Administrator s Guidelines

Transcription

1 My First Texas Home (TMP-79) including HFA Preferred, Mortgage Credit Certificate (MCC) Program, Combination TMP-79 with MCC Administrator s Guidelines Date Published: May 13, 2014 Updated Updates are shown on Page 3!!!!

2 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 2 INTERACTIVE TABLE OF CONTENTS INTRODUCTION 5 THE TDHCA PARTNERSHIP TEAM 6 PROGRAM PRODUCTS 7 AVAILABLE FUNDS 7 THE FIRST MORTGAGE 8 THE SECOND LIEN 8 TILA-RESPA Integrated Disclosure Rule ( TRID ) 9 MORTGAGE CREDIT CERTIFICATES (MCC s) 10 QUALIFYING FOR TMP 79 and/or MCC WHO, WHAT AND WHERE 10 Eligible Borrowers 10 Homebuyer Education/MCC Course Requirements 11 Current Annual Family Income 13 Income Limit Chart 14 GEOGRAPHY, PROPERTY AND PROGRAM REQUIREMENTS 15 Eligible Area 15 Acquisition Limits (Purchase Price Limits) 15 About the Property 15 Additional Program Requirements Rev Targeted Areas (Rev ) 16 FINANCING FACTS 17 SUMMARY OF THE COMPLIANCE ORIGINATION PROCESS 19 ELECTRONIC SUBMISSION LOAN PURCHASE FILE 24 PROGRAM TIMELINE 25 Loan Processing, Delivery and Purchase Timetable (Rev 04/19/17) 25 PROGRAM FEES 26 RATE NOTICE - SAMPLE 28 COMPLIANCE UNDERWRITING 29 OTHER DOCUMENTS REQUIRED FOR COMPLIANCE FILE 33 TARGETED AREA CENSUS TRACT NUMBERS 33 UPDATES TABLE Date Items (Effective immediately for new reservations unless otherwise noted) Page Added Government Loan DPA Plus program Added Government Loan DPA Plus reservation process Added Government Loan DPA Plus detailed reservation process Revised Government Loan DPA Plus amount to up to $8,000 Effective for new loan reservations , New Income Limits / Added introduction of TDHCA FHA Streamline Refinance Program TDHCA FHA Streamline Refinance Program guidelines 5, June 2015 Special Pricing for National Homeownership Month Purchase Price Limits revised 13

3 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 3 Date Items (Effective immediately for new reservations unless otherwise noted) Page Reverting back to bond calculation of income Program Products and Available Funds revised FHA Streamline Refinance - FICO Current Annual Family Income revised Adverse Market Fee Clarify need to qualify non-purchasing spouse, include in program income calculation and first-time buyer qualification For program income calculation, Include income of person living in home who is secondarily liable on Note and Deed Non Purchasing Spouse Info added for all loan types Targeted Areas, added verbiage Recapture Tax, added verbiage throughout Deleted references to Commitment Lot Notice throughout TILA-RESPA Integrated Disclosure Rule (TRID) Added Closing Disclosure Added language regarding some forms Added Updated Language for some program fees US Bank Funding Fee Increased Revised Program Product descriptions, Deleted unavailable products Deleted incorrect FICO and DTI information, Deleted Exception loan HFA Preferred - no manufactured housing, condos only LTV < 95% Deleted Gov loan DPA Plus. Origination Fee language clarified Sample Rate Notice, HUD-1 deleted and added Closing Disclosure(TRID) TDHCA FHA Streamline Refinance Program Process Flow 6, 8 10, , 31 33, Sue Nance s phone number updated Name of program changed to My First Texas Home Language on INTRODUCTION page revised Added overtime and rental income to bond income Various housekeeping revisions New Homebuyer Education AND Homebuyer Courses added for TMP and MCC Program Compliance Income & Current Annual Income language revised Housekeeping visions Screen shots of TDHCA web page on ehousingplus replaced Compliance Process language revised Program Fees and ehp Fees language revised New Sample Rate Sheet TDHCA Program Process Flow removed from guideline Targeted Area Census Tracts Revised Income and Purchase Price Limits Revised Program fees effective 05/01/16 Cover 4 6 6, 7, 8, & & & Revised current annual family income language Removed $300 US Bank Underwriting Fee for Non-Delegated lenders Deleted bullet point in reference to amount of funds available in rate notice Added fixed rate to MCC 15 or 30 year term Added required criteria grid Changed page number reference to FICO/DTI requirements Revised Conventional loan minimum FICO Revised ehousingplus fee language Removed FHA Streamline from Cover and Guidelines

4 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 4 Date Items (Effective immediately for new reservations unless otherwise noted) Page Added new Master Servicer, Idaho HFA throughout guideline Changed minimum FICO and Manual Underwriting Requirement Added references to Idaho HFA loan purchase file 22 & Removed ehousingplus Electronic Submission Process Revised Program Fees & Lender Compensation Revised Sample Rate Notice Updated allowable loan products, Max DTI and Manual Underwriting Added LP as an eligible AUS system Revised purchase price limits effective 03/17/17 13 & Revised income Limits Revised Program Timeline and Extension Fees Revised allowable property types to include manufactured housing Revised MCC contacts 21 & Revised Required Criteria chart Repaired broken link to system training and pre-closing program disclosures Corrected rate lock extension fees effective 09/01/ Revised MCC Compliance Shipping Contacts Revised MCC Stand Alone Contacts Revised MCC Issuance and Re-issuance information MCC Combo Fee Waived - Effective 01/02/ Revised income limit link effective 04/24/ Revised 2 unit property purchase price effective

5 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 5 INTRODUCTION What s different about these programs? These programs are all about streamlining products, processes and paperwork and providing the most benefits possible to Texas first-time homebuyers. The goal was to make them more beneficial to homebuyers and easier for lenders to use the products alone or together. One reservation system does it all. One set of forms for nearly all options. Basically, the requirements for all options are the same except in a few instances that are noted in the guidelines. TDHCA Texas Homeownership options: My First Texas Home Program (TMP 79): My First Texas Home (MFTH), also referred to as TMP 79, offers expanded mortgageloan opportunities to qualifying first-time homebuyers, including government and conventional 30-year, fixed-rate mortgage-loan options that also include down payment and/or closing-cost assistance. The Fannie Mae HFA Preferred conventional option is available loan product under the TMP 79 program. Texas Mortgage Credit Certificate Program (TX MCC): The Texas Mortgage Credit Certificate (MCC) program operates as a federal income tax credit, reducing the Borrowers potential federal income tax liability. By having a MCC, the first-time homebuyer has the ability to convert a portion (currently 40%) of their annual mortgage interest into a direct income tax credit of up to $2,000 on their U.S. individual income tax return. The credit is may be applied for the life of the loan, as long as this continues to be the borrower s primary residence. The TDHCA Texas MCC Stand-alone option can be used with a conventional or government first mortgage loan. No specific Investor requirement; no additional credit/dti overlays on Stand-alone MCC (only). COMBO Option - My First Texas Home (TMP 79) and Texas MCC: Texas first-time homebuyers can maximize their home-purchase benefits by combining the My First Texas Home (TMP 79) mortgage loan/dpa option with the Texas Mortgage Credit Certificate option. Please be sure to follow the applicable process with reserving under the Combo option. Note: Lender must complete the process of adding the MCC to the mortgage loan during loan reservation. This can be done by clicking on the add additional tab after the TMP 79 loan has been reserved.

6 ! TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 6 THE TDHCA PARTNERSHIP TEAM TDHCA Issues the program, creates the first mortgage and down payment assistance options, sets the rate, term and points, creates the MCC program, administers the stand-alone MCC program and markets the programs. Approves lender participation. Participating Lenders Take applications, reserve in ehousingplus system, process, underwrite, approve, fund, close and sell qualified loans to the program s Master Servicer if utilizing TMP-79 or TMP-79/MCC Combo. If using only the MCC program, participating lenders may sell their loan to their investor of choice. Check with your company on how to reserve a loan in your own system so that you have funds available for closing. Lenders are responsible for servicing first and second program loans in accordance with Agency requirements until they re purchased by the Master Servicer. TMP Program and TMP/MCC Combo - Idaho HFA, Master Servicer Provides information and training concerning the mortgage loan file including 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. ehousingplus, Program Administration Maintains the program reservation system and related website, posts guidelines, provides auto-fill forms, provides training on compliance issues and system, sends program notices, answers compliance questions, sends program notices regarding program timelines, receives compliance files, reviews, posts and notifies of exceptions and approves compliance file.

7 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 7 PROGRAM PRODUCTS TDHCA Income Guideline Change Effec7ve Monday, July 6, 2015: Bond Loan - Bond Income includes the gross income of all mortgagors both living on the property and liable on the Deed of Trust. All forms of income should be considered, including Annual Wages, Overtime, Commissions, Bonuses, Self- Employment (Plus Depreciation), Dividends, Interest, Annuities, Pensions, Child Support, Alimony, Rental Income, and Public Assistance. The income of a Non- Purchasing (Non-Borrowing) Spouse should also be included. Available on Government loan products (FHA, VA, USDA). REV Combo Loan - Meets Bond Income described above. Combines the TMP 79 and the Texas MCC. Rev FNMA HFA Preferred Conv. Loan All FNMA HFA Preferred Conventional loans. With or Without MCC. REV The Rate Notice will provide specific details. AVAILABLE FUNDS Rev The Department has designated ehousingplus as the Compliance Agent. All terms (rates, amount of down payment assistance, origination points, servicing release premium related to the Program and the Mortgage Loans will be available in Rate Notices that are POSTED on the ehousingplus website at The Rate Notice will notify Mortgage Lenders of the following: Notifies Mortgage Lenders that funds are available. Specifies the mortgage rate in effect for TMP-79 Mortgage Loans or the MCC Credit Rate for Mortgage Credit Certificates. Specifies fees associated with each program. Specifies the amount of down payment and closing cost assistance for TMP-79 Mortgage Loans. Provides a reminder that TMP-79 Mortgage Loans must be purchased within 60 days of loan registration. MCC s must be approved within 90 days of registration. Final Purchase Date (which is 60 days after the loan registration date unless extended) will be identified on the loan confirmation available through the program s lender portal. TMP 79 and/or MCC funds are secured for a buyer by reserving loans in the program

8 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 8 internet reservation, tracking and reporting system. Funds are available on a first-come, first-served basis. For a summary of the program click here, then click on the SUMMARY tab. THE FIRST MORTGAGE TMP 79 First Lien Mortgage Loans will generally bear interest at a slightly higher rate than the current market rate and will include down payment and closing assistance in an amount specified in the Rate Notice and secured by a second lien as described below. Lenders underwrite loans in accordance with Agency guidelines, and any Master Servicer or Program overlays. THE SECOND LIEN TMP 79 Second Lien Down Payment and Closing Cost Assistance loans are repayable and will be secured by a lien that features a thirty-year term at zero percent interest. No monthly payments are required. Repayment in full is due within the 30-year second mortgage loan term upon sale, refinance, transfer, or other disposition of the property, assumption of the first mortgage loan, or if the borrower ceases to occupy the residence. Down payment and closing cost assistance will be in an amount specified in the Rate Notice. Down payment assistance is not a separate program. All requirements of the First Mortgage apply to the assistance. The second mortgage may be prepaid in full or in part at any time without penalty. Second mortgage assumptions are not permitted. Assumption of the first mortgage will result in acceleration of the second mortgage, which will be due and payable in full. Percentage based down payment assistance is reserved simply by reserving the First Lien Mortgage Loan. Rev Lenders will make the determination that the borrower(s) meet the requirements of the Taxable Mortgage Program (TMP-79) and will advance the assistance funds at the time of closing. Lenders will be reimbursed the amount of the assistance advanced when the Mortgage loan is purchased by the Master Servicer. The lender will be responsible for preparing TDHCA s Note and Deed of Trust and any other documents that may be required to secure any 2nd lien repayment of the assistance or insurance.

9 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 9 TILA-RESPA Integrated Disclosure Rule ( TRID ) Please reference the following TDHCA guidance in response to the new TILA-RESPA Integrated Disclosure Rule ( TRID ): TDHCA TMP 79 Down Payment Assistance (DPA) loan product qualifies for the Consumer Financial Protection Bureau (CFPB) partial exemption based on the following criteria: The loan is a subordinate lien The loan must be used for down payment, closing costs, or similar assistance The loan does not have any interest charged The loan is forgiven or has deferred payments The loan has closing costs at 1% or less of the loan amount, limited to recording, counseling and application fees. *Note: No fees may be charged to the buyer by the lender or any 3 rd party on the subordinate loans in order that the subordinate loans comply with the 1% threshold. ehousingplus, Program Administrator/Compliance Agent, will continue to review the 1 st lien HUD-1/Closing Disclosure (CD) to ensure compliance with this requirement. The Disclosure of 2 nd Mortgage Loan Terms has been created (per ) to further clarify the terms of the 2 nd mortgage for the borrower. This disclosure is generated from the Lender Portal with all other program documents. The subordinate loans will continue to close in TDHCA s name and be funded by the lender at closing. With respect to the primary credit transaction, the down payment assistance should be included in the Calculating Cash to Close section on page 2 of the Loan Estimate under Adjustments and Other Credits. Proceeds from subordinate financing or other source. Funds that are provided to the consumer from the proceeds of subordinate financing, local or State housing assistance grants, or other similar sources are included in the amount disclosed under (h)(1)(vii). [Official Comment 37(h)(1)(vii)- 5]. On the Closing Disclosure, the amount should be included in the Calculating Cash to Close section under Adjustments and Other Credits and then detailed in Section L Paid already by or on behalf of Borrower. Subordinate financing proceeds. Any financing arrangements or other new loans not otherwise disclosed pursuant to (j)(2)(iii) or (iv) must also be disclosed pursuant to (j)(2)(vi). For example, if the consumer is using a second mortgage or note to finance part of the purchase price, whether from the same creditor, another creditor, or the seller, the principal amount of the loan must be disclosed with a brief explanation. If the net proceeds of a second loan are less than the principal amount of the second loan, the net proceeds may be listed on the same line as the principal amount of the second loan. For an example, see form H 25(C) of appendix H to this part. [Official Comment 38(j)(2)(vi)].

10 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 10 MORTGAGE CREDIT CERTIFICATES (MCC s) Mortgage loans associated with a stand-alone MCC may have a 15 or 30 year fixed rate term, may be underwritten using Conventional or Governmental guidelines and are not subject to the TMP-79 Program FICO requirements. (Rev 08/01/16) QUALIFYING FOR TMP 79 and/or MCC WHO, WHAT AND WHERE Eligible Borrowers All applicants/borrowers and spouses (including Non-purchasing spouse) must be firsttime homebuyers. For TDHCA purposes a first-time homebuyer is defined as a Borrower who has not had an ownership interest in any principal residence during the previous three (3) years. Tax Returns or Tax Transcripts will be required for the most recent three (3) year period. Exceptions to the first-time homebuyer requirement: Targeted Areas - property being purchased is located in a federally designated targeted area; Contract for Deed Exception - borrowers with land possessed under a contract for deed by a mortgagor whose principal residence is located on such land and whose family income is not more than 50% of the Applicable Median Family Income; Veterans Exception borrowers who are qualified veterans and have not previously received a loan under this exception or obtained a loan financed by single family mortgage revenue bonds or another MCC utilizing the exception to the first-time homebuyer requirement for Residences to Veterans under Section 143(d)(2)(D). A Non-purchasing spouse must be considered for program eligibility including firsttime homebuyer requirement; income requirement; and principal residence requirement. All applicants/borrowers and spouses (including Non-purchasing spouse) must have a valid social security number or an Individual Tax Identification Number (ITIN). Non-citizen applicants follow Agency (FHA, VA, RHS) guidelines.

11 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 11 Homebuyer Education/MCC Course Requirements Homebuyers must complete a Pre-purchase Homebuyer Education (HBE) course provided by: A Homebuyer Education Provider certified through the TDHCA Texas Statewide Homebuyer Education Program (TSHEP). To find a certified TSHEP Homebuyer Education Provider, visit the TDHCA website at HUD approved counseling agencies; New TDHCA Becoming a Homeowner Online Homebuyer Education (HBE) course. The Becoming A Homeowner free online homebuyer education tool provides buyers a greater understanding of what to expect when purchasing a home. The convenient, self-paced course offers a preand post-purchase tutorial on the ins and outs of buying a home. The online course is available 24/7 - Other online counseling options offered by MI companies, HUD, Fannie Mae, Freddie Mac or ehome America. Mortgage Credit Certification (MCC) Course Requirement New All borrowers participating in the TDHCA Texas MCC Program are encouraged to complete the Online Mortgage Credit Certificate course. The course offers an introduction to the Texas MCC program, and also provides the borrower with valuable information to help gain a better understanding of the benefits and responsibilities of being a MCC holder. Lenders should note that completion of this MCC course will soon become a requirement of the Texas MCC program. TDHCA will notify lenders when this requirement goes into effect. FICO and Debt-to-Income (DTI) Requirement (Rev. 12/01/16) Texas Mortgage Credit Certificate (TX MCC) Program (Stand-alone): When using the TX MCC as a stand-alone option (meaning not combining with the TMP 79 loan program), there are no FICO or DTI overlays. Lenders should follow the applicable loan product underwriting guidelines and any internal overlays. My First Texas Home (TMP 79) or Combo (TMP 79 with TX MCC) loan options: FHA, VA, USDA, Conv. Fannie Mae HFA Preferred loan products Minimum FICO No max DTI with DU or LP (FHA or VA only) approve/eligible Manual Underwriting Allowed - 45% Max DTI for Manual Please pay extra attention to the following: If minimum credit score required by an Agency (FHA, VA, RHS) is higher than the program minimum, then you must follow Agency guidelines. If as a Participating Lender your internal requirements dictate a higher minimum credit score, you must adhere to your lending guidelines.

12 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 12 If a tri-merged credit report is used, the middle score must be the program minimum or higher. If a merged credit report only returns two scores, the lower of the two scores must be the program minimum or higher.

13 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 13 Current Annual Family Income Program Compliance Income My First Texas Home (TMP 79) and Texas MCC programs consider Current Annual Family Income to determine that all applicant(s) meet Federal Tax Law compliance requirements. Current Annual Family Income is defined as the annualized gross income of a mortgagor, and any other person who will be liable on the mortgage and be vested on title including the income of a Non-purchasing (Non-borrowing) Spouse. (Rev 06/30/16) All forms of income should be considered, including: Gross Pay, Overtime, Bonuses, Commissions, Part-time employment, Dividends, Interest, Annuities, Child support payments, Pensions, Gross rental or leased income, Welfare payments, Social Security benefits, Disability payments, Unemployment compensation and Sick pay. Family Income excludes income from employment of any one NOT on title. The Program Income Requirement does not apply to the TDHCA FHA Streamline Refinance program. Required Criteria Form Borrower Co-Borrower Notices to Buyers Affidavit Disclosure of 2nd Mortgage Taxes Homebuyer Education Included in Income Calculation DPA - 2nd Mortgage DPA - 2nd Note DPA - Obligation Letter On Title Expected to Reside in Property (Revised 11/10/17) Non Purchasing Spouse Co-Signor

14 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 14 Income Limits In order to be eligible for a mortgage loan under this program, the borrower s current annual family income must not exceed the limits shown on the linked Income Limit Chart below. Income Limit Chart (Effective for loan closings on or after 04/24/18.)

15 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 15 GEOGRAPHY, PROPERTY AND PROGRAM REQUIREMENTS Eligible Area All of the State of Texas. Acquisition Limits (Purchase Price Limits) Acquisition cost means the cost to a Mortgagor of acquiring a Residence from the Seller as a completed residential unit - in most cases this is the Sales Price. This must include everything paid by the buyer or on the buyer s behalf with the exception of Agencypermitted financing costs. The acquisition cost of the property cannot exceed the limits as shown on the linked Acquisition Cost/Purchase Price Limits Chart. Acquisition Limits One unit property limit: (Effective for loan reservations dated 04/24/18 and after) Two unit property limit: (Effective for loan reservations dated 04/24/18 and after) COUNTY NAME NON-TARGETED TARGETED Atascosa, Bandera, Bexar, Comal, Guadalupe, $424,266 $518,547 Kendall, Medina, Wilson Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, Waller $390,384 $477,136 Bastrop, Caldwell, Hays, Travis, Williamson $452,716 $553,319 Collin, Dallas, Denton, Ellis, Hood, Hunt, $455,432 $556,639 Johnson, Kaufman, Parker, Rockwall, Somerville, Tarrant, Wise All Other Areas $347,178 $424,329 About the Property New or existing, one or two unit dwellings, detached or attached, condos* and town homes. Manufactured homes. (Rev 07/28/17) *Fannie Mae HFA Preferred, only Single Family properties are allowed. Condos allowed at < 95%. A duplex may be financed under the program as long as one unit of the duplex is occupied by the Eligible Borrower as their Principal Residence and the duplex was first occupied for residential purposes at least five years prior to the closing date for the Mortgage Loan. The five-year requirement does not apply to a duplex if it is located in a Targeted Area and the family income of the Eligible Borrower meets the income limits for Targeted Area Loans (120% or 140% of Applicable Median Family Income, as appropriate).

16 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 16 Homes are considered new if never previously occupied. Mobile, recreational, seasonal or other types of vacation or non-permanent homes are not permitted. Properties purchased in the program must be residential units and the Eligible Borrower must reasonably expect to occupy the property as their Principal Residence within a reasonable time (not to exceed 60 days) after the financing is provided. Additional Program Requirements Rev For TMP-79 Down payment assistance funds received by mortgagor must be applied to the transaction and are verified on the Closing Disclosure (CD); such funds must be applied to offset any required down payment or to pay for closing costs. A title insurance policy must insure the mortgagee s interest. For All Products Seller must not have advanced funds, solicited or induced funds to be advanced by another, directly or indirectly, for the payment of any amount required by the loan, except to the extent specifically provided by the program. All settlement and closing costs paid, outside of pre-paids or borne by either party to the transaction, will be disclosed, itemized and clearly explained on a closing or settlement statement, a copy of which will be furnished to the Borrower(s) and the Property Seller prior to closing. Targeted Areas (Rev ) A portion of available funds is set aside for targeted areas for a period of time. After that time, any remaining funds may be used for non-targeted areas as well as targeted. The determination of the Qualified Census Tracts in the State of Texas was made by the United States Department of Housing and Urban Development and the Treasury Department based on criteria in the 2010 Census and Section 143 of the Internal Revenue Code. The Texas Department of Housing and Community Affairs did not participate in the determination of the Qualified Census Tracts although the Lenders and/or the Department may rely thereon. In Targeted Areas, buyers who will occupy the Targeted Area property as their Principal Residence do not have to be first-time homebuyers, and income and sales price limits are higher. To determine the census tract of a specific property click here You may also find the Qualified Census Tracts on the TDHCA website below. Or on the last 5 pages of this lender guide.

17 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 17 FINANCING FACTS FOR ALL PRODUCTS 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. Temporary, construction or bridge financing with a term of 2 years or less may be taken out with a program loan. FOR TMP-79 LOANS ONLY Appraisal Must indicate that the home has at least a 30 year remaining useful life. Asset tests Not required for compliance purposes. Assumptions First mortgage loans may be assumed by a qualified borrower meeting qualifying requirements, income and acquisition price restrictions in place at the time of the assumption. Such loans must continue to fully comply and be insured or guaranteed by the insurer/guarantor. Second loans are not assumable. Mortgage loans originated under the Fannie Mae HFA Preferred product are not assumable. Buydowns Are subject to all applicable limitations and rules of FHA and the limitations of the Ginnie Mae Guide and are limited to a 2-1 buydown. Buydowns are not permitted under the Fannie Mae HFA Preferred product. Cash Back Cash back to the borrower is permitted only as a reimbursement of overage of earnest money deposit to the extent any minimum contribution has been satisfied and permitted by Agency guidelines and any fees paid outside of closing (POCs) i.e. credit report, appraisal. Construction to perm Generally, not permitted. However, a mortgage loan under the program may be made to replace an existing mortgage if such mortgage is securing a construction period loan, a bridge loan, or a similar temporary or initial financing having a stated maturity date within 24 months after the date the temporary financing was closed and does not provide for scheduled payments of principal during such term. HUD 184 loans are permitted. Refer to the loan product guidelines for additional information.

18 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 18 Co-borrower Added An individual who executes the loan documents, who is named on the mortgage loan and whose income and credit are used to qualify for the mortgage loan/mcc. Coborrowers must: (1) meet the program income limits; (2) have not had an ownership interest in a principal residence during the three-year period ending on the date the the Warranty Deed is executed, unless the residence purchased is in a Targeted Area or meets the Veteran s Exception; and (3) occupy the property being purchased under the program within 60 days of closing. Non-occupying co-borrowers are not allowed. Co-signor Updated A non-occupant who is co-signing the promissory note to offer additional security on the mortgage loan. The Co-signor cannot take title to the property. Eligible Loans Each Mortgage Loan must be insured by FHA 203(b); 203(b)(2); 203(h); 234(c); 2-1 Buydowns (FHA only) or other acceptable FHA program as determined by TDHCA from time to time) or guaranteed by VA (under 1810 and 1810A or other acceptable VA program as determined by the Department from time to time) or guaranteed by HUD under Section 184 Indian Home Loan Guarantee or guaranteed by RHS and eligible for packaging in the Ginnie Mae Mortgage-Backed Securities Program under the Ginnie Mae Guide. The Fannie Mae HFA Preferred product is allowed under the program but other Fannie Mae or Freddie Mac products are not allowed. Minimum Loan Amount There is no minimum loan amount in this program. Prepayments The first and second liens may be prepaid at any time without penalty. Remaining reserves Not established by the program. used. If any, these are determined by the type of financing

19 TDHCA TMP, MCC and FHA STREAMLINE REFI PROGRAMS ADMINISTRATOR S GUIDELINES Page 19 SUMMARY OF THE COMPLIANCE ORIGINATION PROCESS It s important to click on this site: texas/texas-department-of-housing-community-affairs/. You do not need a username or password to access the TDHCA webpage in the ehousingplus system. You will be able to find a great deal of information on this page. You need a username and password to enter the Lender Portal. That s where you ll reserve loans and access loan forms and status reports. Underwriters access the Underwriter Certification in the Lender Portal. The Lender Portal is a secure site and requires a username and password. Below is a picture of a portion of the TDHCA webpage in the ehousingplus system. You will not need a username and password to view the information that follows. Please note that above the TDHCA logo there is a line of tabs that follow the word PROGRAMS. They are: SUMMARY - is a brief one screen summary of the program. RATES - is where you find the current first mortgage rate for TMP-79, the current percentage of down payment/closing cost assistance and the current MCC rate.

20 TDHCA TMP, MCC and FHA STREAMLINE REFI PROGRAMS ADMINISTRATOR S GUIDELINES Page 20 GUIDE & FORMS - has the most current Administrator s Guidelines and samples of the program forms. Also, under this tab, there is a blank copy of the Notices to Buyers if you need a copy before reserving a loan. PARTICIPATING LENDERS - the most current list of approved lenders for the program options TMP-79 with an MCC, TMP-79 only and MCC only. BLACKBOARD - highlights changes to the program options. TRAINING - provides information on both program and system training.

21 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 21 Reference will be made to the tabs in the following explanation of the origination process. TRAIN Lender program training provided by the Administrator and Servicer -- Click on the TRAINING tab. ehousingplus (ehp) Training is a 2-step process that involves program training and ehousingplus Lender Portal System Software Training. ehousingplus (ehp) PROGRAM TRAINING ehp University program training is offered 24/7. Follow directions provided within the TRAINING tab. Usernames and passwords are added to the notice directory once weekly on Wednesdays. LENDER PORTAL SYSTEM SOFTWARE TRAINING Following ehp University Program training, first-time users of the ehousingplus Lender Portal are REQUIRED to attend system training. System software training is conducted on a weekly basis via live Webinar. Click on this link to register to attend the live System Software Training. 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 Lender will determine the applicant(s) meet the program eligibility requirements. DISCLOSE Prior to loan reservation, Lender should provide the applicant with the Notice to Buyers disclosure. This document can be found on the TDHCA page on the ehousingplus web site -- click on the Guide and Forms tab. A signed copy of the Notice to Buyers will be required in the Compliance File. RESERVE Reserving a My First Texas Home (TMP 79) loan and/or a Texas Mortgage Credit Certificate (MCC) online: Buyers must present an executed sales agreement before loan and/or MCC reservation Access the TDHCA page of the ehousingplus website at Follow the link to the ehousingplus online LENDER/PROGRAM PORTAL - services.ehousingplus.com/ Lender signs in the system using their secure user credentials (ID and password) Reserve the loan under one of the available loan options - be sure to complete all screens

22 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 22 If using the Combo option (TMP 79 w/mcc), go back to Main Menu and Additional Mortgage to add the MCC. Following this process will automatically reserve the MCC by duplicating the information used for the TMP 79 loan reservation and assign the MCC number. Print the Loan Confirmation for the file. Borrower may want a copy to confirm reservation of DPA and/or MCC. No documentation required to be sent to TDHCA or ehousingplus prior to closing. Lender processes and underwrites the loan following applicable loan product guidelines. Be sure to confirm loan meets any credit/dti overlays. (See page 11 -FICO/DTI requirements). (Rev 08/01/16) UNDERWRITER CERTIFICATION Be sure to have the Underwriter complete the Underwriter Certification process in the lender portal (ehousingplus) prior to loan closing. Once a loan has been Underwriter Certified it cannot be changed by the Lender on line. Any additional changes can only be made by the ehousingplus compliance staff and may be subject to additional steps. CLOSING It is important to provide accurate closing instructions to closing agents. All program documents must be returned to the lender. Following the Underwriter Certification, lenders will access and generate all program related documents specific to the borrower, directly from the lender portal. An invoice can also be generated to confirm any TDHCA program related fees (Compliance Fee, MCC Issuance Fee, any applicable late fees). When printing the program documents, click on each form available to be sure you don t miss anything. All program related forms MUST BE SIGNED AT CLOSING and will be required in the Compliance File that is required to be sent to ehousingplus after loan closing. Borrower, Co-borrower, Spouse (including Non-Purchasing Spouse) MUST sign the program documents. Co-Signors are only required to sign the Affidavit of Co-signor/Guarantor. COMPLIANCE FILE SHIP/SUBMIT Use the Compliance File Checklist (generated with the program documents) to assemble the compliance file. All compliance files are submitted directly to ehousingplus. Questions regarding files submitted for Compliance Review TMP-79 AND COMBO Please contact ehp staff: services@ehousingplus.com. The first mortgage file and credit package are submitted to Idaho HFA. Recorded mortgage documents should be submitted to Idaho HFA.

23 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 23 MCC only Please contact TDHCA staff: Dina Gonzalez dina.gonzalez@tdhca.state.tx.us (512) Sheron Everett sheron.everett@tdhca.state.tx.us (512) Sue Nance sue.nance@tdhca.state.tx.us (512) (Rev 01/03/18) ehousingplus Compliance File EXCEPTIONS/ FILE DEFICIENCIES Following review of compliance file by ehousingplus, if there are exceptions Lenders will receive notice from ehousingplus via . Exceptions will be posted online. Exceptions may be viewed online in two places a. at the loan level and b. in an exceptions report. Files with exceptions remain subject to the purchase timelines. Loans must be compliance approved prior to Idaho HFA loan purchase review. Loans are reviewed weekly by ehousingplus to assure compliance with timelines. Questions regarding Compliance File exceptions should be directed to: ehp.exceptions@ehousingplus.com IDAHO HFA LOAN PURCHASE FILE Following review of loan purchase file, if there are exceptions, Lender can review online via Lender Connection. MCC stand-alone Following review of compliance file by TDHCA, if there are exceptions, Lenders will receive notice from ehousingplus via . Exceptions will be posted online. Exceptions may be viewed online in two places a. at the loan level and b. in an exceptions report. Questions regarding exceptions for MCC stand-alone should be directed to: Dina Gonzalez dina.gonzalez@tdhca.state.tx.us (512) Sheron Everett sheron.everett@tdhca.state.tx.us (512) (Rev 01/03/18) APPROVALS TMP-79 AND TMP-79 with MCC Following approval of compliance file by ehousingplus, lenders are notified and reminded of the purchase deadline. Idaho HFA will begin loan purchase file review once file is compliance approved. MCC stand-alone Following approval of compliance file by ehousingplus, lenders are notified.

24 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 24 ISSUANCE OF MCC S/RE-ISSUANCE OF MCC S For all MCC s (both MCC S WITH TMP-79 and stand-alone MCC s) All MCC s will be issued by TDHCA including re-issuance of MCC s as a result of refinance and replacement of MCCs. (Rev 01/03/18) ELECTRONIC SUBMISSION LOAN PURCHASE FILE Loan purchase file will be uploaded into the Idaho HFA Lender Connection.

25 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 25 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 MAY NOT BE HELD for the buyer until such time as the buyer presents a valid contract. Loan Processing, Delivery and Purchase Timetable (Rev 04/19/17) Lenders must close, fund, deliver and clear conditions on the Mortgage Loans with both the Compliance Agent (ehousingplus) and the Servicer (Idaho Housing and Finance Association) within sixty (60) calendar days of the date the Mortgage Loan is reserved on the Lender Portal. Adequate time should be allowed for Idaho HFA to perform loan purchase review and ehousingplus to perform compliance review in order to cure any conditions prior to their approvals. Note: TMP 79 loans are reviewed for loan purchase by Idaho HFA after compliance approval by ehousingplus. If a Mortgage Loan is not purchased within such sixty (60) day period, an extension is available for a fee that is applicable to the extension time necessary. (Effective 09/01/17) Rate Lock Extension Extension Fees 7 days % 15 days 0.125% 22 days % 30 days 0.25% These fees will be netted out of the lender service release premium (SRP) upon loan purchase by Idaho Housing and Finance Association. FOR MCC stand-alone: MCC Extension requests should be sent directly to TDHCA to Dina Gonzalez at dina.gonzalez@tdhca.state.tx.us.

26 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 26 PROGRAM FEES Effective 10/01/16 For My First Texas Home (TMP 79) The following fees will be charged by Idaho HFA and deducted from the mortgage loan purchase price: $150 Purchase File Review Fee $59 Tax Service Fee $225 Compliance/Admin Fee (payable to ehousingplus; included with ehousingplus Compliance File) COMBO Option - My First Texas Home (TMP 79) and Texas MCC The following fees will be charged by Idaho HFA and deducted from the mortgage loan purchase price: $150 Purchase File Review Fee $59 Tax Service Fee $225 Compliance/Admin fee (payable to ehousingplus; included with ehousingplus Compliance file) MCC Issuance Fee WAIVED (Combo option ONLY) (Effective 01/02/18 Rev 01/03/18) For Texas Mortgage Credit Certificate (MCC) - Stand Alone MCC option The following fees should be payable to ehousingplus and included in the ehousingplus Compliance File: $500 MCC Issuance Fee $200 Compliance/Admin Fee Lender Compensation/Service Release Premium (SRP) My First Texas Home (TMP 79) loans will be purchased by Idaho HFA (Master Servicer). Lenders will be compensated by Idaho HFA upon loan purchase. Total lender compensation will be: 2.75 % See TDHCA Rate Notice for current Rates/DPA Options/Origination/SRP. The TDHCA Rate Notice can be found on the TDHCA page of the ehousingplus website at TMP 79 Conventional HFA Preferred option No Adverse Market Delivery Fee or Loan Level Price Adjustment fees. For Texas MCC loans originated with the Stand-alone MCC option will not be purchased by Idaho HFA. The lender may retain the loan, or sell to any Investor. Allowable Lender Fees Lenders may collect all reasonable and customary fees and closing costs, provided all fees are fully disclosed in accordance with federal, state and local regulations.

27 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 27 All fees and charges must be properly listed on the Closing Disclosure. ehousingplus First Mortgage Fee 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 10/9/15) 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 program requirements, including those for first-time homebuyer, income limits, sales price limits, targeted areas, homebuyer education, rate, term, points, fee limits, LTV, and FICO score. (Revised ) See next page for Sample Rate Notice and Mortgage Loan Purchase Price

28 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 28 RATE NOTICE - SAMPLE

29 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 29 COMPLIANCE UNDERWRITING Underwriters should remember that CALCULATION OF PROGRAM (COMPLIANCE) INCOME IS DIFFERENT THAN CALCULATION OF INCOME FOR CREDIT PURPOSES. The program requires that underwriters consider all forms of borrower income. You must also include income of non-purchasing spouse. Use the information below as a general guide. Unlike income that is averaged for credit underwriting, the program income 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 federal tax transcripts 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. 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. 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 Applicant 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. Do not include income of co-signors. The Applicant Affidavit, executed by the borrower(s), and certified by the lender, must include the total verified annual family income. Questions regarding the calculation of income for program purposes should be directed to the Compliance office at services@ehousingplus.com or So that you have an answer in writing we suggest you your question. Then you can simply print a copy of the response and add to your file. There are many variables and the Compliance office will be pleased to assist. Information acceptable to FHA and secondary market entities is acceptable Mortgage Lender verification for compliance purposes, provided that such documentation includes the necessary, acceptable federal tax transcripts. 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. Although reference is made to VOE s and VOD s in the guidelines below, they are not required if not required by the appropriate Agency. This documentation includes, but may not be limited to, current pay stubs which delineate current period, W-2's, for all

30 TDHCA TMP, MCC PROGRAMS ADMINISTRATOR S GUIDELINES Page 30 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 federal tax transcripts. 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. 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 federal tax transcripts submitted to verify that there are no unexplained and/or unacceptable differences in current income to past income. Examples below not intended to serve as exclusive methodology. Please contact the Compliance office with questions regarding individual cases. See our online contact directory for addresses. Please note that the income reported for the program 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 or for balance of year. 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 available paystubs, VOE s, previous year s income per W2's and federal tax transcripts. 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. Salaried 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 or for balance of year. 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)