Own A Home Opportunity Program (Charlotte, Collier, DeSoto, Lee, Palm Beach & Sarasota Counties) Program Issuer: Lee County Housing Finance Authority

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1 Own A Home Opportunity Program Program Issuer: Lee County Housing Finance Authority ADMINISTRATOR S GUIDE Published on March 25, 2014 Updated 07/23/18 Updates on Page 3

2 Own a Home Opportunity Program Page 2! TABLE OF CONTENTS OWN A HOME OPPORTUNITY PROGRAM TEAM 5 WHO TO CONTACT 6 THE PRODUCTS 7 Own a Home Opportunity Second Mortgage 7 Funding of Downpayment Assistance 7 OWN A HOME OPPORTUNITY 9 FIRST MORTGAGE PROGRAM REQUIREMENTS 9 ELIGIBLE AREAS 9 Targeted Areas 9 Household Income Calculation 10 HOUSEHOLD INCOME LIMITS OWN A HOME OPPORTUNITY 11 FIRST MORTGAGE AND ASSISTANCE 11 HOUSEHOLD INCOME LIMITS AFFORDABLE INCOME SUBSIDY GRANT 12 HOUSEHOLD INCOME LIMITS AFFORDABLE INCOME SUBSIDY GRANT 12 PROPERTY REQUIREMENTS 14 FINANCING FACTS 14 LENDER TRAINING REQUIREMENTS 16 SUMMARY OF THE COMPLIANCE ORIGINATION PROCESS 17 PROGRAM TIMELINE 21 Loan Processing, Delivery and Purchase Timetable 21 PROGRAM FEES 22 FIRST MORTGAGE FEES 22 PROGRAM FEES CONTINUED 23 LENDER FEES 23 LENDER COMPENSATION 24 COMPLIANCE INCOME CALCULATION 24 PROGRAM FORMS 28 DOCUMENTS REQUIRED FOR THE COMPLIANCE FILE 29 US BANK WEB SITE INFORMATION 30

3 Own a Home Opportunity Program Page 3! UPDATES Date Topic (effective immediately unless otherwise noted) Page Eligible Area change: No more reservations for first mortgage funds in Broward County U.S. Bank Funding Fee increases Added Homebuyer education requirement for Palm Beach Income and purchase price limits updated Homebuyer Education required for Palm Beach New second mtg/note combo form all to be recorded and Lee Compliance Checklist includes requirement for homebuyer ed cert for Palm Beach Buyers only Added reminder regarding maximum loan amount and consideration of both the purchase price limit, not exceeding the appraised value and not using DPA to make up difference between appraised value and purchase price limit , Added that copy of homebuyer ed certificate must accompany DPA request for Palm Beach FHA products include 203(ks) and lenders must notify U.S. Bank if they are intending to originate 203(ks) loans. Loans cannot be purchased if U.S. Bank not notified. For loans reserved as of June 1, 2015, the maximum second mortgage amount will be up to $7,500 except in Palm Beach County where the maximum will remain at $10,000. Non-Traditional Credit - lenders referred to U.S. Bank Bulletin Income and Sales Price Limits effective with new reservations Old Income and Sales Price Limits for reservations dated and before Added Contact Directory Reformatted Financing facts 10, Reformatted Origination Process 12, 13, Reformatted Program Fees Reformatted documents for compliance file Added ehp fee information & revised US Bank fee Added disclaimer regarding not reproducing program forms Revised minimum FICO Manufactured homes no longer permitted in program Language added regarding non-traditional credit and manual underwriting Language added regarding credit documentation for the Master Servicer Revised RD and VA minimum FICO Corrected ehp Compliance/Admin Fee Revised income and purchase price limits for Palm Beach County effective with new loan applications dated 06/14/16 and after 7 9 & , Added Second mortgage disclosure requirements 6

4 Own a Home Opportunity Program Page 4! Date Topic (effective immediately unless otherwise noted) Page Revised income & purchase price limits for Charlotte, Collier, DeSoto, Lee & Sarasota counties effective 06/14/15 and after 8 & Revised income limits for Charlotte, Lee & Sarasota counties effective 08/10/16 and after Clarified ehousingplus Fees Changed Origination and Lender Compensation Effective Nov. 22, Included Freddie Mac HFA Advantage Loan Product Information 7, 8, 10, Revised lender compensation effective with new loan reservations 12/19/16 and after Added Homebuyer education requirement for all eligible areas effective 12/19/ Updated Who To Contact Directory Added DPA Loan Disclosure information for Second Mortgage Revised DTI requirement information (US Bank conventional AUS approval policy change) Added US Bank condominium guideline expansion language Added Second Mortgage Intangible Tax exemption language Added Second Mortgage Proceeds policy Revised US Bank tax service fee effective 04/17/17 Revised US Bank Web Site link Removed 203Ks from list of approved loan products Revised language for non-citizens Revised DTI Requirement language Revised income Limits Revised Sales Price Limits Added MCC Fee Information to Program Fees Section Added US Bank lender help desk number Added Freddie Mac Affordable Income Subsidy Grant Information Added Freddie Mac Credit Smart to approved homebuyer education providers Revised conventional loan DTI to 50% Added Affordable Income Subsidy step-by-step reservation process Added Affordable Income Subsidy Closing instructions Revised Program Fees , 11, & Revised SRP for VA loans Removed incorrect information from AIS Grant regarding no reimbursement of overage of EMD Revised AIS Grant Amount, effective 04/23/18 Revised US Bank Tax Service Fee 7, 16, 17 7, 16, Revised the funding of the down payment assistance 7, Revised income limits Revised AIS Grant Income Limits Effective 07/29/18 Revised Purchase Price Limits Effective 05/23/

5 ! Own a Home Opportunity Program Page 5! OWN A HOME OPPORTUNITY PROGRAM TEAM Lee County HFA Creates the first mortgage program, the down payment assistance second mortgage program. Sets the rate, term and points, markets the program. The HFA also solicits the participation of other counties and signs inter-local agreements with those choosing to participate. 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 program loan rate in your own system so that you have funds available for closing. Lenders are responsible for servicing first second program loans in accordance with GNMA requirements until they re purchased by the Master Servicer. 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 the Authority s funds for down payment/closing cost assistance to each closing. Please do not contact US Bank in Ohio regarding the wiring of these funds. Detailed instructions are provided in these Guidelines. The wire request form 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 program compliance questions, receives compliance files, reviews, posts and notifies of exceptions and approves compliance file.

6 Own a Home Opportunity Program Page 6! Question General Program Compliance Questions Assistance with ehp Lender Portal Assistance with User Credentials for ehp Lender Portal Update an Underwriter Certified Loan WHO TO CONTACT (Updated 04/10/17) Direct Questions Contact Information to: ehousingplus (ehp) support@ehousingplus.com ehousingplus (ehp) ehousingplus (ehp) (954) support@ehousingplus.com Ashlynn Mosher (954) ext 261 ashlynne.mosher@ehousingplus.com Anyone at ehp Compliance Office services@ehousingplus.com Program Training ehousingplus (ehp) Click on this link to attend Program training. Program Training Issues ehousingplus (ehp) support@ehousingplus.com System Software Training for ehp Lender Portal ehousingplus (ehp) Click on this link for the once weekly Live Webinar: System Software Issues ehousingplus (ehp) support@ehousingplus.com Program Rates ehousingplus (ehp) Click on this link: to view the Own a Home Opportunity Program rates. Then click on the RATES tab. Credit Underwriting questions Questions regarding the shipping of closing loan files Participating Lenders need to refer to internal Underwriting Department or Manager 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 hfa.exceptions@usbank.com Debbie Kerr ehp.exceptions@ehousingplus.com X216 hfa.communications@usbank.com hfa.exceptions@usbank.com

7 Own a Home Opportunity Program Page 7! THE PRODUCTS Own a Home Opportunity First Mortgage (Rates are subject to change, for current rate please visit ehousingplus.com) No defined limit for first mortgage funds -- continuously funded pool to be replenished and/or supplemented 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 following mortgage products are offered in this program: FHA, VA, USDA: RD and Freddie Mac HFA Advantage conventional loan. US Bank provides the types of government and conventional loan products permitted. The program offers down payment and closing cost assistance in the form of a second mortgage. (Rev 05/15/17) Own a Home Opportunity Second Mortgage As of June 1, 2015, the amount of down payment assistance shall be an amount up to $7,500 secured by a second mortgage. However, Palm Beach County will continue funding seconds of up to $10,000. Loans in all counties reserved prior to June 1, 2015 that meet the program timelines receive a 30-year fixed rate mortgage loan with up to $10,000 secured by a second mortgage. The second mortgage proceeds may be used for down payment and closing cost assistance. (Effective new reservations June 1, 2015). Second Mortgage Loans bear interest at a rate of 0%, 30 year, deferred (or due upon sale, re financing, transfer of title, or rental of the home if done within first 30 years). This loan is never forgiven. The Second Mortgage offered with the program s First Mortgage Loans can provide up to 100% of the homebuyer s cash to close. Proceeds may be used for any eligible use associated with the Mortgage Loan closing process, including but not limited to closing costs, Lender fees, Servicer fees, doc stamps and intangible tax, pre-paids, mortgage insurance premiums, discounts, and the reimbursement of earnest money and pre-close fees, such as credit report and appraisal fees. The second mortgage proceeds may not be used to pay off debt, nor may any surplus funds from the Assistance Grant be paid to the homebuyer over and above any reimbursable fees paid prior to the close of escrow. Funding of Downpayment Assistance THE DOWN PAYMENT ASSISTANCE AMOUNT IS SUBJECT TO CHANGE AT ANY TIME. ( Rev 4/24/14) Lee, Charlotte, Collier, DeSoto and Sarasota Counties Effective for loans reserved prior to May 7, The Assistance will be funded by the HFA OF LEE COUNTY via electronic wire transfer from US Bank. Detailed information on the process is provided in these Guidelines. Palm Beach County Effective for loans reserved prior to May 7, The Assistance will be funded by the HFA of Palm Beach County via electronic wire transfer from US Bank. Detailed information on the process is provided in these Guidelines. ALL COUNTIES Effective for loans reserved May 7, 2018 and after - The Lender will fund the second mortgage at closing and US Bank will reimburse the lender at loan purchase. (Rev 04/28/18)

8 Own a Home Opportunity Program Page 8! Affordable Income Subsidy (AIS) Grant - Freddie Mac HFA Advantage Loan ONLY Borrowers using the Freddie Mac HFA Advantage Loan that meet specific income limits may be eligible for additional funds to help with down payment and closing costs. The income limits are determined by the county location of the home. Effective with new loan reservations 04/23/18 and after, borrowers at or below 80% of the Area Median Income Limits as published by Freddie Mac are eligible for an additional grant in the amount of $1,500 and borrowers at or below 50% AMI will receive an additional grant of $2,500. The AIS Grant is reserved in the ehousingplus Lender Portal using the ADDITIONAL LOAN tab after the first mortgage AND Second Mortgage are reserved. The AIS will be provided at closing by the Lender. The AIS funds must be used for down payment and closing cost assistance only. There is no repayment of the AIS Grant. Upon purchase of the loan, US Bank will reimburse the Lender for all qualified subsidies. The AIS must be reflected on Page 3, Section L of the CD 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. (Rev 04/16/18) SECOND MORTGAGE DISCLOSURE REQUIREMENTS The determination has been made that the Own a Home Opportunity Second Mortgage, as nonamortizing 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. Effective with loan closings April 10, 2017 and after The Own a Home Opportunity Program does not require the use of a separate HUD-1 Disclosure for the second mortgage. Instead, lenders are required to use a DPA Loan Disclosure Form created to further clarify the terms of the Second Mortgage for the borrower. The disclosure is generated from the ehousingplus Lender portal and is signed at closing by the borrower.

9 Own a Home Opportunity Program Page 9! OWN A HOME OPPORTUNITY FIRST MORTGAGE PROGRAM REQUIREMENTS Buyers and spouses must be first-time buyers Buyers and spouses must be able to permanently reside in the U.S. Follow Agency (FHA, VA, USDA-RD, Freddie Mac) and U.S. Bank guidelines for non-citizens. U.S. Bank guidelines are located in their Lending Manual. (Rev 05/15/17) 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. The past three years federal income tax returns/transcripts required for all buyers and spouses. With a Freddie Mac HFA Advantage Conventional Loan, a borrower CANNOT own other property at the time of closing. ELIGIBLE AREAS Includes all of Charlotte, Collier, DeSoto, Lee, Palm Beach and Sarasota Counties (As of 05/22/14 Broward County is no longer an eligible area) FIRST TIME BUYER EXCEPTIONS Buyers utilizing the Veterans Exception or purchasing in a Targeted Area do not need to be first-time buyers. Veterans Exception Qualified Veterans do not have to be first-time buyers. And do not need to submit the past three years tax transcripts. 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 Veteran cannot have 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 Borrower must provide true and correct copies of discharge or release papers, which demonstrate that such discharge or release was other than dishonorable. Targeted Areas Borrowers purchasing in targeted areas do not need to be first-time buyers. And do not need to submit the past three years tax transcripts. Targeted areas are determined by census tract number provided by HUD specifically for this program. Targeted areas are considered either economically distressed or have very low loan origination. Targeted Area census tract numbers: Collier , , , Lee , , , , , , Palm Beach , , , , , , , , , , , , , , , Charlotte and Sarasota Counties have no Targeted Areas. Get free census tract information

10 Own a Home Opportunity Program Page! 10 Homebuyer Education Effective for all loans closing Dec. 19, 2016 and after, all borrowers and anyone listed on the deed 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. (Rev 11/15/17) Approved Face-to-Face education provider 1) Face to face from a HUD approved education provider Approved Online education providers 2) Online education from ehomeamerica 3) HomeTRAK online education: 4) Freddie Mac Credit Smart: 5) Online education from MGIC (Instruct your borrower to look for: MGIC Homebuyer Education for Freddie Macs Home Possible Program and certain HFA's): English Spanish: Minimum Credit Score Buyers must have a minimum FICO credit score of 660 for FHA loans and 640 for VA, RD and Freddie Mac HFA Advantage conventional loans (mid score must be the minimum or above). If an Agency (FHA. VA, etc) 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 bond loans, then lenders must use the higher minimum. Manual underwriting is NOT permitted in this program for FHA loans. (Rev 12/07/16) DTI Requirement The maximum DTI ratio is 45% for Government loans (FHA, VA, RD). And the maximum DTI ratio is 50% for the Freddie Mac HFA Advantage Conventional Loan. Reference US Bank Bulletin for additional information. (Rev 11/15/17) Household Income Calculation Include income of borrower(s) and spouse and any person who will live in the household who is 18 years of age or older. Program income is not averaged. It is annualized. That s different from income used for credit underwriting. More detailed guidelines for calculating program income are in the Underwriter s Program Income Calculation Guide included in these Guidelines. IN THE EVENT MORTGAGE CREDIT CERTIFICATES ARE UTILIZED IN CONNECTION WITH THE UNDERLYING MORTGAGE LOAN, THE INCOME LIMITS LISTED ABOVE WILL NOT BE APPLICABLE, AND INSTEAD THE INCOME LIMITS DESCRIBED FOR THE MCC PROGRAM WILL GOVERN. (Added 05/18/18)

11 Own a Home Opportunity Program Page 11! HOUSEHOLD INCOME LIMITS OWN A HOME OPPORTUNITY FIRST MORTGAGE AND ASSISTANCE Effective for all new loan reservations 05/18/18 and AFTER County All Household Sizes Charlotte $93,750 Collier $112,500 DeSoto $93,750 Lee $95,550 Palm Beach $111,450 Sarasota $105,450 Effective for all new loan reservations PRIOR to 05/18/18 County Non-Target 1-2 Person Non-Target 3 + Person Targeted 1-2 Person Targeted 3 + person Charlotte $59,000 $67,850 N/A N/A Collier $83,640 $97,580 $83,640 $97,580 DeSoto $59,000 $67,850 N/A N/A Lee $59,000 $67,850 $70,800 $82,600 Palm Beach $72,544 $83,426 $86,280 $100,660 Sarasota $65,500 $75,325 N/A N/A

12 Own a Home Opportunity Program Page! 12 HOUSEHOLD INCOME LIMITS AFFORDABLE INCOME SUBSIDY GRANT FREDDIE MAC LOANS ONLY Effective for all new loan reservations and after. County 80% AMI 50% AMI Charlotte $46,640 $29,150 Collier $60,000 $37,500 DeSoto $41,680 $26,050 Lee $50,960 $31,850 Palm Beach $52,560 $32,850 Sarasota $56,240 $35,150 HOUSEHOLD INCOME LIMITS AFFORDABLE INCOME SUBSIDY GRANT FREDDIE MAC LOANS ONLY Effective for all new loan reservations PRIOR to County 80% AMI 50% AMI Charlotte $43,600 $27,250 Collier $54,640 $34,150 DeSoto $38,720 $24,200 Lee $46,320 $28,950 Palm Beach $51,280 $32,050 Sarasota $52,400 $32,750

13 Own a Home Opportunity Program Page! 13 ACQUISITION LIMITS (Sales Price Limits) FOR ALL LOANS Effective for all new loan reservations 05/23/18 and after The sales price must include everything paid by the buyer or on the buyer s behalf. County Non-Targeted Targeted Charlotte $271,165 N/A Collier $415,058 $507,293 DeSoto $271,165 N/A Lee $271,165 $331,423 Palm Beach $317,646 $388,235 Sarasota $275,294 N/A ACQUISITION LIMITS (Sales Price Limits) FOR ALL LOANS Effective for all new loan reservations PRIOR to 05/23/18 The sales price must include everything paid by the buyer or on the buyer s behalf. County Non-Targeted Targeted Charlotte $253,809 N/A Collier $415,058 $507,293 DeSoto $253,809 N/A Lee $253,809 $310,211 Palm Beach $317,646 $388,235 Sarasota $264,706 N/A

14 Own a Home Opportunity Program Page! 14 PROPERTY REQUIREMENTS (Rev. 04/01/17) New or existing, one to four units*, detached or attached, condos, townhomes. *Freddie Mac Loans - One Unit property ONLY Freddie Mac Loans - Condos are permitted. For condos with LTVs from 95.01% to 97% the project must be approved by USBHM, in addition to meeting Fannie Mae or Freddie Mac guidelines, as applicable. Review US Bank bulletin Condominium Guideline Expansion for complete details. (Rev 04/10/17) Homes are considered new if never previously occupied. Manufactured homes, mobile, recreational, seasonal or other types of vacation or non-permanent homes are not permitted. (Rev 12/01/15) 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 program loans. There are no variances for program loans. example, FHA flipping rules apply to program loans as they do to any other FHA loans. For 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. FHA, VA, RD and Freddie Mac HFA Advantage conventional loans are permitted. Find the specific government and conventional loan products permitted on the US Bank website. (Rev ) 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, etc) who do not provide updated information to ehousingplus. (Added ) Freddie Mac HFA Advantage Fact Sheet: hfa_factsheet.pdf (Added ) 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. Cannot be paid by borrower or any of their 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. See Second Mortgage Proceeds (added 04/10/17).

15 Own a Home Opportunity Program Page! 15 Construction to perm is not permitted. Co-signers (FHA, VA, USDA-RD)- Are permitted to the extent allowed by applicable Agency (FHA,etc). Treat co-signer income as directed by agency. A co-signer cannot have any ownership interest in the property (they cannot be on the mortgage/deed/warranty deed). And a co-signer may not live in the property. (Added ) Co-signers (Freddie Mac) - Not allowable. (Added ) Freddie Mac Loan Level Price Adjustment and Adverse Market Fees. These fees have been waived. (Added ) Documentary Stamp Tax There is NO exemption in this program for the first or second mortgages and notes. 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. Intangible Tax There is NO exemption in the program for the first mortgage and note. See Second Mortgage Intangible Tax Exemption. (Added 04/10/17) Manual Underwriting - See U.S. Bank bulletin With new reservations as of December 1, 2015, FHA loans may NOT be manually underwritten. Rev 12/01/15 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. Rev 12/01/15 Minimum Loan Amount There is no minimum loan amount in this program. Maximum Loan Amount Follow Agency (FHA, VA, etc) guidelines. Must also meet program maximum purchase price limits. Also considered, loans cannot exceed appraised value. DPA cannot be used as borrowers funds make up the difference between appraised value and purchase price.prepayments The first and second mortgage 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.

16 Own a Home Opportunity Program Page! 16 Refinances This 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 are not established by this program. of financing used (i.e. FHA, VA.). If any, these are determined by the type Second Mortgage Intangible Tax Exemption Effective with all loan closings April 10, 2017 and after, the second mortgage is exempt from Intangible Tax pursuant to Section , Florida Statues. The exemption language appears at the top of the Second Mortgage that is generated from the ehousingplus lender portal. The first mortgage and note AND second note are NOT exempt from Intangible Tax. (Added 04/10/17) Second Mortgage Proceeds Effective with all loan closings April 10, 2017 and after, if there is less than $500 in remaining Second Loan proceeds available at the close of escrow, the Lender MUST use such proceeds to reduce the Second Loan principal balance. If the remaining Second Loan proceeds is $500 or greater, the Second Loan Amount must be recalculated and reduced before settlement and the Lender should draw new Second Loan documents and disclosures. It is the Lender s responsibility to assure that Second Loans close in compliance with these requirements. (Added 04/10/17) Tax Returns or Tax Transcripts or any combination Tax returns or tax transcripts or any combination of returns or transcripts for the preceding year are due April 15 of the current year. The past three years tax returns/transcripts are required for borrowers and spouses. Not required for those buying in Targeted Areas or those purchasing under the Veteran s Exception. Requests for Extensions are not acceptable in lieu of tax returns/transcripts. LENDER TRAINING REQUIREMENTS MANDATORY PROGRAM TRAINING FOR LENDERS Lender training is mandatory for anyone working with this program. ehousingplus provides program training online 24/7. To attend, click here. ehousingplus LENDER PORTAL SYSTEM TRAINING Conducted once a week via live WebEx with the ehousingplus Compliance Office. Anyone who will need access to the ehousingplus Lender Portal for the MCC program will need to attend. Training lasts 45 to 60 minutes. Click here to register to attend. LENDER PORTAL USER CREDENTIALS After completing Program training an attendee will receive a follow-up with instructions to apply for user credentials. If you need assistance please contact trainer@ehousing.cc

17 Own a Home Opportunity Program Page! 17 SUMMARY OF THE COMPLIANCE ORIGINATION PROCESS 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. PROCESS Lenders process the loan as they would normally keeping in mind the program timeline. Please do not reserve funds too soon. Wait to reserve until you are relatively sure your underwriter will approve the loan within 15 days of reservation in the ehousingplus Lender Portal. RESERVE FIRST MORTGAGE FUNDS To reserve funds in program s online system click on this link. 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. RESERVE SECOND MORTGAGE ASSISTANCE Immediately following reservation of the Own a Home Opportunity 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. (Added 11/15/17) 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 (view AMI limits on page ) 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. Follow the details step-by-step instructions on the next page. (Rev 04/16/18)

18 AIS GRANT STEP-BY-STEP RESERVATION INSTRUCTIONS 1. Click on ADD ADDITIONAL 1 Conventional w/60 day lock FreddieMac HFA Advantage After you click on ADD ADDITIONAL you will see the below. 2. Select one of the options Pinellas 2016B 0.00% DPA Assistance DPA Second AIS 80% AMI - $1,500 AIS 50% AMI - $2,500 After you select one of the options, you will see the below. 3. Click on New Additional Loan Lee County Own a Home Grant 0.00% DPA Assistance DPA Second 4. Enter the calculated loan amount Lee County Own a Home Grant ENTER THE LOAN AMOUNT Buyers at or below 50% AMI = $2,500 Or Buyers at or below 80% AMI = $1,500

19 Own a Home Opportunity Program Page! 19 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 15 DAYS OF LOAN RESERVATION, Underwriter completes the online Underwriter Certification within the ehousingplus Lender Portal. FUND THE DOWN PAYMENT ASSISTANCE Effective for loan reservations May 7, 2018 and after, the lender will fund the down payment assistance. US Bank will reimburse the lender at loan purchase. (Rev 04/28/18) REQUEST DOWN PAYMENT ASSISTANCE Effective for loans reserved prior to May 7, 2018 The HFA provides DPA funds directly to the Closing Agent. The Lender may not advance these funds. The requirements apply to all loans. 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. A copy of the Homebuyer Education Certificate must be sent with the PALM BEACH DPA Funds Request. Rev The Request Form must be printed, signed, and scanned in pdf, jpg, tif or png format. Three (3) business days prior to funding, the Lender sends a complete, executed pdf or scanned version of the DPA Funds Request Form directly to the appropriate party. Lee, Charlotte, Collier, DeSoto, Sarasota: Phil Burnett philburnett@embarqmail.com Palm Beach: David Brandt Dbrandt@pbcgov.org A Wire Request Form Review Anything received by 2 pm will be verified that day and the requests forwarded to the HFA. Requests received after 2 pm, will be processed by 12 noon the following day. Special Attention will be given to Forms received on Fridays to ensure that they are sent before start of business on Monday. Any s received over the weekend will be processed on Monday and for Holidays on the next business day. The DPA Funds Request Form is reviewed for accuracy. Lenders will be contacted if the Form cannot be verified. Verified forms are sent to (US Bank, NA). US Bank wires funds to the closing agent. Funds are wired directly to the Closing Agent/Title Company and NOT the Lender or Borrower. Please make sure that instructions are provided to internal Processor/Closer and to the Title Company/Closing Agent.

20 Own a Home Opportunity Program Page! 20 Effective for loans reserved prior to May 7, 2018 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: For Lee County HFA DPA: For the Palm Beach HFA DPA: BANK: U.S. Bank NA ABA: FBO: US Bank CT WIRE CLRG ACCT REF LEE HFA DPA / ATTN SUE FAHIMI / BANK: US BANK NA ABA: FBO: US Bank CT WIRE CLRG ACCT REF PALM BEACH HFA DPA / ATTN SUE FAHIMI / CLOSE Borrower executes the Affidavit (Mortgagor & Seller/Builder Affidavit & Lender Certificate) and the Down Payment Assistance Award letter. IT S IMPORTANT that lenders have the borrower(s) sign the DPA Award Letter. Lenders retain original, copies in their FHA Case Binder, to borrowers and to U.S. Bank. 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 Own a Home Opportunity Program 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 DU or LP findings, along with the Second Mortgage provided by the Own a Home Opportunity Program. 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. Cash back, reimbursement of pre-paids and reimbursement of overage of earnest money deposit is not permitted for any borrower utilizing the AIS Grant. There are two (2) files shipped post closing: SHIP / SUBMIT File #1 is the Compliance File and it is sent to ehousingplus. The Compliance File Checklist is found within the ehousingplus Lender Portal in the Loan Forms section. File #2 is 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.

21 Own a Home Opportunity Program Page! 21 EXCEPTIONS Lenders are notified by ehousingplus and US Bank of exceptions. Exceptions for both ehousingplus and U.S. Bank are available in the ehousingplus web-based system. 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 loans can meet the timelines below. Loans not purchased within the timeframe below, cannot be purchased. The revolving pool of funds assures continuous funding. rush to reserve funds. Fund availability makes it unnecessary to 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 1. Underwriter certified within 15 days of loan reservation; 2. Closed and delivered to the Servicer within 45 days of loan reservation; and 3. Purchased within 70 days of loan reservation. Any loan not purchased within 70 days is ineligible for purchase unless the lender chooses a onetime 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 on the ehousingplus web page for the Own a Home Opportunity Program, Click on this link. Then click on the SUMMARY tab, scroll to the area titled, Extensions. Remember that the form must be submitted BEFORE the 70th day after loan reservation.

22 Own a Home Opportunity Program Page! 22 PROGRAM FEES FIRST MORTGAGE FEES For loans originated Nov. 22, 2016 and after = Lenders may charge 1.00% Origination AND ZERO DISCOUNT. Please see section titled, FINANCING FACTS for details about Doc Stamps and Intangible Tax. ehousingplus Fee The Compliance/Admin Fee is collected at closing, payable to ehousingplus and submitted with the Compliance File. ONLY Cashier s or Corporate checks are acceptable and the fee may not be financed. Chronically deficient files pay a penalty fee of $100. (Rev 11/15/17) Own a Home Opportunity First Mortgage (with or without the second mortgage) $300 Own a Home Opportunity First Mortgage (with or without the second mortgage) AND Affordable Income Subsidy Grant $375 Own a Home Opportunity First Mortgage (with or without the second mortgage) AND a Mortgage Credit Certificate $525 Own a Home Opportunity First Mortgage (with or without the second mortgage) AND a Mortgage Credit Certificate AND Affordable Income Subsidy Grant $600 VERY IMPORTANT - ONLY FOR MCC The HFA of Lee County MCC Issuance Fee (NOT included with the fees listed above) The HFA of Lee County has authorized an Issuance Fee of $200. The fee is made payable to and paid directly to Hilltop Securities. Following closing the fee is sent to: Hilltop Securities 1201 Elm St., Suite 3500 Attn: Housing Dallas, Texas Questions regarding the Lee County Issuance fees should be directed to: sharon.gonzalez@hilltopsecurities.com lori.wood@hilltopsecurities.com and htshousing@hilltopsecurities

23 Own a Home Opportunity Program Page! 23 PROGRAM FEES CONTINUED The Compliance/Admin Fee is the fee charged by the Program Administrator/Compliance Agent to process the applicant/borrower from Origination to Compliance Approval, and to assess that the lenders originating such loans are following Program guidelines for the benefit of the eligible borrower(s). The Program Administrator/Compliance Agent tracks the loan via its web-based system, and assists the lender in processing the loan ensuring eligibility to the program available offerings, which can include various rate options, and down payment assistance. (Added 10/15/15) The Compliance/Admin fee includes the review of information and documents delivered in the form of a Compliance File by the originating lender, on behalf of the borrower. Additionally the Compliance review verifies that the lender has charged only the fees allowed by the Program. Contrary to this, approval may be denied and/or fees may have to be reimbursed to the borrower. The compliance file processing consists of required affidavits, application, closing documents, certain non-mortgage documents, tax returns where applicable and other pre-defined Program documents that are disclosed to the potential borrower(s). This is required to ultimately receive Compliance Approval. These documents can support both the first mortgage and any down payment assistance available, and are required to ensure eligibility to the Program, Federal, State and Local requirements, where applicable. The Compliance review verifies that the data and documents submitted meet all requirements, and may include those for first-time homebuyer, income limits, sales price limits, targeted areas, homebuyer education, rate, term, points, fee limits, LTV, FICO score, special state, city, county program requirements for qualified military, first responders, teachers, etc.). (Rev 08/22/16) US Bank Fees LOAN RESERVATIONS APRIL 30, 2018 AND AFTER - $80 Tax Service Fee and $400 Funding Fee. These fees will be netted out at time of purchase by US Bank. See US Bank Bulletin L TAX SERVICE FEE CHANGE for further details. (Rev 04/13/18) LOAN RESERVATIONS PRIOR TO APRIL 30, $58 Tax Service Fee and $400 Funding Fee. These fees will be netted out at time of purchase by US Bank. See US Bank Bulletin L TAX SERVICE FEE REDUCTION for further details. (Rev 04/10/17) 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 stamp and intangible taxes, 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.

24 Own a Home Opportunity Program Page! 24 LENDER COMPENSATION For FHA, RD and Freddie Mac Loans closing Feb 20, 2018 and after,1.50% SRP from US Bank upon loan purchase plus 1.00% Origination Fee. Total of 2.50% Lender compensation. For VA Loans closing Feb 20, 2018 and after, 1.00% SRP from US Bank upon loan purchase plus 1.00% Origination Fee. Total of 2.00% Lender compensation. (Rev 02/20/18) COMPLIANCE INCOME CALCULATION Underwriters should remember that CALCULATION OF PROGRAM (COMPLIANCE) INCOME IS DIFFERENT THAN CALCULATION OF INCOME FOR CREDIT PURPOSES. The 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 Compliance if you have questions. Unlike income that is averaged for credit underwriting, the 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) co-signers. 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 There are many variables and the Compliance office will be pleased to assist.

25 Own a Home Opportunity Program Page! 25 The Servicer requires the complete closing and credit documentation as identified on their specific loan delivery checklists. Lenders may rely on the same documentation for program compliance purposes.although mentioned in this section of the guidelines, VOE s and VOD s, current pay stubs which delineate current period, W-2's, for all borrowers from all employers, and bank statements to verify assets may be included to the extent required by the Servicer for their purposes. Figures shown on all documents should be consistent. (Rev 12/01/15) 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. office with questions regarding individual cases. Please contact the Compliance Please note that the income reported for program income calculation CAN NEVER BE LOWER THAN THE INCOME USED TO QUALIFY FOR CREDIT PURPOSES. Hourly Employees program 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.