Mortgages for Foreign Nationals

Jumbo Fixed Rate and ARM Program Matrix

Non-Agency Foreign National 5/1 LIBOR ARM (2/2/6 1 year Libor, Margin/Floor Rate 5.50%)

Non-Agency Foreign National 30 Year Fixed

All loans must meet HPML and ATR requirements to be eligible. Full Income and Asset documentation is required in compliance with Appendix Q requirements. (HPML and QM Rebuttable Presumption are acceptable.)

Foreign National – Fixed and ARM
PURCHASE AND RATE TERM REFINANCE 1,2
Occupancy	FICO	LTV	Loan Amount
Second Home	680*	70% 1	$625,000	43%
Second Home	680*	65%2	$1,000,000	43%
Second Home	680*	60%	$1,500,000	43%
Second Home	680*	50%	$2,000,000	43%
Investment Property	680*	50%	$1,000,000	43%

Notes: Loan amount minimum $ 200,000 – Maximum $ 2,000,000
1. Delayed Financing may be underwritten and priced as a rate term refinance. Maximum 60% LTV. The loan amount is the lesser of the Matrix or $1,500,000. Rate term cash back amount restriction does not apply.
2. For Rate term transactions, maximum cash back amount is $2,000.
*FICO minimum is required only if a domestic credit report is obtainable. If one is not present, loan is required to have an international credit report or a credit report obtained from the country of origin sourced through a US credit reporting agency (Equifax, CBC, Kroll, Core Logic)

• Foreign National borrowers are defined as individuals that reside outside of the US, is not employed within the US has legally entered the US and retained a valid passport issued by the country of residence, an Ex-Patriot that and has resided outside of the US for a prolonged period of time or a previous VISA holder that has had all applicable USCIS documents expire.
• Borrowers with Diplomatic Immunity are ineligible
• Politically exposed borrowers are ineligible
• All borrowers must complete and execute a W8 prior to final approval
• Borrowers are required to establish an ACH debit form from a US based bank
• All income, asset and credit documents that originate from the borrower’s country of residence are required to be
  translated into English by a non-participating third party and all currencies are to be exchanged into US equivalents.
• All closings are to occur within a US based title agent’s office
• Picture Identification is required to be validated by the closing agent who performs a comparison of the picture identification on record with Caliber Home Loans and the document provided at closing by the borrower.
• OFAC check is required to be performed on all applications/applicants
• No POA’s allowed
• Non-occupant co-borrowers are not permitted
• Subordinate financing is not permitted
• non-arm’s length transactions are not permitted
• Gift funds are not permitted
• Declining market, LTV will be reduced by 5%
• Max. 10 Acres

ARM Qualification
5/1 ARM must be qualified at the Note Rate

Loan Amount – Minimum $ 200,000 – Maximum $ 2,000,000 (refer to matrix for details)

Transaction Types

• Purchase
• Rate and Term Refinance
• Delayed Financing maximum LTV 60%

Program Highlights

• Domestic credit report not required
• Second Homes and Investment Properties allowed

Payment History
0x30 in most recent 24 months on all mortgages/rentals if the borrower has a mortgage or is currently renting.

Occupancy

• Second Home (loan to be coded as a second home due to primary being located in country of origin)
• Owner expects to occupy for more than 14 days a year and meet Dodd-Frank ability to Repay requirement.
• 1 unit investment property

Number of Financed Properties

• 2 US financed properties
• Maximum 1 financed properties with Lender

Appraisals
Purchases:
 One appraisal required for all loans < $1,500,000.  Two appraisals required for all loans > $1,500,000

Refinances:
 One appraisal required for all loans < $1,000,000.  Two appraisals required for all loans > $1,000,000.

Eligible Assets
All assets used within the Foreign National Program are to be on deposit within a recognized U.S. depository or Banking entity (Goldman Sachs, Merrill Lynch etc). When assets are moved from a foreign country to a US bank, all assets must be sourced and seasoned at least 30 days.

Full Asset Documentation is required for both funds to close and reserves. All assets must be supported by the most recent two months bank statements or most recent quarterly statement.

Foreign Based Bank accounts can be used for reserve funds only with the following parameters:

• Two (2) months consecutive statements or a quarterly statement are acceptable as verification.
• All bank statements are to be translated and converted to US dollars.
• Funds must not be in a bank located in a country on the Ineligible Country List.
• The borrower must disclose, and the lender must verify all assets.
• Stocks/Bonds/Mutual Funds – 70% may be used for reserves.
• Vested Retirement Account funds – 60% may be considered for reserves.
• If needed to close, verification that funds have been liquidated (if applicable) is required.
• Large deposits in excess of 25% of monthly qualifying income or any large deposit that is out of the ordinary are required to be explained and sourced documented in the file.

Interested Party Contributions – Up to 6% for Second Home and 2% for Investment Property.

Ineligible Assets

• Gifts and/or Gift Equity
• Grant Funds
• Pooled funds
• Business accounts
• Builder Profits
• Employer Assistance Assets
• Cash Advance on credit card
• Signature loan
• Unsecured financing
• Personal loan
• Cash on hand (cash for which the source cannot be verified)
• Commission from sale of subject property
• Salary advance
• Sweat equity (contribution to the construction or rehabilitation of a property in the form of labor or services rather than cash)
• Unverifiable source of funds
• Reverse mortgage
• Pension fund
• Seller Real Estate Tax Credit
• Funds donated by the property seller, builder, real estate agent or any other party not related to the borrower to satisfy down payment requirements.

Foreign National – Reserves

Occupancy – # of Months PITIA

Second Home – 12

Investment Property – 12

Additional Reserves for Each Financed Property – NA

Ratios Maximum DTI 43%

Eligible Borrowers
Foreign National Borrowers are defined as individuals that do not reside within the United States, do not possess a Green Card or Visa, do not work within the United States and have a primary residence within their country of origin or country of residence.

• Borrowers are required to establish an ACH debit form from a US based bank.
• OFAC check is required to be performed on all applications/applicants
• World Compliance M product is required on all applications.
• Previous US Visa holders that USCIS documents have expired but still maintain a US Social Security Number
  Expatriate
• US Citizen Co-borrowers are allowed with a valid credit report.

Eligible Title Vesting

• Individuals
• Joint Tenants
• Tenants in Common
• Revocable Trusts, where individual Borrower(s) execute both the Note and Security Instrument
• Non-Purchasing Spouse allowed

Ineligible Borrowers

• Ineligible Borrowers include, but are not limited to:
• US Citizens
• First Time Home Buyers
• Limited partnerships, general partnerships, corporations, blind trusts, International Investment
• Partnerships and Foreign Investment Vehicles
• Non-occupant co-borrowers
• Guarantors
• Borrowers with Diplomatic Immunity
• Borrowers that are residents or citizens of countries that are listed on the US Secretary of State
  restricted countries
• Ineligible borrowers include those with passports from geographic areas that LSRMF may
  identify from time to time at its discretion
• Persons of Political Interest
• non- arm’s length transactions

Due to inability to compel payment or obtain judgment the following borrowers are not eligible for financing*:

• Politically exposed borrowers are not eligible
• Borrowers with Diplomatic Immunity or otherwise excluded from US jurisdiction
• Borrowers whose income is not likely to continue for at least three years
• Borrowers with Passports from geographic areas with OFAC sanctions against them and/or borrowers listed on the Specially Designated Nationals list.(SDN)

– Burma (Myanmar)
– Cuba
– Iran
– Iraq
– Liberia
– Sudan
– North Korea
– Syria
– Yemen
– Zimbabwe
– Ukraine
– Russia
– Afghanistan
– Somalia
– Egypt
– The Democratic Republic of the Congo

Ineligibility can also be determined if any of the following occurs:

• Finding listed within World Compliance M system for any category
• International Credit Report reveals discrepancy of provided information that cannot be cured with supplemental documentation.
• Applicant currently retains a US based property
• Applicant retains a US Social Security number
• Applicant is considered a US Ex-patriot
• Applicant is a current holder of a US Visa, US Passport or Green Card
• Fraudulent activity is determined by any systemic or manual process

*List can be updated at any time and does not provide a grandfather provision for loans currently in the pipeline if applicant status change occurs that is determined to be detrimental to Lender.

Chain of Title
All transactions require a 12-month chain of title that also includes sales price of the property at the time of transfer. Preliminary Title or Title Commitment must be no more than 60 days from the note date. A date down/title supplement is required after 60 days.

Credit Requirements

Foreign National Credit Report Requirements

• International Credit Report is required for every loan application unless the applicant has a US Credit Report that has sufficient trade lines reporting or a Foreign Credit report provided by a US Credit Reporting Company (Equifax, Experian, CBC)
• Mortgage or Rental history must be 0x30 in the most recent 24 months if the borrower has a mortgage or is currently renting. Rental history must be evidenced by 24 months of canceled checks or by an Institutional VOR or 24 months payment history.
• No derogatory credit events permitted in the last 7 years from completion date to application date.

US Citizen Co-borrower Credit Report Requirements

• Residential Mortgage Credit Report or tri-merged in the file from all three repositories is required.
• The representative credit score for each borrower is the median of the three scores (or lesser of two, if only two scores are returned); the representative score for the loan is that of the borrower with the lowest representative score.
• Each Borrower must have a minimum of 2 open trade lines that have been active within the last 12 months and reporting for a minimum of 12 months. Joint accounts count as one trade line for each borrower.
• One of the 2 must be open and active within the last 12 months and reporting for a minimum of 12 months
• Authorized User Accounts cannot be used to satisfy minimum trade line or FICO requirements.
• A borrower not using the income to qualify and showing $0 earned or is not employed; does not need to meet the minimum trade line requirements listed above.

Income (Full documentation is required)
Eligible Income
All income documentation that originates from a foreign country is required to be translated into English and all income figures are to be converted into United States dollars at the time of application.
Employed Borrowers: Most Recent Paystub including year-to-date earnings (covering a minimum of 30 days) and a two year proof of employment from the employer including annual income, bonuses, commissions and all other sources of income. Income statement must be signed and dated by a company representative on Company Letterhead.
– Credit Report to confirm employment (if applicable)
Self-employed Borrowers (where the borrower has 25% or more ownership interest) must provide the following documentation:
– Borrowers are to provide a financial statement from their CPA exhibiting the most recent two-year history of income (including YTD)including the following:
– Total annual income (converted to US $)
– Source of income
– Signed and dated by the Accountant
– Accountant firm is to be recognizable via internet search
– Credit report to validate existence of company (If applicable)
– Information is to be captured on CPA Company’s letterhead with the CPA’s license referenced in the body of the statement.
– CPA’s signature to be present on the document
IRS Form W8 is required to be signed and executed prior to loan closing.
Gaps in employment are not acceptable.

Residual Income Requirements
All loans are required to be validated thru the Loans Residual Income Table.
The residual income must be equal to or more than the minimum requirement per the Residual
Income Table. Loans that fail to meet the minimum requirements are not eligible for loan approval.
Residual income is calculated per the below:
– Add all proposed housing costs, including monthly mortgage payments, insurance, and taxes or the monthly escrow account charges. Also include the estimate of monthly utility charges, such as electricity, water, and if applicable heating oil or natural gas.
– Add the total monthly payments that the borrower makes for car loans, credit cards, alimony, child support and other regularly recurring monthly debts.
– Add the proposed housing costs and monthly payments together.
– Subtract the combined total of the proposed housing costs and monthly payments from the monthly gross income, and, if applicable the spouse’s gross income.

Ineligible Income

• Income that cannot be verified
• Asset Dissipation
• Asset Depletion
• Educational benefits, such as VA benefits or scholarships
• Lump sum payments such as inheritances or lawsuit settlements (may be verified as assets to close)
• Payments that are received for purchase or reimbursement of specified items
• Retained earnings
• Reverse Mortgage Loan proceeds
• Secondary income that will continue for less than three years
• Taxable forms of income that the borrower does not declare on federal income tax returns
• Unverifiable income
• Value of a company furnished automobile
• Value of employment benefits packages that are not received as cash wages
• Lump sum payments of lottery earnings that are not ongoing
• Non-borrower spouse income
• Student loans/grants
• Allowance income (for example, an allowance received from a family member)
• Stock options
• Room and board received for the borrower’s principal residence
• Severance Pay
• Trailing wage earner income
• Projected Income

Ineligible

• Assumption
• Balloon Mortgages
• Cash out
• Conversion (modification) loans
• Construction loans
• Construction to Permanent Financing
• Escrow Holdbacks
• If the appraiser notes a declining market, delayed financing is not allowed.
• IRS 1031 Exchange
• Pre-Payment Penalty
• Power of Attorney
• Temporary buydowns
• Secondary Financing
• Section 32 (HOEPA)
• State of Hawaii, Maine, and New York

Property Eligibility

Eligible Property Types

• 1 Unit Single Family Residences (Attached and Detached)
• PUDs (Attached and Detached)
• Townhomes
• Modular Homes
• Multiple parcels allowed meeting FNMA guidelines
• Warrantable Condominiums (Attached and Detached) Warranty must meet FNMA’s project review guidance. The lender will finance up to 25% of the units in any one project.
• Non-Warrantable Condominiums including Condotels (see chart below). All Non-Warrantable Condominiums will be reviewed and approved by Lender. Final Risk Levels are determined by the lender after a Full Review is performed. Subject to Full Investor’s approval.

Ineligible Property Types
Ineligible Property Types include, but are not limited to:

• Cooperative units
• Primary Residences
• Manufactured homes
• Dome properties
• 2-4 units
• Mixed use properties
• Log Homes
• Unique properties
• Agricultural zoned
• Properties with more than 10 acres
• Mobile homes
• Houseboats
• Hobby Farms
• Working farms, ranches, orchards, and/or commercial operations
• Property used for commercial purposes
• Unimproved land
• Residences lacking kitchen and full bathroom facilities
• Hotel or motel conversions, or conversions of other transient properties (i.e.; lodge, motor inn, etc.)
• Properties in less than average condition
• Properties sold at auction by the builder, developer, or construction lender are not eligible.
• Foreclosed properties located in a state where a redemption period is allowed (allowed in some
• states for both Tax Sales and Judicial Foreclosures) until The redemption period has expired
• AND the foreclosure sale had been confirmed AND clear and marketable title can be obtained.
• Leasehold Estates
• Deed Restricted Properties
• Projects in current or pending litigation
• Any property not zoned residential.

Acreage
Max 10 acres
Maximum land value for all acres:
– Rural properties – Not to exceed 35%. The land value would be based on total acreage.
– Non-rural Properties – No maximum land value as long as the property conforms to the area.

Working farms, commercial operations, or any other income producing properties are not allowed. Income must be incidental and non-commercial in nature. Incidental income cannot be a large percentage of the borrower’s income or related to their main source of income.
The primary use of the property must be residential and zoning must allow for residential use. Some communities have enacted a zone comprised of land located in an agricultural area but not suited to farming. An example of this type of zoning is A-3. Residential development is allowed in this zone, and while not limited to, is typically one home on one acre or less with sewer services or the minimum acres needed for on-lot sewage disposal. As the intended and allowable use of the land in this zone is residential and not agricultural, despite a prefix of agricultural in the zoning, properties are eligible as long as all other eligibility requirements are met.
Properties on privately owned and maintained streets require a private road maintenance agreement, except for properties in California. If the property is located within a state, other than California, that has statutory provisions that define the responsibilities of property owners for the maintenance and repair of a private street, no separate agreement or covenant is required as long as the statutory provisions provided in the file.
The appraiser must consider all acres of the subject property and the comparables must be of similar size.
The property must be appraised and the final conclusion and estimate of value must be based on the actual acreage and lot size.

Property Flipping
Acceptable property flip transactions are sales of properties that have been substantially improved through legitimate and verified renovations since the property was acquired by the seller. Any increase in the sales price over the seller’s acquisition cost
should be representative of the market given the improvements made to the subject property.

Exempt transactions include:
Resales of properties purchased by an employer or relocation agency in connection with an employee relocation. A relocation agency DOES NOT include individual real estate agents that advertise themselves as relocation experts and who purchase properties from persons who are relocating from the area.
Property inherited by the seller.
Sales of properties by state and federally charted financial institutions (lender or servicer), Government Sponsored Enterprises (e.g. Fannie Mae and Freddie Mac), U.S. Government, local or state agencies, or MI Companies when the property was acquired through foreclosure or deed in lieu of foreclosure.
Sales of properties acquired through a divorce settlement.

Sales within 0-90 days of the seller’s acquisition
Properties acquired by the seller within 90 days preceding the current sales contract are acceptable provided the increase in the sales price is less than 20%.
Properties with a sales increase of 20% or more require either a Collateral Desktop Analysis (CDA) or
Desk Review to support the increase in value.
– If the value increase is due to recent renovations or improvements, the appraiser must supply interior photos of the renovations and comment on the cost of the repairs/renovations and likely contribution to the value increase.
– Receipts, building permits and/or signed contracts must be submitted.
Loans requiring mortgage insurance must be submitted to the MI Company for underwriting and approval.
Sales > 90 days of the seller’s acquisition
If the sales price has increased 20% or more since the most recent purchase, the increase must be justified.
– If the value increase is due to recent renovations or improvements, the appraiser must supply interior photos of the renovations and comment on the cost of the repairs/renovations and likely contribution to the value increase.
– Receipts, building permits and/or signed contracts must be submitted.
Loans requiring mortgage insurance must be submitted to the MI Company for underwriting and approval if the sale was within 180 days of the seller’s acquisition.
– Delegated MI underwriting authority is only allowed on sales > 180 days of the seller’s acquisition.

Delayed Financing
Borrowers who purchased the subject property within the past 12 months (measured from the date on which the property was purchased to the disbursement date of the new mortgage loan) are eligible for a rate term refinance if all of the following requirements are met. Note: If the appraiser notes a declining market, delayed financing is not allowed.
The original purchase transaction was an arms-length transaction.
The borrower(s) may have initially purchased the property as one of the following: a natural person;
an eligible inter vivos revocable trust, when the borrower is both the individual establishing the trust and the beneficiary of the trust;
 an eligible land trust when the borrower is the beneficiary of the land trust; or
an LLC or partnership in which the borrower(s) have an individual or joint ownership of 100%.
The original purchase transaction is documented by a HUD-1 Settlement Statement, which confirms that no mortgage financing was used to obtain the subject property. (A recorded trustee’s deed [or similar alternative) confirming the amount paid by the grantee to the trustee may be substituted for a HUD-1 if a HUD-1 was not provided to the purchaser at the time of sale.)The preliminary title search or report must confirm that there are no existing liens on the subject property.
The sources of funds for the purchase transaction are documented (such as bank statements, personal loan documents, or a HELOC on another property).
If the source of funds used to acquire the property was an unsecured loan or a loan secured by an asset other than the subject property (such as a HELOC secured by another property), the HUD-1 for the refinance transaction must reflect that all cash-out proceeds be used to pay down, if applicable, the loan (unsecured or secured by an asset other than the subject property) used to purchase the property. Any payments on the balance remaining from the original loan must be included in the debt-to-income ratio calculation for the refinance
transaction. Note: Funds received as gifts and used to purchase the property may not be reimbursed with proceeds of the new mortgage loan.
The new loan amount can be no more than the actual documented amount of the borrower’s initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points on the new mortgage loan.
May be underwritten and priced as a rate term refinance.
Maximum 60% LTV. LTV is based on the lesser of the Purchase Price or current appraised value.
The loan amount is the lesser of the Matrix or $1,500,000. Rate term cash back amount restriction does not apply.