1. Essex Mortgage Brings CALHFA PRODUCTS to you!
June
Hello, and welcome to our CalHFA presentation. My hope is that you come away from this presentation knowing more about the product than you knew before! My goal is to make you confident in knowing the product and how to submit correctly so that we can insure a quick and smooth funding.
Let me start by saying….this program is designed ONLY FOR 1ST TIME HOMEBUYERS. It also allows loans for conforming and high balance loans. Now, let’s go find out how this program can work for you.

2. How do you know what program you want?
June
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! (Exception – has not had an ownership interest in any principal residence during the previous 3 years). You have several product options, but they all surround these basic descriptions!
CalHFA 1st – only allows a 2nd (Conventional or FHA) can be combined with:
My Home Assistance 2nd; or
School Program 2nd.
Cal “Plus” 1st - allows for a 2nd and 3rd (Conventional or FHA) can be combined with:
My Home Assistant 2nd
School Program 2nd
My Home Assistant 2nd and a ZIP 3rd
School Program 2nd and a ZIP 3rd (One borrower must be affiliated with a K-12 school, including public charter schools, school district offices and county/continuation schools.
NOTE: My Home and School 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.
You have options on this program.
1st: Choose –between a Conventional or FHA loan? Conforming or High Balance? Calhfa 1st or Cal Plus 1st
The CalHFA 1st can only be combined with a 2nd …IT CAN NOT HAVE A 3RD.
The two 2nds you can choose are the MH 2nd or the School 2nd.
If you need a 1st 2nd, and 3rd, you would choose the Cal Plus as your 1st …For the 2nd, you may choose the MH or School Second. For the 3rd, you would choose the ZIP.
When choosing the School 2d, at least one of your borrowers must be affiliated with a school More later on this product.

3. Compare: My Home Assistance – ZIP – SCHOOL FHA or Conventional)
MY HOME ASSISTANCE – 2nd only
ZIP – Can be a 2nd or a 3rd
School Program – can only be a 2nd
Can only be used as a 2nd with a CalHFA 1st or CalPlus 1st –
Can be used as 2nd or 3rd with a CalPLUS 1st only. (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
3.25% Simple Interest Rate compounded annually; deferred payments.
Due when 1st is paid in full, refinanced, or assumed. No forgiveness of debt.
0% Interest Rate/payments
Due when property is transferred or 1st loan is refinanced, or paid in full.
No forgiveness of debt.
3.25%– simple interest deferred payment
Loan amount: 3 1/2 % of Sales Price or appraised value, whichever is less
Loan amount can be 2% or 3% of 1st loan amount (including MIP)
Loan amount not to exceed 4% of lesser of s/p or a/v/
June
WHEN PRICING LOANS, THE RATE ON THE 1ST WILL DEPEND ON which 2ND or 3rd YOU CHOOSE
If you choose a CalHFA 1st and 2nd – you will have the best pricing as it does not include a 3rd, nor can it.
CalPLUS 1st PRICING is required as you can combine with a 1st, 2nd and 3rd.
These are the 2nds and or 3rds that are offered:
My Home Assistance: You can use this 2nd for the “down payment or closing costs. The rate is currently at 3.25%.The loan amount of the 2nd is 3.50% of sales price or a/v whichever is less...
The School 2nd Program - You can use this 2nd towards down payment or closing costs. This program is designed for a borrower who is currently employed in any K thru 12 public school, including public charter schools, school district offices and county/continuation schools. The only difference from this and the MH 2nd is that you can receive up to 4% (vs. 3.50%) of the appraised value or purchase price, whichever is lower. The rate is 3.25%, same as MH.
If you needed a 3rd, you would choose the ZIP. The ZIP CAN ONLY BE USED FOR CLOSING COSTS, NOT DOWN PAYMENT. The rate on the ZIP IS 0% but you have 2 choices on the amount of the 3rd – you can choose 2% or 3% of the 1st loan amount.
The rate of the CalPlus 1st is different depending which ZIP loan you choose (2 or 3%)
One more option-

4. CalHFA Made Easy
June
This is a simple way to look at how you can create your loan. Remember the CalHFA 1st can only work with a 1st and 2nd. If choosing Cal Plus you can have a 1st , 2nd and 3rd. The pricing on the rate sheet for the 1st depends on what program you are using. The pricing can be found on page 8 of our rate sheet.

5. Comparing Programs (cont.)
CalHFA Con 1st
CalHFA FHA 1st
Cal Plus Con 1st
Cal Plus FHA 1st
MHA 2ND only
ZIP 2nd or 3rd
2nd only :
School Program
640 Minimum FICO
No manual underwrite
Can not use a ZIP
660 FICO if manual underwrite
Depending on 1st TD
SFR, Condos and PUD’s
Same
N/O co-signors/borrower are not allowed
Conforming or High Balance limits – check
Add on fee for HB loans see page 8 of rate sheet
June
The program requires a 640 FICO SCORE – 660 if you have a manual underwrite. The manual underwrite is only for FHA loans. The 2nd TD guidelines fall behind what is required of the 1st. We can not do units, it is only SFR – owner occupied homes. CalHFA used to allow for non occupant co-signers on FHA only. They no longer allow this for FHA or Conventional.

6. Comparing Programs cont.
CalHFA Con
CalHFA FHA
CalPlus Con
CalPlus FHA
MHA 2nd only
ZIP (2nd or 3rd)
SCHOOL PROGRAM
(2nd only)
Home Education required for 1 occupant
Same
same
Not subject to recapture tax
3 Years Tax Return
Proof of no homeowner-ship in last 3 Years: Tax Returns or 4506 option
RATIOS:
45% Max DTI
43% if Manual underwrite
Same as 1st TD
June
Home Education is always required for only 1 of the occupants.
None of these programs are subject to recapture tax
TO PROVE 1ST TIME HOMEBUYER, we will either require 3 years tax returns or a 4506 run for the previous 3 years. If using this option, please provide signed 4506’s and the top portion of the 1st page of the tax return, This will help us in knowing the exact name and address used when they filed their returns. This saves us a lot of time.
RATIOS FOR THIS PROGRAM ARE 45 max DTI – 43 if a manual underwrite

7. Comparing Programs (cont)
CalHFA Con
CalHFA FHA
Cal
Plus Con
Cal Plus FHA
MHA 2ND
ZIP (2nd or 3nd)
School Program
MI – Genworth
18% on 97% LTV16% on 95%
FHA MIP
MI 18% on 97% LTV16% on 95% LTV Genworth
n/a
One Year Home Warranty must include water heater(s), air conditioning and heating; oven/stove/range
Paid receipt required at time of funding to show this was purchased
Same
June
This is where the beauty is here when doing a Conventional loan. Note the MI on a conventional is much less than on a regular Conventional loan. Home Warranties are required for both conventional and FHA. At closing we will be asking for a paid receipt to show that the warranty was obtained. Be sure to include a fee for this on your up front disclosures.

8. New CHANGE for 2019 CalHFA Income Calculations
Calhfa no longer has a different version of how to calculate income.
CalHFA will underwrite to industry standards for FHA, Conventional and VA.
REMINDER:
MAX RATIO 45% (43% for manual)
FICO 640
June
As of March 1st, CalHFA changed their methods of calculating income. They now follow all Agency guidelines when underwriting income for the borrowers; either FNMA or FHA.
Reminder: No matter FHA or Conventional, the ratios are 45 (43% for manual) and the FICO IS 640

9. Fees and Lock Periods FEES FOR THE PROGRAM L
LOCK WHEN APPROVED AND APPRAISAL SIGNED OFF
Lock Period is for 30 days
LOANS MUST BE LOCKED BY 1:00 – MANUAL LOCK –
CALHFA turn times found at CalHFA.gov
How much of your production with Essex can be CalHFA products? 50%
Option for unlimited CalHFA’s:
origination fee + $ $250 Ask your AE how this can be done.
June
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
Home Warranty fee
Third Party Contractors allowed if within the 3% points and fees test.
This a borrower paid program. To meet Mavent, we have figured is a safe bet on how much you can make without exceeding 3 points. We have an Admin fee of $1350 along with a $250 processing fee on the 2nd and a $11.95 fee for the 3rd
BE SURE TO INCLUDE YOUR HOME WARRANTY FEE ON YOUR FEE WORKSHEET, when submitting the loan.
If your commission needs to be reduced because it not passing MAVENT, you will receive a call from our office asking you to adjust your commission.
If you use a third party contractor for this program, it will be part of the points and fees test.
WHEN LOCKING – This is a manual lock. You are able to lock this loan if you have an approval and your appraisal has been signed off. To lock, by 1:00.

10. Income and Sales Price Limits
Sales Prices: $765,000 statewide. Check your max loan amounts per counties.
Income Limits effective June 17, 2019:
June

11. Sample Loan Scenario http://www.calhfa.ca.gov/calc/scenario.html
June
ON LINE, CALHFA OFFERS A MORTGAGE CALCULATOR. THIS IS A GREAT TOOL. IT WILL HELP YOU CALCULATE THE BEST WAY TO USE THE FUNDS. HAVE YOUR ESTIMATED CLOSED COST AVAILABLE so that your numbers will be accurate.
See link above to navigate to the calculator

12. Can CalHFA liens be subordinated
Can CalHFA liens be subordinated? Effective 7/1/2019 CalHFA will not allow for subordination.
June
As of the moment, CalHFA allows you to subordinate their liens. For more information on this, go to the link shown on this screen.
HOWEVER, EFFECTIVE July 1st, they will no longer allow their liens to subordinate.
FOR MORE INFORMATION ON REFINANCING AND SUBORDINATION:

13. Property 1 unit only – no units – SFR, condo or PUD’s
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
June
A few property guidelines to be aware of.

14. SAMPLE PRICING (subject to change) Rates found on page 8 of rate sheet Manual Lock – Loan must be approved and appraisal signed off.
June
This is a sample of the pricing. Always check the most current rate sheet for rates and product availability.
PLEASE NOTE IF DOING A HIGH BALANCE LOAN, THERE IS AN ADDITIONAL HIT.

15. 1ST Time Homebuyer – Homebuyer Education &
First Time Homebuyer (FTHB)
June
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.
What constitutes a 1st time homebuyer? Someone who has not had any principal residence during the previous 3 years; proven with 3 years tax returns (OR 4506 option) and proof paying rent elsewhere. The other exception is if your house was destroyed by a natural disaster, such as the WILD fires in so California.
Please take note of the notes above as to what constitutes a CalHFA loan to be due and payable.

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 or 4506 for each year. – Attach top portion of the 1040’s for accurateness when we submit the 4506.
June
We need a loan number for each loan you upload. Please use the SUBMISSION SHEET ALONG WITH CALHFA ADDENDUM checklist for uploading CalHFA loans which is on the web site: essexwholesale.com PRODUCTS/CALHFA
The more your loan is complete at submission, the faster you will get a clean approval. Your file does require CalHFA approval so please account for that on your closing date. CalHFA posts their turn times on their site daily.

17. CALHFA Addendum Submission Sheet http://www. essexwholesale
June
Under our Products – CalHFA you will find this helpful worksheet in submitting your CalHFA loan. Please review and use this to get a clean submission and quick approval.

18. How to run DU Conventional
June
Here are some helpful notes on how to run DU if conventional

19. 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.
June
Notes on running your DU for FHA

20. Additional required CALHFA Forms at time of submission: Forms found at:
CalHFA Addendum Submission Sheet
CalHFA Borrower Affidavit & Certification (1/19 – certifying 1st time HB)
CALHFA Borrower Affidavit dated Tax Return Affidavit (only required if borrower not required to file 1040’s) (7/10/2013)
These forms can be found at click on Products - CalHFA
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:
June
Here are the forms required at submission and where they can be found on our web site. These forms can be found on the web: under PRODUCTS - CalHFA
Included on this screen is information and web site to go to when Home Buyer Education is required.

21. Conventional Mortgage Insurance
June
MI requirements for Conventional CalHFA loans – The MI fee for a CalHFA conventional vs. a regular Conventional is much less. As you can see, the coverage for a 97% is 18% coverage vs Same with 95% - only 16% coverage.
That is the end of our presentation. We look forward to doing business with you on this product.
If you have any questions at all, feel free to reach out to your Account Executive at Essex Mortgage.