* Exceptions will NOT be considered for any Arc Elite, Conventional Investment, FNMA/FHLMC Second Home & Investment, and/or Jumbo loans. *

** The exception form is located below the exception restrictions, please review the restrictions and continue to the bottom of the page. **

Arc Access Non-QM Exception Restrictions

At this time, Arc Home will not consider exceptions submitted for Arc Access Non-QM transactions when any of the items noted below are present.

Acreage

  • Subject property acreage is more than 10 acres over the program maximum

Asset Utilization

  • No exceptions will be permitted for the use of business funds on the Asset Utilization product

Borrower Residency

  • Request to validate borrower residency status (permanent or non-permanent resident alien, etc.) with documentation that does not meet guideline requirements and/or is expired
  • Borrower (U.S. Citizen, permanent or non-permanent resident alien) does not have a valid and verifiable legal address within the U.S.
  • No exceptions will be considered for a borrower residency status that does not meet guideline requirements

Cash-Out Seasoning

  • No exceptions will be considered for waiving the 12-month seasoning required between cash-out transactions (non-court ordered)

Conflict of Interest

  • Personal transactions for owner/principal of mortgage brokerage or correspondent lender originated within own company

Credit Score

  • No credit score exception requests will be considered for a cash-out refinance transaction
  • Payment shock exceeds guideline limits and credit score exception greater than 5 points
  • Any credit score exception and close to program maximums for 2+ items (such as DTI, cash-out, reserves, etc.)
  • Credit score exception greater than 10 points

Debt-to-Income (DTI)

  • No DTI exceptions permitted

Debt Service Coverage Ratio (DSCR)

  • Request for any exception on a cash-out transaction will not be considered
  • No exception will be considered for the use of gift funds or gift of equity

Derogatory Credit

  • No derogatory credit exceptions will be considered

Escrows (Impound Accounts)

  • Request for waiver of escrows outside of program guidelines

First Time Home Buyer

  • Credit score exception greater than 5 points
  • Request includes more than a single exception
  • Requested income source is Asset Utilization
  • Requested exception does not include compensating factors
  • No exceptions will be permitted for FTHB housing history verification

Housing Payment History

  • Request to allow more than 2x30 or 1x90 within the last 12 months

Income

  • No exceptions permitted for use of business income when borrower has been self-employed for less than 20 months

Loan Amount

  • Requested loan amount exception greater than 105% of maximum loan amount and/or final loan amount exceeds $1.5mm

Loan-to-Value (LTV)

  • Requested LTV exception greater than 5% over guidelines without compensating factors
  • Requested rural property LTV exception greater than 5% and/or rural property LTV exceeds 75%

Mixed-Use Properties

  • Subject property is outside of acceptable Fannie Mae mixed-use guidelines (SFR with office/business)

Multiple Exceptions

  • Request includes multiple exceptions and exception items are not close to program requirements (multiple exceptions considered only when exception items are very close to requirements – 2 points from FICO, 2% from LTV, 1% from DTI)
  • Request includes multiple exceptions and credit score exception greater than 10 points
  • Request includes multiple exceptions and does not have one of the following:
  • LTV less than 10% of maximum and loan amount less than maximum
  • Borrower has more than 5 months additional reserves (own funds)

NSF/Overdrafts

  • No NSF/overdraft exceptions permitted

Non-Occupant Co-Borrower

  • No exceptions considered for alternative income documentation for a non-occupant co-borrower

Property Flipping

  • Purchase transaction in which the seller has not owned subject for at least six (6) months (180 days from Seller’s acquisition date to Buyer’s date of sales contract) and the transaction does not meet an approved scenario to proceed (acquired from GSE, inheritance, relocation, etc.)

Reserves

  • Exception to waive more than two (2) months reserves for programs that require at least 12 months of reserves
  • Exception to waive reserves for programs that require six (6) months of reserves or less

Rural Properties

  • Requested LTV exceeds 75% for a rural property
  • Requested LTV exception greater than 5% for a rural property

Fields marked with asterisk (*) are mandatory