A. Blind Trusts

Blind trusts are not eligible for financing. A blind trust is an arrangement where financial holdings of a person are placed in the control of a fiduciary, typically to avoid a conflict of interest. Therefore, someone other than the borrower has control over the trust assets.

B. Life Estates

Life estates are not eligible for financing due to marketability issues in the event of a foreclosure. A life estate is an estate whose duration is limited to the life of the party holding it, or some other person, upon whose death the right reverts to the grantor or his heirs.

C. Unacceptable Titles

Title may not be taken in the name of:

  • Revocable trust (including Living Trusts)
  • Irrevocable trust
  • A corporation
  • Any type of partnership
  • An individual on behalf of a corporation or partnership or trust
  • A church

D. Executing Documents as Trustee

Not allowed, since AmMAC will not make loans secured by property in a trust of any kind.

E. Power of Attorney

Use of a Power of Attorney—whether general or specific—is not allowed.

F. Co-Borrower

Requirements

Co-Borrowers are allowed on most AmMAC Wholesale Lending programs subject to the following requirements:

The Co-Borrower must sign the application and the mortgage note. Co-Borrowers do not have to sign the mortgage security instrument unless they take title to the property.

All Co-Borrowers don’t have to be titleholders, but anyone on title, MUST either be a borrower or co-borrower on the loan, or else execute the Security Instrument and all Riders, Truth-In-Lending Disclosure, Itemization of Amount Financed, Notice of Right to Cancel (if applicable), Errors and Omissions/Compliance Agreement, Occupancy Statement, and Financial Status Affidavit, in order to pledge their interest in the property to secure repayment of AmMAC’s loan.

The submission file must include a credit package on the Co-Borrower.

Adding someone to a mortgage note who does not have a relationship with the Borrower and who has a financial interest in the loan being closed (Realtor, Seller, Broker) is not allowed.

Qualifying ratios must comply with the program requested

Occupancy

The Co-Borrower is required to occupy the subject property as his/her primary residence.

Cash Equity

Minimum cash equity of 20% of the purchase price must be provided by the occupant Borrower. See Down Payment for further details.

G. Non-Borrowing Spouse/Partner or Non-Borrowing Titleholder

Definition

A married applicant, registered domestic partner or member of a civil union may individually purchase or refinance property. The spouse/partner of the applicant is not involved in the transaction and is therefore a "non-borrowing spouse/partner". Similarly, one or more individuals may be on title to the subject property but not be a borrower in the transaction. They would be a non-borrowing titleholder. Non-borrowing spouses or titleholders are still required to sign any and all documents necessary to pledge their interest in the property towards repayment of AmMAC’s loan. See below for requirements regarding signing the security instrument and other documents.

Valid Security

A non-borrowing spouse/partner or non-borrowing titleholder, is not required to sign the note. To ensure a valid security interest, however, they must sign the security instrument or any other document required to waive dower/curtesy or homestead rights (as applicable). Whenever a non-borrowing spouse or titleholder is required to sign the security instrument, they must also execute any and all riders to the security instrument, the Truth-In-Lending disclosure, Notice of Right to Cancel (if applicable), Itemization of Amount Financed, Errors and Omissions/Compliance Agreement, Occupancy Statement, and Financial Status Affidavit.

Alternative to Signature

As an alternative to requiring the signature of a non-borrowing spouse/partner, an affirmative statement from the title company on the title policy stating that "the lack of spouse's (partner's) signature will not affect the enforceability and validity of the lien" is acceptable. This option is not available to a non-borrowing titleholder.

Relieving Liability

If the non-borrowing spouse/partner or non-borrowing titleholder is concerned that signing the mortgage/deed of trust makes him/her liable for repayment of the loan, the following statement may be added above the signature on the mortgage/deed of trust:

"I, (name of non-borrowing spouse/partner or non-borrowing titleholder), am executing this Mortgage/Deed of Trust solely to subject the property herein to the lien of this Mortgage/Deed of Trust. I am undertaking no personal responsibility for the payment of the debt secured hereby."

H. Divorced or Separated Borrowers

Borrowers Who Are Divorced, former Registered Domestic Partners or former members of a Civil Union

The Borrower’s marital status is not considered to be a risk factor and does not enter into the underwriting decision. However, the division of assets, assignment of liabilities, or receipt of income are risk factors that may arise as the result of a divorce or dissolution of a registered domestic partnership, civil union.

A copy of the court decree will generally be required in the following circumstances:

To verify the division of assets and liabilities in divorce or dissolution situations.

To verify the receipt or payment of child support, alimony or separate maintenance income that the Borrower disclosed on the application.

Borrowers Who Are Separated

When the Borrower indicates on the Loan application that (s)he is separated, the Underwriter should confirm if the Borrower is legally separated.

If the Borrower states there are no plans for a legal separation, no further documentation is necessary. The Borrower is legally married, so all joint assets and joint debts are the Borrower's.

If the Borrower is legally separated, the Underwriter should obtain a copy of the legal separation agreement to determine the division of assets and liabilities and potential obligations. If there is no legal separation, a letter from the attorneys of both parties involved should specify the proposed settlement terms.

If no documentation can be obtained to verify the division of assets and liabilities, the Loan will be considered an unacceptable risk.Bottom of Form

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I. Multiple Loans to One Borrower

The following guidelines apply to the number of 1-4 unit properties financed with AmMAC and all other lenders. All financed 1- 4 unit properties for all Borrowers on the transaction must be included in the total. The maximum number of properties a borrower can own overall, is limited to 10 (including any financed).

Occupancy Type - AmMAC Loan

Total # financed with all lenders including AmMAC

Primary

4 (including primary)

2nd Home

4 (including primary)

Investment

Investment Properties are not allowed as AmMAC collateral, but properties financed with other lenders may be Investment properties. Max # financed (including AmMAC property) is still 4. AmMAC limits the total number of personally held rental units to four (4) units total—whether in a single property or a combination of properties. Borrowers with more than 4 units of personally held rental property are not eligible for financing with AmMAC.

J. Social Security Number

Each borrower on the loan transaction must have a valid Social Security number.Top of Form

K. Non-US Citizen Borrowers

AmMAC does not lend to non-US citizen borrowers, including:

  • Permanent Resident Aliens
  • Non-Permanent Resident Aliens
  • Foreign Nationals