Product Description HOMEOWNERSHIP ASSISTANCE PROGRAM SUMMARY Second mortgage loan program to be used in conjunction with: FHA Fixed Rate Fannie Mae Fixed 30-year Conforming Product (DU) Fannie Mae Housing Authority Product Fannie Mae HomeReady with Community Second Allowable Origination Retail and Wholesale Channel Program Name Program Approval Expiration Housing Authority Subject to Availability approval expires: 12/26/2018 City of Dallas (Authority) Contact: David Silva 1500 Marilla, 6BN Dallas, TX 75201 Phone: (214) 670-7043 Email: david.silva@dallascityhall.com Website: http://dallascityhall.com/departments/housingcommunityservices/dallasmap/pages/default.aspx Housing Authority EIN 75-6000508 DPA Provider Classification Government Entity Secondary Financing Programs First Mortgage Maximum LTV First Mortgage Maximum CLTV Fannie Mae Conforming Product: Refer to Product Profile Fannie Mae HomeReady with Community Second: Refer to Product Profile o Purchase only: o 1 unit: LTV >95-97% (NO first-time home-buyer (FTHB) requirement). o Purchase and Limited Cash Out (Rate/Term): o 1 unit: 95% FRM; 90% ARM Fannie Mae Conforming Product: Refer to Product Profile for CLTV requirements, may not exceed limits in product profile Fannie Mae HomeReady: Refer to Product Profile Maximum Second Mortgage Loan Amount The CLTV may not exceed 105% on HomeReady loans, unless further restricted by product profile. The sum of all financing may not exceed 105% of the cost to acquire the property plus any normal prepaid expenses. Up to $14,000 Up to $1,500 may be used for minor repairs on existing properties as required by the Minimum Housing Standards (MHS). Those repairs must be completed prior to closing. Up to $4,000 for closing costs Page 1
Second Mortgage Loan Interest Rate Minimum Borrower Down Payment 0% Borrower must invest a minimum of $1,000 toward the purchase and have at least 2 months of monthly mortgage payments in savings after closing. Fannie Mae Conforming Product: Refer to Product Profile Fannie Mae HomeReady with Community Second: Refer to Product Profile NOTE: If first mortgage guidelines are higher than the Agency s for borrower s minimum investment, the first mortgage guidelines prevail. Second Mortgage Purpose Down payment Closing costs Second Mortgage Loan This second mortgage loan is a no interest no monthly payment 5- year forgivable loan. The Repayment Terms assistance is forgiven 1/5 th on each anniversary date of the note. Repayment is due in full upon sale, transfer, lease, refinancing, change of ownership or home no longer is occupied as primary residence. Loan proceeds may not be used to pay off other loans, advances or consumer debts. However, if any of the following repayment triggering events occur, the principal balance and any accrued interest shall be due and payable in full: Evidence of the act of fraud committed to falsely obtain assistance funds The property is sold Transferred title Refinancing with cash out A default on the first mortgage The borrower(s) ceases to occupy the property as their principal place of residence Upon the death of the last surviving applicant The filing of any bankruptcy by the applicants Upon divorce, unless one of the applicants continues residing in the property by the decree of divorce Loan may be pre-paid in full at anytime Loan is NOT assumable Types of Financing Purchase Money Mortgage o 30 year fixed rate (No ARM, balloon payment or prepayment penalty) Occupancy Owner occupied primary residence only All co-borrowers must occupy Borrower(s) may not have an ownership interest in any other residential dwelling at the time of loan closing Geographic Location Property must be located within the City of Dallas, Texas Eligible Properties Acquisition Limit: Sales price of the purchase property cannot exceed: Existing Properties - $195,000, New Construction - $224,000 Properties shall be sited on a permanent foundation, with a permanent utility hook-up, and may include: Single family - detached, attached (Fixed Rate) Condominiums or Townhomes or Planned Urban Development -detached, attached Page 2
Must be currently occupied by the owner, vacant or occupied by the homebuyer. If occupied by a tenant the property must be vacated for a period of 60 days prior to execution of sales contract. Properties must meet City of Dallas Minimum Housing Standards (MHS), including lead-based paint regulations at time of closing. ALL repairs called for by inspections MUST be completed prior to closing. Refer to product profile for additional property eligibility requirements, not all property types are allowed on all products. Underwriting Lender to pre-approve all borrowers for the first mortgage product. Standard Fannie Mae Conforming Product, and Fannie Mae HomeReady, except as described herein: The Loan Officer will assist the borrower in completing a 2016-2017 Lender Membership Application Package available on the City of Dallas Lender Resources Tab: http://dallascityhall.com/departments/housingcommunityservices/dallasmap/pages/lender_ Resources.aspx Once you have completed this package, please mail the original documents to City of Dallas office. Please direct the package to: Attention: Pamela Beck City of Dallas Housing/Neighborhood Revitalization 1500 Marilla Street, Suite 6BN Dallas, Texas 75201 Once the City of Dallas has received the original executed Lender Membership Application Package, they have a 24-hour processing period to determine all necessary requirements have been met. Upon review and approval, the City of Dallas will notify the Primary Contact listed in the Membership Application by email of its determination. If approved, the email will include the User Account information for the loan officers that are to use the DHAP Loan Registration System. If the borrower is not approved, the email will contain a list for additional information. Upon approval, a copy of DPA Approval Letter MUST be in each file. Eligible Borrowers Borrower(s) must qualify for the first mortgage selected. First Time Home Buyers (FTHB) only Borrowers may not currently own a house and may not have owned a house during the last three years prior to making application. Must be a U.S. Citizen, lawful permanent resident alien or other qualified alien. Co-signers are not allowed. Borrowers Housing Expense to Income Ratio may not exceed 30%, while the Borrower s Total Debt to Income Ratio may not exceed 43%. Assets Borrower must have required amount of their own funds in the transaction for type of first mortgage financing selected. Borrower may not have more than $10,000 in liquid assets. Retirement funds in IRSrecognized retirement accounts are excluded. Income Limits 80% AMI Effective April 14, 2017 1 Person 2 Persons 3 Persons 4 Persons 5 Persons 6 Persons 7 Persons 8 Persons $41,100 $47,000 $52,850 $58,700 $63,400 $68,100 $72,800 $77,500 NOTE: If first mortgage guidelines are more restrictive than the Agency s for borrower s income limit, the first mortgage guidelines prevail. Page 3
MI Coverage FHA: Standard UFMIP and monthly if applicable Fannie Mae Housing Authority Product Refer to Product Profile Fannie Mae Conforming Product Refer to Product Profile Fannie Mae HomeReady and Conforming (DU) Products: Standard mortgage insurance requirements must be met, if applicable, as described in Product Profile Special Provisions Homeownership Counseling: Refer to product profile for specific product requirements Borrower and co-borrower must successfully complete a homebuyer education course from a MAP and HUD approved education provider. Online courses are not eligible. Borrower s Certification of Completion of Homeownership Counseling is required Page 4 Fannie Mae HomeReady Only: See Product Profile for Homeownership Counseling requirements. Freddie Mac Home Possible Only: See Product Profile for Homeownership Counseling requirements. All: May be funded by a municipality, state, county or local housing finance agency, non-profit organization, a regional Federal Home Loan Bank or an employer May be used to fund all or part of the down payment or closing costs The more restrictive down payment requirement between the product and the second mortgage will apply No reporting requirements permitted DPA Processing Fee Costs incurred for down payment assistance secondary financing program may only be included in the amount of the second lien. The fee cannot be included in the first mortgage transaction or appear on the HUD-1. Special Feature Code N/A Underwriting Requirements Receipt of borrowers approval from DPA provider Receipt of DPA Funds (at closing) No cash back at closing (at closing) Copy of DPA s Executed Promissory Note, and Subordinate Deed of Trust (at closing) First Mortgage Loan Loan documents and security instruments must conform to Agency requirements (FHA and Fannie Documents Second Mortgage Loan Documents DPA Program Restrictions That Are Not Permitted Special Requirements: Loan documents and security instruments must conform to Agency requirements (FHA and Fannie PRMG The Inclusionary Housing Program may not Restrict the transfer of servicing rights of the first Mortgage Require prior notification or approval from the sponsoring authority in the event of the transfer of the first mortgage servicing rights. If there is any evidence of this verbiage in the subordinate documents, the program will no longer be eligible. The First Mortgage may not be subject to a bond program loan documents and security instruments must conform to Agency requirements (FHA, Fannie
Additional Comments: Approved with Closing Instructions for Closing the DPA Mortgage needs to be recorded in 2nd lien position. Category 1 Funds (only) (5-year program) is the only program approved in this Program Summary. STATUS APPROVAL ELIGIBLE The DPA IS eligible for use with the programs below INELIGIBLE The DPA IS NOT eligible for use with the programs below CONV FHA VA USDA CONV FHA VA USDA X X X X PRMG Approved By: PRMG DPA Review Department 12/26/2017 Name / Title Date Page 5