4501.7: Eligible Borrowers for Home Possible® Mortgages (10/29/18)

(a) Income limits

The Borrower's qualifying income converted to an annual basis must not exceed 100% of the area median income (AMI) for the location of the Mortgaged Premises. There is no income limit if the Mortgaged Premises is located in a low-income census tract, which is a census tract where the median tract income is at or below 80% of the AMI. To determine whether the Borrower's income exceeds the income limits, the Seller must rely on the income used to qualify the Borrower and submitted to Loan Product Advisor® for Loan Product Advisor Mortgages.For Loan Product Advisor® Mortgages, Loan Product Advisor will determine the income eligibility of the Mortgage; for Non-Loan Product Advisor Mortgages, the Seller must use the Home Possible® Income & Property Eligibility tool. The Seller may not use other published AMI versions (such as AMIs posted on https://www.huduser.gov/portal/home.html) to determine Mortgage or product eligibility.

(b) Occupancy

At least one Borrower must occupy the property secured by a Home Possible Mortgage as their Primary Residence.Non-occupying Borrowers are permitted provided that:

The Mortgage is secured by a 1-unit property
The loan-to-value (LTV), total LTV (TLTV) and Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratios must not exceed:
- 95% for Loan Product Advisor Accept Mortgages, except that for fixed-rate Mortgages with Affordable Seconds®, the TLTV ratio must not exceed 105%
- 90% for Manually Underwritten Mortgages, except that for fixed-rate Mortgages with Affordable Seconds, the TLTV ratio must not exceed 105%
For Manually Underwritten Mortgages, the occupant Borrower's:
- Monthly housing expense-to-income ratio should not exceed 35% of the occupant Borrower's stable monthly income; and
- Monthly debt payment-to-income (DTI) ratio must not exceed 43% of the occupant Borrower's stable monthly income
Funds used to qualify for the Mortgage may come from the occupying and/or the non-occupying Borrower