FANNIE M F 5/1 LIBOR ARM REVISED - CUHMS

1 FANNIE MAE FIXED 5/1 LIBOR ARM REVISED 5/25/2012. Eligible Minimum Transaction Type Number Maximum Maximum DTI Ratio Property Types Credit Score (1) of Units LTV/CLTV/HCLTV (4). (2) (3). Primary Residences Detached SFR. Purchase Money Condominium 97% / 97% / 97%. Mortgage 1-Unit PUD. and Manufactured 85% / 90% / 90%. Limited Cash-Out ( < 30 Years). Refinance 2-Units Multi-Family 80% / 80% / 80%. 3-4 Units Multi-Family 75% / 75% / 75% 620 45%. Detached SFR. Condominium 85%/ 85% / 85%. Cash-Out 1 Unit PUD. Refinance Manufactured 65% / 65% / 65%. ( < 20 Years). 2-4 Units Multi-Family 75% / 75% / 75%. Second Homes Owns 5-10 Financed Properties = See Page 12.

2 Purchase Money Detached SFR. Mortgage Condominium 90% / 90% / 90% LTV > 80% 720. and 1-Unit PUD LTV 660. Limited Cash-Out Manufactured LTV < 75% 620. Refinance 85% / 90% / 90%. ( < 30 Years). 45%. Detached SFR. Condominium 75% / 75% / 75%. Cash-Out 1-Unit PUD 680. Refinance Manufactured NA / NA / NA. ( < 20 Years). Investment Properties Owns 5-10 Financed Properties = See Page 12. Detached SFR 80% / 80% / 80%. 1 Unit 680 if LTV > 75%. Condominium (5). 620 if LTV < 75%. Purchase Money PUD. Mortgage 1 Unit Manufactured NA / NA / NA NA. 2-4 Units Multi-Family 75% / 75% / 75% 660. Detached SFR. Condominium 1-2 Units = 620. 1-4 Units 75% / 75% / 75% 45%. Limited Cash Out PUD 3-4 Units = 660.

3 Multi-Family 1 Unit Manufactured NA / NA / NA NA. Detached SFR. 1 Units Cash-Out Condominium 75% / 75% / 75 700 - All LTV. Refinance PUD. 2-4 Units Multi-Family 70% / 70% / 70% 680 - All LTV. (1) Highlights are based on FNMA Eligibility Guidelines. Although loan may be eligible for FNMA, it may not be eligible for MI or DGU. Refer to MI or DGU for qualifying guidelines. (2) Attached Condominium and PUD must meet secondary market and MI minimum project review guidelines (3) Loans not meeting minimum credit score must receive AUS approval, and have direct approval by MI Company, if applicable (4) Ratios exceeding maximum must have strong compensating factors, receive AUS approval, and direct approval by MI Company (5) Investment Property LTV reduced from FNMA guideline due to LTV > 80% is ineligible for Mortgage Insurance M:\Mortgage Procedures\Program Highlights\FNMA Conforming Page 1 of 13.

4 GENERAL GUIDELINES: All loans must be eligible to be sold to FANNIE Mae. (Refer to , MRI FNMA Standards Quick Reference, and/or MI Company site for complete guidelines). LOAN TYPE / AMORTIZATION: 10, 15, 20, 30, 40-Year Fixed 30- and 40-Year 5/1 LIBOR ARM. 5/1 LIBOR ARM: ARM Features: 5/1 LIBOR ARM. Index 1-Year LIBOR Index Margin Fixed Rate Period 60 Months First Adjustment Cap Periodic Interest Rate Cap Lifetime Interest Rate Cap Conversion Option to Fixed Rate No Qualifying Rate: Qualifying rate is the note interest rate plus 2% or the fully indexed rate whichever is greatest. MAXIMUM LOAN LIMITS: 1 Unit $417,000. 2 Units $533,850. 3 Units $645,300. 4 Units $801,950.

5 GEOGRAPHIC MARKET AREAS: Washington State only ELIGIBLE APPLICANTS: Borrower must be eligible for credit union membership Citizens Inter Vivos Revocable Trusts (Must be approved by title company - see investor guidelines for requirements). Permanent Resident Aliens (the right to live and work in the US permanently). Non-permanent Resident Aliens (the right to live and work in the US temporarily) are eligible for: Purchase and Rate/Term Refinance Owner-Occupied only Evidence of Occupancy status is validated by one of the following required INS documents: - Unexpired foreign passport containing INS form I-94 stamped with Employment Authorized . - Temporary Resident Card form I-688.

6 - Employment Authorization Card form I-688 A or O containing the applicant's photograph Evidence of Residency status is validated by a copy of the borrower's temporary work Visa (INS form I- 94). The following documentation is required for Residency eligibility: - Borrower must have established a 2-year history of residency, employment and credit within the US. - VISA status must provide a remaining duration of at least three years - Heavy emphasis will be placed on employment and likelihood of continuation - Assets for down payment, closing costs and reserves should be verified on deposit in a US financial institution for at least 6 months M:\Mortgage Procedures\Program Highlights\FNMA Conforming Page 2 of 13.

7 Ineligible: Non-Resident Aliens, Partnerships, Corporations, Syndications, Trusts (other than Inter Vivos Revocable Trusts), and Foreign Nationals DOCUMENTATION: If MI or DGU, loan must meet their minimum documentation requirements; regardless of AUS. recommendation Credit documentation cannot be over 90 days old at time of closing DU recommended documentation acceptable. Verbal verification of employment and copy of business license, if applicable IRS 4506T for each applicant; verified prior to doc prep FraudGuard and clearance of red flags Liabilities not reflected on the credit report are to be fully documented by supplement to credit report, direct verification of loan-mortgage, or copies of most recent real estate tax and insurance statement for other real estate owned.

8 Investment transactions require documentation verifying primary residence mortgage payment includes PITI. or member is to provide copies of current real estate tax statement and insurance statement. 1008 underwriting comments to clearly characterize the loan and justify approval Any additional documentation deemed necessary by underwriter NON-OCCUPANT CO-APPLICANTS: Non-occupant co-applicants are allowed Refer to Mortgage Insurance Company Guidelines For mortgage loans with a non-occupant co-borrower, the LTV, CLTV, and HCLTV ratios cannot exceed 90%. for manually underwritten loans, or 97% for loan case files underwritten with DU. These limitations are not applicable if the maximum LTV ratios for the transaction are lower than 90 or 97%, respectively.

9 DU will analyze the risk factors in the loan casefile without the benefit of the non-occupant co-borrower's income or liabilities and will not require verification of employment or income for the non-occupant co- borrower. For manually underwritten loans, the income from a non-occupant co-borrower may be considered as acceptable qualifying income. This income can offset certain weaknesses that may be in the occupant borrower's loan application, such as limited financial reserves, limited credit history, or higher-than-normal qualifying ratio. However, it may not be used to offset significant or recent instances of major derogatory credit in the occupant borrower's credit history.

10 The occupant borrower must still reasonably demonstrate an ability and willingness to make the mortgage payments and maintain homeownership. Note: If loan is manually underwritten, DU report would not be part of the loan file, and ALL FANNIE Mae manual underwriting requirements for the loan in its entirety applies. MORTGAGE INSURANCE: Refer to MI Premium Schedule Delegated MI Underwriting is not allowed - Direct MI Approval Required LTV > 95% to be insured by MGIC. Loan must meet MI company minimum underwriting guidelines; regardless of AUS recommendation CREDIT HISTORY: A joint credit report on more than one individual applicant, without regard to marital status, is acceptable.