Underwriting Guidelines - National MI

1 National MI TrueGuide : Underwriting Guidelines VERSION Effective: 6/1/2021. EF F EC TI V E: 6. 1. 2021 1 A S 0. 13. 02. National MI TrueGuide : Underwriting Guidelines Table of Contents COVID-19 Guidelines .. 7. Introduction .. 8. National MI TrueGuide Underwriting Philosophy ..8. Compliance with Laws and Regulations ..9. Insured Originator Approval .. 10. Delegation of Underwriting Authority .. 10. National MI AXIS Online System .. 11. GSE AUS Systems .. 11. Delegated Assurance Review (DAR) with Independent Validation .. 11. Premium Plans .. 12. Guideline Questions .. 12. Mortgage Insurance Eligibility - AUS Plus Overlays .. 13. AUS Requirements and Comprehensive Credit Assessment .. 13. DU /LPA Outcomes.

2 13. Data Integrity .. 13. Documentation .. 13. Comprehensive Credit 13. General Eligibility 15. Products .. 15. Purpose .. 15. Construction to 15. Renovation Loans .. 16. Occupancy .. 16. Residency .. 16. Credit History .. 16. Non-arm's Length Transactions .. 16. Assets and Equity .. 17. Wholesale Lending .. 17. Corporate Relocation .. 17. State Restrictions .. 17. Appraisal Review .. 18. Manufactured Homes .. 19. Automated Tools .. 20. Credit Overlay Requirements .. 21. Section AUS Conforming Loans .. 22. Section AUS Conforming High Balance Loans .. 23. Section AUS Affordable 24. Mortgage Insurance Eligibility Non AUS Dependent Standard Guidelines .. 25. Mortgage Products (Loan Type) .. 25. Fixed Rate Mortgages.

3 25. EF F EC TI V E: 6. 1. 2021 2 A S 0. 13. 02. National MI TrueGuide : Underwriting Guidelines Graduated Payment Mortgages .. 25. Balloon Mortgages .. 25. Adjustable Rate Mortgages (ARMs) .. 26. Subordinate Financing .. 27. Buydowns .. 27. Borrower Eligibility .. 27. Citizenship and Residency Requirements .. 27. Non-occupant Co-borrowers .. 28. Co-signers .. 28. Trusts .. 28. Non-Arm's Length Transactions .. 28. Maximum Number of Insured Loans .. 29. Borrowers with Previously Paid Claims .. 29. Occupancy .. 29. Types .. 29. Primary Residence Classification Buying for Parent or Documentation .. 29. Occupancy Conversions .. 30. Pending Sale of Departure Residence .. 31. Purpose .. 32. Purchase.

4 32. Rate and Term Refinance .. 32. Cash-Out Refinance .. 33. Corporate Relocation .. 33. Construction to 33. Home Renovation (Improvement) .. 36. Affordable Lending .. 37. General Requirements ..37. Reserves ..37. Borrower Contributions ..38. Gifts and Grants ..38. Special Programs .. 38. Medical Professional Program ..38. Seasoned Loans .. 39. Underwriting the Borrower .. 39. Income Documentation and Calculations .. 39. General and Form 4506 Requirements ..39. Alimony or Child Support ..41. Auto Allowance ..41. Bonus or Overtime ..41. Capital Gains ..41. Commission ..42. Disability ..42. Employment Offers and Compensation Increases ..42. Foreign Foster Care ..43. Hourly ..43. EF F EC TI V E: 6.

5 1. 2021 3 A S 0. 13. 02. National MI TrueGuide : Underwriting Guidelines Interest and Dividend ..43. Military ..43. Note Receivable ..43. Overtime ..43. Part-Time or Secondary ..44. Public Assistance (Including Housing Choice Voucher Section 8) ..44. Rental ..44. Retirement Asset Liquidation (Fund Income) ..45. Retirement, Government Annuity and Pension ..45. Reverse Mortgage Income ..45. Royalty Payments ..46. Salaried/Hourly ..46. Seasonal ..46. Secondary Employment (Second Job) ..46. Self-Employment ..47. Social Security ..48. Temporary Leave ..49. Tips ..50. Trust ..50. Unemployment Benefits ..50. VA Benefits ..50. Mortgage Credit Certificate (MCC) ..50. Ineligible Sources of Income ..51. Unreimbursed Business Expenses.

6 51. Other Eligible Income ..51. Verbal Verification of 52. Asset Documentation and Calculations .. 53. Source of Minimum Borrower Contributions (Occupant Borrower's Own Funds) ..53. Additional Eligible Assets ..55. Ineligible Assets ..57. Interested Party Contributions and Abatements ..57. Reserve Requirements ..58. Credit Reports and Scores .. 58. Traditional Credit Requirements ..58. Non-Traditional Foreign Credit ..59. Representative FICO Score for Underwriting ..59. Minimum FICO Payment of Derogatory Amounts ..59. Fraud Alert Messages on Credit Reports ..59. Liabilities and 60. General Requirements ..60. Qualifying Payment Amounts ..61. Debt-To-Income (DTI) Ratios ..63. Underwriting the Property.

7 63. Eligible Property Types .. 63. Single Family/PUD ..63. Condominiums ..63. Co-ops ..64. EF F EC TI V E: 6. 1. 2021 4 A S 0. 13. 02. National MI TrueGuide : Underwriting Guidelines Two-Four (2-4) Units ..64. Mixed Factory-Built and Manufactured Housing ..65. Zoning ..65. Accessory Unit ..65. Property Condition ..65. Postponed Improvements Completion Escrows ..66. Properties Listed or Previously Listed For Resale Restrictions ..67. Seasonal Second Homes Not Suitable for Year-Round Occupancy ..68. Ineligible Property 68. Eligible Ownership Types .. 69. Fee Simple Estate ..69. Leasehold Estates ..69. Property Flips .. 69. Geographic and Market Considerations .. 70. Restricted Markets ..70. Appraisal Indicates Declining Market.

8 70. Appraisal Types .. 70. Appraisal Review .. 71. Loan-to-Value (LTV) and Home Equity Combined Loan-to-Value (HCLTV) .. 71. Financed Premiums and LTV .. 71. Home Equity Combined Loan-to-Value (HCLTV) .. 72. Loan Amount .. 72. Insurance Requirements .. 72. Flood Insurance .. 72. Hazard 72. Title Insurance .. 72. Legal and Regulatory Requirements .. 72. Age of Documentation .. 72. Credit Bureau and FICO Score .. 72. Income and Asset Documentation .. 72. Verbal Verification of 72. 72. Additional Requirements .. 73. Origination Channel (Retail and Non-Retail) .. 73. Fraud Tools .. 73. Changes to MI Commitments .. 73. Incomplete/Denied Applications and Borrower Communication .. 74. Pre-Funding Audit.

9 74. Comprehensive Credit 74. State Restrictions .. 75. Third Party Verification Services .. 76. Product Eligibility Matrices Non AUS Conforming, Non AUS Jumbo, Non AUS Affordable Loans and Medical Professionals Program .. 76. EF F EC TI V E: 6. 1. 2021 5 A S 0. 13. 02. National MI TrueGuide : Underwriting Guidelines Section Non AUS Conforming Loans .. 77. Section Non AUS Jumbo Loans .. 78. Section Non AUS Affordable Lending .. 79. Section Non AUS Medical Professionals Program .. 80. Commitments and Certificates .. 81. Conditional Commitments and/or 81. Submission Requirements .. 81. Delegated Submissions .. 81. Non-delegated Submissions .. 82. Non-delegated Post Closing Package Submissions.

10 83. MI Submissions & Document Delivery Methods .. 83. National MI's AXIS System .. 83. Loan Origination System (LOS) .. 83. Email or 83. National MI Commitment of Insurance and Insurance Activation .. 84. Commitment Extensions & Reinstatement of Cancelled or Expired Commitments .. 84. Activation of a National MI Commitment .. 84. Changes After Insurance Issued (Certification) .. 85. Insuring Loans after Closing .. 85. Assumptions, Partial Releases and Transfers of Title .. 85. Modifications to Existing National MI Insured Loans .. 85. Reinstatement of Cancelled Certificate .. 85. Delegated Underwriting Requirements .. 86. Delegated Program Requirements .. 86. Delegated Underwriting Program Approval.