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CHDAP 2 nd Trust Deeds 1/29/2015 1. FHA 1 st TD at 96.5% Combine with a CHDAP 3% 2 nd TD This program can only be done with an FHA – 30 year fixed. No.

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Presentation on theme: "CHDAP 2 nd Trust Deeds 1/29/2015 1. FHA 1 st TD at 96.5% Combine with a CHDAP 3% 2 nd TD This program can only be done with an FHA – 30 year fixed. No."— Presentation transcript:

1 CHDAP 2 nd Trust Deeds 1/29/2015 1

2 FHA 1 st TD at 96.5% Combine with a CHDAP 3% 2 nd TD This program can only be done with an FHA – 30 year fixed. No 203K’s Borrower contribution to down payment not required – can all be gift. Can be used with a FLIP loan. One Year Home Warranty Required Compensation:  Lender Paid – Paid as usual, depending on your Broker Compensation Plan, Broker can be paid up to 2.75%  Borrower Paid: The maximum origination fee for the 1 st can be 2% or $3,000.00 whichever is greater. No payments on the 2 nd; deferred for the life of the 1 st loan. The 2 nd is due and payable when certain events occur…… CLTV cannot exceed 103% Term on 2 nd needs to match term of 1 st, not to exceed 30 years. The CHDAP 2 nd Trust Deed 1/29/2015 2

3 What is a first time homebuyer? A first time homebuyer is defined as someone who has not had any ownership in a primary residence within the last three years (timeshares okay and n/o/o okay if currently renting – and not from a family member). Federal income tax returns required for the previous 3 years. Borrowers not legally obligated to file must complete Tax Return Affidavit. 1/29/2015 3

4 CHDAP 2 nds Must be a first time home buyer FHA 1 st Trust Deed 96.5% financing; 30 year fixed (no 203k’s) CHDAP 3% 2 nd; deferred payments The 2 nd can be used for down payment or closing costs Borrower contribution to down payment not required.50% down payment can all be a gift 640 FICO requirement 43% max ratio (see co signer guidelines for higher ratios) 1 st Time Homebuyer – no primary ownership in 3 yrs. Borrower’s income can not exceed the CalHFA published income limits. Only calculate the purchasing borrower’s income to qualify for the loan. Non-0ccupant co-signers okay (see next slide); No non-occupant co-borrower; You don’t need to be married but all income must be considered and total family members. You can use an MCC with this product, but it can not be used to reduce the ratios. Homebuyer Education is required for one occupying borrower –The cost is $50, including immediate access to their completed certification for printing. Follow up telephone interview not required and is more costly. Go here for the training: SFR’s, condos, and PUDS (no 2-4 units); flips okay over 90 days. Five acres maximum; no income producing; hobby okay. If garage has been converted, no stove allowed – gas needs to be capped; no 2 nd kitchen.. DU or LP approvals. One Year Home Warranty required. 1/29/2015 4

5 CHDAP Co-signers Helps with the ratios of 45% maximum. 1/29/2015 5

6 Additional Co-Signer Requirements Cosigners may not have a financial interest in the transaction (seller, builder, real estate agent, MLO, etc., are ineligible). Co signers must be closely related to the occupying borrowers. Allowable relatives are parents, children, siblings, stepchildren, aunts/uncles, nieces/nephews ONLY. Lexis-Nexis to show family relationship and/or additional documentation may be required by underwriting. Cosigners must have a principal residence in the US exempted due to military service or as US citizens living abroad. Occupant borrower’s debt to ratios cannot exceed 46.99/56.99%. Total DTI including co-signer’s income is 43%. Full credit packages will be required for Cosigners (credit reports, full income documentation and asset documentation, full disclosures in accordance with FHA and total scorecard requirements). 1/29/2015 6

7 Lender vs. CALHFA Review of Income 1/29/2015 7

8 Notes of Interest on how CalHFA calculates maximum income for family or anyone who is living in the house – not just borrowers. Schedule C or E Income – do not add back in depreciation. Negative is a wash, not deducted. Do not back out 2106 expenses. 2013 and YTD income (no 2012 income is reviewed since we are in 2014). P&L’s are okay for 2014. In question, CalHFA will always take the higher income. 1/29/2015 8


10 2014 Sales Price Limitations 1/29/2015 10

11 2014 Sales Price Limitations 1/29/2015 11

12 CHDAP INCOME LIMITS 1/29/2015 12

13 CHDAP INCOME LIMITS 1/29/2015 13

14 CHDAP Income Limits 1/29/2015 14

15 CalHFA CHDAP Submission Check List All these Forms can be found at under Forms and Documents ___We will require 2 packages to be uploaded; the 1 st and the 2 nd; with 2 separate loan numbers. ___The 1 st mortgage – submit by using your FHA Required Submission Forms list; exception CalHFA requires 3 years tax returns on all borrowers. ___ GFE & TiL on the 2 nd : $250.00 origination fee in Box 1 which will go to Essex Mortgage. No other fees can be charged on the 2 nd. Additional Forms: ___CalHFA Borrower & Lender Affidavit of Loan Analysis Comparison ___CalHFA Borrower Affidavit (for non-MRB loans) OTHER THINGS TO KNOW: Once a complete package is approved by Essex Mortgage, your file will be submitted to Agency for approval; turn times vary. Please check with your AE. Prior Agency approval is required to locking your loan. 1/29/2015 15

16 When you add an CalHFA MCC to the CHDAP When multiple CalHFA loan programs are used in combination, the most restrictive income limits apply (such as combining with an CalHFA MCC Tax Credit – the tax credit can not be used for credit qualifying). 1/29/2015 16

17 Subordination Procedures 1/29/2015 17

18 1/29/2015 18

19 When Subordinating the CHDAP 1/29/2015 19

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