Home Equity Lending Program Guidelines

Credit Requirements:

• Minimum credit score: 660
• Interest rate is primarily based on the primary wage earner’s credit profile
• Co-borrowers must maintain a minimum 660 credit score

Income & Debt-to-Income

• Maximum DTI: 45%
• Income verified using agency-standard documentation
  • Pay stubs
  • W-2s
  • Tax returns (when applicable)
• HELOC underwriting qualifies the line using 1% of the requested loan amount

Primary Residences

• Financing available up to 100% LTV

Secondary Homes

• Maximum 89.99% LTV

Mortgage Insurance

• Required on loans exceeding 89.99% LTV

Our valuation process is designed to provide flexibility while maintaining sound lending practices.

Automated Valuation Models (AVMs)

Available for loan amounts up to $250,000 when:

• Confidence score is 80% or greater
• Property condition inspected is completed
• Current exterior photos and street views are provided

Exterior Property Evaluations

May be utilized for loan amounts up to $250,000 when applicable

Full Appraisals

Required for:

• Loan amounts exceeding $250,000
• Valuation that do not meet AVM requirements
• Other situations deemed necessary by underwriting

Appraisals provided by referring mortgage companies may be accepted, subject to internal review and compliance requirements.

Certain refinance transactions may utilize existing title documentation when eligibility requirements are met.

Future Value HELOC

Designed for borrowers completing smaller home improvement projects.

Program Highlights:

• Based on a property’s future completed value
• Borrowers may access up to 20% of appraised future value
• Standard LTV and loan amount guidelines still apply
• Highland Bank orders appraisal and completion inspection

Ideal For:

• Kitchen renovations
• Bathroom remodeling
• Basement finishing
• Exterior upgrades

Bridge Financing

Provides short-term financing for borrowers purchasing a new home before their current residence sells.
Eligible Markets

• Twin Cities Metro
• 11-County Metro Area
• St. Cloud Market

Key Features

• Up to 89.99% LTV in metro areas
• Up to 80% LTV in outstate markets
• One-year maximum term
• Interest-only payments
• Fixed interest rates
• 1% origination fee

Borrowers must qualify carrying both properties during the bridge period.

Highland Bank may consider borrowers with a previous:

• Bankruptcy
• Foreclosure
• Short Sale

Minimum considerations include:

• Four years since discharge or completion
• Re-established credit history
• No recent late payments
• Acceptable revolving credit utilization

All scenarios are reviewed individually.

Acceptable fees that exceed Highland Bank’s actual costs may be:

• Financed into the loan or line
• Paid directly by the borrower

Additional administrative, recording, valuation, title, and appraisal fees may apply based on transaction type.