Radian Guaranty Inc. is relaxing its requirements on investment properties and affordable loans. It is also enhancing its mortgage insurance premiums.
Investment property loans are becoming insurable through the Philadelphia-based company’s One Underwrite and Standard Eligibility Underwriting programs.
Borrowers will need to have a FICO score of at least 720, while the maximum debt-to-income ratio is limited to 41 percent.
Loan-to-value ratios on investment properties are capped at 85 percent, and six months reserves are required for the subject property.
Radian said it will insure no more than one investment property loan per borrower and no more than two loans overall per borrower.
All rate cards will be updated with investor adjustments.
The updates were spelled out in Radian eBulletin 2014-3.
On affordable loans with LTV ratios in excess of 95 percent and subordinate financing, the mortgage insurer is eliminating the requirement that borrowers must contribute the lower of $1,000 or 1 percent from their own funds.
Radian is revising its Standard Eligibility Underwriting Guidelines to allow adjustable-rate mortgages with initial fixed periods of at least five years and LTV’s of more than 95 percent and up to 97 percent.
The mortgage insurance company additionally noted that it will now approve “ineligible” loans.
“We are expanding our One Underwrite program to allow Approve, Accept/Ineligible findings for one-unit attached, detached, purchase, rate/term when the Ineligible finding are for product and program only,” the bulletin stated.
Expanded One Underwrite requirements are based on LTV ratios between 95 and 97 percent on fixed-rate loans and between 80 and 97 percent on ARMs with initial fixed terms of at least five years.
Another update is that prime mortgages with temporary buy downs will receive fixed rates for borrower-paid and lender-paid M.I. as long as there is a level payment for the first five years. Otherwise, a non-fixed rate will apply.
Borrower-paid and lender-paid mortgage insurance rates are being revised to include non-fixed monthly rates for loans with LTV ratios of more than 95 percent and up to 97 percent and credit scores as low as 620.
Non-refundable and refundable borrower-paid M.I. rates, as well as lender-paid M.I. rates, are being updated to include fixed and non-fixed single rates for loans with LTV ratios between 95 and 97 percent. FICOs can be as low as 620.
Refundable and non-refundable SplitEdge rate cards will include non-fixed rates for loans with FICOs between 620 and 679 and LTV ratios up to 95 percent.
The changes take effect on M.I. applications received on, or after, July 14.
