HOME ADVANTAGE MANUAL - WSHFC

Updated 04/08/2024 HOME ADVANTAGE MANUAL

TABLE OF CONTENTS Click below to jump to a section or page. To search for specific terms, press CTRL+F.

1 - INTRODUCTION............................................................................................................................. 1 Washington State Housing Finance Commission .......................................................................... 1 Benefits of the Home Advantage Program...................................................................................... 1 Purpose and Scope............................................................................................................................2 Process Overview ..............................................................................................................................2 Manual Updates & Revisions ...........................................................................................................3 Contacts for Questions .....................................................................................................................4 Eligible Lenders ................................................................................................................................6 Eligible Loan Originators .................................................................................................................6

2 - TERMS AND CONDITIONS .......................................................................................................... 7 Loan Types ........................................................................................................................................ 7 Loan Underwriting ...........................................................................................................................8 Loan Term for First Mortgage ........................................................................................................11 Loan Term for Second Mortgage ....................................................................................................11 New Financing .................................................................................................................................11 Total Debt to Income (DTI) Ratio Restriction...............................................................................11 Credit Score ..................................................................................................................................... 12 Credit Report................................................................................................................................... 12 Tax Liens ......................................................................................................................................... 13 Document Verification ................................................................................................................... 13 IRS Form 4506-C............................................................................................................................ 13 Income/Employment Verification................................................................................................. 13 Tax Transcripts ............................................................................................................................... 13 Interest Rate.................................................................................................................................... 14 Buydowns (Temporary).................................................................................................................. 14 Buydowns (Permanent).................................................................................................................. 15 Property Flipping............................................................................................................................ 15 Homebuyer Education ................................................................................................................... 15 Allowable Fees................................................................................................................................. 16 Non Allowable Fees ........................................................................................................................ 17 Mortgage Insurance........................................................................................................................ 17 Title Insurance ................................................................................................................................ 18 Flood Insurance Policy ................................................................................................................... 18 Hazard Insurance Policy ................................................................................................................ 18

HOME ADVANTAGE MANUAL

Power of Attorney ........................................................................................................................... 19 Escrow Holdbacks/Repair Escrow ................................................................................................ 19 Interest Credits .............................................................................................................................. 20 Reserve/Escrow Accounts ............................................................................................................. 20 Prepayment Penalty....................................................................................................................... 20 Assumptions................................................................................................................................... 20 Subordinate Financing ................................................................................................................... 21 Servicing .......................................................................................................................................... 21 Quality Control................................................................................................................................ 21 Repeat Program Users.................................................................................................................... 21

3 - ELIGIBLE BORROWERS.............................................................................................................23 Non Discrimination ........................................................................................................................23 Residency Type Requirements.......................................................................................................23 Occupancy Requirement ................................................................................................................25 First-Time Homebuyer Requirement............................................................................................25 Calculation of Credit Underwriting Income .................................................................................25 Maximum Total Annual Income....................................................................................................26 Co-Signer/Guarantor......................................................................................................................26

4 - PROPERTY REQUIREMENTS ....................................................................................................27 In General........................................................................................................................................27 Qualifying Single-Family Residences............................................................................................27 Appraisals ........................................................................................................................................ 27 Property(Home) Inspections ........................................................................................................ 28

5 ? THIS SECTION INTENTIONALLY LEFT BLANK ....................................................................29

6 - HOMEBUYER EDUCATION ...................................................................................................... 30 Policy .............................................................................................................................................. 30 Seminar Instructors....................................................................................................................... 30 Instructors Who No Longer Work for a Participating Lender .................................................... 31 Seminar Format .............................................................................................................................. 31 Seminar Curriculum .......................................................................................................................32 Interpreters .....................................................................................................................................32 Seminar Workbooks .......................................................................................................................33 Commission Provided Materials....................................................................................................33 Seminar Arrangements ..................................................................................................................33 Publicity ........................................................................................................................................... 34

HOME ADVANTAGE MANUAL

Online Course Homebuyer Education Policy ...............................................................................34 Disciplinary Action .........................................................................................................................36 Seminar Checklist ...........................................................................................................................36

7 - RESERVATION PROCESS .......................................................................................................... 38 In General....................................................................................................................................... 38 Making a Reservation .................................................................................................................... 38 Mandatory Delivery Dates............................................................................................................. 38 Extensions to Reservations ............................................................................................................39 Changes to a Reservation ...............................................................................................................39 Expired Reservations and Changes in Property .......................................................................... 40 Cancelled Reservations.................................................................................................................. 40 Reservation Transfer ..................................................................................................................... 40 Status of Loans................................................................................................................................ 41 On-Line Reservation System ......................................................................................................... 41

8 - LOAN ORIGINATION & PROCESSING .....................................................................................44 Documents Submitted for a Home Advantage Loan....................................................................44 Processing a Home Advantage Loan .............................................................................................44

9 - PRE-CLOSING COMPLIANCE REVIEW & APPROVAL ...........................................................46 Purpose of Pre-Closing Compliance Review .................................................................................46 Submission of Loan File .................................................................................................................46 Where to Submit Files ....................................................................................................................47 Review Procedure ...........................................................................................................................47 Checking Mortgage Loan Status ....................................................................................................47

10 - LOAN CLOSING..........................................................................................................................49 Compliance Approval .....................................................................................................................49 Closing Documents .........................................................................................................................49 Closing Documents (Commission Second Mortgages) ................................................................52 Rate Lock Extension Fees ..............................................................................................................53

11 - POST CLOSING COMPLIANCE REVIEW & APPROVAL ........................................................54 Submission of Mortgage Loan File ................................................................................................54 Items Needed at Post Closing Compliance ...................................................................................54 Where to Submit Files .................................................................................................................... 55 Review Procedure ...........................................................................................................................55 Checking Mortgage Loan Status ....................................................................................................55

HOME ADVANTAGE MANUAL

12 - LOAN PURCHASE & DELIVERY............................................................................................... 57 In General........................................................................................................................................57 Amortized Loan Balance ................................................................................................................ 57 Timing and Delivery of Closed Loans............................................................................................ 57 Penalties Withheld From Funding ................................................................................................58 Delivery Address .............................................................................................................................58 Wire/ACH Transfer Instructions...................................................................................................58 Loan Purchase Schedule/Funding.................................................................................................59 Purchase Prices (Lender SRP) .......................................................................................................59 Loan Suspensions (Curatives) ...................................................................................................... 60 First Payment/Notice of Assignment ........................................................................................... 60 Hazard Insurance Premium........................................................................................................... 61 Flood Insurance .............................................................................................................................. 61 FHA Monthly Insurance Premium ................................................................................................ 61 Conventional Mortgage Insurance Premiums .............................................................................. 61 Post-Closing Details of Origination Charges: Items Payable in Connection with Loan ...........62 Final Documents.............................................................................................................................62 Common Exceptions that Delay Purchase ....................................................................................62

13 - DOWNPAYMENT PROGRAMS .................................................................................................64 Downpayment Assistance Programs .............................................................................................64 Program Description ......................................................................................................................64 Maximum Income Limit, Loan Amount & Mortgage Details ......................................................64 Program Eligibility..........................................................................................................................65 Combined Loan to Value (CLTV) and Total Loan to Value (TLTV) ............................................65 Reserves (Not Applicable to the Home Advantage DPA Program at 0% Interest) ....................65 Buydowns ........................................................................................................................................66 Reservations ....................................................................................................................................66 Income Calculation.........................................................................................................................66 Calculating Downpayment Assistance Loan Amount ..................................................................67 Needs Assessment Form (Not Applicable to Home Advantage Downpayment Assistance Program at 0% Interest).................................................................................................................67 Eligible Uses of Downpayment Assistance Funds ....................................................................... 68 Cash Back ........................................................................................................................................69 Closing and Delivering the Loan....................................................................................................70 HUD Commitment Letter for FHA Loans.....................................................................................70 FHA Insurance Award Letter......................................................................................................... 71 Insurance Requirements ................................................................................................................ 71

HOME ADVANTAGE MANUAL

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download