TABLE OF CONTENTS. Section 2 Terms and Conditions

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1 TABLE OF CONTENTS Section 1 Introduction Washington State Housing Finance Commission Benefits of the Home Advantage Program Purpose and Scope Process Overview Manual Updates & Revisions Contacts for Questions Eligible Lenders Eligible Loan Originators Section 2 Terms and Conditions Loan Types Loan Underwriting Loan Term For First Mortgage Loan Term For Second Mortgage.2.3 New Financing Total Debt To Income Ratio Restriction Credit Score Tax Liens Document Verification IRS Form 4506-T Tax Transcripts..2.5 Interest Rate Buydowns (Temporary) Property Flipping Homebuyer Education Allowable Fees Non Allowable Fees Mortgage Insurance Title Insurance Flood Insurance Hazard Insurance Power of Attorney Escrow Holdbacks/Repair Escrow Interest Credits Reserve/Escrow Accounts Prepayment Penalty 2.10 (Rev. 03/01/18) TABLE OF CONTENTS.i

2 Subordinate Financing Servicing Quality Control Repeat Program Users.2.11 Section 3 Eligible Borrowers Non Discrimination Occupancy Requirement First-Time Homebuyer Requirement Calculation of Credit Underwriting Income Maximum Total Annual Income Co-Signer/Guarantor Section 4 Property Requirements In General Qualifying Single-Family Residences Appraisals Property Inspections Section 6 Homebuyer Education Policy Seminar Instructors Instructors Who No Longer Work for a Participating Lender Seminar Format Seminar Curriculum Interpreters Seminar Workbooks Commission Provided Materials Seminar Arrangements Publicity On Line Homebuyer Education Policy Disciplinary Action Seminar Checklist (Rev. 03/10/18) TABLE OF CONTENTS.ii

3 Section 7 Reservation Process In General Making a Reservation Mandatory Delivery Dates Extensions to Reservations Changes to a Reservation Expired Reservations and Changes in Property Cancelled Reservations Reservation Transfer Status of Loans On-line Reservation System Section 8 Loan Origination & Processing Documents Borrower Submits for a Home Advantage Loan Processing a Home Advantage Loan Section 9 Pre-Closing Compliance Review and Approval Purpose of Pre-Closing Compliance Review Submission of Loan File Where to Submit Files Review Procedure Checking Mortgage Loan Status Section 10 Loan Closing Compliance Approval Closing Documents Closing Documents (Commission Second Mortgages) Rate Lock Extension Fees Section 11 Post Closing Compliance Review and Approval Submission of Mortgage Loan File Items Needed At Post Closing Compliance Where to Submit Files Review Procedure Checking Mortgage Loan Status (Rev. 03/01/18) TABLE OF CONTENTS.iii

4 Section 12 Loan Purchase and Delivery In General Amortized Loan Balance Timing & Delivery Penalties Withheld From Funding Delivery Address Wire/ACH Transfer Instructions Loan Purchase Schedule/Funding Purchase Prices Loan Suspensions (Curatives) First Payment/Notice of Assignment Hazard Insurance Premiums Flood Insurance FHA Monthly Insurance Premium Conventional Mortgage Insurance Premiums Post Closing Details of Origination Charges Final Documents Common Exceptions That Delay Purchase Section 13 Downpayment Programs Program Description Maximum Income Limit, Loan Amount & Mortgage Details Program Eligibility Combined Loan to Value and Total Loan to Value Reserves Buydowns Reservations Income Calculation Calculating Downpayment Assistance Loan Amount Needs Assessment or Mortgage Subsidy Worksheet Form Eligible Uses of Downpayment Assistance Funds Cash Back Closing and Delivering the Loan HUD Commitment Letter For FHA Loans.13.6 FHA Insurance Award Letter Insurance Requirements Payment Statement Payoff of Second Mortgage TRID Guidance (Rev. 03/01/18) TABLE OF CONTENTS.iv

5 Section 14 Special Programs Section 15 Forms Section 16 Program Announcements Section 18 Appendices APPENDIX III HFA Preferred Product Section 19 Frequently Asked Questions (Rev. 03/01/18) TABLE OF CONTENTS.v