Section 3.1: Borrower Eligibility - esnmc.com

1 Section : Borrower Eligibility Borrower Eligibility A Overview SecurityNational Mortgage will allow mortgages made to natural persons only. If the borrowers are another type of legal entity or hold title in another type of entity (such as a corporation, S Corporation, non revocable inter vivos trust, life estate, land trust, general partnership or real estate syndication), the mortgage is ineligible. Additionally, loans where a custodian, agent, conservator, or guardian is signing on behalf of the Borrower , non Borrower spouse, or a vested owner are not allowed. B Borrower 's Age All borrowers must have reached the age at which the mortgage note can be legally enforced in the jurisdiction where the property is located. There is no maximum age limit for borrowers. All borrowers are evaluated on their ability to meet SNMC underwriting guidelines. C Employee Loans All employee loans must be processed with full income and asset documentation.

2 All employee loans must be processed through the retail channel and underwritten by a corporate underwriter. The loan application must be processed by a different branch than where the employee is employed. If you have any questions, please contact the Credit Policy Department. D Power of Attorney Whenever we have a loan request, where the Borrower or borrowers will not be present to sign the loan documents, and therefore are using a Power of Attorney (POA), the underwriter needs to evaluate the file very carefully and make sure the use of a POA does not present undue risk with the loan file. After reviewing the overall transaction, and other documents in the credit file, if the underwriter can justify the use of the POA, they should put a condition in E approve and then sign it off so that the closers/funders know the file is OK to close with a POA for the Borrower . If a file goes to closing with the use of a POA for the Borrower , and there is not a condition listed and signed off by the underwriter, it is the responsibility of the closer/funder to return the file to underwriting, so a proper risk analysis can be made.

3 E Residency E1 United States Citizen A United States citizen is a native or naturalized person entitled to rights and privileges of the United States. Unless otherwise noted, loan program requirements are based on the assumption that the Borrower is a United States citizen. SNMC P a g e | 1 Section : Borrower Eligibility E Residency (cont'd) E2 Permanent resident Aliens (cont'd) Permanent resident aliens are non United States citizens who hold acceptable evidence of permanent residency issued by the citizenship and Immigration Services (USCIS). SNMC will allow mortgages made to non citizens who are lawful, permanent residents of the United States under the same terms available to citizens. Permanent resident aliens must have any of the following: Permanent resident Card (USCIS form I 551) May be issued as a conditional right to reside for individuals seeking residency through marriage to a citizen/permanent resident or based on a financial investment in a business.

4 These cards will have an expiration date and are valid for two years. At the end of the two years the individual must apply for an unconditional right to reside or risk losing their permanent resident status. Cards that are due to expire within 90 days must be accompanied by a copy of the USCIS form I 751 (Petition to Remove Conditions on Residence) or USCIS form I 829 (Petition by Entrepreneur to Remove Conditions) filing receipt. Cards may be issued without conditions and are valid for ten years. Cards that are due to expire within 6 months must be accompanied with a copy of USCIS form I 90 (Application to Replace Permanent resident Card) filing receipt. There are numerous versions of the I551 card that are no longer issued but are considered valid as long as unexpired. Cards that are due to expire within 6 months must be accompanied with a copy of USCIS form I 90 (Application to Replace Permanent resident Card) filing receipt.

5 Unexpired Foreign Passport Must contain an unexpired stamp reading Processed for I 551 Temporary Evidence of Lawful Admission for Permanent Residence. Valid until mm dd yy. Employment authorized. A copy of the Green Card/United States Permanent resident Alien Card is required for all permanent resident aliens whose income and/or assets are being used to qualify for a loan. A copy of the front and back of the card is required and must be included in the loan file. While the Green Card itself states Do Not Duplicate for the purpose of replacing the original card, Citizenship and Immigration Services (USCIS) allows photocopying of the Green Card. Making an enlarged copy or copying on colored paper may alleviate any concerns the Borrower may have with photocopying. FHA loans For those borrowers with lawful permanent resident alien status, FHA will insure the mortgage under the same terms and conditions as citizens; the lender must document the mortgage file with evidence of permanent residency and indicate on the Uniform Residential Loan Application (URLA) that the Borrower is a lawful permanent resident alien.

6 Evidence of lawful permanent residency is issued by the Bureau of Citizenship and Immigration Services (BCIS)(Formerly the Immigration and Naturalization Service) within the Department of Homeland Security. SNMC P a g e | 2 Section : Borrower Eligibility E Residency (cont'd) E3 Non Permanent resident Aliens Non permanent resident aliens are non United States citizens who are permitted to reside in the United States on a temporary basis and may have been granted authorization to work in the by the Citizenship and Immigration Services (USCIS). These borrowers follow the non permanent resident alien guidelines. These non permanent resident aliens must have valid visas or other proof of legal residency. Acceptable visas are: E 1, Treaty Trader: This visa is essentially the same as an H 1 or L 1; the title refers to the foreign country's status with the United States H 1 (includes H 1B and H 1C), Temporary Worker: This is the most common visa given to foreign citizens who are temporarily working in the United States L 1, Intra Company Transferee: given to professional employees whose company's main office is in a foreign country (L 2 applies to the spouse and children of the L 1 nonimmigrant) G series: given to employees of international organizations that are located in the United States.

7 Some examples include the United Nations, Red Cross, World Bank, UNICEF, and the International Monetary Fund. Verification that the applicant does not have diplomatic immunity must be obtained from the applicant's employer and reviewing the applicant's passport and reviewing the diplomatic list. TN 1, Canadian NAFTA visa: Used by Canadian citizens for professional or business purposes TN 2, Mexican NAFTA visa: Used by Mexican citizens for professional or business purposes Notes: Foreign nationals from Canada and Mexico who are working in the under the terms of NAFTA should be treated as non permanent resident aliens when determining their Eligibility for mortgage financing. Residency The following documentation is required to verify residency: Verification that the Borrower is authorized to work in the with a source of income. Evidence of a visa that allows the Borrower to reside and work in the for a limited amount of time. There is no minimum time required to be left on the visa; however, underwriter discretion is advised.

8 If there is less than six months remaining, the Borrower should provide a letter explaining his/her intention to reman in the country, and a copy of their application for the visa extension. SNMC P a g e | 3 Section : Borrower Eligibility E Residency (cont'd) E3 Non Permanent resident Aliens (cont'd) Funds Funds recently deposited into a depository institution are an acceptable source of funds if there is evidence that the funds were transferred from the country from which the Borrower permanently resides, and it can be established that the funds were the Borrower 's before the date of transfer. In this case, the sources of all funds used for closing should be verified as for a Borrower who is a citizen. Documentation requirements are: A copy of the Wall Street Journal showing the conversion rate used should be provided in the loan file along with a written conversion of the beginning and end balances. Funds for the down payment, closing costs and reserves must be verified as being on deposit in a bank prior to closing.

9 Additional Information If the visa will expire within six (6) months of loan application and the Borrower has not changed employers, a copy of the employer's letter of sponsorship for renewal must be provided. If the Borrower is changing or has changed employers at or after loan application, a new visa must be obtained (pending applications for visas are not acceptable) An application to change status is NOT sufficient evidence of lawful residency If a non permanent resident alien is a Borrower with a citizen, it does not eliminate or reduce any visa or other non permanent resident alien documentation requirements All standards for determining stable monthly income, adequate credit history and sufficient liquid assets must be applied in the same manner to each Borrower , including Borrowers who are non permanent resident aliens. Income should be expected to continue for at least 3 years. If the petitioner (employer) on a Notice of Approval is different than the employer listed on the loan application for the Borrower , the Notice of Approval is no longer valid.

10 Conventional Non permanent resident aliens must have been employed in the for the previous two years. FHA FHA will insure a mortgage made to a non permanent resident alien provided that the property will be the Borrower 's principal residence, the Borrower has a valid SSN, and the Borrower is eligible to work in the as evidenced by an Employment Authorization Document (EAD) issued by BCIS. If the authorization for temporary residency status will expire within one year and a prior history of residency status renewals exists, the underwriter may assume continuation will be granted. If there are no prior renewals, the underwriter must determine the likelihood of renewal, based on information from the BCIS. Although social security cards may indicate work status, such as not valid for work purposes , an individual's work status may change without the change being reflected on the actual social security card. Therefore, the social security card is not to be used as evidence of work status for non permanent resident aliens; the BCIS employment authorization document is to be used instead.