Private lender credit standards
A bank statement loan qualifies a self-employed borrower from deposits rather than tax returns. How many months are required, how the expense factor is calculated, and whether personal or business accounts are accepted differ by lender.
All Carrington Correspondent credit standards →
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Alternative Income Documentation Types Include • 1 Year Documentation (W-2 or Tax Return) • 12 or 24-Months Business or Personal Bank Statements • 1 or 2-Years IRS Form 1099 or Profit and Loss Statements • Written Verification of Employment •
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
History Mortgage payments not reflected on the original credit report must be documented via an institutional Verification of Mortgage (VOM). VOMs from servicers and LLCs are considered institutional. Rental payments must be documented via a Verification of Rent (VOR). A combined total of all late mortgage and rental payments in the past 12 months must be used to determine the housing history for all borrowers. Twelve (12) months of cancelled checks or bank statements must be obtained when: • the borrower is making rental payments to an interested party, or • the borrower is making mortgage payments to an individual or an interested party. A VOR/VOM is not required but may be requested for clarification. All mortgages and rental payments should be current at time of closing. If the credit report or VOR/VOM reflects a past-due status, updated documentation is required to verify account is current. Borrowers with no housing history or less than 12 months housing history are permitted. Refer to Carrington Flexible Advantage Underwriting Guidelines for full details.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Asset Conversion Borrowers must have the lesser of (a) 1.5 times the loan balance or (b) $1mm in qualified assets, both of which must be net of down payment, loan costs and required reserves to qualify. Qualified Assets can be comprised of stocks, bonds, mutual funds, vested amount of retirement accounts and bank accounts. If a portion of the qualified assets are being used for down payment, closing costs, or reserves, those amounts must be excluded from the balance before analyzing a portfolio for income determination. Please note: Restricted stock accounts are not considered qualified assets and are not eligible. The following assets are considered Qualified Assets and can be utilized to calculate income: • 100% of checking, savings, and money market accounts • 100% of the remaining value of stocks & bonds, less any margin balance • 70% of retirement assets • 100% Cash Value of Life Insurance • 3-month seasoning of assets required The following assets are not permitted: • Funds in Foreign Banks Asset Conversion is an Alternative Income Documentation type and may be used as standalone income or with other income types. Bank Statement Documentation used to calculate self-employment income may not be included in the Asset Conversion calculation. The income calculation is as follows: Monthly Income = Net Qualified Assets / 60 Months. Refer to Carrington Prime Advantage Underwriting Guidelines for additional information.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Limited Tradelines Primary Residence and Second Homes only. Not permitted on Investment Properties. No minimum tradeline requirements when limited tradeline requirements are met. If the borrower does not meet the requirements for Standard Tradelines but still has a valid credit score, he or she may qualify under Limited Tradelines. The following requirements apply when qualifying with Limited Tradelines: • Primary residence and second homes only • 10% minimum borrower contribution • Minimum 6-months reserves after closing • Full documentation of income (Bank Statement Documentation not allowed) When qualifying with Limited Tradelines, the lower of either the Representative Loan Score or a 580 score is used to qualify the borrower on the Non-Prime Matrix. The loan may be priced using the actual Representative Loan Score.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Non-Salaried Two years documentation and evidence of at least 3 year continuance is required. Retirement Income requires a copy of the award letter and most recent 1099's OR 3-months consecutive bank statements showing receipt of the income. Social Security income can be taxed up 25% or an amount that is prudent based on federal tax levels but not to exceed 25%. Documentation is required to show the income is non-taxable. Alimony and child support must be received at least 6-months to be used for qualifying.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Documentation Borrowers with self-employment earnings may submit 12- or 24-months Profit and Loss (P&L) statements. The following restrictions apply: • Borrowers must be self-employed for at least two (2) years verified by two (2) years of business licenses or a CPA letter. • Business must be in existence for at least two (2) years. • Foreign Nationals are ineligible. Exceptions are not permitted. • Documentation must be provided to show the borrower’s percentage of business ownership. Qualifying income will be multiplied by the percentage of profits that the borrower is entitled to. • Standard Trade Lines are required. • IRS form 4506-C is not required for income documented with profit and loss statements. • The borrower or tax preparer must provide a signed letter of explanation describing the nature of the business, how income is generated, and how long the business has been in existence. • Multiple businesses are permitted, P&L statements must be supplied for each business and each business must have been in existence for at least two (2) years. • Evidence of a decline in earnings will require additional evaluation by the underwriter and may result in disqualification • Profit and Loss statements must be provided for the most recent 12 or 24 months, refer to CFA+ Guidelines for full details. • Bank statements covering the most recent 2 months are required when the qualifying FICO is <600 or evidence of the business can’t be validated. Validation may be supported by a business license, internet search, or acceptable 3rd party verification. The bank statement deposits must support 80% of the monthly average revenue from the P&L. If the most recent 2 months bank statements do not support 80% of the monthly average, continuous bank statements may be added to the analysis until the tolerance is met.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 05/13/26 9.7 • Revised Credit Score Requirements to add No Score Alternative. • Revised Seller Contributions requirements. 05/04/26 9.6 • Updated Vesting in the Name of a Business Entity to include acceptable business purposes. • Updated Credit Report to include Undisclosed Debt Monitoring (UDM) report as an option is required within 14 calendar days of closing. • Updated Bank Statement Documentation to state a change in the legal structure, name, or tax ID number of a business is acceptable when the business activities are substantially the same before and after the change. • Updated Bank Statement Documentation to modify the Option 1 Default Expense Factor and Option 2: Third-Party Prepared Expense Statement. • Updated 1099 Income Documentation to state a change in the legal structure, name, or tax ID number of a business is acceptable when the business activities are substantially the same before and after the change and removed Option 2: Third-Party Prepared Expense Statement. • Updated Profit & Loss Income Documentation to include a requirement for bank statements and calculating qualifying income cannot be lower than 20% expense floor. • Updated Asset Conversion to remove margined accounts. • Updated Employment by a Relative to state that if a borrower is employed by a relative, and the relative is also a borrower on the loan, the relative that owns the business may not use alternate income documentation for qualifying. • Updated Self-Employed Income to state a change in the legal structure, name, or tax ID number of a business is acceptable when the business activities are substantially the same before and after the change. • Updated Ineligible Sources of Assets to state deposits to traditional bank accounts that are sourced to liquidations of virtual currency are acceptable. The crypto wallet must be sourced to the borrower or to an acceptable gift donor and otherwise meet the requirements for gift funds. • Updated Land Value and Acreage to include all occupancy types. • Updated HOA Certification Review to state new condos must be Fannie Mae PERS approved or reviewed as a non-warrantable condo project.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 04/02/26 9.5 • Revised Asset Documentation to add Asset statements or asset verification reports obtained directly by CMS from a third-party asset verification service. • Revised Business Bank Statements to add requirements for third-party asset verification for income and add transaction history printouts from the borrower are not acceptable. • Updated Ineligible Property Types to add “Group homes or boarding houses, including convalescent and/or healthcare homes, Nursing homes, Adult care centers.” 12/09/25 9.4 • Revised Ineligible Property Types to list Non-Warrantable Condominiums (case-by case exceptions). • Revised Self-Employed Income > Sole Proprietorship to remove the Balance Sheet requirement to align with other CMS Non-QM guidelines. 10/02/25 9.3 • Revised Cash-Out Letter of Explanation Required requirements. • Revised 1099 Income Documentation requirements. • Revised Calculating Qualifying Income requirements. • Updated Interest-Only Qualifying Payment to add 40 year loans. • Revised Ineligible Property Types to remove Rural Properties. • Updated Appraisal Review Process requirements for Second Full Appraisal to increase loan amount to $2M. • Revised Land Value and Acreage to 5 acres. • Added requirements for Declining Market Values. • Updated requirements for Rural Properties to make them eligible on a case by case basis. 06/10/25 9.2 Added Escrow Waivers requirements. 05/05/25 9.1 • Revised Requirements for P&L Documentation to add requirements: 1) tax preparer or CPA must have prepared the borrower’s most recent tax returns, 2) Underwriter must research (i.e. Google Search) the tax preparer/CPA and tax preparer/CPA Company and the search results must be documented, and 3) Underwriter must perform a 100% reverification of the P&L statement and/or CPA letter utilizing the phone number or email from the underwriter research. • 5/20/25 - Made correction to remove Hobby Farms from Ineligible Property Types. 04/16/25 9.0 • Revised Vesting to add Limited Liability Company (LLC) for Flexible Advantage Plus Program only • Revised Ineligible Borrowers to clarify Limited Liability Company (LLC) is ineligible for Flexible Advantage Program only • Revised Credit Report > Age of Credit Report / Credit Documentation to 120 days (was 90) • Revised Age of Loan Documentation requirements. • Revised Asset Documentation to 120 days (was 90) • Added Written Verification of Employment Alternative Income Documentation requirements • Revised Gifts of Equity to add For ITIN borrowers using a gift of equity, a 5% LTV reduction is required in lieu of using cash out LTVs • Revised Uniform Residential Appraisal Report (URAR) to remove FNMA form 1004MC requirement • Revised Market Analysis > Property Values within Market Area to remove FNMA form 1004MC requirement
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 01/06/25 8.9 • Updated Individual Taxpayer Identification Number (ITIN) Borrower requirements for foreign driver’s license. 09/04/24 8.8 • Revised First Time Investor to add 36-month period for CFA+. • Added CPA General Requirements. • Revised Asset Conversion to remove funds in business accounts as not permitted and updated Income documentation type requirements. • Revised Concessions and Contributions to reflect investment property transactions, the property seller and/or interested parties may contribute up to 4% (was 2%). • Revised Gift Funds to remove gift funds as ineligible for investment property transactions. • Revised Gifts of Equity to add requirements for primary residence and investment property transactions. 05/28/24 8.7 • Removed Exhibit A – Tier 3 Zip Codes • Revised Gift Funds to refer to Reserves section. • Revised Rural Properties to remove Tier 3 Markets requirements. 04/11/24 8.6 • Added Individual Taxpayer Identification Number (ITIN) Borrower requirements. 03/15/24 8.5 • Revised Texas Section 50(a)(6) General Requirements to add Alternative Documentation of income allowed. • Revised Expanded Ratio to require Credit Score ≥ 620 (was 640). 02/07/24 8.4 • Revised Personal Bank Statements to reflect verification completed within 10 business days (was calendar days). • Revised Sole Proprietorship, Partnerships, Corporations and S Corporations to reflect verification completed within 10 business days (was calendar days). • Revised Ineligible Property Types to add Barn conversions or Barndominiums. • Revised Accessory Units requirements for rental income. 09/15/23 8.3 • Revised Non-Permanent Resident Alien > Income / Employment Requirements to remove note reading non-permanent residents as ineligible. • Revised Collections and Charge-Offs requirements. • Revised Bank Statement Documentation to remove non-permanent residents as ineligible. • Revised 1099 Income Documentation to remove non-permanent residents as ineligible. • Revised Profit & Loss Income Documentation to remove non-permanent residents as ineligible. 08/07/23 8.2 • Revised Mortgage and Rental Payment Verification to clarify VOM and VOR requirements. • Revised Reserves to clarify gift fund requirements. • Renamed Repairs to Repairs and Escrow Holdbacks and revised to add requirements for escrow holdbacks on delayed landscaping on new construction properties.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 06/01/23 (06/16/23) 8.1 • Revised Properties Listed for Sale to add minimum 2-year prepayment requirements. • Revised Tradeline Requirements to remove requirement for activity within the past 12 months and add requirements for manually rated trade lines. • Updated OPTION 1: DEFAULT EXPENSE FACTOR calculation. • Revised Rural Properties to add requirements for exceptions. • Updated document with 40-Year Fixed program (06/16/23). 04/27/23 8.0 • Revised General Refinance Requirements seasoning to “property was acquired ≤ 6 months from the note date of the new mortgage (was application date). • Revised Fraud Report and Background Check to clarify that a fraud report is not required for the business entity itself. • Revised Credit Score Requirements to clarify FICO requirements are 500 or greater for Carrington Flexible Advantage or 620 or greater for Carrington Flexible Advantage Plus. 03/22/23 7.9 • Revised General Refinance Requirements for determining LTV. • Revised Higher Priced Mortgage Loan Requirements to remove second appraisal requirement for a different AMC. • Revised Flip Transactions to simplify requirements and clarify a second full appraisal is required. • Revised Power of Attorney to clarify Power of Attorney is not allowed on Texas Home Equity transactions. • Revised Business Bank Statements documentation requirements to add multiple bank accounts may be used, but a combination of business and personal is prohibited. • Revised 1099 Income Documentation to add Carrington Flexible Advantage (CFA) is permitted and Refer to matrix for FICO and reserve requirements. • Revised Profit & Loss Income Documentation to add Carrington Flexible Advantage (CFA) is permitted and Refer to matrix for FICO and reserve requirements. • Added Rental Income from an ADU requirements. • Revised Reserves to lower FICO requirement to 620 (was 700). • Revised Appraisal Review Process to remove second appraisal requirement for a different AMC • Revised Accessory Units requirements to add Illegal Accessory Units are not permitted and For an ADU that is legal non-conforming, the appraisal contains 2 comparables (was 3) with similar additional accessory units • Revised Site Condominiums to update FNMA form requirements to 1004 Uniform Residential Appraisal Report or 1073 Individual Condominium Unit Appraisal Report.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 01/04/23 7.8 Revised Bank Statement Documentation to clarify effective income requirements. 11/01/22 (11/08/22) 7.7 Revised Prepayment Penalties, Points, and Fees to remove requirement to obtain the Business Purpose Affidavit. Rebranded document with new logo (11/08/22). 04/28/22 7.6 Revised Asset Documentation to add “Asset statements must be dated within 90 days of closing”. 04/18/22 7.5 • Revised 1-Year Alternative Income Documentation to add Self-Employed 1099: 1 Year IRS Form 1099 Statements • Added 1099 Income Documentation and P&L Income Documentation requirements (Permitted under the Carrington Flexible Advantage Plus (CFA+) program.) • Revised Self-Employed Income to add “Borrowers who receive self-employed 1099 earnings may be qualified under the Sole Proprietorship guidelines by providing IRS Form 1040 tax returns for the most recent 1 or 2 years, or under the 1099 Income Documentation guidelines by providing IRS Form 1099 for the most recent 1 or 2 years.” 12/13/21 7.4 • Revised First Time Home Buyers required minimum credit score to 620. • Revised Business Assets requirements to require 50% and add business assets must be multiplied by the borrower’s ownership percentage of the business. 10/12/21 7.3 Revised Business Assets to add “Note: The requested information shall not be interpreted as an assurance of solvency.” 09/02/21 7.2 • Updated Asset Conversion (formerly Depletion) requirements. 08/11/21 7.1 • Revised Soft Pull Credit Report requirement to 14 days. • Revised Ineligible Property Types to add illegally zoned properties. • Revised Appraisal Review Process. 06/23/21 7.0 • Revised Higher Priced Mortgage Loan Requirements to add second appraisal must be “from a different AMC.” • Updated references to Letters of Explanation to clarify “Borrower(s) must write, sign, and date all Letters of Explanation themselves. The Lender or Broker may identify the subject matter only and not contribute to the letter’s content.” • Updated Flood Insurance with SFHA zones. 06/10/21 6.9 Added Appraisal Re-Use requirements. 05/24/21 6.8 • Revised General Refinance Requirements > Determining Loan-to-Value to 6 months seasoning. • Revised Age of Credit Report / Credit Documentation seasoning requirements. • Revised Forbearance due to Presidentially Declared Disasters, including COVID-19 payment requirements. • Revised Age of Loan Documentation seasoning requirements. • Revised Personal Bank Statements and Business Bank Statements documentation requirements. 04/19/21 6.7 Revised Appraisal Review Process for Collateral Underwriter and Desk Review occupancy types. 03/23/21 6.6 Revised Reserves to add Cash-out proceeds are permitted for reserves with a FICO score greater than or equal to 700. 02/18/21 6.5 Updated references to Uniform Residential Loan Application (URLA) and 4506-T to 4506-C throughout.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Control • Revised Condominium Project Review to add 2-4 Unit properties require a full review including review of the budget/ financials. 09/25/19 5.8 • Revised Bank Statement Documentation add Exceptions are not permitted for Non-Permanent Resident Aliens and Foreign Nationals and Foreign sources of income are ineligible. • Revised Bank Statement Documentation > Rental Income requirements. • Revised Foreign Income to add borrower who is self-employed. • Added Royalty Payment Income requirements (mirrors FNMA) • Revised Adjustable Rate Qualifying and Interest Only Payment Qualifying to state qualifying rate is rounded up to the nearest eighth percentage. • Revised Borrowed Funds Secured by an Asset to clarify requirements for using 401(k). • Revised Property Considerations > New Construction to remove calculation for CA and refer to Property Tax Policy for calculation of monthly taxes for qualification. 08/12/19 5.7 • Revised Collections and Charge-Offs Paid through Closing Transaction to require either a payoff demand or credit report or supplement for documentation. • Revised Business Bank Statements to include additional requirements for calculating qualifying Income using Expense Factors and Expense Statements. • Revised Notes Receivable Income to require 12 months history (formerly 2 years). Removed requirement to obtain copy of the note. • Revised Tips and Gratuities documentation requirements. • Revised Unemployment Compensation documentation requirements. • Revised Ineligible Property Types to add Mobile Homes.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 12/03/18 4.2 • Revised Occupancy > Primary Residence to add additional requirement that Borrower shall occupy the property as a principal residence within 60 days after closing and continue to occupy the property as a principal residence for at least one year after the date of occupancy, • Revised Non-Occupant Co-Borrowers/ Co-Signers/ Guarantors to add Note: if a non-occupant co-borrower is the primary wage earner, their credit score will be used for qualifying purposes. • Revised Credit Score Requirements to clarify the primary wage-earner may be an occupying or non-occupying co-borrower. • Revised Disputed Tradelines to clarify disputed account may not be waived. • Revised Past Due Accounts to clarify debts may be more than 30 past due as long as they will be paid off at closing. • Added new Qualifying Reserves on ARM Loans requirements. 11/20/18 4.1 • Added new Payoff in Less than 12 Months requirements. • Revised Properties Listed for Sale to include submission date in addition to application date • Revised Cash-Out Refinance > Seasoning requirements and added reference to Continuity of Obligation. • Revised Flip Transactions to clarify newly constructed properties require a second appraisal • Revised Asset Depletion to clarify retirement assets may go up to 70% for borrowers of retirement age that do not have a 10% withdrawal penalty. • Revised Appraisal Review Process to clarify newly constructed properties require a second appraisal. • Revised Gifts of Equity to add definition of family member. 11/09/18 4.0 • Revised Bank Statement Documentation to clarify Overdraft Protection Transfers are not considered an NSF. • Revised Bank Statement Documentation > Rental Income to “Obtain the most recent lease agreement(s) for rental properties and proof of receipt at the current lease rate using a cancelled check or bank statement. Calculate the qualifying rents by using 75% of the current lease minus the full PITIA.”
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 11/09/18 4.0 • Revised 1099 Miscellaneous Income to add “When a borrower is qualified solely on W-2 wages and secondary 1099 income is discovered during the underwriting process, tax returns are not required unless the borrower requests the secondary business income to be considered.” • Revised Ineligible Property Types to remove Agriculturally zoned and Properties that provide income to borrower • Revised Minimum Hazard Insurance Coverage Amount to align with standard CMS Hazard Insurance requirements and removed Deephaven overlay. • Revised Evidence of Hazard Insurance to require that “policy must be effective for at least 30 days (previously was 60 days) after the date of funding.” 11/02/18 3.9 • Revised Cash-Out Refinance Transactions to clarify Cash-Out LOE requirements and Seasoning requirements. • Added requirements for Forbearance Due to a Disaster. • Revised Bank Statement Documentation to add self-employment can be verified by two (2) years of business licenses or a CPA letter. • Revised Personal Bank Statements to clarify Investment Program allows for 12 or 24 months of bank statements. • Revised Ineligible Property Types to remove Mixed Use Properties. • Renamed Mixed Use Defined to Mixed Use Properties and added mixed use requirements. • Revised Non-Warrantable Condos to increase Single Entity Ownership from 20% to 30%. 10/18/18 3.8 • Revised OPTION 2: THIRD-PARTY PREPARED EXPENSE STATEMENT to remove to remove the Borrower P&L option. • Revised Rental Income from Other Real Estate Owned seasoning to 1 year for properties owned for less than 1 year (formerly 2 years) to calculate rental income. • Revised Gift Funds to add: Gift funds must be from a relative: defined as the borrower’s spouse, child, or other dependent; or by any other individual who is related to the borrower by blood, marriage, adoption, or legal guardianship; or a fiancé, fiancée, or domestic partner. • Revised Appraisal Review Process to add Desk Review as an option. • Revised Private Roads to add Maintenance agreements are not required for private roads in Homeowners Associations (HOAs). • Revised Non-Warrantable Condominiums to state All Non-Warrantable condominiums must have a valid project review along with a completed CMS Mortgage HOA Certification (previously only allowed on exception basis).
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Allowed • Revised Bank Statement Documentation to remove the Borrower P&L option. Bank Statement Documentation is now either: Option 1: 50% Expense Factor OR Option 2: Third-Party Prepared Expense Statement. • Revised Rental Income to add Boarder Income may not be used. 09/13/18 3.6 • Added Anti-Steering requirements to General Program Information • Revised Cash-out Refinance to remove Cash out is not allowed for Investment Properties in Texas restrictions. • Revised Texas Home Equity Loans > Occupancy to remove “Cash-out transactions are not permitted on 2nd homes and investment properties in Texas under any programs.” • Revised Subject Property and Rental Income from Other Real Estate Owned > Calculating Rental Income to 12-months (formerly 24-months) requirements • Revised Appraisal Review to add Fannie Mae Collateral Underwriter (CU) score requirements 08/27/18 3.5 • Revised Non-Permanent Resident Alien to remove ineligible program types • Revised Personal Bank Statement Documentation > Calculating Qualifying Income to remove Income indicated on the initial signed 1003 • Revised Business Bank Statement Documentation > Calculating Qualifying Income to remove Income indicated on the initial signed 1003 08/16/18 3.4 • Added First Time Investors are not allowed. • Deleted overlay in Rental Income with requirements for converting a current residence to a rental unit. • Revised Assets Analysis > Secondary/Subordinate Financing to add requirements for PACE, HERO and other Energy Efficiency Loans. • Revised the Appraisal Review Section with new CDA requirements effective 8/16/18.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Updated Cash-out Limits • Revised Appraisal Review Process to $2.0M 06/29/18 3.1 • Rebranded Guidelines to Carrington Flexible Advantage Program (formerly Non- Prime) and Carrington Flexible Advantage Plus Program (formerly Near Prime) • Removed Near-Prime 95% LTV requirements. 06/21/18 3.0 Revised OPTION 1: BORROWER PREPARED P&L STATEMENT to add Bank Statement average income per Bank Statement Calculator and remove Net income using the Bank Statements and Income indicated on the initial signed 1003. 06/19/18 2.5 • Revised OPTION 1: BORROWER PREPARED P&L STATEMENT to add Net income using the Bank Statements. • Updated Investment Property requirements throughout. • Deleted Investor Advantage requirements throughout. 05/17/18 2.4 • Revised Cash-Out Refinance > Seasoning section to remove property acquired through inheritance • Revised Inherited Properties and Property Buyouts section to add “For inherited properties, a minimum of six (6) months must have elapsed since the most recent mortgage transaction on the subject property (either the original purchase transaction or subsequent refinance). Note date to note date is used to calculate the six (6) months.” • Updated Tradeline Requirements to add Disputed Tradelines requirements • Added Temporary/Contract Income requirements. • Revised Asset Depletion to add restricted stock and margined accounts are not considered qualified assets and are not eligible. 05/03/18 2.3 • Added Near-Prime Program requirements throughout. • Added 1-Year Alternative Income Documentation requirements. • Added Asset Depletion requirements to the Sources of Income section.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 04/24/18 2.2 • Revised Employment/ Income Documentation to add requirements when no tax transcripts are available. • Revised Verbal Verification of Employment (VVOE) to reflect 10 business days (previously 10 calendar days). • Updated Ineligible Property Types to align with published matrix. Added Leaseholds, Agriculturally Zoned, Properties that provide income to borrower, Working Farms, Properties with oil, gas, or mineral rights, Builder Model Leaseback and Non-Conforming zoning regulations that prohibit rebuilding. 04/10/18 2.1 Added Limited Power of Attorney requirements. 04/02/18 2.0 New version 2.0 for applications taken on and after 4/2/18. • Revised Programs with new Non-Prime program codes of A, B and C • Revised Cash-out Limits for Non-Prime program to $500,000 and removed 10% LTV Reduction column from table. • Corrected Flip Transactions to reflect “seller” not underwriter. • Revised First Time Home Buyers to increase required FICO to 580 (previously 560) • Revised Mortgage and Rental Payment Verification > Non-Prime Housing Verification to reflect Credit Grade C (previously RHE) and changed Recent Housing Event to Housing Event throughout • Revised Bankruptcy > Non-Prime Program > Chapter 7 or 11 Bankruptcy to refer to the non-prime matrix • Revised Housing Events to remove definition of Recent Housing Event. • Revised Housing Events > Non-Prime Program to reflect new Credit Grades and seasoning requirements. A = 24 months, B = 12 months and Credit Grade C (previously RHE) = no seasoning. • Revised Employment/Income Analysis > Bank Statement Documentation > Calculating Qualifying Income > Option 1 to reflect Borrower Prepared P&L Statement (previously Third Party Prepared P&L Statement). Additionally, revised Total monthly average deposits per bank statements (minus any disallowed deposits) must be within 10% (previously 5%) of gross revenue reflected on P&L. • Revised Ratios and Qualifying > Ratios to remove Housing Ratio requirements. Updated Expanded Ratios to reflect new A and B Credit Grades. For 50% Debt Ratio added 620 Credit score requirement and removed Full Doc or 24-Month Personal Bank Statement Program only requirement. • Revised Depository Accounts to add Payable on death (POD) depository account requirements.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 03/27/18 1.5 • Revised Borrowers > Non- Permanent Resident Aliens > Verification of Residency Status section to add Non-Permanent Resident Aliens who do not have a green card or a valid visa or if they only have an employment authorization document (EAD) are ineligible. • Revised Rolling Late Payments and Past Due Accounts sections to add Investor Advantage requirements. • Revised Investor Advantage Credit Grade > Forms section to add 2 copies of Business Purpose & Occupancy Affidavit form is required. 03/13/18 1.4 • Added requirements for IRS Taxes Owed (No Lien). • Revised Non-Arm’s Length Transactions to remove Property seller foreclosure bailouts • Revised Limited Power of Attorney – not permitted • Added Seasoning Requirements for Vesting and Ownership • Revised Ineligible Borrowers to add DACA • Added Document Images requirements • Revised Pay Stubs and W-2s to add handwritten paystub requirements • Revised Self-Employed Income to add Liquidity Test is not required • Revised Verification of Assets > Borrowed Funds Secured by an Asset to add Real Estate as eligible • Revised Verification of Assets > Unacceptable Funds to add cryptocurrency • Revised Property Considerations to add Mixed Use definition 02/12/18 1.3 • Revised Appraisal Review section. • Revised Transferred Appraisal requirements. • Added 24 Months Bank Statement requirements. • Revised Reserve Requirements. 01/31/18 1.2 • Added Continuity of Obligation requirements. • Revised Employment History -Gaps in Employment section requirements. • Added Like-Kind Exchanges requirements.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Documentation • 24 Months Business or Personal Bank Statements • 12 Months Business or Personal Bank Statements • 1 Year Documentation (W-2 or Tax Return) • 1 or 2 Years IRS Form 1099 or P&L Statements •
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Asset Conversion Borrowers must have the lesser of (a) 1.5 times the loan balance or (b) $1mm in qualified assets, both of which must be net of down payment, loan costs and required reserves to qualify. Qualified Assets can be comprised of stocks, bonds, mutual funds, vested amount of retirement accounts and bank accounts. If a portion of the qualified assets are being used for down payment, closing costs, or reserves, those amounts must be excluded from the balance before analyzing a portfolio for income determination. Please note: Restricted stock accounts are not considered qualified assets and are not eligible. The following assets are considered Qualified Assets and can be utilized to calculate income: • 100% of checking, savings, and money market accounts • 100% of the remaining value of stocks & bonds, less any margin balance • 70% of retirement assets • 100% Cash Value of Life Insurance • 3-month seasoning of assets required The following assets are not permitted: • Funds in Foreign Banks Asset Conversion is an Alternative Income Documentation type and may be used as standalone income or with other income types. Bank Statement Documentation used to calculate self-employment income may not be included in the Asset Conversion calculation. The income calculation is as follows: Monthly Income = Net Qualified Assets / 60 Months. Refer to Carrington Prime Advantage Underwriting Guidelines for additional information.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Date Version Description of Change 08/06/26 6.3 Added new requirements for Short-Term Rentals. 07/22/26 6.2 Revised the Vesting in the Name of a Business Entity section to add that the Personal Guaranty disclosure form must be completed and signed with the closing documents for all investment property loans closing in an LLC. 06/04/26 6.1 • Updated Eligible Property Types to add Condotels or Condo Hotels, Non- Warrantable Condominiums, and Leaseholds. • Updated Ineligible Property Types to remove Condotels or Condo Hotels, Leaseholds and Non-Warrantable Condominiums. • Added Requirements for Leasehold Mortgages. • Revised Condominiums > Ineligible Projects requirements. • Added requirements for Non-Warrantable Condominium Projects. • Added requirements for Condotel Projects. 05/13/26 6.0 Revised Seller Contributions requirements. 05/04/26 5.9 • Updated Vesting in the Name of a Business Entity to include acceptable business purposes. • Updated Credit Report to include Undisclosed Debt Monitoring (UDM) report as an option is required within 14 calendar days of closing. • Updated Bank Statement Documentation to state a change in the legal structure, name, or tax ID number of a business is acceptable when the business activities are substantially the same before and after the change. • Updated Bank Statement Documentation to modify the Option 1 Default Expense Factor and Option 2: Third-Party Prepared Expense Statement. • Updated 1099 Income Documentation to state a change in the legal structure, name, or tax ID number of a business is acceptable when the business activities are substantially the same before and after the change and removed Option 2: Third-Party Prepared Expense Statement. • Updated Profit & Loss Income Documentation to include a requirement for bank statements and calculating qualifying income cannot be lower than 20% expense floor. • Updated Asset Conversion to remove margined accounts. • Updated Employment by a Relative to state that if a borrower is employed by a relative, and the relative is also a borrower on the loan, the relative that owns the business may not use alternate income documentation for qualifying. • Updated Self-Employed Income to state a change in the legal structure, name, or tax ID number of a business is acceptable when the business activities are substantially the same before and after the change. • Updated Ineligible Sources of Assets to state deposits to traditional bank accounts that are sourced to liquidations of virtual currency are acceptable. The crypto wallet must be sourced to the borrower or to an acceptable gift donor and otherwise meet the requirements for gift funds. • Updated Land Value and Acreage to include all occupancy types. • Updated HOA Certification Review to state new condos must be Fannie Mae PERS approved or reviewed as a non-warrantable condo project.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Date Version Description of Change 04/02/26 5.8 • Revised Asset Documentation to add Asset statements or asset verification reports obtained directly by CMS from a third-party asset verification service. • Revised Business Bank Statements to add requirements for third-party asset verification for income and add transaction history printouts from the borrower are not acceptable. • Updated Ineligible Property Types to add “Group homes or boarding houses, including convalescent and/or healthcare homes, Nursing homes, Adult care centers.” 12/09/25 5.7 • Revised General Refinance Requirements to add "Any refinance of a Carrington Serviced Non-QM loan that has not made at least 12 payments since it was last originated requires review and approval. The loan may be subject to manual pricing if approved." • Revised Ineligible Property Types to list Non-Warrantable Condominiums (case- by case exceptions). 10/02/25 5.6 • Revised Cash-Out Letter of Explanation Required requirements. • Revised 1099 Income Documentation requirements. • Revised Calculating Qualifying Income requirements. • Revised Ineligible Property Types to remove Rural Properties. • Revised Land Value and Acreage to 5 acres. • Updated Appraisal Review Process requirements for Second Full Appraisal to increase loan amount to $2M. • Added requirements for Declining Market Values. • Updated requirements for Rural Properties to make them eligible on a case by case basis. 05/05/25 5.5 Revised Requirements for P&L Documentation to add requirements: 1) tax preparer or CPA must have prepared the borrower’s most recent tax returns, 2) Underwriter must research (i.e. Google Search) the tax preparer/CPA and tax preparer/CPA Company and the search results must be documented, and 3) Underwriter must perform a 100% reverification of the P&L statement and/or CPA letter utilizing the phone number or email from the underwriter research. 04/16/25 5.4 • Revised Vesting to add Limited Liability Company (LLC). • Added Vesting in the Name of a Business Entity requirements. • Revised Ineligible Borrowers to remove Limited Liability Company (LLC). • Revised Age of Credit Report/Credit Documentation to 120 days (was 90). • Revised Age of Loan Documentation requirements to clarify documents and seasoning. • Revised Asset Documentation to 120 days (was 90). • Add Written Verification of Employment Alternative Income Documentation requirements. • Revised Gifts of Equity to add For ITIN borrowers using a gift of equity, a 5% LTV reduction is required in lieu of using cash out LTVs. • Revised Uniform Residential Appraisal Report (URAR) to remove FNMA Form 1004MC. • Revised Property Values within Market Area to remove FNMA Form 1004MC. • Revised Vesting to add Business Entity (for LLC).
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Documentation) • Revised Expanded Ratio to require Credit Score ≥ 680 (was 700). 02/07/24 4.7 • Revised Personal Bank Statements to reflect verification completed within 10 business days (was calendar days). • Revised Sole Proprietorship, Partnerships, Corporations and S Corporations to reflect verification completed within 10 business days (was calendar days). • Revised Ineligible Property Types to add Barn conversions or Barndominiums. • Revised Accessory Units requirements for rental income. 09/15/23 4.6 • Revised Collections and Charge-Offs requirements. • Revised Bank Statement Documentation to remove non-permanent residents as ineligible. • Revised 1099 Income Documentation to remove non-permanent residents as ineligible. • Revised Profit & Loss Income Documentation to remove non-permanent residents as ineligible.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Date Version Description of Change 08/07/23 4.5 • Revised Mortgage and Rental Payment Verification to clarify VOM and VOR requirements. • Revised Reserves to clarify gift fund requirements. • Renamed Repairs to Repairs and Escrow Holdbacks and revised to add requirements for escrow holdbacks on delayed landscaping on new construction properties. 06/01/23 (06/16/23) 4.4 • Revised Properties Listed for Sale to add minimum 2 year prepayment requirements. • Revised Tradeline Requirements to remove requirement for activity within the past 12 months and add requirements for manually rated trade lines. • Updated OPTION 1: DEFAULT EXPENSE FACTOR calculation. • Revised Rural Properties to add requirements for exceptions. • Updated document with 40-Year Fixed program (06/16/23). 04/27/23 4.3 • Revised General Refinance Requirements seasoning to “property was acquired ≤ 6 months from the note date of the new mortgage (was application date). • Revised Fraud Report and Background Check to clarify that a fraud report is not required for the business entity itself. • Revised Reserves to remove 620 FICO score requirement. 03/22/23 4.2 • Revised General Refinance Requirements for determining LTV. • Revised Higher Priced Mortgage Loan Requirements to remove requirement for second appraisal from a different AMC. • Revised Flip Transactions to simplify requirements and clarify a second full appraisal is required. • Revised Business Bank Statements documentation requirements to add multiple bank accounts may be used, but a combination of business and personal is prohibited. • Added Rental Income from an ADU requirements. • Revised Reserves to lower FICO requirement to 620 (was 700). • Revised Eligible Property Types to update Multi-Family Properties for primary residence to 1-4 units (was 1-2 units). • Revised Accessory Units requirements to add Illegal Accessory Units are not permitted and For an ADU that is legal non-conforming, the appraisal contains 2 comparables (was 3) with similar additional accessory units • Revised Site Condominiums to update FNMA form requirements to 1004 Uniform Residential Appraisal Report or 1073 Individual Condominium Unit Appraisal Report. 02/15/23 4.1 • Revised Power of Attorney to clarify a Power of Attorney is not allowed on Texas Home Equity transactions. • Revised Business Bank Statements to state 12 or 24 months complete business bank statements are required (formerly incorrectly listed personal bank statements). 01/04/23 4.0 Revised Bank Statement Documentation to clarify effective income requirements. 11/01/22 (11/08/22) 3.9 • Revised Prepayment Penalties, Points, and Fees to remove requirement to obtain the Business Purpose Affidavit. • Rebranded document with new logo (11/08/22).
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Date Version Description of Change 04/28/22 3.8 Revised Asset Documentation to add “Asset statements must be dated within 90 days of closing”. 04/18/22 3.7 • Revised 1-Year Alternative Income Documentation to add Self-Employed 1099: 1 Year IRS Form 1099 Statements and 12 and 24 months Profit & Loss Statements. • Added 1099 Income Documentation and P&L Income Documentation requirements (Permitted under the Carrington Flexible Advantage Plus (CFA+) program.) • Revised Self-Employed Income to add “Borrowers who receive self-employed 1099 earnings may be qualified under the Sole Proprietorship guidelines by providing IRS Form 1040 tax returns for the most recent 1 or 2 years, or under the 1099 Income Documentation guidelines by providing IRS Form 1099 for the most recent 1 or 2 years.” 02/02/22 3.6 Revised Exceptions to remove rural properties and align with UW Exception Policy. 12/13/21 3.5 Revised Business Assets requirements to require 50% and add business assets must be multiplied by the borrower’s ownership percentage of the business. 10/12/21 3.4 Revised Business Assets to add “Note: The requested information shall not be interpreted as an assurance of solvency.” 09/02/21 3.3 Updated Asset Depletion requirements. 08/11/21 3.2 • Revised Exceptions requirements. • Revised First Time Investor requirements. • Revised Soft Pull Credit Report requirement to 14 days. • Revised Asset Depletion requirements. • Revised Ineligible Property Types to add illegally zoned properties. • Revised Appraisal Review Process. • Revised Rural Properties requirements. 06/23/21 3.1 • Revised Higher Priced Mortgage Loan Requirements to add second appraisal must be “from a different AMC.” • Updated references to Letters of Explanation to clarify “Borrower(s) must write, sign, and date all Letters of Explanation themselves. The Lender or Broker may identify the subject matter only and not contribute to the letter’s content.” • Updated Flood Insurance with SFHA zones. 06/10/21 3.0 • Added Appraisal Re-Use requirements. 05/24/21 2.9 • Revised General Refinance Requirements > Determining Loan-to-Value to 6 months seasoning. • Revised Forbearance due to Presidentially Declared Disasters, including COVID-19 payment requirements. • Revised Age of Loan Documentation seasoning requirements. • Revised Personal Bank Statements / Business Bank Statements documentation requirements. • Revised 50% Expanded Debt Ratio requirements.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Date Version Description of Change 04/19/21 2.8 • Revised Prepayment Penalties, Points, and Fees to add Investment Property requirements. • Revised Occupancy to add Second Home and Investment Property requirements. • Revised General Refinance Requirements > Benefit to Borrower to add primary residence and second home requirements. • Revised Cash-Out Limits to add Second Homes, and Investment. • Revised Higher Priced Mortgage Loans (HPML) to add exemptions for Second Homes and Investment properties. • Updated Foreign Borrowers requirements. • Revised Multiple Financed Properties to add requirements for Second Homes and Investment properties. • Revised Tradeline Requirements to update occupancy with Second Home, and Investment. • Revised Rental Income requirements. • Revised Ratios and Residual Income requirements. • Revised Reserves to add Multiple Financed Properties requirements. • Revised Financing Concessions/Seller Contributions requirements. • Revised Gift Funds requirements to add .Gift funds are not permitted for investment property transactions. • Revised Relocation and Employer Assistance to add Employer assistance funds are not permitted on second homes or investment properties. • Revised Secondary / Subordinate Financing to add Secondary financing is not permitted for second homes. • Added First Time Investor requirements. • Revised Eligible Property Types requirements for primary and Investment properties. • Revised Ineligible Property Types to remove 3-4 unit properties. • Revised Land Value and Acreage to add Investment property transactions are limited to 2 acres. 03/23/21 2.7 • Revised Reserves to add Cash-out proceeds are permitted for reserves with a FICO score greater than or equal to 700. 02/17/21 2.6 • Updated references to Uniform Residential Loan Application (URLA) and 4506-T to 4506-C throughout guidelines. 1/19/21 2.5 • Revised Seasoning to update Trust and LLC requirements. • Revised Points and Fees to add Texas Conversion loans are excluded from the 2.00% fee limitation. • Revised Bank Statement Documentation to clarify requirements for money transfer service business account statements. • Revised Rural Properties to remove exceptions are not permitted. 11/06/20 2.4 • Added Self-Employed Confirmation of Employment Requirements. • Updated Documenting Business Bank Account Ownership. 11/02/20 2.3 • Updated Texas Home Equity > General Requirements to add Maximum LTV = Maximum Cash Out LTV per Matrix (not to exceed 80% LTV). • Updated Secondary Financing to add Maximum CLTV = Maximum LTV for the transaction. • Updated Secondary / Subordinate Financing to clarify the maximum CLTV is equal to the maximum LTV for the transaction (Institutional seconds only). 09/25/20 2.2 Updated Rural Properties requirements. 09/23/20 2.1 Updated Forbearance Due to a Disaster requirements.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Documentation • 24 Months Business or Personal Bank Statements • 12 Months Business or Personal Bank Statements • 1 Year Documentation (W-2 or Tax Return) • 1 or 2-Years IRS Form 1099 or Profit and Loss
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Income Loans utilizing bank statement documentation for income will not require a 4506-C form to be signed or processed for transcripts. When a file has mixed income (W-2 wage earner income) combined with the bank statement income option, CMS must obtain a 4506-C and transcripts for the W-2 wage earner income only. See Carrington Flexible Advantage Program Guidelines for details. Please Note: Underwriter may condition for 4506-C tax transcripts to be signed and processed on a case by case basis.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Non-Salaried Two years documentation and evidence of at least 3 year continuance is required. Retirement Income requires a copy of the award letter and most recent 1099's OR 3 months consecutive bank statements showing receipt of the income. Social Security income can be taxed up 25% or an amount that is prudent based on federal tax levels but not to exceed 25%. Documentation is required to show the income is non-taxable. Alimony and child support must be received at least 6 months to be used for qualifying.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Assets Must be sourced/seasoned for 60 days. Asset statements must be dated within 120 days of closing and verified. Deposit verification and seasoning of assets must be documented by two months bank statements. Marketable securities require a copy of the stock certificate. Retirement accounts require documentation verifying the lending terms of the account. All sources of funds must be owned by the borrower. All large deposits must be sourced per guidelines. Asset documentation must be dated within 30 days of application and 90 days of closing. Evidence of liquidation is required for all securities and real estate. Evidence of transfer of funds is required for all cash accounts. Gifts are acceptable provided minimum borrower investment requirements are met. Eligible Sources of
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Documentation Self-employed borrowers are eligible for either Personal Bank Statement Documentation or Business Bank Statement Documentation. The following restrictions apply to both documentation types: Borrowers must be self-employed for at least 2 years. Business must be in existence for at least 2 years. Standard Tradelines and a 12-month housing history are required. Foreign Nationals are ineligible. Exceptions are not permitted. Foreign sources of income are ineligible. For Personal Bank Statement qualifying, all parties listed on each bank account must be included as borrowers on the loan. For Business Bank Statements where the borrower is not 100% owner of the business or another party appears on the business bank statements, refer to the guidelines for documenting the borrower’s percent ownership of the business. Statements must be consecutive and reflect the most recent months available. Statements must support stable and generally predictable deposits. Unusual deposits must be documented. Evidence of a decline in earnings may result in disqualification. More than 3 NSFs or overdrafts within the most recent 12 months require explanation, supporting documentation, and underwriter analysis for acceptability. Refer to guidelines for additional details. Note: Overdraft Protection Transfers are not considered an NSF. If bank statements provided reflect payments being made on obligations not listed on the credit report, see Undisclosed Debts for additional guidance. PayPal business account statements are ineligible. PayPal earnings must be deposited into a business or personal bank account for consideration. W-2 Wages: Additional income deposited into the bank statements but derived from a source other than the self-employed business may not be included in the bank statement average. W-2 earnings must be documented as per the requirements in Wage-Earners along with a processed 4506-C verifying the W-2 earnings only. W-2 transcripts may be used in lieu of paper W-2s. Rental Income: Obtain the most recent lease agreement(s) for rental properties and proof of receipt at the current lease rate using a cancelled check or bank statement. Calculate the qualifying rents by using 75% of the current lease minus the full PITIA. The following documentation is required: 12 or 24 months complete personal/business bank statements. Bank statements should be from the same account. Multiple bank accounts may be used, but a combination of business and personal is prohibited. Account changes during the review period are acceptable for circumstances such as account closure when the borrower is a victim of fraud or the borrower changes banking institutions, provided there is a clear account transfer date and no deposits are duplicated. Transaction history printouts are not acceptable.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Documentation Self-employed borrowers with non-employee compensation earnings on IRS Form 1099-NEC, such as independent contractors and gig workers, may provide 1 or 2 years 1099-NEC statements. The following restrictions apply: • Borrowers must be self-employed for at least two (2) years verified by two (2) years of business licenses or a CPA letter. • Business must be in existence for at least two (2) years. • This program is designed for self-employed independent contractors with low overhead. If documentation in the file indicates an expense ratio greater than 20%, including (but not limited to) a YTD P&L or bank statements that reflect payroll or rental expenses, income must be qualified using traditional, bank statement, or P&L documentation to account for the higher expenses. Note: automobile payments and leases are not counted towards business expenses if the payments are already considered in the debt ratio as a liability. • Standard Trade Lines are required. • Foreign Nationals are ineligible. Exceptions are not permitted. • IRS form 4506-C must be processed for 1 or 2 years 1099 forms • Multiple 1099 forms from different industries will be reviewed independently as separate businesses. For example, a borrower with earnings from Rideshare and IT Consulting must have a two-year history in each line of work to consider earnings from both sources. • Evidence of a decline in earnings may result in disqualification • Year-to-Date earnings must support the qualifying income calculated per instructions below. YTD earnings must be documented with one of the following, utilizing the most recent documentation available as of the loan application date: o YTD Profit & Loss statement prepared by a licensed or registered CPA or tax preparer. Net monthly earnings on the P&L must not be more than 10% less than qualifying net income of the previous 1 or 2 years. o Earnings Statement with YTD income or Pay Stub with YTD income from the Payer listed on the 1099 forms. Gross earnings on the YTD Earnings Statements must not be more than 10% less than gross monthly 1099 earnings. o Most recent two (2) months bank statements, earnings statements without YTD income, or pay stubs without YTD income. Earnings statements or pay stubs must come from the Payer listed on the 1099 forms. Gross deposits or earnings on bank statements, earnings statements, or pay stubs must not be more than 10% less than gross monthly 1099 earnings. • Expense factor must be considered, refer to Carrington Flexible Advantage Plus (CFA+) Guidelines for full details.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Plus-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Documentation A Written Verification of Employment may be used to calculate income for borrowers qualifying with wages from base pay/salary, overtime, bonus, tips, and commissions, subject to the following requirements: • Borrower must be employed by the same employer for a minimum of two years. • The Written VOE must be obtained directly by CMS from an automated or third-party service, such as Equifax The Work Number, CoreLogic AutomatIQ, Veri-Tax, etc., and include income data. Note: CMS may issue an initial decision using a hand-written or TPO-provided Written VOE, but must obtain an automated or third-party Written VOE directly from the service provider for the final income calculation. • Income labeled as "Other" or similar on the Written VOE will require a year-to-date and year-end itemization from the employer or pay stubs in order to use for qualifying. • W-2s and pay stubs are otherwise not required. • Tax returns, transcripts, and 4506-C are not required unless the borrower is qualifying with additional forms of income like interest, dividends, capital gains, etc. • Self-employment, employment by a family member, and foreign income are not eligible. Borrowers who receive rental income as a secondary income source may utilize Written VOE Documentation for calculating employment-related income and the most recent lease agreement(s) for rental properties for calculating rental income. Obtain proof of receipt at the current lease rate using a cancelled check or bank statement. Calculate the qualifying rents by using 75% of the current lease minus the full PITIA.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Income Loans utilizing bank statement documentation for income will not require a 4506-C form to be signed or processed for transcripts. When a file has mixed income (W-2 wage earner income) combined with the bank statement income option, CMS must obtain a 4506-C and transcripts for the W-2 wage earner income only. See Carrington Flexible Advantage Program Guidelines for details. Please Note: Underwriter may condition for 4506-C tax transcripts to be signed and processed on a case-by-case basis.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Non-Traditional Credit Not permitted Mortgage/Rental History See Grade Determination above. Mortgage payments not reflected on the original credit report must be documented via an institutional Verification of Mortgage (VOM). VOMs from servicers and LLCs are considered institutional. Rental payments must be documented via a Verification of Rent (VOR). A combined total of all late mortgage and rental payments in the past 12 months must be used to determine the housing history for all borrowers. Twelve (12) months of cancelled checks or bank statements must be obtained when: • the borrower is making rental payments to an interested party, or • the borrower is making mortgage payments to an individual or an interested party. A VOR/VOM is not required but may be requested for clarification. All mortgages and rental payments should be current at time of closing. If the credit report or VOR/VOM reflects a past-due status, updated documentation is required to verify account is current. Borrowers with no housing history or less than 12 months housing history are permitted for all occupancy types. Full doc income only. Refer to Carrington Flexible Advantage Program Guidelines for full details. Forbearance Due to
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Assets Must be sourced/seasoned for 60 days. Asset statements must be dated within 120 days of closing and verified. Deposit verification and seasoning of assets must be documented by two months bank statements. Marketable securities require a copy of the stock certificate. Retirement accounts require documentation verifying the lending terms of the account. All sources of funds must be owned by the borrower. All large deposits must be sourced per guidelines. Asset documentation must be dated within 30 days of application and 90 days of closing. Evidence of liquidation is required for all securities used for closing and real estate. Evidence of transfer of funds is required for all cash accounts. Gifts are acceptable provided minimum borrower investment requirements are met. Eligible Sources of
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Documentation Self-employed borrowers are eligible for either Personal Bank Statement Documentation or Business Bank Statement Documentation. The following restrictions apply to both documentation types: Borrowers must be self-employed for at least 2 years. Business must be in existence for at least 2 years. Standard Tradelines and a 12-month housing history are required. Foreign Nationals are ineligible. Exceptions are not permitted. Foreign sources of income are ineligible. For Personal Bank Statement qualifying, all parties listed on each bank account must be included as borrowers on the loan. For Business Bank Statements where the borrower is not 100% owner of the business or another party appears on the business bank statements, refer to the guidelines for documenting the borrower’s percent ownership of the business. Statements must be consecutive and reflect the most recent months available. Statements must support stable and generally predictable deposits. Unusual deposits must be documented. Evidence of a decline in earnings may result in disqualification. More than 3 NSFs or overdrafts within the most recent 12 months require explanation, supporting documentation, and underwriter analysis for acceptability. Refer to guidelines for additional details. Note: Overdraft Protection Transfers are not considered an NSF. If bank statements provided reflect payments being made on obligations not listed on the credit report, see Undisclosed Debts for additional guidance. PayPal business account statements are ineligible. PayPal earnings must be deposited into a business or personal bank account for consideration. W-2 Wages: Additional income deposited into the bank statements but derived from a source other than the self-employed business may not be included in the bank statement average. W-2 earnings must be documented as per the requirements in Wage-Earners along with a processed 4506-C verifying the W-2 earnings only. W-2 transcripts may be used in lieu of paper W-2s. Rental Income: Obtain the most recent lease agreement(s) for rental properties and proof of receipt at the current lease rate using a cancelled check or bank statement. Calculate the qualifying rents by using 75% of the current lease minus the full PITIA. The following documentation is required: 12 or 24 months complete personal/business bank statements. Bank statements should be from the same account. Multiple bank accounts may be used, but a combination of business and personal is prohibited. Account changes during the review period are acceptable for circumstances such as account closure when the borrower is a victim of fraud or the borrower changes banking institutions, provided there is a clear account transfer date and no deposits are duplicated. Transaction history printouts are not acceptable.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Documentation Self-employed borrowers with non-employee compensation earnings on IRS Form 1099-NEC, such as independent contractors and gig workers, may provide 1 or 2 years 1099-NEC statements. The following restrictions apply: • Borrowers must be self-employed for at least two (2) years verified by two (2) years of business licenses or a CPA letter. • Business must be in existence for at least two (2) years. • This program is designed for self-employed independent contractors with low overhead. If documentation in the file indicates an expense ratio greater than 20%, including (but not limited to) a YTD P&L or bank statements that reflect payroll or rental expenses, income must be qualified using traditional, bank statement, or P&L documentation to account for the higher expenses. Note: automobile payments and leases are not counted towards business expenses if the payments are already considered in the debt ratio as a liability. • Standard Trade Lines are required. • Foreign Nationals are ineligible. Exceptions are not permitted. • IRS form 4506-C must be processed for 1 or 2 years 1099 forms • Multiple 1099 forms from different industries will be reviewed independently as separate businesses. For example, a borrower with earnings from Rideshare and IT Consulting must have a two-year history in each line of work to consider earnings from both sources. • Evidence of a decline in earnings may result in disqualification • Year-to-Date earnings must support the qualifying income calculated per instructions below. YTD earnings must be documented with one of the following, utilizing the most recent documentation available as of the loan application date: o YTD Profit & Loss statement prepared by a licensed or registered CPA or tax preparer. Net monthly earnings on the P&L must not be more than 10% less than qualifying net income of the previous 1 or 2 years. o Earnings Statement with YTD income or Pay Stub with YTD income from the Payer listed on the 1099 forms. Gross earnings on the YTD Earnings Statements must not be more than 10% less than gross monthly 1099 earnings. o Most recent two (2) months bank statements, earnings statements without YTD income, or pay stubs without YTD income. Earnings statements or pay stubs must come from the Payer listed on the 1099 forms. Gross deposits or earnings on bank statements, earnings statements, or pay stubs must not be more than 10% less than gross monthly 1099 earnings. • Expense factor must be considered, refer to Carrington Flexible Advantage Plus (CFA+) Guidelines for full details.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Income Documentation A Written Verification of Employment may be used to calculate income for borrowers qualifying with wages from base pay/salary, overtime, bonus, tips, and commissions, subject to the following requirements: • Borrower must be employed by the same employer for a minimum of two years. • The Written VOE must be obtained directly by CMS from an automated or third-party service, such as Equifax The Work Number, CoreLogic AutomatIQ, Veri- Tax, etc., and include income data. Note: CMS may issue an initial decision using a hand-written or TPO-provided Written VOE, but must obtain an automated or third-party Written VOE directly from the service provider for the final income calculation. • Income labeled as "Other" or similar on the Written VOE will require a year-to-date and year-end itemization from the employer or pay stubs in order to use for qualifying. • W-2s and pay stubs are otherwise not required. • Tax returns, transcripts, and 4506-C are not required unless the borrower is qualifying with additional forms of income like interest, dividends, capital gains, etc. • Self-employment, employment by a family member, and foreign income are not eligible. Borrowers who receive rental income as a secondary income source may utilize Written VOE Documentation for calculating employment-related income and the most recent lease agreement(s) for rental properties for calculating rental income. Obtain proof of receipt at the current lease rate using a cancelled check or bank statement. Calculate the qualifying rents by using 75% of the current lease minus the full PITIA.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Matrix.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Co-Signers Allowed. Note: if a non-occupant co-borrower is the primary wage earner, their credit score will be used for qualifying purposes. First Time Homebuyers Verification of 12 months’ rent required via cancelled checks or bank statements. 6 months reserves from borrower's own funds required. Minimum FICO >= 620
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 01/19/21 6.4 • Revised Points and Fees to add Texas Conversion loans are excluded from the 2.00% fee limitation. • Revised Bank Statement Documentation to clarify requirements for money transfer service business account statements. • Revised Rural Properties to remove exceptions are not permitted. 11/06/20 6.3 Updated Documenting Business Bank Account Ownership. 09/29/20 6.2 Updated Rural Properties requirements. 09/23/20 6.1 Updated Forbearance Due to a Disaster requirements. 09/10/20 6.0 • Revised Programs to remove Investment Property Programs. • Removed Expanded Loan to Values requirements. • Revised Occupancy > Investment Property to state “Investment properties are permitted on the Carrington Flexible Advantage Plus program only.” • Revised Purchase to state “Assignment of the sales contract is not permitted.” • Updated Cash-Out Refinance > Cash-Out Limits LTV requirements. • Revised Higher Priced Mortgage Loan Requirements to add HPML requirements. • Revised Flip Transactions to remove assignments requirement. • Revised Land Contract /Contract for Deed to clarify Cash-out and non-arm’s length transactions are ineligible for both Land Contracts and Contracts for Deed. • Revised Credit Report > Age of Credit Report to 60 days (was 120 days). • Revised Carrington Flexible Advantage Housing Verification to remove Investment Property Program requirements. • Revised Credit Analysis > Housing Events to remove Investment Property Program requirements. • Revised Age of Loan Documentation seasoning requirements. • Revised Personal Bank Statements remove Investment Property Program requirements and update business bank statements requirements. • Revised Business Bank Statements to update the types of bank statements to be used for qualification • Updated Annuity Income 1099 requirements. • Revised Asset Depletion to not permitted and removed requirements. • Revised Pension / Retirement 1099 requirements. • Revised Unemployment Compensation 1099 requirements. • Revised Ratios and Qualifying to update FICO requirement and remove 55% expanded ratio requirements. • Revised Residual Income to remove 55% expanded ratio requirements. • Revised Asset Analysis > Reserves requirements. • Revised Concessions and Contributions LTV requirements. • Revised Minimum Borrower Contribution to clarify loan amount used is FHFA 1-unit Conforming Loan Limit.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 09/10/20 6.0 (cont) • Revised Eligible Property Types to remove Non-Warrantable Condominiums. • Revised Ineligible Property Types to add Non-Warrantable Condominiums. • Revised New Construction to add property tax impound requirements. • Removed Non-Warrantable Condominiums requirements. 02/06/20 5.9.2 • Revised Rate / Term Refinance to clarify requirement that property taxes must be pre-paid. Payment of delinquent property taxes is not permitted for rate/term refinances. • Revised Cash Out Refinance to clarify requirement that payment of delinquent property taxes is permitted for cash out refinances and must be paid with borrower funds or cash out proceeds. • Added Delinquent Property Taxes requirements. • Revised Bank Statement Documentation to add Borrower may not be an employee of any other borrower. • Revised Employment History > Gaps in Employment to clarify recent graduates with evidence of post-secondary education from a college, university, community college, Junior college, Career school, technical school, or vocational/trade school are allowed. • Revised Employment by a Relative to add note that if a borrower is employed by a relative, and the relative is also a borrower on the loan, the relative that owns the business may not use bank statement documentation for qualifying. • Revised Eligible Property Types to add Hobby Farms. • Revised Ineligible Property Types to remove Hobby Farms and add Income Producing Farms. • Added description of Hobby Farms.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 07/22/19 5.6 • Revised Cash-Out Refinance > Seasoning to add 6 month requirements for vesting changes from a Trust or LLC. • Revised Vesting to add Vesting in the name of an LLC is not permitted • Revised Soft Pull Credit Report to clarify “calendar” days • Revised No Housing History or Less than 12 Months Verified to add Alternative Income Documentation and Bank Statement Documentation are allowed for properties owned free and clear. • Revised Bank Statement Documentation to clarify statements must be consecutive and reflect the most recent months available as of the “application” date ( previously was closing date) • Added Interest Only Payment Qualifying requirements 06/12/19 5.5 • Revised Property Characteristics to add “all property repairs must be completed prior to closing with no exceptions. Escrow holdbacks are not permitted.” • Revised Cash Flow Analysis to add additional requirements. • Revised Appraisal Review Process to add new appraisal requirements. • Revised Appraisal Review Tolerance to add new appraisal requirements. 06/10/19 5.4 • Revised 1-Year Alternative Income Documentation to remove rental income as ineligible under Supplemental Income. • Corrected Adjustable Rate Qualifying to state the floor is the start rate (not margin). • Revised Deferred Maintenance to add requirements for roofs to be water tight. 06/03/19 5.3 • Updated Fraud Report and Background Check section to add exclusionary lists. • Revised Consumer Credit Counseling Service (CCCS) to clarify if the CCCS accounts are being paid off through our closing transaction, the 12 months seasoning is not required. • Revised Business Debt to add a recently opened debt may replace a similar paid-off liability and both liabilities may be used to meet the 6 month requirement. • Revised Employment / Income Documentation to separate the Confirmation of Employment requirements for self-employed borrowers and add CPA letter requirements. • Revised Self-Employed Income to add requirements for using tax returns. • Revised Ineligible Property Types to add Hawaiian properties in lava zones 1 and 2 • Revised Property Considerations to add requirements for Hawaiian Lava
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Transaction • Revised Chapter 13 Bankruptcy to clarify, “If the bankruptcy has late payments within the last 12 months, they must be paid off and the loan must be graded as Credit Grade C.” • Revised Housing Events to clarify Seasoning of a foreclosure is measured from the date of the Sheriff’s sale or foreclosure auction. Seasoning of a deed- in-lieu or short sale is measured from the date of completed sale or final property transfer. • Revised Concessions and Contributions to add requirements for Interested Parties. • Added requirements for Relocation and Employer Assistance 03/26/19 4.9 • Added Higher Priced Mortgage Loans (HPML) section and requirements • Revised Flip Transactions section to add timeframes and HPML requirements • Revised Vesting section to add Vesting in the name of a Trust is not permitted. • Removed Vesting in the Name of a Business Entity. • Revised Multiple Financed Properties to add clarification that additional reserves are not required when the subject property is a primary residence. • Revised Mortgage and Rental Payment Verification to clarify verification is required for all borrowers. • Revised Delinquent Credit Belonging to Ex-Spouse to add note that CMS will follow State specific divorce laws for acceptable documentation. • Revised Housing Events to clarify Foreclosure seasoning is measured from the date of the Sheriff’s sale or foreclosure auction. • Revised Employment/ Income Documentation to remove 4506T requirement for loans utilizing bank statement documentation • Revised Appraisal Review Process to add HPML requirements • Revised Property Considerations to add requirements for Additions without
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 03/07/19 4.8 • Added Documenting Business Bank Account Ownership requirements • Revised Calculating Qualifying Income to add “Qualifying income must be multiplied by the percentage of ownership the borrower is entitled to.” • Revised Mixed Use Properties to remove DD Firm appraisal requirements. 02/19/19 4.7 • Added Vesting in the Name of a Business Entity (Investment Properties Only) requirements. • Revised Ineligible Borrowers to add *Corporations, Partnerships, and LLCs permitted for Investment Properties only. • Revised Employment/Income Documentation to remove requirement for obtaining 4506T at application. • Revised Appraisal Review Process to clarify different Due Diligence product restrictions 02/07/19 4.6 • Revised Urban Homestead Definition to remove Rural requirements • Revised Borrowers to add CMS limits the maximum number of borrowers on one loan to eight (8). • Revised Bankruptcy to add Note: Open Chapter 13 bankruptcy will be graded per the mortgage rating. • Revised 1-Year Alternative Income Documentation to add Business Bank Statements and remove DTI requirement • Revised Bank Statement Documentation to add additional NSF requirements and reference to new NSF Check and Overdrafts section • Revised Personal Bank Statements to remove DTI requirement • Revised Business Bank Statements to clarify Verification of business existence required within 10 business days of closing (was calendar days) • Added new NSF Checks and Overdrafts section and requirements • Revised Appraisal Review Process to remove AVM from bulleted list 01/22/19 4.5 • Revised Notes Receivable Income to obtain tax returns for the most recent 12-month period (formerly 2 years) • Revised Rental Income from Other Real Estate Owned to add “To calculate rental income from a departure residence when converting a current residence into a rental: 75% of a lease minus the full PITIA may be used.” • Revised Properties Listed for Sale to clarify requirements for LOE. 01/17/19 4.4 • Updated Prepayment Penalty requirements.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 01/14/19 4.3 • Deleted Continuity of Obligation requirements. • Added Co-Signers definition • Removed Guarantors from Borrower Types • Revised Vesting to expand requirements • Added Vesting for Non-Borrowing / Non-Title Spouse requirements • Revised Credit Score Requirements to add requirements for co-borrowers who earn the exact same amount. • Added Rapid Rescore requirements • Revised Bankruptcy to clarify Chapter 13 dismissal seasoning requirements by Credit Grade. • Revised Housing Events for CFA Credit Grade C to remove the LOE requirements • Revised Child Support, Alimony or Maintenance Obligations to add repayment plan requirements. • Revised Undisclosed Debts to remove pay history requirement and add 30 day requirement. • Revised Employment/ Income Documentation > Pay Stubs and W-2s to add W-2 transcripts may be used in lieu of paper W-2s. • Revised Employment/ Income Documentation > Federal Income Tax Returns to add 1040 transcripts may be used in lieu of paper 1040s when the breakdown of the individual schedules are not required for qualifying purposes. • Revised Bank Statement Documentation to clarify NSF requirements and add Paypal account statement restriction • Revised Rental Income to remove Operating Income Statement form (FNMA Form 216) • Revised Calculating Rental Income from the Subject Property and Rental Income from Other Real Estate Owned to clarify the circumstances warrant utilizing 75% of the current lease agreement • Revised Unacceptable Income to add income form marijuana sales (medical and recreational) • Revised Reserves to add Bank Statement Income: 6 Months and All income types meeting the reduced parameters can receive the reduced reserves. • Revised Gifts of Equity to clarify relatives and delete FHA definition of Family
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Date Version Description of Change 09/27/18 3.7 • Revised Business Bank Statements to clarify Option for either 12 or 24 month complete business bank statements. Added note: If borrower elects 12 months, additional LLPA’s apply • Deleted Written Explanations for Derogatory Credit requirements. • Revised Multiple Financed Properties to add no limit on financed properties. • Revised Limited Tradelines to clarify FICO requirements to calculate LTV • Deleted Payment Shock requirements. • Revised Bank Statement Documentation to clarify Overdraft coverage is not considered an NSF. • Revised Non-Occupant Co-Borrowers/ Co-Signers/ Guarantors to be
carringtoncorrespondent.com-Carrington-Investor-Advantage-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Rental History Rental payments must be documented via a Verification of Rent (VOR). A combined total of all late mortgage and rental payments in the past 12 months must be used to determine the housing history. All mortgages on the borrower's credit report, the subject property (for refinance transactions), and the borrower’s primary residence must be rated. Mortgages on the subject property and primary residence must be rated even if the mortgage is not in the borrower’s name. Twelve (12) months of cancelled checks or bank statements must be obtained when: • the borrower is making rental payments to an interested party, or • the borrower is making mortgage payments to an individual or an interested party. A VOR/VOM is not required but may be requested for clarification. All mortgages and rental payments requiring a rating must be current at time of closing. If the credit report or VOR/VOM reflects a past-due status, updated documentation is required to verify account is current. Forbearance Due to
carringtoncorrespondent.com-Carrington-Investor-Advantage-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Assets Must be sourced/seasoned for 30 days. Asset statements must be dated within 120 days of closing and verified. Deposit verification and seasoning of assets must be documented by one monthly bank statement. Retirement accounts require documentation verifying the lending terms of the account. Supporting documentation must be obtained for single, unexplained deposits that exceed 2% of the appraised value for the loan. Documentation of large deposits is not required on refinance transactions. Gifts are acceptable for down payment provided minimum borrower investment requirements are met. Sources of funds used for the minimum required investment and reserves must be owned by the borrower. Eligible Sources of
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
History Mortgage payments not reflected on the original credit report must be documented via an institutional Verification of Mortgage (VOM). VOMs from servicers and LLCs are considered institutional. Rental payments must be documented via a Verification of Rent (VOR). A combined total of all late mortgage and rental payments in the past 12 months must be used to determine the housing history for all borrowers. Twelve (12) months of cancelled checks or bank statements must be obtained when: • ·the borrower is making rental payments to an interested party, or • ·the borrower is making mortgage payments to an individual or an interested party. A VOR/VOM is not required but may be requested for clarification. All mortgages and rental payments must be current at time of closing. If the credit report or VOR/VOM reflects a past-due status, updated documentation is required to verify account is current. Borrowers with no housing history or less than 12 months housing history are permitted. Refer to Carrington Prime Advantage Underwriting Guidelines for full details. Forbearance Due to
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Income Loans utilizing bank statement documentation for income will not require a 4506-C form to be signed or processed for transcripts. When a file has mixed income (W2 wage earner income) combined with the bank statement income option, CMS must obtain a 4506-C and transcripts for the W2 wage earner income only. See Carrington Prime Advantage Program Guidelines for details. Please Note: Underwriter may condition for 4506-C tax transcripts to be signed and processed on a case by case basis.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Non-Salaried Two years documentation and evidence of at least 3-year continuance is required. Retirement Income requires a copy of the award letter and two most recent 1099’s- OR 2-month’s consecutive bank statements showing receipt of the income. Social Security income can be taxed up 25% or an amount that is prudent based on federal tax levels but not to exceed 25%. Documentation is required to show the income is non-taxable. Alimony and child support must be received at least 6 months to be used for qualifying.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Documentation Self-employed borrowers are eligible for either Personal Bank Statement Documentation or Business Bank Statement Documentation. The following restrictions apply to both documentation types: Borrowers must be self-employed for at least 2 years. Business must be in existence for at least 2 years. Standard Tradelines are required. Foreign Nationals are ineligible. Exceptions are not permitted. Foreign sources of income are ineligible. For Personal Bank Statement qualifying, all parties listed on each bank account must be included as borrowers on the loan. For Business Bank Statements where the borrower is not 100% owner of the business or another party appears on the business bank statements, refer to the guidelines for documenting the borrower’s percent ownership of the business. Statements must be consecutive and reflect the most recent months available. Statements must support stable and generally predictable deposits. Unusual deposits must be documented. Evidence of a decline in earnings may result in disqualification. More than 3 NSFs or overdrafts within the most recent 12 months require explanation, supporting documentation, and underwriter analysis for acceptability. Refer to guidelines for additional details. Note: Overdraft Protection Transfers are not considered an NSF. If bank statements provided reflect payments being made on obligations not listed on the credit report, see Undisclosed Debts for additional guidance. PayPal business account statements are ineligible. PayPal earnings must be deposited into a business or personal bank account for consideration. W-2 Wages: Additional income deposited into the bank statements but derived from a source other than the self-employed business may not be included in the bank statement average. W-2 earnings must be documented as per the requirements in Wage-Earners along with a processed 4506-C verifying the W-2 earnings only. W-2 transcripts may be used in lieu of paper W-2s. Rental Income: Borrowers who receive rental income as a secondary income source may utilize Bank Statement Documentation for calculating business income and the most recent lease agreement(s) for rental properties for calculating rental income. Obtain proof of receipt at the current lease rate using a cancelled check or bank statement. Calculate the qualifying rents by using 75% of the current lease minus the full PITIA. Borrowers whose primary source of income is derived solely from the ownership of rental properties as declared on personal or business tax returns must be calculated using Full Documentation of Income. The following documentation is required: 12 or 24 months complete personal/business bank statements. Bank statements should be from the same account. Multiple bank accounts may be used, but a combination of business and personal is prohibited. Account changes during the review period are acceptable for circumstances such as account closure when the borrower is a victim of fraud or the borrower changes banking institutions, provided there is a clear account transfer date and no deposits are duplicated. Transaction history printouts are not acceptable.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Documentation Self-employed borrowers with non-employee compensation earnings on IRS Form 1099-NEC, such as independent contractors and gig workers, may provide 1 or 2 years 1099-NEC statements. The following restrictions apply: Borrowers must be self-employed for at least two (2) years verified by two (2) years of business licenses or a CPA letter. Business must be in existence for at least two (2) years. This program is designed for self-employed independent contractors with low overhead. If documentation in the file indicates an expense ratio greater than 20%, including (but not limited to) a YTD P&L or bank statements that reflect payroll or rental expenses, income must be qualified using traditional, bank statement, or P&L documentation to account for the higher expenses. Note: automobile payments and leases are not counted towards business expenses if the payments are already considered in the debt ratio as a liability. Standard Trade Lines are required. Foreign Nationals are ineligible. Exceptions are not permitted. IRS form 4506-C must be processed for 1 or 2 years 1099 forms Multiple 1099 forms from different industries will be reviewed independently as separate businesses. For example, a borrower with earnings from Rideshare and IT Consulting must have a two-year history in each line of work to consider earnings from both sources. Evidence of a decline in earnings may result in disqualification Year-to-Date earnings must support the qualifying income calculated per instructions below. YTD earnings must be documented with one of the following, utilizing the most recent documentation available as of the loan application date: o YTD Profit & Loss statement prepared by a licensed or registered CPA or tax preparer. Net monthly earnings on the P&L must not be more than 10% less than qualifying net income of the previous 1 or 2 years. o Earnings Statement with YTD income or Pay Stub with YTD income from the Payer listed on the 1099 forms. Gross earnings on the YTD Earnings Statements must not be more than 10% less than gross monthly 1099 earnings. o Most recent two (2) months bank statements, earnings statements without YTD income, or pay stubs without YTD income. Earnings statements or pay stubs must come from the Payer listed on the 1099 forms. Gross deposits or earnings on bank statements, earnings statements, or pay stubs must not be more than 10% less than gross monthly 1099 earnings. • Expense factor must be considered, refer to the Carrington Prime Advantage (CPA) Guidelines for full details.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Documentation A Written Verification of Employment may be used to calculate income for borrowers qualifying with wages from base pay/salary, overtime, bonus, tips, and commissions, subject to the following requirements: • Borrower must be employed by the same employer for a minimum of two years. • The Written VOE must be obtained directly by CMS from an automated or third-party service, such as Equifax The Work Number, CoreLogic AutomatIQ, Veri-Tax, etc., and include income data. Note: CMS may issue an initial decision using a hand-written or TPO-provided Written VOE, but must obtain an automated or third-party Written VOE directly from the service provider for the final income calculation. • Income labeled as "Other" or similar on the Written VOE will require a year-to-date and year-end itemization from the employer or pay stubs in order to use for qualifying. • W-2s and pay stubs are otherwise not required. • Tax returns, transcripts, and 4506-C are not required unless the borrower is qualifying with additional forms of income like interest, dividends, capital gains, etc. • Self-employment, employment by a family member, and foreign income are not eligible. Borrowers who receive rental income as a secondary income source may utilize Written VOE Documentation for calculating employment-related income and the most recent lease agreement(s) for rental properties for calculating rental income. Obtain proof of receipt at the current lease rate using a cancelled check or bank statement. Calculate the qualifying rents by using 75% of the current lease minus the full PITIA.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Matrix.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Assets Must be sourced/seasoned for 60 days. Asset statements must be dated within 120 days of closing and verified. Deposit verification and seasoning of assets must be documented by two months bank statements. Marketable securities require a copy of the stock certificate. Retirement accounts require documentation verifying the lending terms of the account. All sources of funds must be owned by the borrower. All large deposits must be sourced per guidelines. Asset documentation must be dated within 30 days of application and 90 days of closing. Evidence of liquidation is required for all securities and real estate. Evidence of transfer of funds is required for all cash accounts. Gifts are acceptable provided minimum borrower investment requirements are met. Eligible Sources of
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Date Version Description of Change 01/22/25 5.3 Revised Individual Taxpayer Identification Number (ITIN) Borrowers requirements for foreign driver's license. 09/04/24 5.2 • Revised First Time Investor to 36-month period (was 12 months). • Revised Mortgage and Rental Payment Verification to reflect Mortgages and rental payments may not exceed 1x30 in the past 12 months (was 0x30). • Added CPA General Requirements. • Revised Asset Conversion to remove funds in business accounts as not permitted and updated Income documentation type requirements. • Revised Concessions and Contributions to reflect investment property transactions, the property seller and/or interested parties may contribute up to 4% (was 2%). • Revised Gift Funds to remove gift funds as ineligible for investment property transactions. • Revised Gifts of Equity to add requirements for primary residence and investment property transactions. 07/25/24 5.1 • Revised Cash-Out Limits to refer to program matrix. • Revised Bank Statement Documentation to align with CFA/CFA+ Underwriting Guidelines (added “Borrower may not be an employee of any other borrower” and updated “Statements must be consecutive and reflect the most recent months available as of the application date”). 05/28/24 5.0 • Removed Exhibit A – Tier 3 Markets by Zip Code Table • Revised Gift Funds to refer to Reserves section. • Revised Rural Properties to remove Tier 3 Markets requirements. 04/11/24 4.9 Revised Borrowers to add Individual Taxpayer Identification Number (ITIN) Borrower requirements. 03/21/24 4.8 • Revised General Refinance Requirements to reflect subject property was purchased (formerly acquired) for seasoning purposes. • Revised Texas Section 50(a)(6) General Requirements to add Alternative Documentation of income is allowed (formerly stated Bank Statement
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Calculating Qualifying Income To calculate qualifying income using Business Bank Statement Documentation, choose one of the documentation options below applicable to the Expense Statement method chosen: OPTION 1: DEFAULT EXPENSE FACTOR Add up the deposits over the 12 or 24 months of statements provided to determine a gross deposit number as follows: Multiply Gross deposits by 50% to determine net income. Divide the net deposit number by 12 or 24 months as determined by the number of months of bank statements utilized to support monthly income. Qualifying income must be multiplied by the percentage of ownership the borrower is entitled to. If the borrower’s business expense factor is lower than 50% an Expense Statement prepared and signed by a third-party (i.e. CPA or licensed tax preparer) (See OPTION 2 below) may be used to determine monthly income.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Documentation (continued) • Year-to-Date earnings must support the qualifying income calculated per instructions below. YTD earnings must be documented with one of the following, utilizing the most recent documentation available as of the loan application date: o YTD Profit & Loss statement prepared by a licensed or registered CPA or tax preparer. Net monthly earnings on the P&L must not be more than 10% less than qualifying net income of the previous 1 or 2 years. o Earnings Statement with YTD income or Pay Stub with YTD income from the Payer listed on the 1099 forms. Gross earnings on the YTD Earnings Statements must not be more than 10% less than gross monthly 1099 earnings. o Most recent two (2) months bank statements, earnings statements without YTD income, or pay stubs without YTD income. Earnings statements or pay stubs must come from the Payer listed on the 1099 forms. Gross deposits or earnings on bank statements, earnings statements, or pay stubs must not be more than 10% less than gross monthly 1099 earnings. • Rental Income: Borrowers who receive rental income as a secondary income source may utilize 1099 Income Documentation for calculating self-employment income and the most recent lease agreement(s) for rental properties for calculating rental income. Obtain proof of receipt at the current lease rate using a cancelled check or bank statement. Calculate the qualifying rents by using 75% of the current lease minus the full PITIA. Borrowers whose primary source of income is derived solely from the ownership of rental properties, including short-term rentals, as declared on personal or business tax returns must be calculated using Full Documentation of Income. See Rental Income.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Documentation (continued) • Profit and Loss statements must be provided for the most recent 12 or 24 months, and: o P&L statements must be prepared and signed by a third-party licensed or registered tax preparer. Tax preparers must be a Certified Public Account (CPA), Enrolled Agent (EA), hold a state license for tax preparation, or belong to a professional trade organization within their state, such as the California Tax Education Council (CTEC). Evidence of licensing or professional organization membership must be documented. o The borrower must sign all P&L statements. o P&L statements must not include unacceptable disclaimers or exculpatory language regarding their preparation. o P&L statements may be provided for the 12- or 24-month period immediately predating the loan application, or for the prior 12- or 24-month calendar or fiscal year period. If more than 120 days have passed since the end of the most recent calendar or fiscal year, a Year-to-Date P&L statement must be provided. The YTD P&L must be prepared by the same licensed party that prepared the 12- or 24-month P&L. o Business expenses must be fully itemized and must be reasonable and reflect all expenses expected for the type of business. Underwriting may request additional documentation if necessary. o Underwriter must research (i.e. Google Search) the tax preparer/EA/CPA and tax preparer/EA/CPA Company and the search results must be documented. QC review is required when the tax preparer/EA/CPA and tax preparer/EA/CPA Company is not locatable in search results. o CMS must perform a 100% reverification of the P&L statement and/or CPA letter utilizing the phone number or email from the underwriter research. o Bank statements covering the most recent 2 months are required when evidence of the business can’t be validated. Validation may be supported by a business license, internet search, or acceptable 3rd party verification. The bank statement deposits must support 80% of the monthly average revenue from the P&L. If the most recent 2 months bank statements do not support 80% of the monthly average, continuous bank statements may be added to the analysis until the tolerance is met. • Multiple businesses are permitted, P&L statements must be supplied for each business and each business must have been in existence for at least two (2) years. • Evidence of a decline in earnings will require additional evaluation by the underwriter and may result in disqualification
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Income Annuity income can be used for qualification when the following requirements are met: 12-month history must be verified using 1099s or 1099 transcripts, tax returns, and/or bank statements Letter from issuer of annuity to be obtained stating that it has been set up on periodic withdrawal, amount of withdrawal, duration and balance Account asset balance must support the continuance of the monthly payments for at least 3 years after the close of escrow Annuities less than 12 months old must be in a non-revocable trust with a minimum term of 40 months in order to use the income to qualify. For annuity distributions from a 401(k) or pension, see Pension/Retirement.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Conversion Asset Conversion may be used to determine qualifying income. Permitted on Purchase, Rate and Term and Cash Out. All occupancy types are permitted. See the Carrington Flexible Advantage and Carrington Flexible Advantage Plus Program Matrices for credit score and LTV restrictions. Borrowers must have the lesser of (a) 1.5 times the loan balance or (b) $1mm in qualified assets, both of which must be net of down payment, loan costs and required reserves to qualify. Qualified Assets can be comprised of stocks, bonds, mutual funds, vested amount of retirement accounts and bank accounts. If a portion of the qualified assets are being used for down payment, closing costs, or reserves, those amounts must be excluded from the balance before analyzing a portfolio for income determination. Please note: Restricted stock accounts are not considered qualified assets and are not eligible. The following assets are considered Qualified Assets and can be utilized to calculate income: • 100% of checking, savings, and money market accounts • 100% of the remaining value of stocks & bonds, less any margin balance • 70% of retirement assets • 100% Cash Value of Life Insurance • 3-months seasoning of assets required The following assets are not permitted: • Funds in Foreign Banks Asset Conversion is an Alternative Income Documentation type and may be used as standalone income or with other income types. Bank Statement Documentation used to calculate self-employment income may not be included in the Asset Conversion calculation. The income calculation is as follows: Monthly Income = Net Qualified Assets / 60 Months
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
MONTHLY NET RENTAL INCOME/LOSS Rental Income from an ADU Rental income from an ADU may be considered when permitted by local zoning laws and/or regulations. Any rental income received from the accessory unit and used for qualifying must be documented as follows: The loan file must contain documentation to support that the ADU may be legally rented per local codes or regulations. Purchase transactions involving a property with an ADU: o For ADUs that are currently leased, obtain a copy of the current lease. o Obtain the appraiser’s estimate of market rent on FNMA Form 1007, Comparable Rent Schedule or FNMA Form 1025, Small Residential Income Property Appraisal Report. o The lesser of the actual or market rents less a 25% vacancy and maintenance factor may be used for qualifying. Refinance transactions involving a property with an ADU: o For full doc loans, obtain the most recent tax return. For alt doc loans using bank statements, P&Ls, or 1099s for qualifying, or properties acquired since the most recent tax filing, obtain the current lease and proof of receipt at the current lease rate using a cancelled check or bank statement. o Obtain the appraiser’s estimate of market rent on FNMA Form 1007, Comparable Rent Schedule or FNMA Form 1025, Small Residential Income Property Appraisal Report.
carringtoncorrespondent.com-Carrington-Flexible-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-25 (date inferred — not labelled in the document)
Mortgage Lending Division Version 10.1 – 08/25/26 CMS Policies & Procedures Page 82 of 159 Proprietary and confidential. For internal, Broker and Correspondent use only. Do not distribute. Sources of Income (continued) Rental Income from an ADU (continued) o For full doc loans, the lesser of the Sch E net rents or market rents less a 25% vacancy and maintenance factor may be used for qualifying. For alt doc loans and properties acquired since the most recent tax filing, the lesser of the actual or market rents less a 25% vacancy and maintenance factor may be used for qualifying. o Rental income may not be considered for ADUs that do not have a history of being leased. Transactions where other Real Estate Owned has an ADU that may be legally rented: o For full doc loans, obtain the most recent tax return. Sch E net rents may be used for qualifying. o For alt doc loans using bank statements, P&Ls, or 1099s for qualifying, or properties acquired since the most recent tax filing, obtain the current lease and proof of receipt at the current lease rate using a cancelled check or bank statement. The actual rents less a 25% vacancy and maintenance factor may be used for qualifying. o Rental income may not be considered for ADUs that do not have a history of being leased.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Calculating Qualifying Income To calculate qualifying income using Business Bank Statement Documentation, choose one of the documentation options below applicable to the Expense Statement method chosen: OPTION 1: DEFAULT EXPENSE FACTOR Add up the deposits over the 12 or 24 months of statements provided to determine a gross deposit number as follows: Multiply Gross deposits by 50% to determine net income. Divide the net deposit number by 12 or 24 months as determined by the number of months of bank statements utilized to support monthly income. Qualifying income must be multiplied by the percentage of ownership the borrower is entitled to. If the borrower’s business expense factor is lower than 50% an Expense Statement prepared and signed by a third-party (i.e. CPA or licensed tax preparer) (See OPTION 2 below) may be used to determine monthly income.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Documentation (continued) • Evidence of a decline in earnings may result in disqualification • Year-to-Date earnings must support the qualifying income calculated per instructions below. YTD earnings must be documented with one of the following, utilizing the most recent documentation available as of the loan application date: o YTD Profit & Loss statement prepared by a licensed or registered CPA or tax preparer. Net monthly earnings on the P&L must not be more than 10% less than qualifying net income of the previous 1 or 2 years. o Earnings Statement with YTD income or Pay Stub with YTD income from the Payer listed on the 1099 forms. Gross earnings on the YTD Earnings Statements must not be more than 10% less than gross monthly 1099 earnings. • Most recent two (2) months bank statements, earnings statements without YTD income, or pay stubs without YTD income. Earnings statements or pay stubs must come from the Payer listed on the 1099 forms. Gross deposits or earnings on bank statements, earnings statements, or pay stubs must not be more than 10% less than gross monthly 1099 earnings. • Rental Income: Borrowers who receive rental income as a secondary income source may utilize 1099 Income Documentation for calculating self-employment income and the most recent lease agreement(s) for rental properties for calculating rental income. Obtain proof of receipt at the current lease rate using a cancelled check or bank statement. Calculate the qualifying rents by using 75% of the current lease minus the full PITIA. Borrowers whose primary source of income is derived solely from the ownership of rental properties, including short-term rentals, as declared on personal or business tax returns must be calculated using Full Documentation of Income. See Rental Income.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Documentation (continued) Requirements for P&L Documentation (continued) o Business expenses must be fully itemized and must be reasonable and reflect all expenses expected for the type of business. Underwriting may request additional documentation if necessary. o Underwriter must research (i.e. Google Search) the tax preparer/EA/CPA and tax preparer/EA/CPA Company and the search results must be documented. QC review is required when the tax preparer/EA/CPA and tax preparer/EA/CPA Company is not locatable in search results. o CMS must perform a 100% reverification of the P&L statement and/or CPA letter utilizing the phone number or email from the underwriter research. o Bank statements covering the most recent 2 months are required when evidence of the business can’t be validated. Validation may be supported by a business license, internet search, or acceptable 3rd party verification. The bank statement deposits must support 80% of the monthly average revenue from the P&L. If the most recent 2 months bank statements do not support 80% of the monthly average, continuous bank statements may be added to the analysis until the tolerance is met. • Multiple businesses are permitted, P&L statements must be supplied for each business and each business must have been in existence for at least two (2) years. • Evidence of a decline in earnings will require additional evaluation by the underwriter and may result in disqualification • Rental Income: Borrowers who receive rental income as a secondary income source may utilize Profit and Loss Income Documentation for calculating self-employment income and the most recent lease agreement(s) for rental properties for calculating rental income. Obtain proof of receipt at the current lease rate using a cancelled check or bank statement. Calculate the qualifying rents by using 75% of the current lease minus the full PITIA. Borrowers whose primary source of income is derived solely from the ownership of rental properties, including short-term rentals, as declared on personal or business tax returns must be calculated using Full Documentation of Income. See Rental Income.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Conversion Permitted on Purchase, Rate and Term and Cash Out. All occupancy types are permitted. See the Carrington Prime Advantage Program Matrix for credit score and LTV restrictions. Borrowers must have the lesser of (a) 1.5 times the loan balance or (b) $1mm in qualified assets, both of which must be net of down payment, loan costs and required reserves to qualify. Qualified Assets can be comprised of stocks, bonds, mutual funds, vested amount of retirement accounts and bank accounts. If a portion of the qualified assets are being used for down payment, closing costs, or reserves, those amounts must be excluded from the balance before analyzing a portfolio for income determination. Please note: Restricted stock accounts are not considered qualified assets and are not eligible. The following assets are considered Qualified Assets and can be utilized to calculate income: • 100% of checking, savings, and money market accounts • 100% of the remaining value of stocks & bonds, less any margin balance • 70% of retirement assets • 100% Cash Value of Life Insurance • 3-months seasoning of assets required The following assets are not permitted: • Funds in Foreign Banks Asset Conversion is an Alternative Income Documentation type and may be used as standalone income or with other income types. Bank Statement Documentation used to calculate self-employment income may not be included in the Asset Conversion calculation. The income calculation is as follows: Monthly Income = Net Qualified Assets / 60 Months
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
MONTHLY NET RENTAL INCOME/LOSS Rental Income from an ADU Rental income from an ADU may be considered when permitted by local zoning laws and/or regulations. Any rental income received from the accessory unit and used for qualifying must be documented as follows: • The loan file must contain documentation to support that the ADU may be legally rented per local codes or regulations. • Purchase transactions involving a property with an ADU: o For ADUs that are currently leased, obtain a copy of the current lease. o Obtain the appraiser’s estimate of market rent on FNMA Form 1007, Comparable Rent Schedule or FNMA Form 1025, Small Residential Income Property Appraisal Report. o The lesser of the actual or market rents less a 25% vacancy and maintenance factor may be used for qualifying. • Refinance transactions involving a property with an ADU: o For full doc loans, obtain the most recent tax return. For alt doc loans using bank statements, P&Ls, or 1099s for qualifying, or properties acquired since the most recent tax filing, obtain the current lease and proof of receipt at the current lease rate using a cancelled check or bank statement. o Obtain the appraiser’s estimate of market rent on FNMA Form 1007, Comparable Rent Schedule or FNMA Form 1025, Small Residential Income Property Appraisal Report.
carringtoncorrespondent.com-Carrington-Prime-Advantage-Program-Underwriting-Guidelines.pdf · document dated 2026-08-06 (date inferred — not labelled in the document)
Mortgage Lending Division Version 6.3 – 08/06/26 CMS Policies & Procedures Page 75 of 137 Proprietary and confidential. For internal, Broker and Correspondent use only. Do not distribute. Sources of Income (continued) Rental Income from an ADU (continued) o For full doc loans, the lesser of the Sch E net rents or market rents less a 25% vacancy and maintenance factor may be used for qualifying. For alt doc loans and properties acquired since the most recent tax filing, the lesser of the actual or market rents less a 25% vacancy and maintenance factor may be used for qualifying. o Rental income may not be considered for ADUs that do not have a history of being leased. • Transactions where other Real Estate Owned has an ADU that may be legally rented: o For full doc loans, obtain the most recent tax return. Sch E net rents may be used for qualifying. o For alt doc loans using bank statements, P&Ls, or 1099s for qualifying, or properties acquired since the most recent tax filing, obtain the current lease and proof of receipt at the current lease rate using a cancelled check or bank statement. The actual rents less a 25% vacancy and maintenance factor may be used for qualifying. o Rental income may not be considered for ADUs that do not have a history of being leased.
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§2 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01
2. GENERAL PROGRAM INFORMATION 2.1. PROGRAMS AD offers the loan programs below. See the appropriate AD Matrices for additional details and criteria: • AD Owner Occupied / Second Home / Investment Program Mortgage History Min FICO Credit Event (CE) Seasoning Tradelines Residual Income Super Prime 0x30x12 and 0x90x24 620 48 months Standard $2,000 Prime 0x60x12 620 12 months Standard / Limited $1,500 • AD Investment Property / DSCR Program Mortgage History Min FICO Credit Event (CE) Seasoning Tradelines Ownership Requirement DSCR (No DTI) 0x30x12 and 0x90x24 620 48 months Standard Not Required • AD Second Home / Investment Property Foreign National Program Mortgage History Min FICO Credit Event (CE) Seasoning Tradelines Ownership Requirement Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 13 Foreign National Full Doc 0x30x12 and 0x90x24 660 48 Months Not Required Not Required Foreign National Asset Utilization 0x30x12 and 0x90x24 660 48 Months Not Required Not Required Foreign National DSCR 0x30x12 and 0x90x24 660 48 Months Not Required Not Required 2.2. PRODUCTS See latest applicable AD Matrix. 2.3. LOAN AMOUNTS AND LOAN-TO-VALUES See latest applicable AD Matrix. The lesser of the purchase price or appraised value of the subject property is the original value used to calculate the loan-to-value, with consideration to the value derived from the secondary valuation waterfall. 2.4. DOCUMENTATION Documentation types include: • Full Documentation • Asset Utilization • Personal Bank Statement Documentation • Business Bank Statement Documentation • Written Verification of Employment (WVOE) • Profit and Loss Statement • 1099 Income 2.5. LOAN AGE The period between the note date and the AD Mortgage funding date cannot exceed 90 days for correspondent loans. AD will consider longer periods on a case-by case basis. 2.6. PREPAYMENT PENALTIES, POINTS, AND FEES Total points, fees, and APR may not exceed current state and federal high-cost thresholds. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 14 Prepayment penalties are allowed on investment property transactions - see applicable AD Matrices for details. Prepayment penalties on primary residence and second home transactions are prohibited. Where permitted by applicable laws and regulations on an investment property, a prepayment charge may be assessed in the period between six (6) months and five (5) years following the execution date of the Note. The prepayment charge will be equal to 6 months of interest on the amount of the prepayment that exceeds 20% of the original principal balance. The charge applies to loans that pay off due to sale or refinance, or curtailments that exceed 20% of the original principal balance in each 12-month time period. See rate sheet for further detail. The prepayment penalty can be disclosed within the body of the Note or in a separate rider. The following state restrictions apply: • Prepayment penalties are not allowed in AK, AR, KS, MI, MN, NM, OH (1-2 units with loan amount less than or equal to 116,356) and RI. Prepayment penalty buydown is required. • Prepayment penalties are not allowed on loans vested to individuals in IL, NJ and VT. Prepayment penalty buydown required or close in LLC (maximum prepayment penalty period is 3 years in IL). • Maximum prepayment penalty period is 2 years in MS. • Maximum prepayment penalty period is 3 years in ID and MA. • Maximum prepayment penalty period is 3 years in DC and MD. The prepayment charge will be equal to 2 months of interest on the amount of the prepayment that exceeds 20% of the original principal balance. • Virginia a
§2 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01
2. GENERAL CLOSED-END SECOND LIEN PROGRAM INFORMATION 2.1. PROGRAMS AD offers the loan programs below. See the appropriate AD Matrices for additional details and criteria: • AD Owner Occupied / Second Home Program Mortgage History Min FICO Credit Event (CE) Seasoning Tradelines Residual Income US Citizens / Permanent Residents / Non-Perm Residents / Alt-Income 0x30x12 and 0x90x24 680 48 months Standard $2,000 • AD Investment Property / DSCR / Foreign National Program Mortgage History Min FICO Credit Event (CE) Seasoning Tradelines Residual Income US Citizens / Permanent Residents / Non-Perm Residents / Alt-Income / DSCR (No DTI) 0x30x12 and 0x90x24 680 48 months Standard $2,000 / DSCR Not Required Foreign National 0x30x12 and 0x90x24 680 (No Fico) 48 Months Not Required Not Required Maximum Combined Loan Amount for both first and second liens is $4,000,000. 2.2. PRODUCTS See latest applicable AD Matrix. 2.3. LOAN AMOUNTS AND LOAN-TO-VALUES See latest applicable AD Matrix. Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 13 The lesser of the purchase price or appraised value of the subject property is the original value used to calculate the loan-to-value, with consideration to the value derived from the secondary valuation waterfall. 2.4. DOCUMENTATION Documentation types include: • Full Documentation • Asset Utilization • Personal Bank Statement Documentation • Business Bank Statement Documentation • Written Verification of Employment (WVOE) • 1099 Income 2.5. LOAN AGE The period between the note date and the AD Mortgage funding date cannot exceed 90 days for correspondent loans. AD will consider longer periods on a case-by case basis. 2.6. PREPAYMENT PENALTIES, POINTS, AND FEES Total points, fees, and APR may not exceed current state and federal high-cost thresholds. Prepayment penalties are allowed on investment property transactions - see applicable AD Matrices for details. Prepayment penalties on primary residence and second home transactions are prohibited. Where permitted by applicable laws and regulations on an investment property, a prepayment charge may be assessed in the period between six (6) months and five (5) years following the execution date of the Note. The prepayment charge will be equal to 6 months of interest on the amount of the prepayment that exceeds 20% of the original principal balance. The charge applies to loans that pay off due to sale or refinance, or curtailments that exceed 20% of the original principal balance in each 12-month time period. DSCR loans require a minimum 1-year prepayment penalty where allowable by state law. See rate sheet for further detail. The prepayment penalty can be disclosed within the body of the Note or in a separate rider. The following state restrictions apply: • Prepayment penalties are not allowed in AK, AR, KS, MI, MN, NM, OH (1-2 units with loan amount less than or equal to 116,356), RI and TX. Prepayment penalty buydown is required. • Prepayment penalties are not allowed on loans vested to individuals in IL, NJ and VT. Prepayment penalty buydown required or close in LLC (maximum prepayment penalty period is 3 years in IL). • Maximum prepayment penalty period is 2 years in MS. Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 14 • Maximum prepayment penalty period is 3 years in ID and MA. • Maximum prepayment penalty period is 3 years in DC and MD. The prepayment charge will be equal to 2 months of interest on the amount of the prepayment that exceeds 20% of the original principal balance. • Virginia and Maryland - Prepayment penalties are not allowed on loan balances l
§13.5.1 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01
13.5.1. CO-BORROWERS WITH DIFFERENT RESIDENCY Loans to US Citizen and Permanent Resident borrowers with Non-Permanent Resident Alien co- borrowers will be qualified based on Non-Permanent Resident eligibility criteria. Loans to US Citizen and Permanent Resident borrowers with Foreign National co-borrowers will be qualified based on Foreign National eligibility criteria. Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 93 13.6. NON-OCCUPANT CO-BORROWERS /CO-SIGNERS / GUARANTORS Non-occupant borrowers are allowed which are owners of the subject property and are obligated to repay a loan on an owner-occupied or second home. Such non-occupant borrowers cannot be the primary income earners and are immediate relatives to one of the occupying borrowers either by family relation or marriage. Non-occupying co-borrowers are ineligible for cash-out transactions. 13.7. FIRST-TIME HOMEBUYER A first-time homebuyer is defined as a borrower who had no ownership interest in a residential or mixed-use properties up to 20 units in the United States (for Foreign National programs property ownership in any country suffice) during the preceding three (3) year period. If one (1) borrower is a first-time homebuyer and the other borrower is not, then first-time homebuyer guidance does not apply. Residential properties owned under business entity are eligible with a minimum 25% entity ownership requirement. The following requirements apply to first-time homebuyer transactions: • The borrower must contribute at 5% own funds for owner occupied transaction and 10% for investment • Max 80 CLTV for Bank statement document type • First-time homebuyer is allowed on DSCR program. Short-term rentals are not allowed. • First-time homebuyers with payment shock exceeding 300% are ineligible. Payment shock measures the increase in a borrower’s monthly housing expense compared to their current housing expense. Payment Shock (%) = ((Proposed Housing Expense – Current Housing Expense) ÷ Current Housing Expense) × 100, if the borrower is rent-free (with no housing expenses), the payment shock is not calculated. 13.8. MULTIPLE FINANCED PROPERTIES AND AD EXPOSURE AD Mortgage exposure may not exceed $5M aggregate with a maximum of 10 loans for each individual borrower in 6 months span counting from 1st loan’s note date to the most recent loan’s note date. Exceptions to this policy may be reviewed on a case-by-case basis. When the subject property is a primary residence, second home or investment property, there are no limitations on the number of other properties the borrower(s) may currently have financed. 13.9. INELIGIBLE BORROWERS The following borrowers are not eligible: • Borrowers with diplomatic immunity or otherwise excluded from U.S. jurisdiction. • Non-occupant co-borrowers are ineligible for cash-out transactions. • Residents of any country not permitted to transact business with US companies are ineligible (as determined by any U.S. government authority). Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 94 • Irrevocable Trusts or Land Trusts. • Borrowers less than 18 years old. • If the application, title, or credit documents indicate the borrower is involved in a lawsuit or litigation Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 95 Exhibit 1 - “VISA” Visa classifications allowed as Non-Permanent Resident Aliens Visa Valid EAD Card Description B1/A3/G5 C17 Non-i
§13.5.1 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01
13.5.1. CO-BORROWERS WITH DIFFERENT RESIDENCY Loans to US Citizen and Permanent Resident borrowers with Non-Permanent Resident Alien co- borrowers will be qualified based on Non-Permanent Resident eligibility criteria. Loans to US Citizen and Permanent Resident borrowers with Foreign National co-borrowers will be qualified based on Foreign National eligibility criteria. 13.6. NON-OCCUPANT CO-BORROWERS /CO-SIGNERS / GUARANTORS Non-occupant borrowers are allowed which are owners of the subject property and are obligated to repay a loan on an owner-occupied or second home. Such non-occupant borrowers cannot be the primary income earners and are immediate relatives to one of the occupying borrowers either by family relation or marriage. Non-occupying co-borrowers are ineligible for cash-out transactions. 13.7. FIRST-TIME HOMEBUYER A first-time homebuyer is defined as a borrower who had no ownership interest in a residential or mixed-use properties up to 20 units in the United States (for Foreign National programs property ownership in any country suffice) during the preceding three (3) year period. If one (1) borrower is a first-time homebuyer and the other borrower is not, then first-time homebuyer guidance does not apply. Residential properties owned under business entity are eligible with a minimum 25% entity ownership requirement. The following requirements apply to first-time homebuyer transactions: • Maximum loan amount of $1,000,000 • Min 660 FICO for Super Prime and Prime, min 680 FICO for DSCR or No FICO (only for FN) • Max DTI 50 • Max 80 CLTV for Bank statement document type • The borrower must contribute at 5% own funds for owner occupied transaction and 10% for investment • First-time homebuyer is allowed on DSCR program with minimum DSCR 1. Short-term rentals are not allowed. • First-time homebuyers with payment shock exceeding 300% are ineligible. For P&L document type payment shock cannot exceed 100%. Payment shock measures the increase in a borrower’s Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 111 monthly housing expense compared to their current housing expense. Payment Shock (%) = ((Proposed Housing Expense – Current Housing Expense) ÷ Current Housing Expense) × 100, if the borrower is rent-free (with no housing expenses), the payment shock is not calculated. 13.8. MULTIPLE FINANCED PROPERTIES AND AD EXPOSURE AD Mortgage exposure may not exceed $5M aggregate with a maximum of 10 loans for each individual borrower in 6 months span counting from 1st loan’s note date to the most recent loan’s note date. Exceptions to this policy may be reviewed on a case-by-case basis. When the subject property is a primary residence, second home or investment property, there are no limitations on the number of other properties the borrower(s) may currently have financed. 13.9. INELIGIBLE BORROWERS The following borrowers are not eligible: • Borrowers with diplomatic immunity or otherwise excluded from U.S. jurisdiction. • Non-occupant co-borrowers are ineligible for cash-out transactions. • Residents of any country not permitted to transact business with US companies are ineligible (as determined by any U.S. government authority). • Irrevocable Trusts or Land Trusts. • Borrowers less than 18 years old. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 112 Exhibit 1 - “VISA” Visa classifications allowed as Non-Permanent Resident Aliens Visa Valid EAD Card Description B1/A3/G5 C17 Non-immigrant domestic servant (VISA and Valid EAD Card must be combined) BC-1 N Broadcaster in the US employed by the International Broadcasting Bureau of the Broad
§2 · admortgage-com-Apex-Prime-Eligibility-Guidelines-June-29-2026-pdf.pdf · document dated 2026-07-01
2. GENERAL PROGRAM INFORMATION 2.1. PROGRAMS AD offers the loan programs below. See the appropriate AD Matrices for additional details and criteria: • AD Owner Occupied / Second Home / Investment Program Mortgage History Min FICO Credit Event (CE) Seasoning Tradelines Residual Income Apex Prime 0x30x24 680 48 months Standard $2,000 2.2. PRODUCTS See latest applicable AD Matrix. 2.3. LOAN AMOUNTS AND LOAN-TO-VALUES See latest applicable AD Matrix. The lesser of the purchase price or appraised value of the subject property is the original value used to calculate the loan-to-value, with consideration to the value derived from the secondary valuation waterfall. 2.4. DOCUMENTATION Documentation types include: • Full Documentation • Asset Utilization • Personal Bank Statement Documentation • Business Bank Statement Documentation • 1099 Income 2.5. LOAN AGE The period between the note date and the AD Mortgage funding date cannot exceed 90 days for correspondent loans. AD will consider longer periods on a case-by case basis. 2.6. PREPAYMENT PENALTIES, POINTS, AND FEES Total points, fees, and APR may not exceed current state and federal high-cost thresholds. Prepayment penalties are allowed on investment property transactions - see applicable AD Matrices for details. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 13 Prepayment penalties on primary residence and second home transactions are prohibited. Where permitted by applicable laws and regulations on an investment property, a prepayment charge may be assessed in the period between six (6) months and five (5) years following the execution date of the Note. The prepayment charge will be equal to 6 months of interest on the amount of the prepayment that exceeds 20% of the original principal balance. The charge applies to loans that pay off due to sale or refinance, or curtailments that exceed 20% of the original principal balance in each 12-month time period. See rate sheet for further detail. The prepayment penalty can be disclosed within the body of the Note or in a separate rider. The following state restrictions apply: • Prepayment penalties are not allowed in AK, AR, KS, MI, MN, NM, OH (1-2 units with loan amount less than or equal to 116,356) and RI. Prepayment penalty buydown is required. • Prepayment penalties are not allowed on loans vested to individuals in IL, NJ and VT. Prepayment penalty buydown required or close in LLC (maximum prepayment penalty period is 3 years in IL). • Maximum prepayment penalty period is 2 years in MS. • Maximum prepayment penalty period is 3 years in ID and MA. • Maximum prepayment penalty period is 3 years in DC and MD. The prepayment charge will be equal to 2 months of interest on the amount of the prepayment that exceeds 20% of the original principal balance. • Virginia and Maryland - Prepayment penalties are not allowed on loan balances less $75,000. • Pennsylvania - Prepayment penalties are not allowed on loan balances less than an adjusted value as determined by the Dept of Banking & Securities for 1-2 units. For calendar year 2026 the amount is $329,411. Note: States may impose different definitions of points and fees, rate/APR, or prepayment penalties that apply under HOEPA. States may also use different triggers in each category for determining whether a loan will be a "high-cost mortgage" (or equivalent terms) under state law. As a matter of policy, AD does not fund loans defined as high-cost mortgages (or equivalent terms) under Federal or state law, regardless of the basis for the loan's treatment as such.
§13.5.1 · admortgage-com-Apex-Prime-Eligibility-Guidelines-June-29-2026-pdf.pdf · document dated 2026-07-01
13.5.1. CO-BORROWERS WITH DIFFERENT RESIDENCY Loans to US Citizen and Permanent Resident borrowers with Non-Permanent Resident Alien co- borrowers will be qualified based on Non-Permanent Resident eligibility criteria. Loans to US Citizen and Permanent Resident borrowers with Foreign National co-borrowers will be ineligible. 13.5. NON-OCCUPANT CO-BORROWERS /CO-SIGNERS / GUARANTORS Non-occupant borrowers are allowed which are owners of the subject property and are obligated to repay a loan on an owner-occupied or second home. Such non-occupant borrowers cannot be the primary income earners and are immediate relatives to one of the occupying borrowers either by family relation or marriage. Non-occupying co-borrowers are ineligible for cash-out transactions. 13.6. FIRST-TIME HOMEBUYER A first-time homebuyer is defined as a borrower who had no ownership interest in a residential or mixed-use properties up to 20 units in the United States during the preceding three (3) year period. If one (1) borrower is a first-time homebuyer and the other borrower is not, then first-time homebuyer guidance does not apply. Residential properties owned under business entity are eligible with a minimum 25% entity ownership requirement. The following requirements apply to first-time homebuyer transactions: • Maximum loan amount of $2,000,000 • Max 80 CLTV for Bank statement document type • The borrower must contribute at 5% own funds for owner occupied transaction and 10% for investment • First-time homebuyers with payment shock exceeding 300% are ineligible. Payment shock measures the increase in a borrower’s monthly housing expense compared to their current Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 91 housing expense. Payment Shock (%) = ((Proposed Housing Expense – Current Housing Expense) ÷ Current Housing Expense) × 100, if the borrower is rent-free (with no housing expenses), the payment shock is not calculated. 13.7. MULTIPLE FINANCED PROPERTIES AND AD EXPOSURE AD Mortgage exposure may not exceed $5M aggregate with a maximum of 10 loans for each individual borrower in 6 months span counting from 1st loan’s note date to the most recent loan’s note date. Exceptions to this policy may be reviewed on a case-by-case basis. When the subject property is a primary residence, second home or investment property, there are no limitations on the number of other properties the borrower(s) may currently have financed. 13.8. INELIGIBLE BORROWERS The following borrowers are not eligible: • Borrowers with diplomatic immunity or otherwise excluded from U.S. jurisdiction. • Non-occupant co-borrowers are ineligible for cash-out transactions. • Residents of any country not permitted to transact business with US companies are ineligible (as determined by any U.S. government authority). • Irrevocable Trusts or Land Trusts. • Borrowers less than 18 years old. • FTHB rent-free borrowers • Foreign Nationals • ITIN Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 92 Exhibit 1 - “VISA” Visa classifications allowed as Non-Permanent Resident Aliens Visa Valid EAD Card Description B1/A3/G5 C17 Non-immigrant domestic servant (VISA and Valid EAD Card must be combined) BC-1 N Broadcaster in the US employed by the International Broadcasting Bureau of the Broadcasting Board of Governors BC-2,3 y Spouse, child of BC-1 C-5; C-51 N Employment creation C-52-53 C09 Spouse or child of C-5 or C-51 DV- 1,2,3 N Diversity immigrant, spouse, child E-1, 2, or spouse of E-1, 2 (the spouse does not get a different number for this category) A17 Treaty/Trade investor or spouse E-11/EB-1 N Person with ex
§6.7.3 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01
6.7.3. BUSINESS DEBT Business debt appearing on the borrower's individual credit report will be included in the debt calculation unless the debt can be verified as a business expense and independent of the borrower's personal obligation. Documentation Requirements • Twelve (12) months canceled checks; or • Automatic drafts from the business account • Business debt being excluded from the monthly obligation must have a paid-on time payment history. 6.8. ASSETS Assets to be used for down payment, closing costs, debt payoff, and reserves must be seasoned or sourced for 30 days. If cash out proceeds are used for reserves most recent 1 month’s bank statement must be provided prior to closing where funds will be disbursed. Documentation must be provided to evidence seasoning and sourcing by any of the following: • Most recent 1 month’s account statements, or most recent quarterly account statement, indicating opening and closing balances, and reflecting a consecutive 30 days of asset verification • Supporting documentation should be obtained for single, unexplained deposits that exceed 50% of the borrower’s gross monthly qualifying income for the loan • Documentation of large deposits is not required on refinance transactions • Written Verification of Deposit (VOD), completed by the financial institution • Must include the current and average balances for the most recent 1 month • Large disparities between the current balance and the opening balances will require additional verification or supporting documentation • Online bank statements are acceptable if they clearly identify the account holder and the URL associated with the financial institution (printouts from the financial institution printed and signed by financial institution officer are acceptable for qualification) • Account statements must provide all of the following information: o Borrower as the account holder o Account number o Statement date and time-period covered o Current balance in US dollars o For new bank accounts with less than 30 days seasoning, all ‘large’ or ‘unusual’ deposits should be verified (even for DSCR where income not qualified) Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 52
§6.7.3 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01
6.7.3. BUSINESS DEBT Business debt appearing on the borrower's individual credit report will be included in the debt calculation unless the debt can be verified as a business expense and independent of the borrower's personal obligation. Documentation Requirements • Twelve (12) months canceled checks; or • Automatic drafts from the business account • Business debt being excluded from the monthly obligation must have a paid-on time payment history. 6.8. ASSETS Assets to be used for down payment, closing costs, debt payoff, and reserves must be seasoned or sourced for 30 days. If cash out proceeds are used for reserves most recent 1 month bank statement must be provided prior to closing where funds will be disbursed. Documentation must be provided to evidence seasoning and sourcing by any of the following: • Most recent 1 month’s account statement, or most recent quarterly account statement, indicating opening and closing balances, and reflecting a consecutive 30 days of asset verification • Supporting documentation should be obtained for single, unexplained deposits that exceed 50% of the borrower’s gross monthly qualifying income for the loan • Documentation of large deposits is not required on refinance transactions • Written Verification of Deposit (VOD), completed by the financial institution • Must include the current and average balances for the most recent 1 month • Large disparities between the current balance and the opening balances will require additional verification or supporting documentation • Online bank statements are acceptable if they clearly identify the account holder and the URL associated with the financial institution (printouts from the financial institution printed and signed by financial institution officer are acceptable for qualification) • Account statements must provide all of the following information: o Borrower as the account holder o Account number o Statement date and time-period covered o Current balance in US dollars o For new bank accounts with less than 30 days seasoning, all ‘large’ or ‘unusual’ deposits should be verified (even for DSCR where income not qualified) Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 67
§6.5.16 · admortgage-com-Apex-Prime-Eligibility-Guidelines-June-29-2026-pdf.pdf · document dated 2026-07-01
6.5.16. BANK STATEMENTS ANALYSIS TOOLS AD can accept bank statement analysis tools for calculation of deposits and NSFs attached to the file with underwriter’s certification and bank statements review. 6.6. INCOME AND EMPLOYMENT Stable monthly income is the borrower's verified gross monthly income from all acceptable and verifiable sources that can reasonably be expected to continue. While the sources of income may vary, the borrower should have a consistent level of income despite changes in the sources of income. Future income is not permitted for qualifying purposes. Income from a position not yet commenced – including income documented solely by an offer letter, a signed employment contract, or a scheduled raise or promotion – is not eligible. All qualifying income must be currently active and verifiable at the time of application. Can commingle documentation types subject to guideline restrictions and underwriter discretion (i.e., no tax returns in bank statement programs). Verification for Employed Borrowers: A minimum two (2) year employment history is required. Any gaps in employment that span one or more months must be explained. AD is allowing some flexibility in lieu of the traditional verbal verification of employment with one of the following methods: • Written VOE: An email directly from the employer’s work email address that identifies the name and title of the verifier and the borrower’s name and current employment status may be used in lieu of a verbal VOE. This is required within 10 business days of the note date. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 42 • Paystub: The underwriter may obtain a year-to-date paystub from the pay period that immediately precedes the note date. Verification for All Self-Employed Borrowers: • Underwriter must verify the existence of the business within 120 business days of the note date and ensure the business is active. Acceptable methods of business verification include: o Secretary of State Website. A list of SOS websites may be found at https://e- secretaryofstate.com/ o Verifying a phone listing and address for the borrower's business using a telephone book, the Internet, or directory assistance o Active Insurance policy (Errors & Omissions) o Documentation showing registration for remitting sales tax o Paid Supplier Invoices o Bank Statements with transactions within 120 days o Certificate of business existence issued within 120 days o CPA verification • For bank statements a business narrative is required prior to submission. • Underwriter must consider the financial strength of a self-employed borrower's business. • Underwriter will complete review on borrower’s business to validate 2 and more years of existence, and business ownership %. The borrower’s business used for qualifying purposes must have been in existence for at least two years. The borrower also must own the business for at least two years in case of the change of ownership. A change in structure is allowed with proper documentation – example borrower previously was a sole proprietor but has changed structure to an LLC with 100% ownership. A minimum of 25% ownership is required for self-employed borrowers. • A change in the ownership structure of the business during the life of the loan is prohibited. • CPA Letter requirements: o Attestation that the CPA/Tax Preparer/Enrolled tax agent has filed or reviewed at least previous year of tax returns or financial audit for the borrower. o The letter must be signed by CPA/Tax Preparer/Enrolled tax agent and include the preparation date of the document. o The license number must be provided. o CPA cannot be an employer, employee or a relative of the borrower. • Underwriter must verify the business ownership using one of the following methods: o If the borrower’s b
§6.7.3 · admortgage-com-Apex-Prime-Eligibility-Guidelines-June-29-2026-pdf.pdf · document dated 2026-07-01
6.7.3. BUSINESS DEBT Business debt appearing on the borrower's individual credit report will be included in the debt calculation unless the debt can be verified as a business expense and independent of the borrower's personal obligation. Documentation Requirements • Twelve (12) months canceled checks; or Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 59 • Automatic drafts from the business account • Business debt being excluded from the monthly obligation must have a paid-on time payment history. 6.8. ASSETS Assets to be used for down payment, closing costs, debt payoff, and reserves must be seasoned or sourced for 30 days. If cash out proceeds are used for reserves most recent 1 month bank statement must be provided prior to closing where funds will be disbursed. Documentation must be provided to evidence seasoning and sourcing by any of the following: • Most recent 1 month’s account statement, or most recent quarterly account statement, indicating opening and closing balances, and reflecting a consecutive 30 days of asset verification • Supporting documentation should be obtained for single, unexplained deposits that exceed 50% of the borrower’s gross monthly qualifying income for the loan • Documentation of large deposits is not required on refinance transactions • Written Verification of Deposit (VOD), completed by the financial institution • Must include the current and average balances for the most recent 1 month • Large disparities between the current balance and the opening balances will require additional verification or supporting documentation • Online bank statements are acceptable if they clearly identify the account holder and the URL associated with the financial institution (printouts from the financial institution printed and signed by financial institution officer are acceptable for qualification) • Account statements must provide all of the following information: o Borrower as the account holder o Account number o Statement date and time-period covered o Current balance in US dollars o For new bank accounts with less than 30 days seasoning, all ‘large’ or ‘unusual’ deposits should be verified
§6.5.15 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01
6.5.15. BANK STATEMENTS ANALYSIS TOOLS AD can accept bank statement analysis tools for calculation of deposits and NSFs attached to the file with underwriter’s certification and bank statements review. Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 33 6.6. INCOME AND EMPLOYMENT Stable monthly income is the borrower's verified gross monthly income from all acceptable and verifiable sources that can reasonably be expected to continue. While the sources of income may vary, the borrower should have a consistent level of income despite changes in the sources of income. Future income is not permitted for qualifying purposes. Income from a position not yet commenced – including income documented solely by an offer letter, a signed employment contract, or a scheduled raise or promotion – is not eligible. All qualifying income must be currently active and verifiable at the time of application. Can commingle documentation types subject to guideline restrictions and underwriter discretion (i.e., no tax returns in bank statement programs, DSCR is standalone). Verification for Employed Borrowers: A minimum two (2) year employment history is required. Any gaps in employment that span one or more months must be explained. AD is allowing some flexibility in lieu of the traditional verbal verification of employment with one of the following methods: • Written VOE: An email directly from the employer’s work email address that identifies the name and title of the verifier and the borrower’s name and current employment status may be used in lieu of a verbal VOE. This is required within 10 business days of the note date. • Paystub: The underwriter may obtain a year-to-date paystub from the pay period that immediately precedes the note date. Verification for All Self-Employed Borrowers: • Underwriter must verify the existence of the business within 120 business days of the note date and ensure the business is active. Acceptable methods of business verification include: o Secretary of State Website. A list of SOS websites may be found at https://e- secretaryofstate.com/ o Verifying a phone listing and address for the borrower's business using a telephone book, the Internet, or directory assistance o Active Insurance policy (Errors & Omissions) o Documentation showing registration for remitting sales tax o Paid Supplier Invoices o Bank Statements with transactions within 120 days o Certificate of business existence issued within 120 days o CPA verification • For bank statements programs a business narrative is required prior to submission. • Underwriter must consider the financial strength of a self-employed borrower's business. Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 34 • Underwriter will complete review on borrower’s business to validate 2 and more years of existence, and business ownership %. The borrower’s business used for qualifying purposes must have been in existence for at least two years. The borrower also must own the business for at least two years in case of the change of ownership. A change in structure is allowed with proper documentation – example borrower previously was a sole proprietor but has changed structure to an LLC with 100% ownership. A minimum of 25% ownership is required for self-employed borrowers. • A change in the ownership structure of the business during the loan process is prohibited. • CPA Letter requirements: o Attestation that the CPA/Tax Preparer/Enrolled tax agent has filed or reviewed at least previous year of tax returns or financial audit for the borrower. o The letter must be signed by CPA/Tax Prepare
§6.6.4 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01
6.6.4. WRITTEN VERIFICATION OF EMPLOYMENT (WVOE) A written Verification of Employment may be utilized when primary source of earnings is wages/salary. • Two-year history with same employer is required. • Bonus, commission, and overtime are allowed under WVOE. • Completed FNMA Form 1005 • Paystubs, Tax Returns, 4506-C, or W-2’s not required. • For loans with CLTV greater than 70%, two (2) Months Personal Bank Statements required to support the WVOE income. The bank statements must reflect deposits from the employer supporting at least 65% of gross wage/salary reflected on the WVOE. No more than 3 NSFs allowed. • For loans with CLTV 70 and below, no bank statements are required. • Must be completed by Human Resource, Payroll Department or Officer of the Company. • The borrower cannot be employed by family members. • Gift funds are allowed, the borrower must contribute at least 20% from their own funds with maximum 80% CLTV. Gift funds are not allowed for CLTV above 80%. Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 37 6.6.5. 1099 INCOME Payments to sole proprietors or contract individuals are reported on IRS Form 1099 and included in the borrower’s Schedule C. 1099 must be in the name of the borrower’s personal name. Tax returns may be waived and wage-earner documentation requirements followed in 6.6.1 Wage-Earners when all of the following requirements are met: • 1099s for the most recent 1 year are provided • 1099s are from the same employer for the past 1 year • 1099s are validated with a wage and income transcript from the IRS • Year-to-date earnings are verified via a YTD paystub, written VOE, or other equivalent third- party documentation • All gross receipts will have an expense ratio of 10% applied to them If the borrower does not meet the requirements above, tax returns for the most recent 1 years (IRS Form 1040) are required to determine income and related expenses. If the current year is NROR the direct verification from the employer can be accepted. If Borrower is a Seasonal 1099 Employee, Unemployment Income Compensation may also be used in qualification provided it can be documented with a 2-year history on Form 1099-G and comments from Borrowers Employer that the UEC is likely to continue are received. UEC must be confirmed on the 1099 Transcripts. Note: 1099 forms covering a full 1-year period are not required when a borrower changes from being paid W-2s to 1099s while working for the same employer in the same position.
§13.3.4 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-2nd-Lien-July-1-2026-pdf.pdf · document dated 2026-07-01
13.3.4. ASSET VERIFICATION Non-Permanent Resident Aliens must follow minimum reserves requirements from 6.8.6 RESERVES for the subject property, all programs. The seasoning requirement for purchase, rate/term, and cash out refinance is 30 calendar days. Assets must be verified in U.S. Dollar equivalency at the current exchange rate via either www.xe.com or the Wall Street Journal conversion table. A US bank account is required prior to clear to close for all non-permanent resident borrowers. MIXED OR OVERSEAS ASSETS Will allow overseas business funds into personal accounts. AD will need a letter from the CPA, signed and include the preparation date, covering 12 or 24 months (depending on program) explaining where overseas business is from and nature of business. 13.4. FOREIGN NATIONAL A Foreign National is a non-U.S. citizen authorized to live in the U.S. on a temporary basis but does not meet the definition of a Non-Permanent Resident Alien. Foreign National Borrower qualify under Investment Property - DSCR program with foreign national pricing/LTV grid and the Investment Property – Full Doc. EAD card is not required if visa is active. All purchase transactions in Florida made to foreign principals, persons, and entities must have the signed Buyer’s Affidavit published by the Florida Land Title Association. 13.4.1. VERIFICATION OF RESIDENCY STATUS The visa types considered as Foreign Nationals listed in “Exhibit 1 – VISA. Visa types considered as Foreign Nationals". Title Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 90 VISA EXPIRATION REQUIREMENTS Borrower has to have active visa as of the note date or be legally present in the US. Copies of the borrower’s passport and unexpired visa must be obtained. Acceptable alternative documentation to verify visa classification is an I-797 form (Notice of Action) with valid extension dates and an I-94 form (Arrival/Departure Record). Borrowers unable to provide evidence of lawful residency status in the U.S. are not eligible for financing. VISA WAIVER PROGRAM AND CITIZENS OF CANADA OR BERMUDA Borrowers who are residents of countries which participate in the State Department’s Visa Waiver Program (VWP) will not be required to provide a valid visa. Participating countries can be verified through the U.S. Department of State website at https://travel.state.gov/content/travel/en/us- visas/tourism-visit/visa-waiver-program.html Following document required to confirm valid VWP status - Unexpired ESTA Authorization from U.S. Customs Border and Protection https://esta.cbp.dhs.gov/esta/ , if authorization expires in 60 days from the application date updated authorization required to be provided prior to closing. Citizens of Canada and Bermuda do not require ESTA. 13.4.2. CREDIT REQUIREMENTS A U.S. credit report should be obtained for each Foreign National borrower with a valid Social Security number. The credit report should provide merged credit information from the 3 major national credit repositories. For borrowers without a valid Social Security number, an Individual Taxpayer Identification Number (ITIN) is also allowed. A traditional U.S. credit report is not required for borrowers without a valid SSN, however, would be obtained and taken into consideration if exists. Foreign National borrowers who do not have a SSN or ITIN may still proceed under the Foreign National Program. All other program requirements still apply. QUALIFYING U.S. CREDIT The Qualifying U.S. Credit designation refers to non-U.S. citizen borrowers who meet Standard Tradelines or have a minimum of one active tradeline opened for 24 months with no derogatory history. A Qualifying U.S. Credit borrower is eligible for all investment property products and programs reflected on the AD Investment Property Matrix. If non-U.S. citize
§6.5.16 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01
6.5.16. BANK STATEMENTS ANALYSIS TOOLS AD can accept bank statement analysis tools for calculation of deposits and NSFs attached to the file with underwriter’s certification and bank statements review. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 44 6.6. INCOME AND EMPLOYMENT Stable monthly income is the borrower's verified gross monthly income from all acceptable and verifiable sources that can reasonably be expected to continue. While the sources of income may vary, the borrower should have a consistent level of income despite changes in the sources of income. Future income is not permitted for qualifying purposes. Income from a position not yet commenced – including income documented solely by an offer letter, a signed employment contract, or a scheduled raise or promotion – is not eligible. All qualifying income must be currently active and verifiable at the time of application. Can commingle documentation types subject to guideline restrictions and underwriter discretion (i.e., no tax returns in bank statement programs, DSCR is standalone). Verification for Employed Borrowers: A minimum two (2) year employment history is required. Any gaps in employment that span one or more months must be explained. AD is allowing some flexibility in lieu of the traditional verbal verification of employment with one of the following methods: • Written VOE: An email directly from the employer’s work email address that identifies the name and title of the verifier and the borrower’s name and current employment status may be used in lieu of a verbal VOE. This is required within 10 business days of the note date. • Paystub: The underwriter may obtain a year-to-date paystub from the pay period that immediately precedes the note date. Verification for All Self-Employed Borrowers: • Underwriter must verify the existence of the business within 120 business days of the note date and ensure the business is active. Acceptable methods of business verification include: o Secretary of State Website. A list of SOS websites may be found at https://e- secretaryofstate.com/ o Verifying a phone listing and address for the borrower's business using a telephone book, the Internet, or directory assistance o Active Insurance policy (Errors & Omissions) o Documentation showing registration for remitting sales tax o Paid Supplier Invoices o Bank Statements with transactions within 120 days o Certificate of business existence issued within 120 days o CPA verification • For bank statements and P&L programs a business narrative is required prior to submission. • Underwriter must consider the financial strength of a self-employed borrower's business. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 45 • Underwriter will complete review on borrower’s business to validate 2 and more years of existence, and business ownership %. The borrower’s business used for qualifying purposes must have been in existence for at least two years. The borrower also must own the business for at least two years in case of the change of ownership. A change in structure is allowed with proper documentation – example borrower previously was a sole proprietor but has changed structure to an LLC with 100% ownership. A minimum of 25% ownership is required for self-employed borrowers. • A change in the ownership structure of the business during the loan process is prohibited. • CPA Letter requirements: o Attestation that the CPA/Tax Preparer/Enrolled tax agent has filed or reviewed at least previous year of tax returns or financial audit for the borrower. o The letter must be signed by CPA/Tax Preparer/En
§6.6.4 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01
6.6.4. WRITTEN VERIFICATION OF EMPLOYMENT (WVOE) A written Verification of Employment may be utilized when primary source of earnings is wages/salary. • Two-year history with same employer is required. • Bonus, commission, and overtime are allowed under WVOE. • Completed FNMA Form 1005 • Paystubs, Tax Returns, 4506-C, or W-2’s not required. • For loans with CLTV greater than 70%, two (2) Months Personal Bank Statements required to support the WVOE income. The bank statements must reflect deposits from the employer supporting at least 65% of gross wage/salary reflected on the WVOE. No more than 3 NSFs allowed. • For loans with CLTV 70 and below, no bank statements are required. • Must be completed by Human Resource, Payroll Department or Officer of the Company. • The borrower cannot be employed by family members. • Gift funds are allowed, the borrower must contribute at least 20% from their own funds with maximum 80% CLTV. Gift funds are not allowed for CLTV above 80%. 6.6.5. 1099 INCOME Payments to sole proprietors or contract individuals are reported on IRS Form 1099 and included in the borrower’s Schedule C. 1099 must be in the name of the borrower’s personal name. Tax returns may Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 49 be waived and wage-earner documentation requirements followed in 6.6.1 Wage-Earners when all of the following requirements are met: • 1099s for the most recent 1 year are provided • 1099s are from the same employer for the past 1 year • 1099s are validated with a wage and income transcript from the IRS • Year-to-date earnings are verified via a YTD paystub, written VOE, or other equivalent third- party documentation • All gross receipts will have an expense ratio of 10% applied to them If the borrower does not meet the requirements above, tax returns for the most recent 1 years (IRS Form 1040) are required to determine income and related expenses. If the current year is NROR the direct verification from the employer can be accepted. If Borrower is a Seasonal 1099 Employee, Unemployment Income Compensation may also be used in qualification provided it can be documented with a 2-year history on Form 1099-G and comments from Borrowers Employer that the UEC is likely to continue are received. UEC must be confirmed on the 1099 Transcripts. Note: 1099 forms covering a full 1-year period are not required when a borrower changes from being paid W-2s to 1099s while working for the same employer in the same position.
§6.6.9 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01
6.6.9. PROFIT AND LOSS STATEMENT PROGRAMS P&L FOR LAST 12 MONTHS • Licensed CPA, CTEC registered Tax Preparer or IRS Enrolled Tax Agent to provide P&L covering the last 12 months period. • P&L needs to be strictly the 12 months most recent consecutive calendar month OR all separated out by years + YTD i.e. 12 month P&L if application date is 10/01 could be: o 10/01/2025 – 09/31/2026 qualified at 12 months; OR o 01/01/2025– 12/31/2025 on 1 P&L + YTD on another to validate no current decrease o Qualified income for review 2025/12 months; if YTD is lower – require LOE and reviewed under UW’s discretion • CPA, Tax Preparer or Enrolled Agent must have currently active license or status at IRS portals: https://irs.treasury.gov/rpo/rpo.jsf https://www.irs.gov/tax-professionals/ptin-information-and-the-freedom-of- Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 56 information-act https://cpaverify.org/ https://www.irs.gov/e-file-providers/approved-irs-e-file-for-business-providers A CTEC registered tax preparer must have active license verified here https://www.ctec.org/verify?nav=taxpayers License number must be provided. • For loans with CLTV greater than 70%, 2 months of consecutive personal or business bank statements, the most recent statement dated within 120 days of the note date are required for the business/businesses being used for P&L qualification purposes. Total deposits reflected on the bank statements, minus any inconsistent deposits or deposits unrelated to business activity, must support at least 75% of the gross income reflected on the P&L. P&L period must be consistent with the bank statement period. If bank statements do not support the income reported on the P&L statement, the underwriter has the right to request additional months of bank statements to verify the income reported on the P&L. This is acceptable in cases where the nature of the business implies such a situation. No more than 3 NSFs allowed. • For loans with CLTV 70 and below, no bank statements are required. • CPA cannot be an employee or a relative of the borrower. • P&Ls and any letters that come from CPA/Tax Preparer/Enrolled Agent must be signed and include the preparation date. • The business needs to have existed for at least the last two years. • ADM will allow P&L from 2 separate companies. Each company must have their own P&L. • Borrower must own at least 25% of the business, with using pro-rated portion of qualifying income. • Gift funds are allowed, the borrower must contribute at least 20% from their own funds with maximum 80% CLTV. Gift funds are not allowed for CLTV above 80%. • To understand the nature of business and its operations, underwriter may request the borrower or tax preparer to provide a written, signed statement to include the following information about the business: The nature of the business How income is generated How long the business has been in existence • Expenses: Need to make sense for the type of business, and underwriter may ask for additional documentation at their discretion. The minimum expense ratio for qualification purposes is 10%. The P&L must have the expenses itemized. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 57 P&L FOR LAST 24 MONTHS • Licensed CPA, CTEC registered Tax Preparer or IRS Enrolled Tax Agent to provide P&L covering the last 24 months period. • P&L needs to be strictly the 24 months most recent consecutive calendar month OR all separated out by years + YTD i.e. 24 months P&L if application date is 10/01 could be: - 10/01/2024 – 09/31/2026 qualified at 24 months; OR - 01/
§13.4.4 · admortgage-com-Non-QM-Loan-Eligibility-Guidelines-June-29-July-01-2026-pdf.pdf · document dated 2026-07-01
13.4.4. FOREIGN NATIONAL ASSET UTILIZATION Asset Utilization may be used to determine qualifying income as the sole source of income or to supplement other income sources. Qualified Assets can be comprised of stocks, bonds, mutual funds, vested amount of retirement accounts and bank accounts. If a portion of the qualified assets are being used for down payment, closing costs, or reserves, those amounts must be excluded from the balance before analyzing a portfolio for income determination. Funds from foreign accounts in a verifiable Canadian financial institution along with translation and proper currency conversion rate are acceptable. Business assets are not permitted. The following assets are considered Qualified Assets and can be utilized to calculate income: • 100% of checking, savings, money market accounts, and Certificate of deposit (CD) • 100% of the remaining value of public traded stocks, bonds, and mutual funds • 80% of retirement assets • 3-month seasoning of assets required • Proceeds from cash-out excluded from Qualifying assets The income calculation is as follows: Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED. For internal use only. No part of this work may be used, reproduced or transmitted in any form or by any means, by or to any party outside of AD Mortgage LLC. Created: 07-01-2026 P a g e | 109 Monthly Income = Net Qualified Assets / 60 Months* *60 months used to assume a standard rate of return and income received for 5 years Eligible trust assets include: • Assets held in a revocable trust where the trustee to the trust is the borrower. • Assets in an irrevocable trust where the borrower is the beneficiary, and the borrower has immediate access to the assets of the trust. • Based upon the assets held in the trust, the above asset percentages apply. Borrowers must have the lesser of (a) 1.1 times the loan balance or (b) $1mm in Qualified Assets, both of which must be net of down payment, loan costs and required reserves to qualify. When borrowers are not the only holder of the account, the letter from other parties on the account must be provided stating that 100% of the account funds can be used by the borrower. When asset utilization is used to supplement other income sources, such income must represent less than 50% of the total qualifying income, the minimum asset requirements are waived, the stricter eligibility and worse pricing will be applied. 13.4.5. ASSETS & RESERVES The seasoning requirement for all funds is 30 calendar days. If cash out proceeds are used for reserves most recent 1 month’s bank statement must be provided prior to closing where funds will be disbursed. Assets used for down payment and closing costs can be wired directly to title company or escrow agent and must be OFAC cleared by title agent’s or escrow company’s bank to be considered assets/funds/cash for closing: • Special consideration for purchases with escrow deposits made >12 months from date of application - ADM will accept Escrow deposit confirmation – Escrow letter, from a non- builder related/owned title agent holding the funds for closing. • Business assets acceptable in general, when borrower’s share in the business is less than 100% a written acknowledgment from all other owners is required to use business funds. Foreign National borrowers must have 12 months PITIA reserves for the subject property. A US bank account is required prior to clear to close for all foreign national borrowers. Assets held in foreign accounts are eligible for reserves and cash to close. Assets must be verified in U.S. Dollar equivalency at the current exchange rate via either www.xe.com or the Wall Street Journal conversion table. VENEZUELA SPECIFIC Assets located in Venezuelan financial institutions are ineligible for purposes of qualification or to complete a mortgage loan transaction. Assets/Cash/funds to close plus required reserves must be verified outside of Venezuela. Copyright © 2026 AD Mortgage LLC - ALL RIGHTS RESERVED.
All NewRez Correspondent credit standards →
newrezcorrespondent.com-smartself_grid.pdf · document dated 2026-08-20 (date inferred — not labelled in the document)
Not Permitted • First Time Homebuyers • Non-Permanent Residents 1 P&L Documentation • Maximum LTV/CLTV 70% • Minimum FICO 700 • Maximum Loan Amount $2,000,000 o Loan Amount > $1,000,000 requires two (2) month’s business bank statements to support the P&L income • Purchase and Rate & Term Refinance Permitted 2 One Year Self-Employed • Maximum LTV/CLTV 70% • Minimum FICO 700 • Maximum Loan Amount $2,000,000 • Purchase and Rate & Term Refinance Permitted 3 Condotels • Cash Out Refinance: Maximum LTV/CLTV is the lesser of 75% or the LTV/CLTV based on loan amount and FICO 4 Cooperative – Non-Delegated only Maximum LTV/CLTV 70%
newrezcorrespondent.com-smartself_grid.pdf · document dated 2026-08-20 (date inferred — not labelled in the document)
Cash Out Refinance $2,000,000 720 80% $1,500,000 700 80% $1,000,000 680 75% $1,000,000 640 70% 1 P&L Documentation • Maximum LTV/CLTV 75% • Minimum FICO 700 • Maximum Loan Amount $2,000,000 o Loan Amount > $1,000,000 requires two (2) month’s business bank statements to support the P&L income • Purchase and Rate & Term Refinance Permitted 2 One Year Self-Employed • Maximum LTV/CLTV 75% • Minimum FICO 700 • Maximum Loan Amount $2,000,000 • Purchase and Rate & Term Refinance Permitted 3Condotels • Cash Out Refinance: Maximum LTV/CLTV is the lesser of 75% or the LTV/CLTV based on loan amount and FICO 4 Cooperatives – Non-Delegated only • Maximum LTV/CLTV 70% 5 Texas 50A6 • Maximum LTV/CLTV 80% •
newrezcorrespondent.com-smartself_grid.pdf · document dated 2026-08-20 (date inferred — not labelled in the document)
SmartSelf Product Summary Bank Statement, 1099 and P&L Programs Information is accurate as of the date of publishing and is subject to change without notice. The guidelines outlined in this document apply to Newrez SmartSelf loans originated under Newrez’s Smart Series Product Line. This document should not be relied upon or treated as legal advice. Guidelines subject to change without notice; Printed copies may not be the most current version. For the most current version, always refer to the online version.
newrezcorrespondent.com-smartself_grid.pdf · document dated 2026-08-20 (date inferred — not labelled in the document)
SmartSelf Product Summary Bank Statement, 1099 and P&L Programs Information is accurate as of the date of publishing and is subject to change without notice. The guidelines outlined in this document apply to Newrez SmartSelf loans originated under Newrez’s Smart Series Product Line. This document should not be relied upon or treated as legal advice. Guidelines subject to change without notice; Printed copies may not be the most current version. For the most current version, always refer to the online version.
newrezcorrespondent.com-yosemite_jumbo_aus.pdf · document dated 2026-07-23
Permanent Financing • Follow FNMA/FHLMC Seller Guide and AUS Findings. • One-Time-Close Transactions are not permitted. 28BCredit Tradeline Requirements: Follow FNMA/FHLMC Seller Guide and AUS Findings • Authorized user accounts are not allowed as an acceptable tradeline. • Non-traditional credit is not allowed as an acceptable tradeline. Disputed Tradelines: • Follow FNMA/FHLMC Seller Guide and AUS Findings Rental History Requirements: • If the borrower(s) is a First Time Homebuyer and has a rental history in the most recent twelve (12) months, a VOR must be obtained reflecting 0X30 in the last twelve (12) months. Applies to all borrowers on loan. • First-Time Homebuyer is defined as a borrower who has not owned a home in the last three (3) years. For loans with more than one (1) borrower, where at least one (1) borrower has owned a home in the last three (3) years, first-time homebuyer requirements do not apply. • If the landlord is a party to the transaction or relative of the borrower, cancelled checks or bank statements to verify satisfactory rent history is required; otherwise, if not related or a party to the transaction a satisfactory VOR can be provided. Derogatory Credit: • Housing History: 0x30 for mortgage in past 24 months. • Non-Mortgage Payment History: Follow FNMA/FHLMC Seller Guide and AUS Findings. Follow FNMA/FHLMC Selling Guide and AUS findings for additional credit guidelines. • Bankruptcy: Chapter 7, 11 or 13: Seven year waiting period from the discharge or dismissal date.
All Champions Funding TPO credit standards →
championstpo.com-Accelerator-Activator-Alt-Doc.pdf · document dated 2026-06-16 (date inferred — not labelled in the document)
Income Documentation • 12 mos Personal Bank Statements: Should be self-employed minimum 2 years. May qualify with less than 2 years but more than 1 year if borrower can document at least 2 years of previous employment in the same line of work or related occupation or 1 year of employment and formal education/training in the same line of work. • 12 mos Business Bank Statements: Business should be established and in existence minimum 2 years. May qualify with less than 2 years but more than 1 year of self-employment, then the business should be established for the same length of time and borrower must document they have been in the same line of work or related occupation or 1 year of employment and formal education/training in the same line of work. • P&L Only: Must cover most recent 12 mos. Completed, reviewed and signed by CPA, IRS EA, CTEC, or other registered tax preparer • WVOE: FNMA Form 1005 or Champions approved WVOE form. Only Wage/Salary income used. 2 year history with same employer required. Less than 2 years considered on case by case (exception needed). Fico > 720 LTV's limited to Purchase | R&T: 80% C/O OR FTHB: 70%. FICO's < 720: Purchase | R&T: 75% C/O OR FTHB: 70% • 1099 IRS Form Only: Fixed Expense Ratio 10%; YTD Documentation to support continued receipt of income from source. Borrower(s) must be self-employed for at least 2 years, and the business must be in existence for at least 2 years. • P&L + Two Months Bank Statements: Must meet the requirements for P&L and two months business bank statements are to be provided to support the income reflected on the P&L. Bank statements cannot be more than 20% less than the monthly gross revenue reflected on the P&L.
championstpo.com-Accelerator-Activator-Alt-Doc.pdf · document dated 2026-06-16 (date inferred — not labelled in the document)
Geographic Restrictions Ineligible States: Refer to State Licensing Ineligible Locations: Hawaii lava zones 1 & 2| Puerto Rico, Guam| The US Virgin Islands| Baltimore MD| Philadelphia, PA (NOO only) Federal and State Specific Restrictions: Federal and State or Local High Cost not permitted. Federal High Cost applies to Owner Occupied only. Alt Doc: Bank Statement, P&L, WVOE, 1099, Asset Utilization Accelerator (Investor) / Activator (Primary & 2nd Home)
championstpo.com-ITIN-Activator-Alt-Doc.pdf · document dated 2026-02-09 (date inferred — not labelled in the document)
Wage Earner 2 months bank statements reflecting direct deposits OR paystub reflecting YTD income. FNMA 1005, two (2) most recent months of personal bank statements reflecting deposit(s) from employer on each statement OR 2 most recent paystubs.
championstpo.com-ITIN-Activator-Alt-Doc.pdf · document dated 2026-02-09 (date inferred — not labelled in the document)
Self-Employed Income calculated based on 12 months recent Business bank statements. Refer to program guidelines for calculation methods available. Bank statements should show a stable or increasing trend. If the trend is declining and/or irregular, additional documentation may be required up to and including additional 12 months statements. 24 months may be required based on deposit history. •Minimum eligible assets: $1,000,000 or 150% of the loan balance •Monthly income based on Total Eligible Assets less down payment, closing costs, and reserves divided by 60. 12 months CPA |IRS Enrolled Agent |Certified Tax Preparer-Profit and Loss. See guidelines for P&L requirements. Most recent year tax return filed to be utilized for income qualifying per FNMA guidelines. Most recent 1 year 1099. Borrower must receive compensation in the form of commissions or independent contractor. Income will be calculated with an expense ratio per guidelines. •Assets documented with 3 months asset statements Cash out *Max LTV/CLTV 80% but LTV can go to 85% if transaction is a Purchase or Rate & Term with min. FICO 720, max. DTI 45%, min. tradelines 3x12 or 2x24 months, primary homes only, and employment must be two years uninterrupted.
All Acra Lending credit standards →
acralending.com-acra-ws-ratematrix-platinum-noo-summary.pdf · document dated 2026-08-17 (date inferred — not labelled in the document)
Loan Amount Requirements Minimum Loan Amount: $100,000 Maximum Loan Amount: $2,000,000 RestricƟons Loan Amount < $350,000 Max CLTV: 75.00%, Loan Amount > $1,500,000, Max CLTV: 75.00% Loan Amount to be in $50 increments Income DocumentaƟon & Debt RaƟo Requirements Eligible Income DocumentaƟon Types Full DocumentaƟon (12 or 24 Mo)2: W2 or signed 1040s for most recent one (1) or two (2) years & current pay stub reflecƟng year- to-date earnings. Self-employed borrowers require addiƟonal applicable supporƟng documentaƟon (i.e. 1120s, K-1s, etc.). AlternaƟve DocumentaƟon – Bank Statements (12 or 24 Mo)2 Personal Bank Statements: 12-month or 24-month personal bank statements. Calculate qualifying income by dividing the total income by the number of bank statements. Business Bank Statements: 12-month or 24-month business statements. The minimum allowable percentage of ownership is 25% per applicant uƟlizing the account. AlternaƟve DocumentaƟon – 1099 Only (12 or 24 Mo, available for self-employed borrowers only)2: IRS Form(s) 1099 to document prior one (1) year income; and Bank Statements for the most recent 60 days to document the current year to date, which should reflect gross deposits consistent with the 1099s. AlternaƟve DocumentaƟon – Asset DepleƟon: Divide asset amount by 60 and add the result to qualifying income. Note: funds used for asset depleƟon may not be used as reserves. Max CLTV: 80% Purchase & 75% Refi R/T & Cashout Maximum Debt-to-Income (DTI) Wholesale 43%: Correspondent 40% Borrower CiƟzenship Requirements Eligible Borrower CiƟzenship Types US CiƟzen, Permanent Resident RestricƟons Permanent Resident must have an unexpired PRA ID and SSA card/SSA89 PlaƟnum Select NOO-DTI Program Summary V e r s i o n : 8.17.2026
§table-p1-3 · acralending.com-acra-ws-ratematrix-platinum-np-summary.pdf · document dated 2026-08-17 (date inferred — not labelled in the document)
Full Documentation (12 or 24 Mo)2: W2 or signed 1040s for most recent one (1) or two (2) years & current pay stub reflecting year-to-date earnings. Self-employed borrowers require additional applicable supporting documentation (i.e. 1120s, K-1s, etc.). Alternative Documentation – Bank Statements (12 or 24 Mo)2 Personal Bank Statements: 12-month or 24-month personal bank statements. Calculate qualifying income by dividing the total income by the number of bank statements. Business Bank Statements: 12-month or 24-month business statements. The minimum allowable percentage of ownership is 25% per applicant utilizing the account. Alternative Documentation – 1099 Only (12 or 24 Mo, available for self-employed Borrowers only)2: IRS Form(s) 1099 to document prior one (1) year income; and Bank Statements for the most recent 60 days to document the current year to date, which should reflect gross deposits consistent with the 1099s. Alternative Documentation – Asset Depletion: Divide asset amount by 60 and add the result to qualifying income. Note: funds used for asset depletion may not be used as reserves. Max CLTV: 80% Purchase & 75% Refi R/T, Refi C/O Maximum Debt-to-Income (DTI) Wholesale 43%: Correspondent 40%
All LoanStream Wholesale credit standards →
loanstreamwholesale.com-LSM-NQM-Matrix-08.05.26.pdf · document dated 2026-08-05
LoanStream Non-QM Matrix Select Non-QM and Core Non-QM Income Types: Full Doc - 12, 24 months | Alt Doc - 1099, WVOE, Asset Utilization, Bank Statements, P&L w/3 mos Bank Stmts, P&L Only, One Yr Self-Employment, Assets as Blended Income *Investment and Non-TRID (Business Purpose): All subject properties located in Baltimore City, MD (and it's neighborhoods) are temporarily suspended*
loanstreamwholesale.com-LSM-NQM-Matrix-08.05.26.pdf · document dated 2026-08-05
First Time Homebuyers Primary Residence and Investment Properties allowed (2nd Homes ineligible), payment shock should not exceed 300% Investment - Purchase & Refinance: Full Doc and Bank Statement income only, 80% Max LTV, 660 Min FICO, 50% Max DTI, $1.5M Max LA
All Mega Capital Funding credit standards →
mcfunding.com-MVP-DSCR.pdf · document dated 2026-08-05 (date inferred — not labelled in the document)
History The Borrower’s previous housing payment history is required. The file must contain verification of the Borrower’s 12-month payment history on the primary residence, and any mortgage loans on a Second/Vacation Home or Investment Property. www.mcfunding.com | MVP DSCR Update: 08/05/2026 10 No mortgage payment, including subordinate liens & rental payment, may be (to date of loan application): • More than 1x30 days past due in the last 12 months (1x30x12) Mortgage Payment History: The file must also contain a 12-month payment history (or since origination, whichever is less) for all mortgages (including subordinate liens). Mortgage history must be verified from the credit report or other acceptable documentation, such as a Verification of Mortgage (VOM) completed by a financial institution. A VOM from a private party does not meet the requirement to verify the Borrower’s prior housing payment history. In this case, the borrower must provide cancelled mortgage payment checks or bank statements. Rental Payment History: If the Borrower previously paid rent for their residence, then the Borrower’s rental housing payment history is required. Payments must be documented via an institutional Verification of Rent (VOR)/ credit supplement, or cancelled checks/bank records. A VOR from an individual or a private party landlord does not meet the requirement of verifying the Borrower’s prior housing payment history. Rent Free: Borrowers who have lived in a rent-free situation are ineligible. If a Borrower has lived in a temporarily rent-free situation for a time period of 3 months or less, and the prior 12 months can be documented, this is acceptable (example: Borrower sold residence then lived with family rent-free until a new home was available). Borrowers whose spouse has the mortgage in only their name but can verify payments are coming from a joint account or who have other mortgaged properties with satisfactory most recent 12 month pay histories, are excluded from rent free restrictions. Borrowers with a primary home that is owned free & clear are also exempt from this requirement.
mcfunding.com-MVP-DSCR.pdf · document dated 2026-08-05 (date inferred — not labelled in the document)
Foreign Assets Foreign assets are acceptable and must be thirty (30) days seasoned with one (1) most recent bank statement. A currency calculation must be provided. The funds must be transferred to US Financial Institution. Assets from countries under OFAC sanctions are not permitted.
All Luxury Mortgage Wholesale credit standards →
luxurymortgagewholesale.com-SimpleSeconds-WSE.pdf · document dated 2026-05-12 (date inferred — not labelled in the document)
Interest Only Full Documentation, Bank Statements and 1099 Only Qualify at the applicable FRM based on the amortizing term of the loan. The following amortization terms would be used for qualifying on a 30 year term loan. As interest only term is 10 years. • 30 FRM w/ IO: 20 years
Other non-agency programs: DSCR · Foreign national · Asset depletion
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