Wholesale ALERT – Updates for Arc Access DSCR and USDA

Arc Home is excited to announce guideline and eligibility updates to the Arc Access Non-QM Debt Service Coverage Ratio (DSCR) program, effective for new loans registered on or after September 27, 2023.

Highlights

·        Improved Purchase transaction eligibility to allow loan amount up to $3,000,000 with 700 credit score and 1.0 DSCR

·        Increased maximum LTV/CLTV for Cash-Out transactions to 75% for 1-unit properties

·        Reduced credit event seasoning to 36 months for bankruptcy, foreclosure, and short sale

Please review the Access NQM & Elite QM Update Summary for a side-by-side comparison of all current Access DSCR eligibility and guideline revisions, which will be available HERE soon. As a reminder, this summary document is intended to highlight the updates only; please refer to the Arc Selling Guide and product matrix for complete Arc Access DSCR program guidelines.

The updated program matrix will be published on the website (HERE) soon. As a reminder, the Arc Selling Guide for Access and Elite is available within the SPARC 2.0 portal (HERE).

As a result of the rural area review process, a new ineligible area map for Rural Development Single Family Housing (SFH) will be available on the USDA Income and Property Eligibility website (HERE) on October 1, 2023. The current map will be moved to the “Previous Eligible Areas” tab.

On October 1, 2023, all properties for new USDA Single Family Housing applications must be located in an eligible rural area based on the new eligibility map. However, a property that is located in an area being changed from rural to non-rural may be approved if ALL of the following conditions are met:

·        Application is dated and received prior to October 1, 2023 AND the Loan Estimate was issued within three (3) days of application receipt.

·        The borrower has a signed/ratified sales contract on an eligible USDA property that is dated prior to October 1, 2023.

·        The borrower meets all other USDA loan eligibility requirements.

If the property is located in an area being changed from rural to non-rural, the following documentation must be provided to USDA, in addition to all other required documentation:

·        Copy of the signed/ratified and dated sales contract,

·        Copy of the Loan Estimate issued to the borrower, and

·        Verification the property was located in an eligible rural area prior to October 1, 2023. A printout of the map indicating the property address was previously eligible is acceptable. Note: Maps of the “Previous Eligible Areas” (eligibility maps prior to October 1, 2023) will be available on the USDA website (HERE).

The Guaranteed Underwriting System (GUS) recommendation will display an INELIGIBLE property determination for properties no longer located in an eligible rural area after the map update on October 1, 2023. Provided all requirements noted above are met and documented within the loan, Arc Home will override the property eligibility determination and complete the final submission to USDA.

The USDA eAuthentication Service is partnering with Login.gov to launch a new login page for secure online access to USDA programs and services. Login.gov is a government service that will require users to set up at least one authentication method to keep the account secure with an added layer of protection (i.e., multi-factor authentication). The transition to Login.gov is being implemented as a phased approach but is available as a sign-in option on the eAuth login page today. The use of Login.gov is optional for existing eAuth account holders during the initial phase, but users are encouraged to begin using the new platform when accessing USDA applications as soon as possible, as all eAuth customer accounts will transition to Login.gov at a future date.

Review the USDA Bulletin for the Login.gov account creation requirements and complete details regarding this security enhancement.