HOMEOWNERSHIP ASSISTANCE PROGRAM SUMMARY Product Description Allowable Origination Channel Program Name 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 Retail Program Approval Expiration Housing Authority Subject to Availability approval expires: 10/26/2018 Palm Beach County Department of Economic sustainability 100 Australian Avenue, Suite 500 West Palm Beach, FL 33406 Contact: Sherita White Telephone: (561) 233-3627 Email: SWhite1@pbcgov.org Website: http://www.pbcgov.com/des/programs/housing/ship.htm Housing Authority EIN 59-6000785 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 Second Mortgage Loan Interest Rate 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. Very Low Income $100,000, Low Income $65,000, Moderate Income $50,000. NOTE: PRMG is NOT participating in the additional rehabilitation of 20% of the contingency amount. PRMG does not allow escrow holdbacks/repair escrows. 0% Page 1
Minimum Borrower Down Payment Very Low Income must contribute a minimum of 2.5% of the sales price, low and moderate income must contribute a minimum of 3.5% of the sales price 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 zero interest no monthly payment deferred 30-year loan with a 30- Repayment Terms year affordability period. As long as the property remains borrower s principal residence then the principal balance will be forgiven in full at maturity date. 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 Properties must be located within Palm Beach County, Florida Eligible Properties Acquisition Limit: Existing and New Construction: $317,647 Properties shall be sited on a permanent foundation, with a permanent utility hook-up, and may include: Single family - detached, attached o No condominiums o No property flipping or investor property Must be currently occupied by the owner, vacant or occupied by the homebuyer ALL repairs called for by inspections MUST be completed prior to closing. Page 2
Underwriting Refer to product profile for additional property eligibility requirements, not all property types are allowed on all products. Lender to pre-approve all borrowers for the first mortgage product. Standard FHA, Fannie Mae Conforming Product, and Fannie Mae HomeReady, Freddie Mac except as described herein: The borrower will complete the application package available on the following link: http://www.pbcgov.com/des/programs/housing/ship.htm. Before the borrower executes a purchase agreement on a property, make sure the date the owner purchased the property is more than twelve months (no investor flipping or investor property allowed). Borrower is required to submit all of the required documents directly to the Authority. Upon qualification of the underwriting, the homebuyer will be issued a preapproval letter indicating the amount of assistance. 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. Special priority will be given to elderly, persons with disabilities and veterans above all other eligible income groups. Assets Borrower must have required amount of their own funds in the transaction for type of first mortgage financing selected. All assets will be considered when calculating annual income (i.e.: checking/savings accounts, IRA s, 401(k) s, CD s, cash value life insurance, etc.) Income Limits West Palm Beach and Boca Raton MSA Effective April 17, 2017 Number of 30% AMI 50% AMI 80% AMI 120% AMI 140% AMI Persons 1 $15,100 $25,200 $40,250 $60,480 $70,560 2 $17,250 $28,800 $46,000 $69,120 $80,640 3 $20,420 $32,400 $51,750 $77,760 $90,720 4 $24,600 $35,950 $57,500 $86,280 $100,660 5 $28,780 $38,850 $62,100 $93,240 $108,780 6 $32,960 $41,750 $66,700 $100,200 $116,900 7 $37,140 $44,600 $71,300 $107,040 $124,880 8 $41,320 $47,500 $75,900 $120,792 $133,000 NOTE: If first mortgage guidelines are more restrictive than the Agency s for borrower s income limit, the first mortgage guidelines prevail. 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 Borrowers must successfully complete an 8-hour homebuyer education class provided by a HUD approved counseling agency Borrower s Certification of Completion of Homeownership Counseling is required Page 3
Page 4 Fannie Mae HomeReady Only: Borrowers must successfully complete a homebuyer education class provided through Framework, on line program approved by Fannie Mae. Special borrower consideration can be made for borrowers with the presence of a disability, lack of internet access, or other issues. Framework has a toll-free customer service line for direction. In lieu of Framework course, Fannie Mae will allow lenders to accept a certificate of prepurchase education/counseling from a HUD approved counseling agency dated within the previous six months before loan application date and before April 1, 2016. Landlord education required for 2-4 units only. This education is not available through Framework. 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, HOME Written Agreement, and Deed of Trust (at closing) First Mortgage Loan Loan documents and security instruments must conform to Agency requirements (FHA, Fannie Mae, Documents Freddie Mac loan type) Second Mortgage Loan Documents DPA Program Restrictions That Are Not Permitted Special Requirements: Loan documents and security instruments must conform to Agency requirements (FHA, Fannie Mae, Freddie Mac loan type) PRMG The 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 Mae loan type) This Fact Sheet form and any attachments MUST be placed in each loan file at the time of submission.
Additional Comments: Approved with Closing Instructions for Closing the DPA Mortgage needs to be recorded in 2nd lien position. 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 10/26/2017 Name / Title Date Page 5