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Program and Requirements

Section 2.0 CES Program and Requirements

2.1 Program Overview

The Amres closed-end second (CES) can be stand-alone and in combination with new first liens. When used in combination with a new first mortgage, the income documentation used for qualifying must be the same for both liens.
See Matrix for details and program specific.
The CES is designed for primary, second home and investment borrowers. For both QM and Non-QM transactions, with flexibility in mortgage history, credit history, and/or payment and documentation options. This program offers expanded credit parameters for multiple borrower profiles while utilizing standard and alternative document types.
Full Doc 1 or 2 Yrs: Standard FNMA Documentation
Alt Doc Bank Statements: 12, 24 Bank Statements
Loan amounts are rounded down to the nearest $100.
Example $205,631, round down to $205,600

2.2 Eligible Products

The following loan products are eligible for purchase by Amres. See Matrix for details.
Fully Amortizing Fixed Rate of Qualifying ratios are based on PITIA payment with the principal and interest payments amortized over the loan term.
10, 15, 20, 30-year fixed rate.
Balloon Notes.
30/15, 40/15
See matrix for limitations.

2.3 Ineligible Senior Liens

A copy of the 1st mortgage statement is required to determine eligibility. Statement date to be within 60 days of Note date. Copy of 1st mortgage note is required if statement does not provide sufficient details to determine terms.
Loans in active forbearance or deferment.
Loans with negative amortization.
Reverse mortgages.
Interest only mortgages
Balloon loans that the balloon payment comes due during the amortization period of the 2nd loan.

2.4 Seasoning: Loan and Document

Amres will typically not purchase loans seasoned more than 90 days from the Note Date at the loan delivery date. Underwriting and borrower credit documents may not be more than 120 days seasoned at the Note Date. When using a previous appraisal, it may be seasoned up to 12 months from the Note Date.

2.5 Seasoning: Property Listing

Properties that have been on the market within twelve months of the application date are ineligible.

2.6 Seasoning: Ownership

Properties owned less than six (6) months ineligible.

2.7 Borrower Contact Consent Form

To assist the loan servicer in contacting the borrower in a timely manner, the seller is required to obtain a valid phone number for the borrower(s). The phone number can be collected on the 1003 loan application or by using the Borrower Contact Consent Form Borrower Contact Consent Form.

2.8 State and Federal High Cost Loans

Not eligible for Amres loan purchase.

2.9 Legal Documentation

Available Fannie Mae security instruments, notes, riders/addenda, and special purpose documents can be utilized for loan documentation.

2.10 Interest Credit

Loans closed within the first ten (10) days of the month may reflect an interest credit to the borrower.

2.11 Assumability

Fixed Rate Notes are not assumable.

2.12 Property Hazard Insurance

2.12.1 Coverage Requirements

Hazard insurance for loans must protect against loss or damage from fire and other hazards covered by the standard extended coverage endorsement. The coverage must provide for claims to be settled on a replacement cost basis. Extended coverage must include, at a minimum, wind, civil commotion (including riots), smoke, hail, and damages caused by aircraft, vehicle, or explosion.
Follow FNMA guidance for additional information.

2.13 Flood Insurance

Flood insurance is required for any property located within any area designated by the Federal Emergency Management Agency (FEMA) as a Special Flood Hazard Area (SFHA). A SFHA is typically denoted as Flood Zone A or Zone V (coastal areas). Properties in Flood Zone A or V must be located in a community which participates in the FEMA program to be eligible for financing.
Flood insurance must be maintained throughout the duration of the loan.

2.13.1 Flood Certificate

Determination whether a subject property is in a flood zone must be established by a Flood Certificate provided by the Federal Emergency Management Agency (FEMA). Flood Cert from CoreLogic or ServiceLink is preferred. The appraisal report should also accurately reflect the flood zone.
The flood insurance requirement can be waived if:
Subject property improvements are not in the area of Special Flood Hazard, even though part of the land is in Flood Zone A or V; or
Borrower obtains a letter from FEMA stating that its maps have been amended so that the subject property is no longer in an area of Special Flood Hazard

2.13.2 Minimum Flood Insurance Coverage

For reference, the minimum amount of flood insurance required for most first mortgages secured by 1-unit properties and individual PUD units is the lower of:
100% of the replacement cost of the insurable value of the improvements;
the maximum insurance available from the National Flood Insurance Program (NFIP), which is currently $250,000 per dwelling; or,
the unpaid principal balance of the mortgage.
The minimum amount of flood insurance required for a PUD or condo project is the lower of:
100% of the insurable value of the facilities; or,
the maximum coverage available under the appropriate National Flood Insurance Program (NFIP).
The flood policy for a PUD or condominium project must cover any common element buildings and any other common property located in a SFHA.
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