HFA OF MANATEE COUNTY 2013 PROGRAM

Transcription

1 TABLE OF CONTENTS TABLE OF HFA OF MANATEE COUNTY 2013 PROGRAM CONTENTS 2 REVISION TABLE Single Family Loan Program, Second Mortgage Loan Program 3 and Mortgage Credit Certificate (MCC) Program Offers A Federal Income Tax Credit THE PRODUCT 4 THE REQUIREMENTS 7 THE PROCESS 8 ADMINISTRATOR S GUIDELINES Published Revised Revisions on Page 3

2 HFA of Manatee County 2013 Single Family Program Page 2 TABLE OF CONTENTS REVISION TABLE 3 THE HFA OF MANATEE COUNTY TEAM 4 What is a Mortgage Credit Certificate? 8 FIRST MORTGAGE PROGRAM REQUIREMENTS 11 Eligible Borrowers (Rev ) 11 Veterans Exception 11 Homebuyer Education 11 Minimum Credit Score 11 Maximum Debt to Income Ratio 11 HOUSEHOLD INCOME LIMITS 12 Eligible Area 12 ACQUISITION LIMITS (SALES PRICE LIMITS) 12 Property Requirements 12 FINANCING FACTS 13 SUMMARY OF THE COMPLIANCE ORIGINATION PROCESS 15 PROCESS GUIDELINES FOR REQUESTING DOWN PAYMENT ASSISTANCE FUNDS 17 MORTGAGE CREDIT CERTIFICATE PROCESS DETAILED 19 PROGRAM TIMELINE 20 HOW TO RESERVE A LOAN IN THE ehousingplus LENDER PORTAL 21 PROGRAM FEES 22 LENDER FEES 22 LENDER COMPENSATION 22 COMPLIANCE INCOME CALCULATION 23 PROGRAM FORMS 27 OTHER DOCUMENTS REQUIRED FOR COMPLIANCE FILE 28 US BANK WEB SITE INFORMATION 29 SAMPLE FORMS 30

3 HFA of Manatee County 2013 Single Family Program Page 3 REVISION TABLE Date 4/11/13 Page 5, DPA revised to $7,500 5/1/13 Page 28, clarified tax transcripts language 7/1/13 Pages 16, 18, 27 ADDED INFORMATION REGARDING DPA AWARD LETTER RE: /2/13 Pages 16, 18 CLARIFIED INFORMATION REGARDING DPA AWARD LETTER RE: /5/13 Page 5, DPA INCREASED 9/1/13 Page 22, US Bank Revised Transfer Fee

4 HFA of Manatee County 2013 Single Family Program Page 4 THE HFA OF MANATEE COUNTY TEAM Manatee County HFA Creates the first mortgage program, the down payment assistance second mortgage program and the Mortgage Credit Certificate (MCC) program. Sets the rate, term and points, markets the program. Participating Lenders Take applications, reserve in their own systems, process, underwrite, approve, fund, close and sell qualified loans to the program. Check with your company on how to reserve a bond loan rate in your own system so that you have funds available for closing. U S Bank Master Servicer Provides information on acceptable loan products and delivery and funding, receives all mortgage files, reviews mortgage files, notifies lenders of mortgage file exceptions, approves mortgage files, purchases first and second mortgage loans. US Bank, National Association Trustee This is a different US Bank division that is providing the service of wiring DPA funds for down payment/closing cost assistance to each closing. Please do not contact US Bank in Ohio regarding the wiring of these funds. Follow instructions In these Guidelines found as the second and third pages of Summary of the Compliance Origination Process. The request for wire transfer of funds is found on the ehousingplus webpage for the program. Program Administration Maintains the program reservation system, websites, and posts guides, forms, training materials, provides training on compliance issues and system, answers bond compliance questions, receives compliance files, reviews, posts and notifies of exceptions and approves compliance file.

5 HFA of Manatee County 2013 Single Family Program Page 5 THE PRODUCTS First Mortgage Loan Rates are subject to change, for current rate please visit ehousingplus.com Revolving first mortgage funds (first-come, first-served pool to be replenished as loans are pooled and delivered). The borrower receives a 30-year, fixed rate, fully amortizing first mortgage loan with 360 level monthly payments. The Internal Revenue Service and the HFA of Manatee County have requirements that are reviewed for compliance. It s the responsibility of lenders to review program documents and to originate loans that meet the requirements. The Master Servicer is not obligated to purchase loans that do not comply with program terms. Second Mortgage Loan Down Payment and Closing Cost Assistance - $10,000 Rev and effective for loans reserved on or after The second is available only to those using the first mortgage. The second mortgage loan is a 30 year deferred, 0% fixed-rate product. However, the loan is due upon sale, refinance, prepayment of the first mortgage loan or when the property ceases to be the principal residence of the mortgagor. The second mortgage loan is serviced by the HFA. The Lender shall: 1) Qualify the Buyer for the first mortgage loan (to be sold to and serviced by US Bank). 2) Reserve both the first mortgage loan and the second mortgage loan in the ehousingplus reservation system. 3) Process normally. DPA funds may not be requested for loan closings until the First Mortgage Loan has received Underwriter Certification. 4) At least 3 days prior to Closing, the Lender or closing agent will request funds for the Second Mortgage from ehousingplus by completing the wire request form. Please see Pages 17 and 18 of these Guidelines for specific direction. 5) In addition to the first mortgage loan forms, complete the following forms found behind security on the website. Some information will auto-fill. Those blanks that do not autofill are interactive so that lenders can complete the blanks online and print the completed form. a. The Second Mortgage; b. Promissory Note; c. DPA Certificate.

6 HFA of Manatee County 2013 Single Family Program Page 6 6) At closing, the Buyer must execute the Second Mortgage, Promissory Note and DAP Certificate and pay a second mortgage processing fee of $ Checks should be made payable to the Housing Finance Authority (HFA) of Manatee County. HUD-1 should indicate that the fee was paid to the HFA. 7) The Lender or closing agent shall record the second mortgage loan along with the first mortgage loan, with directions that the Clerk shall return the original recorded second mortgage to Angela A. Abbott, P.A. at the address below. 8) Within 2 business days of closing, the Lender or closing agent shall deliver by overnight mail, the following documents to the Program Administrator, Angela A. Abbott (at the address below): a. The original Promissory Note for the second mortgage loan; b. The original DAP Certificate; c. A copy of the HUD-1 Settlement Statements for the First and Second Mortgages Loans; d. A certified copy of the Second Mortgage; and e. The processing fee of $ payable to the Housing Finance Authority of Manatee County, Florida. 9) All documents and correspondence in connection with the Second Mortgage should be sent to: Angela A. Abbott, P.A S. Washington Avenue Titusville, FL (321) angelaabbott@cfl.rr.com DO NOT DIRECT ANY FORMS OR QUESTIONS RELATING TO THE SECOND MORTGAGE LOAN PROGRAM TO US BANK. Use of Second Mortgage Loan Proceeds Second mortgage loans are available ONLY with an HFA first mortgage loan. Proceeds may be used for down payment, closing costs, and reimbursement of prepaids and earnest money deposit to the extent any minimum contribution has been satisfied and that the reimbursement is permitted by Agency (FHA, VA, etc) guidelines. There is no cash-back to the borrower. To the extent the funds advanced by the borrower, plus the first and second mortgage amounts, are less than required at closing, the Mortgage Lender will reduce the second mortgage amount. Owner Occupancy Requirement The borrower receiving the second mortgage loan must occupy the residence for the term of the loan or until the loan is satisfied. Loan Repayment This second mortgage loan must be repaid in full on the earlier of 30 years (final repayment date of the first mortgage loan) or upon sale, transfer, rental, other disposition of the property (including any involuntary transfer by or as a result of foreclosure or judicial sale or operation of law), refinance or satisfaction of the first mortgage loan. This loan must be repaid. It is never forgiven.

7 HFA of Manatee County 2013 Single Family Program Page 7 Maximum income and purchase price limits mortgage loans. Limits are the same as for the HFA first Disclosure Requirements The second mortgage loan must meet Federal Truth-in-Lending Disclosure requirements and any other applicable state and federal lending regulations. Hazard and Title Insurance Requirements The hazard insurance policy, when issued, must name the Housing Finance Authority of Manatee County as an insured second mortgagee. The mortgage title insurance policy, when issued, must include the second mortgage as a valid lien against the property subordinate only to the first mortgage. Recordation Requirements The second mortgage must be recorded. Funding of Second Mortgage Loans Manatee HFA advances the funds. See pages 17 and 18 in these Guidelines. Assumption The second mortgage loan is not assumable. Refinance of First Mortgage Loan: The second mortgage loan must be repaid. It can never be subordinated. Prepayment The second mortgage loan may be prepaid at any time without penalty. Mortgagee The Mortgagee is the Housing Finance Authority of Manatee County as preprinted on the Second Note and Second Mortgage and, therefore, an Assignment is not required. Recapture The second mortgage loan is not subject to the Recapture Provision that is applicable to the first mortgage loan. Documentary Stamp Tax/Intangible Tax The second mortgage and second note are exempt from Florida Documentary Stamp and Intangible Tax. The deed is not exempt. Tax on the deed must be paid by someone other than the borrower, the borrower s funds or the second mortgage proceeds unless an REO of HUD, Fannie, Freddie or a bank. The second mortgage has language pre-printed on the first page that speaks to the exemption. US Bank will require the exemption language typed on the first mortgage. Documents are available on the website.

8 HFA of Manatee County 2013 Single Family Program Page 8 TAX DISCLAIMER This material is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. This material may be used to support the promotion or marketing of the matter discussed herein. The taxpayer should seek advice from an independent tax advisor regarding the matters set forth herein based on the taxpayer s particular circumstances. What is a Mortgage Credit Certificate? A mortgage credit certificate (an MCC ) is an instrument designed to assist persons of low and moderate income to better afford individual ownership of housing. MCCs were established as an alternative to the issuance of single family mortgage revenue bonds. As distinguished from a bond program, in a MCC program no bonds are issued so mortgages are financed in the conventional or government-insured market. Under a MCC program, the mortgagor may take a tax credit in an amount equal to the annual amount of interest paid on the mortgage loan multiplied by the Mortgage Credit Certificate Rate. Currently, the Mortgage Credit Certificate Rate for the Program is 50%. (However, if the loan is in an amount where the mortgage interest in the first full year will be $12,000 or more the Lender should notify the Administrator so that the credit amount can be adjusted.) As an example, an Applicant with a $120,000, 30 year, fixed rate mortgage (monthly payment has equal monthly installments of principal and interest) and a 3.25% interest rate could realize the following federal income tax savings (numbers are rounded): Example Mortgage Amount $120,000 Interest Rate 3.25% Monthly P & I $539 Total Interest Paid First 12 mos $4163 Mortgage Credit Rate 50% Maximum First Year Credit Amount $2,000 During the first year of the Program, the Applicant in this example would be eligible for a tax credit of up to $2,000 if not limited by tax liability. The Applicant would be able to file a revised W-4 withholding form taking into consideration the anticipated tax credit and have approximately $166 per month in additional disposable income in the first year. Applying that savings to the monthly payment, decreases the payment to $373. Additionally, taxpayers who file itemized returns may continue to take a deduction equal to the amount on Line 3 of Form Because the credit rate is greater than 20%, the amount of MCC is capped at $2,000.

9 HFA of Manatee County 2013 Single Family Program Page 9 In the example, 100% of the mortgage interest paid is $4,163 so 50% of the mortgage interest paid is $2,081. Because the credit rate is 50%, the amount that may be claimed as a credit is capped at $2,000. According to IRS instructions on Form 8396, the amount of allowable mortgage interest deduction on Schedule A is determined by reducing by the amount on Line 3 of Form 8396 ($2,000). So the total mortgage interest paid in the first 12 months was $4,163, subtract $2,000 and the remaining $2,163 may continue to be used as a deduction. The tax credit amount of $2,000 may be used as a tax credit after all other deductions and credits have been applied and to the extent there is tax liability. If not all of the $2,000 can be used because there is not enough tax liability, it may be carried forward for up to three years. However, it cannot be added to the allowable mortgage interest deduction. If 50% of the mortgage interest paid was $1,000, then $1,000 would be shown on Line 3 on Form 8396 and $4,163 less the $1,000 credit amount means $3,163 becomes the amount of a mortgage interest deduction on Schedule A. Borrowers who receive a MCC and who continue to own and occupy the financed home will be eligible for a tax credit each year for the term of the loan. The amount of the credit actually claimed on the MCC holder s federal income tax return cannot exceed the amount of federal income taxes due after other credits and deductions have been taken into account. For example, if after taking into account other tax credits and deductions, a borrower only owes $1,000, he or she cannot use the MCC tax credits in an amount in excess of $1,000. Any unused MCC related tax credit can be carried forward up to three years to be applied against future income tax liability. A purchaser of a new or existing single family home may apply for a MCC through any mortgage lender (who is willing to sign a no cost agreement with the HFA) at the time he or she applies for a mortgage from the lender. Any lender is eligible to participate in the Program by entering into a Participation Agreement and complying with Program requirements. A MCC cannot be issued to a homebuyer who is refinancing an existing mortgage or in connection with a mortgage from a relative. Also, a MCC cannot be used in connection with a tax-exempt, bond-financed mortgage loan. It s important to note that all or a portion of the MCC related tax credit may be subject to recapture if the Residence is sold within the first full nine years of purchase. This tax credit recapture is further explained in the Notice of Potential Recapture Tax and in the Recapture Tax brochure provided to an applicant. What is the lender involvement? Simply follow the guidelines for the first mortgage loan. The Lender is responsible for filing a form with the IRS in each year in which they originate loans for which MCCs are issued, and for keeping certain records regarding the MCCs. For participating lenders, the annual form will be forwarded via by the Program Administrator for execution and filing by the Lender.

10 HFA of Manatee County 2013 Single Family Program Page 10 MCC Homebuyer Benefit The MCC can reduce the amount of federal income taxes; however, the tax benefit cannot exceed the amount of federal taxes owed for the year after other credits and deductions have been taken. But unused credit may be carried forward for up to three years. Borrowers will have to adjust federal income tax withholding in order to receive the MCC benefit on a paycheck by paycheck basis. By doing so, borrowers will have more disposable (after tax) income with which to make mortgage payments. Borrowers should contact their tax professional or the IRS for guidance. The benefit of the MCC program continues for the term of the mortgage as long as the holder of the MCC continues to own and occupy the home under the mortgage for which the MCC was issued. What does the Homeowner have to do to claim the benefit with the IRS? Each year the homeowner files Form 8396 with their federal income tax return. The form is available on the IRS website. Special Rules There are special rules regarding refinancing of the loan for which a MCC was issued. The borrower should contact the Program Administrator when and if refinancing the loan for which this MCC is issued.

11 HFA of Manatee County 2013 Single Family Program Page 11 FIRST MORTGAGE PROGRAM REQUIREMENTS Eligible Borrowers (Rev ) Buyers and their spouses (borrowing and non-borrowering must be first-time buyers, must provide tax transcripts and must be able to permanently reside in the US. Please contact the Compliance office with questions regarding permanent residency. Work visas, student visas, any temporary visas do not qualify. Those with permanent asylum do qualify & should provide an I-9. Buyers 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. Buyers must occupy the property purchased within 60 days of closing. Contact Bond Compliance with questions regarding eligibility. The past three years federal income tax transcrilpts are NOT required for Targeted Area buyers or those meeting Veteran s Exception. Veterans Exception For the Veterans Exception, 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." The Mortgagor Affidavit has a checkbox that states: Mortgagor(Comortgagor) meets the requirements to qualify as a veteran as defined in 38 U.S.C. Section 101 and has not previously obtained a loan financed by single family mortgage revenue bonds utilizing the veteran exception to the first-time homebuyer requirement set forth in Section 416 of the Tax Relief and Health Care Act of Attached hereto are true and correct copies of my discharge or release papers, which demonstrate that such discharge or release was other than dishonorable. Homebuyer Education Homebuyer Education is encouraged but not required. Minimum Credit Score Buyers must have a minimum FICO credit score of 640 on FHA/VA/RD (mid score must be 640 or above); however, for home buyers with no FICO score, manual underwriting shall be permitted. Maximum Debt to Income Ratio The maximum debt to income ratio is 45%. Household Income Calculation Include income of borrower(s) and spouse (occupants and non- occupants) and any person who will live in the household who is 18 years of age or older. Bond program income is not averaged. It is annualized. That s different from income used for credit underwriting. More detailed guidelines for calculating bond program income are in the Underwriter s Program Income Calculation Guide included in this Guide.

12 HFA of Manatee County 2013 Single Family Program Page 12 HOUSEHOLD INCOME LIMITS FOR FIRST MORTGAGES, MCC S AND HFA SECOND MORTGAGES 1-2 person households = $73,920 3 or more person households = $86,240 Eligible Area Eligible Area Includes all of Manatee County Targeted Areas There are no Targeted Areas in Manatee County. ACQUISITION LIMITS (SALES PRICE LIMITS) FOR FIRST MORTGAGES, MCC S AND HFA SECOND MORTGAGES Bond program refers to Acquisition Limits - in most cases this is the Sales Price and is never FHA Acquisition limits. Has to include everything paid by the buyer or on the buyer s behalf. New or Existing $408,461 Please note that existing 2-4 unit dwellings must be at least 5 years old. The mortgagor must reside in one unit of the property. Property Requirements New or existing, one to four units, detached or attached, condos, townhomes, manufactured homes that meet servicer/insurer/guarantor requirements. Homes are considered new if never previously occupied. Mobile, recreational, seasonal or other types of vacation or non-permanent homes are not permitted. Land may not exceed the size required to maintain basic livability. Properties purchased in the program must be residential units. No more than 15% of the square footage of the home being purchased may be used in connection with a trade or business including Child Care services (other than incidental rental from eligible multi-unit structures). Industry changes apply to bond program loans. In this program, there are no variances for bond program loans.

13 HFA of Manatee County 2013 Single Family Program Page 13 FINANCING FACTS 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 allocation is not being utilized inappropriately. Appraisal The appraisal must indicate that the home has at least a 30 year remaining useful life. Buydowns Limited to 1 or 2 years with a maximum change of 1.00% per year. borrower or any of their assistance. Cannot be paid by 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 perm Construction to perm loan type is not permitted. See Refinance below. Cosigners Cosigners are permitted for FHA loans under very specific conditions. Follow FHA guidelines for credit purposes only. Treat cosigner credit/income as directed by FHA. Cosigners are allowable in an FHA transaction when meeting the following conditions (1) a cosigner cannot have any ownership interest in the property (they cannot be on the Mortgage/Deed) and (2) the cosigner cannot reside in the property being purchased. A cosigner s income is not considered for bond program purposes, tax returns are not required and cosigners do not sign any bond documents. Documentary Stamp and Intangible Tax First and second mortgages and notes are exempt from doc stamp and intangible tax. Deeds are not exempt. Sellers must pay the fee on the deed. Only in cases of an REO of FHA, VA, USDA, Freddie, Fannie or bank, may the buyer pay the fee on the deed. The following legend must appear on the first mortgage. It is preprinted on the second mortgage: THIS MORTGAGE IS EXEMPT FROM FLORIDA DOCUMENTARY STAMP TAX UNDER , F.S. AND FLORIDA NONRECURRING INTANGIBLE TAX UNDER 199, F.S. PER FLORIDA STATUTES. Manufactured Housing See US Bank bulletin on their web page. Minimum credit score is 660. Minimum Loan Amount There is no minimum loan amount in this program. Prepayments The first and second mortgage may be prepaid at any time without penalty.

14 HFA of Manatee County 2013 Single Family Program Page 14 Recapture Tax The conditions of repayment of the federal subsidy of these loans is explained in a separate brochure provided on the Website. Basically, if the property is disposed of in the first full nine years AND a net profit is made AND the borrowers income exceeds the income limits allowed at time of sale, recapture tax may have to be paid with the federal income tax return for the year in which the home is sold. Refinances This program is for new mortgage loans only. Refinances are not permitted. However, temporary, construction or bridge financing with a term of 2 years or less may be taken out with a bond program loan. Reissuance of MCC s If the first mortgage loan is refinanced, the MCC may be reissued for a fee of $275. the Program Administrator for all details regarding a reissue. Contact Remaining reserves are not established by the Program. If any, these are determined by the type of financing used (i.e. FHA, VA.).

15 HFA of Manatee County 2013 Single Family Program Page 15 SUMMARY OF THE COMPLIANCE ORIGINATION PROCESS PROGRAM TRAINING Lender training provided by the Administrator and Servicer -- See TRAINING tab located on the ehousingplus web page for the HFA of Manatee County Program. For programmatic information and program and system training -- ehp University is offered 24/7 -- username and passwords, added to notice directory once weekly on Wednesdays. For underwriting, delivery and funding information --US Bank also offers ongoing training. LENDER PORTAL TRAINING Following ehp University training, first-time users of the ehousingplus Lender Portal are REQUIRED to attend system training. System training is conducted every Friday via live Webinar. To attend system training please LENDER PORTAL USER CREDENTIALS Lenders who currently have access to other ehousingplus programs in the lender portal will retain their current username and password. However, a form must still be submitted so the compliance office can add the new program to your credentials. New users must first attend system training and then request user credentials. QUALIFY Lenders qualify applicants for the bond program. Lenders may pre-qualify and complete application process in their own internal systems using their internal codes. For the bond program, buyers must present an executed sales agreement before being entered into the program reservation system. RESERVE To reserve funds in program s online system click on this link. New construction, short sales or any other known delayed loans must be reserved no sooner than 45 days prior to closing. DISCLOSE Lenders have borrowers sign the Notices to Buyers and attach a copy of the Recapture Brochure. That s it for extra paperwork upfront. But it has to be signed upfront because it s the disclosure for the bond program. Program forms are available behind security in the ehousingplus Lender Portal. JUSTIFY Lenders process the loan normally and consider bond requirements - Notices to Buyers has been signed and ORIGINAL retained for compliance file. PRE-APPROVAL = UNDERWRITE AND CERTIFY Lenders underwrite and are responsible for credit decisions of the loans in the program. Servicer does not re-underwrite loans. Following credit approval, Underwriter completes the online Underwriter Certification form. The Underwriter Certification is available behind security in the ehousingplus Lender Portal.

16 HFA of Manatee County 2013 Single Family Program Page 16 DPA REQUEST FOR FUNDING Please reference Page 17 of this guide for details. The DPA Funding Request Form may be found behind security in the ehousingplus Lender Portal. CLOSE AND VERIFY It s important to provide accurate closing instructions to closing agents. All program docs must be returned to you. AT CLOSING, BORROWERS MUST SIGN THE DOWN PAYMENT ASSISTANCE PROGRAM AWARD LETTER. Original remains with Lender, copy to borrower, US Bank (with USB002) and in FHA Case Binder. THE LETTER MUST BE USED FOR ALL LOANS THAT CLOSE ON OR AFTER JULY 1, Find all forms behind security at the ehousingplus web site. SHIP / SUBMIT Use the Bond Compliance Checklist to assemble the compliance file. Forms may be found behind security in the ehousingplus Lender Portal. THE COMPLIANCE FILE IS SENT DIRECTLY TO ehousingplus. The mortgage file with credit package is submitted to U S Bank.

17 HFA of Manatee County 2013 Single Family Program Page 17 HOUSING FINANCE AUTHORITY OF MANATEE COUNTY PROCESS GUIDELINES FOR REQUESTING DOWN PAYMENT ASSISTANCE FUNDS Based on NEW HUD-mandated regulations, the HFA MUST provide DPA funds directly to the Closing Agent. The Lender may no longer advance these funds. These requirements apply to all loan types. In order to expedite the delivery of the funds: 1. Lender will reserve the first mortgage and any assistance as is being done today on the online system at ehousingplus.com. Please review Pages 5-7 for a full explanation of the use of second Mortgage, Note and DAP Certificate and delivery of same. It is very important that you review the information. 2. Lender will process the loan(s) and update the information in the system as the loan moves through the pipeline. 3. Once the loan has been approved internally, the Lender s Underwriter will execute the Underwriter s Certification online. 4. After the Underwriter Certification has been completed, and with a scheduled closing date, the Lender s authorized representative must fill out and execute the Down Payment Assistance Funding Request Form available in the system, under FORMS. 5. The Request Form must be printed, signed, and scanned in pdf, jpg, tiff or png format. 6. Three (3) business days prior to funding, the Lender sends a complete, executed pdf or scanned version of the DPA Funds Request Form, to ehousingplus at fundsrequest@ehousingplus.com. 7. Request Form Review a. Anything received by 2 pm ET will be verified that day and the requests forwarded to the HFA. b. Requests received after 2 pm ET, will be processed by 12 noon ET the following day. c. Special Attention will be given to Forms received on Fridays to ensure that they are sent before start of business on Monday. d. Any s received over the weekend will be processed on Monday and for Holidays on the next business day. 8. The DPA Funds Request Form is reviewed by ehousingplus (ehp) for accuracy. Lenders will be contacted by ehp if the Form cannot be verified. Verified forms are sent to the HFA of Manatee County and to the Trustee (US Bank, NA) by ehp. US Bank wires funds to the closing agent. Funds are wired directly to the Closing Agent/Title Company and NOT the Lender or Borrower.

18 HFA of Manatee County 2013 Single Family Program Page Please make sure that instructions are provided to internal Processor/Closer and to the Title Company/Closing Agent. 10.If the Loan does not close on the Loan Closing Date indicated on the Request Form, Lender agrees to cause the funds to be returned to (US Bank, NA) for the credit of the Authority s account not later than the close of business on the business day following the Loan Closing Date. Wiring instructions for the return of funds are as follows: U.S. Bank 777 E. Wisconsin Avenue, Milwaukee, WI ABA A/C US Bank Trust Wire Clearing A/C Ref Manatee HFA/ Attn James Audette/ Rev IT S IMPORTANT that lenders (1) have the borrower(s) sign the letter that meets requirements of (appears in the auto-fill Forms available for closing labeled as ) and retain original with copies to borrower, US Bank and a copy in the FHA Case Binder; AND (2) have a copy of the wire or proof of the wire delivered to the Closing Agent. Lenders retain proof, place a copy of the proof in their FHA Case Binder and FOLLOW US BANK requirements USB002. ehousingplus (ehp) 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 ehp and Angela Abbott s addresses are added to your white lists/contacts as both systems generated and other s related to the DPA Funds Request will be sent. Should you have any questions, please contact ehp staff services@ehousingplus.com or

19 HFA of Manatee County 2013 Single Family Program Page 19 MORTGAGE CREDIT CERTIFICATE PROCESS DETAILED There are requirements imposed by the IRS and the Issuer that are reviewed for compliance with the program guidelines. If the loan complies with the requirements of the first mortgage loan as detailed in the Administrator s Guidelines, it qualifies for the MCC. It is the responsibility of lenders to review program documents and to originate loans that meet the requirements. The Administrator reviews the Compliance File. It s easy to give borrower s the MCC Tax Credit. Complete the reservation screens online and submit. Reservations submitted correctly receive a MCC number. If submitted incorrectly, there is instant online feedback identifying non-compliance and/or missing information issues. The only difference in paperwork involves the Recapture Brochure. The brochure being used for loans utilizing a MCC is different than the Recapture Brochure used for the HFA first mortgage. So if using only a first mortgage, use the Recapture Brochure labeled First Mortgage only. If using a MCC and first mortgage or MCC only, use the Recapture Brochure labeled, For MCC. Both are posted on the website and labeled appropriately. After closing, simply follow the Compliance File Checklist. The MCC and Final Recapture Notice will be issued by the Program Administrator via regular mail sent to the borrower at the property address once the compliance file is approved. Each January, the Program Administrator will provide the Lender with the required IRS reporting form for each year in which the Lender originates loans with MCC s. MCC s in this program qualify for re-issuance if the first mortgage loan is refinanced. The charge for re-issuance is $275.

20 HFA of Manatee County 2013 Single Family Program Page 20 PROGRAM TIMELINE Buyers must have a fully executed sales contract for a specific property in order to have funds reserved or be on a waiting list. 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 UNTIL 45 DAYS PRIOR TO CLOSING. Loans not purchased within the timeframe below, cannot be purchased. The revolving pool of funds assures continuous funding. unnecessary to rush to reserve funds. Fund availability makes it Loan Processing, Delivery and Purchase Timetable: Once a loan is reserved in the ehousingplus system and is provided the Servicer s Loan number, the loan must be Underwriter certified within 15 days of loan reservation; Closed and delivered to the Servicer within 45 days of loan reservation; and 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 cost of the extension is $375. The $375 extension fee is due whether or not loans are ultimately delivered and/or purchased. The $375 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 of $375. Any outstanding fees owed by the Lender may result in that Lender becoming ineligible to participate in the program. At 101 days, a loan that hasn t been delivered is cancelled and cannot be reinstated. Again, the extension is offered once per loan and no further extensions will be allowed. Furthermore, regardless of choosing an extension, any loan not purchased within the approved timeframe will become the liability of the originating lender, including any down payment assistance provided at closing. An extension request is available online at Program Docs hold the Extension Request form that is completed and submitted online. Remember that the form must be submitted BEFORE the 70th day after loan reservation. Term of MCC Program By law the current election to use allocation for MCCs is available for loans closing through December 31, The Issuer may choose to allocate additional funds to another MCC program.

21 HFA of Manatee County 2013 Single Family Program Page 21 HOW TO RESERVE A LOAN IN THE ehousingplus LENDER PORTAL (Reserve, View Your Pipeline, View or Run Reports, Review Exceptions) This represents a brief presentation of information available to lenders. The ehousingplus online system is called the Lender Portal. There is an online Chat feature, which is the easiest way to receive answers for your questions about the use of the system. You do not need a username and password to access the program guidelines or training materials. Click here for the ehousingplus HFA of Lee County web page, then click on the SUMMARY tab to view the Administrator Guidelines. To attend training click on the above link, click on the TRAINING tab, then click on ehp University (available March 22, 2013) You DO need a username and password to log in and reserve money for a borrower and to print forms that are auto-filled and printed ready for execution or to run a variety of reports. These reports offer an opportunity to truly manage your pipeline. FIRST MORTGAGE FUNDS are locked for a buyer when a reservation is submitted on and accepted by the system and a loan number is obtained. All loans must be registered through the ehousingplus Lender Portal. Complete the reservation screens online and submit. Reservations submitted correctly receive a loan number that becomes the loan number for the life of the loan. If submitted incorrectly, there is instant online feedback identifying noncompliance and/or missing information issues. Following submission of first mortgage loan, reserve the second mortgage loan by following these steps: Step 1 - Reserve the first mortgage funds Step 2 - When the first mortgage reservation is complete you will see the tab, Add Additional (right next to the submit button). Click on the Add Additional tab. Step 3 - Select DPA and enter the amount and click UPDATE Step 4 (when reserving an MCC) - Click on the Add Additional tab. Step 5 - (when reserving an MCC) - Select MCC, the MCC amount is automatically calculated so all you need to do is click UPDATE. The security features control the information each user can access. For example, only Underwriters may access the Underwriter Certification. The Underwriter Certification serves as the pre-approval process and is implemented by the lender s Underwriter. In this program, the Underwriter will simply be verifying data that has already been input into the system (i.e. property address, borrower name, loan amount, etc) and making changes where necessary.

22 HFA of Manatee County 2013 Single Family Program Page 22 PROGRAM FEES (Revised US Bank Transfer Fee ) Product Use * App Fee to ehousing Plus ** Tax Service Fee to US Bank *** Transfer Fee to US Bank **** Second Mtg Processing Fee to HFA ***** Origination and Discount Fees 1st Mtg Zero on 2nd ****** No Doc stamp or Intangible Tax on Mtg and Note Manatee First Mtg and HFA second AND MCC Manatee First Mtg and MCC $275 $85 $250 $ % Origination on1st and Zero on 2nd; No Discount on 1st or 2nd $275 $85 $250 N/A 1.00% Origination and No Discount Not charged on First and Second Mortgages & Notes Not charged on First Mortgages & Notes Manatee First Mtg and HFA second $225 $85 $250 $ % Origination and No Discount Not charged on First and Second Mortgages & Notes * The fee is payable by buyer or seller at closing and may not be financed. The fee must be disclosed on the HUD-1 as being paid to ehousingplus. It is sent directly to ehousingplus with the compliance file. (**) (***) Fees are netted by Servicer at loan purchase. Must be disclosed as being paid to US Bank **** Fee is payable by buyer or seller at closing and may not be financed. Fee must be disclosed on the HUD-1 as being paid to the Housing Finance Authority of Manatee County. ***** Origination Fee is paid by buyer at closing. This may be paid from the HFA s downpayment assistance. ****** Deeds are not exempt. Borrowers may not pay this charge (exception: REO s of HUD, Fannie, Freddie, a bank). 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 COMPENSATION Lenders net a total of 2.75% (1.00% Origination collected from borrower plus 1.75% at loan purchase from Master Servicer as SRP).

23 HFA of Manatee County 2013 Single Family Program Page 23 COMPLIANCE INCOME CALCULATION Underwriters should remember that CALCULATION OF PROGRAM (COMPLIANCE) INCOME IS DIFFERENT THAN CALCULATION OF INCOME FOR CREDIT PURPOSES. The Bond program requires that underwriters consider the income of borrowers and their spouses (regardless of their address) and all household members 18 years of age or older(related or unrelated). Use the information below as a general guide. Because each case is different, please contact Bond Compliance if you have questions. Unlike income that is averaged for credit underwriting, the bond program is concerned with actual current income. You should be reviewing the YTD income, the income of the last 4 months and the income shown on previous tax returns for consistency. You should not be averaging income. If there are not inconsistencies in earnings, use the guidelines for each loan type to determine current gross monthly income. Current gross monthly income is multiplied by remaining months in the year to determine "total current annualized income". For the tax year in which the closing occurs, consider YTD income. Then establish current base income for the balance of the year using the guidelines for each type of income. Then consider any additional income. For assistance, contact the Compliance Office. Gross monthly income is the sum of monthly gross pay; any additional income from overtime, part-time employment, bonuses, income from self-employment, dividends, interest, royalties, pensions, VA compensation and net rental income, other income (such as alimony, child support, public assistance, sick pay, social security benefits, unemployment compensation, income received from trusts, and income received from business activities or investments, continuation of which is probable based on foreseeable economic circumstances based upon the Mortgagor's Affidavit (to such effect), all as computed at the time of application for a mortgage loan and confirmed at the time of closing. We will check information with respect to gross monthly income obtained from the reservation form, Underwriter s Certification and applicable certificates and affidavits executed the date of the Closing of the Mortgage Loan, provided that any gross monthly income not included for credit underwriting purposes must be included in determining gross monthly income. The limit is the limit and any amount over the limit is not acceptable. Include the income of non-borrower co-habitants who will reside in the property. However, do not include (1) dependents that are claimed on tax returns but who will not permanently reside in the home the majority of the time and (2) cosigners. The Affidavit, executed by the borrower(s), and certified by the lender, must include the total verified annual household income. This program considers HOUSEHOLD INCOME not income of the borrower. Household income includes the income of borrower, spouse. Remember if persons are not divorced they are married. We count the income of the spouse whether they reside in property or not. Also include the income of all who will reside in the home 18 years of age or older (children, parents on social security, etc). Questions regarding the calculation of income for program purposes should be directed to the Compliance office services@ehousingplus.com or There is also a chat feature available online. There are many variables and the Compliance office will be pleased to assist.

24 HFA of Manatee County 2013 Single Family Program Page 24 Alternate Documentation (Alt Docs) as defined by secondary market entities is acceptable Lender verification for compliance purposes, provided that such documentation includes the necessary, acceptable income tax returns. The Servicer requires a credit package as indicated on the various loan delivery checklists. However, the Servicer does not re-underwrite the loans for credit purposes. See bolded paragraph below. Although reference is made to VOE s and VOD s in the guidelines below, they are not required if acceptable alternate documentation is in the file and if acceptable to the Agency (FHA, VA, etc). This documentation includes, but may not be limited to, current pay stubs which delineate current period, W-2's, for all borrowers and all employers, and bank statements to verify assets. If W-2's are present in the loan file, lending personnel should verify that the total of W-2's presented equals the total income shown on borrower s tax returns. If a VOE is in the file, the borrower does not have to provide W-2's unless the underwriter deems this necessary for prudent underwriting. Figures shown on all documents should be consistent. See bolded paragraph below. Because a program qualifier is income, even if not required for credit purposes (i.e. automated underwriting), you should be seeking the two most current paystubs with YTD. Do not include in the compliance file, keep copies for your records. Although reference is made to the last 4 to 6 weeks income, Underwriters should be reviewing the income tax returns submitted to verify that there are no unexplained and/or unacceptable differences current income to past income. Examples below not intended to serve as exclusive methodology. Please contact the Compliance office with questions regarding individual cases. Please note that the income reported for bond income calculation CAN NEVER BE LOWER THAN THE INCOME USED TO QUALIFY FOR CREDIT PURPOSES. Hourly Employees For the tax year in which the loan is closing, use the Year to Date base income. If consistent, utilize the base to determine the balance of the year by 1.Using last 4 to 6 weeks' pay stubs, identify hourly rate of pay and average number of regular hours worked per week. Multiply hourly rate times regular weekly hours. Multiply result times number of weeks for balance of year and add to YTD for an annualized base salary. 2. If the person has no other sources of income (for example: overtime, bonus, commissions, second jobs, interest, dividends, child support, alimony, public assistance), this will be the Current Total Annual Income. 3. Compare the total annual income in #2 above to Paystubs, VOE s, previous year s income per W2's and tax returns. You should not find significant differences. In some cases, the Current Total Annual Income will be higher than the previous year's income. Variances should be attributable to increases/decreases in pay or number of hours worked. You should not find significant differences. In some cases, the Current Total Annual Income will be higher than the previous year's income. Variances should be attributable to increases/ decreases in pay or number of hours worked.

25 HFA of Manatee County 2013 Single Family Program Page 25 Salaried Employees 1. Using last 4 to 6 weeks' pay stubs, identify weekly (or other frequency) rate of pay. Multiply rate times the number of regular pay periods in the year (52 weeks, 12 months, 24 semi-months) 2. If the person has no other sources of income (for example: overtime, bonus, commissions, second jobs, interest, dividends, child support, alimony, public assistance), this will be the Current Total Annual Income. 3. Compare the total annual income in #2 above to Paystubs, VOE s, previous year s income per W2's and tax returns. You should not find significant differences. In some cases, the Current Total Annual Income will be higher than the previous year's income. Variances should be attributable to increases/decreases in pay or number of hours worked Business, Self Employment 1. Use the quarterly tax returns and financial statements to identify the current NET year to date income. 2. Divide the year to date income by the number of months during which it was earned and multiply times remaining number of months in year. Add to actual YTD. ADD DEPRECIATION. 3. If the person has no other sources of income (for example: overtime, bonus, commissions, second jobs, interest, dividends, child support, alimony, public assistance), this will be the Current Total Annual Income. 4. Compare the total annual income in #2 above to the previous year's income per W2's and tax returns. You should not find significant differences. Verified Termination of Overtime, Commission, Bonus, Seasonal, Periodic, One Time Overtime, Bonus, Commissions Using last 4 to 6 weeks' pay stubs, identify the year to date total earnings of the borrower. Subtract the Current Total Base Income (see above) to arrive at the total year to date extraordinary income. If verification of termination of overtime, commission or bonus is provided in writing (i.e. a letter from an employer) or such termination is due to a change of employment, use the current YTD overtime, commission or bonus, do not annualize and add as a lump sum to the Current Total Annual Income. Regular Overtime, Bonus, Commissions 1. Using last 4 to 6 weeks' pay stubs, identify the year to date total earnings of the borrower. Subtract the Current Total Base Income (see above) to arrive at the total year to date extraordinary income. 2. Divide the year to date extraordinary income by the number of pay periods during which it was earned (to obtain an average). Multiply times the appropriate factor (Balance of year weeks, months, semi- months, etc.) for balance of year figure and add to actual YTD extraordinary income for annual income. 3. If the person has no other sources of income (for example: second jobs, interest, dividends, child support, alimony, public assistance), this will be the Current Total Annual Income. Compare the total annual income in #2 above to Paystubs, VOE s, previous year s income per W2's and tax returns. You should not find significant differences. In most cases, the Current Total Annual Income will be higher than the previous year's income. It will also generally be higher than the annualized year to date income. The variances should be attributable to increases/decreases in pay.

26 HFA of Manatee County 2013 Single Family Program Page 26 Interest, Dividends 1. Use current earnings statements issued by the bank, investment broker or agent. Identify the year to date interest or dividend earnings. Divide by the investment term year to date (for an average) and multiply times appropriate factor to annualize the earnings. 2. If statements are not available, and the terms of the investment agreement are available, multiply the principal amount of the asset times the annual interest yield factor for a projected interest earnings amount. 3. If neither are available, use the previous year's earnings statements or tax returns to identify total annual interest and dividend income. If the assets are still invested in the same instruments, use the previous year's figure. 4. Add the result of the computation in either #1, #2 or #3 above to the Current Total Annual Income. Alimony, Child Support 1. Use the monthly amount appearing in the divorce decree, separation agreement or other support document. 2. If the borrower receives more than the amount stipulated in the agreements, use the monthly figure that the borrower declares and can be verified. 3. If the borrower receives less than the amount stipulated in the agreements and there is a verifiable history of the underpayments for at least 2 years (as evidenced by Court records), then use the past 2 years' historical monthly earnings. If there is no such history that can be verified, use the amount stipulated in #1 above. 4. Multiply the monthly amount of alimony or child support times 12. Add to the Current Total Annual Income (plus any other income sources). Pensions, Temporary Payments 1. Use the benefits statement issued by the benefits provider (pensions, workers compensation, disability compensation, social security, AFDC, etc.) to identify the amount of the benefit, payment frequency and expected term of the benefit. 2. Multiply the amount of the benefit times the payment frequency for the balance of year and add to actual YTD for an annualized amount. Add to the Current Total Annual Income (plus any other income sources). 3. If the benefit is absolutely not payable to the recipient beyond a given date (that means a complete and permanent stop of benefits without extensions, exceptions, waivers or other conditions) and such date is within 12 calendar months of the anticipated closing date, then calculate the benefits expected through the end of the benefits term. That will be the total annual income amount from the specific benefits source. Add to the Current Total Annual Income (plus any other income sources). Boarder s Income and Rental Income in One Unit Properties The Boarder s wages/income and rental income paid to the borrower must be included in the bond calculation of income. Rental Income from 2-4 Unit Properties Anticipated rental income from the property being purchased is not included in the bond calculation of income but may be treated as detailed in Agency (FHA, VA, Freddie, etc) guidelines. If the borrower s own other rental property from which income is derived, that income must be included in the bond calculation of income.

27 HFA of Manatee County 2013 Single Family Program Page 27 PROGRAM FORMS This topic addresses the specific compliance forms required for the bond program for originating, processing, closing and loan delivery. All forms are available behind security at The forms are behind security so that system data is accessed when the forms are printed. The forms auto-fill and are ready for execution. It s important that Underwriters and Closers are certain that the data in the system is correct before forms are printed. The simple rule of who signs bond forms if the person is named on the Mortgage or Warranty Deed or is the spouse of the Mortgagor (even if a non-borrowing spouse), they sign the compliance forms. Also, remember cosignors cannot live in property, do not sign bond documents or take title. Having people sign documents who should not sign is as incorrect as not having all sign who should. Under no circumstances may a cosignor have an ownership interest in the property. Also, please remember that only those on credit sign the 1003 and HUD-1. 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. ORIGINATING COMPLIANCE FORMS In addition to all the standard disclosures, the program has specific disclosures all contained in the Notices to Buyers that are auto-filled by the system and executed at a time as close as possible to loan application. To the borrower s copy attach the two-page Recapture Brochure. There is a Recapture Brochure for those using first mortgage without a MCC and a different Brochure for those using the MCC. Both are available online. The Original of the Notices to Buyers should be included in the package that goes to the Underwriters and ultimately included in the Compliance File. CLOSING COMPLIANCE FORMS Rev Affidavit/Certifications (original in Compliance file) written to include MCC requirements if one is used. Tax Exempt Rider (Must be recorded and sent to U S Bank) The Second Mortgage Promissory Note DAP Certificate DAP Award Letter (Added7-1-13) POST CLOSING COMPLIANCE FORMS Compliance File Checklist is available online. Final Recapture Notice and MCC sent by Program Administrator to borrower at new property address

28 HFA of Manatee County 2013 Single Family Program Page 28 OTHER DOCUMENTS REQUIRED FOR COMPLIANCE FILE Tax Transcripts Rev ) (Tax transcripts for the preceding year are due April 15 of the current year.) Tax transcripts are required for borrowers and spouses (includes non-borrowing spouse) Not required for those buying in Targeted Areas or qualifying under the Veterans Exception.. A form 4506 is available on the IRS Website: for borrower requests for a line-by-line Tax Transcript. Requests for Extensions DO NOT satisfy this requirement. 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. 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 bond 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. HUD-1 Settlement Statement Buyer, seller and closing agent must fully execute the HUD-1. Borrowers on the HUD-1 must be all persons taking title to the property and match the Affidavit and application. Persons not taking title to the property may not appear or sign the HUD-1. Please do not bundle program fees. Itemize all charges to the transaction. Payoffs of other debt must appear on Page 1 under Section 100 of the HUD-1 as part of "Settlement Costs" (absolutely not paid by program resources). Warranty Deed A copy of the Warranty Deed is required. Discharge or Release Papers For those using the Veterans Exception. provide a copy of Discharge or Release Papers.URFA

29 HFA of Manatee County 2013 Single Family Program Page 29 US BANK WEB SITE INFORMATION SEE USB 002 ATTACHED TO US BANK BULLETIN DATED JUNE 28, 2013 For information on how to locate the US Bank checklists, bulletins and guidelines please see below. 1. Click on this link: BL=USB&ID= Click on the US Bank Lending Manuals. 3. You will be prompted with a pop-up message, click Continue. 4. Click on Housing Finance Authority folder, and then click Manatee. 5. After you click on the Manatee folder, you can locate the Product Descriptions, US Bank Checklists and Fee Sheet

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