Application Processing/Required Documentation and 2.9 – Recertification. • Updated Section 10.17 – HMDA ULI requirements.

12/17/19

2.7

Updated section 5.1 – Approved Property Origination States to remove Massachusetts.

11/21/19

2.6

Revised section 2.4 – Insurance Policy Requirements.

Date

carringtoncorrespondent.com-CMS-Correspondent-Seller-Guide.pdf · 2026-07-16

Date

Version

Description of Change

11/15/21

3.9

Added Section 12.3 Early Payment Default Fees.

07/12/21

3.8

Revised section 10.15 - Electronic Signatures to allow e-signing with the exception of the Note, Deed of Trust/Mortgage and Consummation CD which must be wet signed.

06/25/21

3.7

• Updated 1.8 Holiday Schedule to add Juneteenth National Independence Day • Updated Delegated Fee Type table to add USDA fees. Revised Federal Holiday tables to add Juneteenth National Independence Day.

06/16/21

3.6

Added section 5.6 – Loans for Correspondent, Owners, Partners, or Employees.

05/03/21

3.5

Changes throughout to add Delegated Seller requirements.

01/01/21

3.4

Revised section 12.1 – Loan Purchase Fee Table with new fee schedule (NQM $750.00 and Conforming Conventional & Government $600) effective 2/1/20.

10/16/20

3.3

• Added Relock Pricing requirements. • Revised Impound/Escrow Accounts starting escrow balance requirements.

06/16/20

3.2

Revised Loan Payment Mailing Address throughout.

06/03/20

3.1

Revised section 9.3 – Trailing Collateral Documents to update address to Anaheim Records Management.

04/13/20

3.0

• Revised section 5.5 - Ineligible Loan Programs to add New Manufactured Properties • Revised sections 11.10 Purchasing and 11.11 Purchasing into the Month to clarify loan amortization by purchase date.

03/17/20

2.9

Updated section 5.1 – Approved Property Origination States to remove North Dakota.

02/03/20

2.8

• Updated Section 2 Participation Requirements – Approval Process subsections 2.3 - Application Processing/Required Documentation and 2.9 – Recertification. • Updated Section 10.17 – HMDA ULI requirements.

12/17/19

2.7

Updated section 5.1 – Approved Property Origination States to remove Massachusetts.

11/21/19

2.6

Revised section 2.4 – Insurance Policy Requirements.

Date

Version

Description of Change

03/26/19

2.0

Revised section 10.2 Original Note Endorsement or Allonge to remove requirements to send a copy of the Preliminary Title Report/Title Commitment to Deutsche Bank.

03/15/19

1.9

Added new section 10.19 with Funding Into the Month requirements.

02/27/19

1.8

Added new section 11.15 with FHA Transfer Date requirements.

02/21/19

1.7

Revised section 11.14 Transfer Letter to remove CMS Mortgagee Clause requirements.

02/01/19

1.6

Added section 3.10 Prepayment Penalties and requirements for charging prepayment penalties on Carrington Advantage Program Non-Owner-Occupied Investment Property loans.

01/23/19

1.5

• Revised section 6.1 Non-Delegated Responsibilities for FHA/VA Loans to add Sponsored TPO requirements. • Revised section 10.16 Home Mortgage Disclosure Act (HMDA) to clarify ULI and LEI must be provided at the time of submission acceptance. • Revised section 11.22 Impound/Escrow Accounts to add Aggregate Escrow Cushion requirements

01/07/19

1.4

• Added section 9.3 – Collateral Trailing Documents • Revised section 10.3 – Document Delivery to add Preliminary Title Report/Title Commitment as a required document. • Revised section 10.4 – Closing Documents to clarify that per diem interest for Conventional loans including Carrington Advantage loans is calculated on a 360-day year.

01/02/19

1.3

• Revised section 2.3 – Application Processing / Required Documentation to remove requirement for minimum of two Investor’s Scorecards. • Removed section 9.2 – Carrington Advantage Product Compliance Review • Revised new section 9. 2 – Collateral Package Documents to add “complete Preliminary Title Report” to list of required documents. • Revised section 11.14 – Transfer Letter to remove: Flood Zone Determination Company as a requirement. • Updated PMI address

12/10/18

1.2

Added Deficiency Fees to section 3.2 – Rate Lock Confirmation

11/20/18

1.1

• Added section 6.3 – Required Documents • Revised sections 9.3 and 10.2 to clarify Carrington Correspondent Team • Added section 10.20 – Appraisals

10/31/18

1.0

New Document

Reserves

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · 2026-08-06

	Program Max LTVs					Primary / Second Homes* Full Doc						Alternative Doc				Investment Full Doc				Alternative Doc				Program Requirements
Loan Amount		Reserves	FICO		Purch & R/T			Cash Out			Purch & R/T		Cash Out		Purch & R/T		Cash Out		Purch & R/T			Cash Out		Mortgage History		1x30x12
≤ $1,000,000		6 Months	720		80%			75%			80%		75%		70%		65%		70%			65%		Foreclosure Seasoning		36 Months
			680		80%			75%			80%		75%		70%		65%		65%			60%		Short Sale/DIL Seasoning		36 Months
			660		80%			70%			80%		70%		70%		65%		65%			60%		Bankruptcy Seasoning		36 Months
			640		75%			70%			75%		70%		65%		60%		65%			55%		1x120 Mortgage Late		36 Months
			620		75%			70%			70%		65%			-		-		-			-	Residual Income(1)		$2,500
> $1,000,000 up to $2,000,000		12 Months		720		80%			75%			80%		70%		70%		65%		65%			60%	Maximum Cash Out		$500,000
				680		75%			70%			75%		70%		65%		60%		60%			55%	Standard Debt Ratio		50%
				660		75%			70%			70%		65%		65%		60%		60%			50%	Minimum Loan Amount(2)		$100,000
				640		70%			65%			65%		60%	60%**			-	55%**				-	Maximum Loan Amount		$2,000,000
				620		70%			65%			-		-		-		-		-			-	(1) Does not apply to Investment Properties (2) NY loans: Primary Residence and Second Homes must pass the NY Subprime test.
	See Max LTV below for Second Homes LTV / *Purchase Only
	Property Type Requirements																								Products
	Property Type						Max LTV			Property Type											Max LTV				30 Year Fixed, 40 Year Fixed, 5/6 ARM, and 7/6 ARM

The following FICO and LTV restrictions apply when any borrower uses an Individual Taxpayer Identification Number (ITIN) instead of a Social Security Number (SSN). Refer also to ITIN section below. ITIN Max LTVs Loan Amount	Flexible Advantage Plus - Program Maximum LTVs	Reserves	FICO		Purchase & Rate/Term	Primary / Second Homes Full Doc	Purchase & Rate/Term	Alternative Doc	Purchase & Rate/Term	Investment Full Doc	Purchase & Rate/Term	Alternative Doc
≤ $1,000,000		6 Months	760		75%		75%		60%		60%
			720		75%		75%		60%		55%
			700		75%		75%		60%		55%
			680		75%		75%		55%		55%
			660		75%		70%			-		-
			640		70%		65%			-		-
> $1,000,000 up to $2,000,000		12 Months		760		70%		70%		60%		55%
				720		65%		65%		55%		50%
				700		65%		60%		55%		50%
				680		60%		55%		50%*		45%*
				660		60%		-		-		-
	*Purchase Only
Carrington Flexible Advantage Plus Program – Guideline Requirements
COLLATERAL

Projects

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · 2026-08-06

COLLATERAL, continued
Condominiums	All attached condominiums must have a valid project review along with a completed CMS Homeowners’ Association Certification (InterIsland HOA Questionnaire). ATTACHED CONDOS: For properties in established condo projects, comparable sales from within the same project as the subject property must be used if the subdivision or project has resale activity. Use of comparable properties located outside of the established subject neighborhood must be explained in the appraisal analysis. For properties in new condo projects, the subject property must be compared to other properties in its general market area as well as to properties within the subject project. The appraiser must select one comparable sale from the subject project and one comparable sale from outside the subject project. The third comparable sale can be from inside or outside of the subject project, provided it is a good indicator of value for the subject property. DETACHED CONDOS: Appraisal must support market acceptance of site condominiums in the subject’s market area. HOA Cert is not required; appraisals for site condos may use the 1004 URAR or 1073 Individual Condominium Unit Appraisal Report. The appraiser should include an adequate description of the project, information about the homeowners’ association fees, and note the quality of the project maintenance. See Carrington Flexible Advantage Underwriting Guidelines for condominium specifications.
Non-Warrantable Condominium Projects	A condominium project that is not approved through the Fannie Mae, FHA, or HOA Certification Review options may be eligible as a non-warrantable condominium project, subject to management review and approval. Refer to the [program] matrix for maximum LTVs. The reason for the project's ineligibility through one of the approval methods must be documented. Examples of generally accepted non-warrantable condo features include: • New projects that lack PERS approval but are generally complete with a sufficient number of units sold or under contract for sale • Projects with investor-owned unit concentrations exceeding 50% • Projects where a single entity owns more than 10% of the units • Projects with commercial space exceeding 25% • Projects with reserve contributions of less than 10% of the annual budgeted HOA dues • Projects with leased amenities, provided the lease does not impede CMS's lien position • Projects with insurance deductibles that exceed 5% • And other non-warrantable reasons Non-warrantable condo projects will be reviewed to ensure the project is operating with an acceptable budget and in a way that doesn't impede the general marketability of the units. Projects that are significantly under-insured, past due on required building inspection, contain construction defects that pose an immediate threat to the occupants or structural integrity of the improvements, or with limited marketability will not be accepted. Refer to page 1 for the Non-Warrantable Condominium Projects LTV limits.

COLLATERAL, continued

Condominiums

All attached condominiums must have a valid project review along with a completed CMS Homeowners’ Association Certification (InterIsland HOA Questionnaire). ATTACHED CONDOS: For properties in established condo projects, comparable sales from within the same project as the subject property must be used if the subdivision or project has resale activity. Use of comparable properties located outside of the established subject neighborhood must be explained in the appraisal analysis. For properties in new condo projects, the subject property must be compared to other properties in its general market area as well as to properties within the subject project. The appraiser must select one comparable sale from the subject project and one comparable sale from outside the subject project. The third comparable sale can be from inside or outside of the subject project, provided it is a good indicator of value for the subject property. DETACHED CONDOS: Appraisal must support market acceptance of site condominiums in the subject’s market area. HOA Cert is not required; appraisals for site condos may use the 1004 URAR or 1073 Individual Condominium Unit Appraisal Report. The appraiser should include an adequate description of the project, information about the homeowners’ association fees, and note the quality of the project maintenance. See Carrington Flexible Advantage Underwriting Guidelines for condominium specifications.

Non-Warrantable Condominium Projects

A condominium project that is not approved through the Fannie Mae, FHA, or HOA Certification Review options may be eligible as a non-warrantable condominium project, subject to management review and approval. Refer to the [program] matrix for maximum LTVs. The reason for the project's ineligibility through one of the approval methods must be documented. Examples of generally accepted non-warrantable condo features include: • New projects that lack PERS approval but are generally complete with a sufficient number of units sold or under contract for sale • Projects with investor-owned unit concentrations exceeding 50% • Projects where a single entity owns more than 10% of the units • Projects with commercial space exceeding 25% • Projects with reserve contributions of less than 10% of the annual budgeted HOA dues • Projects with leased amenities, provided the lease does not impede CMS's lien position • Projects with insurance deductibles that exceed 5% • And other non-warrantable reasons Non-warrantable condo projects will be reviewed to ensure the project is operating with an acceptable budget and in a way that doesn't impede the general marketability of the units. Projects that are significantly under-insured, past due on required building inspection, contain construction defects that pose an immediate threat to the occupants or structural integrity of the improvements, or with limited marketability will not be accepted. Refer to page 1 for the Non-Warrantable Condominium Projects LTV limits.

COLLATERAL, continued
Condotel Projects	Condominium projects that are unable to be warranted due to condotel-like features may be approved as a non-warrantable condo project. Non- warrantable condominium projects require management review and approval. Examples of acceptable condotel-like features include: • Projects located in resort areas or that contain resort-like amenities • Projects with a high concentration of short-term rentals • Projects where the HOA maintains a website or other services to facilitate the listing of available units for rent Projects that exhibit reduced or limited marketability or any of the following features will not generally be approved: • Conversion from a previous motel or hotel use • Mandatory rental or pooling of units • Restrictions on a unit-owner's ability to occupy • Timeshare, fractional, or split ownership of units Refer to page 1 for the Condotel Projects LTV limits.
Requirements for Leasehold Mortgages	• The term of the leasehold estate must run for at least five years beyond the maturity date of the Mortgage unless the fee simple title vests at an earlier date. • The loan must be secured by a first lien in the property improvements and the borrower's rights in the leasehold interest in the land. • The lease estate and the improvements must constitute real property and be subject to the mortgage lien. • All rents, other payments, or assessments under the lease that have become due must be paid. • The lease must not be in default under any provision of the lease and the lessor must not have claimed any such default. • The lease must be recorded in the appropriate land records. • The lease must allow the lease for it (including the lessee's option to purchase) to be assigned, transferred, mortgaged, and subleased an unlimited number of times either without restriction or on payment of a reasonable fee and delivery of reasonable documentation to the lessor. The lease must not require a credit review or impose other qualifying criteria on any assignee, transferee, mortgagee, or sublessee. • The lease must provide protection of the lender's financial interests in the event of a condemnation or similar taking proceeding. Note: If the lease provisions are silent or insufficient, the lender may rely on applicable state law or other written agreement that provides substantially the same protections. • The lease must not include any default provisions that could result in forfeiture or termination of the lease, unless the lease provides the lender with: o the right to receive notice of any lessee default under the lease, and o at least 30 days, at the lender's option, to either cure the default, take over the lessee's rights under the lease, or commence foreclosure. Note: If the property is located in Maryland, it is exempt from this requirement if applicable state law provides for the registration of residential leases with the state and requires the lessor to send written notice of default under the lease to the lender at least 30 days prior to the lessor filing an action for possession. • The lease must not include any provisions that allow the leasehold estate to be extinguished or otherwise impaired by any merger of title between the lessor and lessee without the lender's prior consent.

COLLATERAL, continued

Condotel Projects

Condominium projects that are unable to be warranted due to condotel-like features may be approved as a non-warrantable condo project. Non- warrantable condominium projects require management review and approval. Examples of acceptable condotel-like features include: • Projects located in resort areas or that contain resort-like amenities • Projects with a high concentration of short-term rentals • Projects where the HOA maintains a website or other services to facilitate the listing of available units for rent Projects that exhibit reduced or limited marketability or any of the following features will not generally be approved: • Conversion from a previous motel or hotel use • Mandatory rental or pooling of units • Restrictions on a unit-owner's ability to occupy • Timeshare, fractional, or split ownership of units Refer to page 1 for the Condotel Projects LTV limits.

Requirements for Leasehold Mortgages

• The term of the leasehold estate must run for at least five years beyond the maturity date of the Mortgage unless the fee simple title vests at an earlier date. • The loan must be secured by a first lien in the property improvements and the borrower's rights in the leasehold interest in the land. • The lease estate and the improvements must constitute real property and be subject to the mortgage lien. • All rents, other payments, or assessments under the lease that have become due must be paid. • The lease must not be in default under any provision of the lease and the lessor must not have claimed any such default. • The lease must be recorded in the appropriate land records. • The lease must allow the lease for it (including the lessee's option to purchase) to be assigned, transferred, mortgaged, and subleased an unlimited number of times either without restriction or on payment of a reasonable fee and delivery of reasonable documentation to the lessor. The lease must not require a credit review or impose other qualifying criteria on any assignee, transferee, mortgagee, or sublessee. • The lease must provide protection of the lender's financial interests in the event of a condemnation or similar taking proceeding. Note: If the lease provisions are silent or insufficient, the lender may rely on applicable state law or other written agreement that provides substantially the same protections. • The lease must not include any default provisions that could result in forfeiture or termination of the lease, unless the lease provides the lender with: o the right to receive notice of any lessee default under the lease, and o at least 30 days, at the lender's option, to either cure the default, take over the lessee's rights under the lease, or commence foreclosure. Note: If the property is located in Maryland, it is exempt from this requirement if applicable state law provides for the registration of residential leases with the state and requires the lessor to send written notice of default under the lease to the lender at least 30 days prior to the lessor filing an action for possession. • The lease must not include any provisions that allow the leasehold estate to be extinguished or otherwise impaired by any merger of title between the lessor and lessee without the lender's prior consent.

Leasehold Mortgages

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · 2026-08-06

COLLATERAL, continued
Condotel Projects	Condominium projects that are unable to be warranted due to condotel-like features may be approved as a non-warrantable condo project. Non- warrantable condominium projects require management review and approval. Examples of acceptable condotel-like features include: • Projects located in resort areas or that contain resort-like amenities • Projects with a high concentration of short-term rentals • Projects where the HOA maintains a website or other services to facilitate the listing of available units for rent Projects that exhibit reduced or limited marketability or any of the following features will not generally be approved: • Conversion from a previous motel or hotel use • Mandatory rental or pooling of units • Restrictions on a unit-owner's ability to occupy • Timeshare, fractional, or split ownership of units Refer to page 1 for the Condotel Projects LTV limits.
Requirements for Leasehold Mortgages	• The term of the leasehold estate must run for at least five years beyond the maturity date of the Mortgage unless the fee simple title vests at an earlier date. • The loan must be secured by a first lien in the property improvements and the borrower's rights in the leasehold interest in the land. • The lease estate and the improvements must constitute real property and be subject to the mortgage lien. • All rents, other payments, or assessments under the lease that have become due must be paid. • The lease must not be in default under any provision of the lease and the lessor must not have claimed any such default. • The lease must be recorded in the appropriate land records. • The lease must allow the lease for it (including the lessee's option to purchase) to be assigned, transferred, mortgaged, and subleased an unlimited number of times either without restriction or on payment of a reasonable fee and delivery of reasonable documentation to the lessor. The lease must not require a credit review or impose other qualifying criteria on any assignee, transferee, mortgagee, or sublessee. • The lease must provide protection of the lender's financial interests in the event of a condemnation or similar taking proceeding. Note: If the lease provisions are silent or insufficient, the lender may rely on applicable state law or other written agreement that provides substantially the same protections. • The lease must not include any default provisions that could result in forfeiture or termination of the lease, unless the lease provides the lender with: o the right to receive notice of any lessee default under the lease, and o at least 30 days, at the lender's option, to either cure the default, take over the lessee's rights under the lease, or commence foreclosure. Note: If the property is located in Maryland, it is exempt from this requirement if applicable state law provides for the registration of residential leases with the state and requires the lessor to send written notice of default under the lease to the lender at least 30 days prior to the lessor filing an action for possession. • The lease must not include any provisions that allow the leasehold estate to be extinguished or otherwise impaired by any merger of title between the lessor and lessee without the lender's prior consent.

COLLATERAL, continued

Condotel Projects

Condominium projects that are unable to be warranted due to condotel-like features may be approved as a non-warrantable condo project. Non- warrantable condominium projects require management review and approval. Examples of acceptable condotel-like features include: • Projects located in resort areas or that contain resort-like amenities • Projects with a high concentration of short-term rentals • Projects where the HOA maintains a website or other services to facilitate the listing of available units for rent Projects that exhibit reduced or limited marketability or any of the following features will not generally be approved: • Conversion from a previous motel or hotel use • Mandatory rental or pooling of units • Restrictions on a unit-owner's ability to occupy • Timeshare, fractional, or split ownership of units Refer to page 1 for the Condotel Projects LTV limits.

Requirements for Leasehold Mortgages

• The term of the leasehold estate must run for at least five years beyond the maturity date of the Mortgage unless the fee simple title vests at an earlier date. • The loan must be secured by a first lien in the property improvements and the borrower's rights in the leasehold interest in the land. • The lease estate and the improvements must constitute real property and be subject to the mortgage lien. • All rents, other payments, or assessments under the lease that have become due must be paid. • The lease must not be in default under any provision of the lease and the lessor must not have claimed any such default. • The lease must be recorded in the appropriate land records. • The lease must allow the lease for it (including the lessee's option to purchase) to be assigned, transferred, mortgaged, and subleased an unlimited number of times either without restriction or on payment of a reasonable fee and delivery of reasonable documentation to the lessor. The lease must not require a credit review or impose other qualifying criteria on any assignee, transferee, mortgagee, or sublessee. • The lease must provide protection of the lender's financial interests in the event of a condemnation or similar taking proceeding. Note: If the lease provisions are silent or insufficient, the lender may rely on applicable state law or other written agreement that provides substantially the same protections. • The lease must not include any default provisions that could result in forfeiture or termination of the lease, unless the lease provides the lender with: o the right to receive notice of any lessee default under the lease, and o at least 30 days, at the lender's option, to either cure the default, take over the lessee's rights under the lease, or commence foreclosure. Note: If the property is located in Maryland, it is exempt from this requirement if applicable state law provides for the registration of residential leases with the state and requires the lessor to send written notice of default under the lease to the lender at least 30 days prior to the lessor filing an action for possession. • The lease must not include any provisions that allow the leasehold estate to be extinguished or otherwise impaired by any merger of title between the lessor and lessee without the lender's prior consent.

COLLATERAL, continued
Short-Term Rentals	Short-term rental income from the subject property is acceptable for Investment Properties. Short-term rents must be documented with both of the following: 1. Short term rental income analysis from the appraiser, and 2. AirDNA Rentalizer obtained by CMS. Must contain at least three comparable STR properties within the same zip code, an occupancy rate ≥ 50%, and a market or submarket score ≥ 60. Short-term rents will be reduced by 20% to account for additional expenses associated with these types of properties. Qualifying rental income will be the lowest of 80% of the appraiser’s rent estimate, 80% of the AirDNA gross rents, or 80% of the documented actual rents from the property management service, when available. See the Short-Term Rentals Section of the Underwriting Guidelines for additional details.
All Properties Square Footage	Minimum of 600 square feet of gross living area.
Eligible Property Types	SFR, PUD, Townhome, Condominium, Condotels or Condo Hotels, Non-Warrantable Condominiums, 2-4 Unit, Modular, Leaseholds, Hobby Farms, Agriculturally Zoned Properties, and Mixed-Use Properties.
Ineligible Property Types	Manufactured / Mobile Homes, Co-ops, Log Homes, Farms or Working/Income Producing Farms, Unique properties, Barn conversions or Barndominiums, Properties with active oil, gas, or mineral drilling, excavation, etc., Indian leased land, Hawaiian Homelands, Hawaiian properties in lava zones 1 and 2, Builder Model Leaseback, Non-Conforming zoning regulations that prohibit rebuilding, Illegally zoned properties, Group homes or boarding houses, including convalescent and/or healthcare homes, Nursing homes, Adult care centers, and State-approved medical marijuana producing properties.
Mixed Use Properties	CMS will allow for mortgages that are secured by properties that have a business use in addition to their residential use, such as a property with
	space set aside for a day care facility, a beauty or barber shop, or a doctor’s office.
	The following special eligibility criteria must be met:
	• The property must be a one-unit dwelling that the borrower occupies as a principal residence. • The borrower must be both the owner and the operator of the business. • The property must be primarily residential in nature. • The dwelling may not be modified in a manner that has an adverse impact on its marketability as a residential property.
	The appraisal requirements for mixed-use properties must:
	• provide a detailed description of the mixed-use characteristics of the subject property; • indicate that the mixed use of the property is a legal, permissible use of the property under the local zoning requirements; • report any adverse impact on marketability and market resistance to the commercial use of the property; • report the market value of the property based on the residential characteristics, rather than of the business use or any special business-use modifications that were made; • report that no modifications have been made that would adversely affect marketability
	A confirmation of the appraiser’s review will be performed by a Due Diligence (DD) firm. If the DD firm disagrees with the appraiser, DD findings will
	take priority over appraiser findings.

COLLATERAL, continued

Short-Term Rentals

Short-term rental income from the subject property is acceptable for Investment Properties. Short-term rents must be documented with both of the following: 1. Short term rental income analysis from the appraiser, and 2. AirDNA Rentalizer obtained by CMS. Must contain at least three comparable STR properties within the same zip code, an occupancy rate ≥ 50%, and a market or submarket score ≥ 60. Short-term rents will be reduced by 20% to account for additional expenses associated with these types of properties. Qualifying rental income will be the lowest of 80% of the appraiser’s rent estimate, 80% of the AirDNA gross rents, or 80% of the documented actual rents from the property management service, when available. See the Short-Term Rentals Section of the Underwriting Guidelines for additional details.

All Properties Square Footage

Minimum of 600 square feet of gross living area.

Eligible Property Types

SFR, PUD, Townhome, Condominium, Condotels or Condo Hotels, Non-Warrantable Condominiums, 2-4 Unit, Modular, Leaseholds, Hobby Farms, Agriculturally Zoned Properties, and Mixed-Use Properties.

Ineligible Property Types

Manufactured / Mobile Homes, Co-ops, Log Homes, Farms or Working/Income Producing Farms, Unique properties, Barn conversions or Barndominiums, Properties with active oil, gas, or mineral drilling, excavation, etc., Indian leased land, Hawaiian Homelands, Hawaiian properties in lava zones 1 and 2, Builder Model Leaseback, Non-Conforming zoning regulations that prohibit rebuilding, Illegally zoned properties, Group homes or boarding houses, including convalescent and/or healthcare homes, Nursing homes, Adult care centers, and State-approved medical marijuana producing properties.

Mixed Use Properties

CMS will allow for mortgages that are secured by properties that have a business use in addition to their residential use, such as a property with

space set aside for a day care facility, a beauty or barber shop, or a doctor’s office.

The following special eligibility criteria must be met:

• The property must be a one-unit dwelling that the borrower occupies as a principal residence. • The borrower must be both the owner and the operator of the business. • The property must be primarily residential in nature. • The dwelling may not be modified in a manner that has an adverse impact on its marketability as a residential property.

The appraisal requirements for mixed-use properties must:

• provide a detailed description of the mixed-use characteristics of the subject property; • indicate that the mixed use of the property is a legal, permissible use of the property under the local zoning requirements; • report any adverse impact on marketability and market resistance to the commercial use of the property; • report the market value of the property based on the residential characteristics, rather than of the business use or any special business-use modifications that were made; • report that no modifications have been made that would adversely affect marketability

A confirmation of the appraiser’s review will be performed by a Due Diligence (DD) firm. If the DD firm disagrees with the appraiser, DD findings will

take priority over appraiser findings.

Limited Cash Out

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · 2026-08-06

COLLATERAL, continued Rural Property Determination	Rural properties are permitted on case-by-case basis. Properties are considered rural if the appraiser indicates the subject Location as Rural in the Neighborhood section of the appraisal report. A property may also be determined to be rural by the underwriter based upon their review of the appraisal. All rural properties require additional review and approval by CCM. See Carrington Flexible Advantage Underwriting Guidelines for additional requirements.
Property Flipping	Title transfers within 180 days are subject to additional requirements. See Carrington Flexible Advantage Underwriting Guidelines for specifications.
Resale/Deed Restrictions	Communities where the minimum age requirement is 55 are permitted.
Maximum Number of Financed Properties	There is no limit on the number of other properties borrowers may currently have financed. Second homes and Investment Properties require 2
	months additional reserves for each additional financed property. Additional reserves are not required when the subject property is a primary
	residence. See Carrington Flexible Advantage Underwriting Guidelines for additional requirements.
Maximum Acreage	All occupancy types: maximum 10 acres
Declining Market Values	When the appraiser indicates the subject property is in an area of Declining Property Values, Oversupply Demand/Supply, or Over 6 months
	Marketing Time, the maximum LTV available must be reduced by 5%. The LTV reduction is in addition to any other LTV reductions or restrictions.
TYPES OF FINANCING
General Refinance Requirements	Rate/term refinance and cash-out refinance transactions are allowed. Any refinance of a Carrington Serviced Non-QM loan that has not made at least 12 payments since it was last originated requires review and approval. The loan may be subject to manual pricing if approved. Determining Loan-to-Value If the subject property was purchased between 6 months and 12 months from the note date of the new mortgage, the current appraised value may be used to determine the loan amount when two full appraisals are obtained. The lower of the two values must be used. If the property was purchased ≤ 6 months from the note date of the new mortgage, the lesser of the current appraisal value or previous purchase price plus documented improvements (if any) must be used. The purchase settlement statement and any invoices for materials/labor will be required. Refinances of Short Payoffs are only acceptable for CMS to CMS (Stanwich Portfolio) transactions.
Rate & Term Refi / Limited Cash Out	No seasoning of first mortgage (no minimum number of payments required on current mortgage). If owned less than 12 months but greater than 6 months, the current appraised value can be used to determine loan to value. Two full appraisals are required and the lower of the two values will determine the loan to value. If owned more than 12 months, (recorded date to application date of new loan), the LTV is based on the current appraised value. Maximum cash in hand is the lessor of 2% of the principal of the new loan amount or $2000. Final Closing Disclosures or settlement statements required from any transaction within past 6 months. If the most recent first mortgage transaction on the property was a cash-out refinance within the last 6 months, the new mortgage is not eligible. Note date to note date is used to calculate the 6 months. Must demonstrate there is a Benefit to the borrower by utilizing the CMS benefit to borrower form currently in use through Encompass for refinance transactions.

COLLATERAL, continued Rural Property Determination

Rural properties are permitted on case-by-case basis. Properties are considered rural if the appraiser indicates the subject Location as Rural in the Neighborhood section of the appraisal report. A property may also be determined to be rural by the underwriter based upon their review of the appraisal. All rural properties require additional review and approval by CCM. See Carrington Flexible Advantage Underwriting Guidelines for additional requirements.

Property Flipping

Title transfers within 180 days are subject to additional requirements. See Carrington Flexible Advantage Underwriting Guidelines for specifications.

Resale/Deed Restrictions

Communities where the minimum age requirement is 55 are permitted.

Maximum Number of Financed Properties

There is no limit on the number of other properties borrowers may currently have financed. Second homes and Investment Properties require 2

months additional reserves for each additional financed property. Additional reserves are not required when the subject property is a primary

residence. See Carrington Flexible Advantage Underwriting Guidelines for additional requirements.

Maximum Acreage

All occupancy types: maximum 10 acres

Declining Market Values

When the appraiser indicates the subject property is in an area of Declining Property Values, Oversupply Demand/Supply, or Over 6 months

Marketing Time, the maximum LTV available must be reduced by 5%. The LTV reduction is in addition to any other LTV reductions or restrictions.

TYPES OF FINANCING

General Refinance Requirements

Rate/term refinance and cash-out refinance transactions are allowed. Any refinance of a Carrington Serviced Non-QM loan that has not made at least 12 payments since it was last originated requires review and approval. The loan may be subject to manual pricing if approved. Determining Loan-to-Value If the subject property was purchased between 6 months and 12 months from the note date of the new mortgage, the current appraised value may be used to determine the loan amount when two full appraisals are obtained. The lower of the two values must be used. If the property was purchased ≤ 6 months from the note date of the new mortgage, the lesser of the current appraisal value or previous purchase price plus documented improvements (if any) must be used. The purchase settlement statement and any invoices for materials/labor will be required. Refinances of Short Payoffs are only acceptable for CMS to CMS (Stanwich Portfolio) transactions.

Rate & Term Refi / Limited Cash Out

No seasoning of first mortgage (no minimum number of payments required on current mortgage). If owned less than 12 months but greater than 6 months, the current appraised value can be used to determine loan to value. Two full appraisals are required and the lower of the two values will determine the loan to value. If owned more than 12 months, (recorded date to application date of new loan), the LTV is based on the current appraised value. Maximum cash in hand is the lessor of 2% of the principal of the new loan amount or $2000. Final Closing Disclosures or settlement statements required from any transaction within past 6 months. If the most recent first mortgage transaction on the property was a cash-out refinance within the last 6 months, the new mortgage is not eligible. Note date to note date is used to calculate the 6 months. Must demonstrate there is a Benefit to the borrower by utilizing the CMS benefit to borrower form currently in use through Encompass for refinance transactions.

TYPES OF FINANCING, Continued
Listed For Sale or Purchase	To be eligible for either a rate/term or a cash-out refinance, the subject property must be taken off the market on or before application date, provide a letter of explanation for the MLS listing and statement of intent to retain the property for 12 months after closing. For cash-out transactions, if the subject property was listed for sale in the 6 months prior to application date, a minimum 2-year prepayment penalty* or 10% LTV reduction from the maximum available for the specific transaction is required. The lesser of the most recent list price or the current appraised value should be used to determine loan-to-value for both rate/term or cash-out transactions. *Note - Prepayment penalties may only be applied to Investor Loans. Please refer to the state-specific matrices for details.
Cash-out Refinance	For all cash-out refinance transactions: a signed letter from the borrower disclosing the purpose of the cash-out must be obtained. At least one borrower must have been on title a minimum of six (6) months prior to the new note date and a minimum of 6 months must have elapsed since the most recent mortgage transaction on the subject property (either the original purchase transaction or subsequent refinance). Note date to note date is used to calculate the 6 months. For cash-out refinance transactions where the property is currently vested in a trust or LLC, the borrowers must have owned the property in the name of the trust or LLC for at least six (6) months prior to closing. Note: Properties removed from a Trust or LLC are not required to meet the seasoning requirements if the property moves from the Trust to the owner of Trust or the LLC to the owner of LLC. Minimum fifty-percent (50%) ownership of the LLC is required. There is no waiting period if the borrower was legally awarded the property through divorce, separation, or dissolution of a domestic partnership.
Cash Out	Maximum Amount: $500,000 Cash out may be used to pay off debt for qualifying. Cash out proceeds permitted for reserves with ≥ 620 FICO.
All Refinances	All refinance transactions must have Net Tangible Benefit to Borrower.
Construction-to-Perm	Not permitted
Texas A(6) Refinances	Permitted. Refer to Carrington Flexible Advantage Program Guidelines and Texas Home Equity section below for full details. Not Permitted for Interest Only
Texas Conversion (Refinance) Transactions	To convert (refinance) a Texas 50(a)(6) loan to a Rate/Term loan the following are required: • Existing Texas 50(a)(6) loan must be seasoned for at least 12 months at time of closing • Borrower(s) must be provided a copy of Notice Concerning Refinance of Existing Home Equity Loan to Non-Home Equity Loan Under Section 50(f)(2) disclosure • Borrower(s) must receive disclosure within 3 business days of application and 12 calendar days prior to consummation • Maximum 80% LTV/CLTV • No cash out permitted • Not Permitted for Interest Only
Secondary Financing - Payoff	Allowed
Secondary Financing - Subordination	Allowed for Primary Residence and Second Home. Not permitted on Investment Properties. Maximum 90% CLTV (Institutional seconds only) Refer to Carrington Flexible Advantage Program Guidelines for additional information regarding Secondary/Subordinate Financing.

TYPES OF FINANCING, Continued

Listed For Sale or Purchase

To be eligible for either a rate/term or a cash-out refinance, the subject property must be taken off the market on or before application date, provide a letter of explanation for the MLS listing and statement of intent to retain the property for 12 months after closing. For cash-out transactions, if the subject property was listed for sale in the 6 months prior to application date, a minimum 2-year prepayment penalty* or 10% LTV reduction from the maximum available for the specific transaction is required. The lesser of the most recent list price or the current appraised value should be used to determine loan-to-value for both rate/term or cash-out transactions. *Note - Prepayment penalties may only be applied to Investor Loans. Please refer to the state-specific matrices for details.

Cash-out Refinance

For all cash-out refinance transactions: a signed letter from the borrower disclosing the purpose of the cash-out must be obtained. At least one borrower must have been on title a minimum of six (6) months prior to the new note date and a minimum of 6 months must have elapsed since the most recent mortgage transaction on the subject property (either the original purchase transaction or subsequent refinance). Note date to note date is used to calculate the 6 months. For cash-out refinance transactions where the property is currently vested in a trust or LLC, the borrowers must have owned the property in the name of the trust or LLC for at least six (6) months prior to closing. Note: Properties removed from a Trust or LLC are not required to meet the seasoning requirements if the property moves from the Trust to the owner of Trust or the LLC to the owner of LLC. Minimum fifty-percent (50%) ownership of the LLC is required. There is no waiting period if the borrower was legally awarded the property through divorce, separation, or dissolution of a domestic partnership.

Cash Out

Maximum Amount: $500,000 Cash out may be used to pay off debt for qualifying. Cash out proceeds permitted for reserves with ≥ 620 FICO.

All Refinances

All refinance transactions must have Net Tangible Benefit to Borrower.

Construction-to-Perm

Not permitted

Texas A(6) Refinances

Permitted. Refer to Carrington Flexible Advantage Program Guidelines and Texas Home Equity section below for full details. Not Permitted for Interest Only

Texas Conversion (Refinance) Transactions

To convert (refinance) a Texas 50(a)(6) loan to a Rate/Term loan the following are required: • Existing Texas 50(a)(6) loan must be seasoned for at least 12 months at time of closing • Borrower(s) must be provided a copy of Notice Concerning Refinance of Existing Home Equity Loan to Non-Home Equity Loan Under Section 50(f)(2) disclosure • Borrower(s) must receive disclosure within 3 business days of application and 12 calendar days prior to consummation • Maximum 80% LTV/CLTV • No cash out permitted • Not Permitted for Interest Only

Secondary Financing - Payoff

Allowed

Secondary Financing - Subordination

Allowed for Primary Residence and Second Home. Not permitted on Investment Properties. Maximum 90% CLTV (Institutional seconds only) Refer to Carrington Flexible Advantage Program Guidelines for additional information regarding Secondary/Subordinate Financing.

Secondary Financing

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · 2026-08-06

TYPES OF FINANCING, Continued
Listed For Sale or Purchase	To be eligible for either a rate/term or a cash-out refinance, the subject property must be taken off the market on or before application date, provide a letter of explanation for the MLS listing and statement of intent to retain the property for 12 months after closing. For cash-out transactions, if the subject property was listed for sale in the 6 months prior to application date, a minimum 2-year prepayment penalty* or 10% LTV reduction from the maximum available for the specific transaction is required. The lesser of the most recent list price or the current appraised value should be used to determine loan-to-value for both rate/term or cash-out transactions. *Note - Prepayment penalties may only be applied to Investor Loans. Please refer to the state-specific matrices for details.
Cash-out Refinance	For all cash-out refinance transactions: a signed letter from the borrower disclosing the purpose of the cash-out must be obtained. At least one borrower must have been on title a minimum of six (6) months prior to the new note date and a minimum of 6 months must have elapsed since the most recent mortgage transaction on the subject property (either the original purchase transaction or subsequent refinance). Note date to note date is used to calculate the 6 months. For cash-out refinance transactions where the property is currently vested in a trust or LLC, the borrowers must have owned the property in the name of the trust or LLC for at least six (6) months prior to closing. Note: Properties removed from a Trust or LLC are not required to meet the seasoning requirements if the property moves from the Trust to the owner of Trust or the LLC to the owner of LLC. Minimum fifty-percent (50%) ownership of the LLC is required. There is no waiting period if the borrower was legally awarded the property through divorce, separation, or dissolution of a domestic partnership.
Cash Out	Maximum Amount: $500,000 Cash out may be used to pay off debt for qualifying. Cash out proceeds permitted for reserves with ≥ 620 FICO.
All Refinances	All refinance transactions must have Net Tangible Benefit to Borrower.
Construction-to-Perm	Not permitted
Texas A(6) Refinances	Permitted. Refer to Carrington Flexible Advantage Program Guidelines and Texas Home Equity section below for full details. Not Permitted for Interest Only
Texas Conversion (Refinance) Transactions	To convert (refinance) a Texas 50(a)(6) loan to a Rate/Term loan the following are required: • Existing Texas 50(a)(6) loan must be seasoned for at least 12 months at time of closing • Borrower(s) must be provided a copy of Notice Concerning Refinance of Existing Home Equity Loan to Non-Home Equity Loan Under Section 50(f)(2) disclosure • Borrower(s) must receive disclosure within 3 business days of application and 12 calendar days prior to consummation • Maximum 80% LTV/CLTV • No cash out permitted • Not Permitted for Interest Only
Secondary Financing - Payoff	Allowed
Secondary Financing - Subordination	Allowed for Primary Residence and Second Home. Not permitted on Investment Properties. Maximum 90% CLTV (Institutional seconds only) Refer to Carrington Flexible Advantage Program Guidelines for additional information regarding Secondary/Subordinate Financing.

TYPES OF FINANCING, Continued

Listed For Sale or Purchase

To be eligible for either a rate/term or a cash-out refinance, the subject property must be taken off the market on or before application date, provide a letter of explanation for the MLS listing and statement of intent to retain the property for 12 months after closing. For cash-out transactions, if the subject property was listed for sale in the 6 months prior to application date, a minimum 2-year prepayment penalty* or 10% LTV reduction from the maximum available for the specific transaction is required. The lesser of the most recent list price or the current appraised value should be used to determine loan-to-value for both rate/term or cash-out transactions. *Note - Prepayment penalties may only be applied to Investor Loans. Please refer to the state-specific matrices for details.

Cash-out Refinance

For all cash-out refinance transactions: a signed letter from the borrower disclosing the purpose of the cash-out must be obtained. At least one borrower must have been on title a minimum of six (6) months prior to the new note date and a minimum of 6 months must have elapsed since the most recent mortgage transaction on the subject property (either the original purchase transaction or subsequent refinance). Note date to note date is used to calculate the 6 months. For cash-out refinance transactions where the property is currently vested in a trust or LLC, the borrowers must have owned the property in the name of the trust or LLC for at least six (6) months prior to closing. Note: Properties removed from a Trust or LLC are not required to meet the seasoning requirements if the property moves from the Trust to the owner of Trust or the LLC to the owner of LLC. Minimum fifty-percent (50%) ownership of the LLC is required. There is no waiting period if the borrower was legally awarded the property through divorce, separation, or dissolution of a domestic partnership.

Cash Out

Maximum Amount: $500,000 Cash out may be used to pay off debt for qualifying. Cash out proceeds permitted for reserves with ≥ 620 FICO.

All Refinances

All refinance transactions must have Net Tangible Benefit to Borrower.

Construction-to-Perm

Not permitted

Texas A(6) Refinances

Permitted. Refer to Carrington Flexible Advantage Program Guidelines and Texas Home Equity section below for full details. Not Permitted for Interest Only

Texas Conversion (Refinance) Transactions

To convert (refinance) a Texas 50(a)(6) loan to a Rate/Term loan the following are required: • Existing Texas 50(a)(6) loan must be seasoned for at least 12 months at time of closing • Borrower(s) must be provided a copy of Notice Concerning Refinance of Existing Home Equity Loan to Non-Home Equity Loan Under Section 50(f)(2) disclosure • Borrower(s) must receive disclosure within 3 business days of application and 12 calendar days prior to consummation • Maximum 80% LTV/CLTV • No cash out permitted • Not Permitted for Interest Only

Secondary Financing - Payoff

Allowed

Secondary Financing - Subordination

Allowed for Primary Residence and Second Home. Not permitted on Investment Properties. Maximum 90% CLTV (Institutional seconds only) Refer to Carrington Flexible Advantage Program Guidelines for additional information regarding Secondary/Subordinate Financing.

CREDIT
Minimum Credit History - Primary Wage-earner Requirements	Standard Credit: 3 tradelines reporting for 12+ months OR 2 tradelines reporting for 24+ months Trade lines must meet the following: The credit line must be reflected on the borrower’s credit report • The account may be open or closed • Tradelines used to qualify may not exceed 0x60 in the most recent 12 months of reporting • An acceptable 12- or 24-month housing history not reporting on credit may also be used as a tradeline • Manually rated utility bills with at least 12 or 24 payments made may be used to meet Minimum Tradelines if they are added to the credit report or credit supplement. Utilities include mobile and landline phone, internet, cable and satellite, gas, electricity, water, solar, and trash. Video streaming services are not permitted. Credit lines on which the borrower is not obligated to make payments are not acceptable for establishing a minimum history. e.g., loans in a deferment period, collection or charged-off accounts, accounts discharged through bankruptcy, and authorized user accounts.
Limited Tradelines	Not permitted
Disputed Tradelines	Borrowers are not required to remove disputed tradelines from their credit report regardless of the number of accounts or the amounts. A disputed account is not a waiver of the debt from consideration in underwriting. Disputed accounts must meet the guideline requirements for collections and/or charge off status unless there is documentation provided of a bonafide dispute such as a police report due to fraud or theft.
Non-Traditional Credit	Not permitted
Qualifying FICO	The FICO of the Primary Wage Earner which will be the score used for grading and pricing. Primary wage-earner may be an occupying or non- occupying co-borrower.
Rapid Rescore	Permitted. See Underwriting Guidelines for additional requirements.
Mortgage/Rental History	Mortgage payments not reflected on the original credit report must be documented via an institutional Verification of Mortgage (VOM). VOMs from servicers and LLCs are considered institutional. Rental payments must be documented via a Verification of Rent (VOR). A combined total of all late mortgage and rental payments in the past 12 months must be used to determine the housing history for all borrowers. Twelve (12) months of cancelled checks or bank statements must be obtained when: • the borrower is making rental payments to an interested party, or • the borrower is making mortgage payments to an individual or an interested party. A VOR/VOM is not required but may be requested for clarification. All mortgages and rental payments should be current at time of closing. If the credit report or VOR/VOM reflects a past-due status, updated documentation is required to verify account is current. Borrowers with no housing history or less than 12 months housing history are permitted. Refer to Carrington Flexible Advantage Underwriting Guidelines for full details.

CREDIT

Minimum Credit History - Primary Wage-earner Requirements

Standard Credit: 3 tradelines reporting for 12+ months OR 2 tradelines reporting for 24+ months Trade lines must meet the following: The credit line must be reflected on the borrower’s credit report • The account may be open or closed • Tradelines used to qualify may not exceed 0x60 in the most recent 12 months of reporting • An acceptable 12- or 24-month housing history not reporting on credit may also be used as a tradeline • Manually rated utility bills with at least 12 or 24 payments made may be used to meet Minimum Tradelines if they are added to the credit report or credit supplement. Utilities include mobile and landline phone, internet, cable and satellite, gas, electricity, water, solar, and trash. Video streaming services are not permitted. Credit lines on which the borrower is not obligated to make payments are not acceptable for establishing a minimum history. e.g., loans in a deferment period, collection or charged-off accounts, accounts discharged through bankruptcy, and authorized user accounts.

Limited Tradelines

Not permitted

Disputed Tradelines

Borrowers are not required to remove disputed tradelines from their credit report regardless of the number of accounts or the amounts. A disputed account is not a waiver of the debt from consideration in underwriting. Disputed accounts must meet the guideline requirements for collections and/or charge off status unless there is documentation provided of a bonafide dispute such as a police report due to fraud or theft.

Non-Traditional Credit

Not permitted

Qualifying FICO

The FICO of the Primary Wage Earner which will be the score used for grading and pricing. Primary wage-earner may be an occupying or non- occupying co-borrower.

Rapid Rescore

Permitted. See Underwriting Guidelines for additional requirements.

Mortgage/Rental History

Mortgage payments not reflected on the original credit report must be documented via an institutional Verification of Mortgage (VOM). VOMs from servicers and LLCs are considered institutional. Rental payments must be documented via a Verification of Rent (VOR). A combined total of all late mortgage and rental payments in the past 12 months must be used to determine the housing history for all borrowers. Twelve (12) months of cancelled checks or bank statements must be obtained when: • the borrower is making rental payments to an interested party, or • the borrower is making mortgage payments to an individual or an interested party. A VOR/VOM is not required but may be requested for clarification. All mortgages and rental payments should be current at time of closing. If the credit report or VOR/VOM reflects a past-due status, updated documentation is required to verify account is current. Borrowers with no housing history or less than 12 months housing history are permitted. Refer to Carrington Flexible Advantage Underwriting Guidelines for full details.

History

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · 2026-08-06

CREDIT
Minimum Credit History - Primary Wage-earner Requirements	Standard Credit: 3 tradelines reporting for 12+ months OR 2 tradelines reporting for 24+ months Trade lines must meet the following: The credit line must be reflected on the borrower’s credit report • The account may be open or closed • Tradelines used to qualify may not exceed 0x60 in the most recent 12 months of reporting • An acceptable 12- or 24-month housing history not reporting on credit may also be used as a tradeline • Manually rated utility bills with at least 12 or 24 payments made may be used to meet Minimum Tradelines if they are added to the credit report or credit supplement. Utilities include mobile and landline phone, internet, cable and satellite, gas, electricity, water, solar, and trash. Video streaming services are not permitted. Credit lines on which the borrower is not obligated to make payments are not acceptable for establishing a minimum history. e.g., loans in a deferment period, collection or charged-off accounts, accounts discharged through bankruptcy, and authorized user accounts.
Limited Tradelines	Not permitted
Disputed Tradelines	Borrowers are not required to remove disputed tradelines from their credit report regardless of the number of accounts or the amounts. A disputed account is not a waiver of the debt from consideration in underwriting. Disputed accounts must meet the guideline requirements for collections and/or charge off status unless there is documentation provided of a bonafide dispute such as a police report due to fraud or theft.
Non-Traditional Credit	Not permitted
Qualifying FICO	The FICO of the Primary Wage Earner which will be the score used for grading and pricing. Primary wage-earner may be an occupying or non- occupying co-borrower.
Rapid Rescore	Permitted. See Underwriting Guidelines for additional requirements.
Mortgage/Rental History	Mortgage payments not reflected on the original credit report must be documented via an institutional Verification of Mortgage (VOM). VOMs from servicers and LLCs are considered institutional. Rental payments must be documented via a Verification of Rent (VOR). A combined total of all late mortgage and rental payments in the past 12 months must be used to determine the housing history for all borrowers. Twelve (12) months of cancelled checks or bank statements must be obtained when: • the borrower is making rental payments to an interested party, or • the borrower is making mortgage payments to an individual or an interested party. A VOR/VOM is not required but may be requested for clarification. All mortgages and rental payments should be current at time of closing. If the credit report or VOR/VOM reflects a past-due status, updated documentation is required to verify account is current. Borrowers with no housing history or less than 12 months housing history are permitted. Refer to Carrington Flexible Advantage Underwriting Guidelines for full details.

CREDIT

Minimum Credit History - Primary Wage-earner Requirements

Standard Credit: 3 tradelines reporting for 12+ months OR 2 tradelines reporting for 24+ months Trade lines must meet the following: The credit line must be reflected on the borrower’s credit report • The account may be open or closed • Tradelines used to qualify may not exceed 0x60 in the most recent 12 months of reporting • An acceptable 12- or 24-month housing history not reporting on credit may also be used as a tradeline • Manually rated utility bills with at least 12 or 24 payments made may be used to meet Minimum Tradelines if they are added to the credit report or credit supplement. Utilities include mobile and landline phone, internet, cable and satellite, gas, electricity, water, solar, and trash. Video streaming services are not permitted. Credit lines on which the borrower is not obligated to make payments are not acceptable for establishing a minimum history. e.g., loans in a deferment period, collection or charged-off accounts, accounts discharged through bankruptcy, and authorized user accounts.

Limited Tradelines

Not permitted

Disputed Tradelines

Borrowers are not required to remove disputed tradelines from their credit report regardless of the number of accounts or the amounts. A disputed account is not a waiver of the debt from consideration in underwriting. Disputed accounts must meet the guideline requirements for collections and/or charge off status unless there is documentation provided of a bonafide dispute such as a police report due to fraud or theft.

Non-Traditional Credit

Not permitted

Qualifying FICO

The FICO of the Primary Wage Earner which will be the score used for grading and pricing. Primary wage-earner may be an occupying or non- occupying co-borrower.

Rapid Rescore

Permitted. See Underwriting Guidelines for additional requirements.

Mortgage/Rental History

Mortgage payments not reflected on the original credit report must be documented via an institutional Verification of Mortgage (VOM). VOMs from servicers and LLCs are considered institutional. Rental payments must be documented via a Verification of Rent (VOR). A combined total of all late mortgage and rental payments in the past 12 months must be used to determine the housing history for all borrowers. Twelve (12) months of cancelled checks or bank statements must be obtained when: • the borrower is making rental payments to an interested party, or • the borrower is making mortgage payments to an individual or an interested party. A VOR/VOM is not required but may be requested for clarification. All mortgages and rental payments should be current at time of closing. If the credit report or VOR/VOM reflects a past-due status, updated documentation is required to verify account is current. Borrowers with no housing history or less than 12 months housing history are permitted. Refer to Carrington Flexible Advantage Underwriting Guidelines for full details.

CREDIT, continued Forbearance Due to FEMA Disaster	CMS will permit forbearance only in cases of a FEMA Disaster Declaration. Documentation from the servicer must be obtained and the cause outside the disaster (i.e. loss of work, damage, etc.) must be cured and documented (i.e. back to work).
Late Payments after Forbearance	The forbearance may be resolved through one of the following two options: 1. Remove the disaster forbearance status and reinstate the mortgage by making a lump-sum payment to bring the mortgage current. The impact of any lump sum payment must be considered in the asset analysis. Funds may not be borrowed for the purpose of a full reinstatement after the date of the loan application. Or 2. Complete three (3) regular monthly payments after an approved loss mitigation option with the current servicer, such as a repayment plan, payment deferral, or trial payments for a loan modification. Any remaining balance due after three timely payments are made pursuant to a loss mitigation option may be included in a rate and term or cash out refinance. Borrowers who have missed payments pursuant to a disaster forbearance must provide documentation of acceptable resolution of any hardship. Missed mortgage payments during the period of a disaster forbearance will not be deemed as “late” payments for the purpose of establishing eligibility or credit grade, provided the forbearance is documented per the requirements above. Missed mortgage payments after termination of the forbearance plan or during an approved loss mitigation option will be considered late for the purposes of establishing eligibility and graded accordingly. A borrower who experiences a Housing Event, including foreclosure, short sale, or deed-in-lieu of foreclosure after a forbearance must continue to meet all program guidelines related to Housing Events, including seasoning and credit grading.
Late Payments	Rolling Late Payments: Rolling late payments are not considered a single event. Each occurrence of a contractual delinquency is considered individually for loan eligibility. Past Due Accounts: Past due consumer debts can be no more than 30 days past due at time of closing unless the past due consumer debt will be paid off at closing. For mortgage late payment requirements refer to Mortgage/Rental History above.
Bankruptcy	Minimum 36 months seasoning since discharged/dismissed for all Chapter 7, Chapter 11 and Chapter 13 bankruptcies.
Housing Events	Minimum 36 months seasoning since event. Housing events include short sale, foreclosure, deed-in-lieu, modification, or 1x120 mortgage late. See Carrington Flexible Advantage Underwriting Guidelines for details on when a modification is classified as a housing event.
Collections/Charge Offs	The following accounts may remain open: • Collections and unsecured charge-offs < 24 months old with a maximum cumulative balance of $2,000 • Collections ≥ 24 months old with a maximum of $2,500 per occurrence • Unsecured charge-offs ≥ 24 months old • Collections and charge-offs that have passed beyond the statute of limitation for that state (supporting documentation required) • All medical collections Collections and charge-off balances exceeding the amounts listed above must be paid in full under the Carrington Flexible Advantage Plus Program. Charge offs secured by real estate must be paid in full.

CREDIT, continued Forbearance Due to FEMA Disaster

CMS will permit forbearance only in cases of a FEMA Disaster Declaration. Documentation from the servicer must be obtained and the cause outside the disaster (i.e. loss of work, damage, etc.) must be cured and documented (i.e. back to work).

Late Payments after Forbearance

The forbearance may be resolved through one of the following two options: 1. Remove the disaster forbearance status and reinstate the mortgage by making a lump-sum payment to bring the mortgage current. The impact of any lump sum payment must be considered in the asset analysis. Funds may not be borrowed for the purpose of a full reinstatement after the date of the loan application. Or 2. Complete three (3) regular monthly payments after an approved loss mitigation option with the current servicer, such as a repayment plan, payment deferral, or trial payments for a loan modification. Any remaining balance due after three timely payments are made pursuant to a loss mitigation option may be included in a rate and term or cash out refinance. Borrowers who have missed payments pursuant to a disaster forbearance must provide documentation of acceptable resolution of any hardship. Missed mortgage payments during the period of a disaster forbearance will not be deemed as “late” payments for the purpose of establishing eligibility or credit grade, provided the forbearance is documented per the requirements above. Missed mortgage payments after termination of the forbearance plan or during an approved loss mitigation option will be considered late for the purposes of establishing eligibility and graded accordingly. A borrower who experiences a Housing Event, including foreclosure, short sale, or deed-in-lieu of foreclosure after a forbearance must continue to meet all program guidelines related to Housing Events, including seasoning and credit grading.

Late Payments

Rolling Late Payments: Rolling late payments are not considered a single event. Each occurrence of a contractual delinquency is considered individually for loan eligibility. Past Due Accounts: Past due consumer debts can be no more than 30 days past due at time of closing unless the past due consumer debt will be paid off at closing. For mortgage late payment requirements refer to Mortgage/Rental History above.

Bankruptcy

Minimum 36 months seasoning since discharged/dismissed for all Chapter 7, Chapter 11 and Chapter 13 bankruptcies.

Housing Events

Minimum 36 months seasoning since event. Housing events include short sale, foreclosure, deed-in-lieu, modification, or 1x120 mortgage late. See Carrington Flexible Advantage Underwriting Guidelines for details on when a modification is classified as a housing event.

Collections/Charge Offs

The following accounts may remain open: • Collections and unsecured charge-offs < 24 months old with a maximum cumulative balance of $2,000 • Collections ≥ 24 months old with a maximum of $2,500 per occurrence • Unsecured charge-offs ≥ 24 months old • Collections and charge-offs that have passed beyond the statute of limitation for that state (supporting documentation required) • All medical collections Collections and charge-off balances exceeding the amounts listed above must be paid in full under the Carrington Flexible Advantage Plus Program. Charge offs secured by real estate must be paid in full.

Offs

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · 2026-08-06

CREDIT, continued Forbearance Due to FEMA Disaster	CMS will permit forbearance only in cases of a FEMA Disaster Declaration. Documentation from the servicer must be obtained and the cause outside the disaster (i.e. loss of work, damage, etc.) must be cured and documented (i.e. back to work).
Late Payments after Forbearance	The forbearance may be resolved through one of the following two options: 1. Remove the disaster forbearance status and reinstate the mortgage by making a lump-sum payment to bring the mortgage current. The impact of any lump sum payment must be considered in the asset analysis. Funds may not be borrowed for the purpose of a full reinstatement after the date of the loan application. Or 2. Complete three (3) regular monthly payments after an approved loss mitigation option with the current servicer, such as a repayment plan, payment deferral, or trial payments for a loan modification. Any remaining balance due after three timely payments are made pursuant to a loss mitigation option may be included in a rate and term or cash out refinance. Borrowers who have missed payments pursuant to a disaster forbearance must provide documentation of acceptable resolution of any hardship. Missed mortgage payments during the period of a disaster forbearance will not be deemed as “late” payments for the purpose of establishing eligibility or credit grade, provided the forbearance is documented per the requirements above. Missed mortgage payments after termination of the forbearance plan or during an approved loss mitigation option will be considered late for the purposes of establishing eligibility and graded accordingly. A borrower who experiences a Housing Event, including foreclosure, short sale, or deed-in-lieu of foreclosure after a forbearance must continue to meet all program guidelines related to Housing Events, including seasoning and credit grading.
Late Payments	Rolling Late Payments: Rolling late payments are not considered a single event. Each occurrence of a contractual delinquency is considered individually for loan eligibility. Past Due Accounts: Past due consumer debts can be no more than 30 days past due at time of closing unless the past due consumer debt will be paid off at closing. For mortgage late payment requirements refer to Mortgage/Rental History above.
Bankruptcy	Minimum 36 months seasoning since discharged/dismissed for all Chapter 7, Chapter 11 and Chapter 13 bankruptcies.
Housing Events	Minimum 36 months seasoning since event. Housing events include short sale, foreclosure, deed-in-lieu, modification, or 1x120 mortgage late. See Carrington Flexible Advantage Underwriting Guidelines for details on when a modification is classified as a housing event.
Collections/Charge Offs	The following accounts may remain open: • Collections and unsecured charge-offs < 24 months old with a maximum cumulative balance of $2,000 • Collections ≥ 24 months old with a maximum of $2,500 per occurrence • Unsecured charge-offs ≥ 24 months old • Collections and charge-offs that have passed beyond the statute of limitation for that state (supporting documentation required) • All medical collections Collections and charge-off balances exceeding the amounts listed above must be paid in full under the Carrington Flexible Advantage Plus Program. Charge offs secured by real estate must be paid in full.

CREDIT, continued Forbearance Due to FEMA Disaster

CMS will permit forbearance only in cases of a FEMA Disaster Declaration. Documentation from the servicer must be obtained and the cause outside the disaster (i.e. loss of work, damage, etc.) must be cured and documented (i.e. back to work).

Late Payments after Forbearance

The forbearance may be resolved through one of the following two options: 1. Remove the disaster forbearance status and reinstate the mortgage by making a lump-sum payment to bring the mortgage current. The impact of any lump sum payment must be considered in the asset analysis. Funds may not be borrowed for the purpose of a full reinstatement after the date of the loan application. Or 2. Complete three (3) regular monthly payments after an approved loss mitigation option with the current servicer, such as a repayment plan, payment deferral, or trial payments for a loan modification. Any remaining balance due after three timely payments are made pursuant to a loss mitigation option may be included in a rate and term or cash out refinance. Borrowers who have missed payments pursuant to a disaster forbearance must provide documentation of acceptable resolution of any hardship. Missed mortgage payments during the period of a disaster forbearance will not be deemed as “late” payments for the purpose of establishing eligibility or credit grade, provided the forbearance is documented per the requirements above. Missed mortgage payments after termination of the forbearance plan or during an approved loss mitigation option will be considered late for the purposes of establishing eligibility and graded accordingly. A borrower who experiences a Housing Event, including foreclosure, short sale, or deed-in-lieu of foreclosure after a forbearance must continue to meet all program guidelines related to Housing Events, including seasoning and credit grading.

Late Payments

Rolling Late Payments: Rolling late payments are not considered a single event. Each occurrence of a contractual delinquency is considered individually for loan eligibility. Past Due Accounts: Past due consumer debts can be no more than 30 days past due at time of closing unless the past due consumer debt will be paid off at closing. For mortgage late payment requirements refer to Mortgage/Rental History above.

Bankruptcy

Minimum 36 months seasoning since discharged/dismissed for all Chapter 7, Chapter 11 and Chapter 13 bankruptcies.

Housing Events

Minimum 36 months seasoning since event. Housing events include short sale, foreclosure, deed-in-lieu, modification, or 1x120 mortgage late. See Carrington Flexible Advantage Underwriting Guidelines for details on when a modification is classified as a housing event.

Collections/Charge Offs

The following accounts may remain open: • Collections and unsecured charge-offs < 24 months old with a maximum cumulative balance of $2,000 • Collections ≥ 24 months old with a maximum of $2,500 per occurrence • Unsecured charge-offs ≥ 24 months old • Collections and charge-offs that have passed beyond the statute of limitation for that state (supporting documentation required) • All medical collections Collections and charge-off balances exceeding the amounts listed above must be paid in full under the Carrington Flexible Advantage Plus Program. Charge offs secured by real estate must be paid in full.

CREDIT, continued
Judgments/Liens	Judgments and tax liens must be paid off prior to or at closing, unless the requirements listed below are met. Adverse credit that will impact title must be paid in full as title must insure our lien position without exception. Court-ordered judgments may remain open when all of the following requirements are met: • A copy of the repayment agreement is obtained; • A minimum of 3 months has elapsed on the plan and evidence of timely payments for the most recent 3 months is provided; and • The maximum payment required under the plan is included in the debt-to-income ratio. Outstanding tax liens may remain open on purchase transactions only (additional LTV reductions may be required based on the size of the lien). All of the following requirements must be met: • A copy of the repayment agreement is obtained; • A minimum of 3 months has elapsed on the plan and evidence of timely payments for the most recent 3 months is provided; • The maximum payment required under the plan is included in the debt-to-income ratio; and • The title company must provide written confirmation confirming (a) the title company is aware of the outstanding tax lien, and (b) there is no impact to first lien position.
IRS Taxes Owed (No Lien)	For IRS taxes owed and no lien is present all of the following requirements must be met: • A copy of the repayment agreement is obtained; • A minimum of 3 months has elapsed on the plan and evidence of timely payments for the most recent 3 months is provided; • The maximum payment required under the plan is included in the debt-to-income ratio.
Minimum FICO	The primary wage-earner score is used as the Representative Credit Score for each loan. The primary wage-earner must have a valid score from at least 2 of the following 3 agencies: Experian (FICO), Trans Union (Empirica), and Equifax (Beacon). Only scores from these agencies are acceptable. Additional borrowers on the loan must have at least one valid score of 620 or greater. To determine the Representative Credit Score for the primary wage-earner, select the middle score when 3 agency scores are provided and the lower score when only 2 agency scores are provided.
Minimum Payment	Use the greater of $10 or 5% of balance for revolving accounts if payment not reporting. Include all revolving payments regardless of the number of payments remaining. Revolving accounts are allowed to be paid off prior to or at closing in order to exclude the payment from the debt ratio. Revolving accounts do not have to be closed to exclude the payment from the debt ratio. For 30-day accounts/accounts paid in full on a monthly basis (i.e.: American Express), use 5% of the outstanding balance unless borrower has sufficient liquid assets verified to pay the full balance. Installment payments may be excluded with 10 or less payments remaining, except for car leases. Installment debts can be paid down to meet the 10 payments. If the excluded payment is 5% or more of the borrower's qualifying income, the underwriter must review the transaction for ability to repay.

CREDIT, continued

Judgments/Liens

Judgments and tax liens must be paid off prior to or at closing, unless the requirements listed below are met. Adverse credit that will impact title must be paid in full as title must insure our lien position without exception. Court-ordered judgments may remain open when all of the following requirements are met: • A copy of the repayment agreement is obtained; • A minimum of 3 months has elapsed on the plan and evidence of timely payments for the most recent 3 months is provided; and • The maximum payment required under the plan is included in the debt-to-income ratio. Outstanding tax liens may remain open on purchase transactions only (additional LTV reductions may be required based on the size of the lien). All of the following requirements must be met: • A copy of the repayment agreement is obtained; • A minimum of 3 months has elapsed on the plan and evidence of timely payments for the most recent 3 months is provided; • The maximum payment required under the plan is included in the debt-to-income ratio; and • The title company must provide written confirmation confirming (a) the title company is aware of the outstanding tax lien, and (b) there is no impact to first lien position.

IRS Taxes Owed (No Lien)

For IRS taxes owed and no lien is present all of the following requirements must be met: • A copy of the repayment agreement is obtained; • A minimum of 3 months has elapsed on the plan and evidence of timely payments for the most recent 3 months is provided; • The maximum payment required under the plan is included in the debt-to-income ratio.

Minimum FICO

The primary wage-earner score is used as the Representative Credit Score for each loan. The primary wage-earner must have a valid score from at least 2 of the following 3 agencies: Experian (FICO), Trans Union (Empirica), and Equifax (Beacon). Only scores from these agencies are acceptable. Additional borrowers on the loan must have at least one valid score of 620 or greater. To determine the Representative Credit Score for the primary wage-earner, select the middle score when 3 agency scores are provided and the lower score when only 2 agency scores are provided.

Minimum Payment

Use the greater of $10 or 5% of balance for revolving accounts if payment not reporting. Include all revolving payments regardless of the number of payments remaining. Revolving accounts are allowed to be paid off prior to or at closing in order to exclude the payment from the debt ratio. Revolving accounts do not have to be closed to exclude the payment from the debt ratio. For 30-day accounts/accounts paid in full on a monthly basis (i.e.: American Express), use 5% of the outstanding balance unless borrower has sufficient liquid assets verified to pay the full balance. Installment payments may be excluded with 10 or less payments remaining, except for car leases. Installment debts can be paid down to meet the 10 payments. If the excluded payment is 5% or more of the borrower's qualifying income, the underwriter must review the transaction for ability to repay.

Minimum Payment

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · 2026-08-06

CREDIT, continued
Judgments/Liens	Judgments and tax liens must be paid off prior to or at closing, unless the requirements listed below are met. Adverse credit that will impact title must be paid in full as title must insure our lien position without exception. Court-ordered judgments may remain open when all of the following requirements are met: • A copy of the repayment agreement is obtained; • A minimum of 3 months has elapsed on the plan and evidence of timely payments for the most recent 3 months is provided; and • The maximum payment required under the plan is included in the debt-to-income ratio. Outstanding tax liens may remain open on purchase transactions only (additional LTV reductions may be required based on the size of the lien). All of the following requirements must be met: • A copy of the repayment agreement is obtained; • A minimum of 3 months has elapsed on the plan and evidence of timely payments for the most recent 3 months is provided; • The maximum payment required under the plan is included in the debt-to-income ratio; and • The title company must provide written confirmation confirming (a) the title company is aware of the outstanding tax lien, and (b) there is no impact to first lien position.
IRS Taxes Owed (No Lien)	For IRS taxes owed and no lien is present all of the following requirements must be met: • A copy of the repayment agreement is obtained; • A minimum of 3 months has elapsed on the plan and evidence of timely payments for the most recent 3 months is provided; • The maximum payment required under the plan is included in the debt-to-income ratio.
Minimum FICO	The primary wage-earner score is used as the Representative Credit Score for each loan. The primary wage-earner must have a valid score from at least 2 of the following 3 agencies: Experian (FICO), Trans Union (Empirica), and Equifax (Beacon). Only scores from these agencies are acceptable. Additional borrowers on the loan must have at least one valid score of 620 or greater. To determine the Representative Credit Score for the primary wage-earner, select the middle score when 3 agency scores are provided and the lower score when only 2 agency scores are provided.
Minimum Payment	Use the greater of $10 or 5% of balance for revolving accounts if payment not reporting. Include all revolving payments regardless of the number of payments remaining. Revolving accounts are allowed to be paid off prior to or at closing in order to exclude the payment from the debt ratio. Revolving accounts do not have to be closed to exclude the payment from the debt ratio. For 30-day accounts/accounts paid in full on a monthly basis (i.e.: American Express), use 5% of the outstanding balance unless borrower has sufficient liquid assets verified to pay the full balance. Installment payments may be excluded with 10 or less payments remaining, except for car leases. Installment debts can be paid down to meet the 10 payments. If the excluded payment is 5% or more of the borrower's qualifying income, the underwriter must review the transaction for ability to repay.

CREDIT, continued

Judgments/Liens

Judgments and tax liens must be paid off prior to or at closing, unless the requirements listed below are met. Adverse credit that will impact title must be paid in full as title must insure our lien position without exception. Court-ordered judgments may remain open when all of the following requirements are met: • A copy of the repayment agreement is obtained; • A minimum of 3 months has elapsed on the plan and evidence of timely payments for the most recent 3 months is provided; and • The maximum payment required under the plan is included in the debt-to-income ratio. Outstanding tax liens may remain open on purchase transactions only (additional LTV reductions may be required based on the size of the lien). All of the following requirements must be met: • A copy of the repayment agreement is obtained; • A minimum of 3 months has elapsed on the plan and evidence of timely payments for the most recent 3 months is provided; • The maximum payment required under the plan is included in the debt-to-income ratio; and • The title company must provide written confirmation confirming (a) the title company is aware of the outstanding tax lien, and (b) there is no impact to first lien position.

IRS Taxes Owed (No Lien)

For IRS taxes owed and no lien is present all of the following requirements must be met: • A copy of the repayment agreement is obtained; • A minimum of 3 months has elapsed on the plan and evidence of timely payments for the most recent 3 months is provided; • The maximum payment required under the plan is included in the debt-to-income ratio.

Minimum FICO

The primary wage-earner score is used as the Representative Credit Score for each loan. The primary wage-earner must have a valid score from at least 2 of the following 3 agencies: Experian (FICO), Trans Union (Empirica), and Equifax (Beacon). Only scores from these agencies are acceptable. Additional borrowers on the loan must have at least one valid score of 620 or greater. To determine the Representative Credit Score for the primary wage-earner, select the middle score when 3 agency scores are provided and the lower score when only 2 agency scores are provided.

Minimum Payment

Use the greater of $10 or 5% of balance for revolving accounts if payment not reporting. Include all revolving payments regardless of the number of payments remaining. Revolving accounts are allowed to be paid off prior to or at closing in order to exclude the payment from the debt ratio. Revolving accounts do not have to be closed to exclude the payment from the debt ratio. For 30-day accounts/accounts paid in full on a monthly basis (i.e.: American Express), use 5% of the outstanding balance unless borrower has sufficient liquid assets verified to pay the full balance. Installment payments may be excluded with 10 or less payments remaining, except for car leases. Installment debts can be paid down to meet the 10 payments. If the excluded payment is 5% or more of the borrower's qualifying income, the underwriter must review the transaction for ability to repay.

INCOME/ASSETS
Employment	All borrowers must have a 2-year employment history. Borrowers should provide a signed, written letter of explanation for any employment gaps that exceed 30 days in the most recent 12-month period, or that exceed 60 days in months 13-24. Borrowers newly employed are allowed with documentation showing the borrower was previously in school or a training program and borrower is now employed in that line of work.
Income	Paystub(s) covering the most recent 30-day period providing year-to-date earnings at approval date. E.g. paid weekly = 4 paystubs, Bi-weekly/semi- monthly = 2 paystubs.
Bank Statement Income	Loans utilizing bank statement documentation for income will not require a 4506-C form to be signed or processed for transcripts. When a file has mixed income (W-2 wage earner income) combined with the bank statement income option, CMS must obtain a 4506-C and transcripts for the W-2 wage earner income only. See Carrington Flexible Advantage Program Guidelines for details. Please Note: Underwriter may condition for 4506-C tax transcripts to be signed and processed on a case by case basis.
Residual Income	$2,500 plus an additional $150 per dependent is required for Primary Residence and Second Homes only. Residual Income not required on Investment Properties.
Self-employed	Two years personal & business tax returns with all schedules if borrower has 25% or greater ownership interest in the business. If tax transcripts are not available due to recent filing, a copy of the IRS notice showing "No record of return filed" is required in addition to the previous 2 years validated tax returns. Borrowers are qualified using the returns validated. A Liquidity Test is not required to qualify the borrower.
Non-Salaried	Two years documentation and evidence of at least 3 year continuance is required. Retirement Income requires a copy of the award letter and most recent 1099's OR 3 months consecutive bank statements showing receipt of the income. Social Security income can be taxed up 25% or an amount that is prudent based on federal tax levels but not to exceed 25%. Documentation is required to show the income is non-taxable. Alimony and child support must be received at least 6 months to be used for qualifying.
Rental Income	Rental income from a 1-unit primary residence or second homes may not be used. Boarder income cannot be used. Note: If rental income from the subject property is not being used to qualify, the gross monthly rent must still be documented with appraisal form 1007 for lender reporting purposes. The full PITIA on all rental properties must be considered in the debt ratio when rental income is not used to qualify. Subject property (2-4 unit primary residence) - use the income approach section from the appraisal and a copy of the current lease is required. If the property has been owned for at least 1 year, borrower to provide tax returns with at least a 12 month rental history. If the property has been owned less than 1 year, rental income is calculated per the income approach from the appraisal. Rental Income from other real estate owned - rental income from another property owned prior to loan application should be calculated using the borrower’s federal income tax returns for the most recent 12-month period (Cash Flow Analysis from Schedule E). Income should be averaged. Net rental losses should be included in ratios as a liability. For properties owned for less than 1 year, rental income should be calculated using the lesser of: • 75% of the current lease minus the full PITIA; or • Cash flow analysis of the Schedule E from the most recent year’s federal income tax return (if applicable) Converting current residence into a rental: 75% of a lease minus the full PITIA may be used.

INCOME/ASSETS

Employment

All borrowers must have a 2-year employment history. Borrowers should provide a signed, written letter of explanation for any employment gaps that exceed 30 days in the most recent 12-month period, or that exceed 60 days in months 13-24. Borrowers newly employed are allowed with documentation showing the borrower was previously in school or a training program and borrower is now employed in that line of work.

Income

Paystub(s) covering the most recent 30-day period providing year-to-date earnings at approval date. E.g. paid weekly = 4 paystubs, Bi-weekly/semi- monthly = 2 paystubs.

Bank Statement Income

Loans utilizing bank statement documentation for income will not require a 4506-C form to be signed or processed for transcripts. When a file has mixed income (W-2 wage earner income) combined with the bank statement income option, CMS must obtain a 4506-C and transcripts for the W-2 wage earner income only. See Carrington Flexible Advantage Program Guidelines for details. Please Note: Underwriter may condition for 4506-C tax transcripts to be signed and processed on a case by case basis.

Residual Income

$2,500 plus an additional $150 per dependent is required for Primary Residence and Second Homes only. Residual Income not required on Investment Properties.

Self-employed

Two years personal & business tax returns with all schedules if borrower has 25% or greater ownership interest in the business. If tax transcripts are not available due to recent filing, a copy of the IRS notice showing "No record of return filed" is required in addition to the previous 2 years validated tax returns. Borrowers are qualified using the returns validated. A Liquidity Test is not required to qualify the borrower.

Non-Salaried

Two years documentation and evidence of at least 3 year continuance is required. Retirement Income requires a copy of the award letter and most recent 1099's OR 3 months consecutive bank statements showing receipt of the income. Social Security income can be taxed up 25% or an amount that is prudent based on federal tax levels but not to exceed 25%. Documentation is required to show the income is non-taxable. Alimony and child support must be received at least 6 months to be used for qualifying.

Rental Income

Rental income from a 1-unit primary residence or second homes may not be used. Boarder income cannot be used. Note: If rental income from the subject property is not being used to qualify, the gross monthly rent must still be documented with appraisal form 1007 for lender reporting purposes. The full PITIA on all rental properties must be considered in the debt ratio when rental income is not used to qualify. Subject property (2-4 unit primary residence) - use the income approach section from the appraisal and a copy of the current lease is required. If the property has been owned for at least 1 year, borrower to provide tax returns with at least a 12 month rental history. If the property has been owned less than 1 year, rental income is calculated per the income approach from the appraisal. Rental Income from other real estate owned - rental income from another property owned prior to loan application should be calculated using the borrower’s federal income tax returns for the most recent 12-month period (Cash Flow Analysis from Schedule E). Income should be averaged. Net rental losses should be included in ratios as a liability. For properties owned for less than 1 year, rental income should be calculated using the lesser of: • 75% of the current lease minus the full PITIA; or • Cash flow analysis of the Schedule E from the most recent year’s federal income tax return (if applicable) Converting current residence into a rental: 75% of a lease minus the full PITIA may be used.

Rental Income

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · 2026-08-06

INCOME/ASSETS
Employment	All borrowers must have a 2-year employment history. Borrowers should provide a signed, written letter of explanation for any employment gaps that exceed 30 days in the most recent 12-month period, or that exceed 60 days in months 13-24. Borrowers newly employed are allowed with documentation showing the borrower was previously in school or a training program and borrower is now employed in that line of work.
Income	Paystub(s) covering the most recent 30-day period providing year-to-date earnings at approval date. E.g. paid weekly = 4 paystubs, Bi-weekly/semi- monthly = 2 paystubs.
Bank Statement Income	Loans utilizing bank statement documentation for income will not require a 4506-C form to be signed or processed for transcripts. When a file has mixed income (W-2 wage earner income) combined with the bank statement income option, CMS must obtain a 4506-C and transcripts for the W-2 wage earner income only. See Carrington Flexible Advantage Program Guidelines for details. Please Note: Underwriter may condition for 4506-C tax transcripts to be signed and processed on a case by case basis.
Residual Income	$2,500 plus an additional $150 per dependent is required for Primary Residence and Second Homes only. Residual Income not required on Investment Properties.
Self-employed	Two years personal & business tax returns with all schedules if borrower has 25% or greater ownership interest in the business. If tax transcripts are not available due to recent filing, a copy of the IRS notice showing "No record of return filed" is required in addition to the previous 2 years validated tax returns. Borrowers are qualified using the returns validated. A Liquidity Test is not required to qualify the borrower.
Non-Salaried	Two years documentation and evidence of at least 3 year continuance is required. Retirement Income requires a copy of the award letter and most recent 1099's OR 3 months consecutive bank statements showing receipt of the income. Social Security income can be taxed up 25% or an amount that is prudent based on federal tax levels but not to exceed 25%. Documentation is required to show the income is non-taxable. Alimony and child support must be received at least 6 months to be used for qualifying.
Rental Income	Rental income from a 1-unit primary residence or second homes may not be used. Boarder income cannot be used. Note: If rental income from the subject property is not being used to qualify, the gross monthly rent must still be documented with appraisal form 1007 for lender reporting purposes. The full PITIA on all rental properties must be considered in the debt ratio when rental income is not used to qualify. Subject property (2-4 unit primary residence) - use the income approach section from the appraisal and a copy of the current lease is required. If the property has been owned for at least 1 year, borrower to provide tax returns with at least a 12 month rental history. If the property has been owned less than 1 year, rental income is calculated per the income approach from the appraisal. Rental Income from other real estate owned - rental income from another property owned prior to loan application should be calculated using the borrower’s federal income tax returns for the most recent 12-month period (Cash Flow Analysis from Schedule E). Income should be averaged. Net rental losses should be included in ratios as a liability. For properties owned for less than 1 year, rental income should be calculated using the lesser of: • 75% of the current lease minus the full PITIA; or • Cash flow analysis of the Schedule E from the most recent year’s federal income tax return (if applicable) Converting current residence into a rental: 75% of a lease minus the full PITIA may be used.

INCOME/ASSETS

Employment

All borrowers must have a 2-year employment history. Borrowers should provide a signed, written letter of explanation for any employment gaps that exceed 30 days in the most recent 12-month period, or that exceed 60 days in months 13-24. Borrowers newly employed are allowed with documentation showing the borrower was previously in school or a training program and borrower is now employed in that line of work.

Income

Paystub(s) covering the most recent 30-day period providing year-to-date earnings at approval date. E.g. paid weekly = 4 paystubs, Bi-weekly/semi- monthly = 2 paystubs.

Bank Statement Income

Loans utilizing bank statement documentation for income will not require a 4506-C form to be signed or processed for transcripts. When a file has mixed income (W-2 wage earner income) combined with the bank statement income option, CMS must obtain a 4506-C and transcripts for the W-2 wage earner income only. See Carrington Flexible Advantage Program Guidelines for details. Please Note: Underwriter may condition for 4506-C tax transcripts to be signed and processed on a case by case basis.

Residual Income

$2,500 plus an additional $150 per dependent is required for Primary Residence and Second Homes only. Residual Income not required on Investment Properties.

Self-employed

Two years personal & business tax returns with all schedules if borrower has 25% or greater ownership interest in the business. If tax transcripts are not available due to recent filing, a copy of the IRS notice showing "No record of return filed" is required in addition to the previous 2 years validated tax returns. Borrowers are qualified using the returns validated. A Liquidity Test is not required to qualify the borrower.

Non-Salaried

Two years documentation and evidence of at least 3 year continuance is required. Retirement Income requires a copy of the award letter and most recent 1099's OR 3 months consecutive bank statements showing receipt of the income. Social Security income can be taxed up 25% or an amount that is prudent based on federal tax levels but not to exceed 25%. Documentation is required to show the income is non-taxable. Alimony and child support must be received at least 6 months to be used for qualifying.

Rental Income

Rental income from a 1-unit primary residence or second homes may not be used. Boarder income cannot be used. Note: If rental income from the subject property is not being used to qualify, the gross monthly rent must still be documented with appraisal form 1007 for lender reporting purposes. The full PITIA on all rental properties must be considered in the debt ratio when rental income is not used to qualify. Subject property (2-4 unit primary residence) - use the income approach section from the appraisal and a copy of the current lease is required. If the property has been owned for at least 1 year, borrower to provide tax returns with at least a 12 month rental history. If the property has been owned less than 1 year, rental income is calculated per the income approach from the appraisal. Rental Income from other real estate owned - rental income from another property owned prior to loan application should be calculated using the borrower’s federal income tax returns for the most recent 12-month period (Cash Flow Analysis from Schedule E). Income should be averaged. Net rental losses should be included in ratios as a liability. For properties owned for less than 1 year, rental income should be calculated using the lesser of: • 75% of the current lease minus the full PITIA; or • Cash flow analysis of the Schedule E from the most recent year’s federal income tax return (if applicable) Converting current residence into a rental: 75% of a lease minus the full PITIA may be used.

INCOME/ASSETS, continued
Assets	Must be sourced/seasoned for 60 days. Asset statements must be dated within 120 days of closing and verified. Deposit verification and seasoning of assets must be documented by two months bank statements. Marketable securities require a copy of the stock certificate. Retirement accounts require documentation verifying the lending terms of the account. All sources of funds must be owned by the borrower. All large deposits must be sourced per guidelines. Asset documentation must be dated within 30 days of application and 90 days of closing. Evidence of liquidation is required for all securities and real estate. Evidence of transfer of funds is required for all cash accounts. Gifts are acceptable provided minimum borrower investment requirements are met.
Eligible Sources of Assets	Acceptable sources of funds are bank deposits (checking/savings), marketable public traded securities, loans secured by borrower's assets, sale of real estate, funds borrowed secured by real estate, withdrawals from trust funds, proceeds from surrendered life insurance, retirement accounts using 60% of available/vested balance (SEP-IRA, 401K), borrower’s real estate commission, business assets provided borrower is 50% owner of the business, and depleting the assets from the business account will not have a negative impact on the viability and cash flow of the business.
Ineligible Sources of Assets	Cash-on-hand, Sweat equity, Gift or grant funds which must be repaid, Down payment assistance programs, Bridge loans, Unsecured loans or cash advances, Section 8 Voucher Assistance, Cryptocurrency (digital assets such as bitcoins) and Private Savings Club accounts
Borrower Investment/ Contribution	Primary Residence - 5% own funds Second Home / Investment - 10% own funds A minimum borrower contribution of 10% is required on the following transactions: • Primary residence with unverifiable housing history • Loan amount over the FHFA Conforming Loan Limit
Asset Conversion	Borrowers must have the lesser of (a) 1.5 times the loan balance or (b) $1mm in qualified assets, both of which must be net of down payment, loan costs and required reserves to qualify. Qualified Assets can be comprised of stocks, bonds, mutual funds, vested amount of retirement accounts and bank accounts. If a portion of the qualified assets are being used for down payment, closing costs, or reserves, those amounts must be excluded from the balance before analyzing a portfolio for income determination. Please note: Restricted stock accounts are not considered qualified assets and are not eligible. The following assets are considered Qualified Assets and can be utilized to calculate income: • 100% of checking, savings, and money market accounts • 100% of the remaining value of stocks & bonds, less any margin balance • 70% of retirement assets • 100% Cash Value of Life Insurance • 3-month seasoning of assets required The following assets are not permitted: • Funds in Foreign Banks Asset Conversion is an Alternative Income Documentation type and may be used as standalone income or with other income types. Bank Statement Documentation used to calculate self-employment income may not be included in the Asset Conversion calculation. The income calculation is as follows: Monthly Income = Net Qualified Assets / 60 Months. Refer to Carrington Prime Advantage Underwriting Guidelines for additional information.

INCOME/ASSETS, continued

Assets

Must be sourced/seasoned for 60 days. Asset statements must be dated within 120 days of closing and verified. Deposit verification and seasoning of assets must be documented by two months bank statements. Marketable securities require a copy of the stock certificate. Retirement accounts require documentation verifying the lending terms of the account. All sources of funds must be owned by the borrower. All large deposits must be sourced per guidelines. Asset documentation must be dated within 30 days of application and 90 days of closing. Evidence of liquidation is required for all securities and real estate. Evidence of transfer of funds is required for all cash accounts. Gifts are acceptable provided minimum borrower investment requirements are met.

Eligible Sources of Assets

Acceptable sources of funds are bank deposits (checking/savings), marketable public traded securities, loans secured by borrower's assets, sale of real estate, funds borrowed secured by real estate, withdrawals from trust funds, proceeds from surrendered life insurance, retirement accounts using 60% of available/vested balance (SEP-IRA, 401K), borrower’s real estate commission, business assets provided borrower is 50% owner of the business, and depleting the assets from the business account will not have a negative impact on the viability and cash flow of the business.

Ineligible Sources of Assets

Cash-on-hand, Sweat equity, Gift or grant funds which must be repaid, Down payment assistance programs, Bridge loans, Unsecured loans or cash advances, Section 8 Voucher Assistance, Cryptocurrency (digital assets such as bitcoins) and Private Savings Club accounts

Borrower Investment/ Contribution

Primary Residence - 5% own funds Second Home / Investment - 10% own funds A minimum borrower contribution of 10% is required on the following transactions: • Primary residence with unverifiable housing history • Loan amount over the FHFA Conforming Loan Limit

Asset Conversion

Borrowers must have the lesser of (a) 1.5 times the loan balance or (b) $1mm in qualified assets, both of which must be net of down payment, loan costs and required reserves to qualify. Qualified Assets can be comprised of stocks, bonds, mutual funds, vested amount of retirement accounts and bank accounts. If a portion of the qualified assets are being used for down payment, closing costs, or reserves, those amounts must be excluded from the balance before analyzing a portfolio for income determination. Please note: Restricted stock accounts are not considered qualified assets and are not eligible. The following assets are considered Qualified Assets and can be utilized to calculate income: • 100% of checking, savings, and money market accounts • 100% of the remaining value of stocks & bonds, less any margin balance • 70% of retirement assets • 100% Cash Value of Life Insurance • 3-month seasoning of assets required The following assets are not permitted: • Funds in Foreign Banks Asset Conversion is an Alternative Income Documentation type and may be used as standalone income or with other income types. Bank Statement Documentation used to calculate self-employment income may not be included in the Asset Conversion calculation. The income calculation is as follows: Monthly Income = Net Qualified Assets / 60 Months. Refer to Carrington Prime Advantage Underwriting Guidelines for additional information.

Asset Conversion

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · 2026-08-06

INCOME/ASSETS, continued
Assets	Must be sourced/seasoned for 60 days. Asset statements must be dated within 120 days of closing and verified. Deposit verification and seasoning of assets must be documented by two months bank statements. Marketable securities require a copy of the stock certificate. Retirement accounts require documentation verifying the lending terms of the account. All sources of funds must be owned by the borrower. All large deposits must be sourced per guidelines. Asset documentation must be dated within 30 days of application and 90 days of closing. Evidence of liquidation is required for all securities and real estate. Evidence of transfer of funds is required for all cash accounts. Gifts are acceptable provided minimum borrower investment requirements are met.
Eligible Sources of Assets	Acceptable sources of funds are bank deposits (checking/savings), marketable public traded securities, loans secured by borrower's assets, sale of real estate, funds borrowed secured by real estate, withdrawals from trust funds, proceeds from surrendered life insurance, retirement accounts using 60% of available/vested balance (SEP-IRA, 401K), borrower’s real estate commission, business assets provided borrower is 50% owner of the business, and depleting the assets from the business account will not have a negative impact on the viability and cash flow of the business.
Ineligible Sources of Assets	Cash-on-hand, Sweat equity, Gift or grant funds which must be repaid, Down payment assistance programs, Bridge loans, Unsecured loans or cash advances, Section 8 Voucher Assistance, Cryptocurrency (digital assets such as bitcoins) and Private Savings Club accounts
Borrower Investment/ Contribution	Primary Residence - 5% own funds Second Home / Investment - 10% own funds A minimum borrower contribution of 10% is required on the following transactions: • Primary residence with unverifiable housing history • Loan amount over the FHFA Conforming Loan Limit
Asset Conversion	Borrowers must have the lesser of (a) 1.5 times the loan balance or (b) $1mm in qualified assets, both of which must be net of down payment, loan costs and required reserves to qualify. Qualified Assets can be comprised of stocks, bonds, mutual funds, vested amount of retirement accounts and bank accounts. If a portion of the qualified assets are being used for down payment, closing costs, or reserves, those amounts must be excluded from the balance before analyzing a portfolio for income determination. Please note: Restricted stock accounts are not considered qualified assets and are not eligible. The following assets are considered Qualified Assets and can be utilized to calculate income: • 100% of checking, savings, and money market accounts • 100% of the remaining value of stocks & bonds, less any margin balance • 70% of retirement assets • 100% Cash Value of Life Insurance • 3-month seasoning of assets required The following assets are not permitted: • Funds in Foreign Banks Asset Conversion is an Alternative Income Documentation type and may be used as standalone income or with other income types. Bank Statement Documentation used to calculate self-employment income may not be included in the Asset Conversion calculation. The income calculation is as follows: Monthly Income = Net Qualified Assets / 60 Months. Refer to Carrington Prime Advantage Underwriting Guidelines for additional information.

INCOME/ASSETS, continued

Assets

Must be sourced/seasoned for 60 days. Asset statements must be dated within 120 days of closing and verified. Deposit verification and seasoning of assets must be documented by two months bank statements. Marketable securities require a copy of the stock certificate. Retirement accounts require documentation verifying the lending terms of the account. All sources of funds must be owned by the borrower. All large deposits must be sourced per guidelines. Asset documentation must be dated within 30 days of application and 90 days of closing. Evidence of liquidation is required for all securities and real estate. Evidence of transfer of funds is required for all cash accounts. Gifts are acceptable provided minimum borrower investment requirements are met.

Eligible Sources of Assets

Acceptable sources of funds are bank deposits (checking/savings), marketable public traded securities, loans secured by borrower's assets, sale of real estate, funds borrowed secured by real estate, withdrawals from trust funds, proceeds from surrendered life insurance, retirement accounts using 60% of available/vested balance (SEP-IRA, 401K), borrower’s real estate commission, business assets provided borrower is 50% owner of the business, and depleting the assets from the business account will not have a negative impact on the viability and cash flow of the business.

Ineligible Sources of Assets

Cash-on-hand, Sweat equity, Gift or grant funds which must be repaid, Down payment assistance programs, Bridge loans, Unsecured loans or cash advances, Section 8 Voucher Assistance, Cryptocurrency (digital assets such as bitcoins) and Private Savings Club accounts

Borrower Investment/ Contribution

Primary Residence - 5% own funds Second Home / Investment - 10% own funds A minimum borrower contribution of 10% is required on the following transactions: • Primary residence with unverifiable housing history • Loan amount over the FHFA Conforming Loan Limit

Asset Conversion

Borrowers must have the lesser of (a) 1.5 times the loan balance or (b) $1mm in qualified assets, both of which must be net of down payment, loan costs and required reserves to qualify. Qualified Assets can be comprised of stocks, bonds, mutual funds, vested amount of retirement accounts and bank accounts. If a portion of the qualified assets are being used for down payment, closing costs, or reserves, those amounts must be excluded from the balance before analyzing a portfolio for income determination. Please note: Restricted stock accounts are not considered qualified assets and are not eligible. The following assets are considered Qualified Assets and can be utilized to calculate income: • 100% of checking, savings, and money market accounts • 100% of the remaining value of stocks & bonds, less any margin balance • 70% of retirement assets • 100% Cash Value of Life Insurance • 3-month seasoning of assets required The following assets are not permitted: • Funds in Foreign Banks Asset Conversion is an Alternative Income Documentation type and may be used as standalone income or with other income types. Bank Statement Documentation used to calculate self-employment income may not be included in the Asset Conversion calculation. The income calculation is as follows: Monthly Income = Net Qualified Assets / 60 Months. Refer to Carrington Prime Advantage Underwriting Guidelines for additional information.

INCOME/ASSETS, continued
Gifts	Gift funds are acceptable once the borrower has met the minimum 5% contribution (Primary) or 10% (Second Home/Investment). Excess gift funds verified in the borrower's bank account prior to closing are permitted for reserves. Gift funds provided at closing may not be considered towards reserves. Gift funds must be from a relative: defined as the borrower’s spouse, child, or other dependent; or by any other individual who is related to the borrower by blood, marriage, adoption, or legal guardianship; or a fiancé, fiancée, or domestic partner. The donor may not have any affiliation with a party to the transaction. A signed gift letter is required and must include the amount of the gift, the donor's name, address, telephone number and relationship to borrower. Refer to guidelines for complete requirements on documenting the transfer of gift funds.
Gifts of Equity	Gifts of equity on non-arm’s length transactions are allowed. Primary residence transactions with gifts of equity are subject to the maximum LTVs available for cash-out transactions, and no minimum borrower contribution is required. Second Home and Investment property transactions are allowed after meeting the borrower’s minimum contribution requirement. The following requirements apply: Gift of equity is from an immediate family member, Six months of reserves required of borrower’s own funds, Non-arm’s length criteria is met, Signed gift letter is provided, and Gift of equity is listed on the settlement statement. For ITIN borrowers using a gift of equity, a 5% LTV reduction is required in lieu of using cash out LTVs.
Minimum Reserves	Cash out proceeds permitted for reserves with ≥ 620 FICO. Reserves must come from borrowers own funds. Subject property reserve requirement - refer to the above LTV, Additional Program overlays and requirements sections. Investment Properties and Second Homes Only: Minimum 6 months; 2 months of additional reserves required for each financed property; no limit on the number of other properties borrowers may have financed Multiple Financed Properties: 2 months for each additional property when the subject is a Second Home or Investment Property. Use of Rental Income Without a Lease: 3 months in addition to standard requirement No Housing History or Less Than 12 Months Verified: 6 months For files that have more than the required 3-month reserves (e.g. > $1MM - $1.5MM loan amounts) the reserve requirement can be reduced to 3 months when all of the following requirements are met: • Primary Residence; and • LTV ≥ 10% below the maximum available for the transaction; and • DTI ≤ 43%. Note: At no time will a file have less than 3 months reserves.
Qualifying Reserves on ARM Loans	Reserves on ARM loans must be determined based on the Fully Indexed Rate. Reserves are measured by the number of months of the qualifying payment amount for the subject mortgage (based on PITIA) that a borrower could pay using his or her financial assets.
Ineligible Reserves	Cash-on-hand, Sweat equity, Gift or grant funds which must be repaid, Down payment assistance programs, Bridge loans, Unsecured loans or cash advances, and Section 8 Voucher Assistance
Debt Ratio	See Grid Above
Retaining current Residence	If subject is an owner-occupied purchase transaction and borrower's current residence is pending sale, both the current and proposed housing payments are used to qualify.

INCOME/ASSETS, continued

Gifts

Gift funds are acceptable once the borrower has met the minimum 5% contribution (Primary) or 10% (Second Home/Investment). Excess gift funds verified in the borrower's bank account prior to closing are permitted for reserves. Gift funds provided at closing may not be considered towards reserves. Gift funds must be from a relative: defined as the borrower’s spouse, child, or other dependent; or by any other individual who is related to the borrower by blood, marriage, adoption, or legal guardianship; or a fiancé, fiancée, or domestic partner. The donor may not have any affiliation with a party to the transaction. A signed gift letter is required and must include the amount of the gift, the donor's name, address, telephone number and relationship to borrower. Refer to guidelines for complete requirements on documenting the transfer of gift funds.

Gifts of Equity

Gifts of equity on non-arm’s length transactions are allowed. Primary residence transactions with gifts of equity are subject to the maximum LTVs available for cash-out transactions, and no minimum borrower contribution is required. Second Home and Investment property transactions are allowed after meeting the borrower’s minimum contribution requirement. The following requirements apply: Gift of equity is from an immediate family member, Six months of reserves required of borrower’s own funds, Non-arm’s length criteria is met, Signed gift letter is provided, and Gift of equity is listed on the settlement statement. For ITIN borrowers using a gift of equity, a 5% LTV reduction is required in lieu of using cash out LTVs.

Minimum Reserves

Cash out proceeds permitted for reserves with ≥ 620 FICO. Reserves must come from borrowers own funds. Subject property reserve requirement - refer to the above LTV, Additional Program overlays and requirements sections. Investment Properties and Second Homes Only: Minimum 6 months; 2 months of additional reserves required for each financed property; no limit on the number of other properties borrowers may have financed Multiple Financed Properties: 2 months for each additional property when the subject is a Second Home or Investment Property. Use of Rental Income Without a Lease: 3 months in addition to standard requirement No Housing History or Less Than 12 Months Verified: 6 months For files that have more than the required 3-month reserves (e.g. > $1MM - $1.5MM loan amounts) the reserve requirement can be reduced to 3 months when all of the following requirements are met: • Primary Residence; and • LTV ≥ 10% below the maximum available for the transaction; and • DTI ≤ 43%. Note: At no time will a file have less than 3 months reserves.

Qualifying Reserves on ARM Loans

Reserves on ARM loans must be determined based on the Fully Indexed Rate. Reserves are measured by the number of months of the qualifying payment amount for the subject mortgage (based on PITIA) that a borrower could pay using his or her financial assets.

Ineligible Reserves

Cash-on-hand, Sweat equity, Gift or grant funds which must be repaid, Down payment assistance programs, Bridge loans, Unsecured loans or cash advances, and Section 8 Voucher Assistance

Debt Ratio

See Grid Above

Retaining current Residence

If subject is an owner-occupied purchase transaction and borrower's current residence is pending sale, both the current and proposed housing payments are used to qualify.

Identification Number

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · 2026-08-06

INCOME/ASSETS, continued
Non-Taxable Income	Must verify and document source of income is non-taxable. Documentation includes award letters, policy agreements, account statements or any other documents that address the non-taxable status of the income. All disclosed, non-taxable income must be grossed-up 125% even if not being used for qualification.
Manual Underwrite Only	All loans are manually underwritten. AUS is not permitted.
PURCHASE MONEY
Seller Contribution/Sales Concessions	Maximum seller contribution up to 9% towards closing for Primary Residence and Second Homes (LTV ≤ 75%), 6% towards closing for Primary Residence and Second homes (LTV > 75%); Up to 4% toward closing for Investment Properties for LTVs >65% and 6% for LTVs ≤ 65%. Sales concessions exceeding the seller contribution limits must be deducted from the sales price before calculating the LTV/CLTV. Financing concessions are not allowed.
GENERAL
Individual Taxpayer Identification Number (ITIN)	ITIN borrowers work and reside in the U.S. but do not possess U.S. citizenship or a Social Security Number (SSN). Refer to grid above for FICO and LTV restrictions when any borrower is using an ITIN. Maximum Unpaid Principal Balance (UPB) = $2.0MM • All ITIN borrowers must provide: o Unexpired government ID with photo (driver's license, passport, visa, etc.), and o Unexpired ITIN card or CP565 letter from the IRS assigning the ITIN to the borrower. The letter must be unexpired through the closing date. IRS form W7 is not an acceptable alternative to the ITIN card or CP565 letter. ▪ ITINs are expired if the ITIN card or IRS CP565 letter is more than three years old at closing. ▪ If the ITIN is expired, one of the following must be provided: Transcripts showing tax returns filed within the last three years using the ITIN (does not apply to alt doc income types); E-file receipt or letter from a Tax Preparer confirming the borrower’s most recent return has been filed with the IRS; or fully executed IRS W7 renewing the ITIN including agent signature. • A U.S. credit report must be obtained for each borrower using the valid ITIN number. o Limited tradelines are not permitted. The primary wage earner must meet the requirements for Standard Tradelines. • Full Income Documentation and Alternative Income Documentation types are permitted. o When required, 4506-C must be executed and processed using the borrower's ITIN number. See IRS 4506-C section in Employment/Income Documentation for processing requirements. • Non-occupant co-borrowers permitted on primary residence transactions. The non-occupant co-borrower must be a relative, defined as the borrower's spouse, fiancé, domestic partner, parent, grandparent, sibling, child or other dependent, who is related to the borrower by blood, marriage, adoption, or legal guardianship. • The following are ineligible: o Limited tradelines o ITIN borrowers with income documentation referencing a SSN • The above requirements apply when any borrower on the loan application is using an ITIN. • For ITIN borrowers using a gift of equity, a 5% LTV reduction is required in lieu of using cash out LTVs

INCOME/ASSETS, continued

Non-Taxable Income

Must verify and document source of income is non-taxable. Documentation includes award letters, policy agreements, account statements or any other documents that address the non-taxable status of the income. All disclosed, non-taxable income must be grossed-up 125% even if not being used for qualification.

Manual Underwrite Only

All loans are manually underwritten. AUS is not permitted.

PURCHASE MONEY

Seller Contribution/Sales Concessions

Maximum seller contribution up to 9% towards closing for Primary Residence and Second Homes (LTV ≤ 75%), 6% towards closing for Primary Residence and Second homes (LTV > 75%); Up to 4% toward closing for Investment Properties for LTVs >65% and 6% for LTVs ≤ 65%. Sales concessions exceeding the seller contribution limits must be deducted from the sales price before calculating the LTV/CLTV. Financing concessions are not allowed.

GENERAL

Individual Taxpayer Identification Number (ITIN)

ITIN borrowers work and reside in the U.S. but do not possess U.S. citizenship or a Social Security Number (SSN). Refer to grid above for FICO and LTV restrictions when any borrower is using an ITIN. Maximum Unpaid Principal Balance (UPB) = $2.0MM • All ITIN borrowers must provide: o Unexpired government ID with photo (driver's license, passport, visa, etc.), and o Unexpired ITIN card or CP565 letter from the IRS assigning the ITIN to the borrower. The letter must be unexpired through the closing date. IRS form W7 is not an acceptable alternative to the ITIN card or CP565 letter. ▪ ITINs are expired if the ITIN card or IRS CP565 letter is more than three years old at closing. ▪ If the ITIN is expired, one of the following must be provided: Transcripts showing tax returns filed within the last three years using the ITIN (does not apply to alt doc income types); E-file receipt or letter from a Tax Preparer confirming the borrower’s most recent return has been filed with the IRS; or fully executed IRS W7 renewing the ITIN including agent signature. • A U.S. credit report must be obtained for each borrower using the valid ITIN number. o Limited tradelines are not permitted. The primary wage earner must meet the requirements for Standard Tradelines. • Full Income Documentation and Alternative Income Documentation types are permitted. o When required, 4506-C must be executed and processed using the borrower's ITIN number. See IRS 4506-C section in Employment/Income Documentation for processing requirements. • Non-occupant co-borrowers permitted on primary residence transactions. The non-occupant co-borrower must be a relative, defined as the borrower's spouse, fiancé, domestic partner, parent, grandparent, sibling, child or other dependent, who is related to the borrower by blood, marriage, adoption, or legal guardianship. • The following are ineligible: o Limited tradelines o ITIN borrowers with income documentation referencing a SSN • The above requirements apply when any borrower on the loan application is using an ITIN. • For ITIN borrowers using a gift of equity, a 5% LTV reduction is required in lieu of using cash out LTVs

GENERAL, continued
Age of Documents	The Title Report and Closing Protection Letter (CPL) must be dated within 90 days of closing. All other loan documentation, including appraisal, credit report, income, and asset documentation, must be dated within 120 days of closing.
Loan Terms Available	30-year Fixed, 40-year Fixed, 5/6 ARM, 7/6 ARM, 5/6 ARM-IO, 7/6 ARM-IO, and 30-Year Fixed IO.
Qualifying Payment	Use Qualifying Rate for calculating PITIA
Interest-Only Qualifying Payment	Interest-only loans qualify using the fully amortized payment calculated over the fully amortizing period, based on the greater of the note rate or the fully indexed rate rounded up to the nearest eighth percentage to determine qualifying PITIA. For example, a 30-year loan with a 10-year interest-only period would have a 20-year fully amortizing period.
Escrow Waivers	All States excluding DC: Property tax and insurance escrows may be waived with FICO ≥ 700 and LTV ≤ 80%. DC loans: Property tax and insurance escrows may be waived if the LTV is 80% or lower. HPML loans: escrows may not be waived regardless of LTV.
Assumptions	Not permitted
Compliance	CMS complies with all applicable federal and state regulations.
High-Cost HOEPA Section 32 (Fed/State)	Not permitted for primary residences. Second homes and investment properties are exempt. States may impose different definitions of points and fees, rate, or APR than apply under HOEPA. States may also use different triggers in each category for determining whether a loan will be a "high- cost mortgage" (or equivalent terms) under state law. CMS does not originate loans defined as high-cost mortgages (or equivalent terms) under Federal or state law, regardless of the basis for the loan's treatment as such.
HPML/ Section 35 loans	HPML loans (Section 35) are permitted. Federal Section 35 High Priced Test (allowed if all 4 items below are met): 1. Loan is Impounded (escrows) 2. No Pre Payment Penalty 3. Ability to Repay has been verified 4. Full Appraisal Done on the Property HPML flip transactions require a second appraisal from a different certified or state licensed appraiser. Refer to the See Carrington Flexible Advantage Underwriting Guidelines for additional information.

GENERAL, continued

Age of Documents

The Title Report and Closing Protection Letter (CPL) must be dated within 90 days of closing. All other loan documentation, including appraisal, credit report, income, and asset documentation, must be dated within 120 days of closing.

Loan Terms Available

30-year Fixed, 40-year Fixed, 5/6 ARM, 7/6 ARM, 5/6 ARM-IO, 7/6 ARM-IO, and 30-Year Fixed IO.

Qualifying Payment

Use Qualifying Rate for calculating PITIA

Interest-Only Qualifying Payment

Interest-only loans qualify using the fully amortized payment calculated over the fully amortizing period, based on the greater of the note rate or the fully indexed rate rounded up to the nearest eighth percentage to determine qualifying PITIA. For example, a 30-year loan with a 10-year interest-only period would have a 20-year fully amortizing period.

Escrow Waivers

All States excluding DC: Property tax and insurance escrows may be waived with FICO ≥ 700 and LTV ≤ 80%. DC loans: Property tax and insurance escrows may be waived if the LTV is 80% or lower. HPML loans: escrows may not be waived regardless of LTV.

Assumptions

Not permitted

Compliance

CMS complies with all applicable federal and state regulations.

High-Cost HOEPA Section 32 (Fed/State)

Not permitted for primary residences. Second homes and investment properties are exempt. States may impose different definitions of points and fees, rate, or APR than apply under HOEPA. States may also use different triggers in each category for determining whether a loan will be a "high- cost mortgage" (or equivalent terms) under state law. CMS does not originate loans defined as high-cost mortgages (or equivalent terms) under Federal or state law, regardless of the basis for the loan's treatment as such.

HPML/ Section 35 loans

HPML loans (Section 35) are permitted. Federal Section 35 High Priced Test (allowed if all 4 items below are met): 1. Loan is Impounded (escrows) 2. No Pre Payment Penalty 3. Ability to Repay has been verified 4. Full Appraisal Done on the Property HPML flip transactions require a second appraisal from a different certified or state licensed appraiser. Refer to the See Carrington Flexible Advantage Underwriting Guidelines for additional information.

No Pre Payment Penalty

carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · 2026-08-06

GENERAL, continued
Age of Documents	The Title Report and Closing Protection Letter (CPL) must be dated within 90 days of closing. All other loan documentation, including appraisal, credit report, income, and asset documentation, must be dated within 120 days of closing.
Loan Terms Available	30-year Fixed, 40-year Fixed, 5/6 ARM, 7/6 ARM, 5/6 ARM-IO, 7/6 ARM-IO, and 30-Year Fixed IO.
Qualifying Payment	Use Qualifying Rate for calculating PITIA
Interest-Only Qualifying Payment	Interest-only loans qualify using the fully amortized payment calculated over the fully amortizing period, based on the greater of the note rate or the fully indexed rate rounded up to the nearest eighth percentage to determine qualifying PITIA. For example, a 30-year loan with a 10-year interest-only period would have a 20-year fully amortizing period.
Escrow Waivers	All States excluding DC: Property tax and insurance escrows may be waived with FICO ≥ 700 and LTV ≤ 80%. DC loans: Property tax and insurance escrows may be waived if the LTV is 80% or lower. HPML loans: escrows may not be waived regardless of LTV.
Assumptions	Not permitted
Compliance	CMS complies with all applicable federal and state regulations.
High-Cost HOEPA Section 32 (Fed/State)	Not permitted for primary residences. Second homes and investment properties are exempt. States may impose different definitions of points and fees, rate, or APR than apply under HOEPA. States may also use different triggers in each category for determining whether a loan will be a "high- cost mortgage" (or equivalent terms) under state law. CMS does not originate loans defined as high-cost mortgages (or equivalent terms) under Federal or state law, regardless of the basis for the loan's treatment as such.
HPML/ Section 35 loans	HPML loans (Section 35) are permitted. Federal Section 35 High Priced Test (allowed if all 4 items below are met): 1. Loan is Impounded (escrows) 2. No Pre Payment Penalty 3. Ability to Repay has been verified 4. Full Appraisal Done on the Property HPML flip transactions require a second appraisal from a different certified or state licensed appraiser. Refer to the See Carrington Flexible Advantage Underwriting Guidelines for additional information.

GENERAL, continued

Age of Documents

The Title Report and Closing Protection Letter (CPL) must be dated within 90 days of closing. All other loan documentation, including appraisal, credit report, income, and asset documentation, must be dated within 120 days of closing.

Loan Terms Available

30-year Fixed, 40-year Fixed, 5/6 ARM, 7/6 ARM, 5/6 ARM-IO, 7/6 ARM-IO, and 30-Year Fixed IO.

Qualifying Payment

Use Qualifying Rate for calculating PITIA

Interest-Only Qualifying Payment

Interest-only loans qualify using the fully amortized payment calculated over the fully amortizing period, based on the greater of the note rate or the fully indexed rate rounded up to the nearest eighth percentage to determine qualifying PITIA. For example, a 30-year loan with a 10-year interest-only period would have a 20-year fully amortizing period.

Escrow Waivers

All States excluding DC: Property tax and insurance escrows may be waived with FICO ≥ 700 and LTV ≤ 80%. DC loans: Property tax and insurance escrows may be waived if the LTV is 80% or lower. HPML loans: escrows may not be waived regardless of LTV.

Assumptions

Not permitted

Compliance

CMS complies with all applicable federal and state regulations.

High-Cost HOEPA Section 32 (Fed/State)

Not permitted for primary residences. Second homes and investment properties are exempt. States may impose different definitions of points and fees, rate, or APR than apply under HOEPA. States may also use different triggers in each category for determining whether a loan will be a "high- cost mortgage" (or equivalent terms) under state law. CMS does not originate loans defined as high-cost mortgages (or equivalent terms) under Federal or state law, regardless of the basis for the loan's treatment as such.

HPML/ Section 35 loans

HPML loans (Section 35) are permitted. Federal Section 35 High Priced Test (allowed if all 4 items below are met): 1. Loan is Impounded (escrows) 2. No Pre Payment Penalty 3. Ability to Repay has been verified 4. Full Appraisal Done on the Property HPML flip transactions require a second appraisal from a different certified or state licensed appraiser. Refer to the See Carrington Flexible Advantage Underwriting Guidelines for additional information.

GENERAL, continued QM Fees Ineligible States Illinois Anti-Predatory Lending Databases	Not applicable. Retail and Wholesale: Massachusetts and primary residence properties in New Hampshire are ineligible. Correspondent: All States are eligible. Primary residence properties in New Hampshire are ineligible. Interest Only loans not permitted in West Virginia. Primary Residence: Completion of the Illinois Anti-Predatory Lending Databases is required for subject properties in Cook, Kane, Peoria, and Will counties. A Certificate of Exemption or Certificate of Compliance is required to record the loan. Retail Loans Only: Interest Only loans not permitted in Illinois in Cook, Kane, Peoria, and Will counties.
Maryland HPML Attestation	In compliance with Maryland Mortgage Statute 09.03.06.20 – Duty of Care, Brokers must provide an executed HPML Attestation for HPML loans with a subject property in the state of Maryland.
New York Loans	Primary Residence and Second Homes: Loans must pass the NY Subprime test. Investment Properties: Minimum Loan Amount = $100,000. NY CEMA Loans are permitted (NY CEMA not eligible for CMS Correspondent channel)
Documenting Business Bank Ownership	Generally, the parties on the business bank accounts should be the same parties on the loan request. If a party appears on a business bank account but is not a borrower on the loan, business records must be provided to prove the borrower’s percentage of ownership and entitlement to profits. Examples of acceptable documentation include: Articles of Incorporation with stock ownership breakdown, the business’s Operating Agreement, a Corporate Resolution, or letter from the company’s tax preparer. Qualifying income must be multiplied by the percentage of profits that the borrower is entitled to.

GENERAL, continued QM Fees Ineligible States Illinois Anti-Predatory Lending Databases

Not applicable. Retail and Wholesale: Massachusetts and primary residence properties in New Hampshire are ineligible. Correspondent: All States are eligible. Primary residence properties in New Hampshire are ineligible. Interest Only loans not permitted in West Virginia. Primary Residence: Completion of the Illinois Anti-Predatory Lending Databases is required for subject properties in Cook, Kane, Peoria, and Will counties. A Certificate of Exemption or Certificate of Compliance is required to record the loan. Retail Loans Only: Interest Only loans not permitted in Illinois in Cook, Kane, Peoria, and Will counties.

Maryland HPML Attestation

In compliance with Maryland Mortgage Statute 09.03.06.20 – Duty of Care, Brokers must provide an executed HPML Attestation for HPML loans with a subject property in the state of Maryland.

New York Loans

Primary Residence and Second Homes: Loans must pass the NY Subprime test. Investment Properties: Minimum Loan Amount = $100,000. NY CEMA Loans are permitted (NY CEMA not eligible for CMS Correspondent channel)

Documenting Business Bank Ownership

Generally, the parties on the business bank accounts should be the same parties on the loan request. If a party appears on a business bank account but is not a borrower on the loan, business records must be provided to prove the borrower’s percentage of ownership and entitlement to profits. Examples of acceptable documentation include: Articles of Incorporation with stock ownership breakdown, the business’s Operating Agreement, a Corporate Resolution, or letter from the company’s tax preparer. Qualifying income must be multiplied by the percentage of profits that the borrower is entitled to.

Carrington Correspondent

Source documents

Criteria tables

Maximum Loan Amount

Std/Ltd

No Seasoning

Alternative Income Documentation Types Include

Date

Date

Reserves

Projects

Leasehold Mortgages

Limited Cash Out

Secondary Financing

History

Offs

Minimum Payment

Rental Income

Asset Conversion

Identification Number

No Pre Payment Penalty