Non-Prime Product Primary and Second Home Guideline Updates

April 1, 2018

Effective for Non-Prime Primary Residence and Second Home loans with applications taken on and after Monday, April 2, 2018, Carrington Mortgage Services, LLC (CMS) will introduce the following guideline enhancements:

  • New Credit Grades – Non-Prime Program revised to Credit Grades A, B, and C (formerly grades A-, B+, B and RHE). See CMS Non-Prime Matrix for complete LTV and credit score details.
  • Cash Out Limits – Non-Prime standard cash-out limit has been increased to $500,000 (previously $250,000) with no LTV reduction required.
  • Expanded Debt to Income (DTI) Expanded DTI available for A and B up to 50% with minimum FICO of 620. Expanded DTI available for A and B up to 55% with minimum FICO of 680
  • Mortgage and Payment Verification – Credit Grade A housing history - 0 x 60 x 12 (previously 1 x 30 x 12) for Purchase and Rate/Term Refis with 620 FICO up to 85% LTV. See CMS Non-Prime Matrix for complete Non-Prime housing history requirements.
  • Enhanced Ratios Removed the 40% Maximum Housing Ratio requirements
  • Calculating Qualifying Income Updated income calculations for the Business Bank Statement Program. Option 1 can now be a Borrower prepared P&L.  Additionally, the variance on bank statements vs. P&L has increased to 10% (previously 5%).
    Note: This applies to Investment Bank Statement program as well.

In addition to the enhancements above, the Non-Prime program will have the following additional guideline changes:

  • First Time Homebuyer and Second Homes Minimum credit score increased to 580 from 560.
  • Maximum Loan Amounts loan amounts greater than $1MM available only to credit grades A and B

All loans with APPLICATIONS on and after Monday April 2, 2018 must comply with the new Non-Prime Underwriting Guidelines.  All loans with Applications prior to Monday April 2, 2018 must be fulfilled using the prior Non-Prime Underwriting Guidelines.
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Government Agency Approvals

FHA Non-Supervised Mortgagee Approval #:
24751-0000-5
VA Automatic Lender Approval #:
902324-00-00

Mortgagee/Loss Payee Clause

Carrington Mortgage Services LLC
ISAOA/ATIMA
P.O. Box 692408
San Antonio, TX 78269-2408

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This information is provided for your convenience and Carrington Mortgage Services, LLC makes no warranties concerning the accuracy or completeness of any of the information. This is not financial or legal advice and should not be taken as such. This information is for mortgage professionals only and is not intended for distribution to consumers.
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Government Agency Approval | FHA Non-Supervised Mortgage Approval #: 24751-0000-5 | VA Automatic Lender Approval #: 902324-00-00

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