DC Open Doors Lender Training - PowerPoint Presentation

1. DC Open DoorsLender Training

2. Welcome to DC Open DoorsProgram OverviewProgram HighlightsLoan ProductsDown Payment AssistanceProgram FactsProgram FAQsProgram ProcessReservation ProcessData TransmissionPre-closing ReviewReservation ExtensionsDirect Funding, ClosingPost-ClosingProcess FAQsContact InformationLender Training

3. Program HighlightsDC Open Doors allows participating lenders to offer affordable mortgages and down payment assistance to eligible homebuyers.DC Open Doors has Continuous Funding for its mortgages AND down payment assistance!Interest rates are posted daily at www.dcopendoors.com, Facebook (DC Open Doors) and Twitter (@DCOpenDoors). U.S. Bank, National Association is the Master Servicer.All participating lenders must:Be approved by both U.S. Bank and DCHFAParticipate in all mandatory trainingsLenders are encouraged to originate a minimum of $1 Million annually.Lender Training

4. Program HighlightsFHA and Conventional Loan TypesOpen Doors can provide 1st trust alone or 1st trust and DPALOpen to First Time and Repeat Homebuyers Open to all D.C. Neighborhoods and Wards Maximum Borrower Income of $145,560NO Household income test$484,350 Maximum 1st Trust Loan Amount No Sales Price LimitationsNo Asset TestU.S. Bank Overlays & Investor Guidelines ApplyLender TrainingMore Inclusive Affordable Homeownership!

5. DC Open Doors Loan ProductsLender TrainingGovernmentConventional

6. DC Open DoorsDown Payment AssistanceLender Training

7. DC Open Doors- Program FactsInterest Rates Not Credit Score BasedRate Offered at Par (No Lender Credit, Points, etc.) 50% Maximum Debt to Income Ratio on conventional loans 45% DTI FHA loans640 Minimum Credit ScoreThe maximum loan amount of $484,350 can only be exceeded by the UFMIP on an FHA loanLender Training

8. DC Open Doors- Program FAQsWhy use HFA without DPAL?The MI rates are lower on DC Open Doors than on standard conventional loans (HomeReady/Home Advantage)18% @ 97% LTV 16%@ 95% LTV 12% @ 90% LTV 6%@ 85%LTVIs there a maximum sales price for the program?No, there is not a maximum sales price amount. However, the loan amount may not exceed $484,350 plus FHA MIP.What income must be used to determine qualifications under the maximum income requirement?All borrower income must be documented/verified, regardless of whether or not being used for qualifying purposes –however, NOT based upon household Maximum Income for all borrowers is $145,560Do you allow a non-occupant co-borrower? 4 unit Purchase?Yes, following Investor/Insurer/Servicer guidelines. Income is counted for eligibilityIs there a maximum origination charge the lender is permitted to collect?No, however it must be reasonable and customaryLender Training

9. DC Open Doors- Program FAQsCan the borrower buy down the interest rate?No, all of our loans are quoted with 0 points only (no lender credits, either)If I have more than one purchaser, but only one is going to be on the loan, can the other person be on the deed?Yes, non-borrowers are permitted to be on the title.Can the DC Open Doors programs be used for a refinance?Yes, the HFA Preferred is also a refinance program up to 97% LTV/CLTVCan my borrower own any other property at the time of closing on a DC Open Doors loan?No, the borrower may not have ownership interest in any other property at the time of closing.What types of non-resident aliens are allowed under the program?We follow FHA/FNMA/FHLMC/U.S. Bank guidelinesLender Training

10. Lender TrainingDC Open DoorsProgram Process

11. DC Open Doors Program ProcessNo separate application for DC Open Doors – the borrowers meet with Lender and start loan applicationThe only allowable fee on DPAL is the cost to record the DOT – NO TITLE INSURANCE ON DPALLender reserves loan with DC Open Doors (via eHousingPlus website) at time of rate lock (must have ratified contract)Reservation (Rate Lock) starts 70 Day reservation period (delivery & purchase) – recommended quote to borrower is 30 daysLender Training

12. DC Open Doors Program ProcessDC Open Doors does pre-closing review for all loansDC Open Doors coordinates closing with LenderPost-closing – eHousingPlus review & U.S. Bank reviewDC Open Doors – always here to answer questions!Lender Training

13. DC Open Doors Reservation ProcessReservation = Official Program Rate Lock DateReservation date starts 70 Day period from lock to U.S. Bank purchase post-closingRecommended quote of 30 days to borrower to allow sufficient time for post-closingReserve Loan Using Online Reservation System (eHousingPlus): Input as much borrower/loan information into the reservation system as possible to reduce Pre-Closing Review processing timeInformation must match what is submitted to DCHFAPurchase Contracts MUST be Fully Ratified Prior to Reserving a Loan with DCHFA Lender Training

14. DC Open Doors Data TransmissionDCHFA uses a secure FTP portal for receiving and sending all data, documents, etc. FTP portal supports PDF, Word, Excel, etc.; Lenders are responsible for transmitting all document submissions via FTP portal; Documents are uploaded to DCHFA via secure FTP portal, with specific file naming: Last Name, First Name – Submission or Document TitleDCHFA will transmit DPAL closing documents (commitment letters, loan documents, settlement instructions, etc.) via FTP portal;DPAL docs are NOT sent to lender via eHousingPlus – the FTP is a separate website;Each Lender will be provided with login credentialsFTP link: https://sftp.dchfa.orgLender Training

15. DC Open Doors Data TransmissionLenders must designate a system administrator to manage access to FTP portalDCHFA will provide each individual lender with one set of log-in credentials for access. Credentials can be used by multiple parties (processors, underwriters, etc.)Lender Training

16. DC Open Doors Pre-Closing ReviewDCHFA reviews all loans for compliance and provides a “Clear to Close” Notice. DCHFA is reviewing for the following:Loan Application Form 1003 for accuracyMaximum Borrower Income of $140,640Proof of Income (*see checklist)Ratified Purchase Contract Homebuyer Education (If Applicable)DPAL (If Applicable)DPA Loan Funding Request form & Wiring InstructionsNeed 3 business days to process DPAL funding *Always reference the Review Checklist to ensure your package is complete. Lender Training

17. DC Open Doors Pre-Closing ReviewFiles reviewed on “first come, first served” basis;We will receive an email alert when a loan file has been uploaded by a lender. Files will be logged upon receipt; Files missing documentation will be taken out of the review queue and placed in pending queue until the files are complete; DCHFA commits to a timely pre-closing review time from receipt of a completed package;File Approved – DC Open Doors Sends ‘Clear to Close’ Notice Lender Training

18. DC Open Doors Reservation ExtensionsLender Training

19. DC Open Doors Direct Funding & Closing- DPAL OnlyDCHFA prepares DPAL closing documents and uploads to FTP for lender to accessLender downloads DPAL closing documents and sends to settlement company with 1st trust docsDCHFA funds the DPAL directly to settlement companyDCHFA NEEDS 3 BUSINESS DAYS TO PROCESS FUNDING. PLEASE ENSURE DCHFA HAS SUFFICIENT TIME TO FUND THE DPALIf a first trust loan contains deficiencies, or for any other reason cannot be purchased by U.S. Bank, the lender is responsible for reimbursing DCHFA for the DPALDCHFA will send a letter to the lender requesting reimbursement including wiring instructions and timingFailure to reimburse DCHFA for a DPAL closed with a first trust loan that is not purchased by U.S. Bank could result in lender suspension. Lender Training

20. DC Open Doors Post-ClosingLender TrainingThree Parallel Processes Start Immediately After Closing:DC Open Doors & DPALCopies of Executed Note, Closing Disclosure & DOT for 1st Trust LoanOriginal Borrower Recertification, Note & Recorded DOT mailed to DCHFAeHousingPlus Compliance ReviewPackage is sent to eHP in Weston, FLeHP will follow DCHFA’s Post-Closing Review File Checklist for review: Copy of checklist – available on eHousingPlusCopy of the Borrower Recertification Final executed 1003Copy of executed Closing DisclosureCertified true copy of Executed DOT and Note for all financingeHousingPlus compliance approval is required before U.S. Bank will purchase loanU.S. Bank Purchase ReviewPackage is sent to U.S. Bank via docVelocity ImagingStandard purchase file – please refer to US Bank for complete document listPlease ensure package is completeAllow time for review and purchase – reservation timeline management is criticaleHousingPlus Approval & U.S. Bank Approval RequiredLoan purchased!

21. DC Open Doors Process SummaryPre-Closing through ClosingLender Training

22. DC Open Doors Process SummaryPost ClosingLender Training

23. DC Open Doors Process FAQs & TipsLender TrainingSubordinate financing listed as Source of Down Payment/Closing Costs on 1003 All lender and DCHFA numbers required to reflect the same amountsAll files MUST have the MCC-001 Document whether or not there is an MCC with the loan or not!!!!!!!!!!!!After an approval is issued, no changes to DU, 1003, U.S. Bank approvals, etc. can be made. If so, it must be reviewed again with revisions. LENDERS DO NOT CANCEL DC OPEN DOORS LOANS IN SYSTEMPlease email us at SingleFamilyPrograms@dchfa.org to cancel a loan

24. DC Open Doors Process FAQs & TipsLender TrainingLender should submit loan files as close to the loan settlement date as possible, but not less than 5 business days before;Please coordinate with your Secondary/Loan Ops Department about locks (timing and how-to)No specific MI company is required on DC Open Doors’ loans Refer to U.S. Bank for a list of acceptable MI ProvidersHFA Preferred (FNMA) loans must be run through DU and coded as “HFA Preferred” Must receive DU “Approve/Eligible” Findings HFA Advantage (FHLMC) loans must be run through LP and coded as “HFA”. Must receive Accept findings.

25. DC Open Doors Contact InformationLender Training

26. DC Open Doors Additional ContactsLender Training

27. Common ConditionsLender TrainingCorrect Fees!!!!! on the LE & CD.Property address mismatch on Flood Cert, Note and other Loan Documents. Example: Unit #XXX, #XXX, Unit XXX – ALL MUST MATCH!!!Demand Feature not checked on the Closing Disclosure.List of Service Providers not provided.Source of Funds on 1003 must reflect Subordinate Financing/DC Open Doors (or Secured Borrowed Funds) for loans with DPA.AU Findings must reflect program type (HFA Preferred or HFA Advantage) so that MI requirements are correct and findings are correct.NO title insurance/fees other than cost to record! Let your title company know up front.1st Trust Closing Disclosure must reflect TOTAL DPAL amount and the cost to record needs to be reflected as paid by DCHFA

28. Lender Training

29. Lender Training

30. Lender Training

31. Instructions for after the Live Webinar Program TrainingLender Training Step #1 Attend the eHousingPlus Lender Portal System Software Training This training is only required for anyone who will reserve funds, print forms, view the program pipeline and clear exceptions. System software training is conducted on a weekly basis via Live Webinar. Please click on this link to register : https://attendee.gotowebinar.com/rt/718343202475270145  Step #2 After System Software Training - Apply for user credentials. Loan Officers who will NOT reserve funds in the eHousingPlus Lender Portal but DO need their name to appear in drop down to receive credit for originating a DCHFA DC Open Doors loan, click on this link: http://www.ehousingplus.com/user-credentials/loan-officers-wout-system-access/Loan officers, processors, closers, shippers and post closers who need access to the lender portal and do NOT currently have an eHousingPlus Lender Portal username and password, please click this link: https://services.ehousingplus.com Look for the Sign-In button, directly below click on the link “Register for User ID”.Complete the required information and submit the form. Loan officers, processors, closers, shippers and post closers who need access to the lender portal and DO currently have an eHousingPlus Lender Portal username and password, please click this link: http://www.ehousingplus.com/user-credentials/existing-users-add-programs/ Use the FlexCode: AEROMANCY (code will expire in 5 business days)

32. DC’s MCCsLender TrainingLETS START WITH THE BASICSThe Mortgage Credit Certificate (“MCC”) is NOT a down payment assistance program or a mortgage loanThe MCC program provides a federal income tax credit similar to the federal first-time homebuyer tax creditThe DC MCC is a federal income tax credit that may 1) Reduce the amount of federal income tax the borrower is required to pay 2) Provide more available income to pay the monthly mortgage payment The Credit Amount for the DC MCC is 20% and there is NO annual cap on the amount!

33. DC’s MCCs- What are the benefits?Lender TrainingEXAMPLE 1$280,000 Loan Amount4.50% Interest Rate1st Year’s Interest = $12,507X 20% Tax Credit = $2,501 Benefit$46,150.02$208 Monthly BenefitBorrower is still able to take a deduction for the remaining 80% of interest paid for that year.Don’t wait for tax time to reap the benefits! Adjust dependents on your W-4 Form so that you increase your net take home pay!Example is for illustrative purposes only. Please consult a Tax Advisor.

34. DC’s MCCs- What are the benefits?Lender TrainingEXAMPLE 2$400,000 Loan Amount4.50% Interest Rate1st Year’s Interest = $17,868X 20% Tax Credit = $3,573 Benefit$65,928.60$297 Monthly BenefitBorrower is still able to take a deduction for the remaining 80% of interest paid for that year.Don’t wait for tax time to reap the benefits! Adjust dependents on your W-4 Form so that you increase your net take home pay!Example is for illustrative purposes only. Please consult a Tax Advisor.

35. DC’s MCCs- Loan OptionsLender TrainingOption #1- DC’s MCC may be used as a STAND ALONE product with a Conventional, VA or FHA 30 Year Fixed Rate Mortgage or an FHA Adjustable Rate MortgageMay not be used with bond loans OROption #2- DC’s MCC may be combined with a DC Open Doors Loan. If this option is utilized, the lender must follow the stricter of the program requirements

36. DC’s MCCs- RequirementsLender TrainingGuidelines differ from the DC Open Doors Loan Programs:Borrowers must be first time homebuyersMust not have had an ownership interest in a principle residence within the most recent 3 year periodException for residences purchased in a Targeted Area (see chart)Exception for Veteran’s utilizing a one-time exceptionMaximum income is based upon HOUSEHOLD incomeHousehold income is the income of all members of the household, even if not taking an ownership interest in the home (excluding full-time student dependents)Household Income Limits are based upon the household sizeAcquisition costs (sales price) may not exceed Program LimitsSingle Family residences, only (no 2-4 unit properties)Can be provided in conjunction with a DC Open Doors loan program or without a DC Open Doors loan program

37. DC’s MCCs- CostsLender TrainingDCHFA charges $450 as an MCC Issuance Fee when done in conjunction with a DC Open Doors Loan Program or VA LoanDCHFA charges $1,500 as an MCC Issuance Fee when the MCC is issued without a DC Open Doors Loan ProgramThe lender is permitted to charge an additional $450 MCC Processing FeeDO NOT FORGET THE EHOUSING PLUS FEE!!!!! ($275 for a stand alone MCC. $450 for an MCC with Open Doors)

38. DC’s MCCsLender TrainingNon-targeted Area Family of 2 or lessNon-targeted Area Family of 3 or moreTargeted Area Family of 2 or lessTargeted Area Family of 3 or more$140,640$164,080$140,640$164,080Single-Family UnitNon-targeted$625,764Targeted$764,823Income Limit:Sales Price Limits

39. DC’s MCCsLender TrainingDistrict of Columbia, Census Tract 34District of Columbia, Census Tract 47.01District of Columbia, Census Tract 47.02District of Columbia, Census Tract 64District of Columbia, Census Tract 74.01District of Columbia, Census Tract 74.03District of Columbia, Census Tract 74.04District of Columbia, Census Tract 74.06District of Columbia, Census Tract 74.07District of Columbia, Census Tract 74.08District of Columbia, Census Tract 75.02District of Columbia, Census Tract 75.03District of Columbia, Census Tract 75.04District of Columbia, Census Tract 76.05District of Columbia, Census Tract 77.08District of Columbia, Census Tract 78.08District of Columbia, Census Tract 78.09District of Columbia, Census Tract 88.04District of Columbia, Census Tract 89.03District of Columbia, Census Tract 89.04District of Columbia, Census Tract 92.04District of Columbia, Census Tract 95.01District of Columbia, Census Tract 96.01District of Columbia, Census Tract 96.02District of Columbia, Census Tract 97District of Columbia, Census Tract 98.02District of Columbia, Census Tract 98.03District of Columbia, Census Tract 98.10District of Columbia, Census Tract 98.11District of Columbia, Census Tract 99.04District of Columbia, Census Tract 99.06District of Columbia, Census Tract 99.07District of Columbia, Census Tract 104District of Columbia, Census Tract 109Target Areas in DC

40. Community Based OrganizationsLender TrainingTo apply for assistance or receive more information, please contact one of the following CBOs:FACILITY NAMEADDRESSPHONE NUMBERHousing Counseling Services, Inc.2410 – 17th Street, NWWashington, DC 20009(202) 667-7006Latino Economic Development Corporation641 S Street, NWWashington, DC 20001(202) 588-5102Lydia’s House, Inc.4101 Martin Luther King Jr. Ave., SWWashington, DC 20032(202) 373-1050University Legal Services, Inc.1800 Martin Luther King Jr. Ave., SEWashington, DC 20020(202) 889-2196University Legal Services, Inc.3939 Benning Road, NEWashington, DC 20019(202) 396-1200University Legal Services, Inc.220 “I” Street, NE # 130Washington, DC 20002(202) 547-4747

41. Questions?Lender Training