Conventional and Government Updates

Conventional, FHA, VA, USDA, HomeReady®, Home Possible® and LMI guidelines

Effective with new registrations and pipeline loans on Wednesday, September 26, 2018, New Penn Financial is making certain updates where applicable to our Conventional, FHA, VA, USDA, HomeReady®, Home Possible® and LMI guidelines as noted below.


Student Loans

For Conventional, Home Possible® and Conventional and Home Possible® LMI products, the following updates have been made for LPA scored loans only:

  • LPA scored loans with student loans in repayment, deferment of forebearance, use the payment on the credit report if greater than zero for qualification. If the payment is zero, use 0.5% of the outstanding loan balance, as reported on the credit report.

 For Conventional and Home Possible® products, the following updates have been made for LPA scored loans only:

  • Medical Doctors and Dentists (LPA scored only):

For loans in deferment or forebearance, the payment may be excluded for a borrower in, or who has recently completed, a medical residency program and/or a medical clinical fellowship program.

  • One-unit purchase or rate & term refinance (not a manufactured home)
  • LPA scored with a Risk Classification of Accept
  • Minimum 720 FICO
  • Evidence the loan is in deferment or forbearance and will remain in that status for a minimum of 12 months from the Note Date
  • Investor Feature Identifier of H18 is required (must be manually entered)



Manufactured Homes

HomeReady® and Home Possible®

  • Updated to allow manufactured homes with a maximum 95% LTV/CLTV, and a minimum 660 FICO.

Conventional and FHA:

  • The requirement that cash-out on a manufactured home be limited to paying off the first and unseasoned second liens has been removed. Actual cash out is permitted according to investors’ guidelines.


Conventional Overlays

The following Conventional guidelines have been updated and now align with the agencies’ requirements.

  • Employed by family – additional income documentation requirements removed
  • Co-signers/guarantors – now permitted
  • Mortgage history – now aligns with agency requirements
  • Properties previously listed for sale on a cash-out refinance – removed maximum 70% LTV/CLTV requirement


Texas Refinances

Texas 50(f)(2) refinances have been updated to allow manufactured homes and ARMs (where applicable), to align with standard refinance guidelines. Additionally, (f)(2) guidelines have been removed from the Texas A6 profile and incorporated into the individual product profiles.

The Texas A6 profile has also been streamlined by removing sections that are not (a)(6) specific, and to refer to the first mortgage profile for guidance (i.e. income and employment sections).


HomeReady® Updates

HomeReady® ARMs (including LMI products) have been updated to align with agency guidelines:

  • One-unit – 95% LTV/CLTV (previously 90%)
  • Two-units – 85% LTV/CLTV (previously 75%)
  • Three-to four-units – 75% LTV/CLTV (previously NA)


Additional Updates

FNMA, FHLMC and USDA have announced they no longer require the Market Conditions Addendum (1004MC). At this time NPF will align for Conventional, HomeReady®, Home Possible® and USDA products. All other products will continue to require.

Additionally, NPF will align with the FHLMC condominium project insurance requirement updates as addressed in Bulletin 2018-13. Please see the bulletin for full details.

FNMA has changed the name of Property Inspection Waiver (PIW) to Appraisal Waiver.  Previous references to PIW have been updated where applicable.


Please reference the Product Profiles page for full details of the changes outlined in this announcement.