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UNDERWRITING/PROCESSING TRAINING
Tom Wolf, Governor Brian A. Hudson, Executive Director
PENNSYLVANIA HOUSING FINANCE AGENCY
PENNSYLVANIA HOUSING FINANCE AGENCY
PHFA Mission
In order to make the Commonwealth a better place to live while fostering community and economic development, the Pennsylvania Housing Finance Agency provides the capital for decent, safe and affordable homes and apartments for older adults, persons of modest means and those with special housing needs.
www.phfa.org
PENNSYLVANIA HOUSING FINANCE AGENCY
Agenda
What is PHFA? Allowable Fees Programs for Homebuyers Assistance Programs Underwriting Guidelines Property Guidelines Programs for Homeowners Closing Requirements
PHFA, who are we?
Created in 1972 Non-profit; Quasi Government Agency Headquarters in Harrisburg, PA Considered an “Investor”
PENNSYLVANIA HOUSING FINANCE AGENCY
Seller’s Guide, Chapter 1
Compensation and Allowable Fees
PENNSYLVANIA HOUSING FINANCE AGENCY
Compensation
The lender locks the interest rate as well as the price that PHFA will pay for the loan
Price includes the origination and the servicing release premium (SRP) The loan price includes the SRP, and .625% will be
withheld at the time of purchase and paid when the file is cleared according to the payout schedule
Borrowers will be able to pay up to two discount points in exchange for a lower rate, or they may choose a higher rate for a credit to help towards closing costs
PENNSYLVANIA HOUSING FINANCE AGENCY
Compensation
The maximum a lender may retain from the loan price is 103 percent of the loan amount
Additional compensation above 103 must be provided to the borrower in the form of a credit towards their closing costs and shown as such on the GFE and HUD1 If less than the minimum is given, PHFA will deduct the applicable
amount from the loan proceeds, apply it to the principal balance and require the lender to revise the HUD1 accordingly.
Credit may not be used to fund any portion of the borrower’s downpayment
An extra $250 would be paid for Access Mod loans
PENNSYLVANIA HOUSING FINANCE AGENCY
Allowable Fees: For Purchases
Actual amount (or your standard fees) for items including, but not limited to: Credit report Appraisal fee Filing and recording fees Wood-destroying insect report DU/LP Tax certification fees can only be charged on conventional
loans if it’s a pass thru fee to a third party. $750 Administrative fee to cover overhead such as
underwriting, processing and doc prep
PENNSYLVANIA HOUSING FINANCE AGENCY
Loan Process
Application
Lock Rate
Process & Underwri
teReview Loan
Close Purchase Loan
Lender
PHFALock Funds with PHFAVia Pipeline Plus
Submit to PHFA Compliance for
Approval
Form 51/BlitzDocsSubmit to PHFA for Purchase
Form 58/BlitzDocs
Turn-around time
PENNSYLVANIA HOUSING FINANCE AGENCY
Seller’s Guide, Chapter 3
Programs for Homebuyers
PENNSYLVANIA HOUSING FINANCE AGENCY
Homebuyer Products
HFA Preferred Risk SharingTM
HFA PreferredTM
Keystone Home Loan (80% max)
Keystone Home Loan
Keystone Government (K-Gov) loan
Conventional Financing Government Financing
PENNSYLVANIA HOUSING FINANCE AGENCY
Seller’s Guide, Chapter 3
Conventional Financing
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/HFA PreferredTM Loan Programs
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM
For purchase and limited cash-out refinance Rate & term refis only – more details later
Fully amortized MyCommunityMortgage…BUT No loan level pricing adjustments 30 year, fixed-rate term only
And…
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM
HFA Preferred Risk Sharing™ No mortgage insurance is required Risk is assumed by PHFA and Fannie Mae, NOT the
lender (Normal reps & warrants per the Sellers Guide and the original MOSA apply)
HFA Preferred™ Mortgage insurance provided by a Fannie-
approved insurer Genworth, MGIC, Radian, United Guaranty, CMG, National MI & Essent
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM
No first-time homebuyer requirement, the borrower may not have an ownership interest in any other residential dwelling at the time of loan closing.
Must meet HFA income limits Appendix B Gross, annual income projected over the next 12 months Calculated on ALL adults who intend to occupy the home within one
year from loan closing Loan amount cannot exceed the current Fannie Mae
standard loan limits High cost areas do not apply PHFA delegated authority can not be used with these loans
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM No MI/HFA PreferredTM Lo MI
Desktop Underwriter (DU) Use the “Additional Data” screen and select “HFA Preferred Risk
Sharing” or “HFA Preferred Borrowers must have a FICO of at least 620 up to 97% LTV regardless with a DU finding of Approve/Eligible Max CLTV 105% Borrowers must contribute lesser of 1% or $1000 of own funds
Approve/Eligible only Qualifying income, ratios, reserves, and credit score determined
by DU No flexibility on PHFA’ s part No exceptions
PENNSYLVANIA HOUSING FINANCE AGENCY
Manual underwriting permitted Max LTV of 95%; Max CLTV of 105% Borrowers must have a FICO of at least 680
Maximum DTI for borrowers with FICO scores between 680 and 700 is 36%
Maximum DTI for borrowers with FICO scores 700 or higher is 45% Borrowers with no credit scores or “thin” files are not
acceptable Borrowers must invest lesser of 1% or $1000
Balance of required funds to close may come from PHFA Advantage loan and/or Fannie approved CommunitySeconds®
HFA Preferred Risk SharingTM No MI/HFA PreferredTM Lo MI
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM
Homebuyer Education: All borrowers with middle credit scores below 680 must complete
an in person class session prior to closing Use PHFA approved counseling organizations No online courses are acceptable
All borrowers must sign Form 68, Borrower’s Authorization for Post-Purchase Counseling (purchase & refis) This gives PHFA authorization to refer the borrower to a counseling
agency if they fail to make a mortgage payment
PENNSYLVANIA HOUSING FINANCE AGENCY
Homebuyer Education: For loans where all borrowers have a middle credit score
of 680 or higher: must complete the counseling session prior to closing;
however, it only needs to be completed by one borrower. Use PHFA approved counseling organization OR PHFA online
course OR PHFA approved mortgage insurance company online course.
Online courses or telephonic counseling are acceptable ONLY for these borrowers
At least ONE borrower MUST attend counseling for each loan; method determined by credit score
No Homebuyer education is required on refi’s
HFA Preferred Risk SharingTM No MI/HFA PreferredTM Lo MI
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM
Eligible Properties One unit properties only
No duplexes Condos and PUDs are acceptable
Condos project must be warranted by the lender, PHFA will not review and/or approve their acceptance
Must meet Fannie Mae guidelines No manufactured housing
Property must be primary residence Non-occupying borrowers are not permitted
Review Appendix I for additional property guidelines
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA PreferredTM
Mortgage Insurance Coverage requirements: 18% coverage for LTVs > 95% and <= 97% 16% coverage for LTVs > 90% and <= 95% 12% coverage for LTVs > 85% and <= 90% 6% coverage for LTVs > 80% and <= 85%
Eligible Plans Monthly, Single Premium, and Split Premium
Single Premium must be paid by the borrower (not lender paid) Single & Split Premium: borrower may finance the upfront
premium in the first mortgage or in the subordinate Advantage Loan
PENNSYLVANIA HOUSING FINANCE AGENCY
Mortgage Insurance
When using HFA Preferred you must adhere to the Mortgage Insurance Companies Guidelines even if they are more restrictive; no exceptions.
PENNSYLVANIA HOUSING FINANCE AGENCY
Desktop Underwriter (DU)
97% LTV products require DU® access Lenders that are not DU® approved can be set up
to run DU® through PHFA Main contact should get in touch with Tammy Miller
at [email protected] Lenders will first need access to Desktop Originator
(DO®) For information on how to register for DO®, visit
https://www.efanniemae.com/is/brokcorresp/index.jsp
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Home Loan: Conventional
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Home Loan -Conventional
Maximum LTV is 80%, due to lack of mortgage insurance options
Borrowers must have a 620 minimum credit score Maximum DTI 45% Financing available in conjunction with FHA, VA and
RD No Keystone Advantage on Conventional KHL Appendix A for Income and Purchase Price limits Specific program guidelines will follow
PENNSYLVANIA HOUSING FINANCE AGENCY
Recap of Conventional Financing Products
HFA Preferred Risk Sharing/HFA Preferred
• For Purchase and limited cash out refinance
• Max LTV 97% w/DU Approve/Eligible• Minimum FICO of 620
• Max LTV 95% w/manual underwriting• Minimum FICO of 680• Max DTI 36% for scores 680 to 700• Max DTI 45% for scores 700 or higher
• CLTV 105%• Must contribute the lesser of 1% or $1000
• Downpayment & CCA available through Advantage
• Mortgage Credit Certificate (MCC) available
Keystone Home Loan
• Max LTV 80%• Combination Loans• 80/10/10 or 80/15/5
• Appendix A for Income and purchase price limits
• No CCA available• Borrowers must have a 620 minimum credit
score• Max DTI 45%• Can not be used with MCC
PENNSYLVANIA HOUSING FINANCE AGENCY
Seller’s Guide, Chapter 3
Government Financing
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Home Loan: Gov’t
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Home Loan-Government Income and purchase price limits
Appendix A Gross annual income of all adult occupants
Borrowers must contribute at least the lesser of 1% or $1000 from their own funds for FHA loans.
Borrowers must have a 620 minimum credit score FHA, VA or RD financing available
Following gov’t entity guidelines First-time homebuyer requirement
Waived in 39 Target counties & 13 census tracts Waived for Veterans Applies to all non-target areas
3 Year rule May own other real estate; not primary residence
Downpayment and/or closing cost assistance available through Keystone Advantage
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Home Loan
PHFA Forms: Form 3: Mortgagor’s Affidavit
Upfront & at closing Form 4: Recapture Tax
Upfront or at closing
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Government (K-Gov) Loan
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Government Loan (K-Gov)
Loans insured/guaranteed by FHA, VA or RD Borrowers must contribute the lesser of 1% or $1000
from their own funds for FHA loans. Borrowers must have a 620 minimum credit score No PHFA- specific limits No first-time homebuyer requirement FHA non-occupant co-borrowers are permitted Downpayment/CCA available through Keystone
Advantage for eligible buyers
PENNSYLVANIA HOUSING FINANCE AGENCY
Recap of Government Financing Products
Keystone Home Loan
• FHA, RD &VA financing• Income and purchase limits- Appendix A• Borrowers must contribute the lesser of
1% or $1000 from their own funds. • Borrowers must have a 620 minimum
credit score• Max DTI 45%• Must meet first time homebuyer
requirement, but waived in 39 targeted counties &13 census tracts
• Can own other residences but not primary residence
• Downpayment & CCA available through Advantage
• Can not be used with MCC
Keystone Gov’t (K-Gov)
• FHA, RD & VA financing• No PHFA income or purchase price
limits• Downpayment & CCA available
through Advantage• Borrowers must contribute the
lesser of 1% or $1000 from their own funds.
• Borrowers must have a 620 minimum credit score
• Max DTI 45%• Non-occupant co-borrowers
acceptable• Mortgage Credit Certificate (MCC)
available
PENNSYLVANIA HOUSING FINANCE AGENCY
PENNSYLVANIA HOUSING FINANCE AGENCY
Seller’s Guide, Chapter 4
Assistance Programs
PENNSYLVANIA HOUSING FINANCE AGENCY
Mortgage Credit Certificate (MCC)
PENNSYLVANIA HOUSING FINANCE AGENCY
What is a Mortgage Credit Certificate?
An MCC is an actual paper certificate that allows a homebuyer to claim an annual federal tax credit for the life of the original mortgage, as long as it remains the homeowner’s principal residence.
• Homeowners can claim a tax credit of up to 50% of the mortgage interest they pay each year, not to exceed $2,000 annually.
• The remaining mortgage interest paid may be claimed as a deduction per IRS guidelines.
• The tax credit can not be more than the tax liability (unlike the First-time Homebuyer Tax Credit)
MCC = Homebuyer Tax Credit
PENNSYLVANIA HOUSING FINANCE AGENCY
• The credit can not exceed the amount of the federal tax owed after all other credits and deductions have been taken and can never exceed $2,000 in any given year. In this example, the borrower is entitled to a maximum of $2,000 in the form of a tax credit and the remaining $4,250 as a standard mortgage deduction using Schedule “A” of their annual federal tax return.
• To claim the credit, the homeowner completes and submits IRS Form 8396 along with their federal tax returns.
MCC ExampleMortgage Amount $125,000
Mortgage Interest rate ($6,250)
X 5%
MCC percentage X .50
Eligible Credit Amount
$ 3,125
PENNSYLVANIA HOUSING FINANCE AGENCY
MCC Requirements
• An MCC can be used in conjunction with any PHFA purchase loan except for the Keystone Home Loan.
• Eligible borrowers must meet the requirements for the PHFA first mortgage program, in addition to the requirements for the Keystone Home Loan program since the funding for the MCC program comes from the same source.
• The following Keystone Home Loan eligibility requirements must be met: First-time Homebuyer Income Limit Purchase Price Limit
PENNSYLVANIA HOUSING FINANCE AGENCY
Lender Responsibilities
The Participating Lender must file an annual report with the IRS using IRS Form 8329 for prior calendar year it made any loans with associated MCC’s.
PHFA is not permitted to file the report on behalf of the lender, but we will provide the lender with the necessary data for the prior year’s MCC activity, if any
PHFA will provide reminder letters to all applicable lenders in mid December
A copy of the report must be submitted to PHFA, along with proof it was submitted to the IRS
Records of the annual reports must be maintained by the lender for six years
PENNSYLVANIA HOUSING FINANCE AGENCY
Reissuance of Mortgage Credit Certificate
• If the homeowner chooses to refinance, the MCC may be able to be reissued with the approval of PHFA
• There will be a reasonable fee of $100
• MCC Benefit continues after refinancing, unlike the MRB program
PENNSYLVANIA HOUSING FINANCE AGENCY
Program Recap
If your borrower: Is eligible for a PHFA 1st mortgage – Any program except the
Keystone Home Loan Program (not refinances) Meets the income and purchase price limits of the MRB program,
Appendix A And is a First Time Homebuyer,
They may be the very lucky recipient of a 50% mortgage interest tax credit – worth thousands of dollars via
a Mortgage Credit Certificate!
PENNSYLVANIA HOUSING FINANCE AGENCY
Mortgage Interest Paid
$120,000 Loan Amount
K-Gov InterestPaid (4.25%)
Effective K-GovInterest (4.25%)
With MCCSavings
Year 1 $5,061 $3,061 $2,000
Years 1-10 $46,171 $26,171 $20,000
Years 1-20 $79,307 $42,739 $36,568
Years 1-30 $92,518 $49,345 $43,173
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan
Downpayment and/or closing cost assistance for eligible homebuyers
Borrowers must have a minimum credit score of 660 Can be used with these PHFA first mortgages:
HFA Preferred Risk SharingTM
HFA PreferredTM
Keystone Home Loan (Government loans only) Keystone-Government (K-Gov)
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan
Amortized subordinate mortgage (Second Lien) For existing homes: Loan amount = 4% of sales
price or up to $6K, whichever is less For new construction (homes never occupied): Up
to $6K 0% interest with a 10 year term Asset Limitation
$50,000 borrowers liquid assets Retirement accounts excluded unless drawn without
penalty
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan
Must require maximum financing FHA, VA, RD requirements apply Not available on KHL Conventional loans
Funds locked simultaneously with first mortgage Via Pipeline Plus
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan
Eligible County Assistance Programs Acceptable Review Appendix D – Subordinate Financing
Requirements Utilize assistance programs first
Must be in 3rd lien position Copy of the note and the recorded county program
mortgage is required (need to verify PHFA is in second position)
Advantage Loan Payment Must be included in front end ratio
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan
Assistance amount must be indicated in the “Details of Transaction” section 1003
Lender provides HUD1, TIL and GFE May use PHFA Form 56ADV or standard TIL
Actual amount must be listed on HUD1 Rounded to nearest dollar Standard Paid Outside of Closing (POCs) items may be
reimbursed to borrower Funded by the lender, reimbursed at loan
purchased
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan
The first payment on the assistance loan begins at the same time as the first mortgage (no deferment period)
PENNSYLVANIA HOUSING FINANCE AGENCY
HOMEstead Loan
PENNSYLVANIA HOUSING FINANCE AGENCY
HOMEstead Loan
Downpayment and/or closing cost in conjunction with a PHFA first mortgage
Not eligible in all counties- Appendix 1 & 2 Conventional, FHA, VA and RD financing available Borrowers must have a 620 minimum credit score Borrowers must contribute the lesser of 1% or $1,000 from
their own funds (FHA loans only) Can be used to lower an eligible buyer’s front end ratio to 30% $1,000 to $10,000, based on need Non-interest bearing loan with no monthly payment
PENNSYLVANIA HOUSING FINANCE AGENCY
HOMEstead Loan
Forgiven at 20% a year, over five years Income and purchase limits apply For areas that don’t receive federal HOME funds First time homebuyers only Homebuyer Education required regardless of FICO Liquid assets after closing may not exceed $5,000 Can’t be tenant occupied when Sales Agreement is signed Built after January 1, 1978 (some exceptions) Amount determined by Need Assessment Form (Appendix 3)
PENNSYLVANIA HOUSING FINANCE AGENCY
For Persons with Disabilities
Access Modification Loans
PENNSYLVANIA HOUSING FINANCE AGENCY
Access Home Modification Loan
With any PHFA home purchase program Conventional, FHA or RD $1,000 to $10,000 soft/silent subordinate
mortgage Repayment is not required as long as buyer
occupies home Modifications to be completed within 90 days of
closing
PENNSYLVANIA HOUSING FINANCE AGENCY
Access Downpayment &CCA
Used with a PHFA first AND a PHFA Access Home Modification Loan
Household income can’t exceed $53,280 $1,000 to $15,000 Subordinate loan Borrowers must need maximum financing (may
not have more than 3-5% down) No>$5,000 in liquid assets after closing
PENNSYLVANIA HOUSING FINANCE AGENCY
Asset Documentation
$50,000 asset limitation for all borrowers under the Keystone Advantage
$5,000 household liquid assets to other PHFA Assistance programs
Must be provided for all adult occupants Verification of Deposit (VOD) with average balance completed OR Two months of bank statements
Please note:For FHA loans: large deposits can not be greater than 2% of the sales
priceFor Conventional loans: large deposits can not be greater than 50% of
the borrowers total monthly qualifying income
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan
• The lesser of 4% of sales price, max $6K, for existing homes
• 0% interest with a 10 year term• Must have a minimum credit score of 660• Used with KHL (gov’t), K-Gov and HFA Preferred
Risk SharingTM and HFA PreferredTM
HOMEstead • Up to $10K• Forgiven 20% a year over 5 years
Access Modification Loan
• Up to $10K -Soft second• Modification completed within 90 days• Used with Conventional, FHA and RD financing
purchase products
Access Downpayment and Closing Cost
Assistance
• Can be used with the Access Modification Loan• Up to $15K- Soft lien
Recap of Downpayment and/or Closing Cost Assistance Programs
PENNSYLVANIA HOUSING FINANCE AGENCY
PENNSYLVANIA HOUSING FINANCE AGENCY
Seller’s Guide, Chapter 6
Underwriting Guidelines
PENNSYLVANIA HOUSING FINANCE AGENCY
Preliminary Determinations
PHFA does not issue preapproval or prequalification letters.
Form 1 can be used to review questionable PHFA compliance issues prior to uploading the underwriting package
The lender must determine if the loan is approved under FHA, VA, RD or Fannie Mae guidelines
For HFA conventional loans-DU approval is required with 97% LTV loans
PENNSYLVANIA HOUSING FINANCE AGENCY
Underwriting Guidelines
Job Stability Two year history showing stability Tenure, opportunity, education, training, etc.
If a non-liable co-occupant is listed on the deed they should also appear on the mortgage, title, assignment of mortgage and TIL but not the note A processor’s certification must be in the underwriting
file with name and SS# A Residential Mortgage Credit Report is required
PENNSYLVANIA HOUSING FINANCE AGENCY
Procedures
Lender underwrites the file and uploads underwriting package via BlitzDocs to PHFA for review
Use Form 51 (Compliance Package Checklist- Purchase) for required documents and submission instructions Use Form 51R for Refinance programs
All loans must be locked with PHFA prior to uploading Compliance package
Allow up to 5 business days for PHFA to make a decision
PENNSYLVANIA HOUSING FINANCE AGENCY
Form 51/Form 51R
Complete the top portion and follow the instructions below it
Check off each applicable item Place COPIES of documents in the correct order (or
originals for conventional loans) Upload and submit to PHFA via BlitzDocs
PENNSYLVANIA HOUSING FINANCE AGENCY
Underwriting Results
All notices and reports can be retrieved via Pipeline Plus
Approval Notice: The loan is eligible for sale to PHFA Contains Purchase Conditions (these documents should
be uploaded with the Purchase package)
PENNSYLVANIA HOUSING FINANCE AGENCY
Underwriting Results Suspense Notice:
PHFA can not complete its review due to missing documentation or incomplete info
This notice specifies the additional required info or documents
All documents for suspended loans should be uploaded via BlitzDocs at one time
Denial Notice: PHFA can not approve the loan May be based on underwriting criteria or program
compliance issues
PENNSYLVANIA HOUSING FINANCE AGENCY
Income Documentation
Programs Income DocsFor Borrower(s)
Income Docs forAdult Occupants
Use Income for PHFA limits
HFA Preferred Risk Sharing
Full VOE OR Verbal VOE, Current Paystubs, 2yrs W-2s
Current Paystubs, 2yrs W-2s
Yes
HFA Preferred Full VOE OR Verbal VOE, Current Paystubs, 2yrs W-2s
Current Paystubs, 2yrs W-2s
Yes
Keystone Home Loan
Full VOE OR Verbal VOE, Current Paystubs, 2yrs W-2s
Current Paystubs, 2yrs W-2s
Yes
K-Gov Full VOE OR Verbal VOE, Current Paystubs, 2yrs W-2s
N/A N/A
* Self-employed borrowers two years of tax returns. Profit and Loss statement after the first quarter.
PENNSYLVANIA HOUSING FINANCE AGENCY
Sources of Funds
Seller concessions (Conventional loans) 3% if LTV > 90% 6% if LTV < 90%
If FHA, VA, RD those guidelines apply County programs acceptable if approved by PHFA
or Fannie Mae depending on loan program See Appendix D – Subordinate Financing
Requirements for details
PENNSYLVANIA HOUSING FINANCE AGENCY
Proof of Mortgage Insurance
For FHA loans, the signature section of the Loan Underwriting Transmittal Summary (LUTS) must either indicate a DU Accept or LP Approve AND the ZFHA number, OR it must be signed by the DE underwriter (either way, the DE underwriter must also complete the Conditional Commitment)
Electronic signatures are acceptable on all conventional compliance documents
FHA insured/guaranteed loans, electronic signatures will be accepted on third party docs only, such as sales agreement, per FHA guidelines.
PENNSYLVANIA HOUSING FINANCE AGENCY
Seller’s Guide, Chapter 8
Property Guidelines
PENNSYLVANIA HOUSING FINANCE AGENCY
Appraisal
Full appraisal on all PHFA loans; the only acceptable form is 1004. Also 1004MC (Market Condition Addendum) For HFA PRS &HFA Preferred programs also submit appraisal
through FNMA’s Universal Collateral Data PortalSM (UCDP) A “successful” UCDP Summary Report must be submitted in
underwriting package All additional commentary must be included Submitted in the underwriting package For existing properties, original photographs of the front,
rear and street scene along with internal photos of the subject property must be included
PENNSYLVANIA HOUSING FINANCE AGENCY
Appraisal
The census tract (if applicable) must be listed Include the Conditional Commitment/Direct
Endorsement Statement of Appraised Value for FHA loans (HUD 92800.5b)
Include the Certificate or Notification of Reasonable Value for VA loans
Appendix I - PHFA Appraisal Review Sheet
Cont’d
PENNSYLVANIA HOUSING FINANCE AGENCY
Manufactured Homes
Loan files for Manufactured Homes must contain the following documentation: the original vehicle title was retired for the file to be
purchased by PHFA completed and endorsed PennDOT Form MV 16
If the home was purchased new from a dealer and in the dealer’s possession for less than 6 months, the original certificate of origin is required as proof it was never titled.
PENNSYLVANIA HOUSING FINANCE AGENCY
Manufactured Homes
The VIN number should be referenced in the deed and the legal description of the mortgage
Closings for this home type should not be scheduled until proper documentation is obtained
If the title was never retired, it must be located to determine the date it was titled and if there are any liens
Additional research with PennDOT may be required Manufactured Home Affidavit of Affixation Rider to be
used for all manufactured homes (PHFA Form 60)
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Eligibility
ProgramsAcceptable
Property Types Notes
HFA Preferred Risk SharingTM & HFA PreferredTM
1 units only, PUDs, Condos Must meet FNMA guidelinesNo manufactured housing
Keystone Home Loan One or two units; condos, PUDs, manufactured housing
Must meet respective gov’t entity guide or conventional guidelines (FNMA standards)
K-Gov One or two units, condos, PUDs, manufactured housing
Must meet respective gov’t entity guidelines
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Eligibility
New or existing located in PA Principal residence occupied by owner within 60
days of closing and for life of loan No > 4 acres (up to 10 if meet exceptions) Remaining economic life > 30 years No > 15% of home used for business Taxes and insurance are ALWAYS escrowed
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Standards
Wood Destroying Insect Certification Existing homes only - all buildings included in appraisal
E.g. detached garage Report must be dated within 120 days of closing A CLEAR wood-destroying insect certification must be included
in the Purchase Submission, signed by the inspector.
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Standards
If evidence of infestation was observed, the commentary must be provided. This should be signed by the borrower(s) and the inspector.
If infestation was active, proper control measures must have been taken and addressed prior to closing. Sellers often pay for this service.
If structural damage resulted from the infestation, provide proof that the damage was satisfactorily repaired prior to closing. Sellers often pay for the repairs.
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Standards
Private Water Supply Appraiser must note the type of private water supply; “on-
site” alone is not sufficient.
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Standards
Private Sewage Disposal Appraiser must note the type of system; “on-site” alone is not
sufficient. If appraiser recommends or requires a septic certification OR if
there is indication in the appraisal or sales agreement of an existing or potential problem, a clear septic dye test must be included in the Purchase Submission.
Rural properties forced to utilize “wildcat disposal systems” because there is no alternative, may be acceptable under certain conditions (See Appendix W).
When you encounter a non-traditional form of sewage disposal, contact the Agency for possible acceptability of it.
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Standards
Privately Owned and Maintained Streets For a property on a community or privately owned and
maintained street, provide proof that an adequate, legally enforceable private road maintenance agreement was recorded. A copy of it, with recordation notation, must be included in the Purchase Submission.
Provide proof of ingress, egress and regress. NOT required if the street is maintained by an HOA.
Dirt basements Acceptable if appraiser notes they are common and typical for
the area. The amenities (furnace, etc.) should be on concrete slabs.
PENNSYLVANIA HOUSING FINANCE AGENCY
Homeowner’s Insurance
Term- at least one (1) year Fire and Extended Coverage Required
Protection against loss or damage from fire and other hazards covered by standard extended coverage endorsement
In an amount equal to the LESSER of the loan amount OR the maximum insurable value of the improvements (subtract the land value from the final reconciliation of value on appraisal)
Maximum deductible is $3,000 or 1% of the face amt of policy Mortgagee Clause - Endorsed in favor of PHFA and/or its
successors or assigns, as their interest may appear; address is on Form 53 (closing instructions)
Copy of HO6 (contents) coverage for condos Taxes and Insurance are ALWAYS escrowed
PENNSYLVANIA HOUSING FINANCE AGENCY
Flood Insurance Required for properties where any portion of the
improvements are in a flood zone The maximum deductible permitted by PHFA is $5,000
unless the mortgage insurer/guarantor (such as FHA) requires a lower amount, but the borrower must still qualify at the lowest deductible permitted.
If needed for a condo, obtain proof of Condo Association’s insurance.
All PHFA loans require a “Life of Loan Certification” issued by a Flood Insurance company Insured as “Pennsylvania Housing Finance Agency, its Successors
and Assigns” OR include a “Notice of Servicing Transfer” with the purchase package
PENNSYLVANIA HOUSING FINANCE AGENCY
Flood Insurance
Mortgage qualification purposes, the standard policy rate should be utilized in calculating the debt to income ratios.
The standard rate will also be the amount escrowed and included in the monthly PITI payment.
PHFA uses Corelogic when conflicts arise Clay Rose, Product Account Executive 800.447.1772 ext. 3132 OR 512.977.3132, [email protected] Brenda Gould, Product Account Executive 800.447.1772 ext. 3128 OR 512.977.312,
PENNSYLVANIA HOUSING FINANCE AGENCY
Elevation Information
In the 'Elevation Information' section of an application, the lowest floor, base floor, and base flood elevation must be listed and must match the elevation certificate
If the ‘Elevation Difference’ is less than zero and the full risk (i.e., non-subsidized) NFIP premium at the lowest possible deductible is not provided, then the premium used to underwrite the file will be the lesser of 10 percent of the loan amount or $12,000 If you’d like to underwrite with the actual full risk rates, which may be
significantly lower, ask insurance agents to provide completed applications
PENNSYLVANIA HOUSING FINANCE AGENCY
Flood Insurance
Elevation Certs are not acceptable documentation to waive the flood insurance purchase requirement
No one can waive the flood insurance requirement if the structure is shown to be located in the Special Flood Hazard Area on the FEMA Flood Insurance Rate Map except FEMA via Letter of map Amendment, etc.
Flood insurance for properties in a participating Community must be written through the National Flood Insurance Program (NFIP)
NFIP Publications can be ordered online at www.fema.gov/business/nfip/libfacts.shtm
Review Chapter 12 for additional details
PENNSYLVANIA HOUSING FINANCE AGENCY
Taxes and Assessments
Special Assessments Any special assessments, tax assessments OR any then
due taxes or past due taxes must be paid by closing This includes unpaid lienable water/sewer rents and
unpaid Condo/PUD Association fees
PENNSYLVANIA HOUSING FINANCE AGENCY
PENNSYLVANIA HOUSING FINANCE AGENCY
Seller’s Guide, Chapter 3
Programs for Homeowners
PENNSYLVANIA HOUSING FINANCE AGENCY
Homeowner Products
HFA Preferred Risk SharingTM
HFA PreferredTM
FHA/VA Streamline Refinance
Refinancing: Conventional Refinancing: Government
PENNSYLVANIA HOUSING FINANCE AGENCY
Allowable Fees: For Refinances
Actual amount (or your standard fees) for items including, but limited to: Credit report (not needed for FHA/VA Streamline) Appraisal fee (not needed for FHA/VA Streamline) Filing and recording fees DU/LP (not needed for FHA/VA Streamline) Tax certification fees can only be charged on conventional loans if
it’s a pass thru fee to a third party. $750 Administrative fee to cover overhead such as underwriting,
processing and doc prep- for conventional financing $350 Administrative fee for FHA/VA Streamline Refinance
program
PENNSYLVANIA HOUSING FINANCE AGENCY
Seller’s Guide, Chapter 3
Refinancing: Conventional
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/HFA PreferredTM Loan Programs
Refinance Option
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM
For purchase and limited cash-out refinance Rate & term refis only Available for all loan types
Fully amortized MyCommunityMortgage…BUT No loan level pricing adjustment 30 year, fixed-rate term
Same guidelines as mentioned in the homebuyer section but…
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM
Limited Cash Out refinances (rate & term refi) Cash back limited to lesser of 2% of the balance of
the new loan or $2000 Must be obtaining maximum financing-determined
by DU findings 95% vs. 97% Cash back must be used towards closing costs if
the Advantage Assistance Loan is requested
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM
Acceptable Uses: Pay off the unpaid principal balance of the existing
first mortgage Pay off only subordinate mortgages used to purchase
property
PENNSYLVANIA HOUSING FINANCE AGENCY
Seller’s Guide, Chapter 3
Refinancing: FHA/VA
PENNSYLVANIA HOUSING FINANCE AGENCY
FHA/VA Streamline Refinance Loan
PENNSYLVANIA HOUSING FINANCE AGENCY
FHA Streamline Refinance
Only for existing FHA homeowners New loan can only include:
The outstanding principal balance (from payoff stmt) Odd day’s interest Minus the applicable refund of the UFMIP Plus the new UFMIP up to a maximum amount of
97.75% of the original appraised value One month of annual MI for the current payment due
on the existing loan may also be included
PENNSYLVANIA HOUSING FINANCE AGENCY
VA Interest Rate Reduction Refinancing Loan (IRRRL)
New VA loan can include the outstanding principal balance plus the VA funding fee and eligible closing costs.
Lenders must follow VA’s streamline refinance guidelines in effect at the time of loan application per VA Pamphlet 26-7, Revised -- Chapter 6, Section 1 and sections of chapters 5, 7 and 8 as they pertain to the VA IRRRL’s requirements.
PENNSYLVANIA HOUSING FINANCE AGENCY
FHA/VA Streamline Refinance
Any and all subordinate loans must be re-subordinated or paid off by the borrower; they cannot be paid off with the new loan.
A lien search is required on all loans Title commitments are acceptable
PHFA seconds will only be re-subordinated if the new refinanced loan is coming through PHFA
Copy of the deed
PENNSYLVANIA HOUSING FINANCE AGENCY
FHA Guidelines
Lenders must follow the FHA’s guidelines in effect at the time of loan application for the Streamline Refinance per the HUD Handbook 4155.1, Chapter 3, Section C and Chapter 6, Section C.
Reference Mortgagee Letter 12-4 for information on premiums, as they differ depending on when the original loan was endorsed.
PENNSYLVANIA HOUSING FINANCE AGENCY
FHA Guidelines
Mortgagee Letter 12-4 Streamline Refinance transactions for existing FHA loans
ENDORSED ON OR BEFORE MAY 31, 2009, the UFMIP will decrease from 1% to 0.01% of the base loan amount.
The Annual MIP for refinanced FHA loans ENDORSED ON OR BEFORE MAY 31, 2009 will be 55bps regardless of the base loan amount.
Please review the entire Mortgagee Letter which also discusses premium increases that went into effect on
or after April 9, 2012.
PENNSYLVANIA HOUSING FINANCE AGENCY
For FHA/VA Streamline Refinance Loan Program
Additional PHFA Requirements
PENNSYLVANIA HOUSING FINANCE AGENCY
PHFA Requirements
30 year fixed rate only Owner occupied One or two units, principal residences only
Both the existing and new loan must meet this requirement
Non credit qualifying option is acceptable without an appraisal but a verbal VOE is required on all refis
Maximum mortgage limit is $417,000 Real estate taxes and insurance must be escrowed
regardless of the LTV
PENNSYLVANIA HOUSING FINANCE AGENCY
PHFA Requirements
For loans currently serviced by PHFA: The amount needed to pay off the borrower’s existing PHFA
loan will be reduced by the balance in the borrower's existing escrow account. The payoff statement used must come directly from PHFA staff
The calculation of the new loan amount would still be done normally per the applicable program guidelines.
The lender will perform the standard escrow analysis to ensure sufficient funds are collected to pay for any taxes and insurance due within the next 12 months, and will also provide the initial escrow account disclosure statement.
PENNSYLVANIA HOUSING FINANCE AGENCY
PHFA Requirements
Non-occupying co-borrowers cannot be added to the new loan Permitted only when they were on the original FHA
loan Co-borrowers on the original loan can be removed
from the new loan with additional documentation These must be underwritten according to FHA's credit
qualifying guidelines, although an appraisal is not needed.
PENNSYLVANIA HOUSING FINANCE AGENCY
Lender Instructions and Procedures
PHFA will review the HUD1 to verify that the premium was accurately applied
The allowable lender administration fee is $350 (not $750) Less paperwork for these loans No additional fees may be charged except for the
reasonable and customary third party fees and closing costs
Lock the loan with PHFA via Pipeline Plus – see chapter 2 of the Sellers Guide for details
PENNSYLVANIA HOUSING FINANCE AGENCY
Lender Instructions and Procedures
Underwriting Requirements and Documentation If a co-borrower is being removed, the loan must be
underwritten and documented using FHA’s Credit Qualifying Streamline Refinance guidelines without an appraisal.
The following items will be required: Credit report Income verification A full loan application (1003) with all sections completed
PHFA’s overlays would apply
PENNSYLVANIA HOUSING FINANCE AGENCY
Lender Instructions and Procedures
PHFA delegated underwriting system is not permitted
The underwriting/compliance package must be submitted to PHFA using Form 51R prior to closing
PHFA specific documents are not required: Mortgagor’s/Seller’s Affidavit (Form3) Recapture Tax Notice (Form 4)
PENNSYLVANIA HOUSING FINANCE AGENCY
Appendix E
BlitzDocs Instructions
PENNSYLVANIA HOUSING FINANCE AGENCY
Accessing Blitzdocs
Utilize Appendix E – BlitzDocs Instructions Can be found at www.phfa.org/lenders/forms.aspx#
Log into the PHFA Pipeline Plus system To access BlitzDocs each person must have a PHFA Pipeline Plus
account Continue to use the PHFA Pipeline Plus system to check loan
status and view reports/notifications PHFA will make sure existing Pipeline Plus account users have a
corresponding BlitzDocs account when requested Account Administrators would add the BlitzDocs menu option
to those users submitting any portion of a file to PHFA
PENNSYLVANIA HOUSING FINANCE AGENCY
Accessing BlitzDocs
When creating new Pipeline Plus accounts for an employee that needs access to BlitzDocs, the administrator must email [email protected] PHFA will contact BlitzDocs to obtain login info
Select BlitzDocs from your menu and click the link to launch BlitzDocs in a new window
When a compliance package is submitted via BlitzDocs the purchase package must also be submitted via BlitzDocs
PENNSYLVANIA HOUSING FINANCE AGENCY
Accessing Blitzdocs
“Submission Contact” Determines who will receive the submission confirmation email
from BlitzDocs and can be different for each submission File size limited to 50MB
If larger submit two separate uploads PHFA Employees files cannot be sent via BlitzDocs
Paper files must be sent directly to PHFA marked “Personal and Confidential”
Compliance packages sent to Tammy Miller Purchase packages sent to Karen Zapotosky
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting New Compliance Package
Only create a folder when ready to submit a complete compliance package Do not create multiple folders for the same borrower
When completing the Folder Attributes, you must use PHFA Loan Number Listed on the reservation confirmation In PHFA Pipeline Plus system
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting New Compliance Package
Submission Contact entered should be the person who will receive email notifications for the loan
For the PHFA Delegated Loan section Only select “PHFA-Delegated” if you are an approved
PHFA Delegated lender AND the file you are submitting has been entered into PHFA’s Delegated Underwriting System
For all other lenders, select “PHFA Non-Delegated”
PENNSYLVANIA HOUSING FINANCE AGENCY
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting New Compliance Package
Compliance package must be in the stacking order of Form 51/51R
Upload Compliance Package: Documents>>Upload; Document Type: **To Be Indexed**
Crucial final step! Select: File Submission >> Submit New Compliance Package to PHFA.
Upload the original version of the Appraisal if at all possible If completed separately, you can select Appraisal as the
Document Type Must be an adobe version not XML
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting New Compliance Package
Please do not click File Submission more than once You can verify if your field was properly submitted by
checking the notes section within the loan folder There will be a note with the description of
“Submitted New Compliance Package to PHFA” if it was successful
Please avoid submitting duplicates of any document
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting Conditions: Approval, Suspense
& Denials Review Compliance notifications posted to PHFA
Pipeline Plus
Search in BlitzDocs for folders in status of Approved, Suspended and/or Denied/Cancelled
Make sure you have the necessary documentation please wait to upload the information before submitting conditions Only complete submissions will be reviewed.
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting Compliance Conditions: If Suspended
Obtain suspense notification from PHFA Pipeline Plus system Review and collect ALL outstanding items
All conditions are to be submitted at one time All mail is to be submitted through BlitzDocs
DO NOT send documents via email to compliance officer or to [email protected]
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting Compliance Conditions: If Suspended
Upload Suspense Conditions: Documents>>Upload; Document Type: Compliance Suspense Conditions
Crucial final step! Select: File Submission >> Submit Compliance Suspense Conditions to PHFA.
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting Compliance Conditions: If Suspended
Please do not click File Submission more than once You can verify if your field was properly submitted
by checking the notes section within the loan folder There will be a note with the description of
“Submitted Suspense Conditions to PHFA” if it was successful
Please avoid submitting duplicates of any document
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting Compliance Conditions: If Denied
Review Compliance Denial notification via Pipeline Plus system
If denial can be disputed, collect and upload any supporting documentation: Documents>>Upload; Document Type: Change Request Conditions
Crucial final step! Select: File Submission >> Submit Change Request to PHFA.
If the denial cannot be disputed: No action is required
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting Compliance Conditions: If Denied
Please do not click File Submission more than once You can verify if your field was properly submitted
by checking the notes section within the loan folder There will be a note with the description of
“Submitted Change Request to PHFA” if it was successful
Please avoid submitting duplicates of any document
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting Compliance Conditions: If Approved
Review Compliance Approval Notification and collect all outstanding items
These documents must be submitted when the purchase submission package is uploaded
There’s no file submission action for approval conditions
Documents will not be reviewed until the completed purchase package has been uploaded and submitted
PENNSYLVANIA HOUSING FINANCE AGENCY
Change Requests
The “Submit Change Request” should not be used to upload approval or suspended compliance conditions
This option is used for major changes to the loan that need to be made and reviewed before closing
PENNSYLVANIA HOUSING FINANCE AGENCY
Notifying PHFA of Cancelled/Denied Loans
If a loan previously submitted via BlitzDocs will be cancelled or denied by your organization, you must cancel it on the Pipeline Plus System Be sure to include the reason for cancellation.
PENNSYLVANIA HOUSING FINANCE AGENCY
PENNSYLVANIA HOUSING FINANCE AGENCY
Contact Information
Business Development Unit Coleen Baumert [email protected] 717.780.1871 Michael Brightbill [email protected] 717.780.1801 Justin Coleman [email protected] 717.780.3993
Compliance Unit Tammy Miller [email protected] 717.780.3884 Denise Wolfgang [email protected] 717.780.3923 Betsy Stilo [email protected] 717.780.4321
PENNSYLVANIA HOUSING FINANCE AGENCY
Contact Information
Purchasing/Final Docs Unit Karen Zapotosky [email protected] 717.780.3973 General purchasing questions: [email protected] General final docs questions: [email protected]
Secondary Marketing Unit Jordan Laird [email protected] 717.780.3843 Leah Finley [email protected] 717.780.1872
Homeownership Hotline 1.800.822.1174
THANK YOU FOR YOUR TIME AND ATTENTION
www.phfa.org
PENNSYLVANIA HOUSING FINANCE AGENCY
3/10/15