Liquidity

Find our reserve, documentation and sourcing requirements below.

RESERVE Requirements

The sum of:

  • Down payment (purchase transactions only)

  • Closing costs

  • 1% of the unpaid principal balance (UPB) on all mortgages (except the subject property) reported on the credit reports of all guarantors

  • Nine (9) months of the subject property’s monthly principal, interest, taxes, insurance and HOA payments, as applicable

    • 12 months for 5+ unit properties and foreign nationals

DOCUMENTATION requirements

Full statements (covering a consecutive two month period) in the name of a guarantor or guarantor’s company from:

  • Bank accounts, such as checking, savings, money market and certificate of deposit (CD), and/or

  • Securities accounts, excluding margin accounts, and/or

  • 401K or IRA plans

SOURCING REQUIREMENTS

Written explanations (including source and purpose) and additional financial documentation may be required for:

  • Single deposits of $10K+ exceeding 75% of the ending balance

  • Multiple deposits that seem to be structured to avoid sourcing

  • Atypical activity

GENERAL NOTES

Generally, the funds must be and owned and controlled by the guarantor(s). For large deposits, we want to verify that the funds are unencumbered. Retirement funds (i.e. 401K or IRA plans) are counted at 50% of the value.

Gift funds may be allowed, subject to the following conditions:

  • Can only be applied to 50% of the liquidity reserve requirement

  • Can be applied if provided by a relative

  • Must be accompanied by a gift letter with the following:

    • Date funds were transferred

    • Dollar amount

    • Donor’s name, address, phone number, and relationship to the guarantor

    • Donor’s statement that repayment is not expected

    • Signatures of donor and guarantor

    • Copy of check or transfer confirmation

Screenshots may be allowed, subject to the following conditions:

  • The full statement covering the period is unavailable

  • The screenshot shows the print date, at least four digits of the account number, the account holder name, the balance, and all transactions since the most recent statement