The Enhanced Credit Opportunity Program (ECOP) allows borrowers to obtain mortgage loans in circumstances that are not normally available to them in today’s conforming credit market. These loans are typically designed for borrowers who have experienced rough patches along the way, but these home buying programs can also work for borrowers who are looking for a tax benefit or an investment opportunity.
Benefits of the enhanced credit opportunity program
The main benefit of this program is that it helps people who might not usually be able to get a mortgage, and it allows them to get into a house or to purchase investment properties. However, this is not one of those home buying programs that hands out unaffordable mortgages. Instead, all loans in this program stringently meet or exceed the eight features of the Ability-to-Repay (ATR) requirements that were laid out as part of the Truth in Lending Act and the Dodd-Frank Act, which was created after the housing bubble burst of 2008.
Basic requirements for ECOP home buying programs
In order to qualify for this program, borrowers have to meet the following criteria:
- Max Loan Amount: $2,000,000
- Bankruptcy: Chapter 7- 12 Months, Chapter 13- 12 Months Dismissed
- Foreclosure & Short-Sale: One Day Out
- DTI: 43-50% with compensating factors
- Down Payment: 20%
- Max LTV: 80-90% depending on the scenario
- CLTV: N/A
- Max Properties: N/A
- Reserve Requirements: 3 to 12 months based on product and underwriting
- Credit Score: 500
- Can potentially use bank statements to support income.
With most home buying programs, you need a credit score of at least 600, but even if your score is as low as 500, you may be able to participate in this program. Additionally, if you recently faced a foreclosure or a short sale, that is okay too. As long as you meet the other requirements, you may be able take out a loan through the ECOP on the very first day after the foreclosure or the short sale is complete. You may even be able to get one of these loans after declaring bankruptcy, but depending on which chapter you filed, you have to wait for at least three to seven months.
Debt and income requirements
As with most home buying programs, you also have to meet certain debt and income requirements. In particular, your debt-to-income ratio needs to be between 43 and 50%. For instance, if your income is $100,000, you may qualify if your debt is between $43,000 and $50,000.
Generally, these loans have an 80 to 90% loan to value ratio. That means the loan can be for 80 to 90% of the home’s value. Usually, you need to have a downpayment to pay the rest of the home’s value, but when you speak with a mortgage specialist, they may be able to help you figure out alternatives.
There are many other sub programs that make up the ECOP home buying programs, and they include the following:FULL DOCUMENTATION / SECOND HOMES SELF EMPLOYED SOLUTIONS / SELF EMPLOYED SOLUTIONS EXPRESS INVESTOR SOLUTIONS FOREIGN NATIONAL NON WARRANTABLE CONDOS
If you would like to explore more ECOP home buying programs or other mortgage products available from Capital Mortgage Advisors, please call us at 800-859-5648, or complete our simple form below. One of our experienced mortgage specialists will contact you.