Effective Date
Effective immediately for new locks and registrations unless otherwise noted.
Newrez is enhancing and updating our Smart Series product line as part of our continuing efforts to provide competitive, Non-QM financing options to our customers.
SmartVest Update |
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Topic |
Current Guideline |
New Guideline |
Prepayment Penalty |
Pennsylvania prepayment penalty not permitted for 1–2-unit properties with loan amounts less than $263,975 on the Smart Vest transactions |
Pennsylvania prepayment penalty not permitted for 1–2-unit properties with loan amounts less than $278,204 on the Smart Vest ARM transactions Effective for loans closed on or after January 1, 2022 |
Maximum Cash Out Seasoning |
NA |
For cash-out refinance transactions, the application date must be dated at least six (6) months after the previous Note date of the last Smart Series cash-out refinance loans with Newrez |
Condos |
NA |
Minimum 500 square feet |
Ineligible Property Types |
Properties with less than 600 square feet |
· Condos with less than 500 square feet · Minimum 600 square feet for all properties, excluding condos |
Appraisal Photographs |
Original photographs, electronic images, copies from MLS, or copies from appraiser's files |
All photographs must be in color. Black and white photographs are not permitted |
SmartEdge Update |
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Topic |
Current Guideline |
New Guideline |
Eligibility Matrix |
Second Home: LTV 85%. Loan amounts up to $3,000,000 require a 740-credit score |
Second Home: LTV reduced to 80%. Loan amounts up to $3,000,000 require a 740-credit score |
Maximum Cash Out Seasoning |
NA |
For cash-out refinance transactions, the application date must be dated at least six (6) months after the previous Note date of the last Smart Series cash-out refinance loan with Newrez |
Incidental Cash Back |
Cash out amount on a rate and term refinance not to exceed the lesser of $2,000 or 2% of the loan amount |
· Cash out amount on a rate and term refinance not to exceed the lesser of $2,000 or 2% of the loan amount · Texas homestead properties with a lien subject to 50(a)(6) may not receive any ($0) cash back at closing. Refer to Texas 50(a)(6) Product Profile |
Texas Property Restrictions |
There can only be one outstanding Texas 50(a)(6) loan on a property at any given time |
There can only be one outstanding Texas 50(a)(6) loan on a property at any given time and when present, a Texas 50(a)(6) loan can be the only loan secured by the subject property |
Ineligible Property Types |
· Properties with less than 750 square feet · Condos: Units with less than 500 square feet |
· Condos with less than 500 square feet · Minimum 600 square feet for all properties, excluding condos |
HPML Loans |
Connecticut loan amounts are limited to $417,000 |
Revised to the following: · Connecticut o When the loan is an HPML primary residence refinance transaction with a loan amount ≤ $417,000, homeownership counseling from an independent third-party nonprofit organization approved by the HUD is required when refinancing a Special Mortgage, defined as an FHA, VA, USDA loan, or a bond loan provided by a Housing Finance Agency
Added the following second appraisal requirements · A second appraisal, at no cost to the borrower, is required when both: o The seller acquired the dwelling within 180 days prior to the date of the borrower’s purchase agreement; and o The price reflected in the purchase agreement is higher than the seller’s acquisition price: § More than a 10% price increase if the seller acquired the property in the past 90 days; or § More than a 20% price increase if the seller acquired the property in the past 91 to 180 days · Refer to the Smart Guide for transactions that are exempted from the additional appraisal requirement |
Self-Employed Income |
· Most recent two (2) months’ business bank statements confirming cash flow and revenue trend is consistent with qualifying income and gross receipts appearing on the tax returns. · The statements must include an account history ending within 30 business days of the Note date · If the borrower operates a small business, use of a personal account showing business-related deposits to support cash flow maybe accepted |
Bank statements are no longer required |
Appraisal Photographs |
Original photographs, electronic images, copies from MLS, or copies from appraiser's files |
All photographs must be in color. Black and white photographs are not permitted |
SmartSelf Update |
||
Topic |
Current Guideline |
New Guideline |
Maximum Cash Out |
NA |
For cash-out refinance transactions, the application date must be dated at least six (6) months after the previous Note date of the last Smart Series cash-out refinance loan with Newrez |
Incidental Cash Back |
Cash out amount on a rate and term refinance not to exceed the lesser of $2,000 or 2% of the loan amount |
· Cash out amount on a rate and term refinance not to exceed the lesser of $2,000 or 2% of the loan amount · Texas homestead properties with a lien subject to 50(a)(6) may not receive any ($0) cash back at closing. Refer to Texas 50(a)(6) Product Profile |
Expense Factor |
The underwriter must review the bank statements or 1099 statements and will use the Smart Product Business Impact and Continuity Attestation tool to assess the business operation |
The underwriter uses the information on the bank statements or 1099 statements and what the borrower disclosed on the Smart Product Business Impact and Continuity Attestation to assess if additional information is needed to validate if the appropriate expense factor (+/- 50% or 70%) is being used |
Texas Property Restrictions |
There can only be one outstanding Texas 50(a)(6) loan on a property at any given time |
There can only be one outstanding Texas 50(a)(6) loan on a property at any given time and when present, a Texas 50(a)(6) loan can be the only loan secured by the subject property |
Condo Requirements |
NA |
Minimum 500 square feet for all condos |
Ineligible Property Types |
Properties with less than 600 square feet |
· Condos with less than 500 square feet · Minimum 600 square feet for all properties, excluding condos |
HPML Loans |
Connecticut loan amounts are limited to $417,000 |
Revised to the following: · Connecticut o When the loan is an HPML primary residence refinance transaction with a loan amount ≤ $417,000, homeownership counseling from an independent third-party nonprofit organization approved by the HUD is required when refinancing a Special Mortgage, defined as an FHA, VA, USDA loan, or a bond loan provided by a Housing Finance Agency
Added the following second appraisal requirements · A second appraisal, at no cost to the borrower, is required when both: o The seller acquired the dwelling within 180 days prior to the date of the borrower’s purchase agreement; and o The price reflected in the purchase agreement is higher than the seller’s acquisition price: § More than a 10% price increase if the seller acquired the property in the past 90 days; or § More than a 20% price increase if the seller acquired the property in the past 91 to 180 days · Refer to the Smart Guide for transactions that are exempted from the additional appraisal requirement |
Appraisal Photographs |
Original photographs, electronic images, copies from MLS, or copies from appraiser's files |
All photographs must be in color. Black and white photographs are not permitted |
Resources
Please reference the Smart Series product profiles and Smart Guide in the Newrez Lending Library for complete details.