Administrator s Guidelines Escambia County Housing Finance Authority. Big Splash TBA Single Family (Multi-County) Program

Transcription

1 i Administrator s Guidelines Escambia County Housing Finance Authority Big Splash TBA Single Family (Multi-County) Program Freddie Mac HFA Advantage (Conventional) Program Published and Restated in its Entirety: August 1, 2017 (Initially Published on ) Revised Revisions Summarized on Page vi i

2 ii Table of Contents I. THE ESCAMBIA COUNTY HOUSING FINANCE AUTHORITY TEAM... 1 Escambia County Housing Finance Authority, Issuer... 1 Participating Lenders... 1 U.S. Bank, Master Servicer... 1 ehousingplus, Program Administrator... 1 II. THE ECHFA TBA PROGRAM GENERAL INFORMATION... 3 First Mortgage 3 Down Payment/Closing Cost Assistance... 3 Current Down Payment Assistance Product... 4 DPA Second Mortgage... 4 DPA Second Mortgage Disclosure Requirements... 4 Mortgage Credit Certificate Program... 5 III. THE TBA FREDDIE MAC HFA ADVANTAGE (CONVENTIONAL) PROGRAM... 6 Eligible Borrowers `... 6 Freddie MAC First-Time Homebuyers Exceptions... 6 Veterans Exception... 7 Minimum FICO (Credit) Score... 7 Maximum Debt to Income Ratio... 7 Eligible Properties; Property Requirements... 8 Household Income Calculation... 8 Income Limits 9 Affordable Income Subsidy (AIS) Grants Affordable Income Subsidy Grant Income Limits Financing Facts For Freddie Mac Conventional Program Freddie Mac HFA Advantage Fact Sheet Appraisal Buydowns Cash Back Construction to Permanent Co-signers Freddie Mac Loan Level Price Adjustment and Adverse Market Fees Documentary Stamp Tax and Intangible Tax Final Typed Loan Application (1003) Homebuyer Education... 13

3 iii Manufactured Homes Minimum Loan Amount Maximum Loan Amount Prepayments Real Estate Purchase Contract Recapture Tax Refinances Remaining Reserves Tax Returns or Tax Transcripts IV. SUMMARY OF THE COMPLIANCE ORIGINATION PROCESS MANDATORY PROGRAM TRAINING ehportal and ehp DIGITAL DOCS TRAINING ehportal USER CREDENTIALS QUALIFY 16 RESERVE FIRST MORTGAGE FUNDS RESERVE SECOND MORTGAGE ASSISTANCE RESERVE AFFORDABLE INCOME SUBSIDY (AIS) GRANT RESERVE MORTGAGE CREDIT CERTIFICATE (Optional) PRINT PRE-CLOSING FORMS PROCESS 17 UNDERWRITE AND CERTIFY REQUEST DPA FUNDS FOR CLOSING CLOSE BIG SPLASH TBA PROGRAM & MCC PROGRAM (Optional) CLOSE - BORROWER RECEIVING AFFORDABLE INCOME SUBSIDY GRANT RECORDING THE DOCUMENTARY STAMP AFFIDAVITS SHIP SECOND MORTGAGE PACKAGE TO HFA COMPLIANCE FILE DELIVERY INSTRUCTIONS ehp DIGITAL DOCS COMPLIANCE FILE DELIVERY EXCEPTIONS 21 SUBMIT MORTGAGE FILE & CREDIT PACKAGE TO SERVICER APPROVALS 21 FINAL DOCUMENTS V. PROGRAM TIMELINE Timely Delivery Procedures VI. PROGRAM FEES... 28

4 iv First Mortgage Program Fees Extension Fee 28 Second Mortgage Fees US Bank Fees 30 Lender Fees 30 Lender Compensation Freddie Mac Program VII. PROGRAM FORMS Originating Compliance Forms U.S. Bank Website Other Documents Required for Program Compliance File (Not Auto-Generated) Tax Transcripts Real Estate Purchase Contract Final Typed Loan Application (1003) Closing Disclosure (CD) Warranty Deed Discharge or Release Papers EXHIBIT A 35 Instructions For Completing First Mortgage Affidavit For Exemption From Documentary Stamp Tax Instructions For Completing Second Mortgage Affidavit For Exemption From Documentary Stamp Tax... 37

5 v REVISION TABLE DATE 8/1/17 Substantial revision in connection with implementation of new Freddie Mac HFA Advantage (Conventional) Program Option. 9/25/17 Page 9 & 10, added Bay County and Jefferson County to Governmental Loan Program including Targeted Area Census Tract and removed Income Limits and Acquisition Limits that were not applicable; Page 20, added Bay County and Jefferson County to Freddie Mac Conventional Loan Program and updated the Acquisition Limits; Page 34, deleted Tax Exempt Rider from Compliance Checklist 10/30/17 Page 9 & 10, added Franklin County to Governmental Loan and updated Income Limits and Acquisition Limits; Page 20, added Franklin County to Freddie Mac Conventional Loan Program and updated the Acquisition Limits 12/6/17 Page 9 & 10, added Hernando and Gulf County to Governmental Loan and updated Income Limits and Acquisition Limits; Page 20, added Hernando and Gulf County to Freddie Mac Conventional Loan Program and updated the Acquisition Limits 4/16/18 Page 7, added Mortgage Credit Certificate Program; Page 8, added Jefferson County; Page 12, added Tax Returns and Transcript definition; Page 13, added Homebuyer Education definition; Page 13, 25 & 35, combined Documentary Stamp Tax and Intangible Tax to include new exemption effective July 1, 2018; Page 26, revised Homebuyer Education definition; Page 23, added Freddie Mac Affordable Income Subsidy (AIS) Program; Page 24, added AIS Reservation Instructions; Page 25, added AIS Income Chart; Page 29, added Reservation for Freddie Mac AIS Grant; Page 36, Per US Bank LOU L increase Tax Service Fee to $80 effective for loan reservations on 4/30/18 and after; Adjusted the font to Arial 12 pt for the entire document; Removed the background color from all charts; Changed the red font to black font for the entire document 6/11/18 Pages 10-13, Governmental Program new income limits and sales price limits effective for all loan applications date June 11, 2018 and after. Old limits remain in Guide until loans with earlier limits are fully originated. Pages 24 & 25, Freddie Mac Conventional Program new income limits and sales price limits effective for all loan applications date June 11, 2018 and after. Old limits remain in Guide until loan with earlier limits are fully originated. Page 40, Added ehp AIS Grant fee. 7/9/18 Pages 15, 16, 29, 30, 36, 40, 44, Added First and/or Second Mortgage Doc Stamp Exemption language; Page 41; updated US Bank Tax Service Fee; Page 45, moved US Bank Website information; Pages 48-51, Added Exhibit

6 vi A Instructions for completing First and Second Mortgage Affidavits for Documentary Stamp Tax Exemption. 7/273/18 Page 29, Updated Affordable Income Summary (AIS) new income limits; Page 35, DPA Loan Disclosure should be included with the DPA Funds Request Package; Pages 40 & 42, Effective October 1, 2018, updates regarding the DPA Loan allowable fees. 11/15/18 Removal of the 2012 Single Family (Governmental) Program Option 12/21/18 Throughout, Changed ehousingplus Lender Portal to, ehportal. Page 2, updated contact directory. Page 6, revised language for a lender to contact Freddie Mac regarding ownership of other property. Page 7, added a lender should contact US Bank regarding acceptable AUS. Page 11, removed AIS Grant step-by-step instructions. Pages & 21, revised compliance origination process. Pages 22 25, added ehp Digital Docs Compliance File Delivery. Page 33, revised documents required for the compliance file.

7 Section 1 The ECHFA Team 1 I. THE ESCAMBIA COUNTY HOUSING FINANCE AUTHORITY TEAM Escambia County Housing Finance Authority, Issuer Plans and implements programs, develops relationships with participating counties, structures the first mortgage programs and, if applicable, down payment/closing cost assistance programs, recruits lenders, sets the rate, term and points, assists with funding and financing, maintains county and lender relationships and markets the programs. Participating Lenders Takes applications, reserves in their own system, processes, underwrites, approves, funds, closes and sells qualified loans to the programs. Lender must check with their own company on how to reserve a Program loan rate in its own system so that funds are available for closing (companies may have their own codes). Lenders are responsible for servicing first program loan in accordance with applicable agency requirements until they are purchased by the Master Servicer. U.S. Bank, Master Servicer Provides training concerning underwriting information on acceptable loan products and the delivery and funding of Program loans. Receives all mortgage files, reviews mortgage files, post and notifies lenders of mortgage file exceptions, approves mortgage files, purchases first mortgage loans, pools and delivers loans, delivers certificate to Trustee or Issuer as applicable. Servicer is not obligated to purchase loans that do not comply with applicable requirements. ehousingplus, Program Administrator Maintains the program reservation system and website; posts Administrator s Guidelines, program forms and training materials; provides training on compliance issues and system; answers Program compliance questions, receives compliance files.

8 Section 1 The ECHFA Team 2 Contact Directory Revised 12/21/18 Question Direct Questions to: Contact Information General Program ehousingplus (ehp) Compliance Questions support@ehousingplus.com Assistance with ehportal ehousingplus (ehp) (954) support@ehousingplus.com Assistance with User Ashlynn Mosher (954) ext 261 Credentials for ehportal ashlynne.mosher@ehousingplus.com Update an Underwriter ehousingplus (ehp) Anyone at ehp Compliance Office Certified Loan services@ehousingplus.com Program & ehp Digital Docs Training ehousingplus (ehp) Click on this link to attend Program Training. Program Training Issues ehousingplus (ehp) support@ehousingplus.com Click on this link for the once weekly Live Webinar: System Software Training for ehportal ehousingplus (ehp) System Software Issues ehousingplus (ehp) Anyone at ehp Compliance Office services@ehousingplus.com Program Rates ehousingplus (ehp) Click on this link to view the Escambia County HFA Rates/Offerings (then, click on Rates/Offerings link). Credit Underwriting questions Participating Lenders need to refer to internal Underwriting Department or Manager Questions regarding the shipping of closing loan files ehousingplus (ehp) for questions regarding the program compliance file US Bank does not re-underwriter loans. For general questions, contact US Bank at hfa.programs@usbank.com 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@ehousingplus.com Questions regarding exceptions US Bank for questions regarding the first mortgage closed loan file ehousingplus (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 Debbie Kerr Debbie.Kerr@eHousingPlus.com X216 hfa.communications@usbank.com

9 Section II The TBA - Program General Information 3 II. THE ECHFA TBA PROGRAM GENERAL INFORMATION The Escambia County Housing Finance Authority (the HFA ) Big Splash Single Family (Multi- County) Mortgage Loan Program (the Program or the TBA Program ) serves many counties throughout Florida. Presently, loans may be originated through the Program in Alachua, Bay, Bradford, Escambia, Franklin, Gadsden, Gulf, Hernando, Indian River, Jackson, Jefferson, Leon, Marion, Martin, Okaloosa, Santa Rosa, St. Lucie, Wakulla and Walton Counties. The HFA presently offers its TBA Program as a Freddie Mac HFA Advantage Program (the Conventional Program ). For the Conventional Program, all loans must be guaranteed by Freddie Mac. Loans that are insured or guaranteed by FHA, VA or USDA-RD should be directed to the HFA s 2018 Single Family (Multi-County) Bond Program. Borrowers qualifying for a first mortgage under the TBA Program may choose to utilize the down payment and closing cost assistance products offered by the HFA ( DPA ). PLEASE NOTE THAT THE FIRST MORTGAGE INTEREST RATE AND THE AMOUNT AND TERMS ON THE DOWN PAYMENT ASSISTANCE MAY CHANGE AT ANY TIME WITHOUT NOTICE. First Mortgage The current interest rate on the First Mortgage is available on the ehousingplus web page for the HFA TBA Program. The interest rate is only guaranteed at the time it is reserved on the ehousingplus ehportal. Qualified borrowers will receive a 30-year, fixed rate, fully amortizing first mortgage loan with 360 level monthly payments. Down Payment/Closing Cost Assistance In order to enhance the efficiency of the Program, the HFA provides down payment and closing cost assistance to first time homebuyers through loans and/or grants to assist in the purchase of residences. PLEASE NOTE THAT THE TYPE, AMOUNT AND TERMS OF THE DOWN PAYMENT ASSISTANCE MAY CHANGE AT ANY TIME WITHOUT NOTICE.

10 Section II The TBA - Program General Information 4 Current Down Payment Assistance Product The down payment assistance ( DPA ) currently being offered under the ECHFA TBA Program is a non-amortizing, deferred loan (the DPA Loan ) secured by a second mortgage (the DPA Second Mortgage ) as follows: DPA Second Mortgage The DPA Second Mortgage may ONLY be used with the HFA s first mortgage. If a borrower qualifies for the HFA s first mortgage they automatically qualify for up to $7,500, 0%, 30-year deferred DPA Loan (due upon sale, refinancing, transfer of title, or rental of the home if done within first 30 years) secured by a second mortgage. The DPA Loan is never forgiven. Until otherwise notified the HFA will fund the DPA Loan at closing and will service the DPA Second Mortgage. The proceeds of the DPA Loan may not be used to pay off debt, nor any surplus proceeds be paid to the homebuyer over and above any reimbursement of fees paid prior to the close of escrow (i.e. Mortgage Lender may not use the DPA Loan proceeds for a principal reduction of the First Mortgage). There is no cash back" to the borrower. DPA Loan proceeds may be applied for any eligible use associated with the Mortgage Loan closing process, including but not limited to a borrower s required down payment, closing costs, Lender fees, Servicer fees, prepaids, mortgage insurance premiums, discounts, and the reimbursement of earnest money and pre-close fees, such as credit report and appraisal fees ( Eligible DPA Uses ). With the HFA as the mortgagee, the funds may be used to fulfill any required borrower minimum contribution. DPA Second Mortgage Disclosure Requirements The determination has been made that the Escambia County HFA DPA Second Mortgage, as non-amortizing 0%, 30-year deferred subordinate loans, IS NOT SUBJECT TO TILA or RESPA and lenders may NOT use the new TRID forms (Loan Estimate and Closing Disclosure) for these loans. Instead, a required DPA Loan Disclosure Form has been created to further clarify the terms of the DPA Second Mortgage for the borrower. This disclosure is generated from the ehousingplus ehportal and is signed at closing by the borrower. Effective October 1, 2018, please note that the only fees that are permitted to be charged at origination of an Escambia County HFA DPA loan are (i) governmental recording fees; and (ii) a bona fide and reasonable lender application fee that may not exceed 1% of the DPA loan. The amount of these fees must be shown on the required DPA Loan Disclosure Form. (Rev ) If there is less than $500 in remaining DPA Loan proceeds available at the close of escrow, the Lender MUST use such proceeds to reduce the DPA Loan principal balance. If the remaining DPA Loan proceeds is $500 or greater, the DPA Loan amount must be recalculated and reduced before settlement and the Lender should draw new DPA Loan documents and

11 Section II The TBA - Program General Information 5 disclosures. It is the Lender s responsibility to assure that DPA Loans close in compliance with these requirements. See Process Guidelines for Requesting Down Payment Assistance Funds in this Guide. Mortgage Credit Certificate Program The HFA offers a Mortgage Credit Certificate Program. Mortgage Credit Certificates may be used in connection with a mortgage loan obtained through the TBA Program, but the borrower will have to comply with the more restrictive requirements of the Mortgage Credit Certificate Program. Additionally, if the borrower wants to apply for a mortgage credit certificate, the borrower will have to use a Lender that participates in the Mortgage Credit Certificate Program. Use of the Mortgage Credit Certificate Program is not mandatory for participation in the Big Splash Program, however, if a borrower chooses to do so, the borrower may apply for both a mortgage credit certificate and Down Payment Assistance funds. Information regarding the Escambia HFA Mortgage Credit Certificate Program is available at this link: If the borrower qualifies, the borrower may receive DPA assistance and a mortgage credit certificate from the Issuer, along with an AIS Grant from Freddie Mac (see AIS Grants). These subsidies are stackable. (Rev. 4/16/18)

12 Section III The Freddie Mac Conventional Program 6 III. THE TBA FREDDIE MAC HFA ADVANTAGE (CONVENTIONAL) PROGRAM Eligible Borrowers ` Borrowers must be first-time homebuyers or meet the requirements for a Freddie Mac First-Time Homebuyers Exception. First-time homebuyer means a taxpayer who has not owned a principal residence at any time during the three years prior to the date of purchase of a home through the Freddie MAC HFA Conventional Program. Borrowers and their spouses must be able to permanently reside in the US. Follow Agency (Freddie Mac) and US Bank guidelines for non-citizens. Borrowers must live in the property they purchase as their principal residence. All applicants must be considered irrespective of age, race, color, religion, national origin, sex, marital status, military status or physical handicap. Borrowers must occupy the property purchased within 60 days of closing. The past three years federal income tax returns are NOT required. There is no Recapture Tax. Lender must follow Freddie Mac guidelines regarding ownership of other property. (Revised 12/21/18) Freddie MAC First-Time Homebuyers Exceptions It is not necessary to be a first-time homebuyer if the home is located in a federally designated Targeted Area. It is not necessary to be a first-time homebuyer if the homebuyer is a single parent who has only owned with a former spouse while married. It is not necessary to be a first-time homebuyer if the individual is a displaced homemaker and has only owned with a spouse. It is not necessary to be a first-time homebuyer if the individual who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations. It is not necessary to be a first-time homebuyer if the individual has only owned a property that was not in compliance with state, local or model building codes and

13 Section III The Freddie Mac Conventional Program 7 which cannot be brought into compliance for less than the cost of constructing a permanent structure. It is not necessary to be a first-time homebuyer if the Veteran s Exception applies. A borrower will not be disqualified for having an ownership interest in a principal residence during the preceding three years if: The borrower inherited their ownership interest in the property and shares ownership with another party; OR The borrower owns the property with another party and the debt associated with the property was assigned to the other party by a court order (e.g. a divorce decree); OR The borrower is a cosigner/guarantor on the related mortgage debt and someone other than the borrower has made payments on the debt associated with the property for the most recent twelve months, as documented with copies of canceled checks or a statement from the lender. Veterans Exception For the Veterans Exception, a veteran is defined as "a person who served in the active military, naval, or air service, and who was discharged or released therefrom under conditions other than dishonorable." For the Freddie MAC Conventional Program, there is no limit to the number of times a veteran may use the exception. Minimum FICO (Credit) Score Buyers must have a minimum FICO credit score of 640 (the mid score must be the minimum or above). If Freddie Mac 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 Conventional Program loans, then lenders must use the higher minimum. Manual underwriting is acceptable with Loan to Value ( LTV ) at or below 95% with Debt to Income ( DTI ) of 36%. Contact US Bank HFA Division with any questions regarding acceptable AUS, (Added 12/21/18) The maximum debt to income ratio is 45%. Maximum Debt to Income Ratio

14 Section III The Freddie Mac Conventional Program 8 Eligible Properties; Property Requirements Eligible Properties include primary residences only, may be new or existing, must be one unit only, detached or attached, and may be town homes or condos (up to 95% LTV). Homes are considered new if never previously occupied. Manufactured housing, mobile, recreational, seasonal or other types of vacation or nonpermanent homes are not permitted. Land may not exceed the size required to maintain basic livability. Household Income Calculation Qualifying income in the Conventional Program is established by the 1003 income used to qualify borrower(s) for the loan. It is not necessary to provide three years of tax returns for additional documentation. The remainder of this page is intended to be blank.

15 Section III The Freddie Mac Conventional Program 9 Income Limits The Income Limits and Acquisition Price Limits (Sales Price Limits) for the Freddie Mac Conventional Program are as follows: EFFECTIVE 6/11/18 Rev for loan applications on or after 6/11/18: County Freddie Mac 1-2 person Freddie Mac 3+ Person Acquisition Limits (Non- Targeted Area) Acquisition Limits (Targeted Area) Alachua $ 85,560 $ 99,820 $ 271,164 $ 331,423 Bay (Rev ) $ 77,640 $ 90,580 $ 271,164 $ 331,423 Bradford $ 75,000 $ 87,500 $ 271,164 N/A Escambia $ 78,240 $ 91,280 $ 271,164 $ 331,423 Franklin (Rev ) $ 75,000 $ 87,500 $ 271,164 N/A Gadsden $ 82,080 $ 95,760 $ 271,164 N/A Gulf (Rev ) $ 75,000 $ 87,500 $ 271,164 N/A Hernando ( ) $ 76,680 $ 89,460 $ 271,164 N/A Indian River $ 77,520 $ 90,440 $ 271,164 $ 331,423 Jackson $ 75,000 $ 87,500 $ 271,164 N/A Jefferson (Rev ) $ 82,080 $ 95,760 $ 271,164 N/A Leon $ 82,080 $ 95,760 $ 271,164 $ 331,423 Marion $ 75,000 $ 87,500 $ 271,164 $ 331,423 Martin $ 75,000 $ 87,500 $ 291,176 N/A Okaloosa $ 85,800 $ 100,100 $ 327,176 N/A Santa Rosa $ 78,240 $ 91,280 $ 271,164 N/A St. Lucie $ 75,000 $ 87,500 $ 291,176 $355,881 Wakulla $ 76,680 $ 89,460 $ 271,164 N/A Walton $ 75,000 $ 87,500 $ 327,176 N/A

16 Section III The Freddie Mac Conventional Program 10 Affordable Income Subsidy (AIS) Grants Borrowers using the Freddie Mac HFA Advantage Loan who meet specific income limits may be eligible for a grant made by Freddie Mac to help with down payment and closing costs (the Affordable Income Subsidy Grant or AIS Grant ). The income limits for the AIS Grants are determined by the county location of the home. Borrowers at or below 50% of the Area Median Income ( AMI ) Limits as published by Freddie Mac are eligible for an AIS Grant in the amount of $2,500 and borrowers above 50% of AMI but at or below 80% AMI are eligible for an AIS Grant of $1,500. There is no repayment of the AIS Grant it is a grant subsidy. The AIS Grant is reserved in the ehousingplus ehportal using the ADDITIONAL LOAN tab after the First Mortgage and Second Mortgage are reserved. The AIS will be provided at closing by the Lender. Upon purchase of the loan, US Bank will reimburse the Lender for all qualified subsidies. The AIS funds may be used for down payment and closing cost assistance only. Cash back, reimbursement of pre-paids and reimbursement of overage of earnest money deposit is not permitted for any borrower utilizing the AIS Grant. The AIS must be reflected on Page 3, Section L of the CL as Affordable Income Subsidy. This AIS Grant must be reflected in DU or LP findings, along with the Second Mortgage provided by the Program. Any questions about the preparation of the CD should be directed to US Bank HFA Division. For purposes of the AIS Grant income calculations, AMI is not adjusted for family size. If the borrower qualifies, the borrower may receive the AIS Grant from Freddie Mac and DPA assistance and a mortgage credit certificate from the Issuer. These subsidies are stackable.

17 Section III The Freddie Mac Conventional Program 11 Affordable Income Subsidy Grant Income Limits FREDDIE MAC LOANS ONLY (Rev. 7/23/18) Effective for all new loan reservations July 29, 2018 or after 2018 Florida County Level Area Median Income (100%, 80% and 50%) County Name 100% Area Median Income (AMI) 80% of Area Median Income 50% of Area Median Income Alachua $71,300 $57,040 $35,650 Bay $64,700 $51,760 $32,350 Bradford $59,400 $47,520 $29,700 Escambia $65,200 $52,160 $32,600 Franklin $52,100 $41,680 $26,050 Gadsden $67,400 $53,920 $33,700 Gulf $64,700 $51,760 $32,350 Hernando $63,900 $51,120 $31,950 Indian River $64,600 $51,680 $32,300 Jackson $52,100 $41,680 $26,050 Jefferson $67,400 $53,920 $33,700 Leon $67,400 $53,920 $33,700 Marion $53,400 $42,720 $26,700 Martin $60,500 $48,400 $30,250 Okaloosa $65,700 $52,560 $32,850 Santa Rosa $65,200 $52,160 $32,600 St. Lucie $60,500 $48,400 $30,250 Wakulla $67,400 $53,920 $33,700 Walton $65,700 $52,560 $32,850 Financing Facts For Freddie Mac Conventional Program It is 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 allocation is not being utilized inappropriately. Check with your underwriter for updates to information for Freddie Mac HFA Advantage. Such information is provided by a third party (i.e. Freddie Mac, U.S. Bank, and similar entities) who do not provide updated information to ehousingplus.

18 Section III The Freddie Mac Conventional Program 12 Freddie Mac HFA Advantage Fact Sheet Appraisal The appraisal must indicate that the home has at least a 30-year remaining useful life. Buydowns Buydowns are limited to 1 or 2 years with a maximum change of 1.00% per year. Cannot be paid by borrower or paid with their DPA assistance. Cash Back Cash Back to the borrower is not permitted. However, borrowers are permitted a reimbursement of prepaids and reimbursement of overage of earnest money deposit to the extent any minimum contribution has been satisfied and permitted by Agency guidelines. Construction to permanent is not permitted. Construction to Permanent Co-signers Co-signers are not allowable under present Freddie Mac guidelines. Freddie Mac Loan Level Price Adjustment and Adverse Market Fees These fees have been waived. Documentary Stamp Tax and Intangible Tax First and second mortgages closed on or after July 1, 2018, are exempt from documentary stamp tax, so long as the First and Second Mortgage Doc Stamp Exemption affidavits, available from the ehousingplus ehportal, are recorded with the mortgages. (See Exhibit A hereto for forms of Affidavits and instructions for completing them.) After July 1, 2018, this legend must appear on the first mortgages:

19 Section III The Freddie Mac Conventional Program 13 THIS MORTGAGE IS EXECUTED AND DELIVERED IN CONNECTION WITH A LOAN MADE BY OR ON BEHALF OF A HOUSING FINANCE AUTHORITY. IT IS EXEMPT FROM THE DOCUMENTARY STAMP TAX PURSUANT TO THE PROVISIONS OF SECTION (2), FLORIDA STATUTES UPON THE FILING OF THE ATTACHED AFFIDAVIT. (Rev ) The first mortgage and note are NOT exempt from Intangible Tax. However, the second mortgage and note pursuant to section , Florida Statutes, are exempt from intangible tax. This legend must appear on the second mortgage: THIS MORTGAGE IS EXECUTED AND DELIVERED IN CONNECTION WITH A LOAN MADE BY OR ON BEHALF OF A HOUSING FINANCE AUTHORITY. IT IS EXEMPT FROM FLORIDA INTANGIBLE TAX PURSUANT TO THE PROVISIONS OF SECTION (1), FLORIDA STATUTES AND IS EXEMPT FROM THE DOCUMENTARY STAMP TAX PURSUANT TO THE PROVISIONS OF SECTION (2), FLORIDA STATUTES UPON THE FILING OF THE ATTACHED AFFIDAVIT. (Rev ). Final Typed Loan Application (1003) The typed application signed and dated by all parties is required. Loan interviewer must complete and sign page 3 of 4 of the If this is not possible, then an Officer must sign in place of the interviewer. All persons taking title to the property must execute all program documents. The income disclosed on the Affidavit must be the same or more than that shown on the The purchase price, loan amount, and other financial details must be the same as shown on all other documents. Homebuyer Education All borrowers and anyone listed on the deed, utilizing the Freddie Mac HFA Advantage (Conventional) Loan, must attend homebuyer education PRE-CLOSING from an educational provider approved by the Issuer. The Issuer prefers that education be taken as early in the homebuyer process as possible to maximize the benefit to the borrowers. A Homebuyer Education Certification is acceptable for a period of one year from issuance. Lender provided homebuyer education is unacceptable as is over the phone education. If an education course is not listed on the HUD face-to- face web site, it is not acceptable. As an alternative option, at least one borrower may complete the Freddie Mac CreditSmart Steps to Homeownership Tutorial per Guide Section Click on this link to attend the training: Evidence of completion of the homebuyer education program is required prior to closing the loan. (Rev )

20 Section III The Freddie Mac Conventional Program 14 Manufactured Homes As of December 1, 2015, U. S. Bank will not purchase loans for manufactured housing. U.S. Bank considers manufactured housing a mobile home built entirely offsite on a permanent chassis that is pulled on the highway to a permanent location. Modular, panelized or prefabricated homes are not considered manufactured housing. Minimum Loan Amount There is no minimum loan amount in the Conventional Program. Maximum Loan Amount Maximum loan amount must follow Agency (Freddie Mac) guidelines. Must also meet maximum purchase price limits established for the Conventional Program (see above). Also considered, loans cannot exceed appraised value. DPA cannot be used as borrower s funds to make up the difference between appraised value and purchase price. Prepayments The first and second mortgages may be prepaid at any time without penalty. Real Estate Purchase Contract The full address of the property, full names of all sellers and buyers, total purchase price of the property must be included. If there is not an address for new construction, a lot number and subdivision name are required. All named persons must sign. Include the name and title whenever a representative is signing for a corporation. Recapture Tax There is no Recapture Tax liability in connection with the Freddie Mac TBA Program. Refinances The Conventional Program is for new mortgage loans. Refinances are not permitted. However, temporary, construction or bridge financing with a term of 2 years or less may be taken out with a program loan. Remaining Reserves Remaining reserves are not established by this program. Freddie Mac. If any, these are determined by

21 Section III The Freddie Mac Conventional Program 15 Tax Returns or Tax Transcripts Tax returns or tax transcripts are NOT required for this program. Only the form 1003 is required as set forth above. The remainder of this page is intended to be blank.

22 Section V Program Timeline 16 IV. SUMMARY OF THE COMPLIANCE ORIGINATION PROCESS (Revised 12/21/18) MANDATORY PROGRAM TRAINING Lender training is mandatory for anyone working with this program. ehousingplus and US Bank provide program training online 24/7. To attend click on this link. 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. (Added 12/21/18) 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. 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 FIRST MORTGAGE FUNDS To reserve funds, use the ehousingplus ehportal. Log in and reserve the first mortgage. To reserve funds in the program, the borrower is required to have a signed real estate purchase contract for a specific address. You will need a 1003 and the Real Estate Purchase contract in order to make a reservation. If the reservation is successful, 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 rereserved. The lender is responsible for cancelling the loan within the ehousingplus Lender Portal. And then, the lender must (services@ehousingplus.com) or call the ehousingplus Compliance office at to have the borrower permanently removed from the ehousingplus ehportal. Until this process is complete, the lender will not be able to re-reserve funds for the borrower. (Added 12/21/18) RESERVE SECOND MORTGAGE ASSISTANCE Immediately following reservation of the first mortgage click on the Add Additional button found on the main menu to reserve the second mortgage funds. All fields will populate except for the second mortgage loan amount. Enter the loan amount and then click on the Update button to add the second mortgage assistance to the first mortgage loan reservation.

23 Section V Program Timeline 17 RESERVE AFFORDABLE INCOME SUBSIDY (AIS) GRANT INCOME QUALIFIED FREDDIE MAC HFA ADVANTAGE LOAN ONLY To reserve the Affordable Income Subsidy Grant funds, immediately following the second mortgage loan reservation, click on the Add Additional tab. The lender will be responsible for calculating the amount of the additional subsidy based upon borrower AMI, and enter that amount in the ADDITIONAL LOAN tab. The subsidy must be for the exact amount ($1500 or $2500) based upon borrower AMI - no more and no less. (Added 12/21/18) RESERVE MORTGAGE CREDIT CERTIFICATE (Optional) The Mortgage Credit Certificate is a completely separate reservation. Log in and choose the Escambia County MCC program and reserve the MCC. To reserve funds in the MCC program the borrower is required to have a signed real estate purchase contract for a specific address. You will need a 1003 and the Real Estate Purchase contract in order to make a reservation. If the reservation is successful, you will receive a loan number and a message that you ve completed the reservation successfully. (Added 12/21/18) PRINT PRE-CLOSING FORMS The program forms may only be found within the ehousingplus ehportal. Forms generated from any other source may void the loan making it not purchasable in the program. A lender will need user credentials for the ehportal to access the forms. (Added 12/21/18) Provide the borrower(s) with the following forms that need to be signed pre-closing: Escambia County HFA Big Splash TBA Program Notices to Buyers Escambia County HFA MCC Program MCC Notices to Buyers MCC Recapture Brochure (informational only, not signed) PROCESS Lenders process the loan as they would normally, keep in mind the program timelines. 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 20 DAYS OF LOAN RESERVATION, Underwriter completes the online Underwriter Certification within the ehousingplus ehportal.

24 Section V Program Timeline 18 REQUEST DPA FUNDS FOR CLOSING The Down Payment Assistance (DPA) is table funded by the Escambia County Housing Finance Authority at closing. Within a minimum of three (3) business days (no later than 2:00 p.m. CT) prior to closing AND AFTER the Underwriter s Certification is submitted: 1) Print, complete and scan the DPA Funding Request, Underwriter s Certification Form, and DPA Loan Disclosure Form located within the ehousing ehportal. (Rev ) 2) the DPA Request with all required forms described in paragraph 1 to: pat.lott@escambiahfa.com fran.jones@escambiahfa.com donna.haag@escambiahfa.com kimberly.mcclay@escambiahfa.com susan.stephenson@escambiahfa.com The HFA'S goal is to facilitate this process and to provide Lenders the assistance needed to ensure the DPA Funds are available at each closing. Please make sure that ehousingplus and the addresses above are added to your white lists/contacts as both systems generate s related to the DPA Program. The DPA Funding Request is reviewed and approved by the HFA. Following HFA s review and approval, funds are sent directly to the Closing Agent/Title Company via ACH or CHECK, as applicable. If requesting a check, the Funding Request should include a prepaid shipping label. IF THE CLOSING AGENT/TITLE COMPANY IS NOT SET UP WITH THEIR BANK TO RECEIVE ACHs AND THEY NEED ASSISTANCE, PLEASE HAVE THEM CONTACT PATRICIA D. LOTT, KIMBERLY MCCLAY OR FRAN JONES AT FOR ASSISTANCE.

25 Section V Program Timeline 19 CLOSE BIG SPLASH TBA PROGRAM & MCC PROGRAM (Optional) It is the lender s responsibility to ensure that proper instructions are provided to internal processor/closer and to the title company/closing agent. All program documents (except DPA documents) must be returned to you. The program forms may only be found within the ehousingplus ehportal. Forms generated from any other source may void the loan making it not purchasable in the program. A lender will need user credentials for the ehportal to access the forms. (Added 12/21/18) Provide the borrower(s) with the following forms that need to be signed at closing: Escambia County HFA Escambia County HFA Big Splash TBA Program MCC Program (Optional) Affidavit/Certification MCC Affidavit/Certification DPA Second Mtg. Pkg. (to Escambia) DPA HUD Gift Letter DPA Loan Disclosure Form First Mortgage Doc Stamp Affidavit CLOSE - BORROWER RECEIVING AFFORDABLE INCOME SUBSIDY GRANT The lender will fund the additional Affordable Income Subsidy (AIS) grant at closing. It is critically important that the lender does NOT combine the second mortgage assistance received from the Escambia County HFA with the AIS grant on the CD. The AIS must be reflected on Page 3, Section L of the CD as Affordable Income Subsidy. This AIS Grant must be reflected in LP findings, along with the Second Mortgage provided by the Escambia County HFA. Any questions about the preparation of the CD should be directed to US Bank HFA Division The AIS grant must be used for down payment and closing cost assistance only. (Added 12/21/18) RECORDING THE DOCUMENTARY STAMP AFFIDAVITS There will be 2 Documentary Stamp Affidavits to be recorded. (Added 12/21/18) 1) Escambia County HFA First Mortgage Documentary Stamp Affidavit. This affidavit should be recorded Immediately prior to the first mortgage as a separate document. 2) Escambia County HFA Second Mortgage Documentary Stamp Affidavit. This affidavit should be recorded Immediately prior to the second mortgage as a separate document. In the LOAN FORMS section of the ehportal, a lender will find a letter with instructions provided by the Escambia County HFA titled, DPA Second Mtg Pkg.

26 Section V Program Timeline 20 SHIP SECOND MORTGAGE PACKAGE TO HFA The original Second Mortgage Doc Stamp Exemption Affidavit, Second Mortgage and Promissory Note must be recorded as ONE DOCUMENT in the official records of the applicable County and sent overnight within 30 days of closing to the Escambia County Housing Finance Authority, 700 South Palafox Street, Suite 310, Pensacola, FL PARTICIPATING LENDERS -- PLEASE ENSURE THE CLOSING AGENT AND/OR SHIPPER ARE GIVEN THE FOLLOWING INSTRUCTIONS: 1. THE ORIGINAL SECOND MORTGAGE DOC STAMP EXEMPTION AFFIDAVIT, SECOND MORTGAGE AND PROMISSORY NOTE MUST BE RECORDED AS ONE DOCUMENT IN THE OFFICIAL RECORDS. PLEASE FORWARD THE ORIGINAL RECORDED SECOND MORTGAGE DOC STAMP EXEMPTION AFFIDAVIT, SECOND MORTGAGE AND PROMISSORY NOTE TO THE HFA WITHIN 30 DAYS OF CLOSING. 2. IF THE MORTGAGE LOAN CLOSING DOES NOT OCCUR OR IF THE DPA FUNDS ARE NOT USED IN WHOLE OR IN PART, LENDER MUST NOTIFY THE HFA IMMEDIATELY AND MUST CAUSE THE DPA FUNDS TO BE RETURNED TO THE HFA NO LATER THAN THE CLOSE OF BUSINESS ON THE BUSINESS DAY FOLLOWING THE LOAN CLOSING DATE. IMPORTANT! IMPORTANT! IMPORTANT! IMPORTANT! THE ORIGINAL SECOND MORTGAGE DOC STAMP EXEMPTION AFFIDAVIT, SECOND MORTAGE, AND PROMISSORY NOTE (THE DPA DOCUMENTS ) SHOULD BE RETURNED TO THE ESCAMBIA COUNTY HOUSING FINANCE AUTHORITY. DO NOT INCLUDE THE ORIGINAL DPA DOCUMENTS IN THE COMPLIANCE OR MORTGAGE FILE TO BE SENT TO EHOUSING OR US BANK! THE LENDER WILL BE REQUIRED TO REPAY THE DPA TO THE HFA IF THE FIRST MORTGAGE LOAN IS NOT ULTIMATELY PURCHASED UNDER THE ECHFA PROGRAM.

27 Section V Program Timeline 21 COMPLIANCE FILE DELIVERY INSTRUCTIONS All compliance files are uploaded directly to ehousingplus 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 12/21/18) ehp DIGITAL DOCS COMPLIANCE FILE DELIVERY See pages of this guide for detailed information about ehp Digital Docs. (Added 12/21/18) EXCEPTIONS Lenders are notified by ehousingplus and U.S. Bank of exceptions. Exceptions for both ehousingplus and U.S. Bank are available in the ehousingplus ehportal. ehousingplus notifies Lenders of exceptions in the following manner; as files are received and reviewed, any exceptions will be posted in the ehportal. At the same time, the System will automatically the Lender responsible for curing the exceptions. Additionally, within the ehportal REPORTS area, a lender may view the EXCEPTIONS/DEFICIENCIES report. All file Defi s must be uploaded directly to ehp Digital Docs. A lender may NOT any file Defi s to ehousingplus. (Revised 12/21/18) 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. APPROVALS Following approval of the Compliance File by ehousingplus, lenders are notified and reminded of the purchase deadline. FINAL DOCUMENTS THE RECORDED FIRST MORTGAGE DOCUMENTS SHOULD BE SUBMITTED TO U.S. BANK. THE RECORDED SECOND MORTGAGE DOCUMENTS SHOULD BE RETURNED TO THE AUTHORITY.

28 22 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 ehousingplus 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 ehousingplus 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 ehousingplus

29 23 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 ehousingplus

30 24 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 ehousingplus 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, ehousingplus 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: ehousingplus 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 ehousingplus

31 25 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 ehousingplus