VA IRRRL High Balance

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VA HIGH BALANCE IRRRL

LTV No Max No Max No Max

CLTV No Max No Max No Max

30 Year Fixed4

Purpose Rate Reduction Refi Rate Reduction Refi Rate Reduction Refi

Occupancy O/O SH

N/O/O

Units 1-4 1 1-4

Credit Score3 6202 6202 6202

1. Only existing subordinate financing is allowed and it must be re-subordinated. 2. Loan amounts $1,000,000 to $1,500,000: 700 credit score, 100% max LTV. See Loan Amounts $1,000,000 to

$1,500,000 section for additional requirements. Loan amounts >$1,500,000: 720 credit score, 100% max LTV. See Loan Amounts > $1,500,000 section for additional requirements. 3. Manufactured Homes require minimum 600 credit score 4. Odd terms in annual increments between 21 ? 29 years available, see Loan Terms section for additional information

PRODUCT NAME

Standard Product Codes*: ? VA IRRRL High Balance 30 Year Fixed - NCQ ? VA IRRRL High Balance 30 Year Fixed ? CQ

LOAN TERMS

ALLOWABLE ORIGINATION CHANNELS AGENCY LINKS

*Odd terms in annual increments between 21 ? 29 years available, see Loan Terms section for additional information ? Odd loan terms are allowed in annual increments between 21 and 29 years ? If a specific product code for the 25 year term is available, the loan must be priced

with the 25 year product code ? Odd Terms must be manually locked at this time (this is a temporary constraint) ? When using Polly PPE: for any term between 21 and 29 years that are not offered

standard by the product, user must do the following when locking the loan: ? In the Search Criteria section, check Other under Fixed Programs (where terms

are displayed) and a Select Term drop down will appear ? Select the desired term in years from the drop down (Note, if 25 Yr is selected it

will return the 25 year product code if offered by product, otherwise will price under 30 year product code) ? Price the loan (click Get Pricing or Refresh Pricing, as applicable) and product will price and lock under the 30 Year product code ? Wholesale ? Retail ? Correspondent ? In addition to any Product Profile requirements, you must always meet the published

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VA guidelines. If published VA guidelines are more restrictive than what is allowed in the Product Profile, you must always defer to VA Guidelines.

? All PRMG staff can access all end Agency guidelines though AllRegs Online at . Instructions on how PRMG staff can access the AllRegs service is available in the Resource Center.

? Use the following link to access VA Lender Handbook:

?

MINIMUM LOAN AMOUNT

MAX. LOAN AMOUNT

LOAN AMOUNTS $1,000,000 to $1,500,000

For loans funded on or after 01/01/24 ? For all states except HI and AK: $766,551 ? For HI and AK: $1,149,826 For loans funded prior to 01/01/24 ? For all states except HI and AK: $726,201 ? For HI and AK: $1,089,301 ? $2,000,000 ? Loan amounts $1,000,000 to $1,500,000 must meet all requirements in Loan

Amounts $1,000,000 to $1,500,000 section ? Loan amounts > $1,500,000 must meet all requirements in Loan Amounts >

$1,500,000 section ? In addition to other requirements listed in guidelines, must also comply with the

following: ? 700 minimum credit score required

? Max 100% LTV - base loan amount (excluding the VA funding fee) may not exceed estimated value

? Only existing secondary financing that will be subordinated to the new first mortgage allowed, there is no CLTV limit under this scenario

? No appraisal valuation product required. For applications taken on or after 5/25/18, appraisal may be required if reducing rate with discount points for Net Tangible Benefit test. See Net Tangible Benefit section for additional requirements.

? No deed restrictions, including age restricted properties ? Non-traditional credit not allowed

? Evidence the existing loan is current is required

? No 30-day or greater mortgage lates in the most recent 12 months

? If the loan is seasoned 12 months or more, evidence that the existing loan has not had any 30-day or greater mortgage lates in the past 12 months

LOANS AMOUNTS > $1,500,000

? If the loan is seasoned less than 12 months, evidence the existing loan (loan being refinanced) has no 30-day or greater mortgage lates since the inception of the loan AND no 30-day or greater mortgage lates for any other first mortgage loans associated with the property and borrower(s) in the most recent 12 months.

? Minimum of a six month payment history on the current mortgage. If loan does not have at least a 6 month mortgage payment history on the current mortgage, the loan must be processed as a standard VA refinance transaction.

? For credit qualifying transactions, DTI allowed per VA ? Requires second signature by Corporate Underwriting, Underwriting Supervisors,

Regional Underwriting Management or Operations Manager

? In addition to other requirements listed in guidelines, must also comply with the following: ? Minimum 720 credit score ? The 25% guarantee must be composed entirely of the veteran's entitlement. The use of cash down payment or equity may not be used to meet the 25% guarantee requirement.

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GEOGRAPHIC RESTRICTIONS

? Borrowers must have a primary mortgage or primary housing history of 0x30x12 for the most recent consecutive 12-month period, ending with the application date. Gaps in history or less than 12 months will not be acceptable.

? If the loan is seasoned 12 months or more, evidence that the existing loan has not had any 30-day or greater mortgage lates in the past 12 months

? If the loan is seasoned less than 12 months, evidence the existing loan (loan being refinanced) has no 30-day or greater mortgage lates since the inception of the loan AND no 30-day or greater mortgage lates for any other first mortgage loans associated with the property and borrower(s) in the most recent 12 months.

? Minimum of a six month payment history on the current mortgage. If loan does not have at least a 6 month mortgage payment history on the current mortgage, the loan must be processed as a standard VA refinance transaction.

? Evidence the existing loan is current is required ? Only existing secondary financing that will be subordinated to the new first

mortgage allowed, there is no CLTV limit under this scenario ? Max 100% LTV - base loan amount (excluding the VA funding fee) may not

exceed estimated value ? No appraisal valuation product required. For applications taken on or after

5/25/18, appraisal may be required if reducing rate with discount points for Net Tangible Benefit test. See Net Tangible Benefit section for additional requirements. ? No deed restrictions, including age restricted properties ? Non-traditional credit not allowed ? No 30-day or greater mortgage lates in the most recent 12 months ? For credit qualifying transactions, Max 45% DTI. DTIs above 41% must meet VA's additional requirements.

? Please refer to PRMG's "Eligible States" list, which can be found at this link:

? If the property is in Texas, please refer to the addendum at the end of this product profile

? If the subject property is located in the Alabama Restricted Lending Area (Coliseum Boulevard Area of Montgomery - this area contains a subsurface chemical contamination condition or environmental condition known as the Coliseum Boulevard Plume (CBP)) the loan must meet the following requirements: ? A fully executed disclosure issued by the Montgomery Area Association of Realtors (MAAR), identified as the Coliseum Boulevard Plume Disclosure, must be a part of the purchase contract, signed, and dated by all required parties prior to closing.

? Properties located in Illinois in the counties of Cook, Kane, Peoria or Will requires copies of the following to be closely reviewed: (1) A copy of the Certificate of Compliance with the counseling requirements or the Certificate of Exemption, if the lender or transaction is exempt and (2) A copy of Title Commitment free from any exceptions related to the anti-predatory lending database requirements.

? Owner occupied properties in Kansas where the LTV exceeds 100% must have a full appraisal

? For properties in West Virginia: VA IRRRLs must be credit qualified. ? In West Virginia, LTV can exceed 100% only for the financing of the VA Funding Fee ? For Kansas (KS) primary residences, when an appraisal is not obtained, a property

valuation determined by one of the following three (3) methods is required: (1) Most recent tax assessment value by county; (2) 2055 Drive-by Appraisal Report (not allowed with appraisal waivers); or (3) AVM. If LTV exceeds 100% based on the

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MORTGAGE TYPES DOCUMENTATION

valuation, the LTV must be acceptable to the product and a Kansas High Loan-toValue Notice must be provided to borrower not less than three (3) days prior to closing and a copy must be retained in file. A free copy of appraisal valuation must be provided to borrower, if applicable.

? Any VA programs/mortgage types identified in the VA Lender Handbook that are not specifically allowed in the product profile, including but not limited, to Energy Efficient Mortgages are not eligible.

? Streamline Documentation

? Verifications and similar documents used for qualifying (such as a VOE, VOD or

VOM) must be independently obtained/authenticated, and should never be handled by a party to the transaction (including but not limited to the borrower, realtor, loan officer, seller, etc.) The verifications/document should be ordered/requested by a processor (or similar) and must be sent directly to the third-party who is providing the verification and be returned directly from the same independent third-party. The documents must not pass through the hands of a party to the transaction. If an Underwriters or other team member sees a red flag to indicate a document was not independently obtained, additional diligence must be used to confirm the validity of the documents. ? All borrowers must have a valid social security number (as validated by COE, credit report, etc. and any red flags should be addressed) ? For non-self-employed borrowers: Verbal VOE is required to be completed no more than 10 days prior to the note date for wet funding states and escrow states. If the Verbal VOE is completed more than 10 days prior to the funding date, another Verbal VOE should be completed 10 days prior to funding date for escrow states. ? For self-employed borrowers: No more than 30 calendar days prior to note date, verify the existence of the borrower's business from a third party that may include a CPA letter (cannot be vague, must state length of time doing taxes and be signed by CPA), regulatory agency, or appropriate licensing bureau; OR verify a phone listing and address for the borrower's business through resources such as the telephone book, directory assistance, internet, or contact the appropriate licensing bureau. Verification may not be made verbally, and a certification by PRMG indicating the information was verified is not allowed. Documentation from the source used to verify the information must be obtained and in the file. Internet sites such as , Chamber of Commerce sites and where they allow the business owner to add their own information are not acceptable. Also single source verifications, such as from , and are not allowed. If all other methods of obtaining third party verification have been exhausted, the borrower can provide letters from three clients indicating the type of service performed, length of time of business relationship, frequency of service, payment arrangements, etc. and support the income with current bank statements, deposits, etc. The underwriter must thoroughly investigate that the business, income and proof of business is legitimate. ? Borrower must provide a certification of occupancy ? When paying off any non-transaction related item (i.e., debts, third party payouts, etc.), if the payoff amount does not match the amount on the credit report or the documentation in the file with the payoff amount, then copies of the actual invoices (statements), an updated (current) credit report/refresh or credit supplement reflecting the current balance with a signed amendment (or similar) authorizing disbursement for these account(s) are required. ? All documentation used in qualifying the borrower must be legible and if not in English, will require a full written translation of the entire documentation into English.

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? Veteran's Comparison Statement must be provided to the veteran within three days

of application and at closing and the following information relating to the loan being

refinanced and the refinance loan, i.e. the IRRRL must be included: VA Loan

Identification Number (LIN); Loan Amount; Loan Term; Monthly Payment; Interest

Rate; and Borrower Name(s). The statement must also show the recoupment period

(in months) for all fees, expenses, and closing costs, (including taxes, amounts held in

escrow, and fees paid under chapter 37 such as the VA funding fee), whether

included in the loan or paid outside of closing. It is important to note that the

recoupment calculation for the Comparison Statement is different than what is used

for Eligibility Recoupment, as the funding fee and prepaids must be included in the

recoupment for the Comparison Statement. The recoupment on the Comparison is

able to exceed 36 months, as long as the Eligibility Recoupment is 36 months or less.

NON-CREDIT QUALIFYING ? Verbal VOE is required to be completed within 5 days (preferably within 48-72 hours)

DOCUMENTATION

of funding. In a wet funding state, it must be completed within 5 days (preferably

within 48-72 hours) prior to the note date.

? Mortgage Rating for 12 months or life of the loan (if loan is < 12 months old,

mortgage rating for any previous mortgages associated with the subject property

and borrowers).

? Mortgage only rating with scores is acceptable, a full tri-merge is not required. A tri-

merged in-file credit report with credit scores (only mortgage rating needs to be

reviewed) will also be accepted

? Current employment must be stated on the application

? Income must not be shown on the application (Must enter $1 in Other Income to

trigger disclosures)

? Asset verification is not required.

? Appraisal Requirement: No maximum LTV/CLTV, and no 2055 or AVM allowed (no

appraisal required) For applications taken on or after 5/25/18, appraisal may be

required if reducing rate with discount points for Net Tangible Benefit test. See Net

Tangible Benefit section for additional requirements.

? Documentation to validate prior loan information, including the case number on the

IRRRL certificate of eligibility, interest rate, principal and interest payment, and

original loan amount. This information can be provided from one or more of the

following, as long as the necessary information is provided: prior loan's note, deed

of trust, or mortgage coupon or demand, prelim, etc. Additionally this information

must verify the loan being refinanced is for the same insured VA loan as a new IRRRL.

? In Cook County, Illinois, Kane County, Illinois, Peoria County, Illinois and Will County,

Illinois Streamline Refinances are not exempt under Illinois law from the requirement

to enter applicant income information. The actual income must be

provided/estimated by the applicant(s) and listed on the application (1003) and

entered in the Illinois Anti-Predatory Lending Database (ILAPLD). It is not acceptable

to enter a nominal amount such as $1.00. However, the income will not be

considered in the underwriting of the loan.

CREDIT QUALIFYING

? Verbal VOE is required to be completed within 5 days (preferably within 48-72 hours)

DOCUMENTATION

of funding. In a wet funding state, it must be completed within 5 days (preferably

within 48-72 hours) prior to the note date.

? One month consecutive paystubs are not required if the current paystub includes a

30 day year-to-date total. If the Veteran has only been employed with their current

employer for less than 30 days, all paystubs received are required.

? Last 2 years W-2's

? Amended tax returns must have been filed at least sixty (60) days prior to the

earliest of the purchase agreement, initial credit report date, or mortgage

application date, unless the changes made are non-material to the amount of

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?

? ? ? ? ? ? ?

?

VA High Balance IRRRL Product Profile Guidelines Subject to Change

income claimed, and qualification for the mortgage loan. When using the amended

returns if filed within sixty (60) days to the earliest of the purchase agreement, initial

credit report date, or mortgage application date, or after, the Underwriter must

provide justification and commentary regarding its use, including that borrower does

not require use of amended income for qualification. Regardless of when the

amended returns were filed, due diligence must be exercised with close examination

of the original, and amended returns, to determine if the use of the amended return

is warranted and the following documentation should be reviewed when income

from the amended return is required: A letter of explanation regarding the reason

for the re-filing; evidence of filing (must be validated with a record of account (4506-

C results); copy of the original 1040; any extensions filed, and evidence of payment

of the taxes due, and the ability to pay, if the check has not yet cancelled. A

payment plan is not allowed for amended returns.

Per the 2016 Lenders Conference Edition of the LGY Newsletter, if a joint tax return

shows a business loss, then that loss will have to be deducted from the Veteran's

income in both community and non-community property states. What is reported to

the IRS on a joint return must be used when applying for a federally guaranteed loan.

In a situation where a couple has been faced with business losses, the Veteran and

his or her spouse may want to consider both being on the loan in order to potentially

qualify.

Mortgage Rating for 12 months or life of the loan (if loan is < 12 months old,

mortgage rating for any previous mortgages associated with the subject property

and borrowers).

Letter of explanation for inquiries is required on all manually underwritten loans.

Tri-merged in-file credit report with credit scores.

Tax transcripts are not allowed to take the place of a tax return when it is required

4506-C

Provide a written analysis of the income used to qualify the borrower on the

Transmittal Summary or like document(s) in the file. An Income Analysis must be

completed for self-employed borrowers.

When all income used to qualify a loan for the borrower is made up exclusively of

wage earner income reported on a W2 and/or fixed income reported on a 1099 (i.e.,

social security or VA benefits) transcripts are not required, unless full tax returns are

required for the borrower by the AUS (i.e., borrower employed by family members).

If multiple borrowers are qualifying on the loan, but the tax returns are not filed

jointly, and one borrower requires full returns, but the other borrowers are qualified

exclusively on W2 and/or fixed income then no transcripts are required for the

W2/fixed income borrower and 1040 transcripts are required for the self-employed

borrower/borrower requiring full returns. When using this option, there can also be

no tax returns included in the loan file (including if tax returns are required to be

reviewed by the PRMG underwriter for MCC Approval or other purpose). If the

borrower earns other income that is used to qualify that would be able to be

validated with 1040 transcripts (i.e., rental income from tax returns, etc.) then 1040

transcripts are required to validate that income. A completed and executable

(signed) 4506-C must be submitted with the loan file. For the borrowers where

transcripts are not required, be sure to select the W2/1099 option only when

completing the 4506-C. Do not mark the 1040 or Record of Account option.

When tax returns are required for a borrower or when borrower's qualifying income

is not made up of W2 or fixed income reported on a 1099, validated 1040 tax

transcripts are required if borrower's income is utilized as a source of repayment. If

multiple borrowers are qualifying but the tax returns are not filed jointly (when one

borrower requires full returns), then it is acceptable to provide no transcripts for the

salaried/fixed income borrower and 1040 transcripts for the self-employed

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borrower/borrower requiring the tax returns.

? When required, transcripts must be provided for the number of years of income

documentation required to be in the loan file, in accordance with the AUS findings

and/or VA requirements. Tax transcripts are required to support the income used to

qualify the borrower. The purpose of the 4506-C is to verify the income reported is

accurate.

? Tax transcripts must come to lender directly from the IRS or through a third party

vendor ordered/obtained by lender

? As required by VA, for borrowers who have children up to the age of 12, a childcare

expense letter is required to analyze residual income and ensure other qualifying

calculations for VA are accurate.

? Evidence of a valid Social Security number

? Asset verification is not required.

? Appraisal Requirement: No maximum LTV/CLTV, and no 2055 or AVM allowed (no

appraisal required). For applications taken on or after 5/25/18, appraisal may be

required if reducing rate with discount points for Net Tangible Benefit test. See Net

Tangible Benefit section for additional requirements.

? Documentation to validate prior loan information, including the case number on the

IRRRL certificate of eligibility, interest rate, principal and interest payment, and

original loan amount. This information can be provided from one or more of the

following, as long as the necessary information is provided: prior loan's note, deed

of trust, or mortgage coupon or demand, prelim, etc. Additionally this information

must verify the loan being refinanced is for the same insured VA loan as a new IRRRL.

? Debt ratios are calculated.

? Note: The following scenario requires credit qualifying, however, PRMG does not

allow IRRRLS where a payment is increasing or staying the same.

? If the PITIA increases by 20% or more, the loan must be processed as a credit

qualifying loan.

? The lender must determine that the veteran qualifies for the new payment from

an underwriting standpoint; such as determining whether the borrower can

support the proposed shelter expense and other recurring monthly obligations in

light of income that is established as stable and reliable

? the loan must include a certification by the lender that the veteran qualifies for

the new monthly payment which exceeds the previous payment by 20% or more

? Please note, if the P&I payment stays the same or increases there can be no fees

charged to the borrower. Per VA Circular 26-19-22, the veteran can occur no

fees, closing costs, or expenses (other than taxes, amounts held in escrow, and

the VA Funding fee). (all fees would have to be paid by a lender credit which are

funds provided by the lender that are not a part of the rebate)

DOCUMENT EXPIRATIONS ? Credit documentation must not be more than 120 days old from the note date

? For new construction, credit documentation must not be more than 180 days old

from the note date

? Notice of Value (NOV) is valid for six (6) months

AUTOMATED

? See below

UNDERWRITING

DESKTOP UNDERWRITER ? Not Allowed.

(DU)

LOAN PRODUCT ADVISOR ? Not allowed

(LPA)

? Formerly known as Loan Prospector (LP)

MANUAL UNDERWRITING ? All loans must be manually underwritten.

? For credit qualifying transactions, generally, max ratio of 41% allowed, ratios >41%

when residual income exceeds the guideline by at least 20% and significant

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PROPERTY TYPES ELIGIBLE INELIGIBLE

DEED RESTRICTED PROPERTIES MODULAR HOMES

documented compensating factors exist. See Ratio section for complete information. ? See below ? Single Family Residence ? Modular Homes (see section below) ? Manufactured Homes (see section below) ? 1-4 Units ? PUDs ? Condos ? For properties located in Disaster Areas, please refer to PRMG's Disaster Policy. ? Hawaii properties in lava zones 1 and 2 ? Hawaii Homeland Leasehold properties ? Multiple Unit Condos ? Mobile homes ? Condotels ? Hotel Condominiums ? Timeshares ? Working Farms and Ranches ? Unimproved Land ? Property Currently in Litigation ? Commercial Enterprises (i.e., Bed and Breakfast, Boarding House, Hotel) ? Co-ops ? Mixed-Use ? Unique or non-traditional homes (barndominiums, tiny homes, etc.) ? Geodesic dome, Earth or Geothermal homes ? Leased land ? Deed Restricted Properties ? Properties in a flood zone that do not participate in the National Flood Insurance Program ? Properties with individual water purification systems (an individual water purification system is a system that is needed to make the water safe and meet code when the individual water supply is unsafe for human consumption unless the system is operating properly. This is not a system that is installed to improve the taste or softness of the water. Properties with individual water purification systems can be identified by reviewing the appraisal.) ? Properties rated in "less than average" condition ? Indian land (leased or fee simple) ? Properties that have a Property Assessed Clean Energy (PACE) loan are not eligible (such as the Home Energy Renovation Opportunity (HERO) Program) unless the lien will subordinate via a subordination agreement where the lien is no longer part of the property taxes that can take first lien priority (note, the HERO subordination agreement does not provide for this and is not eligible) and meets all Agency requirements ? Properties with Manufactured Home Accessory Dwelling Units ? Not allowed

? Factory-built housing must assume the characteristics of site-built housing and be legally classified as real property. The purchase, conveyance, and financing (or refinancing) of the property, which must be evidenced by a valid and enforceable first lien mortgage or deed of trust that is recorded in the land records, must represent a single real estate transaction under applicable state law.

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