1. Homeownership Loan Programs Lender Training
Welcome to Delaware State Housing Authority’s Homeownership Program training. This presentation is designed to provide lenders with the knowledge to identify borrowers who are eligible for DSHA financing, and help guide them through the process of choosing the right products for their needs. You will also learn how to navigate the DSHA process to quickly and efficiently obtain approvals and close loans on schedule.
Lakeview Loan Servicing provides multiple training opportunities for their processes each month. A calendar of those dates is available upon request.

2. DSHA is committed to following all aspects of the Fair Housing Act in our efforts to promote responsible homeownership and provide competitive and safe financing for same.
DSHA is committed to following all aspects of the Fair Housing Act in our efforts to promote responsible homeownership and provide competitive fixed rate financing for Delawareans.

3. Agenda Recent Program Enhancements Eligible Loan Products
Eligible Properties
Credit Overlays
Down payment & Closing Cost Assistance Products
Income, Sales price/Purchase Price Limits
DSHA Forms
Loan Flow
Pre-Closing Compliance File Delivery
Pipeline Tracking
Closed Loan Delivery
DSHA Contact List
During this presentation, the following topics will be covered. 3

4. Recent Program Enhancements
DSHA Program Changes Effective May 1, 2018
DSHA Launches its Preferred Plus product Suite
Preferred Plus 2% – 5% down payment assistance. Calculated on total loan amount, not sales price.
This program will eliminate the requirements to comply with TRID and RESPA thereby eliminating upfront and closing disclosures specifically for DSHA
The assistance amount and cost of recording will be required to be included on the primary mortgage closing disclosure
This will be in the form of a Soft Second Mortgage requiring a note and mortgage be completed at loan closing.
The second mortgage is a deferred re-payment for 30 years at 0% interest.
There is no subordination allowed on DAP. Must be paid in the event of re-finance, sale of property, or property is no longer owner occupied.
Principal will be deferred until the following events, refinance, sale; transfer of title, property is no longer the borrower(s) primary residence (whichever comes first).
Closing Documents will still be delivered to Lakeview.
DSHA will continue to table fund the amounts at closing
Wire Request should be uploaded to Mitas.
Lenders should use the forms found on Lenders.destatehousing.com

5. Homeownership Loan Rates Effective 12/17/2018 and subject to change daily
Program Options
GNMA
FNMA
Base Loan Rate
4.625%
5.125%
Preferred Plus 2%
5.500%
5.750%
Preferred Plus 3%
5.625%
5.875%
Preferred Plus 4%
6.000%
Preferred Plus 5%
6.250%
FNMA >80% LTV with No MI
 N/A

6. Additional changes
DSHA is lowering the required FICO scores to 620 for FHA, VA, USDA and Conventional HFA Preferred (reduced MI) mortgages.
The rate lock time will be reduced from 75 to 60 days. One time only rate/product switch allowed. When switching loan products, borrows are subject to “worst case” scenario in pricing. This is based on the original lock date or product switch date.
Borrowers with FICO scores at 659 or below, will be required to attend HUD approved Housing Counseling.
DSHA will also be increasing Lender Compensation to 2.25%. Lenders will still be able to charge the optional .50% origination fee which could further increase compensation to 2.75%.

7. Homeownership Counseling
HUD approved homeownership classes are required for all borrowers with a FICO score of 659 or lower, regardless of loan product used.
A list of HUD approved Housing Counseling Agencies is available on the main DSHA website:

8. Eligible Loan Products
FHA
203(b); 203(b)(2); 234(c); 223(e); 203(ks) and other acceptable FHA products. VA
Originated and guaranteed in accordance with VA guidelines under 1810 and 181A.
USDA Rural Housing Service Loans
Originated and guaranteed in accordance with USDA guidelines.
Fannie Mae Conventional: HFA Preferred product(s) only
MI and No MI options available
DSHA allows most of the common loan products offered through FHA, V A and USDA. Our Conventional loan product is the HFA Preferred product. There are no loan level pricing adjustments for HFA Preferred. 8

9. Current Products Offered
Welcome Home Loans
Mortgages For First-Time Homebuyers
Home Again Loans
Mortgages for Repeat Homebuyers
DSHA offers two types of loans; Welcome Home Loans are available for qualified first-time homebuyers and Home Again loans for those who do not meet the first-time homebuyer definition. 9

10. DSHA Definitions
Welcome Home Product- First-Time Homebuyer Definition:
A person who has not had an ownership interest in his/her principal residence at any time during the last three years prior to the closing date.
Mobile homes not permanently affixed to the ground are not considered real estate; the owner would be eligible for first-time homebuyer programs.
Qualified Veterans as defined in 38 USC Section 101, are exempt from the First-Time Home Buyer requirement. 
Must provide a copy of their DD 214 Form demonstrating military discharge or release under conditions other than dishonorable.
Home Again Product – For Homebuyers who do not meet the First-Time Homebuyer definition.
First-time homebuyers are defined as a person who has not had an ownership interest in his or her principal residence at any time during the last three years prior to the closing date of their new mortgage. There is one exception to qualifying for a Welcome Home Loan. IRS Section 143 allows for a Qualified Veterans Exemption. Any veteran who has been discharged from the military for any reason other than “dishonorable” may request a one-time exemption from the first-time homebuyer requirement, even if they have had an ownership interest in their primary residence within the last three years. A Qualified Veterans Exemption Addendum is required for any veteran wishing to take advantage of the exemption. 10

11. FHA, VA, USDA Eligible Properties
Owner Occupied Residential Properties
Single Family Units and Town Houses
Agency Approved Condominiums for FHA, VA or USDA only
Please refer to Section 4.4 of the Seller’s Guide for specific guidelines
Planned Unit Developments (PUD’s)
1-4 Unit Properties (meeting DSHA purchase price limits and Agency guidelines for the loan product being originated)
Double Wide Manufactured Homes; FHA Only. All borrowers must have a minimum 660 FICO score.
Properties Not Allowed:
Rental homes
Co-ops
Investment properties
Recreational, vacation, or second homes
Please follow agency guidelines for eligible property types, noting the ineligible property types listed on this slide.

12. Credit Overlays Minimum FICO score of 620*
Must have a DU finding of Approved/Eligible for DTI %.
DSHA does not accept non-owner occupied co-borrowers. We do accept co-signors.
*No manually underwriting is permitted for USDA, VA or Conventional loans.
Manual underwriting is permitted on FHA loans in cases where the loan receives an Approved/Eligible DU finding but requires a manual downgrade due to additional information not considered in the DU decision that affects the overall insurability or eligibility of the loan. In these instances, the loans will be subject to a minimum FICO score of 660 and a maximum DTI of 43%
DSHA has worked hard to create products that allow lenders to simply follow investor guidelines with just a few credit overlays. A minimum 620 FICO score is required for all programs. DU must return an “Approved/Eligible”. A minimum FICO score of 680 is required for the HFA Preferred No MI product with up to 95% LTV and 700 is required for 95.01% to 97% LTV.. No manual underwriting is permitted for Conventional loans. Remember you must follow investor guidelines if they are more restrictive than DSHA for FICO. Only owner occupied purchase transactions are eligible to use DSHA financing and the commercial use of the property is limited a total of 15 percent or less of the properties square footage.

13. DSHA and Lakeview Correspondent Website: Accessing Product Matrices & Documents
Go to to: Lenders.DeStateHousing.com access the Lender Resource Center. The client site provides information about Correspondent Lending programs, product matrices, how to apply, and contact information. You will also find the link to Lakeview Loan Servicing credit overlays.
At the Lakeview Loan Servicing site, click on the “Login Here” at the upper right hand corner of the website.
Enter your address and password and click the “Logon” button. This will take you to the Announcements screen. This screen will display all of the announcements we have posted. The navigation tool bar is located on the left hand side of the page. Use this to navigate through the site for loan status, reporting, product matrices, seller guide reference material, and much more.
To get to Delaware State Housing Authority’s (DSHA) product matrices, simply click on “Product Matrix Documents-HFA” and then select either: “DSHA Fannie Mae HFA Preferred Program” or “DSHA Government Loan Program” as applicable.
If you have difficulty logging in, or have any other questions regarding the website, please contact Client Services at or for assistance.

14. Lender Resource Center
Calendar
DSHA Contact List & Useful Links
Homeownership Programs
Homeownership Program Documents
Access the library of DSHA Homeownership program documents.
Homeownership Program Mitas User Resources
The Mitas User Resource page provides step by step User Guides for making the most of Mitas. (This is a secured area. Interested users must submit a request for a user name and password to view content.)
Homeownership Program Training Presentations
View the most recent DSHA training presentations
Lender Announcement Archive
View DSHA announcements.
Program Brochures
View or print DSHA Program Brochures.
Marketing Support

15. FNMA HFA Preferred Credit Overlays
HFA Preferred with MI
Maximum LTV 95% - CLTV 105%
1-4 Unit Properties
Maximum LTV 97% - CLTV 105%
1 Unit Properties Only
Minimum 620 FICO Score
HFA Preferred with No MI
Minimum 680 FICO Score
Minimum 700 FICO Score
Condos & Rural Properties not eligible
All Loans must be underwritten through Fannie Mae DU with an Approved Eligible finding.
The only Conventional Loan product DSHA allows is the HFA Preferred program. HFA Preferred loans require a minimum 620 FICO score (minimum 680 FICO for loans with No MI). Lenders may underwrite these loans. Please refer to the Lakeview Lending Manual.

16. FNMA HFA Preferred Eligible Properties
Eligible Properties - Owner Occupied Residential Properties
Single Family Units and Town Houses
Planned Unit Developments (PUD’s)
Ineligible Properties
Condominiums on loans with No MI
Multiple Unit Properties
Vacation/Second Homes
Co-ops
Investment/Rental Units
Manufactured Homes
HFA Preferred Risk Share – No MI does not allow condominiums or multi-family units to be financed. Please refer to Lakeview’s Lenders Guide.

17. Compliance Income Calculation
Income calculated is the gross pay and any additional income, including all mortgagors and anyone 18 and older that will be living in the property.
All forms of income will be used including:
Overtime, Bonus, SSI, Disability Income, Pension, Retirement, Child Support/Alimony, Seasonal/Part-Time jobs, Self-Employment, Interest and Dividend Income, Rental Income, Gambling and Lottery Winnings, Public Assistance, etc.
Additional income such as bonuses, commissions, shift differential and overtime, is averaged over a 24-month and YTD period.
When DSHA calculates household income, we are required to include all sources of income from anyone residing in the property who are 18 years old or older, even if a resident is not a borrower in the transaction. As a result, our income calculation will likely be different than the calculation the lender uses for underwriting purposes. 17

18. Compliance Income Calculation – EXAMPLE
For W-2 employees: take YTD income and divide by pay period ending date. EXAMPLE: borrower has $30,500 YTD income on a paystub with period ending date 8/15. Divide the YTD pay by 7.5 and the DSHA compliance monthly income is $
For Self Employed borrowers: provide a YTD Profit & Loss statement, with profit, loss & net profit/loss. Document must be signed, dated and notarized. DSHA will use that income for compliance calculation. We do not use tax returns to calculate income.

19. Homeownership Program without DE Tax Credit (MCC) Income Limits
County
Household Income Limit
New Castle, Kent & Sussex
$97,900
The Homeownership Program Income limit is as follows.
Income limits are subject to change.
Income Limits:
Mortgagor’s current total household income must not exceed the Program limits. 19

20. Homeownership Loans without DE Tax Credit (MCC) Loan Limits
County
Loan Limit
Kent, New Castle & Sussex
$417,000
For borrowers not requiring downpayment assistance or those who chose Advantage 4, the loan amount may not exceed the limits shown in this table based on county, household size and whether the property is located in a targeted census tract.
Loan limits are subject to change.
Income Limits:
Mortgagor’s loan amount must not exceed the program limits. 20

21. What is a Delaware First-Time Homebuyer Tax Credit and What are the Benefits?
A Delaware First-Time Homebuyer Tax Credit is a federal income tax credit designed to assist people to better afford individual ownership of housing.
The Delaware First-Time Homebuyer Tax Credit provides an annual tax credit up to $2,000 to qualifying homebuyers for the original term of their mortgage, as long as they live in the property and have a mortgage. The annual credit is calculated by taking the annual mortgage interest paid multiplied by the Delaware First-Time Homebuyer Tax Credit rate of 35% which has been established by DSHA.
The tax credit is applied to the federal income tax liability of the Delaware First-Time Homebuyer Tax Credit certificate holder. There must be a tax liability to claim the credit. To claim credit, tax payers must file IRS Form 8396.
Borrowers must meet First Time Homebuyers definitions, and meet household income/sales price maximum limits to qualify.
The DE First-Time Homebuyer Tax Credit provides a Federal Income Tax credit of up to $2,000 each and every year for the term of the original mortgage, as long as the homeowner has a mortgage and continues to reside in the property as their primary residence. The amount of the credit is calculated by multiplying the total amount of interest that appears on the mortgage form 1098 by 35%. The resulting number is the eligible tax credit amount not to exceed $2,000.

22. Homeownership Loans Using DE Tax Credit (MCC) Income Limits
County
Area
1 – 2 Person Households
3+ Person Households
New Castle
$83,200
$95,680
Targeted
$99,840
$116,480
Kent & Sussex
$74,900
$86,135
$89,880
$104,860
For borrowers using the SMAL down payment assistance program, household income may not exceed the limits shown in this table based on county, household size and whether the property is located in a targeted census tract.
Income limits in effect as of 5/15/17 and are subject to change.
Income Limits:
MCC Mortgagor’s household income must not exceed the program limits. 22

23. Homeownership Loans using DE Tax Credit (MCC) Purchase Price Limits
Property Location by County
Purchase Price Limit
1 Unit
2 Unit
3 Unit
4 Unit
New Castle County
$349,411
$447,283
$540,690
$671,938
Kent County
$248,098
$317,655
$383,962
$477,135
Sussex County
$291,176
$372,752
$450,552
$559,933
For borrowers using the tax credit program, the purchase price may not exceed the limits shown in this table based on county, household size and whether the property is located in a targeted census tract.
Purchase price limits in effect as of 5/15/17 and are subject to change.
Income Limits:
Mortgagor’s purchase price must not exceed the program limits. 23

24. DE Tax Credit ( MCC ) Create as second file in Mitas.
One time fee of $350, if using DSHA as purchase loan.
Must meet income & purchase price limits
Available only to Welcome Home ( First Time Home Buyer ) only.
Available as “stand alone” MCC, not using DSHA purchase loan. Must meet income & purchase price limits. Does not need minimum score or Home Buyer class certificate. One time additional fee of 1% on loan amount.

25. DSHA Forms
All DSHA program specific forms are available on DSHA’s Lender Resource website at Lenders.DeStateHousing.com under the Homeownership Program Documents tab.
DSHA training presentations, important links & contacts, Mitas user tips, as well as a calendar of holidays and scheduled closings are also available on the Lenders Resource Website.
Please use the Lender Resource Center Website hosted by DSHA for access to all of our current forms by visiting Lenders.DeStateHousing.com. There you will also find training manuals, program announcements and a calendar of upcoming events and holiday closings. 25

26. Loan Flow
Lender pre-qualifies homebuyer per DSHA and Agency guidelines.
Lender registers loan(s) through DSHA’s Mitas Online Reservation System at
Lender uploads loan file to Mitas under “Compliance Review” tab at least 72 hours before closing.
Income
Homebuyer Status
Qualified Veteran (if applicable)
Purchase Price/Acquisition Cost
Check Mitas often for status change. If “Pending Conditions”, upload requested documents to Mitas under “Pending Conditions” tab.
Once “Committed” (approved), Lender closes loan and delivers closed purchase file to Lakeview for funding.
If using down payment assistance funds, Lender uploads into Mitas, the Wire Request Worksheet by 2 pm. the day before closing . DSHA will wire funds to closing.
Lender may upload wire request for funds as soon as status is changed to “Committed”
The process is easy and efficient. DSHA requests that lenders reserve loans and submit Compliance Review Packages at least 72 hours prior to closing in order for us to complete our review. Down payment assistance wire requests must be delivered to DSHA no less than 24 hours prior to closing. 26

27. Loan Flow (continued)
Registrations are valid for 60 days. Closed loans must be funded by the Master Servicer, Lakeview Loan Servicing within the reservation period.
DSHA will transmit registrations to Lakeview Loan Servicing.
A one-time 15 or 30-day rate extension may be purchased prior to the expiration of the initial reservation period. The extension fee will be assessed at the time the extension is granted. Loans that are not purchased prior to the expiration of the reservation or extension period will be deemed expired and are subject to additional extension fees once loan is purchased by Lakeview Loan Servicing.
Master Servicer will net any extension or other fees due at loan purchase.
Please review the Program Notice located on DSHA’s Lenders.DeStateHousing.com website for complete product details.
The Reservation Confirmation evidencing the terms of the Reservation should be printed at the time the loan Reservation is completed. DSHA electronically transmits reserved loan information to our Master Servicer. Reservations are valid for 75 days. Loans must close and be purchased by the Master Servicer within that 75 day timeframe. Lenders who need additional time to clear funding conditions may purchase one 15 or 30 day reservation extension. The cost of extensions are quoted daily and are available in Midas on the Register a New Loan page. Extensions cannot be purchased once a reservation has expired. Visit our Lender Resource Website at Lenders.DeStateHousing.com and go to the Homeownership Program Documents tab and review the Program Notice for more detailed information regarding the rules that govern our Homeownership Loan Program. 27

28. Pre-Closing Compliance File Delivery
The Compliance Package for each loan must be uploaded to DSHA at least 3 business days before closing.
Note: Incomplete loan files are not placed in the queue for compliance review until all outstanding conditions have been satisfied. Therefore, it is of no benefit to submit an incomplete package ahead of time.
Please use the Transmittal of Loan Documentation for Compliance, located on the Correspondent Lending Website. Verify the loan file is approved internally with all DU findings supported and documented.
Upload loan file into the Mitas portal under “Document Imaging” tab, “Compliance Review”.
Upload “Pending Conditions” into “Pending Conditions” tab, not “Compliance Review” tab.
Lenders must create a loan reservation in Midas for each loan. The Reservation Confirmation form evidences the borrowers rate has been locked for 60 days. Please submit compliance review file at least 3 days prior to closing. Upload the complete Compliance Review package using the document images function in the Midas reservations Loan Detail view. Be sure to provide all of the items identified on the Compliance Review Transmittal form and placed in the proper stacking order. 28

29. Pre-Closing Compliance File Delivery continued
Do not submit Wire Request worksheet via , rather upload into Mitas portal via “wire request” tab.
Try to avoid 9 a.m. closings, as that is not enough time for funds to be wired to closing agent bank account.
All loans must be “DU Approved Eligible” or for GUS as “Approved Eligible”, or for “LP Accept” for FHA & VA only.
Follow “Loan Transmittal Checklist” exactly. Do not submit additional non requested docs, i.e.: State Tax returns, bank statements, W-2’s, etc.,
Always use forms such as: “Preferred Plus Note”, “Mortgagors Affidavit”, etc., from the document list on Lender Resource Center so as to have the most recent versions.
Submit most recent 3 year Federal Tax Returns, transcripts, or official IRS “no record found” letter.
Remember to complete the full 3 year address history on the Notice of Potential Mortgage Subsidy Recapture Tax rvsd

30. Tracking Your Loan Pipeline in MITAS
Lenders should use MITAS to see status of files delivered to DSHA for Compliance Review for any Compliance Review conditions and DSHA staff assigned to file.
Lenders should cancel reservations of any "dead loans“ prior to reservation expiration to avoid non-cancellation penalty fees.
DSHA uses Midas to communicate with lenders as to the current status of loans in your pipeline. Please check Midas for any loans in a pending conditions posted status as they will require your attention in order to complete our compliance review. Items required to clear pending conditions can be uploaded through Midas using the “submit pending conditions” function found in the document images area of the loan record. Please submit all requested conditions at the same time to expedite your loan approvals. Files with unsatisfied conditions are not submitted to a loan officer for compliance review until all requested conditions have been received. Once all conditions are satisfied and the loan is approved, an approval letter is faxed to the Lender contact identified on the Compliance Review Transmittal Checklist.

31. Closed Loan Delivery
Closed loans must be delivered and purchased by Lakeview within the 60 day reservation period (75 or 90 days based on whether a 15 or 30 day extension was purchased).
If necessary, a lender may purchase a one-time 15 or 30 days rate extension. The request must be received prior to the original reservation expiration date. The cost of an extension may be viewed in Midas during normal business days between 9:00 AM and 5:30 PM on the New Loan Registration page by product type.
Closed loan packages for all reservations must be sent to Lakeview Loan Servicing for purchase. 31

32. DSHA Origination Contacts 302-577-5001 Lender Resource Website: lenders.destatehousing.com
Dawn Momot Housing Finance Manager – Lender Support Pamela Spencer – Compliance review Housing Mortgage Loan Officer 1 Tomacena McCallop – Compliance review

33. DSHA Post Closing Contacts
Telephone:
Fax:
Brian Rossello Housing Finance Manager
Post Closing
Enid Beltran
Mortgage Loan Officer II Post Closing
Carol Orzechowski Administrative Assistant II Document Control
Our post closing area is there to assist in the event any issues arise after your loan has been delivered for purchase. 33