Reserves
Borrower Asset Verification1. Two months of bank statements required.
2. The value of any stock, bond or mutual fund are reduced by 30% 3. The value of retirement accounts reduced by 50%. 4. No Tax Returns 5. No IRS 4506-T 6. No Verfication of Employment 7. Proof of down payment and funds to close required. Are gift funds allowed?
No gifted funds are allowed. The minimum 20-25% down payment for an investment property must be 100% from the borrower’s own money.
|
Borrower ReservesLeased Property:
Most recent month's balances reviewed for one month of liquid PITIA reserves. ( Principal, Interest, Taxes, Insurance, Association Fees) Vacant Property: Three months of liquid PITIA if property is not currently leased. Escrows: Taxes and insurance to be determined by title company. Association Fees: Lender will pre-pay all HOA fees anually and will establish required reserves. |
REIS: We do not source or season funds in bank account
Fannie Mae
Reserve Requirements
Reserve Requirements
If the borrower owns other financed properties, additional reserves must be calculated and documented for financed properties other than the subject property and the borrower's principal residence. The other financed properties reserves amount must be determined by applying a specific percentage to the aggregate ot the outstanding unpaid financed balance (UFB) for mortgages and Home Equity Lines of Credit (HELOC) on these other financed properties.
If the borrower has one to four financed properties: 2% of aggregate UFB.If the borrower has five to six financed properties: 4% of aggregate UFB. If the borrower has seven to ten financed properties: 6% of aggregate UFB.
While some lenders require investors to show four months worth of principal, interest, taxes, insurance and homeowners association dues, some lenders require more. Other lenders often require six months of house payments (including taxes and insurance) plus an additional two months of house payments in reserves for every non-primary residence that a person owns. For DTI's over 36% and under 45% 12 months of reserves may be required for credit scores under 700.
While some lenders require investors to show four months worth of principal, interest, taxes, insurance and homeowners association dues, some lenders require more. Other lenders often require six months of house payments (including taxes and insurance) plus an additional two months of house payments in reserves for every non-primary residence that a person owns. For DTI's over 36% and under 45% 12 months of reserves may be required for credit scores under 700.
