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PINNACLE Capital Mortgage Corporation - Streamline Refis without appraisals - underwriting information contained in this document is intended for use in conjunction with HUD Handbook 4155 and subsequent applicable Mortgagee Letters.

PINNACLE Capital Mortgage Corporation - Streamline Refis without appraisals - underwriting information contained in this document is intended for use in conjunction with HUD Handbook 4155 and subsequent applicable Mortgagee Letters.

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Published by Mary Cochrane





Credit Documents (credit report / employment / income / assets / preliminary title report) must be no more than 120 days at the time of funding.









Appraisal Form





Based on the property type, the following appraisal report form must be used:







PROPERTY TYPE







SFR, PUD





Uniform Residential Appraisal Form (#1004 /#70)









Individual Condominium Appraisal Report







(#1073 / #465)







2-4 units





Small Residential Income Property Appraisal







Report (#1025 / #72)











Credit Documents (credit report / employment / income / assets / preliminary title report) must be no more than 120 days at the time of funding.









Appraisal Form





Based on the property type, the following appraisal report form must be used:







PROPERTY TYPE







SFR, PUD





Uniform Residential Appraisal Form (#1004 /#70)









Individual Condominium Appraisal Report







(#1073 / #465)







2-4 units





Small Residential Income Property Appraisal







Report (#1025 / #72)






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Published by: Mary Cochrane on Jan 10, 2013
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FHA GUIDELINES
Updated 12-28-2012 (changes highlighted in yellow)
 Added guidance for Streamline Refis without appraisals that monthly MIP on the outstanding loan may be included (Page 36): Added 12-14-12 Added illegal income guidance (Page 21): Added 12-28-12 Added guidance for Streamline Refis with appraisals that monthly MIP on the outstanding loan may be included (Page 35): Added 12-28-12
Purchase Rate/Term Refinance Streamline Refinance Cash Out Refinance 
1)Refer to the subordinate financing section for more information2)Refer to the Streamline Refinance section for specific LTV/CLTVs based on credit qualification and use of appraisal
For age requirements related to appraisals, refer to the Appraisal section of the guidelines All appraisals for FHA loans must be completed by a HUD-approved appraiser and use the following forms:
-
Statement of Limiting Conditions.
-
 Appraiser’s Certification.
-
Market Conditions Addendum
Age of Appraisal
-
 Appraisals are valid for up to 120 days.
-
In the event that an appraisal expires, the case number must be cancelled and a new case number must be assigned.
Appraisal Form
Based on the property type, the following appraisal report form must be used:
PROPERTY TYPE
SFR, PUDUniform Residential Appraisal Form (#1004 /#70)Individual Condominium Appraisal Report(#1073 / #465)2-4 unitsSmall Residential Income Property AppraisalReport (#1025 / #72)
Appraisal Report
-
Condominiums (includingsite condos)
Note: The underwriting information contained in this document is intended for use in conjunction with HUD Handbook 4155 and subsequent applicable Mortgagee Letters.
PROPERTY TYPEAGE OF DOCUMENTS:LTVAPPRAISAL REQUIREMENTS
640Credit Documents (credit report / employment / income / assets / preliminary title report) must be no more than
120 days at the time of funding.
When completing the appraisal report form, HUD does not require the cost and depreciation for an older existing home or the incomeapproach for a one- or two-unit owner-occupied home.
FORM NAMECLTV
1
FICO
***For quick search results, utilize the word search option in the pdf document***
PRIMARY RESIDENCE
640
UNDERWRITING OPTIONS
TOTAL/Manual
UNDERWRITING OPTIONS
see notes
2
1-4 unit640640Manualsee notes
2
1-4 unitTOTAL/Manual
PROPERTY TYPELTVPROPERTY TYPECLTV
1
FICO
1-4 unit96.510097.7597.75
LTVCLTV
1
FICOUNDERWRITING OPTIONSPROPERTY TYPELTVCLTV
1
FICOUNDERWRITING OPTIONS
TOTAL/Manual1-4 unit8585
Pinnacle Capital Mortgage FHA Guidelines12-28-2012Page 1 of 38
 
Appraisal Reporting Requirements
-
Include a minimum of two active listing or pending sales on the appraisal form (in addition to the three settled sales).
 Adjust active listings to reflect list to sale price ratios for the market.
Include the original list price, any revised list prices, and total days on the market.
Reconcile the adjusted values of active listing or pending sales with the adjusted values of the settled sales provided.
Include an absorption rate analysis.
-
For additional details, refer to Mortgagee Letter 2009-09 posted on HUDs website.
Appraisal Review
-
 Appraisal Reviews are not required but may be ordered at the PCM Underwriter's discretion
Appraisal Update/Completion Report
--
The Appraisal Update must be DATED prior to the appraisal expiration (this guidance applies to all properties, including HUD REOs)
-
If an Appraisal Update is required, a new 1004MC must also be obtained.
-
 A CoreLogic RealQuest AVM must be obtained by PCM:
If the AVM Estimated Value is < 100% LTV:
-
The Forecast Standard Deviation (FSD) can be disregarded
If the AVM Estimated Value is 100% - 115%:
-
The Forecast Standard Deviation (FSD) must be 20 or less
-
If the AVM Estimated Value is > 115%:
-
The loan is ineligible unless an appraisal is obtained and the loan meets all guideline requirements.
-
When an AVM is unavailable, a 2055 exterior appraisal is an acceptable alternative.
-
 AVM may not exceed 90 days from the date the note is signed.
Carbon Monoxide Detectors:
-
 As-Is property:-
Subject-To property:-
FHA Appraisal Roster
-
FHA Second Appraisal Requirements
-
A lender must obtain a second appraisal by another appraiser if:
The re-sale date of a property is between 91 and 180 days following the acquisition of the property by the seller  AND
The resale price is 100 percent or more over the price paid by the seller when the property was acquired
---
FHA Connection must reflect the lower of the two appraised values.
Health and Safety Issues
-
 Appraisers must comment on all health and safety issues & all deficiencies and needed repairs
Include at least two comparable sales that closed within 90 days prior to the effective date of the appraisal; otherwise, a detailedexplanation is required why the sales could not be provided.The FHA Roster lists appraisers who are eligible to perform FHA single-family appraisals. To conduct an appraisal for FHA insuranceendorsement, the appraiser must be on the FHA Roster and listed as certified residential or certified general.Security bars: there must be an emergency release latch for at least one window in each room where the security bars are located. A 1004D (provided by the appraiser) must be provided to verify that the detectors have been installed and/or are currentlyfunctioning on every floor of the property.The second appraisal must be completed by an FHA roster appraiser selected by PCM. Condominiums (including detached)and 2-4 unit properties must be completed on the appropriate appraisal form. Both appraisals must be completed prior toloan closing.
AVM Requirements
(for all Credit Qualifying AND Non-Credit Qualifying Streamline Refinances) 
If the Forecast Standard Deviation (FSD) is greater than 20, the loan is not eligible unless an exterior-only or full appraisal isobtained to determine the Current Market Value of the property, which must support an LTV < =115% (inclusive of UFMIP).If the property state requires Carbon Monoxide Detectors in the subject property and the detectors are missing or nonfunctional: A 1004D (provided by the appraiser) OR a Lender Certification (provided by a PCM Employee) along with supporting photo(s)must be provided to verify that the detectors have been installed and/or are currently functioning on every floor of theproperty.Loan must be based on the lower of the two values. Borrower cannot pay for appraisal. See Property Eligibility section for more information on Property Flipping.HUD requires an appraiser to provide summary comments and support for all conclusions relating to the trend of the current market. Anappraiser must:Ensure active listings and pending sales are market tested and have reasonable market exposure to avoid the use of over pricedproperties as comparables. Reasonable market exposure is reflected by typical marketing times for the neighborhood. Adjust pending sales to reflect the contract purchase price whenever possible or adjust pending sales to reflect list to sale priceratios.The Appraisal Update and/or Completion Report (Fannie Mae Form 1004D/Freddie Mac Form 442) may be used in lieu of the ComplianceInspection Report (except on New Construction) per HUD Mortgagee Letter 2009-51. The Completion Report may not be used in lieu of the Compliance Inspection Report on new construction.
Pinnacle Capital Mortgage FHA Guidelines12-28-2012Page 2 of 38
 
High Balance Loan Appraisal Requirements
-
Loan Amounts <= $1,000,000
One Full FHA Appraisal
-
Loan Amounts > $1,000,000 <= $2,000,000
One Full FHA Appraisal by a Certified Appraiser 
 A Desk Review with data verification or Enhanced Desk Review with data certification
-
Loan Amounts > $2,000,000
 A Desk Review with data verification or Enhanced Desk Review with data certification
Market Conditions Addendum Requirement
-
PCM Selection of the Appraiser/Inspector
--
 Appraisals cannot be ordered until the case number has been ordered.
Photograph and Property Requirements
--
Properties without a full kitchen (working sink, working stove & cabinets) are not eligible.
Portability of Appraisals
-
Refer to HUD Mortgagee Letter 2009-29
Re-Inspection and Review Requirements for Disaster Areas
-
Valuations performed
on or before the Disaster Date:
-
One of the following documents must be provided:
 Appraisal Update
-
Inspection of Property Condition
-
 A minimum of one clear photo of the subject must be provided
2075/2070 Streamlined Inspection
-
Valuations performed
after the Disaster Date:
----If there is no damage, the appraiser/inspector must provide the following commentary: Property is freefrom damage and the disaster had no affect on value or marketability. An interior inspection is required in all Declared Disaster areas for one year from the date of the disaster declaration.In the event of multiple adverse events (e.g. one hurricane followed by another) the Appraisal Update, Inspection of PropertyCondition or 2075/2070, must occur after the most recent event.The inspection certification must be signed by the original appraiser or Licensed Property Inspector. Theinspection certification may be provided on either corporate letterhead or a Certification of PropertyCondition form. An unlicensed appraiser assistant is not authorized to perform this inspection.PCM may assign the appraiser before receiving the case number, but the case may not be submitted for endorsement without the casenumber. The case number must be placed on all pages of the appraisal report.Pinnacle Capital Mortgage requires additional property re-inspection and review requirements on loans secured by properties located indisaster areas. Any adverse event (including, but not limited to: fire, earthquake, landslide, hurricane, flood, tornado, thunderstorm, etc.)
that may have impacted a subject property must be evaluated in terms of its effect on the subject’s habitability, marketability and value. It
is important to note that not all disaster areas as determined by PCM are qualified as FEMA disaster declarations. PCM will lend onproperties that are located in declared disaster areas provided the if the following requirements are adhered to and documented in the loanfile.The document must address the specific disaster and indicate any apparent damage.If the appraisal indicates damage: The extent of the damage must be addressed. Completion of repairs is required evidencedby Form 1004D, Appraisal Update and/or Completion Report, with photos, prior to funding.Interior photographs of specific rooms must be included in the appraisal report whenever an interior inspection is performed. At aminimum, interior photos must include: Kitchen, all bathrooms, main living area, examples of physical deterioration (if present) andexamples of recent updates/restoration/remodeling/renovation (if present). All comparables should be post-disaster. However, if sufficient comparables are not available, then the appraiser mustprovide current photos (post disaster) of the subject and comparables. (MLS photos or photos used for previous appraisalsare unacceptable)If the appraisal indicates no damage: the appraiser/inspector must provide the following commentary: Property is free fromdamage and the disaster had no affect on value or marketability.The lesser of the appraised value, the Review Value or the Sales Price will be used to determine the LTV/CLTV of the transactionThe lesser of the appraised value, the Review Value or the Sales Price will be used to determine the LTV/CLTV of the transactionIf subject property has sustained more than minor cosmetic damage, a new interior appraisal is requiredand all damage must have been repaired prior to funding. A 1004D (Completion of Repairs) is to becompleted with photos prior to funding. An Inspection of the property condition may be completed in lieu of an Appraisal Update when a disaster has
affected the subject property’s area and the subject has sustained no damage. When a property inspection is
used:If there is no damage, the appraiser/inspector must provide the following commentary: Property is freefrom damage and the disaster had no affect on value or marketability.Two full FHA appraisals completed by Certified Appraisers (a separate appraisal service company must be used for each of theappraisals)FHA requires the use of Fannie Mae Form 1004MC. Information and instructions on completing the Addendum are available online at:https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0830.pdf 
Pinnacle Capital Mortgage FHA Guidelines12-28-2012Page 3 of 38

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