Back to top

Lender Alerts

Home
Lender Alerts


Sun West Logo

New Homeownership Option: HomeReady Mortgage

(Applicable to Wholesale Channel)

Dear Licensed Partner,

Sun West Mortgage Company, Inc. (SWMC) is excited to add Fannie Mae's HomeReady Mortgage to our product-line.

HomeReady Mortgage is designed for creditworthy, low-to-moderate income borrower with expanded eligibility for financing principal residence in designated low-income, minority, and disaster-impacted communities.

The guideline for the program can be accessed through our website (click here).

In our continued commitment to provide support to our valued partners, we would like to share the following features of the HomeReady Mortgage.

  • SWMC allows up to 97.00% financing (1-unit purchase) with qualifying FICO as 660 in HomeReady Mortgage.
  • Borrower must meet Income eligibility limit based on census tract of the subject property. The income eligibility can be verified from the HomeReady income eligibility page.
  • HomeReady option needs to be selected from Community lending product in additional data screen in DU to verify HomeReady mortgage eligibility. A new field is added to the additional Data screen in DU which allows DU to verify the income eligibility.
  • Standard MI coverage is required on HomeReady loans with LTV ratios at or below 90.00%, and 25% coverage is required for LTV ratios exceeding 90.00%, which is lower than Fannie Mae's standard MI coverage levels of 30% for LTV ratios of 90.01%-95.00% and 35% for LTV ratios of 95.01%-97.00%.
  • HomeReady Mortgage permits Non Borrowing Household Member's Income as compensating factor in DU to allow a mortgage with DTI ratio greater than 45% and up to 50% with following requirement:
    • Non Borrowing Household Member's Income is not considered as qualifying income and is not required to meet the HomeReady income eligibility limit. However, Income needs to be verified as per Fannie Mae's Income Verification Standard.
    • Total Non-borrower Income must be at least 30% of the total monthly qualifying income being used by the borrower(s).
    • The Non Borrowing Household members, whose income has been used as compensating factor, must document their income and sign a statement of intent (Form 1019) to reside with the borrower(s) for a minimum of twelve (12) months.
    • Non Borrowing Household members must have history of shared residency with applicant for past 12 months prior to application date.
    • Non-borrower household members with Individual Taxpayer Identification Numbers (ITINs) are eligible. Form 4506-T is not required to be obtained from the Non Borrowing Household members.
  • Boarder income and rental income from an accessory dwelling unit is permitted on HomeReady mortgage. Fannie Mae Single-Family Comparable Rent Schedule (Form 1007) from the appraiser may be required to document rental income from additional dwelling unit. 12 months cancelled check is required to verify boarder income.
  • No minimum borrower contribution (1-unit properties); use flexible sources of funds for down payment and closing costs (gifts, grants and Community Seconds). SWMC would not accept Cash on Hand as an eligible source of fund on HomeReady Mortgage.
  • At least one borrower needs to complete homeownership education through Fannie Mae's Framework online portal. Click here to refer FAQ on home buyer education policies.
    • To support sustainability, borrowers will have access to post-purchase homeownership support for the life of the loan through Framework's homeownership advisor service.
    • Borrowers who do not have access to online education may obtain the home buyer education from HUD-approved counseling agency.
  • SWMC would not accept Non Occupying Co-Borrower in HomeReady Mortgage.
  • LLPAs are waived for HomeReady loans that have an LTV ratio greater than 80.00% and a credit score of 680 or higher. For other HomeReady loans, Fannie Mae's standard LLPAs apply, with a cap of 1.50%.

Additional resources regarding the program can be accessed from here.

If you have any questions, please contact your Client Relations Manager at (855) OK-SUNWEST or (855) 657-8693.

Sincerely,

Sun West Mortgage Company, Inc.
18000 Studebaker Road, Suite 200
Cerritos, CA 90703
Phone: (800) 453-7884
SW-1: Our No Overlays Program

 

Equal Housing Opportunity This information is provided to licensed brokers/lenders 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.