Information in this communication is a summary and is not complete. Refer to the Wells Fargo Funding Seller Guide for additional guidelines. This information is for use by mortgage
professionals only and should not be distributed to or used by consumers or other third parties. Information is accurate as of date of printing and is subject to change without notice. Wells
Fargo Funding is a division of Wells Fargo Bank, N.A. © 2015 Wells Fargo Bank, N.A. All Rights Reserved. NMLSR ID 399801 REV 07/30/19
Wells Fargo Funding
Non-Conforming fact sheet
The Non-Conforming Loan program provides you with the opportunity to serve more markets and help more borrowers
purchase or refinance a home. Below are highlights of the Prior Approval Non-Conforming Loan program.
For complete guidelines, refer first to the Wells Fargo Funding Seller Guide Section 825:
Non-Conforming Underwriting
Guidelines
and Section 950:
Non-Conforming Conventional LTV Matrix
. Where policy is not stated, refer to Section 820:
Conforming Underwriting Guidelines
and then to the more restrictive of Fannie Mae or Freddie Mac guidelines.
Program features Requirement for Loans with LTVs
≤
80% Requirements for Loans with LTVs
>
80%
Occupancy/Loan
purpose
• Primary residences
• Second homes
• Investment properties
• Purchase
• Rate/term refinance
• Cash-out refinance
• Primary residences
• Purchase
Products
• 5/1, 7/1, or 10/1 LIBOR ARM
• 10-, 15-, 20-, and 30-year fixed rate
• 7/1 or 10/1 LIBOR ARM
• 10-, 15-, 20-, and 30-year fixed rate
Loan
amount/combined
loan amount
• Maximum $3 million for one-unit primary
residence, purchase, and rate/term
refinance
• Maximum $2 million for all other
transactions
Refer to Seller Guide Section 950.
Maximum loan amount $1.5 million
Note: Maximum loan amount may be limited
depending on the metropolitan statistical area
median home price and market classification.
Refer to Seller Guide Section 825.50.
Loan amount must be greater than the contiguous U.S. one-, two-, or three- to four-unit
conforming loan limit (as applicable).
Secondary financing Allowed Not allowed
Loan Score Minimum Loan Score requirements:
•
700 for transactions that meet all of the
following:
- Primary residence or second home
- Purchase or rate/term refinance
- Fixed-rate product
•
740 for investment property transactions
•
720 for all other transactions
Minimum Loan Score is 740.
Loan Score definition: Selected credit score of the occupying borrower with the highest income
and valid credit score.
2 Non-Conforming fact sheet
Program features Requirement for Loans with LTVs
≤
80% Requirements for Loans with LTVs
>
80%
Credit reports
•
CoreLogic Credco
•
Equifax
If not provided at the time the Credit Package is submitted for underwriting, Wells Fargo
Funding will obtain a credit report from CoreLogic Credco or Equifax prior to underwriting the
file. This Loan Score will be used to determine pricing and Loan eligibility.
Reserves/post-
closing liquidity
(PCL)
Standard reserves vary depending on transaction details. Refer to Seller Guide Section 950.
LTV/CLTV
• Maximum 80% LTV/CLTV
• Maximum 75% LTV/85% CLTV
Maximum LTV/CLTV requirements may vary
depending on loan amount, market
classification, transaction type, occupancy,
product, and property. Refer to Seller Guide
Section 950.
Maximum 85% LTV
Refer to Seller Guide Section 825.50.
Maximum qualifying
ratios
Front-end/total debt-to-income:
• 36%/43% for primary residence fixed-rate
purchase or rate/term refinance
• 36%/43% for occupant borrower’s ratio
with a nonoccupant coborrower
• 36%/38% for investment property
• 36%/40% for all other transactions
Front-end/total debt-to-income:
• 30%/35% for fixed rate
• 30%/32% for adjustable rate
Nonoccupant
coborrowers
Allowed
Not allowed
Eligible property
types
• Single family (attached or detached)
• Condominium (condo)
• Planned unit development (PUD)
• Cooperative (co-op)
• Leasehold
• 2- to 4-unit property
• One-unit single family (attached or
detached)
• Condo
• PUD
• Co-op
Mortgage insurance Not applicable Not required
Contributions 6% maximum seller contribution
Gift funds For primary residences and second homes, the
full down payment may be from a gift when
the LTV/CLTV is 80% or less.
Gifts of cash, equity, or land are not allowed.
3 Non-Conforming fact sheet
Program features Requirement for Loans with LTVs
≤
80% Requirements for Loans with LTVs
>
80%
Multiple properties
•
The maximum number of financed
properties for all borrowers is four
(including the subject property).
•
For primary residence or second home
transactions, there is no restriction for the
number of properties owned free and clear.
•
For investment property transactions, the
maximum number of properties owned
free and clear is five.
For complete details, refer to Section 825.04.
The maximum number of financed properties
for all borrowers is two (including the subject
property). There is no restriction for the
number of properties owned free and clear.
If aggregate financing for all properties owned by borrower exceeds $3 million, one of the
following is required:
• Minimum 36 months’ PITI reserve (post-closing liquidity)
• Maximum 50% LTV/CLTV
Appraisal
requirements
Appraisal requirements are determined by the total Loan amount provided by Wells Fargo. Refer
to Seller Guide Section 825.11.
Wells Fargo Funding
authorized appraisal
management
companies (AMCs)
Sellers must obtain valuation products from authorized AMCs including:
• Clear Capital
• CoreLogic Valuation Solutions
• PCV Murcor
• ServiceLink
• Solidifi
• Xome Valuation Services, LLC (formerly Assurant Valuations – available through Direct
Order/Direct Deliver only)
Refer to Seller Guide Section 800.10 for ordering and appraisal delivery requirements.
Delivery options
• Data delivery:
− Uniform Loan Delivery Dataset (ULDD) file upload to wellsfargofunding.com
− Direct loan data transfer via Ellie Mae Encompass
• Document delivery:
− Wells Fargo Image Express
SM
Program
− eDelivery and eSignature
Recast option
Once purchased and serviced by Wells Fargo, Loans may be eligible for recasting (reamortizing)
based on the specific scenario. Recast eligibility requirements include but are not limited to:
• Additional principal payment of $20,000 or more
• Wells Fargo must be the current Mortgage servicer and owner of the Loan
• Request must be made 90 days or more after the Loan has been purchased
• Mortgage must be current (i.e., no payments past due)
Commitment
options
Best Effort
Underwriting option Wells Fargo Prior Approval
Buydowns Not allowed
4 Non-Conforming fact sheet
Program features Requirement for Loans with LTVs
≤
80% Requirements for Loans with LTVs
>
80%
Tax and insurance
escrow
• Sellers are responsible for adhering to
applicable state laws for LTV requirements.
Refer to Section 515.04 for additional
information.
• If the property is located in a Special Flood
Hazard Area (SFHA), an escrow/impound
account must be established for the
payment of flood insurance premiums,
regardless of LTV.
Escrows for taxes and hazard insurance are
required (subject to state law). Refer to
Section 515.04 for additional information.
Other policy
parameters
Refer to Seller Guide Section 825.
• Refer to Seller Guide Section 825.50.
• Refer to Seller Guide Section 825 where
Section 825.50 is silent.
Seller Guide
• Section 400: Registrations and Pricing
• Section 505.08: Additional Documentation Required for Non-Conforming Conventional Loans
• Section 800.01(a): Wells Fargo Underwriting Philosophy
• Section 800.10: Appraisal/Valuation Policy
• Section 825: Non-Conforming Underwriting Guidelines
• Section 825.50: Loans with LTVs Greater Than 80%
• Section 850: Qualifying Ratio Tables
• Sections 950, 955, 974, and 975: Non-Conforming LTV Matrices and Product Eligibility
Requirements
• Section 973: Non-Conforming 5/1 LIBOR ARM (for Loans with LTVs ≤80%)
• Exhibit 3: Verbal Verification of Employment
• Exhibit 6: Non-Conforming Initial Loan Submission Checklist
• Exhibit 7: Valuation Product Vendor Information
• Exhibit 20: Wells Fargo Funding Market Classification
• Exhibit 26: Metropolitan Statistical Area Median Home Price (MSA MHP) List (for Loans
with LTVs > 80%)
• Form 1: Loan Submission Summary
Contact us
To learn more about our Non-Conforming program and Seller eligibility, contact a member of your regional sales team.
