DATE: 4/4/2018 SUBJECT: Colorado Housing Assistance Corporation Mortgage Assistance Program for the State of Colorado. Attached is a Fact Sheet for the above referenced program, available for homes purchased within the State of Colorado. Westminster is excluded from the Jefferson County Program. This program can be used in conjunction with Fannie Mae HomeReady Fixed Rate Products. II2 HomeReady 30 Year Fixed with Community Second AA9 30 Year Fannie Fixed with Community Second Income eligible homebuyers can obtain up to (Statewide) $3500.00 to $10,000.00 OR Denver and Jeffco Properties: (6% of the purchase price, up to $10,000 (Denver) or $20,000 (Jeffco) whichever is less for down payment and closing cost assistance associated with the first mortgage. This second mortgage loan is one of two options: Payments start immediately at 2% rate, 30 year amortized loan term. Five (5) year Deferral: Payment starts 61 st month, 6% rate, 25 year amortization loan term However, if any of the following repayment triggering events occurs during the term, 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 Subject to a refinancing of the first mortgage A default of 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, unless eligible heir to or beneficiary of the property, meets the current eligibility requirements 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 Program approval expires: 12/31/18 v Review all material and forms completely to ensure that agency guidelines are met. v While this fact sheet serves as a guide, the loan reviewer is ultimately responsible for consulting the product summary to ensure compliance with the specific loan product v Ditech is not obligated to provide documents and/or requirements to DPA program v This Fact Sheet provides a program overview. For complete program information and additional guidance contact: Program Coordinator- Jeneene Greenbeck # 303-572-9445 x 23 chaconline.org v Approved for Non-Delegated Clients ONLY v Non-Delegated Client must comply with all CO-CHAC requirements (i.e. registration, wiring funds, etc) General Information v The first mortgage lender will submit the application on the borrower s behalf, after a property is under contract and the first mortgage product type selected. Specific rules of the first mortgage may affect the amount and terms of the CHAC assistance available. v The buyer must attend a site based CHFA/CHAC approved first time homebuyer class, before the CHAC application is submitted. E-Home will only be accepted for down payment assistance applicants with prior approval from CHAC staff. v Once the CHAC loan is committed, the buyer will be required to sign certain legal disclosures and attend a CHAC borrower counseling session. This is DIFFERENT from the first time home buyer class and provided only by CHAC. (Buyers outside the metro area can complete this requirement by phone) v The CHAC loan will close in conjunction with the real estate and first mortgage closing. v Fees: May include o $5.00 monthly service fee o $100 document preparation o $200-$250 commitment 1
o Title closing and recording fees Product Description Program Approval Expiration Second mortgage loan program to be used in conjunction with: II2 HomeReady 30 Year Fixed with Community Second AA9 30 Year Fannie Fixed with Community Second Subject to Availability approval expires: 12/31/2018 DPA Provider Classification Government Agency Federal State or Local government Minimum Borrower Down Payment $1,000.00 Fannie Mae HomeReady: Refer to product summary Minimum borrower contribution of 3% on purchase of 2-4 units If first mortgage guidelines are higher than the Agency s for borrower s minimum investment, the first mortgage guidelines prevail. First Mortgage Maximum LTV Purchase- Refer to product summary Maximum CLTV Refer to product summary Second Mortgage Purpose Down payment Closing costs (including prepaid) Minimum Second Mortgage Loan Amount Maximum Second Mortgage Loan Amount Second Mortgage Loan Interest Rate Second Mortgage Loan Repayment Terms $ Not stated Statewide: $3500.00 to $10,000.00. Denver and Jeffco Properties: (6% of the purchase price, up to $10,000 (Denver) or $20,000 (Jeffco) whichever is less Statewide: Interest Rate: 5%; Term: 360 months-30 years (maximum) 2% - 6.00% depending on loan amount and repayment terms. APR: Range 2% 7.25% depending on loan amount and repayment terms. One of two options: Payments start immediately at 2% rate, 30 year amortized loan term Five (5) year Deferral: Payment starts 61 st month, 6% rate, 25 year amortized loan term. Terms: 12.5 years 30 years 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 Is subject to a refinancing 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 2
Loan may be pre-paid in full at anytime Loan is NOT assumable Types of Financing Purchase Money Mortgage Occupancy Owner occupied primary residence only Geographic Location operties must be located within the limits of: Colorado. Arvada and estminster are excluded from the Jefferson County Program. Eligible Properties Acquisition Limit: None stated Properties shall be sited on a permanent foundation, with a permanent utility hook-up, and may include: 1-unit Principal residence, including eligible condos, PUDS and Manufactured Housing (Manufactured Housing DU only, max 95% LTV/CLTV. 2-4 unit Principal residence only ALL repairs called for by inspections MUST be completed prior to closing. Properties built prior to 1978 require a visual Lead Based Paint Inspection. Refer to product summary for additional property eligibility requirements Underwriting Lender to pre-approve all borrowers for first mortgage product. AA9 30 Year Fannie Fixed with Community Second Standard Fannie Mae HomeReady except as described herein. Ratios; 35%/45% All collection and judgements must be cleared or have established payment plans. Please submit a letter of explanation about any negative items. No Credit: Submit 3 sources of alternative credit with initial application. Payment Shock: New housing costs should not exceed150% of current rental costs, if this is NOT true, please submit a budget for all new housing costs and a letter of explanation. Job/Income stability: There is no minimum amount of time, but overall income stability will be considered when the file is underwritten. This DPA Fact Sheet form and any attachments MUST be placed in each loan file at the time of submission. 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. Non-resident co-borrowers or co-signers are not permitted. All household residents must provide proof of lawful presence in the United States. Assets Borrower must have required amount of their own funds in the transaction for type of first mortgage financing selected. Savings: There is no minimum or maximum amount of reserves required. Savings can be an excellent compensating factor. Income Limits Earn less than 80% AMI (Area Median Income). This is an income 3
MI Coverage Special Provisions DPA Processing Fee limit established annually by HUD, based on Family Size and geographic area 100% of Area Median Income (AMI) in high minority census tracts or designated disaster areas.(city of Arvada) Borrowers combined annual income per household must be at or below 80% of area median income adjusted by family size in all other census tracts: http://www.huduser.org/portal/datasets/il/il14/index.html See Page 5 for Income Limits Income eligibility includes ALL members of the household. If first mortgage guidelines are more restrictive than the Agency s for borrower s income limit, the first mortgage guidelines prevail. Refer to the HomeReady Product Matrix for complete Income Limits for High Cost Areas. Refer to product summary for MI rates and approved companies Mortgage insurance is required for all loans over 80% LTV Homeownership Counseling Refer to product summary for specific product requirements Borrowers must successfully complete 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 pre-purchase education/counseling from a HUD approved counseling agency dated within the previous six months before loan application date and before April 1, 2016. Borrower s Certification of Completion of Homeownership Counseling is required. CHFA approved First Time Homebuyer Class. Borrowers must attend a SITE BASED First time homebuyer class prior to application. (Call for EHOME Exceptions) Borrowers must participate in Borrower counseling prior to closing. This is SEPARATE and DIFFERENT from the First Time Homebuyer class and provided only by CHAC after loan commitment, prior to closing. Landlord education required for 2-4 units only. This education is not available through Framework. 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 Ditech must approve subordinate financing programs and mortgage documents, and any subsequent changes in advance. Maximum 105% CLTV 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. Income limits imposed by the Community Seconds provider apply No reporting requirements permitted. 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 Note and Mortgage (at closing) Note: 4
This Fact Sheet form and any attachments MUST be placed in each loan file at the time of submission. 5