Administrator s Guidelines

Transcription

1 ! Administrator s Guidelines Southeast Texas Housing Finance Corporation 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage DPA Effective August 15, 2018 Published August 13, 2018 Revised 12/10/18 Revisions are shown on Page 4!!

2 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 3! TABLE OF CONTENTS REVISIONS TABLE 4 WHO TO CONTACT 5 SOUTHEAST TEXAS HOUSING FINANCE CORPORATION TEAM 6 PROGRAM PRODUCTS 7 About the Assistance 7 PROGRAM REQUIREMENTS 8 Eligible Borrowers 8 Minimum FICO Score 8 Homebuyer Education 8 Eligible Areas 8 Purchase Price Limits 8 Property Requirements 9 QUALIFYING INCOME & INCOME LIMITS 10 FHA-VA LOANS INCOME LIMITS 10 USDA INCOME LIMITS FOR USDA LOANS ONLY 10 ABOUT THE FINANCING 10 SECOND MORTGAGE FAQ 12 LENDER TRAINING REQUIREMENTS 13 SUMMARY OF THE COMPLIANCE ORIGINATION PROCESS 13 REQUEST DOWN PAYMENT ASSISTANCE FUNDS 14 ehp Digital Docs 15 PROGRAM TIMELINE 20 PROGRAM FEES 21 PROGRAM FORMS 22 WHO SIGNS THE PROGRAM FORMS 22

3 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 4! REVISIONS TABLE Date Revision Page Government loan guide revised to reflect second mortgage ehp Fee reduced to $250 effective 08/15/18 Various Removed old US Bank form 14 & Changed Lender Portal to ehportal Added ehp Digital Docs Throughout 15-19, 21

4 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 5! Question General Program Compliance Questions Assistance with ehp Lender Portal Assistance with User Credentials for ehp Lender Portal Update an Underwriter Certified Loan Program Training Program Training Issues System Software Training for ehp Lender Portal System Software Issues Program Rates Credit Underwriting questions Questions regarding the shipping of closing loan files WHO TO CONTACT Direct Questions Contact Information to: (ehp) (ehp) (ehp) (ehp) (ehp) (ehp) (ehp) (ehp) Participating Lenders need to refer to internal Underwriting Department or Manager (ehp) for questions regarding the program compliance file (954) Ashlynn Mosher (954) ext 261 Anyone at ehp Compliance Office Click on this link to attend Program training Click on this link for the once weekly Live Webinar: Click on this link: to view the SETH Program rates. Then click on the RATES tab. US Bank does not re-underwriter loans. For general questions, contact US Bank at or Option 2 (for general questions) Please note: US Bank answers underwriting questions from the underwriter of a lender for whom US Bank provides underwriting services ONLY. services@.com Questions regarding exceptions US Bank for questions regarding the first mortgage closed loan file (ehp) for questions regarding exceptions on the program compliance file US Bank for questions regarding exceptions on the first mortgage closed loan file hfa.programs@usbank.com hfa.exceptions@usbank.com Debbie Kerr ehp.exceptions@ehousingplus.com X216 hfa.communications@usbank.com hfa.exceptions@usbank.com

5 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 6! SOUTHEAST TEXAS HOUSING FINANCE CORPORATION TEAM! Southeast Texas Housing Finance Corporation (SETH) Create and sponsor a first mortgage program and the down payment assistance program, solicit lender participation, conduct homebuyer education classes in portions of the state, set the rate, term and points, and market the program Participating Lenders Take applications, reserve in their own systems, process, underwrite, approve, fund, close and sell qualified loans to the program. Lenders are responsible for servicing program loans in accordance with Agency requirements until they re purchased by the Master Servicer. US Bank Master Servicer Provides information on acceptable loan products, delivery and funding, receives all first mortgage files, reviews first mortgage files, notifies lenders of first mortgage file exceptions, approves first mortgage files, purchases pools and delivers loans, delivers certificate. Program Administration Maintains the program reservation system, websites, and posts Administrator s guide, forms, training materials, provides program and system training, answers program and system questions, receives compliance files, reviews, posts and notifies of exceptions and approves compliance file.

6 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 7! PROGRAM PRODUCTS PLEASE NOTE THAT RATES AND ASSISTANCE AMOUNTS ARE SUBJECT TO CHANGE AT ANY TIME. With respect to reserved loans, the rate and assistance will not change as long as loans are delivered according to the timetable included in this Guide. All loans in this program are Assisted Rate Loans. Current rates are displayed within the ehousing Plus system. PLEASE RELY ON THE SYSTEM FOR THE MOST CURRENT INFORMATION. Funds are available in a first-come, first-served pool that provides continuous funding. The borrower receives a 30-year, fixed rate, fully amortizing first mortgage loan with 360 level monthly payments as well as an assistance payment equal to the percentage of assistance of the note amount to apply toward down payment or closing costs. Current rates are available online within the system. Income limits apply. Effective August 15, 2018, the following products will be available in this program. LOAN PRODUCT FICO REQUIREMENT SECOND LIEN ASSISTANCE AMOUNT Option 2a - FHA % Option 2b - FHA AUS APPROVAL OR 660+ WITH MANUAL UNDERWRITING 4.00% Option 2c - FHA WITH MANUAL UNDERWRITING 3.00% Option 3 - FHA FHA % Option 4a - FHA FHA % Option 4b - USDA, VA % About the Assistance All loans reserved on and after August 15, 2018, Assistance is in the form of a 0% interest, forgivable second mortgage, forgiven over 3 years 1/36th per month with no scheduled payments. The Assistance is calculated on the Note amount. The Assistance may be used for down payment or closing costs and pre-paids. While there is no cash back in this program, the borrower may be reimbursed for any overpayment of escrow. Because the Assistance is a fixed percentage, any remaining Assistance must be applied as a principal reduction. second mortgage is funded by SETH via electronic wire transfer by SETH s Custodial Agent Bank of Texas. Any remaining amount of the DPA second mortgage will only be due from the borrower if the first mortgage is prepaid, refinanced or if the borrower sells, transfers or otherwise disposes of the property, including foreclosure, before the end of the 36 month period. The assistance is reserved automatically with the first mortgage reservation. There is no additional reservation necessary. Second mortgage forms include: DPA Loan Disclosure (RESPA Partial Exemption disclosure), Deed of Trust and Promissory Note all signed at closing.

7 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 8! PROGRAM REQUIREMENTS Eligible Borrowers There is no first-time homebuyer requirement in this program. Follow Agency (FHA, VA, USDA-RD) and U.S. Bank guidelines for non-citizens. U.S. Bank guidelines are located in their Lending Manual at Buyers must occupy the property as primary residence within 60 days of closing. Applicants must be considered irrespective of age, race, sex, color, religion, national origin FHA, VA, USDA -Borrower may own other property at time of closing. All borrowers on the mortgage loan must complete the SETH online homebuyer education course. Minimum FICO Score The Program requires a minimum FICO credit score for various products, the mid score must be the minimum or above. If an Agency (FHA, etc) has a higher minimum, follow Agency guidelines. If a participating lender has a higher minimum for other loans and wishes to require a higher minimum for loans, then lenders must use the higher minimum. For home buyers with NO FICO score, manual underwriting WILL BE permitted. With AUS Approval (DU or LP) the maximum DTI for Government Loans is 45%. USDA and VA Loans with AUS approval and a mid-score of 660 and higher will have a higher DTI limit of 50%. Manually underwritten loans are subject US Bank overlays for DTI and reserve requirements, see US Bank Lender Guidelines for details. Homebuyer Education All borrowers (any person on the Note) must complete the SETH on-line homebuyer education course. Click here to be taken to the Homebuyer Education link on the SETH website: sethfc.com/homebuyer-education/ Eligible Areas ENTIRE STATE OF TEXAS but not within the City Limits of: Grand Prairie, El Paso or in Travis County. Purchase Price Limits Effective December 14, 2017, VA, USDA New or Existing Homes: $453,100 Effective April 2, FHA Limits, click on this link.

8 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 9! Property Requirements New or existing, one-four units, detached or attached, manufactured homes**, condos, and town homes. 2-4 units - must be at least 5 years old Properties purchased in the program must be residential units. Recreational, seasonal or other types of vacation or non-permanent homes are not permitted. **Manufactured Homes Manufactured Housing will only be allowable with Government (FHA, VA, RD) loan products. The Freddie Mac HFA Advantage loan product is NOT allowable with Manufactured Housing. Origination will be limited to a maximum of 200 Manufactured Housing Government loans (for the entire program) purchased through 12/31/18. Borrower(s) must have a minimum representative credit score of 680, maximum DTI of 45% and manual underwriting will not be permitted. It is the lenders responsibility to ensure the minimum credit score. The lender portal will NOT reject a credit score lower than 680 as this is a U.S. Bank overlay. Lenders must follow FHA, VA, RD & U.S. Bank Manufactured Housing guidelines. All questions about Manufactured Housing should be directed to U.S. Bank HFA Division at Please note that there are differences between manufactured housing, modular homes and mobile homes. Click on this link for definitions: Homes/Definitions.

9 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 10! QUALIFYING INCOME & INCOME LIMITS Use 1003 Qualifying Income only. The income shown on the 1003 can t exceed the limits set forth in the income charts provided on the SETH website. See links below. FHA-VA LOANS INCOME LIMITS Please use this link to connect to the 2018 income limits that are posted on the SETH website: USDA INCOME LIMITS FOR USDA LOANS ONLY For USDA:RD loans, use the income limits provided by USDA:RD. ehousing posts these limits but lenders must follow USDA limits and are responsible for monitoring any changes that may occur during the course of the SETH program. Lenders should contact their underwriter. For program income calculation, follow USDA: RD income calculation requirements. Please use this link to connect to the 2018 income limits that are posted on the SETH website: ABOUT THE FINANCING The following mortgage products are offered in this program: FHA, VA, USDA:RD government loans. US Bank provides the specific government loan product types permitted in the program. It s expected that lenders have reviewed some preliminary documentation and believe that applicants will also qualify for credit. Excessive cancellations will be reviewed to assure that program funds are not being utilized inappropriately. Appraisal must indicate that the home has at least a 30 year remaining useful life. Asset tests are not required to be used in this program. Buydowns - NOT PERMITTED. Cash Back to the borrower is not permitted. However, borrowers are permitted a reimbursement of pre paids and overage of earnest money deposit as permitted by Agency (FHA, VA, RD) guidelines and to the extent any minimum contribution, if any, has been satisfied. Construction to perm is not permitted. Co-signors or any type of non-occupying borrowers are not permitted in this program. Final Typed Loan Application (1003) - The typed application signed and dated by all parties is required. All persons taking title to the property must execute all program documents. The purchase price, loan amount, and other financial details must be the same as shown on all other documents.

10 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 11! Manual Underwriting- See U.S. Bank bulletin but with new reservations as of December 1, 2015, FHA loans manually underwritten are limited to second mortgage options outlined on rate sheet. Manually underwritten VA, USDA loans are permitted. Please refer to the Manual Underwriting Guidelines on the US Bank Lenders Guide. Minimum Loan Amount - There is no minimum loan amount in this program. Mortgage Credit Certificate (MCC) - The SETH 5 Star Program can be combined with any available MCC Program. Borrowers will have to meet the MCC Program guidelines in addition to meeting SETH 5 Star guidelines. Follow the MCC Program guidelines, fees and reservation procedures for obtaining your MCC commitment. MCC benefits may be used to lower the borrower s DTI, follow Agency guidelines. Prepayments - The first mortgage may be prepaid at any time without penalty. The Second Mortgage does not accept any payments and will be 100% forgiven in 3 years. Recapture Tax - There is NO RECAPTURE TAX IN THIS PROGRAM. Refinances - Refinances are not permitted in this program. Remaining reserves are not established by the program. Follow Agency Guidelines. Tax Returns or Tax Transcripts - IRS Transcripts will no longer be required for W-2/salaried borrowers for Conventional Conforming, USDA, FHA and VA loans. Delegated Correspondents may use your own process to manage income validation risk on loans you underwrite and deliver to USBHM for purchase. A fully executed 4506-T form will still be required in all loan files. Otherwise, loans must have the most recent year s tax transcripts in the file.

11 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 12! SECOND MORTGAGE FAQ 1. Will a separate Loan Estimate (LE) and Closing Disclosure (CD) be required for the second mortgage? No, the program form, DPA Loan Disclosure, will serve as the LE/CD. The DPA Loan Disclosure is to be signed at closing. 2. Can the DPA Loan Disclosure be e-signed? Yes, the master servicer accepts e- signatures so long as the lender is set-up with US Bank to do so. 3. How should the DPA be entered in AUS? Follow FHA/VA/RD guidelines for correct input. 4. Does the 2nd Deed of Trust need to be recorded? Yes, the originating lender records the DOT (Deed of Trust) and returns it to U.S. Bank s Final Document department. 5. Who endorses the 2nd Promissory Note to U.S. Bank? The 2nd Promissory Note is in the name of SETH HFC. 6. Will SETH subordinate the 2nd so my borrower can refinance during the 3-year forgivable period? No. 7. Are there specific disclosures required for the 2nd mortgage recording fee? The CFPB released a final rule regarding TILA and RESPA disclosures on HFA second mortgages in July. The Final tules amends the RESPA exemption to clarify that any transfer taxes borrowers pay at closing are an allowable fee. The rule also EXEMPTS state and local recording fees and taxes from being counted toward the 1% fee cap. 8. Are the recording fees listed on the 1st mortgage CD? and US Bank do not provide information on where those fees are to be listed. Lenders should take direction from their internal compliance department on disclosing the 2 nd lien recording fees. 9. Are there any other fees for the 2nd mortgage? No, just the recording fee. 10. What is the mortgagee clause for the Second Lien? Lenders should contact US Bank HFA Division for assistance with this question, please call Does the lender fund the assistance at closing? No. Follow existing funding request procedures. The wire request form must be submitted 2 business days prior to closing and will be created from the LOAN FORMS section in the Lender Portal.

12 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 13! LENDER TRAINING REQUIREMENTS MANDATORY PROGRAM TRAINING FOR LENDERS Lender training is mandatory for anyone working with this program. provides program training online 24/7. To attend, click here. ehportal and ehp Digital Docs Training We highly encourage anyone who will reserve funds, complete an underwriter certification, print forms or clear exceptions to attend this additional training. (Rev 12/10/18) Click here for ehportal Training Click here for ehp Digital Docs Training ehportal USER CREDENTIALS Following completion of Program training at ehp University training, an will be sent to lenders giving directions on how to apply for User Credentials for the ehportal. These instructions are for both new users of system and existing users looking to add programs to their profile. SUMMARY OF THE COMPLIANCE ORIGINATION PROCESS QUALIFY Lenders use program requirements to qualify applicants for the program. Buyers must present an executed sales agreement before being entered into the program reservation system. RESERVE To reserve funds, use the ehportal. Log in and reserve the first mortgage that automatically provides Assistance. You will receive a loan number and a message that you ve completed the reservation successfully. IMPORTANT - A reservation is for a borrower with a real estate purchase contract for a specific property. If the property needs to change, the loan must be cancelled and re-reserved. The lender is responsible for cancelling the loan within the ehportal. And then, the lender must (services@.com) or call the Compliance office at to have the borrower permanently removed from the Lender Portal. Until this process is complete, the lender will not be able to re-reserve funds for the borrower. PROCESS Lenders process the loan as they would normally keeping in mind the program timelines.

13 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 14! UNDERWRITE AND CERTIFY Lenders underwrite & are responsible for credit decisions of the loans in the program. Servicer does not re-underwrite loans. Following credit approval AND WITHIN 25 DAYS OF LOAN RESERVATION, Underwriter completes the online Underwriter Certification within the ehportal. Once a loan is Underwriter Certified no further changes can be made. If a change needs to occur after the certification is complete, please (services@.com) or call the Compliance office at to request to have the certification removed. REQUEST DOWN PAYMENT ASSISTANCE FUNDS Minimum of Two (2) Business Days Prior to Loan Closing Date DPA funds MUST be provided directly to the Closing Agent by SETH. advance these funds. These requirements apply to all loan types. Lenders may not Lenders will to Bank of Texas, N.A. at pblack@bankoftexas.com, courtney.miller@bankoftexas.com, and cmcdaniel@bankoftexas.com a Second Mortgage Funding/Wire Request Form. As a reference, please include the Loan Number assigned when the Loan Reservation was made in the ehportal. Please make sure that the internal Processor/Closer and Title Company/Closing Agent receive instructions indicating that the Closing Disclosure should reflect the second mortgage as follows: SETH HFC Second Mortgage. Please remember, all the assistance must be used in the transaction. After all other permitted uses have been utilized, APPLY ADDITIONAL DOWN PAYMENT so that the buyer benefits from reduced monthly benefits. NOTE: To speed up the process of requesting funds, PLEASE REMEMBER THAT A Closing Disclosure IS NOT NEEDED WITH THE WIRE REQUEST. CLOSE AND VERIFY The following program forms are found within the ehportal. It is VERY important to note, if the loan amount changes, all of the forms listed below will need to change as well. As a reminder, the assistance amount is calculated on the Note amount. When the Note amount changes, so will the assistance amount on the forms. DPA Loan Disclosure Notice of DPA for Gov t Loans (Gift Letter - HUD ML ) the Original remains with Lender, provide a copy to borrower, copy to US Bank and a copy in the FHA Case Binder. Deed of Trust (Second Lien) Promissory Note (Second Lien)

14 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 15! COMPLIANCE FILE DELIVERY INSTRUCTIONS All compliance files are uploaded directly to via ehp Digital Docs. All exceptions / file deficiencies will be communicated to the Lender via and will be posted in the ehportal. Exceptions may be viewed online at the loan level and in an exceptions report. Documentation requested to clear file deficiencies are uploaded directly in ehp Digital Docs. (Added 12/10/18) ehp Digital Docs See pages of this guide for detailed information about ehp Digital Docs. (Added 12/10/18) SUBMIT MORTGAGE FILE & CREDIT PACKAGE TO SERVICER The Mortgage File including Credit Package and it is sent to US Bank. The US Bank Delivery and Funding Checklist is found within the US Bank web site. To locate the US Bank Checklist click on this link: Click on US Bank Lending Manuals. Pop-up box will appear, click on Continue. Web page will be redirected to US Bank All Regs site. Click on Housing Finance Authority folder. US BANK notifies lenders of Exceptions, posts exceptions online and sends a weekly summary of outstanding exceptions. APPROVALS Following approval of Compliance File by, lenders are notified and reminded of the purchase deadline.

15 16 NEW INSTRUCTIONS FOR THE DELIVERY OF COMPLIANCE FILES, FEES AND CORRECTED DEFI S. Effective December 10, 2018 Compliance Files and Corrections to previously submitted files with erroneous or missing required documents will be managed through the NEW Digital Docs Portal. This NEW Portal provides lenders with all the tools necessary to deliver the required documents for the approval of the originated loan(s) in their respective affordable homebuyer programs. This Portal is a secure, easy to use and efficient way for lenders to deliver the Compliance File, Correct DEFI s and pay the required Compliance Review Fees via our new ehpay on line fee approval, and related tools. Who needs Access to ehp Digital Docs? Closers, Post-closers, Shippers, Defi/Exceptions and Accounting personnel. FIRST STEPS HELPFUL TIPS FOR UPLOADING THE COMPLIANCE FILE The site works best with the Google Chrome browser. All other browsers may encounter problems. If you cannot remember your password, you can reset from the ehp Digital Docs log in screen. You will need a Username and Password to access ehp Digital Docs a. If you are already an existing Active User of the ehportal Lender Portal, you will automatically be set up to use ehp Digital Docs. Your Username and Password will be the same, but you may be prompted to change the password if it does not meet security guidelines. b. If you are NEW to any of the Portals, you will need to request User Credentials at NEXT, ACCESS THE NEW EHP DIGITAL DOCS PORTAL As a participating lender to various programs, you already know that our website at is where you access both Program Info and the Systems. Click on the PROGRAM Tab and select the desired Agency s available Program(s). New Digital Delivery Instructions ehp Digital Docs

16 17 There are two icons you will immediately see: o This is the existing Lender Origination Portal o This is the NEW ehp Digital Docs Portal. NOW YOU ARE READY TO DELIVER YOUR COMPLIANCE FILE The Compliance File should be a PDF file composed of all required documents on the Checklist. Ø By clicking NEW UPLOAD on the Digital Docs Menu, you will be able to upload the file easily. Ø Currently, there are three file types you will upload into the new DD Portal: Compliance Files, DEFI s, and/or pre-closing documents as required. Additional uploads after the Compliance File are identified as Defis. Ø There is a NOTES Feature in case there is any pertinent information you want to add to the compliance documents. Ø Once Submitted, the System will confirm that the document was uploaded successfully, or it will present an error. Ø All Files Uploaded, can be seen immediately in UPLOADED DOCS. Ø All documents must be a PDF format and must not be locked or encrypted. Ø Documents must be uploaded upright and in a clear legible format. Ø Use the Checklist to make sure you are delivering al required documents. AND SUBMIT THE REQUIRED COMPLIANCE REVIEW FEE Ø Compliance Review Fees may now be submitted separately from the Compliance File. Ø The NEW ehpay is a secure, efficient method for lenders to pay the fees ON- LINE by enrolling in this FREE Program. Loans managed through ehpay are processed faster, without fee errors or other unnecessary delays. Accounting Staff can access ehp Digital Docs and process the compliance fees payment easily via ehpay. New Digital Delivery Instructions ehp Digital Docs

17 18 TIPS Not sure of the required fee for your loan? Use the FIND MY FEE feature under PAYMENT CENTRAL and get the instant answer. Ø Compliance Files Uploaded are NOT ready for review until the Compliance Review Fee Payment has been received by ehp. Ø FILES PENDING PAYMENT lists Compliance Files that have been uploaded successfully, but whose fee payment is still pending. Lenders can monitor this area to ensure their fees have been delivered in a timely manner. Ø UNIDENTIFIED PAYMENTS are payments received from your company without the proper identification to apply it to the intended loan. Lenders can monitor this area to ensure that payments made are being properly identified with OUR LOAN NUMBER. Ø SHORT PAYMENTS If an incomplete payment is submitted, it will be displayed indicating the amount paid and the correct fee amount. Ø Sign up for ehpay. This is a secure solution for the payment of fees. Talk to one of our Business Representatives about how you can sign up, and to answer any questions related to this new service Ø Make sure that every payment made is properly identified with OUR LOAN NUMBER. This is particularly a problem with Wires and ACH payments, as well as bundled payments. ACH/Wires do not properly identify loans in most cases and hold up the processing of your loans! Ø If submitting a paper check, print the INVOICE/RECEIPT. You can submit the fee for one or several loans at one time by attaching this receipt to your check. NOT QUITE READY TO UPLOAD YOUR COMPLIANCE FILES? During this initial transition of delivering Compliance Files Digitally on our NEW ehp Digital Docs portal, will continue to accept paper Compliance Files from those lenders that need a little extra time. If you are sending the paper files, please continue to ship them as you currently do to: 3050 Universal Boulevard, Suite 190 Weston, FL WE trust that you will soon be utilizing all the new features that have been developed to make the delivery of Compliance Files easier and less costly via our NEW ehp Digital Docs portal available for you, the participating lenders. New Digital Delivery Instructions ehp Digital Docs

18 19 CORRECTING DEFICIENT FILES ü AS OF 12/10/2018 CORRECTED LOAN DEFICIENCIES WILL NO LONGER BE ACCEPTED VIA . The ehportal (Lender Origination Portal) has various tools that alert lenders when a Compliance File is delivered DEFICIENT. These multiple tools assist you, the lender, in easily correcting these deficiencies and allow your file to be Compliance Approved in a timely manner. Ø System generated DEFI s sent at time of review with corrective actions. Ø Loan s TIMELINE Tab depicts pending deficiencies ANYTIME you log in and view your loan. Ø EXCEPTIONS/DEFICIENCY Reports are available on the REPORTS Menu. WHEN YOU ARE READY TO SUBMIT YOUR CORRECTED DEFI S OR MISSING DOCUMENTS NEW: The Corrected DEFI s will now be submitted and UPLOADED via ehp Digital Docs, using the same easy method the Compliance File is delivered. Log in to ehp DIGITAL DOCS Search for your loan NEW UPLOAD: select your file(s), and if prompted select Corrected DEFI as Type. The NOTES Feature is available to add any relevant information if needed. YOU RE DONE! Defi s may be uploaded as a lender receives a document. Corrected Defi s may be view in ehp Digital Docs under, Uploaded Docs. QUICK TIPS Ø Save time by trying to consolidate corrections to your loan files. Ø Working on DEFI s might be easier if grouped by loan & Program; typically, the same types of errors occur based on varying Program Criteria. Ø Use the reports available on the ehportal (EXCEPTIONS/DEFICIENCIES) as a guide and deliver them easy using ehp Digital Docs. New Digital Delivery Instructions ehp Digital Docs

19 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 20! PROGRAM TIMELINE Buyers MUST HAVE A FULLY- EXECUTED SALES CONTRACT FOR A SPECIFIC PROPERTY in order to have funds reserved. The contract may be dated prior to the date of the loan application. Buyers may be pre-qualified. However, if the buyer does not have a contract on a property, program funds cannot be reserved for the buyer until such time as the buyer presents a valid contract. To assure that loans are purchased, please follow the Processing, Delivery and Purchase Timetable below. Please DO NOT reserve loans that cannot meet the timetable. This is particularly important with respect to new construction, foreclosures and short sales. Please wait to reserve funds. Loans not purchased within the time frame below, cannot be purchased. The revolving pool of funds provides continuous funding. unnecessary to rush to reserve funds. Fund availability makes it Loan Processing, Delivery and Purchase Timetable: PLEASE DO NOT RESERVE EARLY -- loans must be underwriter certified within 25 days of reservation Once a loan is reserved in the system and is provided the Servicer s Loan number, the loan must be 1. underwriter certified within 25 days of loan reservation 2. compliance file delivered to within 10 days of closing 3. purchased within 70 days of loan reservation. Any loan not purchased within 70 days is ineligible for purchase unless the lender chooses a one-time only 30-day extension. The extension must be requested BEFORE THE 70TH DAY. The cost of the extension will be detailed in the Interest Rate Notice. The extension fee is due whether or not loans are ultimately delivered and/or purchased. The extension fee will be netted by the Servicer when loans are purchased. If an extension is permitted, but the loan is not purchased, the originating lender will be billed for the extension fee. If a Loan s Rate Lock period (including extension) expires when the loan has not closed, a Rate Lock may not be made for the same Borrower and same property address, until 60 days after expiration of the prior Rate Lock period (including extensions). (REV ) Participating lenders with a high loan cancellation rate or other behavior inconsistent with program goals, may be suspended if not terminated even if the lender is in good standing with the Servicer An extension request is available online. Click Click on the SUMMARY tab in the row of tabs above the SETH logo Scroll down and find the Extension Request verbiage int he left column. The form is completed and submitted online. Remember that the form must be submitted BEFORE the 70th day.

20 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 21! PROGRAM FEES First Mortgage Fees A 1.00% fee to be retained by lender as Origination Fee and NO Discount Point. The fee may be paid by buyer or seller as allowable by Agency. Fees The program includes a first mortgage Compliance/Admin Fee of $250 and a penalty fee of $100 for files that are chronically deficient. The Compliance/Admin Fee is submitted with the Compliance File. Read pages of this guide for information about Payment Central located in ehp Digital Docs. (Rev 12/10/18) The Compliance/Admin Fee is the fee charged by the Program Administrator/Compliance Agent to process the applicant/borrower from Origination to Compliance Approval, and to assess that the lenders originating such loans are following Program guidelines for the benefit of the eligible borrower(s). The Program Administrator/Compliance Agent tracks the loan via its web-based system, and assists the lender in processing the loan ensuring eligibility to the program available offerings, which can include various rate options, and down payment assistance. US Bank Fees $80 Tax Service Fee and $400 Funding Fee. These fees will be netted out at time of purchase by US Bank. See US Bank Bulletin L TAX SERVICE FEE CHANGE for further details. Lender Fees Lenders are permitted to charge reasonable and customary charges for out of pocket expenses and costs. Other financing costs such as legal fees and underwriting fees may be charged and courier fees may be charged if such fees are normally charged. Lenders may charge the usual and reasonable settlement costs. Settlement costs include titling and transfer costs, title insurance, survey fees or other similar costs. Other allowable fees include doc prep fees, notary fees, hazard, mortgage and life insurance premiums, recording or registration charges, prepaid escrow deposits and other similar charges allowable by the insurer/guarantor. "Junk" fees are not a defined term and may not be charged. Excessive fees are not permitted in the program. Lender SETH Program Compensation In addition to the standard allowable charges noted above, on each loan the lender collects 1.00% origination as explained above from buyer or seller (follow Agency guidelines). SRP for FHA and RD loans is 1.75% and for VA loans is 1.25% So total SETH Program Compensation is 2.75% for FHA and RD loans and 2.25% for VA loans. Second Mortgage Fees None except for the recording fee.

21 5 Star Texas Advantage Program for Government Loans with Forgivable Second Mortgage Page 22! PROGRAM FORMS The program forms MUST generated directly from the Lender Portal at the loan level. The program forms MUST be printed from the ehportal ONLY. Any program forms printed anywhere other than the ehportal will be deemed void and may cause a loan file to not be purchased. This topic addresses the specific forms required for the program for originating, processing, closing and loan delivery. Original, personal signatures of all borrowers and sellers are required and must match on all documents associated with the transaction. Whenever a party is known in any of the documents by more than a single name, a Name Affidavit Will Be Required. Powers of Attorney and/or Personal Representatives for the Borrower Are Not Acceptable. Exception: Active Duty Military Personnel may provide an Alive and Well letter. PRE-CLOSING DOCUMENTS DPA Requisition Form Underwriter Certification must be completed prior to submission of the Requisition Form. The Requisition Form is available in the Lender Portal behind security, click on this link. CLOSING DOCUMENTS The following program forms are found within the Lender Portal. It is VERY important to note, if the loan amount changes, all of the forms listed below will need to change as well. As a reminder, the assistance amount is calculated on the Note amount. When the Note amount changes, so will the assistance amount on the forms. DPA Loan Disclosure Notice of DPA for Gov t Loans (Gift Letter - HUD ML ) the Original remains with Lender, provide a copy to borrower, copy to US Bank and a copy in the FHA Case Binder. Deed of Trust (2nd Lien) Promissory Note (2nd Lien) WHO SIGNS THE PROGRAM FORMS Form Borrower Co-Borrower Non Purchasing Spouse Notice of DPA for Gov t Loans (Gift Letter) Yes Yes No DPA Loan Disclosure Yes Yes No 2 nd Deed of Trust Yes Yes Yes 2 nd Promissory Note Yes Yes No On Title Yes Yes Yes