Conventional Matrix

Nov. 20, 2023 Advantage Conventional Eligibility Matrix Page 1 of 6

WHEDA Advantage Conventional

Eligibility Matrix

HFA Preferred

(MI) Product

Includes HomeStyle® Renovation

*WHEDA Advantage Compliance requirements supersede Fannie Mae’s Standard, HomeReady®, and HomeStyle® Renovation Guidelines.

Underwriting

Community

Lending Programs

and Mortgage

Insurance

HFA Preferred™

Total annual qualifying income ≤ 80% AMI*:

Total annual qualifying income >80%AMI*:

Charter lever Mortgage Insurance** Coverage applies:

o 95.01 - 97% LTV = 18% coverage

o 90.01 - 95% LTV = 16% coverage

o 85.01 - 90% LTV = 12% coverage

o 80.01 - 85% LTV = 6% coverage

o 80% LTV and lower = Not required

• Subject to interest rate adjustment, and

• Standard Mortgage Insurance** Coverage applies:

o 95.01% - 97.00% = 35% coverage

o 90.01% - 95.00% = 30% coverage

o 85.01% - 90.00% = 25% coverage

o 80.01% - 85.00% = 12% coverage

o 80% LTV and lower = Not required

*Total Household Compliance Income must also meet the WHEDA Income Limits for the appropriate program.

** Mortgage Insurance Company overlays apply for loan amounts > 80% LTV

Desktop

Originator®

Desktop

Underwriter®

• Desktop Originator® (DO®)/Desktop Underwriter® (DU®) submission is mandatory.

• There may be exceptions to the requirements for certain transactions. Refer to the Notes section under each grid.

• When combining HFA Preferred (HomeReady) and HomeStyle® Renovation, the more restrictive guideline must be applied.

Approve/Eligible Recommendation

Maximum DTI as determined by DU/DO

Transaction Type

Number of Units

Maximum

LTV /CLTV /HCLTV

Credit Score

(9)

Minimum Reserves

Purchase

Limited Cash-Out

Refinance (LCOR)

(2)

1 Unit

(4)

Condominiums

(4)

FRM 97/105/105

(1)

Average Median Score of 620

As determined by DU/DO

2 - 4 Units

(4)

2 Units

(3)

(4)

3-4 Units

(3)(4)

FRM 95/105/105

FRM 85/85/85

FRM 75/75/75

Average Median Score of 620

Manufactured

(4)

(Doublewide)

FRM 95/105/105

Average Median Score of 620

As determined by DU/DO

FRM 90/105/105

(2)

(LCOR)

Average Median Score of 620

As determined by DU/DO

(1)

No credit score, Maximum LTV/CLTV/HCLTV FRM 95/95/95, Maximum DTI < 50%, Reserves determined by DU/DO

(2)

Maximum LTV/CLTV/HCLTV FRM 95/95/95 with a non-Community Second; FRM 90/90/90 if manufactured housing;

(3)

When combining HFA Preferred (HomeReady) and HomeStyle® Renovation, the more restrictive requirements and LTV’s apply.

• Not Eligible for community Lending 2

Mortgages

• A minimum 5% contribution of borrower’s own funds is required.

• Property must be > 5 years old.

(4)

Minimum Borrower contribution.

• 2-4 units purchase transaction: a minimum 3% contribution of borrower’s own funds is required; property must be > 5 years old

When combining HFA Preferred (HomeReady) and a grant, Borrower(s) minimum contribution of their own funds.

• Institutional Funded Grant (i.e. FHLB DPP)

o 2 – 4 units purchase transaction: a minimum 5% borrower’s contribution is required; property must be > 5 years old

• Lender Funded Grant

o SFR purchase transaction: a minimum 3% borrower’s contribution is required.

o 2 – 4 units purchase transaction: a minimum 5% borrower contribution is required; property must be > 5 years old

Nov. 20, 2023 Advantage Conventional Eligibility Matrix Page 2 of 6

WHEDA Advantage Conventional

Eligibility Matrix

WHEDA Manual Underwrite

(5)

Maximum DTI < 36%

Maximum DTI < 45%

Purchase

Limited Cash-Out

Refinance (LCOR)

(7)

1 Unit

(10)

Condominiums

(10)

FRM 95/105/105

(6)

680 if > 75%

720 if > 75%

640 if < 75%

680 if < 75%

620 if ≤ 75%

700 if > 75%

660 if > 75%

660 if < 75%

2 Unit

(10)

2- Unit

(8)(10)

FRM 95/105/105

FRM 85/85/85

680 if > 75%

640 if < 75%

700 if > 75%

680 if < 75%

3-4 Units

(10)

3-4 Units

(8)(10)

FRM 95/105/105

FRM 75/75/75

660

680

(5)

Loan must be submitted through the Broker or Mini-Corr channel.

(6)

No credit score, Maximum LTV/CLTV/HCLTV FRM 95/105/105, Maximum DTI < 36%, Minimum reserves per Fannie Mae Selling Guide B3-5.4-01

Eligibility requirements for loans with non-traditional credit.

(7)

Maximum LTV/CLTV/HCLTV FRM 95/95/95 with non-Community Seconds subordinate financing.

(8)

When combining HFA Preferred (HomeReady) and HomeStyle® Renovation, the more restrictive requirements and LTV’s apply.

• Not Eligible for community Lending 2

Mortgages

• A minimum 5% contribution of borrower’s own funds is required.

• Property must be > 5 years old.

(9)

Average Median Score

(10) )

Minimum Borrower contribution

• 2-4 unit purchase transaction: a minimum 3% contribution of borrower’s own funds is required; property must be > 5 years old

When combining HFA Preferred (HomeReady) and a grant, Borrower(s) minimum contribution of their own funds.

• Institutional Funded Grant (i.e. FHLB DPP)

o 2 – 4 unit purchase transaction: a minimum 5% borrower’s contribution is required; property must be > 5 years old

• Lender Funded Grant

o SFR purchase transaction: a minimum 3% borrower’s contribution is required.

o 2 – 4 unit purchase transaction: a minimum 5% borrower contribution is required; property must be > 5 years old

Nov. 20, 2023 Advantage Conventional Eligibility Matrix Page 3 of 6

WHEDA Advantage Conventional

Eligibility Matrix

Category

WHEDA Compliance Requirements Cont’d

GENERAL

Loan Term & Amortization

30 year, fully amortized fixed rate mortgage (FRM)

Occupancy

Owner-occupied, primary residence for the life of the loan

Borrower

• Cannot be listed on the Wisconsin Child Support Lien Docket

• Must be legal U.S. resident with a valid Social Security Number

Servicing

All loans sold servicing-released to WHEDA

Sweat Equity

Ineligible

Subordinate Financing

WHEDA-funded subordinate financing is eligible in transactions involving a WHEDA-

owned property

HPML

Ineligible

QUALIFYING

INCOME

Rental Income

Borrowers having less than one-year history of receiving rental income or documented

property management experience, must have a minimum of a 6-month housing payment

or expense history for rental income to be considered. Non subject property rental

income borrower must have a 12 month history of property management.

QUALIFYING

INCOME

Self Employed

Borrowers must provide 2 years complete tax returns with all schedules to determine

qualifying income. Borrowers must have a complete 2 year history of Self Employment.

CREDIT

Non-Applicant Spouse

Non-applicant spouse’s credit history is required

• All outstanding debts must be included in the total debt-to-income ratio

• Any outstanding judgments incurred in the interest of the marriage must be paid-

in-full

Co-Signor, Guarantor,

Non-Occupant Co-Borrower

• Co-signors, Guarantors and Non-Occupant Co-Borrowers are not allowed

ASSETS

Deposits

• Re-occurring non-payroll deposits should be explained and/or sourced to

determine if there are other sources of income.

COLLATERAL

Property

Must be located in Wisconsin

Title

Only borrowers approved for the loan can take title, or a non-applicant spouse.

Only borrower(s) and a Non-applicant spouse, can be listed on the Offer to purchase,

Mortgage, final title and Note

Manufactured Housing

An Approve/Ineligible recommendation is permitted on a Manufactured Home when

the sole reason for ineligibility is due to the CLTV exceeding 95%.

OTHER

Home Buyer Education

Pre-Purchase Home Buyer Education (HBE) is required for:

• First Time Home Buyer(s)

(1)

utilizing any WHEDA Advantage Conventional loan

program.

o Waived if one borrower is NOT a First Time Home Buyer

• When all borrowers are relying solely on nontraditional credit to qualify, ALL

borrowers must complete the education.

DU/DO findings will disclose the requirement based on the declarations from the loan

application.

Costs set by the Home Buyer Education provider must be included in disclosures

See the WHEDA Advantage Conventional Underwriting Guide, Section 4.05 for acceptable

education sources.

(1)

A First- Time Home Buyer is defined as a person who has not had an ownership interest in a

principal place of residence in the last three years.

Landlord Training

• 2-unit property, LTV/CLTV/HCLTV greater than 85%

• 3-4 unit property, LTV/CLTV/HCLTV greater than 75%

Rates and Pricing

• See WHEDA Rate Sheet for current Conventional and FTHB HFA Preferred (MI)

rates and pricing

• HomeStyle Renovation does not have separate pricing.

Nov. 20, 2023 Advantage Conventional Eligibility Matrix Page 5 of 6

WHEDA Advantage Conventional

Eligibility Matrix

Lender Compensation

• Broker Channel – WHEDA-paid compensation only. Borrower-paid compensation is

prohibited.

• Mini-Corr and Correspondent Channel – Lender-paid or Borrower-paid

compensation plans eligible, determined by WHEDA Participating Lender.

Fees

• $350 WHEDA Compliance Review Fee - Correspondent

• $500 WHEDA Purchase Review Fee – For Broker/Mini-Corr

• $65 Tax Service Fee

• $35 Wire Fee, if applicable (Note: No fee for funds transferred via ACH)

• $50 Subordination Fee, Refinance Only

First Time Home Buyer (FTHB) and VALOR General Product Information

FTHB VALOR

Income and Purchase

Price Limits

FTHB/VALOR Income and Purchase Price Limits

Federal Recapture Tax

Borrowers who finance their home using FTHB/VALOR pricing may be subject to a

federal tax upon the sale of the property. WHEDA provides a reimbursement guaranty.

• Acknowledgement of Federal Recapture Tax Requirements (Form 4).

o Signed by Borrower(s) to inform them of tax and WHEDA guaranty.

Exclusions

Borrowers who qualify for FTHB or VALOR program are not eligible to receive both the

benefit of the preferred interest rate and the Mortgage Credit Certificate (MCC)

program.

FTHB

Borrower

• Borrowers must qualify for a WHEDA Advantage Conventional loan.

• Be a First time Home Buyer defined as an individual who has not owned principal

residence in the last 3 years. ALL borrowers and non-applicant spouses must meet

definition.

o This requirement is waived if a borrower is a qualified military veteran (see

VALOR loan guidelines), as defined in the Conventional Underwriting Guide or is

purchasing a home in a federally designated Target Area.

VALOR

VALOR Eligibility

requirements

• Borrowers must qualify for a WHEDA Advantage Conventional loan.

• Be a Qualified Veteran, defined as a military veteran who served in active duty as

evidenced by Form DD-214 indicating honorable discharge or release in the Charter

of Service*. Only one Applicant must meet this definition.

o NOTE: VA Certificate of Eligibility does not replace form DD-214.

• First-time home buyer requirement is waived .

HomeStyle Renovation

HOMESTYLE

RENOVATION

FTHB/VALOR/MCC

Purchase Price + Total Renovation Costs CANNOT exceed the purchase price limit.

Lender Delivery Channel

Available only in the Broker or Mini-Correspondent Channel.

General Requirements

See the WHEDA Advantage Conventional Guide, Section 3.04 and WHEDA Policy and

Procedure Guide, Section 10.10,for details.

Certified HUD Consultant

Required on all HomeStyle Renovation loans.

Contractor Requirements

• Dwelling Contractor (if used) must be licensed by the State of WI.

• Non-dwelling contractors and/or individuals must be licensed by the State of WI.

• Renovation Contract (Form 38) Executed and signed by each Contractor and the

Borrower.

• “Do It Yourself” option is not allowable – No exceptions.

Refinance

• WHEDA to WHEDA only.

• At least one borrower on the existing WHEDA first mortgage must be a borrower on

the new refinance transaction

Renovation Period

Proposed work must be completed within 6 months of the closing date.

Nov. 20, 2023 Advantage Conventional Eligibility Matrix Page 6 of 6

WHEDA Advantage Conventional

Eligibility Matrix

Contingency Reserve

15% of the total renovation costs must be funded by:

• Adding to the renovation costs,

• Additional funds from the borrower, or

• Gift from an eligible donor

Renovation Escrow

Renovation funds to be held by WHEDA.

Inspections and Draws

• The use of a Title Company for Inspections and Draws is required.

• Draw requests to be submitted to WHEDA by Title Company along with copies of

satisfactory inspections.

Appraisal

Must be completed “subject to” the proposed scope of work.

Ineligible Improvements

• Swimming pools

• Hot Tubs

• Structural changes to manufactured

homes such as garages or additions

• Appliances that are not a part of a

substantial change or upgrade to the

room in which the appliance would

otherwise be placed.

Limited Cash out Refinance (LCOR)

REFINANCE

Transaction Type

• WHEDA to WHEDA only

• At least one borrower on the existing WHEDA first mortgage must be a

borrower on the new refinance transaction

Closing Costs

Closing costs and payoff of mortgages used solely for the acquisition of the property

Subordination

• Existing Community Seconds used in the original purchase transaction may be

subordinated up to 105% CLTV

• Approve/Ineligible is permitted when the loan purpose is “LCOR” and the sole reason

for ineligibility is due to a Non-Community Second, subject to a maximum 95%

LTV/CLTV/HCLTV

Required Forms

ALL LOANS

At application

• Borrower’s Affidavit (Form 2)

• Residential Loan Application Addendum (Form 3)

• Certification of Zero Income (form 35) – If applicable

FTHB/VALOR

At application

• Acknowledgement of Federal Recapture Tax Requirements (Form 4)

HOMESTYLE

RENOVATION

At application

• Renovation Contract (Form 38)

• Renovation Maximum Mortgage Worksheet PURCHASE (Form 41)

At Closing

• Renovation Loan Agreement (Form 39)

• Closing Instructions

During Renovation period

• Renovation Multi Disbursement (Form 40)