Dial in number 559 5461000 Participant Access Code 297334 Homeownership Staff Erik Nore Director of Homeownership Anita Racicot Homeownership Specialist Cynthia Marquez Compliance Specialist ID: 660244
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Slide1
Welcome
Compliance Processing and File Delivery
Dial in number: (559) 546-1000
Participant Access Code: 297334#Slide2
Homeownership Staff
Erik Nore, Director of Homeownership
Anita Racicot, Homeownership Specialist
Cynthia Marquez, Compliance SpecialistShawn Rasmussen, Lending SpecialistLisa Romero, Lending SpecialistBarbara Tashkandy, Lending CoordinatorTeri Baca, Homeownership RepresentativeEunice Duran, Homeownership Representative
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Reservation Process
Reservation of Funds – Household Size
Even though the income may not be counted, loans must be reserved showing all household members so that the correct household size is referenced on the Mortgage Purchase/Funding Agreements
3
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Reservation Process
All Programs
Availability of On-Line Reservation System
The MFA On-Line Reservation System is available from 9:00 am – 5:00 pm Monday – Friday (excluding federal or bank holidays) MSTOn-line reservation system
will not accept reservations before or after the available time.
Be sure to
submit
and complete
the reservation request prior to 5:00 pm
4
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Reservation Process
All Programs
Reservation period
Loan must be purchased by Master Servicer no later than 60 days from the loan reservation date
First mortgage loans that are not purchased within the applicable timeframe must be extended or cancelled by the Lender.
No exceptions, for any reason will be made to the reservation policies
.
5
12/09/2014Slide6
Reservation Process
First Mortgage Loan Products
Changes between loan programs are
not permitted.A loan reservation is for a specific loan program and is attached to the borrower
A loan reservation cannot be transferred between programs (i.e. $aver to Zero, Zero to Plus, Plus to HERO, etc.)
6
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Reservation Process
All Programs
Extension Fees
Lender can request either a 15 day or a 30 day extension for the loan delivery, for a fee:15 day extension (0.1875% of the loan amount)
30 day extension (0.3750% of the loan amount)
Only
ONE
extension is allowed
Extension fee applies to first mortgage only
7
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Reservation Process
All Programs
Extension Fees
In the event that a loan is not purchased by the Master Servicer within 60 days of loan reservation, a 30 day extension will automatically be applied, unless the Lender requests a 15 day extension from MFA prior to the 60 day loan reservation expiration date.
The extension fee may be charged to the borrower
8
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9
Reservation Process
All Programs
Extension Fees
If loan is
not
purchased within 75
(15 day extension)
or 90
(30 day extension)
days of the date of reservation
(including extension)
, loan can still be delivered, but will be purchased from Mortgage Lender on a
worst case, Mark-to-Market basis
that is determined at the time of purchase.Slide10
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10
Reservation Process
Mortgage$aver Programs
Targeted Areas
When reserving property in Targeted Area (Census Tract) the lender is
required
to contact MFA to obtain the lowest rate in the last 12 months from the reservations date and to receive Targeted Area acquisition cost and income limits.
Targeted Area Maps can be accessed at
housingnm.org/targeted-area-census-tractsSlide11
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11
Reservation Process
Mortgage$aver Programs
Section 184 Indian Housing Loan
When reserving property using a Section 184 loan on Federally Designated Tribal Land or Fee Simple Land the lender is
required
to contact MFA to receive Targeted Area acquisition cost and income limits.
If property is on Fee Simple Land, the borrower will receive the current applicable program interest rate.
If property is on Federally Designated Tribal Land
ONLY
, the lender is required to contact MFA to obtain the rate (0.50% below the applicable program interest rate).Slide12
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12
MFA Guidelines
Definition of “Household Income”
Income that is considered “Household Income” includes:
All forms of income from the mortgagor (Borrower) or co-mortgagor (Co-Borrower) will be considered as Household Income for the purposes of qualifying for the single-family loan program.
If the Borrower is taking title as sole and separate, all forms of income from the non-purchasing
spouse
Slide13
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13
MFA Guidelines
Definition of “Household Income”
Income that is
not
considered “Household Income” includes:
All forms of income earned by a family member or household member that do not have ownership interest in the property and are not liable for the mortgage debt.Slide14
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14
MFA Guidelines
Definition of “Household Income”
Only the borrower or co-borrower’s income will be included in the income calculation for the Compliance Review
If the borrower is married, the income of the spouse
must
be included in the income calculation for Compliance Review
Income from any other person living in the home (family member, significant other, etc.) will not be included in the income calculation for Compliance ReviewSlide15
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15
MFA Guidelines
Definition of “Household Income”
However, the definition of “Household Income” remains “all household members age 18 or over” for the
Payment$aver and Helping Hand Programs
because of the Federal HOME Guidelines.Slide16
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16
MFA Guidelines
Definition of “Ownership Interest” for the 3-year Requirement
For purposes of documenting the 3-year requirement (i.e. no ownership interest in a principle residence at any time during the 3 year period prior to the date the mortgage is executed)Slide17
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17
MFA Guidelines
Definition of “Ownership Interest” for the 3-year Requirement
“Ownership Interest” is defined as including the following:
A fee simple interest
A joint tenancy, a tenancy in common or tenancy by the entirety
The interest of a tenant-shareholder in a cooperativeSlide18
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18
MFA Guidelines
Definition of “Ownership Interest” for the 3-year Requirement
“Ownership Interest” is defined as including the following:
A life estate
A land contract (i.e. a contract pursuant to which possession and the benefits/burdens of ownership are transferred, although legal title is not transferred until some later time) and
An interest held in trust for the mortgagor, whether or not it was created by the mortgagorSlide19
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19
MFA Guidelines
Definition of “Ownership Interest” for the 3-year Requirement
Prior “Ownership Interest” by the spouse of the borrower is considered prior “Ownership Interest” of the borrower
, regardless of when the borrower and spouse were marriedSlide20
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20
MFA Guidelines
Electronic/Digital Signature Policy
MFA now accepts electronic/digital signatures on all documents
except for the following:
Income disclosure letter
Any Borrower explanation letter
Lender certification/letter of explanation
YTD Profit and Loss for self-employed borrowers
Rental verification letters from Landlords
Original Note
Original Mortgage
Signature AffidavitSlide21
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21
MFA Guidelines
Tax Returns (For
ALL
Borrowers on the loan and if applicable Non-Purchasing Spouse)
Three (3) years Tax Returns are
not required
if borrower has at least one creditor with a three year credit history on their credit report
Two (2) years Tax Returns
are
required for all Self-Employed borrowers, only,
unless
they do not have a three year credit history, then three years of Tax Returns are requiredSlide22
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22
MFA Guidelines
Minimum Credit Score of 620
Except for manual underwrite with HFA Preferred Product which has a minimum of 660
If credit report provides 3 credit scores (tri-merge), then the middle credit score must be at least 620 for each borrower
If credit report only provides 2 credit scores, the lowest credit score must be at least 620 for each borrowerSlide23
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23
MFA Guidelines
Minimum Credit Score of 620/660
If the credit report only provides 1 credit score that score must be at least a 620/660 for each borrower
If either borrower has no credit score, due to insufficient or stale credit, MFA will accept a manually underwritten loan. In addition, the loan must be underwritten to applicable secondary market guidelinesSlide24
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24
MFA Guidelines
Minimum Credit Score of 620/660
When reserving a borrower without a credit score, the system will not allow you to move to the next screen without entering a score. A 620 score must be entered to get to the next page. After the reservation is complete you
must
call MFA so that the score can be changed and notes added to the reservation screen.Slide25
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25
MFA Guidelines
Minimum borrower cash contribution
MFA requires a minimum borrower cash contribution of $500.00, regardless of program type. HERO Program requires a $1,000.00 contribution.
Funds must be
from
the borrower and
cannot
be derived from any type of gift, grant, pro-rated taxes or down payment.Slide26
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26
MFA Guidelines
Minimum borrower cash contribution
MFA requires the lender to provide
proof
of borrower’s funds on the Final First Mortgage Application in Section VII
and on
the
Final HUD
1
If the borrower contributes more than $500 to the transaction (
i.e.
Earnest Money, POC Appraisal Fee) the borrower can get those funds back at closingSlide27
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27
MFA Guidelines
Use of Mortgage Booster Funds
May
only
be used for minimum down payment and allowable closing costs
MFA will allow a principal reduction of up to $100 if the final Mortgage Booster loan is too high. The principal reduction
must
be applied to the
first
mortgageSlide28
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28
MFA Guidelines
Reasons for Sole and Separate
One Spouse of a married couple is not able to enter into a contract
(i.e. not of legal age), the spouse that is able to enter into a contract will be allowed to purchase the home as their Sole and Separate property.
Proof that spouse is not of legal age must be provided
** All household income needs to be counted toward income eligibility **Slide29
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29
MFA Guidelines
Reasons for Sole and Separate
One spouse of a married
couple has insufficient credit history (no credit score)
, which does not allow for the married couple to qualify for the mortgage jointly, the spouse with the credit score will be allowed to purchase the home as their Sole and Separate property.
Proof of no credit history must be provided
** All household income needs to be counted toward income eligibility **Slide30
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30
MFA Guidelines
Reasons for Sole and Separate
One spouse of a married couple does have a Social Security number and
the other spouse does not have a Social Security number or has an Individual Tax Identification Number (ITIN)
, the spouse with the Social Security number will be allowed to purchase the home as their Sole and Separate property.
Proof of no Social Security number or proof of ITIN must be provided
** All household income needs to be counted toward income eligibility **Slide31
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31
MFA Guidelines
Reasons for Sole and Separate
One spouse of a married couple has a poor credit history (a credit score of less than 620), which does not allow for the married couple to qualify for the mortgage jointly,
the spouse with the credit score above 620 will be allowed to purchase the home as their Sole and Separate property, with the following restrictions;
**All household income needs to be counted toward income eligibility **Slide32
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32
MFA Guidelines
Reasons for Sole and Separate
A maximum debt-to-income (“DTI”) of 45% for the purchasing spouse,
regardless of the automated underwriting system (“AUS”) approval criteria.
Both spouses need to provide proof that they both qualify for any and all First Time Homebuyer Requirements
that might apply, including total household Income and prior homeownership.
(First Time Homebuyer Requirements do not apply to the HERO Program)
Proof of poor credit history must be provided
**All household income needs to be counted toward income eligibility **Slide33
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33
MFA Guidelines
Mandatory Homebuyer Counseling
All MFA Borrowers
are required to take pre-purchase homebuyer counseling regardless of program type.
HERO Program only
if the borrower is a first-time homebuyer
Counseling Certificates
cannot be older than
One (1) YearSlide34
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34
MFA Guidelines
Mandatory Homebuyer Counseling
The pre-purchase homebuyer counseling will be either:
Face to Face pre-purchase housing counseling provided in either a classroom or one-on-one setting by an MFA approved housing counseling agency
Face to Face
counseling
must
be used for the Payment$aver and Helping Hand Programs (the on-line counseling is
not
acceptable for these two programs
Borrowers preferring to go to a counselor instead of taking the
eHomeAmerica
class on-line is also acceptable for the Mortgage$aver, HERO and Mortgage Booster Programs Slide35
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35
MFA Guidelines
Mandatory Homebuyer Counseling
Pre-purchase homebuyer counseling
eHomeAmerica
on-line Housing counseling
Borrowers may take the course married, unmarried or jointly for one fee of $45 paid at the time of registration. When registering type
both names
so that the certificate of completion will print correctly.
The $45 fee can be reimbursed at closing and included with the closing costs included in the second mortgage loanSlide36
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36
MFA Guidelines
Mandatory Homebuyer Counseling
Pre-purchase homebuyer counseling
Link to the
eHomeAmerica
site is on the MFA Home Page
Be sure to refer
all
borrowers to the MFA Home Page to ensure MFA is chosen as their administrator.Slide37
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37
HFA Preferred Loan Program
Special Housing Finance Agency Conventional Loan Product
Definition of “Ownership Interest” for the
HFA Preferred Loan Program
An ownership interest is defined as a borrower whose name appears on the deed to any residential property. Residential properties include single family detached, townhomes, condos, manufactured homes, investment properties and vacation homes
.
MFA
requires the
borrower to be a first-time homebuyer.Slide38
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38
HFA Preferred Loan Program
Special Housing Finance Agency Conventional Loan Product
Eligible Occupancy for the
HFA Preferred Loan Program
The property must be owner-occupied and the borrower may not have an ownership interest in any other residential dwelling at the time of loan closing.Slide39
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39
HFA Preferred Loan Program
Special Housing Finance Agency Conventional Loan Product
Term Sheet
Posted on the MFA websiteSlide40
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40
Compliance Guidelines
Questions
?Slide41
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41
MFA Guidelines
HERO Program
Eligible Borrower(s
)
The
borrower does not have to be a first-time homebuyer (FTHB) under the HERO
Program
Homebuyer
Counseling
Required for first-time Homebuyers (FTHB) onlySlide42
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42
MFA Guidelines
HERO Program
Owning Property
Old
Definition:
The
borrower may not own any other Real Property at the time of closing
New Definition:
The HERO program may only be used to purchase a primary residence and the borrower must occupy the property within 60 days of
closing
Documentation submitted for Compliance Approval regarding ownership of property
Old Definition:
Verification of no other real property is owned by borrower at loan closing
New Definition:
Verification that the property financed will be the borrower’s primary residenceSlide43
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43
MFA Guidelines
HERO Program
Eligible Program Type:
FHA
ONLY
Eligible Property Type:
Must be owner-occupied single family residenceSlide44
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44
Compliance Guidelines
Questions
?Slide45
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45
Mortgage Booster
Use with Mortgage$aver
OR
Mortgage$aver Zero with FHA,
Conv
, RHS, or HUD Section 184
(not allowed with VA)
Maximum loan amount of $8,000
(must follow loan guidelines for CLTV)
Use of funds are limited to cover the minimum down payment and allowable closing costs
30 year amortization, 6.00%Slide46
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46
Second Mortgage RESPA
Lender must provide a Truth in Lending (TIL) Statement and Good Faith Estimate (GFE) to the borrower for the
Mortgage Booster Program per RESPA Guidelines
Lender must re-disclose for MFA if the loan amount increases
NOTE:
The Payment$aver and Helping Hand programs are exempt because they are 0.00% non amortizing loansSlide47
Second Mortgage Allowable Fees
47
12/09/2014
Lender may charge an Origination Fee for Mortgage Booster only of:
$100.00
Recording Fee (DPA Mortgages)
Actual Cost
Daily Interest Charges
Actual CostSlide48
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48
Compliance Guidelines
Questions
?Slide49
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49
Compliance Guidelines
Completing the FHA Loan Underwriting and Transmittal Summary
when there is a second mortgage
MFA’s EIN# must be completed –
85-0252748
Check the Government box
Enter 2
nd
mortgage loan amount
2
nd
mortgage is not a gift
If using CHUMS ID # as ZFHA make sure DU Findings are attached
If not using ZFHA then underwriter must signSlide50
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50
Compliance Guidelines
Completing the FHA Loan Underwriting and Transmittal Summary
when there is premium pricing (Mortgage$aver Plus or HERO)
MFA’s EIN# must be completed in the Gift section –
85-0252748
Check the Government box
Enter total “Gift” amount including the cents
If using CHUMS ID # as ZFHA make sure DU Findings are attached
If not using ZFHA then underwriter must signSlide51
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51
Compliance Guidelines
Income Calculation
ALL
Household income is considered
Example: John Doe is purchasing a home and
is
married. John Doe is taking title as his Sole & Separate property because his wife has bad credit. The wife’s income
must
be counted toward household income according to MFA Guidelines.Slide52
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52
Compliance Guidelines
Income Calculation
Common mistake with the current pay stub
The date that
MUST
be within 30 days of submitting the package is the pay period
paid through
date
NOT
the check date or the pay date.Slide53
Compliance Guidelines
Verification of Employment Income
53
12/09/2014
Monthly gross
income includes, but is not limited to:
Monthly gross pay
(wages, salary, tips, etc.)
Interest and dividends
Overtime
SSI
Part-time
Disability Income
Bonuses
Child Support
Business Income
Alimony
VA Compensation
Rental Income
Other IncomeSlide54
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54
Compliance Guidelines
Compliance File Documentation Requirements
MFA has revised and simplified the documentation requirements
One year, most recent Verification of Rent (VOR)
One month most recent bank statement from
each
bank account (No VODs). However, VODs or
two
months of bank statements are required for the Payment$aver and Helping Hand programs.
NEW Income Disclosure Letter
to be signed by all borrowers at application. Slide55
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55
Compliance Guidelines
Loan Break Down Form
Preliminary
Loan Break Down Form to be completed at the time of submitting the Compliance Package (This is an
estimate
of the
down
payment and closing costs)Slide56
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56
Payment$aver & Helping Hand
Compliance Guidelines
Borrower is not allowed to have more than 6 months income in the bank as cash assets at the time of closing
If liquid assets exceed $5,000 an asset test is required to be performed per the following example:
Borrower has $20,000 in liquid assets
$20,000
× 2% = $400.00
$400.00 ÷ 12 (months) = 33.33
$33.33 will be added to borrower’s monthly incomeSlide57
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57
Payment$aver & Helping Hand
Compliance Guidelines
Face to Face
Homebuyer Counseling is required by MFA Approved Housing Counseling Agency
Non-Profit Agency providing the counseling will provide the lender with the following completed forms:
Completion Certificate
Request for ReimbursementSlide58
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58
Payment$aver & Helping Hand
Compliance Guidelines
HQS (Housing Quality Standards) Inspection is required if home was built
prior
to 1978 (no matter what type of loan the first mortgage is)
HQS inspection is required for homes built
after
1978
if
loan type is Conventional (FNMA), VA or Rural Housing.
(Except if home is a new construction or if there is an FHA appraisal)
List of HQS inspectors available from MFA
HQS Inspector will provide
Copy of signed inspection indicating if the property failed or passed
Request for Reimbursement(s) (If the property failed need two separate Reimbursements, 1 for the pass and 1 for the fail)Slide59
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59
Payment$aver & Helping Hand
Compliance Guidelines
Fund Use Form
Preliminary
Fund Use Form to be completed at the time of submitting the Compliance Package (This is an
estimate
of the down payment and closing costs)Slide60
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60
Payment$aver & Helping Hand
Compliance Guidelines
Original completed, signed and dated Certification of Asset Form
Certification of Status Form (Documentation regarding disability status form signed by
doctor
)
(Required for Helping Hand loans only)Slide61
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61
Payment$aver & Helping Hand
Compliance Guidelines
Bank Statements
Copies of full
2 months
bank statements
OR
1 printout from bank showing average balance over the last 2 months
OR
Written statement from bank that borrower does not have a 2 month history but has X months history with them and average balance over X months
OR
If borrower does not have a bank account an original signed and notarized statement will be accepted
Note:
If a printout is received from the bank in must be stamped and signed or initialed by bank personnel.Slide62
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62
Payment$aver/
SmartChoice
With Mortgage$aver or Mortgage$aver Zero
Maximum loan amount is 8% of the sales price
OR
$8,000 which ever is less
SmartChoice
Program
– Borrower must be in possession of a Section 8 Housing Voucher. Loan amount is $15,000, no more and no less
0% non-amortizing loan due on sale, transfer or refinanceSlide63
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63
Payment$aver/
SmartChoice
Borrower may finance down payment, temporary
buydowns
, closing costs
(
excluding
pre-
paids
)
Use of funds are limited to cover the down payment and allowable closing costs. Borrower may finance additional down payment if needed to help in qualifying.
Income limits vary by county and household size
Face to face
Housing Counseling class required by MFA approved Housing Counseling Agency
Available statewide
except
in the City Limits of AlbuquerqueSlide64
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64
Helping Hand
One person in the household meets the ADA definition of disabled
With Mortgage$aver or Mortgage$aver Zero
Loan amount is $8,000,
no more and no less
0% non-amortizing loan due on sale, transfer or refinance
Available statewide
including
in the City Limits of AlbuquerqueSlide65
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65
Helping Hand
Borrower may finance down payment, temporary
buydowns
, closing costs
(
including
pre-
paids
)
Use of funds are limited to cover the down payment and allowable closing costs. Borrower may finance additional down payment if needed to help in qualifying.
Income limits vary by county and household size
Face to face
Housing Counseling class required by MFA approved Housing Counseling Agency
(Suggested agency is ILRC/Housing Division)Slide66
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66
Compliance File Delivery
Checklists redesigned and simplified.
Descriptions of the required items relocated to the Compliance Manual
Checklists available on MFA website
Mortgage$aver and Mortgage$aver Zero
Mortgage$aver Plus
Mortgage$aver and Mortgage$aver Zero with Booster
Mortgage$aver and Mortgage$aver Zero with Payment$aver or Helping Hand
HEROSlide67
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67
Compliance File Delivery
Use most current check list and forms from MFA’s web site
Two hole punch and
Accofasten
package (no
paperclips)
Do not place in file folderSlide68
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68
Compliance Guidelines
Review of Compliance ChecklistSlide69
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69
Compliance File Review
Compliance review time is:
Three (3) business days after receipt of file
Clearing suspense conditions:
Please send all suspense conditions at once – this will speed up the process.
Policy for clearing conditions on loans with less than 5 conditions 24 (business) hour turnaround time. Files with 5 or more conditions 48 (business) hour turnaround time.Slide70
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70
Compliance Guidelines
Questions
?Slide71
12/09/2014
71
DPA Funding
Process
Per HUD’s Directive, MFA must fund DPA directly to the title company
DPA must be Compliance Approved prior to MFA sending the wire to the title companySlide72
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72
DPA Funding
Process
Lender must provide to MFA 24 hours prior to closing
Wire Request Form (Current form from MFA website)
Wire Instructions to the Title Company
Copy of the
FINAL
pre-close HUD 1
Need two (2) HUDs, if borrower obtaining a Mortgage Booster, Payment$aver, Helping Hand along with the MFA First Mortgage LoanSlide73
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73
DPA Funding
Process
Copy of unsigned documents for funds being wired to title company
Note and
Mortgage
E-mail Wire Request and Attachments to funding@housingnm.orgSlide74
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74
DPA Funding
Process
MFA prepares wire requests once a day
Cut off time to receive wire requests/corrections is 10:00 am for wire to be sent out same day
Wires will be sent out by 3:00 pm to arrive at the title company by 5:00 pm same day
If property is a HUD or Bank owned property the funds need to be at title at the time of signing, be sure to request the funds to be sent to title the day before closing.Slide75
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75
DPA Funding
Process
Mortgage$aver Plus DPA
MFA will wire 3.50% of final loan amount (must be entire 3.50%
including
cents)
HERO DPA
MFA will wire 3.00% of final loan amount (must be entire 3.00%
including
cents)Slide76
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76
Compliance Guidelines
Thank you from all of us at the MFA for your participation in our programs