4501.8: Underwriting requirements for Home Possible® Mortgages (10/29/18)

A Home Possible® Mortgage may be submitted to Loan Product Advisor® or may be a Manually Underwritten Mortgage, except as otherwise stated below.

(a)Loan Product Advisor

The Borrower's credit reputation is acceptable if the Mortgage is submitted to Loan Product Advisor in accordance with Chapter 5101 and receives a Risk Class of Accept.
A Home Possible Mortgage secured by a Manufactured Home must be submitted to Loan Product Advisor.
A Home Possible Mortgage that is secured by a Manufactured Home and has a term greater than 20 years and a loan-to-value (LTV)/total LTV (TLTV)/Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratio greater than 90% and less than or equal to 95% must receive a Risk Class of Accept.
A Home Possible Mortgage that is a super conforming Mortgage must be submitted to Loan Product Advisor and receive a Risk Class of Accept.
For special requirements for submitting Mortgages with Affordable Seconds® to Loan Product Advisor, see Section 4204.2.

(b) Manually Underwritten Mortgages

Manually Underwritten Mortgages must meet the requirements of this chapter and Topics 5100 through 5500 including, but not limited to, the requirement that each Borrower individually, and all Borrowers collectively, have an acceptable credit reputation as described in Topics 5100 and 5200.
An individual Borrower with insufficient credit history, for whom the Seller cannot document a credit reputation because the Borrower does not have sufficient credit history, is considered to have an acceptable credit reputation provided that:

1. The Borrower has no evidence of any derogatory credit, such as a lien, judgment or collection, paid or unpaid, reflected on the credit report or elsewhere in the Mortgage file, and

2. At least one other Borrower whose income and assets are used for qualification has an acceptable credit reputation as described in Topics 5100 and 5200.

For Manually Underwritten Mortgages, the minimum Indicator Scores are:

Property/Mortgage Type	Minimum Indicator Score
1-unit fixed-rate Mortgages that are purchase transactions	660
1-unit ARMs 1-unit Mortgages that are "no cash-out" refinance transactions	680
2- to 4-unit properties	700
Manufactured Homes	720

If none of the Borrowers have a usable Credit Score, Mortgages that are not (i) Home Possible Mortgages with LTV, TLTV or HTLTV ratios greater than 95%, or (ii) secured by Manufactured Homes, may be manually underwritten without Credit Scores provided that for these Mortgages, in addition to meeting the requirements in Chapter 5202, each Borrower's credit history for the most recent 24 months must show:

No unpaid judgments, tax liens or collections
No payments 60 days or more past due
No more than two payments 30 days past due
No housing payments past due

Home Possible Mortgages with LTV, TLTV or HTLTV ratios greater than 95% for which none of the Borrowers has a usable Credit Score are not eligible for sale to Freddie Mac.

A Home Possible Mortgage secured by a Manufactured Home may be a Manually Underwritten Mortgage only when the Mortgage:

Meets the Minimum Indicator Score required in this section, and
Has a term of 20 years or less, or an LTV/TLTV/HTLTV ratio of 90% or less, and
Was submitted to Loan Product Advisor and received an evaluation status of invalid, ineligible, or incomplete, or a Risk Class of Caution, ineligible for A-minus