Agency Conforming Arm Product

Eligibility Guidelines

DESCRIPTION

The Conventional Conforming LIBOR ARM product is an adjustable rate loan tied to the average rate for 1 year U.S. dollar denominated deposits in London markets based on quotations of major banks, AKA London Interbank Offered Rate (LIBOR). Trinity offers ARM products that provides for an initial fixed-rate period of 3, 5, 7, and 10 years with annual interest rate and payment adjustments thereafter.

AVAILABLE MARKETS

Available in all states

LOAN TERM

30 Years: 3/1, 5/1, 7/1 and 10/1 LIBOR ARM

OCCUPANCY

Primary Residence
Second Home
Investment Property (excluding Co-ops)

ELIGIBLE PROPERTIES

1-2 Unit (including Condominiums, PUDs, and Co-ops)
2-4 Unit

MAXIMUM LOAN AMOUNT

The maximum loan amount is the Fannie Mae or Freddie Mac maximum Conforming loan amount.
Refer to the Agency Jumbo Program and Product Descriptions for Agency Jumbo loan sizes and parameters.

DOCUMENTATION PROCESSES

Fannie Mae Desktop Underwriter (DU)
Freddie Mac Loan Prospector (LP)

SUBORDINATE FINANCING

This product is eligible for subordinate financing.

PRIVATE MORTGAGE INSURANCE

The LTV reflected here is for MI purposes only. Refer to the appropriate LTV matrix for the maximum LTV that applies to the occupancy and process selected.

LTV Required Coverage:

95.01 to 97% 1 unit 35%
90.01 to 95% 1-2 Unit & Co-ops 30%
85.01 to 90% 1-2 Unit & Co-ops 25%
80.01 to 85% 1-2 Unit & Co-ops 12%

Trinity does not permit Reduced MI, Lower Cost MI, Custom MI, or minimum coverage levels that require a loan level price adjustment, regardless of what is contained in the AUS findings.
Financed MI is not permitted.

QUALIFYING RATE

Product Qualifying Rate
3/1 LIBOR Greater of Fully Indexed Rate or Note Rate + 2%
5/1 LIBOR Greater of Fully Indexed Rate or Note Rate + 2%
7/1 & 10/1 LIBOR Note Rate

Minimum FICO of 680 for self-employed is required for buy down option if the loan is manually underwritten.

IRS FORM 4506T

A signed 4506-T is required on all loans, regardless of income type salary, self employed, social security, etc. All borrowers must sign this form at application and again at closing. Alternative forms are not permitted.

NOTE RATE LIMITATIONS

3/1 & 5/1 LIBOR: Note rates may not be lower than 2% below the fully indexed rate. 7/1 & 10/1 LIBOR: Note rates may not be lower than 3% below the fully indexed rate.

CONVERTIBILITY

Product Convertibility Feature
3/1, 5/1*, 7/1 and 10/1 LIBOR
The conversion option can only be exercised on the first, second or third interest adjustment.
*5/1: Convertible with 2/2/5 caps only; not convertible with 5/2/5 caps.

ASSUMABILITY

3/1 LIBOR ARM Assumable anytime unless the conversion option is exercised at which time the loan becomes non-assumable.
5/1, 7/1 and 10/1 LIBOR ARM
Assumable anytime after the initial fixed interest rate period unless the conversion option is exercised at which time the loan becomes nonassumable.

INTEREST RATE ADJUSTMENTS

Interest Rate Caps and Margins
Product Interest Rate Caps First Subsequent Life Margin
3/1 LIBOR ARM 2% 2% 6% 2.250%
5/1 LIBOR ARM 2% 2% 5% 2.250%
5/1, 7/1 and 10/1 LIBOR 5% 2% 5% 2.250%
Note: Refer to the Daily Rate Sheet to confirm price adjustments as applicable.
First Adjustment Cap - At the first adjustment, the interest rate cannot be increased or decreased above or below the loan's initial interest more than the percentage listed in the table above.
Subsequent Adjustment Cap - At each subsequent adjustment, the interest rate cannot be increased or decreased above or below the loan's interest rate for the preceding 12 months more than the percentage listed in the table above.
Life Adjustment Cap - The maximum rate payable over the life of the loan is the loan's initial interest plus the percentage listed in the table above.
Floor - Over the life of the loan, the interest rate can never be lower than the margin.
Interest Rate and Payment Change Dates
The interest rate and payment adjusts every 12 months following the initial fixed rate period.

Index

The Index is the average of interbank offered rates for one-year U.S. dollar-denominated deposits in the London market (LIBOR), as published in The Wall Street Journal.