by usezloan | Aug 12, 2021 | Financial study
융자지식186- ACCESSORY DWELLING UNITS
ACCESSORY DWELLING UNITS
An accessory unit is defined as an additional living space that must provide for living, sleeping, cooking and
contain bathroom facilities which may be added to or detached from the primary one-unit dwelling on the
same parcel. Examples include a living area over a garage, basement unit, or guest house.
If the property contains an accessory unit, the property is eligible under the following conditions:
• The primary dwelling property is a one-unit;
• The property contains only one accessory unit, multiple accessory units are not permitted;
• The appraiser provides a description of the accessory unit and analyze any effect it has on the
value or marketability of the subject property;
• The appraisal report demonstrates that the improvements are typical for the market through an
analysis of at least one comparable property with the same use;
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o For Freddie Mac only- If a comparable sale with an accessory unit is not available, for
properties with legal land use and zoning, the appraiser may use a neighborhood
comparable without an accessory unit as long as the appraiser can justify and support such
use within the appraisal report
• The borrower qualifies for the mortgage without considering any rental income from the accessory
unit.
The following requirements should be met to define an additional living space as an acceptable accessory
unit:
• Be subordinate in size to the primary dwelling
• The kitchen, at minimum, must contain cabinets, a countertop, sink with running water, and a stove
or stove hookup (hotplates, microwaves, or toaster ovens are not acceptable substitutes)
o Note that a second kitchen does not by itself constitute an ADU. Other features of living,
sleeping and bathing area must be present.
o Likewise, the removal of a stove does not change the ADU classification. The presence of a
stove hookup is sufficient to classify as an ADU.
• The unit must have an entrance that does not require access through the primary dwelling though it
may include an access to the primary residence. However, it is not considered an ADU if it can only
be accessed through the primary dwelling or the area is open to the primary dwelling with no
expectation of privacy.
Considerations that may require the property to be appraised (Form 1025/72) and treated as multi-unit
properties include, but not limited to:
• Separately metered utilities
• Unique postal address
• Rent collection
• Size of the accessory-unit relative to the main structure
• Multi-unit zoning
ACCESSORY UNITS THAT DO NOT COMPLY WITH ZONING REQUIREMENTS
If it is determined that the property contains an accessory dwelling unit that does not comply with
zoning, the property is eligible under the following additional conditions:
• The lender confirms that the existence will not jeopardize any future property insurance claim
that might need to be filed for the property.
• The property is appraised based upon its current use.
• The appraisal must report that the improvements represent a use that does not comply with
zoning.
• The use conforms to the subject neighborhood and to the market. The appraisal report must
demonstrate that the improvements are typical for the market through an analysis of at least two
comparable properties that have the same non-compliant zoning use.
MANUFACTURED HOME AS AN ACCEPTABLE ACCESSORY UNIT
A manufactured home may be considered an acceptable accessory unit. In addition to the standard
requirement of an accessory unit, as listed above, the below requirements must be met:
• Primary residence must be a site-built property. It is not acceptable to have two manufactured
homes
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• Both single and multi-width manufactured homes are acceptable. Freddie Mac requires the unit
be at least 400 square feet
• The accessory unit must be legally classified as real property
• Land must be held in fee simple interest by the borrower
• The manufactured home must have been built in compliance with the Federal Manufactured
Home Construction and Safety Standards (established June 16,1976 as amended and in force
at the time the home was manufactured)
• The property is attached to a permanent foundation system in accordance with the
manufacturer’s requirements for anchoring, support, stability and maintenance
• The foundation system must be appropriate for the soil conditions for the site and meet local
and state codes
• It is encumbered by the mortgage with the primary dwelling and
• Additional requirements that appear in HUD regulations in 24 C.F.R. Part 3280 must be met
• Manufactured home accessory unit must be recorded on title as real property prior to closing or
at time of purchase.
• An appraisal is required to verify compliance with all manufactured home standards, regardless
of DU/LPA response offerings for an appraisal waiver
• The addition of or improvements to a manufactured home accessory unit are not eligible under
the Homestyle Renovation product.
No exceptions will be made to the above requirements
Appraisal Requirements for Manufactured Home Accessory Units
Compliance with these standards will be evidenced by photos of either the HUD Plate of HUD
Certification Label (or both) in the appraisal. If the original or alternative documentation cannot be
obtained for either the Data Plate/Compliance Certificate or HUD Certification Label, the loan is not
eligible.
The appraisal report for a one-unit property with a Manufactured Home accessory unit must include
the following:
• Demonstrate the unit is acceptably classified as an accessory unit
• Confirmation that the HUD Data Plate/Compliance Certificate is attached to the dwelling. If
not attached, the appraiser must provide the data source(s) for the HUD Data
Plate/Compliance Certificate information reported.
• Freddie Mac- Confirmation that the Wind, Roof Load and Thermal Zones meet the minimum
HUD requirements for the location of the subject property. If the unit does not meet these
requirements, the appraiser must address.
• Confirmation that the HUD Certification Label is attached to the exterior of each section of
the dwelling. If not attached, the appraiser must provide the data source(s) for the HUD
Certification Label information reported.
• Manufacturer’s Serial #(s)/VIN #(s)
• HUD Certification Label #(s)
• Manufacturer’s Name
• Trade/Model
• Date of Manufacture
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• Describe any additions or modifications made to the Manufactured Home (decks, rooms,
remodeling, etc.)
ADDITIONS WITHOUT PERMITS – FANNIE MAE
If the appraiser identifies an addition that does not have the required permit, the appraiser must comment
on the quality and appearance of the work and its impact, if any, on the market value of the subject
property.
ADDRESS DETERMINATION
Use the standardized (USPS address) but compare it to the legal description on Schedule A on the title
commitment. If the legal description’s city/township is different, use the legal city/township, but maintain the
street address portion provided by USPS.
• The appraiser must provide the legal address on an addendum
• For multi-unit properties, it is acceptable to use the legal street address.
• The city indicated on the appraisal can be either standardized or legal.
For condominiums and Planned Unit Developments that have a unique address, i.e., street number is
different for each unit), the unit number does not need to be included on the closing documents (e.g. note,
mortgage, etc., if the unit number is not part of the appraisal or purchase agreement and is referenced in
the legal description. If the unit number is part of the appraisal or purchase agreement and is referenced in
the legal description, the unit number must then be included on the closing documents.
by usezloan | Aug 12, 2021 | Financial study
융자지식185- VERBAL VOE REQUIREMENTS FOR HOURLY, SALARY, AND COMMISSION INCOME
VERBAL VOE REQUIREMENTS FOR HOURLY, SALARY, AND COMMISSION INCOME
• The broker/correspondent must independently obtain a phone number, and if possible, an address
for the borrower’s employee. This can be accomplished by using a telephone book, the internet or
directory assistance, or by contacting the applicable licensing bureau.
• The broker/correspondent must contact the employer, verbally or in writing, and confirm the
borrower’s current employment status within 10 days prior to the closing date. Alternatively, the
VVOE may be obtained after closing up to the time of funding/purchase of the loan. If the VVOE
cannot be obtained prior to funding/purchase, the loan is ineligible for delivery to Flagstar Bank.
• If the contact is made verbally, the conversation must be documented. It should include the name
and title of the person who confirmed the employment, the date of the call, and the source of the
phone number. The written documentation should also include the name and title of the person who
performed the verification for the broker/correspondent.
If a borrower is in the military, a Military Leave and Earnings Statement (LES) is acceptable in lieu of a
verbal VOE when dated within 30 days for Fannie Mae and 120 days for Freddie Mac of the Note date.
Because third party vendor databases are typically updated monthly, the verification must evidence that the
information in the vendor’s database was not more than 35 days old as of the note date.
VERBAL VERIFICATION OF EMPLOYMENT FOR SELF-EMPLOYED
The existence of the borrower’s business must be verified from a third party source. Acceptable third party
sources include the following:
• CPA, regulatory agency, or the applicable licensing bureau, if possible, or
• By verifying a phone listing and address for the borrower’s business using the internet or directory
assistance.
• The existence of the business must be documented within 120 days prior to the note date.
Alternatively, the VVOE may be obtained after closing up to the time of funding/purchase of the
loan. If the VVOE cannot be obtained prior to funding/purchase, the loan is ineligible for delivery to
Flagstar Bank.
by usezloan | Aug 12, 2021 | Financial study
융자지식184- VICTIMS OF TAXPAYER IDENTIFICATION THEFT
VICTIMS OF TAXPAYER IDENTIFICATION THEFT
When a borrower(s) is a victim of taxpayer identification theft, the following conditions must be met in order
to validate the borrower(s) income:
• Proof of identification theft as evidenced by one of the following:
o Proof of identification theft was reported to and received by the IRS (IRS form 14039)
o Copy of notification from the IRS alerting the taxpayer to possible identification theft
• Additionally, provide each of the following secondary documents (as applicable) to validate the
reported income on the tax returns in question:
o W-2 or 1099 transcripts which match the W-2 or 1099 income shown on the 1040s
o 1099 mortgage interest should match the reported interest on Schedule A or Schedule E
o 1099-G unemployment should match reported unemployment
o 1099-DIV and 1099-INT should match reported dividend and interest
o Validation of prior tax year(s) income (income for current year must be in line with prior
year(s)
The IRS has announced that criminals used taxpayer-specific data acquired from non-IRS sources to gain
unauthorized access to information on approximately 100,000 tax accounts through the IRS “Get
Transcript” application. Due to this breach, Flagstar Bank is unable to obtain the full tax transcripts for
taxpayers that may have been impacted. The Reject Code 10 is being used by the IRS “Income Verification
Express Service” (IVES) application when there is possible identity theft on the taxpayer’s account. In
cases where the IRS will not provide the transcripts to the vendor, the following documentation will be
acceptable in lieu of the tax transcripts.
TAX RETURNS ARE REQUIRED TO DOCUMENT INCOME
• Tax Transcripts indicating, due to limitations, the IRS cannot process the request, taxpayer will
receive a mailed notice. If any questions, call the IRS Customer Service at 800-829-1040; Note:
A “no record found” or “data mismatch” is not acceptable; and
• Copy of the signed tax returns (follow AUS for the number of years to obtain); and
• Bank statement or copy of check to evidence that the tax payment made or refund received for
each tax year matches the amount on the 1040; and
• Signed 4506-C for each required tax year.
W2 AND/OR 1099’S ARE REQUIRED TO DOCUMENT INCOME:
• Tax Transcripts indicating, due to limitations, the IRS cannot process the request, taxpayer will
receive a mailed notice. If any questions, call the IRS Customer Service at 800-829-1040; Note:
A “no record found” or “data mismatch” is not acceptable; and
• Copy of all W2’s (follow AUS for the number of years to obtain); and one of the following
o IRS Provided Transcripts mailed to the borrower and uploaded to Paperless File
Manager, or
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o Year End Paystub for each required with Year-to-Date earnings in line with W2’s, or
o Fully Executed Verification of Employment completed by employer with Year End
Figures in line with W2(s).
by usezloan | Aug 12, 2021 | Financial study
융자지식183- MOST RECENT YEAR TAX RETURN REQUIREMENTS
MOST RECENT YEAR TAX RETURN REQUIREMENTS
When tax returns are required to document income, the most recent year’s tax return is required. The most
recent tax return is defined as the last return scheduled to have been filed. For example:
If today’s date is… Then the Most recent Year’s Tax Return would be…
February 15, 2021 2019
April 15, 2021 2020
December 15, 2021 2020
FANNIE MAE
The following table describes which tax-related documentation to obtain depending on the application
date and disbursement date of the mortgage loan.
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Application Date Disbursement Date Documentation Required
October 15, [current year
minus 1] to April 14, current
year
October 15 [current year minus 1] to
April 14, current year
The most recent year’s tax return is
required. The use of a Tax Extension
(IRS Form 4868) is not permitted.
April 14, current year to June 30,
current year
If the borrower has not filed his or her
return with the IRS for the previous
year the borrower must provide the tax
returns for the prior two years (2017
and 2018). Tax Transcripts for 2019 to
show – “No Record on file”
Completed and signed – 4506–C for
tax years provided by the borrower.
July 1, current year to October 14,
current year
• The most recent year’s tax return,
OR all of the following:
• A copy of IRS Form 4868
(Application for Automatic
Extension of Time to File U.S.
Individual Income Tax Return) filed
with the IRS,
• The underwriter must review the
total tax liability reported on IRS
Form 4868 and compare it with the
borrower’s tax liability from the
previous two years as a measure
of income source stability and
continuance. An estimated tax
liability that is inconsistent with
previous years may make it
necessary for the lender to require
the current returns in order to
proceed.
• Tax Transcripts confirming “No
Transcripts Available” for the
applicable tax year, and
• Returns for the prior two years
April 15, current year to
October 14, current year
April 15, current year to December 31,
current year
January 1, [current year plus 1] to April
14, [current year plus 1]
The most recent year’s tax return is
required. The use of a Tax Extension
(IRS Form 4868) is not permitted.
FREDDIE MAC
The following table describes which tax-related documentation to obtain, for Freddie Mac (LPA) on the
application date and disbursement date of the mortgage loan.
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Application Date Note Date Documentation Required
Prior to April 15 of the
current year
Before May 31 of the current
year
The most recent year’s tax return is required. The
use of a Tax Extension (IRS Form 4868) is not
permitted.
On or After April 15 of
current year
Prior to May 31 of the current
year
• The most recent year’s tax return
OR all of the following:
• A copy of IRS Form 4868 (Application for
Automatic Extension of Time to File U.S.
Individual Income Tax Return) filed with the
IRS,
• Review of self-employed income stability (see
below),
• IRS Form 4506–C transcripts confirming “No
Transcripts Available” for the applicable tax
year, and
• Returns for the last one or two years, as
required
All On or After May 31 through
October 14 of the current year
All On or After October 15 of the
current year*
The most recent year’s tax return is required. The
use of a Tax Extension (IRS Form 4868) is not
permitted.
*Flagstar will require the most recent tax returns (e.g. 2020) for Freddie Mac (LPA) loans with a Note date on or
after October 15th.
Self-Employed Stability When Tax Returns Are Older- Freddie Mac
If the Borrower’s federal individual and/or business income tax returns for the most recent calendar
year are not available (e.g., Borrower and/or Borrower’s business filed an IRS extension or tax
returns are not yet filed with the IRS), additional documentation must be provided to document
income stability.
Examples of factors and documentation to consider when using older tax returns to determine
continued income stability include, but are not limited to, the following:
• Business review and analysis of current business activity through a review of the most
recent financial statement(s) that cover the period since the last tax return filing(s)
• Business review and analysis of current business activity through a review of at least the
most recent three months of business bank statements
• Signed IRS Form 941, Employer’s Quarterly Federal Tax Return, for the prior calendar year
and current calendar year quarter(s) that supports wages and other compensation
documented on the most recent business tax return
• Review of tax liability reported with IRS tax filing extension(s) (e.g., IRS Form 4868, IRS
Form 7004) to determine consistency with tax liability reported on prior year(s) tax return(s)
• Review of W-2s, 1099s and/or K-1s from the most recent calendar year, if available
If the continued stability of the income cannot be determined, then the Borrower’s federal individual
and/or business income tax returns from the most recent calendar year may need to be obtained to
make the determination.
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EXCEPTION FOR FISCAL BUSINESS RETURNS
When business tax returns are required, if the borrower’s business uses a fiscal year (a year ending on
the last day of any month except December), the lender may adjust the dates in the above tables to
determine what year(s) of business tax returns are required in relation to the application
date/disbursement date of the new mortgage loan.
by usezloan | Aug 12, 2021 | Financial study
융자지식182- 4506-C REQUIREMENTS
4506-C REQUIREMENTS
A signed, executed 4506-C is to be obtained at time of underwriting and at closing for all loans. The
borrower must sign an additional form 4506-C for each partnership or corporation, prior to closing and it
must state such on the form (i.e. John Smith, owner of XYZ Corporation or Partnership). IRS form 4506-C
is only valid for a specific limited time. Refer to Flagstar Bank Loan Requirements, for execution
requirements.
4506-C REQUIREMENTS
A signed, executed 4506-C is to be obtained at time of underwriting and at closing for all loans. The
borrower must sign an additional form 4506-C for each partnership or corporation, prior to closing and it
must state such on the form (i.e. John Smith, owner of XYZ Corporation or Partnership). IRS form 4506-C
is only valid for a specific limited time. Refer to Flagstar Bank Loan Requirements, for execution
requirements.
TAX TRANSCRIPTS
Applicable Tax transcripts will be required for the following income types:
• Self-Employed
• Rental Income documented on Schedule E
• Employed by family
• Fixed income types such as disability, social security, retirement, child support, alimony, etc., when
the 1040’s are obtained in lieu of alternative documentation e.g., award letter, 1099, bank
statements, etc.
• Hand written income documentation
• Specific products may require transcripts regardless of income type (e.g. Second Mortgage).
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When the tax transcripts reflect Schedule C, K-1s, and/or Schedule E – Supplemental Income and Loss
(such as from rental income), the file must be documented according to the following:
• When the tax transcriptions reflect self-employed income and it is not needed to qualify, a copy of
the tax returns, and schedules will only be required if the income is from Schedule E.
o It is not required to account for self-employment loss when the borrower is qualified using
only income that is not derived from self-employment and self-employment is a secondary
and separate source of income (or loss). Examples of income not derived from selfemployment include salary and retirement income.
When tax returns are used to document income, each tax return must be signed by the borrower unless the
file contains the IRS transcripts for each tax return used.
If income is less in 2020, than in 2019 we will use 2020 figures regardless of the tax transcripts. If the
income from 2020 is needed to qualify, the 2020 tax transcripts will be required.
A non-U.S. citizen borrower who is exempt from filing federal income tax returns due to being employed in
the United States in an official capacity, i.e. diplomat, may have income verified by obtaining either a
Verification of Employment form (Form 1005), or a letter from an official of the foreign government which
documents the borrower’s previous two years of earning, comments on the probability of his or her
continued employment and provides the borrower’s current earning statement.
Review the tables below to determine the transcript documentation requirements.
Income Type Transcripts
Require
Self-Employed 1040
Rental Income Documented on Schedule E 1040
Employed by Family 1040
Fixed Income documented with tax returns (1040’s) 1040
Fixed Income documented with award letter, 1099, bank statement, etc. None
W2 Wage Earner (unless handwritten income documentation then the W2
transcript(s) is required. None
Other Income documented with tax returns (1040’s) – e.g. Dividend & Interest,
Note Receivable Income, etc. 1040
Applicable Tax transcripts will be required for the following income types:
• Self-Employed
• Rental Income documented on Schedule E
• Employed by family
• Fixed income types such as disability, social security, retirement, child support, alimony, etc., when
the 1040’s are obtained in lieu of alternative documentation e.g., award letter, 1099, bank
statements, etc.
• Hand written income documentation
• Specific products may require transcripts regardless of income type (e.g. Second Mortgage).
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When the tax transcripts reflect Schedule C, K-1s, and/or Schedule E – Supplemental Income and Loss
(such as from rental income), the file must be documented according to the following:
• When the tax transcriptions reflect self-employed income and it is not needed to qualify, a copy of
the tax returns, and schedules will only be required if the income is from Schedule E.
o It is not required to account for self-employment loss when the borrower is qualified using
only income that is not derived from self-employment and self-employment is a secondary
and separate source of income (or loss). Examples of income not derived from selfemployment include salary and retirement income.
When tax returns are used to document income, each tax return must be signed by the borrower unless the
file contains the IRS transcripts for each tax return used.
If income is less in 2020, than in 2019 we will use 2020 figures regardless of the tax transcripts. If the
income from 2020 is needed to qualify, the 2020 tax transcripts will be required.
A non-U.S. citizen borrower who is exempt from filing federal income tax returns due to being employed in
the United States in an official capacity, i.e. diplomat, may have income verified by obtaining either a
Verification of Employment form (Form 1005), or a letter from an official of the foreign government which
documents the borrower’s previous two years of earning, comments on the probability of his or her
continued employment and provides the borrower’s current earning statement.
Review the tables below to determine the transcript documentation requirements.
Income Type Transcripts
Require
Self-Employed 1040
Rental Income Documented on Schedule E 1040
Employed by Family 1040
Fixed Income documented with tax returns (1040’s) 1040
Fixed Income documented with award letter, 1099, bank statement, etc. None
W2 Wage Earner (unless handwritten income documentation then the W2
transcript(s) is required. None
Other Income documented with tax returns (1040’s) – e.g. Dividend & Interest,
Note Receivable Income, etc. 1040
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