What transactions require homeownership education?

For the following transactions, at least one borrower on the mortgage loan must complete homeownership education prior to loan closing:

• if all borrowers on the loan are relying solely on nontraditional credit to qualify, regardless of the loan product or whether the borrowers are first-time home buyers;
• HomeReady purchase transactions, when all occupying borrowers are first-time homebuyers; or
• purchase transactions with LTV, CLTV, or HCLTV ratios greater than 95%, when all borrowers are first-time homebuyers.

Note: The requirements that apply to purchases also apply to construction-to-permanent transactions that are processed as a purchase.

For additional information, see B2-2-06, Homeownership Education and Housing Counseling.