Closed End 2nds

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Property Eligibility

Section 3.0 Property Eligibility

3.1 Appraisals

There are two collateral evaluation methods available for the second mortgage program.

3.1.1 Appraisal Options

An original appraisal dated within 12 months of the Note Date plus a Residential Appraisal Review with a value equal to or greater than the appraisal. CLTV is calculated using original appraisal.
A new 2055 appraisal is required if the review value is below the original appraisal value.
A new 2055 appraisal plus a Residential Appraisal Review supporting value within 10%.

3.2 Minimum Property Standards

Minimum property standards include but may not be limited to:
600 square feet.
Property constructed for year-round use
Permanently affixed continuous heat source
Maximum deferred maintenance cannot exceed $2,000
No health or safety issues both internal or external

3.2.1 Eligible Property Types

SFR, PUD, Townhome, Rowhome, Modular
Condos – Warrantable

3.2.2 Ineligible Property Types

Non-warrantable Condos
Log Homes
Working Farms and Hobby Farms
Unique Properties
Agricultural or Commercial Zoned Properties
Room and Board Facilities
Adult Assisted Living/Care Facilities

3.2.3 Acreage Limitations

Maximum 10 acres

3.3 State Ineligibility

All states eligible with exception of:
New York

3.4 Title Vesting and Ownership

Ownership must be fee simple.
Acceptable forms of vesting are:
Joint tenants
Tenants in Common
Inter Vivos Revocable Trust

3.4.1 Inter Vivos Revocable Trust

Inter Vivos Revocable Trusts are allowed when the requirements outlined below are met.
The trust must be established by one or more natural persons, solely or jointly.
The primary beneficiary of the trust must be the individual(s) who is establishing the trust.
Trust must be in the borrower’s name.
Trust must state that the borrower(s) have a right to revoke the Trust during their lifetimes.
Income and assets of at least one borrower of the individuals establishing the Trust must be used to qualify for the mortgage.
Trust must comply with all applicable state and local laws and regulations.
Trustee must have the power to mortgage the property.
The trust must become effective during the lifetime of the person establishing the trust.
Provide copy of Trust Agreement or Trust Certificate (where allowed by law) reviewed and approved by Title company. Title must not contain any title exceptions and offer full title protection without exception to the trust.

3.5 Leasehold Properties

In areas where leasehold estates are commonly accepted and documented via the Appraisal, loans secured by leasehold estates are eligible for purchase. The mortgage must be secured by the property improvements and the borrower’s leasehold interest in the land. The leasehold estate and any improvements must constitute real property, be subject to the mortgage lien, and be insured by the lender’s title policy.
Seller must provide documentation and Leaseholds must meet all FNMA eligibility requirements (i.e. term of lease).

3.6 Limitations on Financed Properties

Primary and Second Homes
The maximum number of financed properties to any one borrower is limited to twenty (20) residential properties including subject property.
Commercial properties and residential > 5-units excluded from calculation.
Investor Properties
There is no limit on the number of financed properties.

3.7 Disaster Areas

Sellers are responsible for identifying geographic areas impacted by disasters and taking the appropriate steps to ensure the subject property has not been adversely affected.
Subject properties that have been adversely affected by disaster events that receive a formal disaster declaration issued by local, state or federal departments of emergency management must follow the procedures listed below. The following guidelines apply to properties located in FEMA declared disaster areas, as identified on the FEMA website at
In addition, when there is knowledge of an adverse event occurring near and around the subject property location, such as earthquakes, hurricanes, floods, landslides, tornadoes, wildfires, volcanic eruptions, civil unrest or terrorist attacks, additional due diligence should be used to determine if the disaster guidelines should be followed.
Guidelines for disaster areas should be followed for 90 days from the disaster period end date or the date of the event, whichever is later.
See AMRES full Loan Eligibility Guidelines for additional specifics on Disaster Areas or FNMA Guidelines.

3.8 Declining Values

Properties in which the appraiser is reporting a declining trend in values for the subject’s market area are ineligible.

3.9 Condominiums

Fannie Mae eligible condominium projects allowed.
The seller may review and approve FNMA warrantable projects. Follow the review process required by Fannie Mae for Limited Review.
The following table from FNMA Seller’s Guide section B4-2.2-01 describes attached units in an established condo project that are eligible for a Limited Review.

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