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Updated Guidelines for FHA Streamline Refinances
&
Income Qualification for Self-Employed Borrowers

Dear Valued Partner,

The following guideline updates for FHA Streamline Refinances and Self-Employed Borrowers are effective as of 01/19/2012.

Please note SWMC's minimum FICO requirements continue to apply for all Streamline transactions.

DTI and LTV Requirements

  • FHA Streamline Refinance submissions, with the Note date on the previous mortgage prior to May 1, 2010 are subject to the DTI and LTV guidelines shown below.
Loan To Value of the AVM
LTV < 100%
No credit qualification required
LTV > 100%
Requires credit qualification
LTV >= 125%
Not acceptable

Debt To Income Ratio (DTI)
Credit Qualification Caps
Examples of Exceptions
Max Front/Back DTI Allowed: 45/55
*Unless program indicates lower DTI
Manufactured and Jumbo Loans

AVM Requirements

SWMC requires an AVM Report for all FHA Streamline loans. Upon review of the AVM, at SWMC's discretion, if a fair value cannot be determined, an Exterior-Only Appraisal will be required.

You may place orders for the AVM and/or the Exterior-Only Appraisal through the "Vendor Order" screen in SunSOFT®.

Self-Employed Borrowers

  • The following guideline updates for Self-Employment Income Qualifying are effective for submissions as of 01/19/2012.

Income Qualification Guidelines for Self-Employed Borrowers

Requirement (s)
Income Decrease of 10%-20%
Income Decrease beyond 20%
Qualifying Income
Proof of 2-year work history based on 2-year tax returns
Use most recent tax year *unless the sourced income is additional to the borrower's primary income
Not acceptable
  • If self-employment income is a secondary source of income, it cannot be considered effective if the income shows a decline greater than 10% over the previous year.
  • Audited profit and loss statement for 2011 is an acceptable source of income verification

If you have any questions, please feel free to call on your Account Executive at (800) 453-7884.

Sincerely,

Sun West Mortgage Company, Inc.
18303 Gridley Road
Cerritos, CA 90703
Phone : (800) 453-7884

Equal Housing OpportunityThis information is provided to licensed wholesale brokers only and may not be copied or distributed to customers or potential customers. All loans are subject to approval. Certain restrictions may apply. Listed pricing is a morning indication only. Program rates, prices, guidelines, fees, costs, terms and conditions are subject to change without notice.

Sun West Mortgage Company, Inc. (NMLS ID 3277) is licensed by the Department of Corporations as a California Finance Lender (License #603 0119) and is licensed by the Department of Real Estate (License #00793885). Refer to www.swmc.com to see where SWMC is a licensed lender. In all states, the principal licensed office of Sun West Mortgage Company, Inc. is 18303, Gridley Road in Cerritos, CA 90703; Phone: (800) 453-7884