Product Specifications for NexBank Mortgage Connect Fully ...

Product Specifications for NexBank Mortgage Connect

Fully Amortized Loans

Product Codes

N56, N76 and N106: Fully amortized 30 YR 5/6, 7/6 and 10/6 SOFR ARM

N56I and N76I: 5/6 Interest-Only, 7/6 Interest-Only - Fully amortized 30 YR with a 10 Year IO Period SOFR ARM

N106I: 10/6 Interest-Only - Fully amortized 20 YR with a 10 Year IO Period SOFR ARM

N55: Fully amortized 30 YR 5/5 SOFR ARM

N30: Fully amortized 30 Year Fixed Rate N15: Fully amortized 15 Year Fixed Rate

PRIMARY RESIDENCE Purchase and Rate/Term Refinance(1)

Property Type 1 Unit

2-4 Units

Loan Amount $2,000,000

$2,000,000

Max Cash Back

Max LTV(2)

N/A

80

89.99

N/A

75

84.99

PRIMARY RESIDENCE

Max CLTV 80

89.99 75

84.99

Min FICO 660 680 660 680

Max DTI 45%

Cash-Out Refinance(1)

Property Type 1 Unit

2-4 Units

Property Type 1 Unit

Property Type 1 Unit

Property Type 1 Unit

2-4 Units

Property Type

Loan Amount $2,000,000 $2,000,000

Loan Amount $1,500,000

Loan Amount $1,500,000

Loan Amount $1,500,000 $1,500,000

Loan Amount

Max Cash Back

Max LTV(2)

N/A

80

89.99

N/A

75

84.99

SECOND HOME

Purchase and Rate/Term Refinance

Max Cash Back

Max LTV(2)

N/A

80

85

SECOND HOME

Cash-Out Refinance

Max Cash Back

Max LTV(2)

$500,000

75

INVESTMENT PROPERTY

Purchase and Rate/Term Refinance

Max Cash Back

Max LTV(2)

N/A

70

80

N/A

65

75

INVESTMENT PROPERTY Cash-Out Refinance

Max Cash Back

Max LTV(2)

Max CLTV 80

89.99 75

84.99

Max CLTV 80 85

Max CLTV 75

Max CLTV 70 80 65 75

Max CLTV

Min FICO 680 740 680 740

Min FICO 660 680

Min FICO 700

Min FICO 660 680 660 680

Min FICO

Max DTI 45%

Max DTI 45%

Max DTI 45%

Max DTI 45%

Max DTI

1 Unit

$1,000,000 $2,000,000

500,000

75

75

680

45%

70

70

680

2-4 Unit

$1,000,000 $2,000,000

500,000

70

65

FOOTNOTES

70

680

45%

65

680

(1)Texas 50(a)(6) | 50(f)(2)

Allowed. Must comply with Texas State Law restrictions.

(2)LTV Restrictions

? Interest Only: See ARM Loans with Interest-Only Feature section for restrictions. ? Subordinate Financing: Max LTV 80% when subordinate financing is present. ? Florida Condo: Max LTV 80%.

Wholesale Transactions

Maximum price, including lender compensation, is capped at the lesser of 102.500 or $15,000 after adjustments.

Exceptions to Program Guidelines Minimum Loan Amount LTV/CLTV Calculations

If approved, will be subject to price and/or rate adjustments. Minimum Loan Amount is $200,000 For purchase transactions, lesser of sales price or appraised value. For refinance transactions, use appraised value.

Effective: 08/16/2021

Minimum Reserves Per AUS

Minimum Reserves Per AUS

Minimum Reserves Per AUS

Minimum Reserves Per AUS

Minimum Reserves Per AUS

Minimum Reserves Per AUS Per AUS

NexBank Jumbo Mortgage Connect

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Topic

Underwriting Specifications

? For loan amounts $1,500,000, one (1) full appraisal is required. ? For loan amounts > $1,500,000, one appraisal required as long as Fannie Mae's Collateral Underwriter (CU) score is 2.5 or less. If CU score is greater than 2.5 or CU score is not available, a CDA (desk review) from Clear Capital is required. If the CDA result reflects a value more than 10% below the original appraisal(s), then a field review (ordered by the TPO) by a NexBank approved AMC is required. Clear Capital contact information: 530-550-2530 | | customer@ **Must specify ordering w/ NexBank

Appraisal Requirements

? Appraisal transfers are permitted only where the requirements of Appraisal Independence Requirements (AIRs) have been met. The transferred appraisal must be accompanied with 1) an executed letter from the original lender certifying that the appraisal was ordered and obtained in a manner consistent with the requirements of AIRs, or if the original appraisal was ordered through a State compliant Appraisal Management Company (AMC), then the requirements of AIRs will have been met, and therefore a transfer letter will not be required and 2) the accurate XML file for the appraisal report or successful UCDP reports.

ARM Loans with Interest-Only Feature

? Properties with condition ratings of C5 or C6 are not eligible. ? Properties with quality rating of a Q6 are not eligible. ? Appraisals expire after 120 days. After 120 days, appraisal updates are permitted. Follow Fannie Mae guidelines. ? Newly constructed homes, a Certificate of Occupancy is not required, but must include an as-is appraisal or final inspection from appraiser to confirm complete. ? Loans with an interest-Only feature (N56I, N76I, N106I) Max LTV/CLTV is 75%. ? Loans with an interest-Only feature require 18 months post-closing reserves: 1) For N56I and N76I reserves are calculated based on interest-only payment plus taxes, insurance and HOA. 2) For N106I reserves are calculated based on the full principal and interest, plus taxes, insurance, and HOA.

? Interest Only ARMs Qualifying Ratios based on the higher of the fully indexed rate or the start rate. For N56I or N76I calculated on the Interest Only payment (plus applicable taxes, insurance, HOA) for the respective 5 year or 7 year term. For N106I must be calculated on the fully indexed/fully amortized rate (plus applicable taxes, insurance, HOA).

? Additional 10/6 Interest-Only ARM (N106I) Restrictions: 1) Minimum 740 FICO required. 2) Max loan amount is $1,500,000. 3) Not available for Investment Property transactions. 4) Not available for Cash-Out Refinances. 5) Not available to First-Time Homebuyers or Non-Permanent Resident Aliens.

ARM Rate Caps & Margins AUS Requirements

Product Code

Interest Rate Cap

Margin

Index Type

N56, N56I

2/1/5

2.75%

30 Day SOFR

N55

2/1/5

2.75%

30 Day SOFR

N76, N76I

5/1/5

2.75%

30 Day SOFR

N106, N106I

5/1/5

2.75%

30 Day SOFR

Interest Rate Floor on N56, N55, N76, N106 equals the margin

? All loans should be run through Fannie Mae's Desktop Underwriter (DU) or Freddie Mac's Loan Product Advisor (LPA) Automated Underwriting System (AUS).

? AUS must reflect Approve or Accept. Ineligible findings can only be due to loan amount if greater than current conforming loan limit.

? AUS will evaluate the presence of disputed trade lines, and condition accordingly (see "credit" section for guidance).

Cash-Out Loans Closing

? "Max Cash Back" limitation (from LTV matrix above) does not apply to a subject property that's owned free and clear

? Hazard/Homeownership Insurance: Insurance must be in force and effective prior to loan disbursement. Acceptable coverage is the lesser of 100% of the insurable value of the improvements OR the subject loan amount as long as it equals the minimum amount of 80% of the insurable value of improvements. Insurable value of improvements may be determined by either the total "costs new" as reflected on the appraisal report OR by the estimated costs new/cost to rebuild as detailed by the insuring company OR insurance company may state "guaranteed replacement cost" verbiage on the Evidence of Insurance.

Credit

? Credit profile eligibility to be determined by AUS.

? Frozen Credit Bureau: AUS will determine acceptability of frozen credit. One bureau, per borrower, may remain in its current "frozen" status. If more than one bureau reflects "frozen" the loan will be ineligible until at least two FICO scores per borrower are reflective on the credit report.

? Disputed tradelines: All disputed tradelines must be included in the DTI if the account belongs to the borrower unless documentation can be provided that authenticates the dispute. AUS will determine acceptability of any derogatory disputed tradelines.

? AUS will determine acceptability of any lates, including but not limited to mortgage, revolving, installment, etc., in the last 12 months

? All credit inquiries within 90 days of the credit report must be addressed by the borrower. Any new debt resulting from the inquiry must be documented and included in the borrower's DTI.

? Revolving Account Monthly Payment Calculation: If the credit report shows any revolving accounts with an outstanding balance but no specific minimum monthly payment, the payment must be calculated at the greater of: 1) 5% of the balance or 2) $10.00. NOTE: If the actual monthly payment is documented from the creditor, or the TPO obtains a copy of the current statement reflecting the monthly payment, that amount may be used for qualifying purposes.

? Installment debts with less than 10 months payments may be omitted from qualifying ratios, unless the monthly payment could adversely affect the borrower's ability to repay the debt within the first 10 months of the loan. Additional reserves, covering the remaining payments on the debt(s), will be considered favorable.

? Contingent Liabilities/Debts Paid by Others: For DU AND LPA loans, evidence the borrower is not the primary obligor must be documented in order to exclude payment from the DTI. [For loans processed through DU] Non-mortgage debts, including installment loans, student loans, revolving accounts, lease payments, alimony, child support, and separate maintenance may be excluded from the borrower's qualifying DTI with 12 months' cancelled checks (or bank statements) from the other party making the payments that document a 12-month payment history with no delinquent payments. When a borrower is obligated on a mortgage debt - but is not the party who is actually repaying the debt the lender may exclude the full monthly housing expense (PITIA) from the borrower's recurring monthly obligations if: 1) the party making the payments is obligated on the mortgage debt, 2) there are no delinquencies in the most recent 12 months, and 3) the borrower is not using rental income from the applicable property to qualify. Note: "other party" making the payments cannot be an interested party to the subject loan transaction. [For loans processed through LPA] For Installment (not including Mortgages), Revolving, and Monthly lease payments - 1) Documentation must support that a party other than the Borrower has been making timely payments for the most recent 12 months (regardless of whether the party is obligated on the debt). 2) The party making the payments is not an interested party to the subject real estate or Mortgage transaction. For Mortgages - Documentation must indicate the following: 1) A party other than the Borrower has been making timely payments for the most recent 12 months. 2) The party making the payments is obligated on the Note for the Mortgage that is being excluded. 3) The Borrower is not on the title for the mortgage property. 4) The party making the payments is not an interested party to the subject real estate or Mortgage transaction.

? Alimony: Borrowers obligated to pay alimony may have the payment deducted from the gross qualifying income in lieu of treating it as a monthly obligation.

? Student Loans: [For loans processed through DU] If a Student Loan payment amount is provided on the credit report, that amount can be used for qualifying purposes. If the credit report does not identify a payment amount (or reflects $0), the lender can use either: 1% of the outstanding student loan balance, or documentation verifying the monthly payment amount even if that amount is $0 based on an income based repayment plan. [For loans processed through LPA] For student loans in repayment, deferment or forbearance 1) If the monthly payment amount is greater than zero, use the monthly payment amount reported on the credit report or other file documentation, or 2) If the monthly payment amount reported on the credit report is zero, use 0.5% of the outstanding balance, as reported on the credit report. Additionally, for LPA loans, student loans subject to employment-contingent repayment programs will be considered that meet FHLMC selling guide 5401.2 (a).

Credit Events (Derogatory Credit)

Delayed Financing

? Current Principal Residence Pending Sale: When the transaction will not close prior to the subject transaction the current PITIA may be excluded from the DTI with 1) the fully executed sales contract for the current residence, and 2) confirmation that any financing contingencies have been cleared for the buyer. NOTE: If the current principal residence is converting to an investment property see "Income" section regarding rental income.

? Open IRS debts: 1) Must have an approved payment arrangement. 2) Must have evidence that at least the first month payment has been made per the payment arrangement. NOTE: Any open "liens" to the IRS (reflected on title or the public records per the credit report) must be paid in full, and released, prior to closing OR a payoff from the IRS has been provided in which the expiration date of the payoff is on or after the settlement/funding date of the loan and the payoff is reflected on the Closing Disclosure.

? No bankruptcy in previous seven (7) years (all bankruptcy types) measured from the Discharge Date to the Disbursement Date of the subject loan. ? No foreclosure in previous seven (7) years as measured from the completion date of the Foreclosure to the Disbursement Date of the subject loan. ? No short sale or Deed-In-Lieu in previous seven (7) years as measured from the sale/DIL date to the Disbursement Date of the subject loan.

? Borrowers with a previous forbearance require six (6) months satisfactory payments after the applicable loan is out of forbearance ? Collections/Charge offs: Required payoffs of Collections and/or charge offs will be determined by the AUS. Funds to pay off the collection account(s) must be sourced. ? Any open judgments or "liens" to the IRS (reflected on title or the public records per the credit report) must be paid in full prior to or at closing. Funds to pay off the liens must be sourced.

? Delayed Financing must follow Fannie Mae guidelines for loans utilizing DU and Freddie Mac guidelines for loans utilizing LPA. ? Closing Disclosure (HUD-1) from the original purchase must show all cash was used for the purchase of the property. ? Will be classified as a rate/term refinance.

NexBank Jumbo Mortgage Connect

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Topic Disclosures (Program Specific) Document Expiration Eligible Borrowers

Assets

Escrow Holdback

Income

Underwriting Specifications ? Borrower(s) must execute a "Know Before You Owe" (Home Loan Toolkit) acknowledgement certifying the toolkit was delivered to borrower(s) within three days of the signed application for all loans.

? For all Full Doc Jumbo ARM loans, borrower(s) must execute a CHARM booklet acknowledgement certifying that the CHARM booklet was delivered timely to the borrower(s) from the date of the signed application.

? Appraisal and credit documentation including paystubs, bank statements, credit report, etc. expire after 120 days. ? U.S. Citizens (including US Citizens living abroad) ? Permanent Resident Aliens ? Non-Permanent Resident Aliens: All Non-Permanent Resident Aliens are required to have a minimum of two years of credit and employment history in the United Stated, or they must apply with a United States Citizen or Permanent Resident Alien on the application.

- Acceptable VISA types: E-1, E-2, E-3, G1-5 (with proof no diplomatic immunity), H-1, H-1B, H-2A, H-2B, H-3, L-1, NAFTA/TC or TN - Employment Authorization Document Card only, not allowed. NOTE: There should be a documented employment and income history including but not limited to two years of US tax returns and a history of visa renewals and no reason to believe employment will cease. Foreign Nationals are ineligible.

? Borrowers which are party to a lawsuit are ineligible. ? 1031 Exchanges: Proceeds from a 1031 exchange in escrow, properly documented and in compliance with Internal Revenue Code Section 1031 are eligible as funds to close. Both the sold property and subject property must be similar and qualify as "like-kind". Tax deferred Exchanges are only eligible for purchases of investment properties. Note: 24 unit properties where one of the units is occupied by customer, are not considered investment properties, and therefore are not eligible.

? Borrower's own funds must be seasoned in a United States bank account(s). Foreign funds recently deposited in a U.S. financial institution are an acceptable source for down payments and/or reserves, provided all of the following requirements are met: 1) Documented evidence of funds transferred from the country from which the funds originated. 2) It can be established that the funds belonged to the borrower, before the date of the transfer, and 3) The source of all funds used for closing can be verified, just as they would for any other depository account. NOTE: All assets must be converted to U.S. dollars, and all documents must be translated to English by a certified third-party translator.

? A gift of equity is ineligible as a source of assets or reserves. ? Gift funds permitted for primary residence transactions only and second homes only. Gifts may be used to meet down payment, funds to close, and reserve requirements. Gifts must be documented in accordance with the AUS requirements. NOTE: Gifts are not eligible for investment transactions.

? Cryptocurrency (or crypto currency) such as Bitcoin, Ethereum, Ripple, Bitcoin Cash, Cardano, Litecoin, etc. are not permitted. ? Business Funds are not permitted as a source of assets for down payment, closing costs or reserves. ? Large deposits (singular deposits reflected on any one bank statement) on purchase transactions must be sourced if they are 50% or more than the total monthly qualifying income. This includes joint accounts with another person that is not a party to our transaction. NOTE: Deposits or transfers may be "backed out" of the qualifying balance without further documentation, at the underwriters discretion.

? Large deposits (singular, or a combination of multiple deposits reflected on any one bank statement) do not have to be sourced on refinance transactions, except where the large deposit(s) is extremely unusual for the borrower's typical savings history. NOTE: Deposits or transfers may be "backed out" of the qualifying balance without further documentation, at the underwriters discretion.

? Stocks/Bonds/Mutual Funds: 100% of funds may be used as reserves. Proof of liquidation required when more than 80% of the stocks/bonds/mutual funds are needed for cash to close.

? Retirement Assets: 100% of the vested amount, minus any outstanding loans, in which the borrower is vested (has access to the funds) may be used as reserves. If using no more than 80% of the amount the borrower has access to in the account for down payment/closing costs, documentation of the loan or withdrawal is not required. In all instances of use of retirement assets (reserves or using the funds for closing) terms and conditions of withdrawal must be obtained to determine the level of access, if any, to the account. If the borrower is unable to withdraw funds or take a loan from the retirement account, the funds may not be used for qualifying, and therefore cannot be listed on the 1003. NOTE: IRA/SEP/Keogh account withdrawal terms are mandated by the IRS and are not required to be documented.

? Secured/Unsecured Funds: Secured funds may be utilized to meet the borrower's down payment, funds to close, and reserve requirements. The collateral securing the debt must be verified as an acceptable source for securitization. A payment for the secured debt would not have to be considered against the qualifying DTI. Unsecured funds: May not be utilized as a source of funds, however the debt must be verified and qualifying payment considered in the subject loan DTI.

? Permitted on an exception only basis. ? 1003 must disclose the borrower(s) employment during the most recent two full years. Any gaps in employment that span one or more months must be explained. If the borrower(s) indicate that he/she was in school or the military for the recent two full years, documentation such as college transcripts, or discharge papers, must be provided to support the history.

? Borrower(s) that are scheduled to begin employment under the terms of an employment offer or contract, are not required to provide a paystub subject to the following requirements: 1) Only eligible for 1-Unit, Owner-Occupied Primary Residence Purchase transactions. 2) The employment offer or contract is provided with start date, salary, and terms of employment must be signed by the employer, accepted by the borrower. 3) The borrower's employment offer or contract must be non-contingent, or any contingencies or conditions of employment must be evidenced as satisfied prior to Final Approval. 4) Borrower cannot be employed by a family member or by an interested party to the transaction. 5) Borrower can only be qualified using fixed based income. (Variable hourly income is not an eligible source of income for qualifying). [For Loans Utilizing DU]: The borrower's employment start date must be no earlier than 30 days prior to the note date or no later than 90 days after the note date AND the borrower must have cash reserves sufficient to cover the amount of reserves that DU requires be verified, plus one of the following: 1) Financial reserves sufficient to cover principal, interest, taxes, insurance, and association dues (PITIA) for the subject property for six months; or 2) Financial reserves or current income sufficient to cover the monthly liabilities included in the debt-to-income ratio, including the PITIA for the subject property, for the number of months between the note date and the employment start date, plus one. Current income refers to income that is currently being received by the borrower (or co-borrower), may or may not be used for qualifying, and may or may not continue after the borrower starts employment under the offer or contract. Current income may be used in lieu of or in addition to financial reserves. For this purpose, the lender may use the amount of income the borrower is expected to receive between the note date and the employment start date. If the current income is not being used for qualifying purposes, it can be documented by the lender using income documentation, such as a paystub, and no verification of employment is required. For calculation purposes, consider any portion of a month as a full month. [For loans utilizing LPA]: The borrower's employment start date may not be before, but must be within 60 days of the note date AND the borrower must have cash reserves sufficient to cover the monthly housing expense and other monthly liabilities for the number of months between the note date and the borrower's employment start date, plus one month. NOTE: All loans where the borrower(s) is utilizing this documentation option must be second-level reviewed by NexBank Underwriting management.

? Borrower(s) that change jobs frequently within the same line of work, but continues to advance in income or benefits, will be considered favorable as the income stability takes precedence over job stability.

? Borrower(s) Employed By Family Members: Two (2) years tax returns recommended. However, if a minimum of 12 months income is reported on a current tax return (to verify any ownership in the business and to validate the income as reflected on paystubs) it will be considered for qualifying.

? Verbal VOE's: Obtain a verbal verification of employment (verbal VOE) for each borrower using employment or self-employment income to qualify. The verbal VOE must be obtained per Fannie Mae guidelines for loans utilizing DU, and per Freddie Mac guidelines for loans utilizing LPA.

? Retirement Account Distributions as Income: [for loans utilizing LPA] If the retirement account from which the Borrower is currently taking distributions is projected to be depleted within three years, the Borrower's additional eligible retirement accounts may be utilized when determining continuance of distributions. [For loans utilizing DU] the retirement account from which the Borrower is currently taking distributions must have a three year continuance after the subject loan's Note Date.

? Restricted Stock Units (RSU) may not be used as qualifying income. ? Foreign Income: Is income earned by a borrower who is employed by a foreign corporation or a foreign government, paid in foreign currency. Borrowers may use foreign income to qualify if the following requirements are met: 1) Copies of his or her signed federal income tax returns for the most recent two years that include foreign income. 2) The lender must satisfy the standard documentation requirements (as addressed in this matrix) based on the source and type of income. NOTE: All applicable foreign documents must be converted to U.S. dollars, and all documents must be translated to English by a certified third-party translator.

? Self-Employed Income: Document per AUS and must comply with Fannie Mae (For DU) or Freddie Mac (For LPA) guidelines. ? Income from gambling winnings is not permitted. ? Income derived from lines of business which are not "legal" on the Federal level are not an eligible qualifying income source. (For example, the cannabis industry.)

NexBank Jumbo Mortgage Connect

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Topic Interested Party

Contributions

Maximum Number of Financed Properties

Non-Arm's Length Transactions

Underwriting Specifications ? Limited to 6% for primary, second home and investment properties. IPCs may only be used for closing costs and prepaid expenses and may not be used for down payment or reserves.

? NexBank will finance a max of four (4) financed properties for any one borrower regardless of occupancy type.

? The taxes, insurance, and HOA (where applicable) must be fully documented/verified on all REO. Use of the Schedule E is acceptable where it is clear the taxes, insurance and applicable HOA dues have been accounted for.

? Non-arm's length transactions are purchase transactions in which there is a relationship or business affiliation between the seller and the buyer of the property. NexBank allows non-arm's length transactions for the purchase of existing properties unless specifically forbidden for the particular scenario, such as delayed financing. For the purchase of newly constructed properties, if the borrower has a relationship or business affiliation (any ownership interest, or employment) with the builder, developer, or seller of the property, NexBank will only allow mortgage loans secured by a primary residence. Transactions on newly constructed homes secured by a second home or investment property if the borrower has a relationship or business affiliation with the builder, developer, or seller of the property are not eligible.

Non-Occupant Co-Borrowers ? Eligibility determined by AUS Findings.

Non-Owner Occupied Property

Power of Attorney

? Borrowers may not be affiliated with the builder/developer or property seller. ? A Power of Attorney (POA) is not acceptable for loans closing in the name of a trust.

Private Mortgage Insurance ? Not permitted

Program Restrictions

? Prepayment Penalties are not permitted. ? Borrower(s) who are principal or employees of Third Party Originators (TPO) are not permitted. ? Properties held in an Estate are not permitted. ? Properties with confirmed environmental contamination issues are ineligible. ? Employer/Employee sales are not permitted. ? Mortgage Credit Certificates are not permitted. ? Flip purchase transactions, in which the seller of the subject property has been vested in title less than 90 days, are permitted: 1) provided the increase in the sales price is less than 20%, or 2) if the sales price is greater than 20%, but the value increase is due to recent renovations or improvements as supported by the appraisal report, and receipts, building permits or signed contracts can be provided to support the recent upgrades.

? Borrower(s) affiliated with the builder, developer or property seller are not permitted. ? Borrowers may only own one second home in the same geographic area. ? 40 acres maximum. For properties >20 acres: Acreage and land value must be typical and common for the subject's market. The appraiser must indicate the total acreage as well as provide data which indicates the like-size properties with similar land values are typical and common in the subject area's market. It is not acceptable to have property appraised with on ly 40 acres in order to meet eligibility. Additionally: 1) Maximum land value of 35%. 2) LTV/CLTV/HCLTV reduced by 5% below maximum allowed per eligibility matrix. 3) Must not have any income producing attributes.

Property Type

Qualifying Payment Qualifying Rate (ARM)

? Condominiums permitted. Based on the project type, condominium project reviews based on Fannie Mae's guidelines are acceptable including the following: Limited Review Process, Full Review - New Condo Project, Full Review - Established Condo Project, Project Eligibility Review Service (PERS) Approved Project (NOTE: NexBank does not facilitate the PERS process). For condos located in Florida: 1) A full project review is required. Additionally, all new construction and new conversion projects located in the State of Florida require PERS approval by Fannie Mae. 2) Maximum financing for an established project in the State of Florida is the lesser of the program maximum, or 80% LTV.

? Single Family Detached Residences and PUD's only. ? Properties zoned agricultural or commercial are ineligible. ? Hobby Farms, Land Trusts and Leasehold properties are ineligible. ? Co-ops, condotels and manufactured homes are an ineligible property type. ? Deed-restricted and resale-restricted properties are ineligible. ? Properties encumbered with a "private transfer fee" or "private transfer fee covenant" are not permitted. ? Properties with condition ratings of C5 or C6 are not eligible. Quality rating of a Q6 is not eligible. ? Properties with confirmed environmental contamination issues are ineligible. ? Properties solar panels must meet Fannie Mae or Freddie Mac requirements. Any UCC liens filed against the property must be released prior to closing. ? Non-Interest Only Loans: The fully amortized payment, based on the qualifying rate, will be used to qualify the borrower. ? Interest Only Loans: See "ARM Loans with Interest-Only Feature" section above. ? Will be the greater of:

For 5/6 and 5/5 ARM: Note Rate + 2% OR Fully Indexed Rate For 7/6 and 10/6 ARM: Note Rate OR Fully Indexed Rate For "Interest-Only" ARM, see "ARM Loans with Interest-Only Feature" section.

Qualifying Rate (Fixed) Refinance Transactions

? Fixed will be equal to Note Rate

? Rate/Term Refinances: 1) The new loan amount is limited to pay off the current first lien mortgage, any seasoned non-first lien mortgages, closing costs and prepaid items. 2) See "seasoning requirements". 3) Max incidental cash-back is limited to 1% of the new loan amount. ? Delayed financing allowed. See "Delayed Financing" section. ? Cash-Out Refinance: 1) Borrower must have owned the property for at least six (6) months. If the property is owned free and clear and six (6) month seasoning is not met, refer to "Delayed Financing" section. 2) Maximum cash-out limitations include the payoff of any unsecured debt, unseasoned liens and any cash-in-hand. ? Properties listed for sale within three months of the application date, on refinance transactions, must remove the listing prior to the CTC. ? Continuity of Obligation is not required. ? Max LTV/CLTV/HCLTV is determined by current appraised value.

Reserve Requirements Seasoning Requirements

? Reserves must be calculated on the full PITIA, including flood insurance where applicable.

? Loans with an Interest-Only feature: Regardless of loan amount, 18 months post-closing reserves required.

? Proceeds from cash-out may not be used to meet reserve requirements will be determined by AUS.

? HELOC liens must be seasoned 6 months with evidence no draws have been taken in the previous 6 months of the subject application date to be considered a rate/term transaction. Otherwise, the loan will be considered a cash-out transaction. Non-HELOC second liens must be seasoned a minimum of 6 months (from the date of the subject loan application date) or be a purchase money lien to be considered rate/term.

State Restrictions Subordination Agreement

Temporary Buy Downs

Underwriting

? Ineligible states: AK, NJ and NY

? Are required on all subordinate liens.

? Temporary Buy Downs are currently not permitted.

? IRS 1040 Transcripts will be required for 2 years. NOTE: NexBank will accept W-2 transcripts in lieu of the actual/original W-2's.

? A fully executed (but not processed) 4506-C is required for each self-employed business utilized to document positive self-employed income to qualify.

? All loans must be processed through Fannie Mae's Desktop Underwriter or Freddie Mac's Loan Product Advisor. Must obtain Approval or Accept.

? All loans must be ATR/QM Safe Harbor compliant, with an APR that does not exceed 1.5% over the APOR which was established at the time the rate was locked with the consumer. Loans must be fully underwritten to just one of the applicable Fannie Mae or Freddie Mac guidelines and cannot use a combination of guidelines from each GSE on one loan. Specifically as it relates to the verification of income, assets, debt obligations, alimony, and child support, loans must adhere to both the AUS requirements and the relevant sections of the specifically enumerated guidelines. With respect to elements outside of income, assets, debt obligations, alimony or child support each loan should meet your origination guidelines.

? Unless otherwise noted in guidelines, Fannie Mae guidelines should be followed for loans utilizing Desktop Underwriter and Freddie mac guidelines for loans utilizing Loan Product Advisor.

? Subject to approval by NexBank Underwriting Department.

NexBank Jumbo Mortgage Connect

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