Genworth Mortgage Insurance has relaxed its guidelines on purchase financing transactions where the borrower’s required downpayment is derived from gift funds.
The minimum contribution from the borrower can now come from gift funds, the mortgage insurer said Thursday.
On Genworth’s Simply Underwrite program, lenders just need to follow Fannie Mae’s or Freddie Mac’s guidelines.
The Raleigh, N.C.-based firm outlined the updates in Announcement 2014-1.
Loans that are ineligible for Simply Underwrite will need to be secured by owner-occupied one-unit properties. The minimum credit score is 740, and the maximum debt-to-income ratio is 41 percent.
When gifts are used to meet the minimum borrower contribution, the loan must be submitted to Genworth for underwriting.
However, delegated can be ordered through Genworth’s order and edit system on its website as of March 17.
Investment properties can qualify for gift downpayments on purchase transactions as long as the maximum loan-to-value ratio and combined LTV ratio doesn’t exceed 85 percent, the minimum credit score is 720 and the maximum DTI ratio is 45 percent.
Acceptable investor properties include single-family detached properties and attached condominiums.
M.I. applications received on or after Feb. 3 are impacted by the changes.
Read the full text of Announcement 2014-1 at .
