Non-QM Underwriting Guideline Updates
Overview
The purpose of this announcement is to provide a summary of approved Carrington Mortgage Services, LLC (CMS) Non-QM underwriting guideline updates (highlighted in red). Please note this is an abbreviated summary of the guideline changes. All updates should be viewed within the context of the full guidelines available on www.CarringtonWholesale.com.
Generally, the updates below are guideline clarifications or expansions and may be implemented immediately for loans in process that are not yet locked. Loans that are locked or have approved exceptions must continue to conform to the guidelines in effect at the time of the lock or approved exception.
| Prime Advantage, Flexible Advantage Plus, and Investor Advantage | |
| Old Requirements | Updated Requirements |
| Seller Contributions For investment property transactions, the property seller and/or interested parties are permitted to contribute up to 4%. |
Seller Contributions For investment property transactions, the property seller and/or interested parties are permitted to contribute up to 4% for LTVs > 65% and 6% for LTVs ≤ 65%. |
| Carrington Flexible Advantage Program | |
| New Requirements | |
| No Score Alternative A primary wage-earner who lacks sufficient traditional credit history to generate credit scores from at least two bureaus, and/or additional borrowers with no scores, may qualify subject to the following requirements:
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| Carrington Investor Advantage | |
| Old Requirements | Updated Requirements |
| Credit Score Requirements
Each borrower and/or guarantor must have a valid score from at least 2 of the following 3 agencies: Experian (FICO), Trans Union (Empirica), and Equifax (Beacon). Only scores from these agencies are acceptable. The applicable credit score is the middle of three scores provided for any borrower. If only two credit score are obtained, the lesser of two will be used. When there are multiple borrowers, the lowest applicable score from the group of borrowers is the representative credit score for qualifying. |
Credit Score Requirements
Each borrower and/or guarantor must have a valid score from at least 2 of the following 3 agencies: Experian (FICO), Trans Union (Empirica), and Equifax (Beacon). Only scores from these agencies are acceptable. The applicable credit score is the middle of three scores provided for any borrower. If only two credit score are obtained, the lesser of two will be used. When there are multiple borrowers, the higher applicable score from the group of borrowers is the representative credit score for qualifying. Any additional borrower must have at least one credit score of 620 or greater. |
| Mortgage and Rental Payment Verification Mortgages and rental payments combined must not exceed:
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Mortgage and Rental Payment Verification Mortgages and rental payments combined must not exceed:
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Contacts
Please contact your Account Executive or Account Manager with any questions.
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