1. Essex Mortgage Brings CALHFA PRODUCTS to you!
05/11/2017

2. How do you know what program you want?
Do you want to work with an FHA or Conventional loan? Do you want a 1st, 2nd, and 3rd or just a 1st and 2nd? Is your borrower a FTHB; they must be.
You have several product options, but they all surround these 3 basic descriptions!
CalHFA 1st (Conventional or FHA) Can be combined with a My Home Assistance 2nd or a Extra Credit Teacher Program (ECTP).
Cal Plus 1st (Conventional or FHA) can be combined with a 2nd ZIP only, or a choice of using a My Home Assistant 2nd or Extra Credit Teacher 2nd and a ZIP 3rd;
NOTE: My Home and Extra Credit Teachers Program can only be used for down payment and/or closing cost assistance. This is not to be used to pay the difference in sales price and appraised value if the sale price is higher. It also can not be used for paying off borrower debt. ZIP can only be used to pay for closing costs and/or prepaid items only.
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3. Comparing Programs
CalHFA Con
CalHFA FHA
CalPlus Con
CalPlus FHA
MHA 2nd
ZIP (2nd or 3rd)
Extra Credit Teacher (2nd only)
Conforming $424,100 + MIP
97/105CLTV
High balance to $636,150 (subject to an additional fee; see rate sheet); Max LTV for HB Conventional 95%/105 CLTV
Can only add a MHA 2nd
High balance to $636,150 (subject to an additional fee; see rate sheet)
Max 97/105CLTV
High balance to $636,150 (subject to an additional fee; see rate sheet) Max LTV for HB Conventional 95/105% CLTV
Two Options:
Can add ZIP only; or can add a MHA 2nd and ZIP 3rd.
Can add ZIP only or can add a HMA 2nd and ZIP 3rd
2 ½% rate 2nd’ ;
3 ½% s/p OR a/v, whichever is less and
can only be used with CalHFA or Cal Plus Conventional or FHA – Must always be in 2nd position CAN BE USED FOR DP/CC/ AND PREPAIDS
Can be used with a ZIP – ZIP must be in 3rd. Cannot be combined with Extra Credit Teacher
3% or 4% of 1st loan amount;
0% interest rate can be used only with Cal Plus Conventional or FHA
ZIP CAN ONLY BE USED TO PAY C/C AND OR PREPAIDS
2 ½% rate No defined area: The greater of 3.5% of s/p or a/v (whichever is less), or $7500.
Defined High Cost Areas: GREATER of 3.5% of s/p or a/v (whichever is less), or $15, (see page 7 for limits loan limits)
NOTE: The max someone could get with a s/p of $600,000 could be $21,000!
Can be combined with a ZIP 3rd TD. Can not be used with MHA.
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4. Comparing Programs (cont.)
CalHFA Con
CalHFA FHA
Cal Plus Con
Cal Plus FHA
MHA 2ND
ZIP (2nd or 3nd)
Extra Teacher Credit Program 2nd
640 Minimum FICO
No manual underwrite
660 FICO if manual underwrite
Depending on 1st TD
SFR, Condos and PUD’s
Same
N/O co borrower are not allowed
Borrower affiliation required
n/a
One occupying borrower must be currently employed in a CA K-12 public school, Charter School, county/continuation school or its school district
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5. Comparing Programs cont.
CalHFA Con
CalHFA FHA
CalPlus Con
CalPlus FHA
MHA 2nd
ZIP (2nd or 3rd)
Extra Credit Teacher (2nd only)
Home Education required for 1 occupant
Same
same
Co Signers are NOT allowed
Co Signers ARE allowed
Same as 1st TD
Not subject to recapture tax
3 Years Tax Return
3 Years Tax Returns
45% Max DTI
43% if Manual underwrite
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6. Comparing Programs (cont)
CalHFA Con
CalHFA FHA
CalPlus Con
Cal Plus FHA
MHA 2ND
ZIP (2nd or 3nd)
Extra Teacher Credit Prg.
When using MCC, MCC guidelines apply
FHA deduct from PITI
Conventional add to income
MI – Genworth
18% on 97% LTV16% on 95%
FHA MIP
MI 18% on 97% LTV16% on 95% LTV Genworth
n/a
Home Warranty must include water heater(s), air conditioning and heating
Home Warranty same as Conventional, but FHA also required oven stove and range
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7. CalHFA Defined High Cost Areas
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8. Compare: My Home Assistance to ZIP
Extra Credit Teacher Pgm.
Can only be used as a 2nd with a CalHFA 1st or CalPlus 1st
Can only be used as 2nd or 3rd with a CalPLUS 1st. (Must be in third position if used with My Home Assistance
Can be used with a CalHFA as 2nd (not with My Home), or Cal Plus as 2nd and add a ZIP 3RD
2 ½% Simple Interest Rate compounded annually; deferred payments. This 2nd may only be used with a CalHFA 1st mortgage. Due when 1st is paid in full, refinanced, or assumed. No forgiveness of debt. Thursday, December 08, 2016
0% Interest Rate/payments deferred for life of 1st mortgage or until property is transferred or 1st loan is refinanced, or paid in full.
No forgiveness of debt.
Deferred payment simple interest rate
Loan amount: 3 1/2 % of Sales Price or appraised value, whichever is less
Loan amount can be 3% or 4% of 1st loan amount (including MIP) (see options)
Not to exceed the greater of $7500 or 3.5 or $15,000 or 3.5% (high cost areas) - lesser of s/p or a/v
Must be a FTHB
Home education required
Home Education required
1 Year HOW Warranty required to cover water heater(s), air conditioning and heating – if placed with an FHA you must also include oven/stove/range
1 Year HOW Warranty required only if a FTHB. Must cover water heater(s), air conditioning, heating and if with an FHA, must include oven stove and range.
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9. First Time Homebuyers and Education Requirements Required: Always required on My Home, MCC and if using ZIP and borrower is a FTHB
First Time Homebuyer (FTHB)
Home Education
For CalHFA purposes, a FTHB is defined as a borrower who has not had any ownership interest in any principal residence during the previous 3 years.
If currently owns a non owner residence, 3 years of cancelled checks would have to be provided to show paying rent elsewhere; living with parents would not suffice. This would only be require if DU calls for a VOR. If no VOR is called for, then no cancelled checks would be required.
Home Education is required for “one” occupying first-time homebuyer
05/11/2017

10. Fees and Lock Periods FEES FOR THE PROGRAM LOCK PERIODS
BORROWER PAID ONLY
Broker Compensation 2.375% or $3000 whichever is more (must pass 3% points and fees test)
1st TD: $1350 Essex Admin Fee
2nd TD: If using My Home Assistance or Extra Credit Teacher : $250 Essex Processing Fee (you can’t use together)
2nd TD: If using ZIP for a 2nd or 3rd: $11.95 MERS Fee
MCC $450 Actual Fee – ALWAYS DISCLOSE $750, IN CASE PROGRAM CHANGES.
Home Warranty fee
Third Party Contractors fee not paid directly from broker. Essex will not reimburse.
LOCK WHEN ALL PTD’S ARE CLEAR
Lock Period is for 30 days
CalHFA turn times can be found at:
8/24/20168/24/2016
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11. Sample Loan Scenario http://www.calhfa.ca.gov/calc/scenario.html
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12. Sample Scenario continued….
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13. Property
Guest Houses (granny units) are eligible; zoned for SFR/must meet city/county zoning Cannot be zoned for 2-4
No income producing; personal use only
No Manufactured housing (Essex requirement)
No Leasehold
Non permitted additions/alterations per FNMA or FHA guidelines
Lot size – max 5 acres
05/11/2017

14. Income Calculations - Differences
Lender –Qualifying Income
CalHFA – Eligibility In come
Same standard calculations per guidelines
Average 2 years Plus YTD
Exclude variable income that does not have a 2 year history
Exclude child support that has less than 3 years continuance
Gross up the non-taxable income
Include all borrower’s income
Average last year and YTD – max 24 months
Include variable income, even if no history
Include child support even if it does not continue
Do not gross up non-taxable income
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15. INCOME COUNTED WWW. http://www. calhfa. ca
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16. How to Submit 1st TD 2nd TD 3rd TD (if there is a 3rd)
Broker to use additional Addendum Submission Sheet for CalHFA in addition to regular Submission Sheet.
Choose the Option Plan.
Broker to register and create a loan number for each loan submitted
Broker to register and create a loan number
Essex will disclose
Submit submission sheet & addendum, fees worksheet, wet signed 4506T, and complete credit package
1003 for the 2nd (3.2)
1003 for the 3rd (3.2)
Additional Forms for the program: CALHFA Borrower Affidavit
and Tax Affidavit if applicable (forms on Essex website)
N/A
3 years 1040’s
05/11/2017

17. CALHFA Addendum Submission Sheet http://www. essexwholesale
05/11/2017

18. You have one chance to get this form right
You have one chance to get this form right! So please pay careful attention! The amount of people who will be living in the house will determine your income limitation
05/11/2017

19. Additional CALHFA Forms at submission:
CalHFA Addendum Submission Sheet
CALHFA Borrower Affidavit
Tax Return Affidavit (only required if not required to file 1040’s)
These forms can be found at
Click on Products – CALFHA
Home Buyer Education: (required for one occupying 1st time buyer – not required for non-1st time homebuyers if using ZIP only – it is required for all My Home Assistance products)
On line:
05/11/2017

20. Conventional Mortgage Insurance
05/11/2017

21. CALHFA Handbooks
(for income)
(for scenarios)
05/11/2017

22. Repayment
Repayment of the principal and interest on the subordinate loan shall be due and payable at the earliest of the following events:
• Transfer of title
• Sale of the property*
• Payoff of the first loan
• Refinance of the first loan, unless the CalHFA junior lien is subordinated
• The formal filing and recording of a Notice of Default (unless rescinded)
Payoff or refinance of the unless the ZIP is resubordinated.
*My Home and Extra Credit Teacher loans behind an FHA first mortgage may be assumed or paid off when the first mortgage is assumed
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23. Conventional Income Limits, effective July 18, 2016
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24. Conventional Income Limits (cont.)
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25. Conventional Income Limits (cont.)
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26. FHA Income Limits (cont.)
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27. FHA Income Limits
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28. Income Limits cont.
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29. 2015 Sales Price Limits (effective 10/27/2015)
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30. 2015 Sales Price Limits (effective 10/27/2015)
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31. How to run DU Conventional
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32. Conventional DU cont.
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33. Conventional DU cont.
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34. How to run DU FHA Note: The rates and % of loan has changed from this SAMPLE See daily rate sheet for most current rates – below are sample rates and %’s ONLY. Call your AE if you have any questions.
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35. DU FHA cont.
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