MAGNOLIA BANK VA FIXED R - Wholesale Mortgage Ratesmagbankwl.com/Portals/1041/VA.pdf · OPTION N/A 9. CONVERSION FEE ... Refer to the VA Refinance Options matrix for specific instruction

MAGNOLIA BANK VA FIXED RATE Product Summaries contain eligibility guidelines only

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VA FIXED RATE

1. PRODUCT

DESCRIPTION

i VA Fixed Rate Mortgage i 10 to 30 years in 5 year increments i Fully amortizing

2. PRODUCT CODE

i VA Fixed Rate 10 Year (Y27) i VA Fixed Rate 15 Year (075) i VA Fixed Rate 20 Year (Y26) i VA Fixed Rate 30 Year (076)

3. INDEX

N/A

4. MARGIN

N/A

5. ANNUAL/

ADJUSTMENT CAP

N/A

6. LIFE CAP

N/A

7. RATE AT

ADJUSTMENT

N/A

8. CONVERSION

OPTION

N/A

9. CONVERSION

FEE

N/A


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10. DELIVERY

Refer to Magnolia Bank Broker/ Correspondent Lending Manual for acceptable delivery time frame

11. TEMPORARY

BUYDOWNS

Not permitted

12. QUALIFYING

RATE AND RATIOS

Qualifying Ratios • AUS Approve loans – Ratios evaluated by AUS • AUS Refer loans - 41%

• 41% <=50% require significant documented compensating factors: • Excellent credit history • Conservative use of consumer credit • Minimal consumer debt • Long-term employment • Significant liquid assets • Sizable down payment • The existence of equity in refinancing loans • Little or no increase in shelter expense • Military benefits • Satisfactory homeownership experience • High residual income • Tax credits for child care • Tax benefits of home ownership. Residual Income Requirements Table of Residual Incomes by Region (For loan amounts $79,999 and below) Family1 Size Northeast Midwest South West 1 $390 $382 $382 $425 2 $654 $641 $641 $713 3 $788 $772 $772 $859 4 $888 $868 $868 $967 5 $921 $902 $902 $1004


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Add $75 for each additional member up to a family of seven Table of Residual Incomes by Region (For loan amounts $80,000 and above)

Family1 Size Northeast Midwest South West 1 $450 $441 $441 $491 2 $755 $738 $738 $823 3 $909 $889 $889 $990 4 $1025 $1003 $1003 $1117 5 $1062 $1039 $1039 $1158

Add $80 for each additional member up to a family of seven Refer to #35 Special Requirements/Restrictions for a breakdown of states by region

13. TYPES OF

FINANCING

Purchase Mortgages Interest Rate Reduction Refinance Loan (IRRRL)1 • Appraisal required – See VA Refinance Options Matrix for appraisal requirements & LTV requirements • Magnolia Bank-to-Magnolia Bank IRRRL transactions do not require appraisal report or limit to LTV • VA to VA refinances only • No seasoning requirements of first mortgage Rate and Term/Cash-Out Refinance

• Not permitted in Texas • Subject property must have an existing lien • No seasoning of first mortgage or junior liens

Refinance of Construction Loans and Installment Land Sales Contracts • Loan amounts may not exceed the lesser of o The VA reasonable value plus the VA funding fee OR o The sum of the outstanding balance of the loan to be refinanced plus allowable closing costs (including the funding fee) and discount points


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• Loan must be set up as a purchase in the system to permit the LTV to exceed 90% of the reasonable value Refer to the VA Refinance Options Matrix for specific details

14. MAXIMUM

TOTAL LOAN AMOUNT (including financed Funding Fee)

All Transactions Continental U.S. 1 unit - $417,000 2 unit - $533,850 3 unit - $645,300 4 unit - $801,950 Alaska and Hawaii 1 unit - $625,500 2 unit - $800,775 3 unit - $967,950 4 unit - $1,202,925 Refer to the VA Refinance Options matrix for specific instruction on calculating the maximum loan amount

15. LOAN

AMOUNT AND LTV LIMITATIONS

Purchases & Interest Rate Reduction Refinances Continental U.S. (National Loan Limits) Units LTV* Max Total Loan Amount (including financed Funding Fee) 1 100% $417,000 2 100% $533,850 3 100% $645,300 4 100% $801,950 *For IRRRL loans only, LTV is calculated by Total Loan Amount (Base Loan amount plus VA Funding Fee) Magnolia Bank-to-Magnolia Bank IRRRL transactions do not require LTV limit Alaska and Hawaii (National Loan Limits) Units LTV* Max Total Loan Amount (including financed Funding Fee) 1 100% $ 625,500 2 100% $ 800,775 3 100% $ 967,950 4 100% $1,202,925


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*For IRRRL loans only, LTV is calculated by Total Loan Amount (Base Loan amount plus VA Funding Fee) Magnolia Bank-to-Magnolia Bank IRRRL transactions do not require LTV limit 1 Regardless of the number of units, the maximum guaranty VA will provide will be based on the total loan amount for a 1 unit dwelling. For Purchase transactions: If the total loan amount is greater than $417,000, a down payment may be required and the LTV may be reduced accordingly. Refer to attached Maximum Guaranty Calculation Worksheet.

i For purchase transactions, total loan amounts > $144,000 and <= $417,000 VA will provide guaranty of 25% of the total loan amount subject to Veterans available entitlement

i The 25% minimum guaranty is considered satisfied for Interest Rate Reduction Refinance Loans regardless of the dollar amount of guaranty being transferred from the previous loan.

i Refer to VA Refinance Options Matrix. Rate and Term /Cash-Out Refinance Continental U.S. (National Loan Limits) Units LTV Max Total Loan Amount (including financed Funding Fee) 1 90% $417,000 2 90% $533,850 3 90% $645,300 4 90% $801,950

16. SECONDARY

FINANCING

i Permitted. However, secondary financing cannot be used to offset required down payment, pay closing costs or cover any portion of the purchase price that exceeds the reasonable value i Must be Magnolia Bank approved i Secondary financing must meet requirements in VA Lender Handbook, for Secondary Borrowing, Chapter 9, Section 4. i The second lien should not restrict the veteran’s ability to sell the property (i.e. assumability feature) i The total CLTV should never exceed 100% of the lesser of the sales price or appraised value.

17. PROPERTY

TYPES

Eligible Property Types • 1-4 units

i See #35 Special Requirements/Restrictions for restrictions regarding 2 - 4 unit properties


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• PUDs– VA or Magnolia Bank approved • Condos – VA approved • Modular Pre-Cut/Panelized housing Ineligible Property Types i Co-ops i Manufactured homes

18. OCCUPANCY

Primary Residence

19. GEOGRAPHIC LOCATIONS/ RESTRICTIONS

Continental US. Hawaii and Alaska

20. ASSUMPTIONS

Permitted- Credit worthy borrowers only

21. ESCROW

WAIVERS

Not Permitted

22. PREPAYMENT

PENALTY

None

23. UNDERWRITING

• Underwritten by a VA Automatic & LAPP approved underwriter employed by Magnolia Bank or a Magnolia Bank VA Delegated Lender • May follow AUS decision and documentation requirements

i Refer to Section 27 Credit for restrictions i If loan requires VA’s prior approval, additional underwriting turnaround time is required

VA Prior Approval Required For i Joint loans involving a veteran and non-veteran who is not the veteran’s spouse (Not on IRRRL loans). i Joint loans involving two or more veterans who intend to use their entitlement and take title jointly (Not on IRRRL loans). i Loans to veterans in receipt of VA non-service related pension (Not on IRRRL loans). i Loans to veterans rated incompetent by VA (Not on IRRRL loans). Underwriting Prior Approval Loans


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i The Magnolia Bank or Delegated Correspondent VA Automatic Underwriter must first underwrite the loan and issue a credit decision i The Magnolia Bank or Delegated Correspondent VA Automatic Underwriter is required to access the VA Information Portal at https://vip.vba.va.gov and enter specific Loan analysis data in VA WebLGY system and submit data to the VA. i Submit a copy of the loan file to the VA Regional Loan Center that has jurisdiction over the property state i Files submitted to the VA for prior approval must be labeled “PRIOR APPROVAL” i Additional documentation is required for Interest Rate Reduction Refinance Loans involving delinquencies of 30 days or more past due since date of application. Refer to the VA Refinance Options Matrix for details VA Reserves or National Guard Certification

i All veteran applicants whose income is being used to qualify for the loan transaction must complete and sign a VA Reserves or National Guard Certification form.

i The VA Underwriter must then use this information to determine the veteran borrower’s true monthly qualifying income.

24. PROCESSING STYLES

i Standard i Streamline (IRRRL)

25. BORROWER

ELIGIBILITY

i Must be a veteran who served the minimum duty with other than a dishonorable discharge i Active duty with at least 181 days of duty i Un-remarried surviving spouse of eligible veteran (COE) i Reservists/National Guard i Certificate of Eligibility must have sufficient entitlement to meet minimum 25% guarantee i Joint loans involving a veteran and a non-veteran who is not the veteran’s spouse (VA prior approval required. Refer to #35 Special Requirements/Restrictions for more details) i Joint loans involving two unmarried veterans (VA prior approval required. Refer to #35 Special Requirements/Restrictions for more details)

26. CO-

BORROWERS

i All borrowers must occupy the subject property i Non-Veteran co-borrower permitted. Refer to #35 Special Requirements/Restrictions for special restrictions

27. CREDIT

i VA Credit Standards apply


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Housing (Mortgage/Rental) Payment History (PITIA) is inclusive of all liens regardless of position, as well as all occupancy types. i AUS Approved loans – Credit evaluated by AUS i AUS Refer and manually underwritten loans i VA Credit Standards apply i For purchase transactions: 12 month housing payment (mortgage/rental) history via a credit report, cancelled checks or VOM to reflect no more than 0 x 30 in the previous 12 months. i For refinance transactions: Refer to Refinance Options Matrix for housing payment history requirements Minimum Fico Score Requirements i Regardless of AUS Decision: 640 i Refer to VA Refinance Options Matrix for additional requirements for IRRRL transactions i Non-traditional credit is ineligible

28. ASSETS

Minimum Borrower Investment i No minimum borrower investment is required for loan amounts up to $417,000 or $625,500 in AK & HI provided the Veteran has full entitlement. i For 2-4 unit dwellings, if the total loan amount is greater than the limit for a one unit dwelling, a down payment may be required. Refer to Section 15, Loan Amount and LTV Limitations. Seller Contributions i Seller can pay 100% of discount points and borrower’s non-recurring closing costs i Seller can provide an additional amount not to exceed 4% of the estimated reasonable value to assist the borrower payment of prepaid expenses and funding fee Gifts

i Acceptable i Gift of Equity is acceptable but cannot be applied as down payment purposes to reduce VA Funding Fee

Cash Reserves i 1 unit – No reserves required i 2 – 4 units when rental income is not being used to qualify – no reserves required i 2 – 4 units when rental income is being used to qualify – 6 months PITI required i When retaining current principal residence as 2nd Home – 6 months PITI required for both properties required OR 2 months PITI required for each if 30% equity in existing principal residence is documented i When converting current principal residence to rental property – 6 months PITI required for both properties


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required OR No reserves required if one of the following circumstance is met: veteran is relocating outside geographic area and has secured tenant for property or 30% equity in existing principal residences is documented. i When pending sale of other real estate is scheduled after the purchase date of current principal residence. – 6 months reserves required for both properties OR 2 months reserves required if 30% equity in existing residence is documented.

29. LIMITATIONS

ON OTHER. R.E. OWNED

i None i See Special Requirements /Restrictions and Assets regarding converting current principal residence to rental property or second home

30. APPRAISER RE-

QUIREMENTS

i VA Approved/VA Fee panel appraisers i IRRRL Loans do not require VA Fee panel appraisers

31. APPRAISAL RE-

QUIREMENTS

i LAPP - Notification of Value (NOV) to be issued by Magnolia Bank - LAPP Approved Underwriter via The

Appraisal System (TAS) at https://tas.vba.va.gov i VA Notice of Value issued by VA i IRRRL transactions require HVCC-compliant conventional appraisal – See VA Refinance Options Matrix i VA REO’s

Properties purchased as VA Real Estate Owned (REO’s) are not eligible for LAPP Appraisals. The VA will issue the Notice of Value (NOV) if the Liquidation Appraisal issued by the VA is less than 6 months old

i To request a NOV from the VA submit a completed paper copy of VA Form 26-018-5 to the VA Regional Loan Center. VA will then transfer the appraisal from the current servicer, if applicable, to Magnolia Bank and issue a new case number

i The VA underwriter still needs to perform complete credit underwriting on these transactions

32. FUNDING FEE

i VA Funding Fee applies unless veteran is exempt Refer to attached chart for specific percentages i Down payment must be made in liquid funds. Gift equity, borrowed funds or seller-equity is not an acceptable Down payment to reduce the funding fee

33. ENGENIOUS

ELIGIBILITY/RE-

Loans are not eligible for submission to Engenious.


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QUIREMENTS

34. INVESTOR

ELIGIBILITY

Veterans Administration (VA)

35. SPECIAL RE-

QUIREMENTS/ RESTRICTIONS

Form 4506-T must be processed prior to closing. • A new IRS Form 4506 T is required to be signed with the closing package as well as at application even when the form has been processed. i Refer to the Magnolia Bank Broker Manual/ Correspondent Funding Client Guide for eligibility guidelines. CAIVR System must be checked For loan amounts up to and including $144,000: The maximum amount of available entitlement minus the amount of entitlement currently in use equals the remaining amount of available entitlement. In our example ($36,000 - $7500 = $28,500). This means the veteran can obtain another zero down payment VA loan for no more than $114,000 ($28,500 x4 = $114,000). BONUS ENTITLEMENT Bonus Entitlement is available: i Only for loan amounts greater than $144,000, up to $417,000 or $625,500 in AK & HI i For veterans with full basic entitlement available i For veterans with partial entitlement available Bonus Entitlement when the Veteran has FULL Entitlement If the veteran has full entitlement, Bonus Entitlement or additional entitlement is calculated as follows: $417,000 x 25% = $104, 250 - $36,000 = $68,250 (Continental US). $625,500 x 25% = $156,375-$36,000 = $120,375 (AK & HI) It is this bonus entitlement that allows a veteran to purchase a zero down payment home for greater than $144,000 and still received full VA guaranty up to $417,000 or $625,500 in AK& HI.


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Bonus Entitlement when the Veteran has PARTIAL Entitlement If veteran only has partial entitlement, meaning he still has an open VA loan, he may still be able to obtain another VA loan for more than $144,000, using bonus entitlement, provided he intends to occupy this property. Example – For loan amounts over $144,000* Current entitlement in use $7500. Veteran’s wishes to purchase a home for $250,000. • $250,000 X 25% = $62,500 (Purchase Price x 25% as required by Ginnie Mae) • $104,250 - $7500 (in use)= $96,750 --Maximum amount of available entitlement for the new loan • The maximum loan amount the veteran can obtain without a down payment is $96,750 x 4 = $387,000. • In this case the borrower is able to purchase this property without a down payment. Joint Loans • Joint loans must be underwritten by Magnolia Bank and then forwarded to the VA for FINAL approval before closing • A joint loan is a loan made to: • The veteran and one or more non-veterans (not spouse) • The veteran and one or more veterans (not spouse) who will not be using their entitlement • The veteran and one or more veterans (not spouse) ALL of who will use their entitlement. Example: Two unmarried veterans • The veteran and the veteran’s spouse who is also a veteran and both entitlements to be used i A loan involving a veteran and his/ her spouse will not be treated as a joint loan if the spouse is not a veteran or is a veteran who will not be using his/her entitlement on the loan Guaranty Guidelines • The maximum guaranty amount for loans up to and including $144,000 is $36,000. • The maximum guaranty amount for loans above $144,000 is calculated as Sales Price/Appraised Value (whichever is less) x 25%. • The minimum guaranty of 25% must be based on the lesser of the purchase price or appraised value. • VA’s guaranty will be limited to that portion of the loan allocable to the veteran’s interest in the property i The veteran must qualify for his or her percentage of ownership interest in the property; i.e., if ownership interest is 50/50, the veteran must qualify for half (50%) of the PITI plus his or her portion of other personal debts VA Funding Fee


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i The funding fee is calculated on the veteran’s portion of the loan. If a reduced funding fee percentage is required as a result of a down payment requirement, the veteran benefits from this reduction as the funding fee will be calculated on his/her portion of the loan

2 - 4 Unit Properties • Prospective rental income may only be included in effective income if both of the following are met • Evidence indicates the borrower has a reasonable likelihood of success as a landlord i Documentation to support the borrower's prior experience managing rental units or other background involving both property maintenance and rental must be provided i It can be verified that borrower has cash reserves totaling minimum 6 months PITI i The amount of rental income to include in effective income is based on 75% of either i Verified prior rent collected on the units of existing properties OR i The appraiser’s opinion of the subject property’s fair monthly rental for new construction Converting Current Principal Residence to Second Home or Rental property i Qualify veteran with both the current PITI and proposed PITI for new loan. i Rental income can only be used to offset the PITI for current principal residence if veteran is relocating to new geographic area (MSA) due employment OR if 30% equity is documented. i When retaining current principal residence as 2nd Home – 6 months PITI required for both properties required OR 2 months PITI required for each if 30% equity in existing principal residence is documented i When converting current principal residence to rental property – 6 months PITI required for both properties required OR No reserves required if one of the following circumstances is met: veteran is relocating outside geographic area and has secured tenant for property or 30% equity in existing principal residences is documented. Pending Sale of Real Estate i Qualify veteran with both PITI for Pending Sale and PITI for new property i Omit PITI of Pending Sale from qualifying DTI, if financing contingencies to purchase home have been cleared and documented and cash reserves described below are met. i When pending sale of other real estate is scheduled after the purchase date of current principal residence. – 6 months reserves required for both properties OR 2 months reserves required if 30% equity in existing residence is documented. Maintenance and utility costs for all regions: • 14 cents per square foot • Example: 1500 square foot home X .14 = $210.00 / mo


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Geographic Regions for Residual Income Guidelines Northeast Midwest Midwest Connecticut Illinois Missouri Maine Indiana Nebraska Massachusetts Iowa North Dakota New Hampshire Kansas Ohio New Jersey Michigan South Dakota New York Minnesota Wisconsin Pennsylvania Rhode Island Vermont South West WEST Alabama Alaska Arkansas Arizona Delaware California District of Columbia Colorado Florida Hawaii Georgia Idaho Kentucky Montana Louisiana Nevada Maryland New Mexico Mississippi Oregon North Carolina Utah Oklahoma Washington Puerto Rico Wyoming South Carolina Tennessee Texas Virginia West Virginia

36. INTERNET

LINKS

i The Appraisal System. Order Case Numbers, Appraisals and obtain Automated Certificates of Eligibility. http://tas.vba.va.gov.TAS/index.html i VA Lenders Handbook Loan Guaranty Service, Home Page (U.S. Department of Veterans Affairs) i VA Lender's and Servicer's Home Page Loan Guaranty Service - Lenders, Servicers and Real Estate Professionals (U.S. Department of Veterans Affairs)


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i VA Regional Loan Centers http://www.homeloans.va.gov/rlcweb.htm

http://www.homeloans.va.gov/rlcweb.htm

Product Summaries contain eligibility guidelines only. 04-27-11 - Page 13

VA FIXED RATE

VA FUNDING FEE TABLEEffective for loans closed on or after January 1, 2004

PURCHASE TRANSACTIONS

TYPE OF VETERAN/MILITARY STATUS

DOWN PAYMENT* PERCENTAGE FOR FIRST TIME USE

PERCENTAGE FOR SUBSEQUENT USE1

Expires 9/30/2011 Expires 9/30/2011

None 2.15% 3.30%

5% or more (up to 10%) 1.50% 1.50%Regular Military

10% or more 1.25% 1.25%

None 2.40% 3.30%

5% or more (up to 10%) 1.75% 1.75%Reserves or National Guard

10% or more 1.50% 1.50%

Disabled Veteran n/a 0.00% 0.00%

CASH OUT REFINANCE

TYPE OF VETERAN PERCENTAGE FOR FIRST TIME USE PERCENTAGE FOR SUBSEQUENT USE1

Expires 9/30/2011Expires 9/30/2011

Regular Military 2.15%

3.3%

Reserves or National Guard 2.40% 3.30%

INTEREST RATE REDUCTION LOANS AND ASSUMPTIONS

TYPE OF LOAN PERCENTAGE FOR EITHER TYPE OF VETERAN WHETHER FIRST TIME OR SUBSEQUENT USEInterest Rate Reduction Refinancing Loans

0.50%

Assumptions 0.50%

1The higher subsequent use fee does not apply to these types of loans if the veteran’s only prior use of entitlement was for a manufactured home NOTclassified as real estate

Funding Fee Calculations All loans EXCEPT IRRRLS - Apply the appropriate funding fee percentage to the loan amount IRRRLs - Calculate the funding fee by completing VA Form 26-8923-VA Interest Rate Reduction Refinancing Worksheet

Joint Loans: Apply the appropriate funding fee percentage to any portion of the loan allocable to a veteran using his/her entitlement who is not exempt from the funding fee.

* Does not include down payment from gift of equity or equity earned from lease-to-purchase transaction.

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VA ENTITLEMENT CODES


VA FIXED RATE

VA ENTITLEMENT CODES

Entitlement Code Meaning01 World War II 02 Korean03 Post Korean04 Vietnam05 Entitlement Restores06 Un-remarried Surviving Spouse 07 Spouse of POW/MIA 08 Post World War II 09 Post Vietnam10 Persian Gulf War 11 Selected Reserves

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Product Summaries contain eligibility guidelines only. Page 15 3-2-11

GMAC BANK WHOLESALE MORTGAGE LENDING VA FIXED RATE

REQUIRED CASH DOWNPAYMENTAND PERCENTAGE OF GUARANTY CALCULATION WORKSHEET

FOR LOAN AMOUNTS up to $417,000(or $625,500 in AK & HI)

Purchase Transactions

Refer to 2011 VA County limits If the county name does not appear on this list, the VA limit is set at $417,000

The primary goal is to verify that the minimum guaranty required by Ginnie Mae is satisfied through veteran’s available entitlement/maximum VA guaranty and or cash down payment.

Special reminders:

No portion of the cash down payment may be derived from borrowed funds.

Minimum Guaranty required by Ginnie Mae is calculated as 25% of the lesser of the sales price or Appraised Value.

Maximum VA Guaranty/Available Entitlement is based on the loan amount including the funding fee, if financed into the loan. Refer to table below.

Loan Amount (Base Loan plus Financed Funding Fee)

Maximum Potential Guaranty (subject to veteran’s available entitlement)

Up to $45,000 50% of the loan amount

$45,001 to $56,250 $22,500

$56,251 to $144,000 40% of the loan amount

$144,001 to $417,000 25% of the loan amount or 25% of the county limit, whichever is less

Example 1: Veteran has Full Entitlement

Property is located in:

VA County Limit for Montgomery County

Sales Price (SP)

Appraised Value (AV)

Veteran Funding Fee factor) First Time Use of entitlement) Borrower is requesting Loan Amount (Base + Financed FF)

Min Guaranty required by GNMA ( 25% of $300,000 (SP)

Maximum VA Guaranty/Available Entitlement = 25% of $306,450 Since the Min Guaranty required by GNMA is less than the maximum guaranty VA will provide, no cash down payment is required from the borrower and the requested loan amount is acceptable

Montgomery County, PA

$417,000

$300,000

$300,000

2.15% $306,450

$ 75,000

$ 76,612.50

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VA FIXED RATE

Example 2 – Veteran has Partial Entitlement Available

(Veteran has used $36,000 of entitlement on a prior loan, which may not be restored)

Property is located in

VA County Limit for Montgomery :

Property Appraised for

Sales Price

Veteran Funding Fee factor (Subsequent Use of entitlement) Borrower is requesting Loan Amount of (Base + Financed FF)

Min Guaranty required by GNMA = 25% of $320,000 (AV)

Maximum VA Guaranty/(Remaining) Available Entitlement = 25% of $417,000 = $104,250 less $36,000

Since the Min Guaranty required by GNMA is greater than the maximum guaranty VA will provide less the entitlement in use, the veteran needs to have a cash down payment to meet the GNMA requirement

Down payment = Minimum GNMA Requirement less RemainingAvailable Entitlement

$80,000 less $68,250

Since a down Payment is required, the base loan amount must be reduced by the amount of the down payment

Adjusted base loan amount = Sales Price less Down Payment $320,000 less $11,750

Percentage of Guaranty = Available Entitlement plus cash down payment divided by sales price

$68,250 plus $11,750 = $80,000 divided by $320,000

Montgomery County, PA

$417,000

$320,000

$320,000

3.3% $330,560

$80,000

$68,250

$11,750

$308,250

25% Min Guaranty is met – loan is saleable

Adjusted Funding Fee = Base Loan Amount X applicable factor $308,250 X 3.3% $10,172.50Adjusted Total Loan Amount = Base Loan Amount plus Funding Fee

$308,250 plus $10,172.50 $318,422

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REQUIRED CASH DOWNPAYMENTAND PERCENTAGE OF GUARANTY CALCULATION WORKSHEETFOR LOAN AMOUNTS GREATER THAN $417,000

(or $625,500 in AK & HI)

Purchase Transactions

Refer to 2011 VA County limits for High Balance Loans

The primary goal is to verify that the minimum guaranty required by Ginnie Mae is satisfied through the veteran’s available entitlement/maximum VA guaranty and or cash downpayment.

As a reminder, no portion of the cash down payment may be derived form borrowed funds.

Minimum Guaranty required by Ginnie Mae is calculated as 25% of the lesser of the sales price or Appraised Value.

Maximum VA Guaranty/Available Entitlement is lesser of 25% of county limit or 25% of the loan amount.


Property is located in:

VA County Limit for Pike County

Sales Price (SP)

Appraised Value (AV)

Veteran Funding Fee factor (First Time Use of entitlement)

Borrower is requesting Loan Amount (Base + Financed FF)

Min Guaranty required by GNMA = 25% of $1,000,000 (SP)

Maximum VA Guaranty/Available Entitlement = 25% of $747,500 (County Limit) = (Since $747,500 is less than $1,000,000 – VA will not guarantee more the county limit)

Since the Min Guaranty required by GNMA is greater than the maximum guaranty VA will provide, a cash down payment is required from the borrower and the loan amount needs to be reduced by the amount of the down payment.

Required Down Payment = Minimum Guaranty less maximum available entitlement

($250,000 - $186,875)

Adjusted Base Loan Amount = Sales Price less required cash down payment:

($1,000,000 less $63,125)

Adjusted Base Loan Amount plus Financed FF = $936,875 + $20,142)

Percentage of Guaranty = Available Entitlement plus cash down payment divided by lesser of sales price or Appraised value

o ($186,875 +$63,125 = $250,000 divided by $1,000,000)

Pike County, PA

$747,500

$1,000,000

$1,200,000

2.15%

$1,021,500

$ 250,000

$ 186,875

$63,125

$936,875

$957,017

25%


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VA FIXED RATE


Property is located in

VA County Limit for TETON :

Property Appraised for

Sales Price

Veteran Funding Fee factor (Subsequent Use of entitlement)

Borrower is requesting Loan Amount of (Base + Financed FF)

Min Guaranty required by GNMA = 25% of $815,000 (AV)

Maximum VA Guaranty/Available Entitlement = 25% of $703,750 = $175,937 less $104,250

Since the Min Guaranty required by GNMA is greater than the maximum guaranty VA will provide minus the entitlement in use, the veteran needs to have a cash down payment to meet the GNMA requirement

Down payment = Minimum GNMA Requirement less Remaining Available Entitlement

$203,750 less $71,687

Since a down Payment is required, the base loan amount must be reduced by the amount of the down payment

Adjusted base loan amount = Sales price less Down Payment $815,000 less $132,063

Percentage of Guaranty = Available Entitlement plus cash down payment divided by sales price

$71,687 plus $132,063 = $203,750 divided by $815,000

TETON, WY

$703,750

$815,000

$815,000

3.3%

$841,895

$203,750

7$1171,687

$ 71,687

$132,063

$682,937

25%

Adjusted Funding Fee = Base Loan Amount X applicable factor $757,000 X 3.3% $22,536Total Loan Amount = Base Loan Amount plus Funding Fee

$757,000 plus $24,981 $705,473

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VA CASH-OUT REFINANCE REQUIRED EQUITY AND PERCENTAGE OF GUARANTY CALCULATION WORKSHEET

LOAN AMOUNTS up to $417,000

Bonus Entitlement is available for Cash Out Refinance loans closed on or after 1/1/09 Your primary goal is to verify that:

1. Ginnie Mae’s required minimum 25% guaranty is met (Ginnie Mae requires a minimum of 25% of Appraised Value in the form of entitlement and/or Equity in the property)

2. The base LTV does not exceed 90% of Appraised Value (While VA permits LTV on a cash-out to 100%, GMACM/GMACB continues to restrict the LTV to 90% of the appraised value)

._______________________________________________________________________________________________

Maximum VA Guaranty Amount / Veteran’s Available Entitlement provided by VA:

Loan Amount Maximum Potential Guaranty (subject to veteran’s available entitlement)

Up to $45,000 50% of the loan amount $45,001 to $56,250 $22,500$56,251 to $144,000 40% of the loan amount $144,001 to $417,000 25% of the loan amount

2011 VA County Limits Greater than $417,000For all counties not appearing on this list, the VA Limit is $417,000


Property is located in: Montgomery County, PA

VA County Limit for Montgomery County $417,000

Appraised Value (AV) $300,000

Veteran Funding Fee factor (First Time use of entitlement - Reservist) 2.4%

Borrower is requesting Loan Amount (Base + Financed FF) 90% of Appraised + FF ($270,000 + $6,480)

$276,480

Min Guaranty required by GNMA ( 25% of $300,000 (A) $ 75,000

Maximum VA Guaranty/Available Entitlement = 25% of $276,480

Since the Min Guaranty required by GNMA is greater than the maximum guaranty VA will provide, the borrower must have sufficient equity in the property to help meet the minimum required guaranty and the requested base loan amount must be reduced.

$ 69,120

Equity is calculated as appraised value less base loan amount $300,000 less $270,000 $30,000

Minimum required Equity = $75,000 less $69,120

Since additional Equity is required, the base loan amount must be reduced by the amount of the min required equity

$5,880

Percentage of Guaranty = Available Entitlement plus Minimum Required equity divided by Appraised Value $69,120 + $5880 = $75,000 divided by $300,000


Adjusted base Loan Amount = Requested Base Loan Amount less Required Equity ($270,000 less $5,880)

$264,120

Adjusted Funding Fee = Adjusted Base Loan Amount X applicable factor ($264,120 x 2.4%)

$6,338.88

Adjusted Total Loan Amount = 6,338.88) $270,458


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VA FIXED RATE


Property is located in: Montgomery County, PA

VA County Limit for Montgomery County $417,000


Veteran Funding Fee factor (Subsequent Use of entitlement) 3.3%

Borrower is requesting Loan Amount of (Base + Financed FF) Appraised Value x 90% + FF

$288,000 + $9,504 $297,504

Min Guaranty required by GNMA ( 25% of $320,000 (SP) $ 80,000

Maximum VA Guaranty/(Remaining) Available Entitlement = 25% of $417,000 = $104,250 less $27,500

Since the Min Guaranty required by GNMA is greater than the maximum guaranty VA will provide less the entitlement in use, the veteran needs to sufficient equity in the property to meet the GNMA requirement

$ 76,750

Equity is calculated as appraised value less base loan amount $320,000 less $288,000 $32,000

Min Required Equity = Minimum GNMA Requirement less Remaining Available Entitlement (80,000 - $76,750)

Since additional Equity is required, the base loan amount must be reduced by the amount of the min required equity

$$3,250

Adjusted base Loan Amount = Requested Base Loan Amount less Required Equity ($288,000 less $3,250)

$284,750

Percentage of Guaranty = Available Entitlement plus Minimum Required equity divided by Appraised Value

$76,750 plus $3,250 = $80,000 divided by $320,000


Adjusted Funding Fee = Adjusted Base Loan Amount X applicable factor ( $284,750 X 3.3%) $9,396.75

Adjusted Total Loan Amount = Base Loan Amount plus Funding Fee ($284,750 plus $9,396.75)

$294,146

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VA CASH-OUT REFINANCE REQUIRED EQUITY AND PERCENTAGE OF GUARANTY CALCULATION WORKSHEET

FOR LOAN AMOUNTS Greater than $417,000

Bonus Entitlement is available for loans closed on or after 1/1/09 Your primary goal is to verify that:

1. Ginnie Mae’s required minimum 25% guaranty is met (Ginnie Mae requires a minimum of 25% of Appraised Value in the form of entitlement and/or Equity in the property)

2. The base LTV does not exceed 90% of Appraised Value (While VA permits LTV on a cash-out to 100%, GMACM/GMACB continues to restrict the LTV to 90% of the appraised value)

.________________________________________________________________________________________________

Maximum VA Guaranty Amount provided by VA:

Loan Amount greater than $417,000 the maximum guaranty varies depending on the location of the property and is calculated as:

Lesser of 25% of the loan amount or 25% of the VA County Limit for a one family dwelling , provided the veteran has full basic entitlement available


Property is located in: Westchester, NY

VA County Limit for Westchester County $681,250.

Appraised Value (AV) $1,000,000

Veteran Funding Fee factor (Subsequent use of entitlement)

3.3%

Borrower is requesting Loan Amount (Base + Financed FF)90% of Appraised + FF ($900,000 + $29,700)

$929,700

Min Guaranty required by GNMA ( 25% of $1,000,000) $ 250,000

Maximum VA Guaranty/Available Entitlement = 25% of $681,250.Since the Min Guaranty required by GNMA is greater than the maximum guaranty VA will provide, the borrower must have sufficient equity in the property to help meet the minimum required guaranty and the requested base loan amount must be reduced.

$ 170,312

Equity is calculated as appraised value less base loan amount ($1,000,000 less $900,000)

$100,000

Minimum required Equity = Minimum required GNMA Guaranty less VA Guaranty/Available entitlement ($250,000 less $170,312.)

$79,688.

Since proposed equity of $ 100,000. is greater than minimum required equity calculated above, no further reduction or adjustment in loan amount is required.

Proceed to test below

Percentage of Guaranty = Available Entitlement plus equity divided by Appraised value $170,312 + $100,000. ($270,312) divided by $1,000,000

27% Minimum Guaranty of 25% is met – Loan is GNMA eligible

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VA FIXED RATE

Example 2 – Veteran has Partial Entitlement Available (Veteran has used $104,250 of entitlement on a prior loan, which may not be restored)

Property is located in: Teton County, WY

VA County Limit for Teton County $703,750.


Veteran Funding Fee factor (Subsequent use of entitlement)

3.3%

Borrower is requesting Loan Amount (Base + Financed FF)90% of Appraised + FF ($733,500 + $24,205.50)

$757,705

Min Guaranty required by GNMA ( 25% of $815,000) $ 203,750

Maximum VA Guaranty/Available Entitlement = 25% of $703,750. (VA County Limit) minus $104,240 (un-restorable entitlement), This is the partial entitlement available.

Since the Min Guaranty required by GNMA is greater than the maximum guaranty VA will provide, the borrower must have sufficient equity in the property to help meet the minimum required guaranty and the requested base loan amount must be reduced.

$ 71,697

Equity is calculated as appraised value less base loan amount ($815,000 less $733,500)

$81,500

Minimum required Equity = Min required Guaranty less VA Guaranty/Available entitlement ($203,750 less $71,697)

Since $132,053. is more than proposed equity of $ 81, 500., additional Equity is required, the proposed base loan amount must be reduced by the difference ($50,553) between required minimum equity amount of $ 132,053 and proposed equity amount of $81,500 from initial Base Loan amount.

$132,053

New Adjusted Base Loan Amount - $733,500 minus $50,553. = $682,947. For New Base Loan Amount.

$682,947.

NEW Equity Amount = $815,000 minus $682,947. $132,053.

New Adjusted Total Loan amount = Base Loan amount plus VA Fee of 3.3% ($682,947. PLUS $ 22,537.)

$ 705,484

Test for New Loan amount : Percentage of Guaranty = Available Entitlement plus Min required Equity divided by Appraised value $71,697. + $132,053.= $203,750,000 divided by $815,000


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Documents

MAGNOLIA BANK VA FIXED R - Wholesale Mortgage Ratesmagbankwl.com/Portals/1041/VA.pdf · OPTION N/A 9. CONVERSION FEE ... Refer to the VA Refinance Options matrix for specific instruction