Eligibility of Loans Secured by Second Home and Investment Properties.
Recent amendments to our senior preferred stock purchase agreement with Treasury impose additional risk criteria on the loans we acquire. One of those restrictions is a 7% limit on our acquisition of single-family mortgage loans secured by second home and investment properties.
As a result of this amendment, we are announcing the following changes to our eligibility policies. Other than the exception noted below, all second home and investment property loans must meet the following requirements to be eligible for purchase: be underwritten with Desktop Underwriter (DU®), receive an Approve/Eligible recommendation, and be delivered as a DU loan in Loan Delivery.
The only exception that will be permitted for second home and investment properties loans is for high LTV refinance loans that are manually underwritten in accordance with the Alternative Qualification Path and delivered with Special Feature Code 840