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: 8/21/2018 Miami Dade County (Authority) Department of Public Housing and Community Development 701 N.W. 1 st, Court 14 th Floor Miami, FL 33136 Contact: Lydia Glasgow or Shawn Topps, Supervisor Email: LGLASGO@miamidade.gov or Shawn.Topps@miamidade.gov Phone: 786-463-2186 or 786-469-2109 Website: http://www.miamidade.gov/housing/ Housing Authority EIN 59-6000573 DPA Provider Classification Government Entity Secondary Financing Programs First Mortgage Maximum LTV First Mortgage Maximum CLTV FHA: Refer to Product Profile Fannie Mae Housing Authority Product. Refer to Product Profile 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 FHA: Refer to Product Profile Fannie Mae Housing Authority Product. Refer to Product Profile 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 First Mortgage Fee Restrictions 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. Miami Dade County, PHCD loan set up fee and origination fee of $400 must be disclosed on LE/CD. If the PHCD loan set up fee and origination fee is not disclosed on the LE/CD then the Miami Dade County FTHB cannot be used. The term of the loan shall be a maximum of 30 years with a fixed rate. The fee is set at a maximum of 2% of the first mortgage amount and is the only fee to be charged by the first lender. It should be sufficient to cover the following costs: o Document Prep fee o Tax service fee prevailing lender cost o Flood Certifications prevailing lender cost o Processing fee o Underwriting fee Page 1
Maximum Second Mortgage Loan Amount Second Mortgage Loan Interest Rate Second Mortgage Loan Payment Minimum Borrower Down Payment o Closing fee o Settlement fee o Notary fee Lender is allowed to charge the following fees: o Appraisal fee prevailing vendor cost o Credit report fee prevailing vendor cost o Re-certification fee - $100 maximum o Final inspection fee $100 maximum o Roof/Termite Inspection prevailing vendor cost o Recording fees per state regulation o Septic Tank Inspection - prevailing vendor cost 2 Up to $80,000. Note: PRMG is not participating in the additional rehab portion as it does not meet Agency guidelines. 0-6% (Interest rate is determined where the funds are coming from CDBG, HOME or SHIP and the borrower income limits) Note: Per Fannie Mae guidelines; the interest rate of the subordinate mortgage cannot exceed no more than 2 percentage points above the first mortgage. HOME/CDBG funds: loans are deferred, no monthly payments required. SHIP funds: loans require monthly amortized payments. Note: PHCD will determine on a case by case basis. Minimum down payment requirement of three percent (3%) and a minimum of one percent (1%) must be from the applicant s own funds. FHA: Refer to Product Profile Fannie Mae Housing Authority Product. Refer to Product Profile Fannie Mae Conforming Product: Refer to Product Profile Fannie Mae HomeReady with Community Second: Refer to Product Profile Page 2 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 There are two options available under this program depending on the funding source. The Repayment Terms HOME/CDBG funds the second mortgage loan is a no interest deferred 30-year loan. The SHIP funds the second mortgage is a low interest amortized monthly payment 30-year loan. 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 Miami Dade County, Florida Eligible Properties Acquisition Limit: Existing & New Properties - $205,000 Page 3 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 Must be currently occupied by the owner, vacant or occupied by the homebuyer. Housing Quality Standards (HQS) inspection will also be required and will be conducted by PHCD staff and the cost will be absorbed by the Department. Additionally, inspections of the roof, septic tank and for termites shall be performed by a State of Florida licensed inspector specializing in each of these areas. These three inspections shall be paid for by the borrower regardless of the outcome of the inspection and are valid for 45 days from the date of the inspection. If the property was constructed prior to 1978, a lead based paint inspection will be required by an Environmental Protection Agency (EPA) Certified Inspector, EPA Certified Risk Accessor and/or EPA Certified Firm prior to closing and is to be paid for by the borrower. 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, Fannie Mae HomeReady, and VA except as described herein: The borrower is required to bring all documents requested including the signed sales contract, to the interview with PHCD for review to determine eligibility for the First-Time Homebuyer Assistance. The borrower will be required to sign all disclosure forms at time of initial interview. When applicable the borrower (s) will be given a predetermination eligibility letter which they will take to the first mortgage lender within 30 days. When the first mortgage lender has approved the file, the lender must submit to PHCD the documents below via regular mail or courier; the documents cannot be submitted by borrower. The underwriting process must be completed before the commitment of funds. The Loan Officer is required to submit a complete loan package to PHCD, which includes the following: o Form 1003 - uniform residential loan application (signed and dated) o Form 1008 - transmittal summary (signed) o Escrow letter and proof of deposit o Bank commitment letter o Truth in lending o Good faith estimate o Appraisal Report
o Current credit report o Single Family Residence Insurance Quotes and Condo Monthly (HOA) o Soil Treatment Certificate and Certificate of Occupancy (For new properties) Upon approval, PHCD will issue a firm commitment letter to the borrower who will be required to sign and return the commitment letter to PHCD to initiate the request for funding. 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. Must be a legal resident (s) of Miami Dade County. Ratios cannot exceed 35%/45%. Assets Borrower must have required amount of their own funds in the transaction for type of first mortgage financing selected. Liquid assets in excess of $5,000 must be included in the income calculation the greater of (i) the actual income earned on those assets, or (ii) the income calculated using the current LIBOR rate as set by HUD for further details contact PHCD. Income Limits Effective April 1, 2016 Household size Low Income Moderate Income 1 $39,800 $59,640 2 $45,450 $68,160 3 $51,150 $76,680 4 $56,800 $85,200 5 $61,350 $92,040 6 $65,900 $98,880 7 $70,450 $105,720 8 $75,000 $112,560 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 a homebuyer education course provided by an approved homebuyer education counseling agency, before meeting with PRMG Loan Officer. Borrower s Certification of Completion of Homeownership Counseling is required PRMG Loan Officer is required not to begin the application process without the homebuyer education certificate. The borrower (s) must provide the Homebuyer Counseling certificate to PRMG Loan Officer. (The homebuyer education certificate is valid for one year). The borrower is also required to provide the certificate to PHCD at the interview for the second mortgage. The Homebuyer Counseling Agency is required to cover the PHCD First-Time Homebuyer Program. This class will provide the homebuyer with all the specific items on the process to purchase a home with a first lender and PHCD. Page 4
Fannie Mae HomeReady 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 Mae loan type) Second Mortgage Loan Documents DPA Program Restrictions That Are Not Permitted Loan documents and security instruments must conform to Agency requirements (FHA and Fannie Mae loan type) PRMG The First Time Homebuyer 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 Mae loan type) Special Requirements: Closing Process: Prior to Closing, a final settlement/statement (HUD-1) must be submitted to PHCD for review and approval to enable funds to be requested and to ensure there are no excessive fees being charged to the borrower. Miami-Dade County requires a minimum of seven working days to process and disburse requested funds. First Time Homebuyer Funds are payable to the closing agents/title companies only. All closing agents/title companies MUST be approved by Miami-Dade County. 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 Page 5
CONV FHA VA USDA CONV FHA VA USDA X X X X PRMG Approved By: PRMG DPA Review Department 08/21/2017 Name / Title Date Page 6