A Resource for Community Bankers

AFFORDABLE MORTGAGE LENDING GUIDE

A Resource for Community Bankers

Part I: Federal Agencies and Government Sponsored Enterprises Revised July 2018; Freddie Mac revised November 2018

PUBLISHED BY: Federal Deposit Insurance Corporation 550 17th Street, NW, Washington, DC 20429 877-ASK FDIC (877-275-3342)

The Federal Deposit Insurance Corporation (FDIC) does not endorse the programs described in this publication or any particular approach to their use. The overviews and program information included in this Guide are designed to illustrate the broad range of options available to financial institutions. The FDIC has taken measures to ensure that the information and data presented in this publication is accurate and current. However, the FDIC makes no express or implied warranty regarding such information or data, and hereby expressly disclaims all legal liability and responsibility to persons or entities who use or access this publication and its content, based on their reliance on any information or data that is available through this website. Each institution is responsible for assessing whether the resources presented here are appropriate for the bank to pursue given factors such as the institution's existing mortgage, Community Reinvestment Act, or community development strategies, as well as business focus, financial condition, and market.

When citing this publication, please use the following: Affordable Mortgage Lending Guide, Part I: Federal Agencies and Government Sponsored Enterprises (Washington, DC: Federal Deposit Insurance Corporation, 2016; revised 2018), .

AFFORDABLE MORTGAGE LENDING GUIDE

A Resource for Community Bankers

Part I: Federal Agencies and Government Sponsored Enterprises Revised July 2018; Freddie Mac revised November 2018

TABLE OF CONTENTS

About This Publication................................................................................................................. 1 Program Matrix ............................................................................................................................. 4 U.S. Department of Housing and Urban Development (HUD) and Federal Housing Administration (FHA) ..................................................................................... 5

Overview of the Federal Housing Administration .............................................................. 5 Doing Business with FHA ....................................................................................................... 7 Using FHA's Section 203(b) Mortgage Insurance Program: A community banker conversation .....................................................................................11 Title I Programs Property Improvement Loan Insurance ..............................................................................13 Manufactured Home Loan Insurance .................................................................................17 Title II Programs 203(b) Mortgage Insurance Program .................................................................................21 Streamline Refinance ............................................................................................................27 203(k) Rehabilitation Mortgage Insurance ........................................................................31 Other HUD Programs 184 Indian Home Loan Guarantee Program......................................................................35 Good Neighbor Next Door ..................................................................................................41 U.S Department of Agriculture (USDA)...................................................................................45 Overview ................................................................................................................................45 Doing Business with USDA ..................................................................................................46 Using USDA's Single Family Housing Guaranteed Loan Program: A community banker conversation .....................................................................................49 Single Family Housing Guaranteed Loan Program...........................................................51 Single Family Housing Direct Loans ...................................................................................55 Single Family Housing Repair Loans and Grants ..............................................................59 U.S. Department of Veterans Affairs (VA) ...............................................................................65 Overview ................................................................................................................................65 Doing Business with VA .......................................................................................................66 Using VA's Home Purchase Loan Program: A community banker conversation .....................................................................................69 Home Purchase Loan Program ............................................................................................71 Interest Rate Reduction Refinance Loan.............................................................................75

U.S. Department of the Treasury Community Development Financial Institutions Fund (CDFI Fund) .............................................................................79

Overview ................................................................................................................................79 Bank Enterprise Awards .......................................................................................................83 CDFI Program ........................................................................................................................85 Capital Magnet Fund ............................................................................................................89 Fannie Mae..................................................................................................................................93 Overview ................................................................................................................................93 Doing Business with Fannie Mae ........................................................................................94 Duty to Serve..........................................................................................................................96 Using Fannie Mae's HomeReadyTM Mortgage Product: A community banker conversation .................................................................................. 101 HomeReadyTM Mortgage .................................................................................................. 103 Standard 97 Percent Loan-to-Value Mortgage............................................................... 107 HomeStyle? Renovation Mortgage ................................................................................. 111 Standard Manufactured Housing Mortgage .................................................................. 117 MH AdvantageTM................................................................................................................ 123 Refi PlusTM/Home Affordable Refinance Program (HARP)............................................ 127 Freddie Mac ............................................................................................................................. 131 Overview ............................................................................................................................. 131 Doing Business with Freddie Mac.................................................................................... 132 Duty to Serve....................................................................................................................... 133 Using Freddie Mac's Home Possible? Product: A community banker conversation .................................................................................. 137 HomeOneSM......................................................................................................................... 139 Home Possible?.................................................................................................................. 143 Construction Conversion and Renovation Mortgage.................................................... 147 Manufactured Home Mortgage ....................................................................................... 151 Relief RefinanceSM/Home Affordable Refinance Program (HARP)............................... 155 FDIC's Community Affairs Program ...................................................................................... 159 Glossary & Terms ..................................................................................................................... 161

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