Lender Guidelines: 5.1 General Mortgage Underwriting

For Mortgage Loans with Non-Bond DPA or Bond DPA:

a. Mortgage loans must be underwritten to the standards of the applicable loan type. In the case of conflicting guidelines, the Lender must follow the more restrictive to meet the credit, income limits, total debt-to-income ratio and loan and property requirements of TSAHC, Fannie Mae, Freddie Mac, FHA, VA, RHS or private mortgage insurer, the Lender or Lakeview Loan Servicing.

b. The following overlays apply:

For FHA Loans:

• Borrowers must have a minimum representative credit score of 620 or greater. A minimum representative credit score of 640 or greater is required for manufactured homes.

o Loans with representative FICO credit scores of 620-639 are subject to a 0.50% origination charge.

• Loans must be submitted through FHA Total Scorecard (DU or LPA) and receive an Accept/Eligible recommendation.

• Loans may be manually underwritten in cases of an Accept/Eligible that requires a manual downgrade or if the loan receives a Refer/Eligible recommendation.

o Maximum DTI for manually underwritten loans is 43.00%

o Minimum FICO credit score of 640

o Non-traditional credit is allowed

o Manual underwriting is not permitted for manufactured homes

For VA or USDA-RHS Loans:

• Borrowers must have a minimum representative FICO credit score of 620 or greater. A minimum representative credit score of 640 or greater is required for manufactured homes (eligible for USDA-RHS loans only).

o Loans with representative FICO credit scores of 620-639 are subject to a 0.50% origination charge

• Fannie Mae’s Desktop Underwriter (DU) or Freddie Mac’s Loan Product Advisor (LPA) are allowed for VA loans. GUS must be used for USDA-RHS loans.

• Manual underwriting is not allowed for either VA or USDA-RHS loans. However, the existing manufactured home pilot program requires a USDA manual underwrite and is allowed.

• Non-traditional credit is not allowed.

For HFA Conventional Loans:

• Borrowers must have a minimum representative FICO credit score of 640 or higher.

o A borrower with no FICO credit score may be eligible if an occupant borrower(s) has a credit score that meets the minimum 640, subject to AUS and Mortgage Insurance approval

• Fannie Mae’s Desktop Underwriter (DU) for HFA Preferred and Freddie Mac’s Loan Product Advisor (LPA) for HFA Advantage are allowed.

• Manual underwriting is not allowed.

• Non-traditional credit is not allowed.

• Manufactured homes are not permitted with conventional loans.

For access to the full TSAHC DPA & MCC Guidelines, please click here.