New Mexico Housing HFA Preferred Loan Program (Conventional)

Transcription

1 New Mexico Housing HFA Preferred Loan Program (Conventional) Revisions Date Revisions 9/9/14 Updates in Section 10-A: new underwriter, Section 10-B7: Electronic Signatures, Section 10-C5: Acquisition Cost Limits, Section 10-C8: Borrower Eligibility 11/26/14 Added Section 10-C Processing. Updated Section 10-D3 Income. 12/12/14 Updated Section 10-C1 Disclosing/Information. 10-A Overview The HFA Preferred Loan Program is a special Housing Finance Agency conventional loan product. The Mortgage$aver program can be used in conjunction with the HFA Preferred conventional product. The Mortgage$aver Programs offer below-market rate first mortgage loans to first-time homebuyers. Firsttime homebuyers are individuals who have not owned and occupied a home as their primary residence (including a manufactured home on a permanent foundation) in the past three years. Eligibility for each program is based upon household income, family size and the sales price of the home. All of those originating and processing New Mexico Housing loans will be required to review the MFA Compliance Lender Training at The SNMC State Housing Team will provide guidelines, answer questions regarding programs, underwrite and close the loans. Members of this team will be: Kyle Castle State Housing Administrator Kyle.castle@snmc.com Lesley Hardman Underwriter Lesley.Hardman@snmc.com Leslie Davis Closer Leslie.Davis@snmc.com 10-B General 10-B1 Eligible Loan Programs Mortgage$aver Plus (30 year, fixed rate, zero points). This program comes with a grant equal to 3.5% of the total loan amount. The grant never has to be repaid. The Mortgage$aver Plus cannot be combined with any second mortgage because it already comes with a grant. Only one source of down payment assistance may be used. The rate on this program is slightly higher because borrower receives a grant. Mortgage$aver Zero (30 year, fixed rate, zero points). This program does not come with a grant but can be combined with a down payment assistance loan instead. The rate for Mortgage$aver Zero is lower than for Mortgage$aver Plus. Mortgage$aver 1+1 is also a 30 year, fixed rate but requires payment of a 1% origination fee and a 1% discount point. This product carries the lowest rate of the three available choices. The Mortgage Booster, Payment Saver and Helping Hand are second mortgages designed to provide down payment assistance. They can be combined with the Mortgage$aver Zero or the Mortgage$aver 1+1, but never with the Mortgage$aver Plus. SNMC Page 1 December 12, 2014

2 10-B General (cont d) 10-B2 Ineligible Programs/Transactions HUD Section 184 Indian Housing Program Manufactured Housing Rental Units Co-ops 10-B3 Product Codes NM-CF30 NMBOOSTER-2ND NMSAVER-2ND NMHELPER-2ND 10-B4 LTV/CLTV Maximum 97%/105%, single family only 10-B5 Loan Type Purchases Only Owner Occupied, Primary Residence Only 10-B6 Loan Term 30 year fixed rate only. 10-B7 Electronic Signatures Electronic/digital signatures are accepted on all documents except for the following: Income disclosure letter Any Borrower explanation letter Lender certification/letter of explanation YTD Profit and Loss for self-employed borrowers Rental verification letters from landlords Original Note Original Mortgage Signature Affidavit 10-C Processing 10-C1 Disclosing/Information All 1 st Mortgages will need to be entered into Encompass. There are several options for the Subordinate Financing Loans. This will determine whether or not they are entered into Encompass. o Mortgage Saver Plus: Is a Grant and is not required to be entered into Encompass. o See below how to enter Grant information. Mortgage Booster, Payment Saver and Helping Hand: Are 2nd Loans and WILL need to be entered into Encompass as piggyback Loans. A complete Initial Disclosure package is required along with any applicable Re-Disclosures for all 1 st and 2 nd mortgages regulatory, program, state specific, etc. (Not applicable for Grants.) SNMC Page 2 December 12, 2014

3 10-C Processing (cont d) 10-C1 Disclosing/Information (cont d) Fees to disclose on the 1st: o Mortgage Saver 1+1: An Origination Fee plus a Discount Point may be charged but cannot exceed 1% for each. o Mortgage Saver Zero and Mortgage Saver Plus: NEITHER an Origination Fee or Discount Point is allowed. o Underwriting Fee -- Refer to the branch manager since this fee varies depending on the region. o Tax Service Fee: $59. o Homebuyer Counseling Fee: $45 (can be POC and reimbursed to borrower at closing.) o Mortgage Booster Program ONLY: $100 Origination Fee for the 2nd (disclose on the first). Fees to disclose on the 2 nd : o Per Diem interest. Income Disclosure Letter: o An Income Disclosure Letter must be wet signed by all borrowers, co-borrowers and non-purchasing spouse s. The Income Disclosure Letter is found in Credit Policy Section 12.6 State Housing Forms section and would need to be uploaded into the State Housing bucket. 10-C2 Entering Grant Information Into Encompass When the 2nd is considered a Grant and not a Loan, the information will need to be entered into Encompass as a Gift source. o On page 1 of the 1003: Select Gift Funds for the Source of Down Payment. o On page 2 of the 1003: Enter the Grant amount in the Show All (VOD) section. o Under Account Information : Select Gifts Total in the Account Type drop down. o Enter the total Grant Amount in the Balance field. 10-C3 Reservation Of Funds o Once the loan has received a Cleared to Close, the Underwriter will reserve the funds. o When the funds are reserved, New Mexico Housing will generate specific loan numbers. The UW will then to add those numbers to the Income Disclosure Letter. o The Loan Officer will need to simultaneously lock the loan through Optimal Blue. 10-C4 Miscellaneous There are income and Acquisition limits for this program. See Income Section for more information. 15 Day extension:.1875% of the loan amount will be charged to the lender for a 15 day extension. The fee is due whether or not the loan is purchased. 30 Day extension:.375% of the loan amount will be charged to the lender for a 30 day extension. The fee is due whether or not the loan is purchased. SNMC Page 3 December 12, 2014

4 10-D Underwriting HFA Preferred must be run through DU using the Additional Data screen; select HFA Preferred. Approve/Eligible is required. Manual underwriting and Expanded Approvals (EA-1/Eligible) are not permitted. Qualifying ratios, reserves and income requirements are determined by DU. A separate debt-to-income ratio of 45%, based on the occupant borrower s income, must also be met. Non-occupant co-borrowers and co-signers are not permitted. Funds for the loan are to be reserved by the underwriter. Funds should not be reserved until the loan has been cleared to close by the underwriter. The compliance package must be delivered to MFA and compliance approved prior to closing. Compliance package will be submitted to MFA by State Housing team underwriter. Loans cannot be closed without approval from MFA. Loans with Mortgage Insurance have additional MI company requirements. See website for guidelines from Genworth or MGIC D1 Credit Score Minimum credit score is 620 with DU approval 10-D2 Qualifying Ratios Qualifying ratios are per DU. 10-D3 Income All household income is counted towards income eligibility. Mortgage$aver income limits apply. Household Income: ONLY the Mortgagers are to be included in the total household income under MFA s single family program. ALL Household Members MUST be counted for even if their income is not being used to qualify. 10-D4 Income Limits Counties 1 or 2 Person Household By Family Size 3 or More Person Household Albuquerque MSA (Bernalillo/Sandoval/Torrance/Valencia) $62,900 $72,335 Santa Fe and Los Alamos Counties $62,000 $71,300 Farmington MSA $55,300 $63,595 All Other Areas and Counties of the State $54,200 $62, D5 Acquisition Cost Limits Area Acquisition Cost Limits Los Alamos County $372,375 Santa Fe County $360,000 Taos County $280,125 All Other Areas and Counties of the State $265,158 SNMC Page 4 December 12, 2014

5 10-D Underwriting (cont d) 10-D6 First Time Homebuyer Borrowers are purchasing their first home. Borrowers have not owned a home as their primary residence for a full three (3) years. Borrower has not lived with an ex-spouse that owned the property as his/her sole and separate property prior to the marriage for a full three years. Veterans do not need to be first time home buyers. o Any loan product can be used, it does not need to be a VA loan o Proof the borrower is a veteran is required in the compliance package 10-D7 Homebuyer Education A prospective borrower must be able to demonstrate that he or she has successfully completed a homebuyer counseling course prior to closing the loan. The New Mexico agency must be investor-approved providing face to face pre-purchase housing counseling in either a classroom or one-on-one setting and must provide a certificate at completion of the homeownership counseling. The agency may or may not charge a fee. If there is a fee the cost will be paid by the borrower and can be reimbursed at closing and included with the closing costs included in the second mortgage loan. Unless the loan program is Payment$aver or Helping Hand where the investor will pay the Housing Counseling Agency outside of closing. OR The ehomeamerica on-line counseling program which is accessed through the investor website. The cost for the ehomeamerica course is $45.00 and can be reimbursed at closing and included with the closing costs included in the second mortgage loan. o Refer borrowers to the investor home page to ensure MFA is chosen as their administrator. Mortgage$aver and Mortgage Booster loan program borrowers may use either a face to face counseling agency or the ehomeamerica on-line for their Homebuyer Counseling. Payment$aver and Helping Hand loan program borrowers must use a New Mexico agency for face to face Homebuyer Counseling. The investor will pay the agency a fee outside of closing; agency will provide the lender with a Request for Reimbursement that will be included in the Compliance Package. Counseling certificates cannot be older than one year. 10-D8 Borrower Eligibility The borrower may not have an ownership interest in any other residential dwelling at the time of loan closing. Ownership interest is defined as a borrower whose name appears on the deed to any residential property. Residential dwellings include single family detached, townhomes, condos, manufactured homes, investment properties and vacation homes. 10-D9 Minimum Borrower Contribution The minimum borrower contribution is $500 of the borrower s own funds. Funds cannot be from a gift, grant, seller concessions, pro-rated taxes, or investor provided down payment assistance. The investor requires proof of borrower s funds on the Final First Mortgage Application in Section VII and the final First Mortgage Settlement Statement (HUD-1). Contributions of more than $500 to the transaction (earnest money, fees paid outside of closing, etc.) can be received back at closing. SNMC Page 5 December 12, 2014

6 10-D Underwriting (cont d) 10-D10 Reserves Reserves are not required. 10-D11 Subordinate Financing Only Community Seconds allowed (Mortgage Booster, Payment $aver, Helping Hand). 10-D12 Interested Party Contributions 3% Maximum for CLTV greater than 90% 6% maximum for CLTV less than or equal to 90% 10-D13 Assumability Yes; make sure the final Truth in Lending disclosures are marked yes. 10-D14 Mortgage Insurance Requirements 18% for LTV s >95% and <= 97% 16% for LTV s >90% and <= 95% 12% for LTV s >85% and <= 90% 6% for LTV s >80% and <= 85% Single premium financed MI permitted on LTVs 97%. Total LTV, including financed MI, may not exceed 100%. The lender can choose the MI company. However, MFA suggests either Genworth or MGIC. See website for additional guidelines 10-D15 Eligible Property Single Family Dwelling Planned Unit Development (PUD) Approved Condos (FNMA warrantable) One kitchen only No rental units No manufactured housing Business use restricted to 15% or less of the home 10-D16 Escrow Waivers Escrow waivers are not permitted. 10-E Program Information 10-E1 Recapture Tax Only applies to first mortgage loans funded from Tax-Exempt Bond proceeds Will only be required if all three of the following events occur: o Borrower sells the home during the first nine (9) years of ownership o Borrower has a net gain (net profit) on the sale of the home o Borrower experiences a substantial increase in their income (IRS formula will define) SNMC Page 6 December 12, 2014

7 10-E Program Information (cont d) 10-E2 Special Feature Codes (SFC) SFC 358 should be used to identify all HFA Preferred loans. SFC 088 should also be used along with SFC 358 to identify HFA Preferred loans that will be delivered as a Mortgage Revenue Bond (MRB) loan within a Mortgage Backed Security (MBS). 10-E3 Reservation of Funds Reservation of funds must be completed by Vicki Thomas after the loan has been underwritten and approved. 10-E4 Program Fees See website for details: Mortgage$aver: 1.00% Origination % Discount to the borrower(s) Mortgage$aver Zero, Mortgage$aver Plus: 0.00% Origination % Discount to the borrower(s) Lender will be paid 1.00% origination when loan is purchased by Master Servicer Mortgage$aver, Mortgage$aver Zero, Mortgage$aver Plus Master Servicer (Idaho Housing) will pay a Service Release Premium of the Higher of 1.50% or $750 SNMC Page 7 December 12, 2014