Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year
Agency FNMA/FHLMC
Conforming, Hi Balance, & Super Conforming
Loan Amounts $417,001 - $625,500
(subject to County Geographical Loan Limit Maximum)
Occupancy
Transaction
Type
Property
Type
Max
LTV/CLTV/HCLTV
Max
Loan
Amount
Min
Credit
Score
Max DTI
Primary
Residence
Purchase
Rate &
Term
1 Unit
90%
$625,500
620
45%
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
1|Page
Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year


Age of
Documentation

Application
Appraisal
Requirements
Credit Docs including Credit Report, Income, Asset, REO, etc…must be no more than 120 days PRIOR
to the Note Date
Appraisal Report must be dated within 120 days of the date of the Mortgage Note. If the date of the
appraisal report is more than 120 days but less than 360 days from the date of the Mortgage Note,
the original appraiser must provide an update to the appraisal based on his or her knowledge of
current market conditions. The appraiser must acknowledge that the value of the subject property
has not declined since the date of the original appraisal. The update must be completed on FNMA
Form 1004D/FHLMC 442 and must be dated within 120 days of the date of the Mortgage Note. A new
appraisal is required when the appraiser indicates in an Appraisal Update that the property value has
declined.
If the Appraisal Update indicates that the value has declined, a new appraisal must be obtained and
must support the original appraised value.

Full 2 year employment history excluding any LOA or layoff (i.e. if borrower had 6 months lay off, the
employment history would have to go back 2.5 years)




No PIW or PIA (Property Inspection Waivers)
No 2075 or 2070 (Property Inspection Reports & LP Marketability Report)
No AVM method
Full URAR reports only(1004 or 1073)

All Field Reviews must be completed on FNMA 2000 or FHLMC 1032 and should include
original front & street photos, and photos of the Comparable Sales
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
2|Page
Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year

Assets/
Funds to Close
Assets/ Funds
to Close
Automated
Underwriting
Borrower Own Funds Acceptable Sources
 Funds on Deposit in financial institutions (All large deposits to be sourced per Agency Guidelines)
 Borrower deposits into an IDA
 Stocks, Bonds, mutual funds, US Savings Bonds
 Trust Account
 Retirement Accounts
 Proceeds from sale of real estate
 Lot Value (when purchased or inherited)
 Rent credits with options to purchase
 Borrower funds secured by borrower asset
 Proceeds from the sale of personal assets
 Cash value of life insurance
 Business Assets (see business funds for additional requirements)
 Gift from eligible donor (see gift for additional requirements)

Unacceptable Sources of Assets

Cash on Hand

Lot Value (when received as a gift)

IPC

Sales concessions,

IDA matching funds

Community Savings Plans

Gifts or Grant that do not meet acceptable source guidelines

Disaster relief grants or loan

Employer assistance

Trade equity

Borrower funds that are not secured by an asset owned by the borrower

Credit card or unsecured line of credit

Anticipated savings

Sweat Equity

New simultaneous secondary financing

1 month statement required when reserves required by UGI MI


All Loans must have an “Approved/Eligible” from DU or “Accept/Eligible” from LP

Loans underwritten by Desktop Underwriter or Loan Prospector may follow the DU Underwriting
Findings Report & FNMA guidelines or LP Feedback Certificate & FHLMC guidelines unless
otherwise stated in this Matrix

Loan prospector Streamlined Accept or Standard Documentation may be used if LP Feedback Certificate
is approved as such unless otherwise noted in this matrix.

No manual underwrites are allowed

Follow the Agency guidelines pursuant to which AUS engine used (i.e. FNMA for DU findings
or FHLMC for LP findings.)
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
3|Page
Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year



U.S. Citizen
Permanent Resident
Non-Permanent Residents- verification borrower has one of the following:

Unexpired Employment Authorization Document (EAD)

Visas H series, L, E-1, G series and TN Visa

A valid passport, letter from employer/sponsor, and I-94 proving work authorization


Inter Vivos Revocable Trust- must meet Agency guidelines and limited to 1-2 units primary
residence.
All borrowers must have a verified/valid Social Security Number
Taxpayer Identification Numbers are not eligible

Borrower minimum contribution own funds minimum 5%





Borrower must be 100% owner of the business
Borrower must be 100% owner of the account
Comparative Income Analysis (FNMA 1088) must be completed and included in loan file.
FNMA Liquidity/Solvency Analysis must be completed and included in the loan file.
Link for Comparative Income Analysis: https://www.fanniemae.com/content/guide_form/1088.pdf
Borrower
Eligibility

Borrower
Minimum
Own Funds
Contribution –
Business
Assets
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
4|Page
Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year



Credit


Minimum Fico Score per matrix on page 1 – each borrower must meet minimum Fico Score requirements
Minimum 2 Fico scores for each borrower
All loans require a Fico Score based upon a minimum 3 traditional tradelines with min 12 months
reviewed/evaluated. Authorized user accounts may not be used to satisfy this requirement unless the
borrower can provide written documentation (i.e. cancelled checks) providing they were the actual & sole
payer .
Non-Traditional credit is not acceptable- each borrower must meet the above requirements of minimum 2
FICO scores w/ minimum 3 tradelines w/ minimum 12 months reviewed
If a non-U.S. citizen borrower does not have sufficient trade line references in the United States, credit
references from foreign countries may not be used.
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
5|Page
Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year






Project must be FNMA approved – PERS, CPM & Lender Full Project Review only approvals
Streamline Project Reviews are not allowed
Non-Warrantable condominiums are not eligible
Maximum Investor concentration to 30%
Minimum 51% owner occupancy
Non-realty limited common elements (e.g. boat dock slip, cabanas, etc.) may not be financed with the
property. Assigned parking spaces may be financed as a cost of the property.
FNMA Project Type
Previously issued a Final Project
Approval “PERS”
Condo Project Manager (CPM)
Expedited Review
Condos
FNMA Project Eligibility Review
Service (PERS)
Full Review



Description
If FNMA has previously issued a Final Project Approval (PERS)
as listed at https://www.fanniemae.com/singlefamily/projecteligibility Print, circle the project name that appears on the
approval page and place in the loan file. Project has to have a
current approval date as of the date of the Note
Condo Project Manager (CPM) Expedited Review is a FNMA webased too that is used to provide specific project acceptance for
attached, detached, new, established, and 2-4 unit condo
projects. Project must have a valid, unexpired CPM Seller
Certification as of the date of the Note & a copy must be in the
loan file prior to loan funding.
FNMA Project Eligibility Review Service (PERS) is available for
submission & review of existing, new and newly converted
condo projects by FNMA. PERS approved projects are posted
on the FNMA website and expire 1 year after issuance.
The full review process is for the review of the new and
established condos. A full review must ensure that the project
meets all eligibility criteria of the applicable Agency
requirements.
FNMA Condominium Warranty Form is required in each loan file; the form must identify the warranty
type of the project & be included in the mortgage loan file.
All project documentation that supports its warranty that the project meets the applicable Agency
eligibility criteria.
A project warranty is valid for 3 months preceding the date of the Mortgage Note. After the 3 month
expiration date, all appropriate documentation must be updated to verify that there have been no
changes that would adversely affect the project
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
6|Page
Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year
Requirements for Continuity of Obligation
For a refinance transaction (either limited cash-out or cash-out) to be eligible for sale to Fannie Mae,
there must be a continuity of obligation if there is currently an outstanding lien that will be satisfied
through the refinance transaction. (Refer to next page for loans without acceptable Continuity of
Obligation or properties without existing liens)
Continuity of obligation is met when any one of the following exist:
 At least one borrower is obligated on the new loan who was also a borrower obligated on the existing loan
being refinanced. 1
 The borrower has been on title and residing in the property for at least 12 months and
has either paid the mortgage for the last 12 months or
can demonstrate a relationship (relative, domestic partner, etc.)2 with the current obligor.
 The loan being refinanced and the title to the property are in the name of a natural person. (An Intervivos
Revocable/Family/Living Trust) is considered a natural person. 3
 The borrower has recently inherited, or was legally awarded, the property (divorce, separation, or dissolution
Continuity of
Obligation
of a domestic partnership). 4
Footnotes:
1.
Borrower’s contractual obligation must be accompanied by individual vesting properties in order to qualify for this
feature. Properties vested in business entities or Trusts are not eligible.
2. Per FannieMae definition: An immediate relative is defined as the Borrower’s spouse, child, or other dependent, or any
individual related by blood, marriage, adoption, or legal guardianship.
3. A limited liability company (LLC) or any Borrowers whom are members of the LLC at the time of or prior to loan
4.
application is not eligible for financing. A chain of title or other property profile history information indicating the
property has been deeded in and out of an LLC or any other type of business entity is not permitted
If the property has recently been inherited or legally awarded, the documentation must include a copy of the applicable
court order. Per FannieMae clarification: Loans which have recently been inherited may be considered either Cash Out or
Rate/Term. The Borrower (Beneficiary) does not necessarily have to be on title at the time of loan application and can be
vested on to the property at close of escrow. Fannie’s rationale is that the decedent’s ownership tenure is transferred
over to the Beneficiary upon passing, so that the 6 month’s ownership seasoning requirement normally required for cash
out refinance are automatically met.
Loans with an acceptable continuity of obligation (as outlined above) may be underwritten, priced,
and delivered as either cash-out or limited cash-out refinance transactions based on the requirements
for each type of transaction.

Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
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Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year
No Acceptable Continuity of Obligation
If the borrower is currently on title but is unable to demonstrate an acceptable continuity of obligation, or if there is no
outstanding lien against the property, the loan is still eligible for delivery but with the additional restrictions described in the
following table. The loans must be underwritten, priced, and delivered as a cash-out refinance transaction
Outstanding Liens
Purchase Date
LTV Ratio Requirements
No (the property was
purchased for cash,
previous mortgages have
been paid off, and so
on).1
Within the 6- to 12-month
period prior to the
application date for the new
financing. 1
The LTV/CLTV/HCLTV ratios must be
based on the lesser of the original sales
price/acquisition cost (documented by
the HUD-1 Settlement Statement) or the
current appraised value. 2
More than 12 months prior
to the application date for
the new mortgage.
The LTV/CLTV/HCLTV ratios must be
based on the current appraised value.
The borrower has been on
title for at least 6 months.
The maximum LTV/CLTV/HCLTV ratios
are limited to 50% based on the current
appraised value. 3
Continuity of
Obligation
continued
Yes
Footnotes:
1. The property must have been purchased by the Borrower. Properties gifted to the Borrowers are not eligible
for refinancing for full 12 months since they cannot meet “lesser of” LTV/CLTV ratio calculation
requirements
2. HUD-1 closing statement must be provided to document acquisition cost
There are no exceptions available to the max 50% LTV/CLTV/HCLTV limitation
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
8|Page
Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year




Conversion
Of Primary
Residence

Conversion to Second Home- Qualify with both the current & proposed mortgage
Equity in the current residence validated by either (a) Valid appraisal dated within 60 days of Note, or
(b) AVM, or (c) BPO minus outstanding lien on all conversions
Conversion to Investment Property requires equity documents on current residence to determine if rental
income can be used for qualifying
Verification of leasing current residence includes:

Fully executed lease agreement

Security deposit from tenant(s)

Bank statement showing the deposited security funds
Net rental income & qualify the borrower according to following requirements:
If the % of equity in the current principal
residence is……
Then……….
Qualify with new PITIA & 75% of the gross rental
income may be credited to offset the current
principal residence’s PITIA
No rental income may be used- Qualify with both
< 30% for 1 Unit
the new PITIA & current principal residence’s
PITIA
 Deed/Resale Restrictions as per FNMA and/or FHLMC are acceptable
 Refer to the specific Agency guidelines for all requirements & restrictions
 The LTV for purchase transactions involving properties with deed restrictions ta do not survive foreclosure
will be based on the lower of the purchase price or the appraised value
 Duration of Resale restrictions - follow applicable Agency guidelines
 Resale Restriction Appraisal restrictions – follow applicable Agency guidelines
> 30% for 1 Unit
Deed/Resale
Restriction
Documenttation
DTI Ratio
The following documentation is ineligible
 Limited Documentation loans (loans in which income, employment, and /or assets is not verified.)
 Streamline refinance transactions
 Streamline purchase transactions
 FNMA Property Inspection Waiver (PIW)
 DU Property Inspection Report Form,2075
 FHLMC Property Inspection Alternative (PIA)
 LP Condition & Marketability Report For 2070
 Any other Automated Valuation Method

Maximum DTI 45% - NO EXCEPTIONS
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
9|Page
Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year
Escrow
Holdbacks
Eligible
Properties







Single family
Properties with Deed Restrictions – refer to the section “Deed Restrictions” for specifics
FNMA Warrantable Condos
Townhouses
PUD
Mixed Use Property Properties that have a business use in addition to their residential use –
 Specific Appraisal Requirements:

Appraisers provide an adequate description of the mixed use characteristics

The mixed use of the property represents a legal, permissible use of the property under the local
zoning requirements

The market value of the property is primarily a function of its residential characteristics, rather
than of the business use or any special business-use modification that were made.

Eligible
Transactions
Escrow/
Impounds
Not permitted




Purchase – A purchase money transaction is one in which the proceeds are used to finance the
acquisition of a property. The proceeds from the transaction must be used to:
 Finance the acquisition of the subject property.
 Pay off the outstanding balance on an installment land contract or a contract for deed.
Refinance – A Rate/Term refinance is a mortgage loan where the proceeds are used to pay off an
existing mortgage loan.
 Must have continuity of obligation
 Follow the AUS & Agency (FNMA or FHLMC) guidelines unless otherwise specified in this Matrix
 For properties located in Texas, a copy of the current mortgage or mortgage note is required to
determine that the existing loan is not subject to Texas Section 50(a)(6)
Include Mortgage Insurance, property taxes, hazard insurance, wind, earthquake, flood, and HOpremiums.
All loans with LTV > 80% require escrow for impounds (except for California)
Escrow waivers for California are available for LTV between 80.01 – 89.99%
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
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Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year
Flipping

If the seller has owned the property less than 180 days from the date of purchase contract and the new
sales price is higher than the price paid by the seller to acquire the property, the increase must be fully
documented and explained.




Donor must be an eligible donor
Complete Gift letter fully executed & dated
Verify Donor ability & transfer of gift funds
Gift from a relative or from a domestic partner who has lived with the borrower for the last
12 months, or from a fiancé or fiancée, is considered the borrower’s own funds and may
be used to satisfy the minimum borrower contribution requirement, as long as both
Individuals will use the home being purchased as their principal residence.
Gift from an eligible donor may be considered borrower’s own funds for purpose of
meeting minimum borrower contribution requirement, when all borrowers occupy the
property and when all of the following underwriting requirements are met, in addition to
standard gift requirements:

Gifts
Occupancy
Transaction
Type
Property
Type
Primary
Residence
Only
Purchase
Only
1 Unit
Detached,
Attached,
Condos
Maximum
LTV
Maximum
Loan
Amount
Minimum
Credit
Score
90%
$625,000
740
Geographic
Restrictions



Mississippi
Refer to Sierra Pacific Geographical Restrictions
No Texas A6 transactions
Identification


Each Borrower must have a valid Social Security Number
No TIN numbers allowed (Taxpayer Identification Number)
Maximum
DTI
41%
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
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Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year







Tax Information Authorization IRS 4506T / Tax Transcripts – validation of income
Current Paystubs – meeting AUS requirements
W-2’s
Written Verification of Employment
Verbal Verification of Employment
Personal and Business (as applicable) Tax Returns
Self Employed Income Analysis
Ineligible
Income
Sources















Future Income
Income derived from the subject property w/land being leased to another party
Income derived from farm income from subject property
Income derived from gambling
Income determined to be temporary or 1 time
Lump sum payment such as inheritances or lawsuit settlements
Lump sum payments of lottery earnings that are not on-going
MCC
Non-incidental income received from farming/agricultural use of subject
Rental income received from the borrower’s SFR or 2nd home
Retained earnings in a company
Stock options
Taxable form of income not declared on 1040’s
Trailing co-borrower income
VA education benefits
Ineligible
Properties






Manufactured Housing
Geodesic homes
Properties comprising more than 15 acres of land
Cooperatives
Leasehold Estates
2-4 Units
Income Doc
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
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Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year
Ineligible
Transactions







Refinance Transaction where property listed for sale last 6 months
Transactions with New Subordinate Financing
Loans to principal owners of the Seller
Permanent Financing for New Construction of the interim loan
Single Close Construction to Permanent
Installment Land Contracts
Loans with Principal Curtailments
Refinance of Restructured Loan or Short Refinance Loan
Renovation/Rehabilitation Mortgage


Follow applicable Agency Guidelines – FNMA OR FHLMC
IPC may never be used to make the borrower’s down payment, meet financial reserve requirements, or
meet minimum borrower contribution requirements

Not Eligible



Purchase
Rate/Term Refinance
Limited Cash – Out (lesser of 2% or $2000)

$417,001


Interested
Party
Contributions
Leasehold
Estates
Loan
Transactions
Minimum Loan
Amount
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
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Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year



Mortgage
Insurance
Standard Mortgage Insurance Coverages
LTV Ranges
Transaction Type
80.01-85&
85.01-90%
Fully amortizing fixed-rate term < 20 years
6%
12%
Fully amortizing fixed rate term > 20 years
12%
25%

Mortgage
History
Multiple
Properties
Owned
Mortgage insurance must be provided by United Guaranty Residential Insurance Company
(United Guaranty) only (RAP & Full file Submissions Eligible
Borrower Paid Mortgage Insurance (BPMI)
• Monthly and Post Pay.®
•For premium amount, Loan must be ran thru UGI on website “Rate Runner”
Lender Paid Single Premium (LPSP)
• Must be paid to United Guaranty prior to purchase by Connective.
• Documentation that the lender has paid the MI premium must be contained in the file.



90.01-95%
25%
30%
Discounted coverage allowed per AUS is not eligible]



A 12 month rating stated on the residential mortgage credit report (RCMR) or merged in-file report.
Verification of mortgage completed by the holder of the mortgage.
Copies (front & back) of 12 months consecutive (1 payment per month) mortgage payment cancelled
checks.
Bank statements or direct payment records showing 1 payment per month
No rolling lates.
Mortgage Loan must be current at the time of closing

If subject is owner occupied- primary residence- no limit
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
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Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year


A primary residence is a property in which all borrowers take title and occupy as his/her primary
residence.
The following table describes conditions in which a residence will considered a principal residence.
Borrower Type
Multiple borrowers
Primary
Residence
Parents wanting to provide housing
for their physically handicapped or
developmentally disable adult child
Children wanting to provide housing
for elderly parents

Attached PUD projects are required to be warranted to applicable Agency requirements:

FNMA Established PUD (Type E)

FNMA New PUD (Type F)

FHLMC Established PUD (E)

FHLMC New (F)






Non-occupant Co-borrower:
1 Unit Primary residence only
Maximum 90% LTV
The occupancy borrower must meet the minimum borrower contribution requirement for the transaction
Maximum 50% DTI for the occupancy borrower
DTI ratio, including the non-occupant borrower’s income and debt, should meet the applicable DTI
requirements for the transaction


Follow Agency Guidelines – FNMA/FHLMC
Defined as a relationship between the Buyer & Seller
PUD
Non-Occ CBR
Non-Arms
Length
Requirements for Owner Occupancy
At least 1 borrower on the transaction must occupy the property
for the majority of the year & take title to the property. For
transaction in which not all of the borrower will occupy the
property as their primary residence see the Non-occupant CoBorrower section
If the child is unable to work or does not have sufficient income to
qualify for a mortgage on his/her own, the parent is considered the
owner/occupant.
If the parent is unable to work or does not have sufficient income
to qualify for a mortgage on his/her own, the child is considered
the Owner/occupant.
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
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Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year
Points & Fees


Max 5%
Includes Origination, UW fee, Broker Fee, Finder Fee, & charges a lender imposes as a condition of the
loan whether paid to 3rd party or not

A PUD is a real estate project or subdivision in which each unit owner has title to a residential
lot and building and a nonexclusive easement on the common areas of the project. The owner
may have an exclusive easement over some parts of the common areas (for example, parking
space). PUDs must comply with the following requirements:
The individual unit owner must own a parcel of land improved with a dwelling. This ownership
may not be in common with other unit owners.
The development must be administered by a homeowners’ association (HOA) that owns and is
obligated to maintain the common elements (including greenbelts, recreation facilities, and
parking areas) within the development for the common use and benefit of the unit owners.
The unit owners must have an automatic, non-severable interest in the HOA and pay
a mandatory assessment.
Must be a single-family residence

Planned Unit
Development





Refinance –
Rate & Term



There must be a Continuity of Obligation on all refinances, if there is currently an outstanding lien to be
satisfied with the proceeds of the refinance transaction
HUD 1 settlement statements are required with respect to any transaction involving the property within
the past 6 months. The subject Mortgage Loan is considered a cash out and therefore ineligible if the
previous transaction:

Cash Out

Combined a 1st & Non-Purchase money 2nd

New transaction combines a 1st & Non-Purchase money 2nd
New subordinate financing is ineligible
Construction to Permanent loans are ineligible
Follow agency guidelines (FNMA/FHLMC)
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Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year

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
Reserves
Restructured/
Modification
Significant
Adverse or
Derogatory
Credit
(Foreclosures,
Deed in Lieu,
Short Sales,
BK, CCS)
As required by FNMA/FHLMC on conversion of primary residences As required by MI- minimum 1 month bank statement needed to document
If the borrower owns other financed properties, the following additional reserves must be calculated and
documented. The required reserves for a financed property are based on the qualifying payment amount
of the financed property.
Then additional reserves (in addition to those
If the total number of financed properties is…
required by DU or the Eligibility Matrix)are…..
2 mths PITI for each 2nd home or
1 to 4 financed properties
investment property
6 mths PITI for each 2nd home or
5 to 10 financed properties
investment property

A borrower who had had a loan restructured resulting in a short refinance requires:
 4 years seasoning after the date of the restructure/modification
 48 consecutive timely mortgage payments from the date of the restructure/modifications



Multiple BK past 7 years are ineligible
Other Bankruptcies follow Agency requirements (FNMA/FHLMC)
Foreclosures, Deed-in-Lieu, Short Sales- all require a 7 year seasoning and satisfactory re-established
credit must be verified (re-established credit defined below)*
Manufactured housing/mobile home loans indicated as repossessions, collections, or charge-offs are
considered foreclosures and require the 7 year seasoning
Borrowers who received Consumer Credit Counseling as a result of derogatory credit should have
satisfactory re-established credit from the conclusion of the counseling
Letter of Explanation for previous significant derogatory credit is required + any supporting
documentation as applicable, regardless of the AUS findings.
Recovery time is measured from the of discharge, dismissal, or completion date to the date of application
Requirements for Reestablishing Credit after a Significant Derogatory Event*:

3 traditional tradelines with activity during the most recent 24 months to show re- establishment of
credit

The waiting period requirements are met

Minimum credit score requirements based upon transaction parameters is met

Non-traditional credit is not allowed
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Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
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Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year


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
Subordinate
Financing
Self
Employed
Borrower


New Subordinate Financing is not allowed (Purchase or Refinance)
Existing Subordinate Financing cannot exceed LTV/ CLTV per the matrix on page 1
CLTV is the equivalent of all other acronyms (i.e. HCLTV, TLTV, etc.)
Ineligible types include existing subordinate financing include (1)Employer assistance (2) IDA (3)Disaster
Relief Loans or Grants
Fully executed & recordation of a Subordination Agreement required unless exempt by State Law
Re-subordination Requirements
A fully execution and recordation of a subordination of a subordination agreement

If state law permits subordinate financing to remain in the same subordinate lien position
established with the prior first mortgage loan that is being refinance. Re-subordination is no
required.
A Borrower who has an ownership interest of 25% or more in a business is considered to be self-employed
 A two year history of self-employment is required to ensure the income is stable. Written evaluation of
an analysis of borrower’s self-employment personal income, including the business income or loss
utilizing the FNMA form 1084 is required. The purpose of this written analysis is to determine the
amount of stable and continuous income that will be available to the borrower.
 2 years complete tax returns, including all schedules (both Individual & Business returns_
 Year-to-date Profit & Loss Statement
 4506T transcripts to validate the 2 years financials
 Written evaluation of an analysis of borrower’s business income utilizing FNMA form 1088 is required.
The purpose is to evaluate the borrower’s business by:
 Measure year to year trends for gross income, expenses, and taxable income.
 Determine (on a yearly or interim basis) the percentage of gross income attributed to expenses and
taxable income, and
 determine a trend for the business based on the change in these percentages over time
 If the analysis reflects that the Borrower’s income has significantly increased or decreased, the file must
contain sufficient documentation and justification to support the determination that the income used to
qualify the Borrower is stable, and likely to continue for the next 3 years. It may be necessary to obtain
additional year’s tax returns when the income fluctuates in order to determine the stability of the
income.
 If the Borrower is self-employed and the self-employment income is not used to qualify, the Borrower’s
1040’a must be obtained to determine if there is a business loss that may have an impact on the stable
monthly income used for qualifying. If a business loss is reported, additional documentation must be
obtained to fully evaluate the impact of a business loss on the income used for qualifying.
Texas(a)(6)

Texas (a) (6) loans are not permitted.
Temporary
Buy-downs

Not permitted
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
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Retail Business Channel
Sierra Connect - Agency Hi Balance & Super Conforming
T300JSC 30 year, T304JSC 20 year, T301JSC 15 year
Terms

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
30 year fixed – T300JSC
20 year fixed – T304JSC
15 year fixed – T301JSC
Vesting

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Individuals
Joint Tenants
Tenants in Common
Revocable Trusts, where the individual borrower (s) execute both the Note & Security Instrument
Must comply with all FNMA requirements
Sierra Connect Agency Hi Balance & Super Conforming Rev 04-18-2014
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