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 VA Retail and Wholesale (All interested Loan Officers and Brokers must attend an in person Certification Workshop and complete an annual Recertification requirement) Program Approval Expiration Housing Authority Subject to Availability approval expires: 7/11/2018 Miami Dade Economic Advocacy Trust (MDEAT) 111 NW 1 st Street, 20 th Floor Suite 2032 Miami Dade County, FL 33128 Phone: (305) 375-5661 Contact: Eric Johnson Email: ericj1@miamidade.gov Website: http://www.miamidade.gov/economicadvocacytrust/ Housing Authority EIN 59-6000573 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. The lower of $7,250 or 10% of the purchase price for households at 80% AMI. The lower of $4,750 or 4% of the purchase price for households above 80% AMI. 0% Page 1
Minimum Borrower Down Payment Borrower is required to contribute 1%-3% 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 0% interest no monthly payment 10-year deferred loan. The Repayment Terms original principal balance is forgiven at the end of the loan term as long as the property remains the borrower s principal residence. Repayment is due in full upon sale, transfer, lease, refinancing, and change of ownership or home no longer 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 Miami Dade County, Florida Eligible Properties Acquisition Limit: Existing & New Construction: Purchase price cannot exceed the current FHA mortgage limit. Properties shall be sited on a permanent foundation, with a permanent utility hook-up, and may include: Single family - detached, attached Condominiums or Townhomes, Villas -detached, attached Must be currently occupied by the owner, vacant or occupied by the homebuyer Refer to product profile for additional property eligibility requirements, not all property types are allowed on all products. Page 2
Underwriting Lender to pre-approve all borrowers for the first mortgage product. Standard FHA, Fannie Mae Conforming Product, Fannie Mae HomeReady and VA, except as described herein: Loan Officers and Brokers must attend an in person Certification Workshop and complete an annual Recertification requirement in order to originate any loans utilizing this program. Upon qualification of the underwriting, the homebuyer will be issued a Commitment Letter listing all of the required documents to be provided within 5 days of approval. A copy of DPA Approval Letter MUST be in each file. Eligible Borrowers Borrower(s) must qualify for the first mortgage selected. Borrower must be a first time homebuyer must not have owned a home anywhere within the three previous years. Others that may qualify as a first-time homebuyer are: Single parent with children under the age of 18, recently divorced and displaced A displaced victim of domestic abuse Person displaced as a result of governmental action Borrower must reside in Miami-Dade County (at time of application with approved lender). Assets Borrowers must have required amount of their own funds in the transaction for type of first mortgage financing selected. Income Limits Maximum Income Limits Effective April 17, 2017 Size <=50% <=50.01-80% <=80.01-100% <=100.01-120% <=120.01-140% 1 $26,450 $42,300 $52,900 $63,480 $74,060 2 $30,200 $48,350 $60,400 $72,480 $84,560 3 $34,000 $54,400 $68,000 $81,600 $95,200 4 $37,750 $60,400 $75,500 $90,600 $105,700 5 $40,800 $65,250 $81,600 $97,920 $114,240 6 $43,800 $70,100 $87,600 $105,120 $122,640 7 $46,850 $74,900 $93,700 $112,440 $131,180 8 $49,850 $79,750 $99,700 $119,640 $135,580 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 face to face 8-hour homebuyer education class provided by MDEAT or a HUD approved counseling agency Borrower s Certification of Completion of Homeownership Counseling is required. Fannie Mae HomeReady Only: Borrowers must successfully complete a homebuyer education class provided through Framework, on line program approved by Fannie Mae. 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 Page 3
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 borrower s approval from DPA provider Receipt of DPA Funds (at closing) No cash back at closing (at closing) Copy of DPA s Executed Note and Second Mortgage (at closing) First Mortgage Loan Documents Loan documents and security instruments must conform to Agency requirements (Fannie Mae as applicable by 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 (Fannie Mae as applicable by 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 as applicable by 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 must be recorded in 2nd lien position. Page 4
ELIGIBLE APPROVAL INELIGIBLE The DPA IS eligible for use with the programs below The DPA IS NOT eligible for use with the programs below CONV (DU) FHA VA USDA CONV FHA VA USDA X X X X PRMG Approved by: PRMG DPA Review Department 7/11/2017 Name / Title Date Page 5