CalHFA CalPlus FHA

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CalHFA CalPLUS FHA with CalHFA Zero Interest Program (ZIP)

For Wholesale As of 4/07/20 Product is Discontinued and no new loan submissions and or locks will be accepted

DPA options subject to change based on market conditions Must confirm availability with Housing Authority.

30 Year Fixed Standard Income

LTV CLTV

Purpose

Units

Occupancy

Credit Score

DTI Ratios

96.50 1051

Purchase

1

O/O

6602

45%3

1. On purchases, the CLTV is further limited to 100% (of the adjusted value) or the standard FHA LTV limit (96.50%)

(depending on the type of financing) if the subordinate lien is NOT from an instrumentality of government or

government agency that is providing down payment and/or closing cost assistance in the form of secondary

financing.

2. All borrowers must have a credit score to be eligible for a CalHFA loan.

3. Effective for loans locked on or after 11/2/20: max DTI is 45%. Effective for loans locked prior to 11/2/20 but on or

after 5/1/20: max DTI is 43%

PRODUCT NAMES

? CalHFA CalPLUS 30 Year FHA Fixed ? CalHFA CalPLUS High Balance 30 Year FHA Fixed

? CalHFA ZIP 2nd or 3rd DPA w/ FHA 1st

? CallHFA MyHome Assistance DPA ? w/FHA 1st -



ALLOWABLE

? Wholesale - Discontinued

ORIGINATION CHANNELS ? Retail - Available

? May be originated through standard retail origination process

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SERVICER EIN (Federal Tax ID) COVID-19 ADDITIONAL REQUIREMENT PRODUCT REQUIREMENT

CALHFA ZIP

? Lakeview Loan Servicing, LLC = Master Servicer

? CalHFA EIN #: 68-0181576 ? Please refer to COVID-19 Informational document for guidance pertaining to topics

such as Income/VVOE, Title/Recording, Appraisals. Until further notice the guidance in the informational document supersedes the information provided in the product profiles ?

? Housing Authority approval required. Loan must be submitted to the agency and approved by them in the required timeframe as outlined in the product profile and on their website. Loan may not proceed to docs or funding without agency approval.

? All borrowers must have a credit score to be eligible for a CalHFA loan. Minimum credit score is 660.

? Loans reserved but not rate locked by Thursday October 31, 2019 at 3:00 p.m. PT ? Reservations with credit scores that do not meet the new minimum credit score requirement will be cancelled ? The lender will have to enter a new reservation ? All new reservations will be subject to current guidelines and interest rates at time of locking

? The CalHFA ZIP second loan is only available with CalPlus and is a silent second loan. The interest rate is zero percent (0.00%) and the payment(s) are deferred for the life of the first mortgage or until the property is transferred or the first mortgage loan is refinanced. Assistance to be used for closing costs ONLY.

? Borrowers qualifying under this program must utilize the down payment assistance associated with this program. The first trust deed is not allowed to be used without using the DPA.

? This is a second lien that will subordinate to the FHA first mortgage and must be considered "secured borrowed funds"

? On the loan application, Question H "Is any part of the down payment borrowed" should show as Yes.

? Additional loan must be created in FT360 to accommodate ZIP second and should be created at the same time the 1st lien is created for disclosure, document and funding purposes.

? Additional CalHFA subordinate loan(s) and grants may also be eligible to be layered with the CalPLUS FHA Loan and ZIP loan

? Credit underwriting guidelines and details are exactly the same as the CalHFA first ? Interest Rate: 0.00% ? The maximum ZIP loan amount is up to 2% or 3% of the total first mortgage loan

amount. ? ZIP may be used for closing costs and/or prepaid items only. ? Any funds due to the borrower from ZIP financing must be applied to the borrower's

principal balance. ? Any funds that were refunded to the borrower will be net funded at time of loan

purchase. ? The ZIP loan combined with a CalPlus first mortgage is available for first-time

homebuyers only. ? Term matches the term of the first mortgage. Payment on FHA ZIP are deferred for

the life of the CalPLUS FHA first mortgage ? Repayment of the principal on ZIP shall be due and payable at the earliest of the

following events: transfer of title, sale of property (ZIP may be assumed or paid off when the first mortgage is assumed) or payoff or refinance of the CalPLUS FHA first

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mortgage

? Loan document must be drawn in lender's name

? ZIP must be in second (2nd) lien position or may be in third (3rd) lien position when

combined with the MyHome Assistance only

DOWN PAYMENT

? The ZIP subordinate loan is to be used only for closing costs and cannot be used for

ASSISTANCE

down payment assistance.

? CalHFA will not purchase any ZIP loan or any other associated CalHFA

subordinate loan when a lender applies ZIP funds to down payment. This may

also result in a repurchase of the first loan from CalHFA's master servicer.

? In cases where a CalHFA first loan closes at a lower or higher loan amount than is

reflected on the CalHFA Notice of Commitment, CalHFA will not purchase the

associated subordinate loan(s). This may also result in a repurchase of the first

loan from CalHFA's master servicer.

? In cases where, prior to loan closing, there are excess ZIP funds, lenders are to

lower the ZIP loan amount and re-submit to CalHFA for re-approval. In cases

where the loan has closed and there are excess ZIP funds, those funds must be

applied as a principal reduction. Borrower may not receive cash back which

exceeds the amount of their earnest money deposit

? In addition to the ZIP, this program may be layered with the following down payment

and/or closing cost assistance options for first-time homebuyers only:

? MyHome Assistance Program

? Refer to MyHome Assistance Guidelines here:



? May be used for closing cost and/or down payment assistance

? In the case of conflicting guidelines, the lender must follow the more restrictive

? Must be recorded in the Second Lien position

? For full MyHome underwriting guidelines and details, refer to the MyHome

Product Profile, located on the Resource Center

? For retail only, this program may be layered with CalHFA Mortgage Credit Certificate

Tax Credit Program (MCC Tax Credit Program) or other Mortgage Credit Certificate

(MCC) programs for first-time homebuyers only

? MCC credit may be used for credit-qualifying purposes, per investor guidelines

? In the case of conflicting guidelines, the lender must follow the more restrictive

? For full CalHFA MCC Tax Credit Program underwriting guidelines and details,

refer to the MCC Tax Credit Program Handbook or log onto the MCC

Administrator's website at

? For loans utilizing MyHome Assistance, refer to MyHome Assistance Guidelines here:



DOWN PAYMENT

? All down payment assistance proceeds must be disclosed on the Closing Disclosure,

ASSISTANCE ON CLOSING

Section L -Paid Already by or on Behalf of the Borrower at Closing. The down

DISCLOSURE

payment assistance proceeds must be labeled accurately. For example: "Second

loan" is not appropriate if the assistance is a grant or gift. Multi-purpose labels such

as Second/Grant/Gift will not be accepted, it must be specific to the transaction. If

the borrower is receiving down payment assistance from multiple sources, all

assistance sources must be itemized on the Closing Disclosure. Unless the CFPB

comes out with guidance restricting it, it is acceptable to place assistance proceeds

as "Other Credits" if necessary due to space limitations.

AUS DATA ENTRY

? See Housing Authority Products with Second Liens in FT360 in the Resource Center,

REQUIREMENTS OF DPA

which can be located at the following link:

LIEN



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AGENCY LINKS

MINIMUM LOAN AMOUNT

MAXIMUM PURCHASE PRICE

AuthorityProductswithDPALiensinFT360.pdf

? In the Secondary Financing of the HUD-92900LT FHA Loan Transmittal screen ? Enter the Secondary Financing Source/EIN ? Select the Correct Check box (Gov't ? A Government Entity is the source of the secondary financing, NP ? A Non-Profit Agency is the source of the secondary financing, Family ? A Family member is the source of the secondary financing, Other ? There is another source of the secondary financing (completed checkbox which will enable if selected)

? Enter the Amount of the Secondary Financing ? For applications taken prior to 3/1/21, in MORNETPlus Community Lending

Section of the Streamlined 1003 and for applications taken on or after 3/1/21 in the MORNET Plus Community Lending Section of the Fannie Mae Additional Data Form: ? Do not select Community Lending on the Mornet Community Lending screen ? If HFA Second Mortgage being used, Community Second needs to be

checked ? If HFA grant is being used neither Community Lending nor Community

Second should be checked

? For additional reference, CalHFA FHA Loan Programs guidelines posted at CalHFA's website:

? In addition to any Product Profile requirements, you must always meet the published HUD guidelines. If published HUD guidelines are more restrictive then what is allowed in the Product Profile, you must always defer to HUD Guidelines.

? All PRMG staff can access all end Agency guidelines though AllRegs Online at . Instructions on how PRMG staff can access the AllRegs service is available in the Resource Center.

? Use the following link to access the HUD Housing Handbooks site, and from there, obtain access to the 4000.1 Handbook:

? s/handbooks/hsgh

? Access the All Regs version of the Handbook at: ?

? No Minimum Loan Amount ? CalHFA's scenario calculator can be found at the following link:

Standard Balance:

? No Minimum Loan Amount ? Note that loan amounts under $30,000 will require special pricing by Secondary

Marketing For loans reserved on or after 1/1/21: High Balance:

? $548,251 For loans reserved prior to 1/1/21: High Balance:

? 1 Unit $510,401

? For loans reserved on or after 6/1/20: CalHFA will no longer have sales price limits on eligible properties. Eligible CalHFA borrowers must continue to meet CalHFA income limits as well as the loan limits for each loan program as announced annually by the Federal Housing Finance Agency (FHFA).

? For loans reserved prior to 6/1/2020: $765,000 for all counties in California

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MAX. LOAN AMOUNT

GEOGRAPHIC RESTRICTIONS MORTGAGE TYPES FEES

? The maximum loan limit is set by HUD and is county specific. ? Maximum loan amount by county may be exceeded by only the amount of the

financed up front MI (UFMIP) Standard Balance:

? The lesser of the base loan amount listed below or the particular county's maximum HUD loan limit. HUD Loan Limits can be found here:

? 1 Unit $510,400 High Balance:

? The maximum loan limit is set by HUD and is county specific. ? Maximum loan amount by county may be exceeded by only the amount of the

financed up front MI (UFMIP)

? Max Limits for all counties can be found here:

? California only ? Please refer to PRMG's "Eligible States" list, which can be found at this link:



? 203(b) Home Mortgage Insurance ? 234(c) Mortgage Insurance for Condominiums

? For loans utilizing MyHome Assistance, refer to MyHome Assistance Guidelines here:

Retail: 1st ? First Mortgage: 2.75% Origination Fee must be charged. Total customary lender

origination fees not to exceed the greater of 3% of the loan amount or $3,000 ? Please note, Discount Fee (if applies) can be charged in addition to Origination Fee ? No other PRMG fee (Processing, Underwriting, etc.) to be charged ? CalHFA Fees: None ? High Balance fee is not included in the 3% or $3,000 fee limit ? In addition to the above fees, other customary third-party fees such as credit report

fee, appraisal fee, insurance fee or similar settlement or financing costs may be charged. ? In all cases the lender must meet federal and California lending laws regarding fees and charges. 2nd ? Second Mortgage: No additional fees are allowed for the DPA 2nd Wholesale ? PRMG must disclose file for broker ? Must be a Borrower Paid transaction 1st ? First Mortgage: Max 2.25% Origination Fee may be charged. Total customary lender/broker origination fees not to exceed the greater of 3% of the loan amount or $3,000. $990 PRMG Underwriting Fee to be charged. ? No other non-third party fees, (including non-third-party-Processing Fees) to be charged ? High Balance fee is not included in the 3% or $3,000 fee limit ? Third-party Processing fees are allowed, but that fee is included in the 3%/$3,000 lender/originator cap. If this cap is exceeded, the broker fee will be reduced to meet the 3%/$3,000 cap. ? CalHFA Fees: None

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CALHFA LOAN SCENARIO CALCULATOR

FT360 SETUP/LOAN SUBMISSION/LOAN DISCLOSURES/LOAN DOCUMENTS

DOCUMENTATION

? In addition to the above fees, other customary third-party fees such as credit report fee, appraisal fee, insurance fee or similar settlement or financing costs may be charged.

? In all cases the lender must meet federal and California lending laws regarding fees and charges.

2nd ? Second Mortgage: No additional fees are allowed for DPA 2nd

? Use the Loan Scenario calculator to compare CalHFA loans, and determine loan amounts for ZIP, and MyHome Assistance

? Print out of Loan Scenario calculator must be included in file submission ?

? Special process applies for loan setup process and disclosures ? For retail transactions, must follow instructions from the document found at the

following link or on the Resource Center for entering loans and creating disclosures: ?

DataEntryandDisclosureProcess.pdf

? For wholesale transactions, broker submits first mortgage to PRMG's Setup team who will create all subordinate liens. Follow submission instructions from the document at the following link or from the Resource Center:

? gAuthorityTPOBrokerSubmissionInstructions.pdf

? For wholesale transactions, PRMG must disclose file for broker

? Full/Alt Doc ? Evidence of Borrower's valid government-issued photo identification or written

statement from lender verifying review of valid government-issued photo identification is required ? When all income used to qualify a loan for the borrower is made up exclusively of wage earner income reported on a W2 and/or fixed income reported on a 1099 (i.e., social security or VA benefits) transcripts are not required, unless full tax returns are required for the borrower by the AUS (i.e., borrower employed by family members). If multiple borrowers are qualifying on the loan, but the tax returns are not filed jointly, and one borrower requires full returns, but the other borrowers are qualified exclusively on W2 and/or fixed income then no transcripts are required for the W2/fixed income borrower and 1040 transcripts are required for the self-employed borrower/borrower requiring full returns. When using this option, there can also be no tax returns included in the loan file (including if tax returns are required to be reviewed by the PRMG underwriter for MCC Approval or other purpose). If the borrower earns other income that is used to qualify that would be able to be validated with 1040 transcripts (i.e., rental income from tax returns, etc.) then 1040 transcripts are required to validate that income. A completed and executable (signed) 4506-C must be submitted with the loan file. For the borrowers where transcripts are not required, be sure to select the W2/1099 option only when completing the 4506-C. Do not mark the 1040 or Record of Account option. ? When tax returns are required for a borrower or when borrower's qualifying income is not made up of W2 or fixed income reported on a 1099, validated 1040 tax transcripts are required if borrower's income is utilized as a source of repayment. If multiple borrowers are qualifying but the tax returns are not filed jointly (when one borrower requires full returns), then it is acceptable to provide no transcripts for the salaried/fixed income borrower and 1040 transcripts for the self-employed borrower/borrower requiring the tax returns.

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? Tax transcripts must come to lender directly from the IRS or through a third party vendor ordered/obtained by lender

? When business tax returns are required by AUS, business income is used to qualify or business income is used to offset a loss on personal tax returns or is included in the loan file, a separate IRS Form 4506-C must be executed (but not processed and must allow enough time to be executed post-closing after delivery to investor) for each business for the required number of years of income documented, for each selfemployed borrower on the loan transaction. Allowable signatures (per IRS): 1120/1120S: Borrower must sign name with title and only the following titles are acceptable: President, Vice President, CEO, CFO, Owner, 1065: Borrower must sign name with title and only the following titles are acceptable: General Partner, Limited Partner, Partner, Managing Member, Member

? Letter of explanation is required for borrowers who are self-employed or have nonW2 income/loss if there is a variance of 10% or more between the total income on the tax transcripts and the tax returns.

? Two years IRS 1040 Transcripts are required on all loans when the borrower is employed by a relative or closely held family business.

? For non-self-employed borrowers: Verbal VOE is required to be completed no more than 10 days prior to the note date for wet funding states and escrow states. If the Verbal VOE is completed more than 10 days prior to the funding date, another Verbal VOE should be completed 10 days prior to funding date for escrow states.

? For self-employed borrowers: No more than 30 calendar days prior to note date, verify the existence of the borrower's business from a third party that may include a CPA letter (cannot be vague, must state length of time doing taxes and be signed by CPA), regulatory agency, or appropriate licensing bureau; OR verify a phone listing and address for the borrower's business through resources such as the telephone book, directory assistance, internet, or contact the appropriate licensing bureau. Verification may not be made verbally, and a certification by PRMG indicating the information was verified is not allowed. Documentation from the source used to verify the information must be obtained and in the file. Internet sites such as , Chamber of Commerce sites and where they allow the business owner to add their own information are not acceptable. Also single source verifications, such as from , and are not allowed. If all other methods of obtaining third party verification have been exhausted, the borrower can provide letters from three clients indicating the type of service performed, length of time of business relationship, frequency of service, payment arrangements, etc. and support the income with current bank statements, deposits, etc. The underwriter must thoroughly investigate that the business, income and proof of business is legitimate.

? VOR/VOM required as indicated by the AU approval, but Private Party VOM/VOR as a stand-alone document is not permitted, 12 months cancelled checks are required to document the payment history

? With AUS Approval documentation must comply with AUS and TOTAL Scorecard section of the 4000.1 handbook

? Amended tax returns cannot be used to qualify if they are amended after the application, initial credit report date or purchase contract date unless the changes made are non-material to the amount of income claimed, and qualification for the mortgage loan. Due diligence must be exercised with close examination of the original, and amended returns, to determine if the use of the amended return is warranted and the following documentation should be reviewed when income from the amended return is required: A letter of explanation regarding the reason for the

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?

? ? ? ?

? ?

DOCUMENT EXPIRATIONS ? ?

?

AUTOMATED

?

UNDERWRITING

DESKTOP UNDERWRITER ? (DU)

? ? ?

re-filing; evidence of filing (must be validated with a record of account (4506-C results); copy of the original 1040; any extensions filed, and evidence of payment of the taxes due (or evidence borrower is on a payment plan in lieu of full payment as long as the borrower qualifies with the payment in the ratios), and the ability to pay, if the check has not yet cancelled. A payment plan is not allowed for amended returns. Profit and loss statement and balance sheet required if more than a calendar quarter has elapsed since date of most recent calendar or fiscal-year end tax return was filed by the borrower. (A balance sheet is not required for self-employed borrowers filing Schedule C income.) Additionally, if income used to qualify the borrower exceeds the two year average of tax returns, an audited profit and loss statement or signed quarterly tax returns obtained from IRS are required.

Income documentation per AUS findings, but VOE as a stand-alone document is not acceptable (must have supporting paystubs) Preliminary Title policy must be no more than 90 days when the note is signed Provide a written analysis of the income used to qualify the borrower on the Transmittal Summary or like document(s) in the file. An Income Analysis must be completed for self-employed borrowers. When paying off any non-transaction related item (i.e., debts, third party payouts, etc.) that has a balance of $5,000 or more, paid for by either borrower or seller, to ensure that the total payoffs are accurate, copies of the actual invoices (statements), an updated (current) credit report/refresh or credit supplement reflecting the current balance with a signed amendment (or similar) authorizing disbursement for these account(s) are required. You cannot use the amount listed on the credit report to document the payoff amount. All documentation used in qualifying the borrower must be legible and if not in English, will require a full written translation of the entire documentation into English. Must authenticate documents obtained from an Internet website and examine portions of printouts downloaded from the Internet including the Uniform Resource Locator (URL) address, as well as the date and time the documents were printed. The lender must visit the URL or the main website listed in the URL if the page is password protected to verify the website exists and print out evidence documenting the lender's visit to the URL and website.

Preliminary Title policy must be no more than 90 days when the note is signed Credit documentation must not be more than 120 days old from the disbursement date Appraisals are valid for 120 days and must be dated within 120 days of the disbursement (unless updated as allowed per the Appraisal Section)

The last AUS finding, which must match the terms of the loan, must be in the loan file. For all loans, the first submission to the AUS must occur prior to the note date (it cannot be the same as the note date.)

All loans must be run through FHA's TOTAL SCORECARD decisioning engine via DU. A copy of the findings must be included in the file. Must receive an Approve/Eligible All conditions outlined in the Findings Report must be satisfied. If TOTAL Scorecard issues an Approve/Eligible and ANY the following applies or the DU findings indicate you need to downgrade, then the loan must be downgraded to a Refer and not eligible

? the mortgage file contains information or documentation that cannot be entered

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