Freddie Mac Single-Family Seller/Servicer Guide 4504.6 — Underwriting requirements, qualifying ratios and maximum loan-to-value (LTV)/total LTV (TLTV) ratios for HeritageOne® Mortgages

Freddie Mac Single-Family Seller/Servicer Guide 4504.6 — Underwriting requirements, qualifying ratios and maximum loan-to-value (LTV)/total LTV (TLTV) ratios for HeritageOne® Mortgages

Effective 2025-03-05 · Freddie Mac's stamp for this section

This section contains requirements related to: ■ Underwriting ■ Qualifying ratios ■ Maximum loan-to-value (LTV)/total LTV (TLTV) ratios (a) Underwriting The Mortgage must be an Accept Mortgage or a Manually Underwritten Mortgage. Mortgages secured by 2- to 4-unit properties must be Accept Mortgages. For Manually Underwritten Mortgages: ■ Each Borrower individually, and all Borrowers collectively, must have an acceptable credit reputation (as described in Topics 5100 and 5200 for Manually Underwritten Mortgages) ■ An individual Borrower with insufficient credit history for whom the Seller cannot document a credit reputation is considered to have an acceptable credit reputation if: ❑ No evidence of derogatory credit, such as a lien, judgment or collection, paid or unpaid, is reflected on the credit report or elsewhere in the Mortgage file with respect to such Borrower; and ❑ At least one other Borrower whose income and assets are used for qualification has an acceptable credit reputation Any income contributed by the Borrower with insufficient credit history may be considered as qualifying income if the amount contributed by such Borrower is not more than 30% of the total qualifying income. The minimum Indicator Scores for Manually Underwritten Mortgages are: Minimum Indicator Scores for Manually Underwritten HeritageOne® Mortgages Property/Mortgage type Minimum Indicator Score1 Purchase transaction Mortgages secured by 1-unit properties 660 “No cash-out” refinance Mortgages secured by 1-unit properties 680 Manufactured Homes 680 1 The minimum Indicator Scores are also in Exhibit 25, Mortgages with Risk Class and/or Minimum Indicator Score Requirements. (b) Qualifying ratios There is no maximum monthly housing expense-to-income ratio, except for Manually Underwritten Mortgages that include a non-occupying Borrower. See Section 5103.1 for additional requirements for Mortgages that include a non-occupying Borrower. For Loan Product Advisor® Mortgages, the maximum monthly debt payment-to-income (DTI) ratio is determined by Loan Product Advisor. For Manually Underwritten Mortgages, the maximum monthly DTI ratios are: Maximum monthly DTI ratios for Manually Underwritten HeritageOne Mortgages Property/Mortgage type Maximum monthly DTI ratio 1-unit properties1 45% Manufactured Homes that are Caution Mortgages 36% 1 See Section 5103.1 for additional requirements for Mortgages that include a non-occupying Borrower. Note: The Borrower’s monthly DTI ratio must be underwritten pursuant to Section 5401.2. (c) Maximum LTV/TLTV ratios The value used to calculate the LTV/TLTV ratios must be established pursuant to Section 4203.1(a). The following maximum LTV/TLTV ratios apply to both purchase transaction and “no cashout” refinance Mortgages: Maximum LTV/TLTV ratios for HeritageOne Mortgages Property/Mortgage type Maximum LTV/TLTV ratios 1-unit properties1 97%2 2- to 4-unit properties 95%2 CHOICEHomes® 97%2 Manufactured Homes1, 3 See Chapter 5703 1 See Section 5103.1 for additional requirements for Mortgages that include a non-occupying Borrower. 2 A TLTV ratio not exceeding 105% is permitted when secondary financing is an Affordable Second®. 3 If permitted under the Seller’s Purchase Documents, see Section 5706.5 for additional requirements for Manufactured Homes on leasehold estates. Note: The maximum LTV/TLTV ratios may be lower for a Condominium Unit Mortgage depending on the project review type or whether the Mortgage is exempt from project review (see Chapter 5701).

Source: Freddie Mac Single-Family Seller/Servicer Guide 4504.6 — Underwriting requirements, qualifying ratios and maximum loan-to-value (LTV)/total LTV (TLTV) ratios for HeritageOne® Mortgages · source URL · snapshot 4c94f67729042dd6