Announcement #2018-46 Conventional Updates

Cash-Out Refinance LTV/CLTV Increase, FHLMC HomeOne, and more.

Announcement 2018-46

Date: July 29, 2018

Conventional Updates

All Channels

Cash-Out Refinance LTV/CLTV Increase

Effective immediately, cash-out refinances are now available up to an 85% LTV/CLTV!


  • One-unit primary residences
  • Minimum FICO 740
  • Maximum loan amount $453,100
  • Loan must score Accept/Ineligible - reason for ineligibility is the LTV/CLTV is greater than 80%, up to 85%, only
  • Condominiums require a full review
  • Financed MI premiums are not permitted
  • Mortgage Insurance must be obtained through Arch, Essent, Genworth or MGIC


FHLMC HomeOneSM  Mortgage

Effective with new applications and locks beginning July 30, 2018, New Penn Financial will offer FHLMC’s HomeOneSM  Mortgage, their newest low down payment option designed to serve the needs of more First-Time Homebuyers. This offering provides an additional low-down payment financing option for Borrowers without specific income or geographic restrictions.  Details can be found within the New Penn Financial Conventional Product Profile.


  • Maximum LTV/CLTV is 97% for fixed rate, one-unit primary residence purchases or rate and term refinances

o   The mortgage being refinanced must be owned or securitized by Freddie Mac

  • At least one Borrower must be a First-Time Homebuyer when the Mortgage is a purchase transaction
  • When all Borrowers are First-Time Homebuyers, at least one Borrower must participate in

homeownership education.



Effective July 30, 2018, the Freddie Mac (LPA) Standard and Super Conforming Eligibility Matrix is being updated to remove the Max LTV with Sub Financing column. There will no longer be a 5% reduction in the CLTV when the loan has subordinate financing.


FNMA LTV Updates

Effective July 30, 2018 the LTVs/CLTVs for ARMs are being increased to align with fixed rate mortgage LTVs/CLTVs, up to 95% LTV.

The LTV for a High Balance ARM, purchase or rate and term refinance of a one-unit property is being updated to 90% to align with investor requirements.

Please note the change to the Eligibility matrices in the Product Profile. The first FNMA Matrix is now Fixed Rate and ARM Standard, and Fixed Rate High Balance. The second FNMA Matrix is High Balance ARMs only.


Home Possible® and Home Possible Advantage® Income Updates

As previously addressed in Announcement 2018-37,  the following applies for all Home Possible® and Home Possible Advantage® Mortgages, effective July 29, 2018, with the exception of low-income census tracts. The borrower’s income, converted to an annual basis, must not exceed 100% of the AMI. There will continue to be no income limit for properties located in low-income census tracts where the median income is at or below 80% AMI. Properties located in designated high-cost areas, census tracts designated as disaster areas and minority census tracts will now be subject to the maximum 100% AMI requirement.

Loan Product Advisor will be updated on July 29, 2018.

When the mortgage is submitted as a Home Possible®  Mortgage on and after July 29, 2018, and…

Income Limits Applied

The last submission before July 29, 2018 was also a Home Possible(R) Mortgage, and income limits were met

The better of income limits for 2017 or 2018

  • The Mortgage is submitted for the first time
  • The Key Number cannot be identified,


  • The last submission before July 29, 2018 was not submitted as Home Possible and/or did not meet the income eligibility limits

2018 limits

The revised Home Possible® Mortgage income limits and 2018 AMI limits will also be implemented in the Home Possible® Income & Property Eligibility tool on July 29, 2018.

Please refer to the New Penn Financial National Correspondent Division’s Product Matrices for specific details.