Home AdvantagePLUS Mortgage Program Guide

NC Home Advantage MortgageTM Program Guide

(excluding $8,000 DPA)

i|P a g e Rev 9/2019

North Carolina Housing Financing Agency

3508 Bush Street Raleigh, NC 27609-7509

(919) 877-5700

NC Home Advantage Mortgage TM

Contents

Section 1: Introduction

............................................................................................. 5

1.1 About NCHFA ................................................................................................................................ 5

1.2 Purpose ......................................................................................................................................... 5

1.3 Program Contact Information ....................................................................................................... 7

Section 2: Definitions

............................................................................................. 8

Section 3: Lender Participation Guidelines ........................................................................................... 13

3.1 Lender Participation Guidelines.................................................................................................. 13

3.2 Annual Recertification Requirements ......................................................................................... 14

3.3 Lender Compensation ................................................................................................................. 14

3.4 Online Lender Services System (OLS).......................................................................................... 15 3.5 Record Retention ........................................................................................................................ 16 3.6 Master Servicer Contact Information ......................................................................................... 16

3.7 Lender's Responsibility to Report Violations (Fraud) ................................................................. 17

Section 4: Loan Eligibility Guidelines

........................................................................................... 18

4.1 NC Home Advantage MortgageTM Loan Program Overview ? 3% or 5% DPA ............................. 18

4.2 Eligible Loan Types ...................................................................................................................... 18

4.3 Ineligible Loans / Loan Types ...................................................................................................... 20 4.4 Mortgage Insurance Coverage Requirements ............................................................................ 20 4.5 Escrow Holdbacks and Repairs ................................................................................................... 21

4.6 Repurchase Conditions ............................................................................................................... 21

4.7 Minimum Investment .................................................................................................................... 22

4.8 Cash Back Limitation ..................................................................................................................... 22

4.9 Maximum Asset Limitation............................................................................................................ 22

4.10 Lien Position Policy ..................................................................................................................... 22 4.11 Principal Reduction Policy........................................................................................................... 22 4.12 Down Payment Assistance (DPA) ? 3% or 5% ............................................................................. 22

4.13 Down Payment Assistance (DPA) ? General Guidelines ................................................................. 23

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4.14 Funding of the DPA by Participating Lender ............................................................................... 24 4.15 Subordination Policy for Refinances (DPA) ................................................................................. 25 Section 5: $1,500 and $2,500 Closing Cost Assistance ............................................................................... 26 5.1 Closing Costs Assistance Options ? Freddie Mac/LPA Loans ...................................................... 26 Section 6: Borrower Eligibility Guidelines ........................................................................................... 28 6.1 Borrower Requirements ............................................................................................................. 28 6.2 Pre-Purchase Education Requirement for First-Time Homebuyers ........................................... 28 6.3 Income Limits .............................................................................................................................. 29 6.4 Ratios .......................................................................................................................................... 29 6.5 Credit Score Requirements ......................................................................................................... 29 6.6 Collections Policy / Liens / Judgments / Student Loans.............................................................. 30 6.7 Bankruptcy Policy........................................................................................................................ 30 6.8 Short Sales/Foreclosures ............................................................................................................ 30 6.9 Flip Properties ............................................................................................................................. 31 6.10 Key NC Home Advantage MortgageTM Highlights........................................................................ 31 Section 7: Property Eligibility Guidelines (NC Home Advantage 3% and 5% DPA only) ............................. 32 7.1 Property Requirements............................................................................................................... 32 7.2 Repairs and Escrows for Completion .......................................................................................... 33 7.3 Owning More Than One Home ................................................................................................... 33 7.4 Property Appraisal Condition Requirements .............................................................................. 34 Section 8: Loan Origination and Underwriting Steps.................................................................................. 35 8.1 General........................................................................................................................................ 35 8.2 NCHFA Normal Review Time....................................................................................................... 35 8.3 Loan Origination.......................................................................................................................... 35 8.4 Pre-Approval Forms/Documents Required................................................................................. 37 8.5 Loan Closing After NCHFA Issues Commitment .......................................................................... 38 8.6 Interest Credit ............................................................................................................................. 39 8.7 Interim Servicing ......................................................................................................................... 39 8.8 Hazard Insurance Requirements................................................................................................. 39 8.9 Electronic Signatures................................................................................................................... 40

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8.10 Power of Attorney (POA) Guidelines .......................................................................................... 40

Section 9: Post-Closing Processing Steps ........................................................................................... 42

9.1 General........................................................................................................................................ 42

9.2 Closing of DPAs in NCHFA's Name .............................................................................................. 45

9.3 Signatures on the DOT and Promissory Note ............................................................................. 45

9.4 Uploading the Closing Package (Required to BOTH NCHFA and ServiSolutions) ....................... 46

9.5 Loan Purchase Review and Funding............................................................................................ 47

9.6 Shipping the Final Documents to Master Servicer...................................................................... 47

Section 10: Rate Extensions, Changes to Lock-In and Loan Withdrawal Guidelines .................................. 49

10.1 Late File Submission.................................................................................................................... 49

10.2 Interest Rate Lock-In Policy......................................................................................................... 51

10.3 Requesting an Extension............................................................................................................. 51

10.4 Changes to a Lock-In ................................................................................................................... 52

10.5 Withdrawal of Loan Locks ........................................................................................................... 52

10.6 Duplicate Locks or Borrowers ..................................................................................................... 52

10.7 Lock Expiration ............................................................................................................................ 52

Section 11: Program Summary

........................................................................................... 54

11.1 Preliminary Lender Participation Guidelines .............................................................................. 54

11.2 54Eligibility Criteria ..................................................................................................................... 54

11.3 Down Payment Assistance (3% and 5% DPA) NC Home Advantage MortgageTM ....................... 55

11.4 Closing/Purchase Guidelines....................................................................................................... 56

11.5 Operations Process ..................................................................................................................... 56

11.6 Documentation Checklist / Matrix.............................................................................................. 57

Index

........................................................................................... 58

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Section 1: Introduction

1.1 About NCHFA NCHFA was created in 1973 by North Carolina General Statutes Chapter 122-A as a corporate body with responsibility to provide affordable housing opportunities for lowand moderate-income North Carolina households. NCHFA has office hours between 8:00 a.m. and 5:00 p.m., Monday through Friday. The telephone number is (919) 877-5700. The mailing address for NCHFA is the following: North Carolina Housing Finance Agency Home Ownership Lending Group P.O. Box 28066 Raleigh, North Carolina 27611-8066 or North Carolina Housing Finance Agency Home Ownership Lending Group 3508 Bush Street Raleigh, North Carolina 27609 This Program Guide and other resource materials may be downloaded from the NCHFA website at . Marketing brochures and flyers may be available from time to time and will be provided to lenders when available.

1.2 Purpose The purpose of the NC Home Advantage MortgageTM Program Guide is to provide a basic overview of the key operational and program details of the NC Home Advantage MortgageTM and associated programs regarding borrower and property eligibility, credit, underwriting, and closing procedures. Lenders must review and understand all program requirements.

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