Presentation on theme: "Offered through FIRST MORTGAGE CORPORATION The “SAPPHIRE” Program Training Desktop Underwriter is a registered trademark of Fannie Mae. Loan Prospector."— Presentation transcript:
Offered through FIRST MORTGAGE CORPORATION The “SAPPHIRE” Program Training Desktop Underwriter is a registered trademark of Fannie Mae. Loan Prospector is a registered trademark of Freddie Mac. This presentation is a summary and is not complete. This information is for mortgage professionals only and should not be distributed to or used by consumers or other third-parties. Information is accurate as of the date shown below and is subject to change without notice. 3/17/2015
Agenda Introductions “Sapphire” Program – Program Overview – Eligibility Highlights – Income Calculation – Underwriting Guidelines – Maximum Allowable Fees Process Flow Reservation and Locking
INTRODUCTION State Restrictions Market Challenges & Access Solution
Purpose of the Program Purpose of the Program… o Provide financing to families and individuals who can afford a mortgage loan but do not have the resources for the down payment and closing costs. What we provide… o First Mortgage Corporation offers affordable financing designed to increase homeownership opportunities to low-to-moderate income individuals and families in 1.CALIFORNIA 2.ARIZONA 3.NEVADA 4.TEXAS 5.UTAH
NAME CHANGE Former name: CHF PLATINUM New Name effective June 1, 2014: SAPPHIRE
Program Overview What the Sapphire Program Offers… 1 st Mortgage Loans: o FHA and VA available products o Available throughout the States of CA, AZ, NV, TX, UT o Interest Rate available at the Reservation Portal at https://nhfresportal.nhfloan.org o The published rate is subject to change at any time Grant: o May not exceed 3% or 5% of total 1 st lien loan amount (including upfront MIP or VAFF) o Proceeds can be used for: Down Payment Closing Costs Prepaid Items Earnest money MIP o Not a 2 nd lien; does not need to be calculated into the DTI/CLTV o There must be no cash back to the borrower from the Grant Fund proceeds
ELIGIBILITY GUIDELINES Income Eligibility Borrower Eligibility Property Eligibility
Eligibility - Income TopicGuidelines Income Limit 115% of HUD AMI PROGRAM Income Limit Link USE THE LINK under “TRAININGS” from any one of our FMC websites!!!
Borrower Qualifying TopicGuidelines Borrower Qualifying Income Qualify Borrower based on Qualifying (Repayment) Income (not Household Income) Only the income used for Qualifying is considered in order to meet the Program Income Limits. Eg., DU Income – Income you input in DU to see if borrower qualifies for loan UW Income – Income used by UW to calculated Debt to Income Ratios to qualify borrower for loan NOTE: Underwriting will NOT ignore any income documented in the file that the borrower receives on a consistent basis, and meets FHA’s ‘effective’ income guidelines for qualifying (eg., 2+ yr. history and likely to continue). Eg., Retirement Income, Overtime Income, Bonus Income, etc. If you use income to qualify the borrower for repayment (DTI), UW will use it towards the program qualifying income limit to determine eligibility for the program.
Sample Qualifying Income Sample: Husband, Wife, 2 kids, Grandma will be moving into home (5 ppl) Who has earned income? Husband & Wife both work – 2+ yr history Son works PT – 6 month history Grandma gets SSI – 2+ yr history Who’s going on the loan? Husband Wife Son Who’s income do we use to qualify borrower for the Program? Qualifying Income (ACCESS) USE ONLY INCOME from: Husband Wife Do not use income from: Son: because he doesn’t have 2 year required to be effective income Grandma: because she’s not going on the loan
Eligibility - Borrower Borrower must meet the following requirements: Be a US Citizen, permanent resident alien, or qualified alien (Eligible Veteran for VA financing) Occupy the residence as their primary residence Non-occupant co-borrowers/co-signers – NOT allowed Borrower qualifying income cannot exceed NHF Income limits for the county in which the property is located 115% Area Median Income (AMI) Minimum Credit Score of 620 Meet all required agency Guidelines (FHA HUD 4155 / VA Handbook, plus FMC overlays)
Eligibility - Properties Properties Allowed: Single Family Units FHA Approved Condominiums Planned Unit Developments (PUDS) 2-Unit properties Ineligible Properties: 3-4 Unit properties Manufactured housing Investment properties Rental Homes Co-ops Recreational, vacation, or 2 nd homes
SAPPHIRE PROGRAM Eligible 1 st Mortgage Program Down Payment & Closing Cost Assistance
SAPPHIRE Program Topic Program Description State RestrictionAvailable throughout the STATES OF CALIFORNIA, NEVADA, ARIZONA, TEXAS AND UTAH ONLY! Program Types FHA 30 Year Fixed VA 30 Year Fixed Max LTV FHA - 96.50% VA – 100% Max CLTVFollow FHA and/or VA guidelines Maximum Loan Amount FHA: The lesser of $417,000 (not including MIP) or FHA allowable limit VA: The lesser of $417,000 (including VAFF) or VA allowable limit Loan PurposePurchase OccupancyOwner Occupied Down Payment Assistance GRANT : 3% or 5% available CAN be used to fulfill the borrower’s equity contribution required on FHA 1 st Mortgage, closing costs, pre-paids, VA allowable fees per VA guidelines
ADDITIONAL GUIDELINES General Underwriting Guidelines Pricing, Costs and Fees
Underwriting Guidelines TopicGuidelines Underwriting Method Allowable underwriting method: Fannie Mae Desktop Underwrite (DU) allowed – Must be risk scored by FHA Scorecard Approve/Eligible recommendation Manual UW allowed – FMC Overlays apply **Unless specifically specified, follow standard FHA guidelines PLUS First Mortgage FHA overlays** Minimum Credit Scores 620 Non-Traditional Tradelines NOT allowed Max Debt Ratio DU Approved loans – Follow DU approval to max 50% DTI Manual UW loans – Follow investor guidelines plus FMC overlays Reserves NONE required – Follow agency guidelines Mortgage Ins. Follow standard FHA MIP
Underwriting Guidelines TopicGuidelines Homebuyer Education NOT required Non-Occupant Co- borrowers/Co-signers NOT ALLOWED Gift Letter Gift Letter is required, per HUD insuring requirements Tax Transcripts Follow FMC’s standard 4506-T policy Property Flips Allowed – Follow HUD guidelines PLUS FMC overlays
UW Guidelines cont’d… TopicGuidelines Seller Contributions Allowed up to 6% Gift FundsAllowed from family members – Follow 4155 Prepayment Penalty No Prepayment Penalty AssumabilityNot allowed *** All other requirements – Follow FHA 4155.1 guidelines PLUS FMC overlays***
Maximum Allowable Fees TopicGuidelines Interest Rates Available on the Reservation Portal, OR the FMC Rate Sheets Max Origination Fee Contact your FMC Support Team for fees and compensation Discount Fees NONE allowed Rebate Pricing None available – PAR pricing only Allowable Fees Must be reasonable and customary and fully disclosed to the borrower in accordance with all agencies, federal, state and local laws - Refer to ML 2009-53 for HUD exception to itemizing fees Contact your FMC Support Team for allowable fees Program CodeFHA: F30FMP VA: V30FMP
PROCESS FLOW & REGISTRATION Process Flow Registration Process
Loan Process Borrower must meet the following requirements: 1.Loan Officer pre-qualifies borrower for Sapphire loan and NHF income limit. 2.FMC Branch submits the fully processed file to Underwriting for loan approval 3.FMC underwrites the loan 4.Upon loan approval, the Branch is notified to reserve funds and lock loan 5.FMC close/pre-fund 1 st mortgage loan 6.FMC includes the grant on our lenders instructions and we over wire the amount when we fund our loan which means, we no longer wait an additional 24 hours to fund a Sapphire loan.
NHF’s EIN # NHF’s EIN #: 42-1549314 We are required to reflect NHF’s EIN on HUD’s FHA Loan Underwriting and Transmittal Summary in conjunction with secondary financing assistance, grants or gifts to the borrower when the borrower is receiving an FHA First Mortgage.
NHF Reservation Portal Borrower must meet the following requirements: Reservations will be handled at the FMC Branch level using the Reservation Portal on the NHF website www.nhfloan.orgwww.nhfloan.org The Reservation Portal can be accessed Monday through Friday between 9:00 AM and 4:00 PM PST. In order to access the Reservation Portal, a “User ID” must be used. One user ID and Passcode will be assigned to each branch by the Vendor Support team at FMC. All prior user ID’s have been de-activated. The Reservation Portal will identify whether a loan registration initially qualifies based on Income and Credit Score Limits information provided, and provide an electronic confirmation (Commitment Confirmation) of the registration which must be provided in the loan file.
Modifications to a reservation will require approval from the Administrator/Manager (NHF). You may cancel the loan registration via the Reservation Portal, which will provide electronic confirmation of cancellation. NHF charges a cancellation fee of $400 for each cancelled loan. This fee if applied will be passed on to the Branch (Broker for Wholesale transactions). If you cancel a loan, you may re-register the loan only after 30 calendar days from cancellation date via the Reservation Portal. You automatically reserve funds for Down Payment Assistance at the time of loan registration via the Reservation Portal. An extension to a reservation will require approval from the Administrator and will be subject to market conditions. A minimum fee of 0.375% of the loan amount will be applied to extensions. Fees may be higher depending on market conditions.
Lock Period Reservation Period: 30 days FMC requires reservations to be done at time of Docs (after loan approval) Cancellations may require a $400 fee Cancellations require a waiting period of 30 days before re- reserving Lock Period: 30 days A copy of the reservation confirmation must be forwarded to the Doc Department with the Doc Order Request
Program Additional Documents The following forms are required in all Sapphire loan files: 1.NHF Funding Commitment Confirmation 2.NHF Gift Letter NHF has implemented a new Grant/Gift Letter that now requires the borrower(s) signature. This new letter is printed out with your reservation once funds are reserved and must be signed by the borrower(s) before they request the grant. Grant amount must be rounded to the highest dollar. Make sure the loan approval and the LT reflects the exact loan amount rounded to the highest dollar to avoid delays in docs/funding.
FMC Support WEB SITE FMC WEBSITES: Rate Sheets Training Materials Guidelines Forms Marketing Tools Calculators SUPPORT Retail: Loan Help Wholesale/Correspondent: Your FMC Account Executive For help with your: Scenarios Pricing / Fees Guidelines Loan Submissions Trainings TRAININGS First Mortgage offers FREE Weekly ONLINE Trainings See the FMC website for the March 2015 Training schedule Trainings for March 2015: 3/3 – FMC Product Overview Presentation 3/5 – ACCESS/FIRSTDOWN Program 3/10 – FHA Streamline Training 3/12 – NEW: FK Program Training 3/17 – Sapphire Program Training 3/19 – TENTATIVE NEW Training??
THANK YOU FOR YOUR BUSINESS! On behalf of First Mortgage, thank you for joining today’s training and we hope the information provided will help you build your business! The main purpose of First Mortgage Corporation’s (FMC) training documents is to assist real estate and mortgage professionals in developing entry-level competence with loan programs. While FMC staff, employees, contractors and contributors take care to ensure the accuracy of the content of training documents, FMC makes no warranties as to the accuracy of the information contained within these materials. Furthermore, every user of this material uses it understanding that he or she must still conduct his or her own original legal research, analysis and drafting. In addition, every user must refer to the relevant legislation, case law, administrative guidelines, rules and other primary sources. FMC specifically disclaims any liability for any loss or damage any user may suffer as a result of information contained within this training material. While the information contained in FMC’s training material addresses guidelines and issues surrounding mortgage programs, these materials do not constitute legal advice. All non-legal professionals are urged to seek legal advice from a lawyer.