Arkansas Development Finance Authority Homeownership Division


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ARKANSAS DEVELOPMENT FINANCE AUTHORITY HOMEOWNERSHIP DIVISION

PROGRAM GUIDELINES

• ADFA Move-Up • Down Payment Assistance (DPA) • Arkansas Dream Down-payment Initiative (ADDI) • Mortgage Credit Certificate (MCC)
Eligible Property Types
• Single Family Detached • Planned United Developments (PUDs): Townhomes or Condos • Manufactured Housing: allowed only on government loan products
(FHA, VA, USDA)
• Duplex: FHA
ALL FILES ARE REVIEWED IN THE ORDER THEY ARE RECEIVED

1 Commerce Way, Suite 602 Little Rock, AR 72202

https://homeloans.arkansas.gov

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AR Home Financing

REVISED 11/1/2021

ADFA

ARKANSAS DEVELOPMENT FINANCE AUTHORITY
HOMEOWNERSHIP DIVISION
INDEX

First Mortgage Programs
Move-Up
Second Mortgage Programs
Arkansas Dream Down-payment Initiative (ADDI) Down Payment Assistance (DPA)
Homeowners Federal Tax Credit Certificate
Mortgage Credit Certificate (MCC)
Programs Income Limits
Mortgage Credit Certificate (MCC) Arkansas Dream Down-payment Initiative (ADDI) Freddie Mac
Resources
Contact Information

Page
3
9 12
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16 18 20
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ADFA

MOVE-UP

PROGRAM GUIDELINES

FIRST MORTGAGE LOAN

Product Information

ADFA “Move Up” 1st Mortgage: Conventional Loan, Freddie Mac HFA Advantage:
• Two Conventional Loan Options, See page 4 • Fixed Rate / 30 Year Amortization / Purchase Only (Available as Stand-Alone) • Arkansas Conventional Conforming Loan Limit • Only 3% down or 5% down options.

Government Loans (VA, RD, FHA):
• Fixed Rate / 30 Year Amortization / Purchase Only (Available as Stand-Alone) • Follow each specific program guidelines: VA, RD, and FHA • Follow All Conforming Loan Limits for each program

Master Server Eligible Borrower

ServiSolutions— A Division of the Alabama Housing Finance Authority:

7460 Halcyon Pointe Drive Suite 200, Montgomery, AL 36117

P.O. Box 242967 Montgomery, AL 36124-2967

In Alabama: 334.244.9200

Toll-free: 800.325.2432

FAX: 334.244.9214

Borrowers must qualify for the 1st Mortgage “Move Up” in order to use ADDI or DPA. ADDI and DPA are not available independently without ADFA “Move-Up” 1st Mortgage, and each down-payment assistance program have their own qualification guidelines. Conventional Loans: • Freddie Mac HFA Advantage Conventional (only)
Borrower (s) must not have an ownership interest in more than two financed residential properties, including the subject property, as of the Note Date. Bulletin: September 16, 2019. • Primary Residence only. (Available as Stand-Alone without down-payment assistance)

Governmental Loans: • Follow each specific program guidelines: VA, RD, and FHA. • Primary Residence only. (Available as Stand-Alone without down-payment assistance)

Rate Lock / Extension Fees

All Loan Reservations must be reserved and closed within 30-Days. • Lenders must complete the expected closing date on the reservation system and upload a
closing package due within 50-Days of reservation or subject to cancellation.
• 60– Day Rate Lock timeline • Extension Policy: you only pay the fee if the loan closes, and can be extended for 7, 15, 22, or
30 days at prorated prices that will be netted out at purchase. Rate is set daily and sent to all participating lenders. Rate subject to change without notice.

First-Time Homebuyer • •

No first-time homebuyer requirement for MOVE-UP, 1st Mortgage Loan. When combined with any ADFA down-payment assistance other requirements may apply.
See ADFA Mortgage Credit Certificate Programs for additional information.

Income Limits

ADFA Move-Up, ALL 1st Mortgage Loans— Borrower (s) or Co-Borrower (s) Qualifying Income* Limit Maximum of $137,000. Effective February24, 2020.

*Income other than base pay does not need to be included if the Borrower (s) or Co-Borrower (s) does not choose to have it considered for repaying the loan.

REVISED 11/1/2021

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ADFA

MOVE-UP
PROGRAM GUIDELINES

FIRST MORTGAGE LOAN

Compliance Review Requirements

Pre-Closing Compliance package:

Post-Closing Compliance (closing) package:

ADDI and MCC

MOVE-UP, ADDI, DPA, and MCC

Due by 15-Day from Lock Rate/Due by 50-Day from Lock Rate/Reservation

HFA Conventional & Standard Conventional
Based on Freddie Mac Income Limits

1. “Move-Up Conventional AT and Less Than 80% AMI” (HFA Conventional) • Borrowers qualifying income at or below 80% AMI • Lower Interest Rate • Allow minimum MI coverage (chartered) • Freddie Mac Home Possible Income Eligibility Tool: Lender must Include a
screenshot/print screen showing the property address and income limits. (This serves as a proof that the Lender checked the borrower’s eligibility for this program).
See “ADFA Reservation Pre/Post Closing Presentation” page 76. Item Included & required in Move-Up Post Closing Checklist.

2. “Move-Up Conventional Greater Than 80% AMI” (Standard Conventional) • Borrowers qualifying income above 80% AMI • Slightly Higher Interest Rate • Standard Mortgage Insurance required. See, Section 4701

MCC Eligible
Maximum Loan-ToValue (LTV) & TotalLoan-To-Value (TLTV)
Minimum Median Credit Score

ADFA MUST BE NOTIFIED PRIOR TO CLOSING of any reservations made for At or less than 80% AMI but discovered to be greater than 80% — the rate will be changed to the greater than 80% AMI rate as of the day it was reserved. If ADFA is not notified and the loan closes at the lower rate the loan will be ineligible for purchase by ServiSolutions due to the difference in the MI coverage.
Yes, MCC may be paired with Move-Up, even if 1st mortgage is not paired with any downpayment assistance program. See ADFA Mortgage Credit Certificate Programs, for additional information.
Governmental Loans: Follow each Program Guidelines for specific Maximum Loan-to-Value & Total-Loan-To-Value

Conventional Loans: All Freddie Mac HFA Advantage

Maximum LTV Ratio 97 %

Maximum TLTV Ratio 105%

FHA

VA

RD HFA Advantage Conventional

Credit Score

640

640

640

640

• All applicants are subject to Credit Score requirements, including Non-Occupant Borrowers Co-Signers.
• Two Credit Score suffices if it meets the minimum score requirement. • Only Traditional Credit Score. Non-traditional is not allowed.

REVISED 11/1/2021

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ADFA

MOVE-UP
PROGRAM GUIDELINES
Debt-To-Income Ratio Maximum (DTI)
DTI

FIRST MORTGAGE LOAN

FHA

VA

RD HFA Advantage Conventional

45.000% 45.000% 45.000%

45.000%

Homebuyer Education
Eligible Purpose
Non-Occupant Borrowers Co-Signers Manufactured Housing

• Debt-To-Income ratio, including DPA 2nd Mortgage payment, must not exceed 45%.
• If using Freddie Mac HFA Advantage Conventional Loans, and if both borrowers are first time homebuyers, at least one borrower is required to take a homebuyer education course.
▪ Credit Smart is acceptable to meet Freddie Mac education requirement for the 1st
Mortgage requirement. For more information, if using ADDI HBE Course requirements, see under ADDI Page 9 • Follow Specific product guidelines for other 1st Mortgages: VA, FHA, RD. • If using ADDI, HBE Course must be HUD Approved.
• Single Family Detached, 1-Unit Primary Residence, and PUDs (Condos & Townhomes). • VA, FHA, RD or Freddie Mac HFA Advantage Conventional loans types allowed. • Manufacturing housing allowed only on government loan products (FHA, VA, USDA). • Duplex allowed on FHA loans, follow FHA program guidelines.
See Eligible Borrower section on page 3 for additional information.
• Non-Occupant borrowers Co-Signers allowed only on FHA Loans. • Co-Signers must sign the Note, and TRID Documents only. Cannot take title or be on the
Warranty Deed. • ADFA does not request income documents on the Co-Signer. • Non-Occupant borrowers Co-Signers must meet credit score guideline as well.
Manufactured housing is allowed under each agency guidelines, and subject to the State of Arkansas. The following guidelines apply:

State of Arkansas Manufactured Housing Requirements

ServiSolutions Loan Delivery & Purchase Guidelines, page 34

Minimum Credit Score 640: VA, RD, FHA

Maximum DTI Maximum LTV Maximum CLTV

45%

Per FHA Program Guidelines

See Manufactured Housing Requirements for each program.
Required Lien Perfection Documentation • Collection of a DFA retirement confirmation document: Confirmation Letter from the AR
Department of Finance & Administration stating the mobile home certificate of title has been cancelled.

REVISED 11/1/2021

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ADFA

MOVE-UP

PROCEDURES

FIRST MORTGAGE LOAN

Lock-In

ALL program reservations and rate Lock-Ins are from 9:00 am to 7:00 pm, Monday– Friday with exception of ADFA holidays.

Income Verification UPDATED

HTTPS://ADFA.MITAS.COM/LENDERPORTAL
Move-Up, Qualifying Income Limit Maximum of $137,000.
Employed—ADFA asks for the Verification of Employment (VOE, follow AUS Income Requirements, and the Loan Approval (AUS). Self-employed—ADFA requires last 2 years signed tax documents, 1099’s, and a selfprepared signed YTD P&L.

Discount Points

Not Allowed

Reservations

ALL program reservations are from 9:00 am to 7:00 pm

Underwriting Delivery Fees Funding

May be reserved or ‘locked’ at application in our Reservation System, keep in mind the following: • If ADFA has not received a Compliance ADDI or MCC File within 15 days from
reservation/lock date the reservation will automatically be cancelled. Once a Compliance File is received, ADFA will issue a conditional commitment to the lender. DPA’s will remain the same as before. • Closing Package reviewed by ADFA:
• If ADFA has not received a Closing Package within 50 days from reservation/lock date, the reservation will automatically be cancelled.
• Documents are required to be uploaded using MITAS as a whole package with separated Index Sheets (preferred), or individually upload without Index sheets. **See pages 21-32 from New Reservation Presentation
• HFA Advantage Conventional through Loan Product Advisor (LPA) “ACCEPT/ELIGIBLE” recommendation is required. LPA A Minus Offering is not allowed.
• VA, FHA through DU “APPROVE/ELIGIBLE” recommendation. • RD through GUS.
**For ALL Loans Manual Underwriting is not allowed**
SERVISOLUTIONS FEES • $200—Funding Fee. This fee is paid directly by the lender and net funded at time of loan
purchase. It is not to be charged to the borrower. • $71.50—Tax Servicing Fee ADFA FEES • ADFA pays 1.75% SRP on All loans when sold to the Master Servicer. • OPTIONAL: Lenders can charge up to a 1% Origination Fee
Originating lender will fund the 1st and 2nd mortgage, at closing.

Points & Fees

ADFA is exempt from ATR-QM (Ability to Repay and Qualified Mortgage Rule).

REVISED 11/1/2021

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ADFA

MOVE-UP

PROCEDURES

FIRST MORTGAGE LOAN

Delivery

• 60—Day purchase timeline from date loan is reserved or ‘locked’ in our Reservation System.

• If ADFA has not received a closing package, “Extension Policy” will be available pertaining to lock-in/reservations where you only pay the fee if the loan is purchased. To further benefit from this change, extensions are now available for 7, 15, 22, or 30 days.

• ServiSolutions will not purchase after 70-days of closing and will send back to Lender.

HFA Conventional Mortgage Insurance

1. HFA Conventional At and Less than 80% AMI: Freddie Mac HFA Advantage Conventional monthly mortgage insurance automatically ends when LTV drops to 78%. Single Premium, available, coverage is Life of Loan with no additional cost.

≤ 95%

97%

90.01% to 95% = 16%

85.01% to 90% = 12%

18%

80.01% to 85% = 6%

Single Premium Mortgage Insurance is allowed, it can be paid by the borrower, Lender or Seller. If it is paid by the Lender or Seller it must be included in the maximum interested party contribution of 3% of the sales price.
Follow Freddie Mac Income Limits

2. HFA Conventional Greater than 80% AMI: Standard Mortgage Insurance required. See, Section 4701

Loan Product Advisor (LPA) UPDATED

Job Aids (Hyperlinks): 1. How to Submit Freddie Mac HFA Advantage Mortgage Loans to Loan Product Advisor 2. Affordable Seconds Checklist

Depending on your LOS, an HFA Advantage mortgage may be identified with one of the three options:
• HFA Advantage (LPA v5.0.06 and higher) • Home Possible Advantage for HFAs (LPA Legacy), or • Using the code 251.

Post-Closing Documents Standard post-closing documents must be uploaded to ADFA by the MITAS Portal. Original Recorded Documents must be submitted to ServiSolutions.

Loan Delivery & Purchase Guidelines

Link: ServiSolutions Loan Delivery & Purchase Guidelines

REVISED 11/1/2021

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ADFA

MOVE-UP
PROCEDURES
ADFA Training Resources

FIRST MORTGAGE LOAN
Arkansas Development Finance Authority 1 Commerce Way, Suite 602 Little Rock, AR 72202 (501) 682-5900

ADFA Forms, under SINGLE FAMILY

ADFA OUTREACH TEAM:

Issac Morales—Outreach Specialist

Kyle Putman—Outreach Specialist

Central & South Arkansas (501) 765-6543
[email protected]

Northwest Arkansas (501) 551-1276
[email protected]

Derrick Rose—Marketing & Outreach

Little Rock

(501) 682-5904 [email protected]

Miscellaneous

The information contained herein (including but not limited to any description of ADFA programs and products, eligibility criteria, interest rates, fees and all other loan terms) is subject to change without notice. Participants are responsible to find the latest information and guidelines. (The information contained in this product description does not modify, replace or substitute information in the Freddie Mac Selling and Loan Product Advisor Guides and or related release notes or supplements. Always check for Freddie Mac, ServiSolutions or ADFA announcements and updates for current underwriting guidelines, changes and/or updates).

REVISED 11/1/2021

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ADFA

ADDI

PROGRAM GUIDELINES

FORGIVABLE SECOND MORTGAGE

ADDI

Affordable Soft 2nd Mortgage: 5-year term, pro-rated, forgiven at 1/60th per month.

• Borrowers may be able to receive 10% of purchase price, up to $10,000. • Can receive cash back at closing for POC items. • Cannot be used for repairs, principal reduction, or to pay debt to qualify. • ADDI is not eligible for refinancing. • MCC Eligible and may be paired in assistance with ADDI. Follow MCC restrictions. • ADDI cannot be combined with DPA.

Eligible Borrower

ADDI cannot be used for principal reduction; but it can used for up to 5% down payment on a Conventional, and up to 3.5% on FHA, plus closing cost & POC items.
On VA / RD, ADDI may only be used for closing cost & POC items, no additional down-payment.
***Borrowers must qualify for the 1st Mortgage “Move Up” in order to use ADDI.*** • Purchase must be used as Primary Residency. • ADFA must approve Compliance Pre-Closing documents prior to closing an ADDI loan.

First-Time Homebuyer Rate Homebuyer Education
Income Limits Eligible Purpose
Purchase Price / Sales Price UPDATED

• No first-time homebuyer requirement for ADDI. See ADFA Mortgage Credit Certificate Programs for additional information.
Not applicable.
• All borrowers must take a HUD approved 8-hour pre-purchase homebuyer education class or an e-home online course through a HUD-Approved homebuyer counseling agency as well.
• Homebuyer Education Course class must be done prior to closing.
Online, 50% OFF, self-paced course link below: HUD-Approved Homebuyer Education Online Course
Household income limits apply by 80% Area Medium Income or below by county: See Page 21 & 22.
• Single family detached , 1-Unit Primary Residence, and PUDs (Condos & Townhomes). • VA, FHA, RD or Freddie Mac HFA Advantage Conventional loans types allowed. • Manufacturing housing allowed on FHA, VA or RD Loans. • Borrower (s) can own other property. • Duplex allowed on FHA loans, follow FHA program guidelines.
ADDI—Purchase Price Limit per County and Property Type, See pages 19 & 20 below.

REVISED 11/1/2021

9

ADFA

ADDI

PROGRAM GUIDELINES

FORGIVABLE SECOND MORTGAGE

Non-Occupant Borrowers Co-Signers

• Non-Occupant Co-Signers allowed only on FHA Loans. • Co-Signers must sign the Note, and TRID Documents only. Cannot take title or be on the
Warranty Deed.

• ADFA does not request income documents on the Co-Signer. Non-Occupant Co-Signers must meet credit score guidelines as well.

Tax Returns

Employed—ADFA requires the most current year of signed 1040’s and W2’s. If 1040 is not available, Lender must provide an IRS Transcript for that year. If W2’s are not available, Lender must provide an IRS RECORD OF ACCOUNT.
Self-Employed—ADFA requires last 2 years signed tax documents, W-2/1099’s and a selfprepared, signed YTD P&L.

Tax Returns: Yes, for ADDI you do need signed tax returns, together with W2’s, from anyone 18 or older who will live in the house.

Income Verification UPDATED

• Verification of Employment (VOE). • 2 months of paystubs. UPDATED

Fees
Awards Letters UPDATED Funding

CHILD SUPPORT: Provide proof of the amount of child support rec'd for each child.
• You may email your inquiry form, with the borrower's name and SS#, to ARKANSAS CHILD SUPPORT ENFORCEMENT at: [email protected] OR [email protected]
• Send ADFA the e-mail you sent to AR CHILD SUPPORT ENFORCEMENT, together with their response. If there is child support, need proof of the monthly amount rec’d by the borrower. This can be documented by a twelve-month printout or a recent court order agreement.
• ADFA allows a $50 lender application fee to borrower, not required. • Borrowers are able to receive cash back at closing to cover POC items. • ADFA pays for up to two HQS Inspections. Any additional inspections cannot be paid by the
borrower and will not be paid by ADFA. • Borrower is not allowed to be charged for ADDI HQS Inspections.
Compliance package submission required prior to closing. Awards letter sent prior to closing ([email protected])
Award Letters must be requested within 24-48hrs prior closing to allow our staff for a proper review.
Originating lender will fund the 1st mortgage and 2nd mortgage at closing.

REVISED 11/1/2021

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ADFA

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Arkansas Development Finance Authority Homeownership Division