chfa firststep program loan operations training

Transcription

1 chfa firststep program loan operations training

2 Disclaimer This Disclaimer applies to all content provided through CHFA webinars or other training events. The training content provided is intended to help explain CHFA s programs, but should not be relied upon as an alternative to the CHFA Seller s Guide. CHFA makes reasonable efforts to ensure that information provided in its trainings is up-to-date and accurate. If there are any discrepancies between information provided in a training event, including in slide presentations, and CHFA s Seller s Guide and/or enews, the later documents should be relied upon. 2

3 general chfa guidelines Only CHFA-approved Participating Lenders can originate All loans must meet FHA and CHFA guidelines* Only borrower(s) may take title to the property No one else may be included on the purchase documents/in title to property No cosigners or non-occupying co-borrowers 30 year fixed rate mortgages only Owner occupied primary residence only Debt to income (DTI) requirements Credit score of or manually underwritten loan max DTI of 50% Credit score of 660 or higher max DTI 55% Business use of the subject property cannot exceed 15% as shown on tax returns Optional Down Payment Assistance available FirstStep Plus (CHFA Second Mortgage DPA only) * CHFA Seller s Guide available on AllRegs via CHFA s website 3

4 chfa s income guidelines household income calculation Income limits based on number of occupants, county purchasing in and targeted or non-targeted area CHFA Household Income Calculation All household income for each applicant, spouse or civil union partner of each applicant and any other household member who is expected to be secondarily liable on the Mortgage Loan is included even if not used to qualify borrower, i.e.; child support, alimony, over-time, etc. All income documentation for each applicant, spouse or civil union partner of each applicant and any other household member who is expected to be secondarily liable on the Mortgage Loan Anyone with differing last names on Tax Returns, letter of explanation and Child Support docs if applicable Profit and Loss Statement signed and dated for all self-employed applicants, self-employed spouse or civil union partner of each applicant and any other self-employed household member who is expected to be secondarily liable on the Mortgage Loan Review Chapter 5, Section 501 of the CHFA Seller s Guide 4

5 program guidelines - property Acceptable Property Types Single family or PUDs or modular (attached and detached - only 1 living unit allowed) Condo Must be approved per FHA guidelines Submit only the FHA approval in the submission file Manufactured (permanently affixed) Singlewide or larger Deed Restrictions, Land Trusts, Affordable Covenants Permitted in accordance with applicable guidelines CHFA Form 780, Affordable Housing Restrictions Approval Certification, must be completed 5

6 program guidelines property (continued) Unacceptable Property Types Income/investment property Properties where more than 15% of the square footage is used for a business purposes Properties with accessory dwelling units 2-4 unit properties Second homes Non-warrantable condos Excess acreage CHFA acreage limit 50 acres Co-ops Properties with cistern as only water source 6

7 homebuyer education Required for ALL CHFA programs except refinance programs All Borrowers must take Homebuyer Education prior to the loan closing Classes from CHFA approved provider list on CHFA website In person Classes No cost to attendees Online Class Fee - $99 for first borrower, $50 for each additional borrower Required one-on-one counseling session via phone by agency staff after completing online course Follow information on providers site for scheduling counseling session Certificates expire twelve (12) months after date of class Borrower must be under contract prior to expiration of certificate 7

8 chfa program compliance requirements Must meet appropriate CHFA income limits listed on the CHFA website Non-traditional credit is acceptable follow FHA guidelines Manual underwrite acceptable Max DTI 50% Borrower minimum contribution $1,000 Gift funds (follow agency guidelines); and/or Earnest money deposit; and/or Application, appraisal, or credit report fee paid to the Participating Lender; and/or Home inspection fee, including fees paid for additional inspection services, such as sewer scopes, structural engineers report, etc.; and/or Hazard insurance premium paid outside of closing; and/or Thirty (30) day Loan Delivery Extension fee of.35% of the total loan amount and/or Any homebuyer education fee, if applicable HOA fees paid out of pocket by borrower Temporary buy downs allowed, permanent buy downs are not allowed 8

9 chfa program compliance submission Prefer original appraisal uploaded with loan file pdf format Compliance turn times 1 business day from receipt of a complete file. Suspended or incomplete files will result in further delays Decision letters sent via Submission of suspend conditions to CHFA deliver via: Upload through document delivery system preferred method Must CHFA Analyst from suspend letter to avoid delays in review of conditions Secure through CHFA verified link If you have not been previously approved by our IT department to send conditions via , have your IT department contact CHFA s Information Security team to validate the communications are secure. Send request to TLS_Request@chfainfo.com Your own company secure Fax Suspend conditions will be reviewed in order received Program Compliance approval conditions must be submitted with Purchase file. Please ensure closer and shipper are aware of required conditions 9

10 common issues that delay program compliance approval Underwriting transmittal missing information/not complete FHA Loan Underwriting Transmittal (92900LT/LUTS) Ratios and total monthly payment information must match AUS findings Manually underwritten loans, transmittal must be signed Risk assessment sections must be completed LUTS must have the CHUMS number for the appraisal reviewer listed Incorrect calculation of CHFA DPA DPA based on total loan amount, whole dollar amount (rounded down) Missing income documentation (VOE s, paystubs, profit & loss statements, etc) 10

11 common issues that delay program compliance approval (continued) Household size differences between loan application and tax return i.e., letter of explanation from borrower Missing required federal tax returns (IRS transcripts are acceptable) CHFA requires most current year of tax returns or transcripts Extensions not acceptable No W-2s or Wage and Income Transcripts in lieu of tax returns All associated loan files are not complete all loan files (first mortgage and second mortgage) must be complete before any file will check in for review 11

12 chfa firststep CHFA FirstStep sm /FirstStep Plus sm FHA only (no 203(k)) Income and purchase price limits will apply May use DU or LPA AUS Total Scorecard findings Manual underwrites acceptable per insurer/guarantor guidelines Temporary buydowns acceptable Manufactured housing single, double wide, or larger acceptable to FHA guidelines CHFA s 5% Second Mortgage Loan available Borrower minimum investment of $1,000 Gift funds acceptable as permitted by insurer/guarantor Must be a first time homebuyer or qualified veteran Never owned or not owned in the most recent three (3) years Exception: may be repeat homebuyer if purchasing in a targeted area Borrower(s) may not have any ownership in residential property Some exceptions may apply Homebuyer education required Affidavits are required MCC cannot be utilized Recapture Tax provision 12

13 fha requirements for chfa second mortgage FHA Loan Underwriting Transmittal (LUTS) CHFA Second Mortgage must show as secondary financing and marked as Government. Also include the EIN number for CHFA

14 recapture tax What is Recapture Tax (IRS) Factors that determine potential of Recapture Tax Property is sold within the first 9 years; and Household income exceeds the maximum income limits (CHFA Form 407 page 4); and Borrower has a gain on the sale of the property Recapture Tax disclosure given to borrowers at closing CHFA Form 407, Notice of Recapture Tax CHFA will reimburse any Recapture Tax paid by borrowers Borrower(s) submits CHFA Form 950 and required documents after recapture tax is paid 14

15 firststep program compliance documentation requirements Follow the list of conditions/documents in the Document Delivery system or utilize the document checklist for the respective program CHFA Form 750, Compliance Submission Review Checklist Do not include checklist in file submission CHFA Form 401, Initial Applicant Affidavit CHFA Form 719, Veteran Waiver Affidavit only required if borrower is a non-first time homebuyer who is an eligible veteran Include copy of DD214 with this form 15

16 16 chfa form 401, initial applicant affidavit

17 17 chfa form 401, initial applicant affidavit

18 18 chfa form 401, initial applicant affidavit

19 19 chfa form 401, initial applicant affidavit

20 20 chfa form 401, initial applicant affidavit

21 chfa form 719, affidavit of veteran for exception to first time homebuyer requirement 21

22 Firststep program purchase documentation requirements Follow the list of conditions/documents in the Document Delivery system or utilize the document checklist for the respective program CHFA Form 751, Purchase Submission Review Checklist Do not include checklist in file submission CHFA Form 220, Tax Exempt Financing Rider Must be attached to first mortgage loan Deed of Trust CHFA Form 402, Final Applicant Affidavit CHFA Form 407, Notice of Recapture Tax 22

23 chfa form 220, tax exempt financing rider Must be recorded with first mortgage Deed of Trust. 23

24 chfa form 220, tax exempt financing rider Must be recorded with first mortgage Deed of Trust. 24

25 chfa form 402, final applicant affidavit 25

26 26 chfa form 407, notice of recapture tax

27 27 chfa form 407, notice of recapture tax

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