Arizona Industrial Development Authority (“AzIDA”) (EIN 81-3526584) – Program Sponsor and Administrator
Creates and directly implements the first mortgage loan and down payment assistance program, sets the loan interest rates, terms, points, authorizes disbursement of the down payment assistance funds, and markets the Program through the HOME+PLUS Program’s participating Lenders. Approves and monitors Lender participation.
Participating Lenders (“Lenders”)
Take applications, reserve in HTS/Emphasys system, process, underwrite, approve, fund, close and sell qualified loans to the Program’s Master Servicer. Lenders are responsible for servicing program loans in accordance with Agency / GSE requirements until they’re purchased by the Master Servicer.
U.S. Bank N. A. (“U.S. Bank”) - Master Servicer
Provides information and training concerning the mortgage loan file including acceptable loan products and delivery and funding, receives all mortgage files, reviews mortgage files, notifies Lenders of mortgage file exceptions, approves mortgage files, purchases first mortgage loans and delivers loans.
Hilltop Securities Inc. (HTS) - Reservation and Program Compliance
Maintains the HOME+PLUS Program reservation system (Emphasys – Lender Online) and the related website, posts guidelines, provides auto-fill forms, provides training on compliance issues and the system, makes corrections and updates in the reservation system at Lender, AzIDA or Master Servicer requests, answers system questions, receives compliance files, reviews, posts and notifies of exceptions and approves DPA Assistance compliance file.
HOME+PLUS HOME BUYER DOWN PAYMENT ASSISTANCE PROGRAM
The HOME+PLUS Home Buyer Down Payment Assistance Program (the “HOME+PLUS
Program”) is being administered by the Arizona Industrial Development Authority, nonprofit corporation and political subdivision of the State of Arizona, formed by the Arizona Finance Authority. Effective August 6, 2016, the Arizona Industrial Development Authority (“AzIDA” or the “Authority”) succeeded to the authority, powers, duties and responsibilities of the Arizona Housing Finance Authority (“AzHFA”). AzIDA was formed under Arizona law H.B. 2666, enacted May 19, 2016. Under H.B. 2666, all administrative matters and contracts, whether final or in process, were transferred from AzHFA to AzIDA on the effective date and retained their same status with AzIDA. (During a temporary transition period, now completed, the Arizona Department of Housing (“ADOH”) provided administrative support on behalf of AzIDA for the HOME+PLUS Program).
In addition to the provisions set forth in these Program Guidelines, the provisions set forth in the Mortgage Origination Agreement (between AzIDA and each participating Lender) shall also apply; in the event of a conflict, the provisions of the Mortgage Origination Agreement shall control.
HOME PLUS FIRST MORTGAGE LOANS
All borrowers under the HOME+PLUS Program will receive a 30-year, fixed rate, fully amortizing first-lien mortgage loan (a “HOME+PLUS First Mortgage Loan” or “First Mortgage Loan”) originated by a participating Lender and down payment assistance (“DPA Assistance”) in the form of a forgivable second lien loan from AzIDA (a “HOME+PLUS DPA Second Loan”). The DPA amount will be equal to 5%, 4%, 3%, or 0% of the original principal amount of the HOME+PLUS First Mortgage Loan, with such DPA amount fluctuating based on the related First Mortgage Loan interest rate. The DPA Assistance is applied toward the related down payment and/or closing costs.
DAILY INTEREST RATE LOCK RESERVATION
Interest rates for the HOME+PLUS Program are posted to the HTS/Emphasys – Lender Online system by 9:00 am CDT at https://lenders.housing.az.gov. Interest rates and reservations for this program are available Monday – Friday 8:00 A.M. – 6:00 P.M. MST, excluding Holidays.
PLEASE NOTE THAT INTEREST RATES AND THE RELATED DPA ASSISTANCE
AMOUNTS ARE SUBJECT TO CHANGE AT ANY TIME. Once reserved however, the interest rate and the related DPA Assistance amount will not change if the loan is delivered according to the timetable included in these guidelines.
Interest rate buy-ups or buy-downs are NOT available under the HOME+PLUS Program.
Commencing January 1, 2018, the HOME+PLUS Program will provides DPA Assistance in the form of a second mortgage loan (not a grant or gift) (the “HOME+PLUS DPA Second Loan”). The HOME+PLUS DPA Second Loan will be have a three-year term, a 0% interest rate and be subject to a second mortgage lien; the principal of the HOME+PLUS DPA Second Loan will be forgiven on a ratable monthly basis over the 3-year term; accordingly, 1/36th of the original second loan principal will be forgiven (cancelled) on each one-month anniversary of the original date of the loan. The AzIDA lien MUST be in a second lien position (i.e., it cannot be in a third lien position). Important Program rules relating to HOME+PLUS life of loan DPA options are set forth in the addendum “HOME+PLUS - Life of Loan DPA Lien, Rules & Requirements.”
The DPA Assistance will be a stated percentage of the HOME+PLUS TOTAL First Mortgage Loan principal amount and will be funded by the Lender on behalf of AzIDA at closing. U.S. Bank will reimburse the Lender at loan purchase. The DPA Assistance funding mechanism will comply be a “legally enforceable obligation” of AzIDA per HUD Mortgagee Letter 2013-14.
The general TRID disclosures for mortgage loans are NOT applicable to the HOME+PLUS DPA Second Loans under the HOME+PLUS Program; however, a TIL disclosure notice will need to be provided to the borrower. The required form of TIL disclosure notice is embedded in our reservation system, is generated by the Lender after reservation and will populate with all the borrower specific data. The HOME+PLUS DPA Second Loan proceeds should be disclosed on a Lender’s first mortgage Closing Disclosure, under Section L, Line 03 or 04.
The Lender will be responsible for any and all regulatory requirements relating to the underlying first mortgage loan. U.S. Bank provides Lender support for TRID-related issues at: USBHMLenderSupport@usbank.com
The Lender will make the determination that a borrower meets the requirements of the HOME+PLUS Program, including the requirements for receiving DPA Assistance. When the Lender reserves the first mortgage loan in the HTS/Emphasys system, the DPA Assistance will be automatically reserved. There are no additional requirements for reservation however, it is AzIDA recommendation to not reserve until the appraisal and property inspection has been completed and accepted by the borrower. The DPA Assistance is only available in conjunction with a HOME+PLUS First Mortgage Loan. The DPA Assistance is NOT tied to LTV. The Lender can choose the DPA Assistance option and LTV that best fits the homebuyer’s situation.
The amount of the Down Payment Assistance is based on the underlying first mortgage loan type, is as follows:
Qualified U.S. military personnel, Veterans, active duty military, active reservists, and active members of the National Guard regardless of length of service or discharge status, are eligible for an additional 1.00% of DPA Assistance. This additional 1% is available on the Fannie Mae HFA Preferred and FHA mortgage types. See the HTS / Emphasys reservation system for the different DPA Assistance and interest rate options for loans eligible for the additional 1%. This allocation is subject to change at any time upon notice from AzIDA, and the allocation is limited and available on a first-come, first serve basis.
Current HOME+PLUS DPA options are summarized below:
Except as provided in the next sentence, DPA Assistance can be applied only for the following purposes: (i) to pay for any portion of the Purchase Price of the Residence due and payable at Closing which is not funded by the First Mortgage Loan (i.e., any portion of the “down payment” for the Residence) and (ii) to pay for any closing costs (see definition in next paragraph) collected by the Lender. Any remaining DPA Assistance must be applied as a principal reduction of the first mortgage (no cash can be paid to the mortgagor). The DPA Assistance will not be applied by the Mortgagor for any other purpose without the consent of AzIDA or the Servicer.
Closing costs mean prepaid taxes, hazard and mortgage insurance premiums (including single premium borrower paid), origination points, guaranty fees, credit report fees, survey fees, appraisal fees, inspection fees, title insurance premium, abstract and attorney’s fees, escrow and courier fees, recording fees, and similar fees.
PROGRAM ELIGIBILITY – Permitted First Mortgage Loan Types
At this time, the HOME+PLUS Program permits FHA-insured, VA-guaranteed, U.S. Department of Agriculture-Rural Development (USDA-RD) guaranteed loans, Freddie Mac HFA Advantage (HFA Advantage is a variance of the FHMLC Home Possible) and Fannie Mae HFA Preferred Loans (HFA Preferred is a variance of the FNMA Home Ready).
HUD 184 Native American Loan Products, FHA 203K loans and FNMA Homestyle Renovation loans are not currently available under the HOME+PLUS Program.
Within the Program Guidelines are the overarching requirements related to the HOME+PLUS Program. The Program Guidelines provide some clarity but do not include ALL specific (FHA, VA, USDA-RD, Freddie Mac HFA Advantage and Fannie Mae HFA Preferred) Agency / GSE relating program guidelines within this single document. The respective Agency / GSE guidelines for the underlying mortgage (FHA, VA, USDA-RD, Freddie Mac HFA Advantage and Fannie Mae HFA Preferred) must be met and requirements adhered to.
Furthermore, the master servicer, U.S. Bank, could have additional underwriting overlays. If there is a conflict between respective Agency / GSE / MI guidelines and U.S. Bank overlays, the more conservative guidance will apply. It is the Lender’s responsibility to adhere to the Agency/GSE guidelines and U.S. Bank overlays, whether or not specifically detailed in this document.
U.S. Bank’s provides Lender support at the following links:
MRBP Home Mortgage Lender manual can be found at www.hfa.usbank.com
General questions on the underlying mortgage can be made at HFACustomerCare@usbank.com
Inquiries on post purchased loans can be made to firstname.lastname@example.org
Guidance on TRID related issues can be made at USBHMLenderSupport@usbank.com
- There is NO first-time home buyer requirement under the HOME+PLUS Program (including eligibility for the First Mortgage Loan or the DPA Assistance).
- Non-U.S. citizens lawfully residing in the U.S. as Permanent Resident Aliens or NonPermanent Resident Aliens are eligible for a First Mortgage Loan and DPA Assistance on the same terms as a U.S. citizen.
All non-U.S. citizen borrowers must have current acceptable documentation evidencing the person’s legal residency status in the U.S. The respective Agency / GSE guidelines for the new underlying mortgage (Fannie Mae HFA Preferred, Freddie Mac HFA Advantage, FHA, VA, USDA) must be met and requirements adhered to. U.S. Bank provides additionally clarity regarding Non U.S. Citizens documentation within their Underwriting / Credit Policy folder, subfolder “Guidelines” at https://www.allregs.com/tpl/public/usb_bond_tll.aspx Section 711.3 for FHA and Section 713.5 for conventional. Qualification for DPA Assistance will follow the agency/insurer guidelines for the new underlying mortgage and any U.S. Bank overlays.
- All borrowers must be considered irrespective of age, race, color, religion, national origin, sex, marital status, military status, or physical handicap.
- Borrowers must occupy the property as their primary residence and reside in the subject property within 60 days of closing.
- Any previously assisted HOME+PLUS Program homebuyers requesting HOME+PLUS DPA Assistance for a second time within five years of the completion of their original transaction, will be reviewed on a case-by-case basis by the AzIDA Program Administrator. To be eligible the previously assisted borrower must have sold their previously assisted HOME+PLUS
HOME+PLUS Program homebuyers who received HOME+PLUS DPA Assistance over five years ago OR used another DPA program are eligible for return to the HOME+PLUS Program without AzIDA Program Administrator review and approval.
The HOME+PLUS Program contains an income limit requirement. To comply with the income limit requirement, the borrower(s)’ annual income is calculated based on the applicable Agency / GSE income guidelines for the underlying HOME+PLUS First Mortgage Loan (FHA, VA, USDA-RD, Freddie Mac HFA Advantage or Fannie Mae HFA Preferred), as disclosed on the final, signed and dated URLA or Form 1003.
In determining the gross monthly income for a borrower or borrowers, the income of each borrower expected to both live in the residence and whose income is required to be included in credit-qualifying for the HOME+PLUS First Mortgage Loan, must be considered.
Household income (as opposed to borrower income), other than in the case of USDA-RD loans, is NOT used to determine HOME+PLUS Program income limit eligibility.
If the respective Agency / GSE guidelines for the underlying mortgage (FHA, VA, USDA-RD, Freddie Mac HFA Advantage and Fannie Mae HFA Preferred) has a more restrictive income limit it must be met and requirements adhered to.
AzIDA fully supports a conservative calculation of income (it makes for an even more sustainable homeowner); however, to materially under-calculate income or willfully not disclose a borrower’s income violates the rules of the HOME+PLUS Program.
- The annual income of the borrower(s) cannot exceed $109,965 for the following mortgage types; FHA, Fannie Mae HFA Preferred – over 80% AMI, VA & USDA.
- The annual income of the borrower(s) for the Fannie Mae HFA Preferred – under 80% AMI and Freddie Mac HFA Advantage – under 80% AMI varies by the County the subject property is located in. See chart for complete breakdown of income limits – the lender should always follow the DU or LPA findings.
o NOTE: When a non-occupant co-borrower or non-occupant co-signor is used, the non-occupant’s income counts against the program income limit when using the Fannie under 80% AMI products.
- HOME+PLUS Borrower(s) Maximum Annual Income Limits by County:
PURCHASE PRICE LIMITS
The HOME+PLUS Program does not impose a purchase price limit.
MINIMUM CREDIT SCORE/MAXIMUM DEBT-TO-INCOME RATIO
Government Loans (FHA, VA, USDA-RD):
- Minimum 640 credit score
- On FHA with 640 – 659 credit score – see USB overlays – summarized on page 13
- Max DTI - 50% – min. 680 credit score see USB overlays – summarized on page 13
- Manufactured Homes – w/ minimum 680 credit score / maximum DTI 45.0% on FHA ONLY Manual underwrite NOT allowed
LTV’s 95.01% - 97%
LTV’s 95.0% - 90.01%
Minimum 640 score
Minimum 640 FICO
Max DTI – 50% - w/ min. 680 score
Max DTI – 50% - w/ min. 680 score
see USB overlays – pg 13
see USB overlays – pg 13
Max CLTV 105%
Max CLTV 105%
Manual underwrite NOT allowed
Manual underwrite allowed– see agency
restrictions & USB overlays – summarized on page 13
Manufactured homes not allowed
Manufactured homes allowed - FNMA HFA Preferred –
w/ 45% DTI & 680 minimum credit score
Fannie Mae HFA Preferred & Freddie Mac HFA Advantage Mortgages:
- The minimum credit score requirements apply to ALL borrowers on the transaction, including non-occupant co-signors / co-borrower. Exception for no credit score detail below.
- If a tri-merged credit report is used, the middle score must be the Program minimum or higher. If a merged credit report only returns two scores, the lower of the two scores must be the Program minimum or higher.
- One credit score is allowed, follow the respective Agency/GSE (FHA, VA, USDA-RD Freddie Mac HFA Advantage and Fannie Mae HFA Preferred) guidelines for the new underlying first mortgage
- No credit score – If either the borrower or co-borrower, on a joint application, does not have a credit score AND AUS generates either an Approved / Eligible or Accept determination the transaction will be acceptable under HOME Plus. If a borrower, single / one borrower on an application, does not have sufficient credit to support an AUS Approval or has erroneous / inaccurate credit or disputed credit, use of non-traditional credit is required. Follow the respective Agency / GSE (FHA, VA, USDA-RD Freddie Mac Advantage of HFA and Fannie Mae HFA Preferred) guidelines for the new underlying first mortgage.
- Please see the U. S. Bank website for HFA Division Lending Guide for more detail on:
- FHA with 640 – 659 credit score
- (USB overlay – minimum 1-months PITIA reserves. As of December 11, 2020 the 6-month employment requirement is no longer a USB overlay)
- Manual underwriting – allowed on Fannie & Freddie only (not allowed on Fannie manufactured homes)
- (USB overlay – minimum 2-months PITIA reserves)
- 01% - 50.0% DTI – allowed on FHA, FNMA HFA Preferred and FHLMC HFA Advantage
- (USB overlay – minimum 680 credit score)
- Do not cross sell conventional products. LPA must be run on Freddie Mac HFA
Advantage and DU must be run on Fannie Mae HFA Preferred, failing to do so could result in a cost-to-cure or potentially an unsaleable transaction.
- Please Note: if a stricter policy is required by the Agency, GSEs or MI Insurers they must be adhered to.
MORTGAGE INSURANCE – Conventional
A secondary benefit to the homebuyer under the HOME+PLUS Program, when using a conventional mortgage (Fannie Mae HFA Preferred – under 80% AMI or Freddie Mac HFA Advantage – under 80% AMI) is the lower charter minimum mortgage insurance premiums. This feature is unique to Housing Finance Agencies. On Fannie Mae HFA Preferred and Freddie Mac HFA Advantage, the borrower(s) MUST be at 80% of AMI or lower to obtain the reduced charter minimum MI premiums.
The following are the required charter minimum private mortgage insurance (MI) levels based on Loan-to-Value (LTV):
HOME+PLUS Conventional Mortgage Insurance Coverage:
The permitted MI structures under the HOME+PLUS Program are: (1) monthly borrower paid, (2) upfront borrower paid and (3) split premium. Upfront premiums can be financed or paid with a financing concession. Seller-paid MI is also acceptable. For more detail, see Fannie Mae Selling Guide sections B3-4.1-30 and B5-6-05 and Freddie Mac Selling Guide section 27.1.1.
QUALIFIED RESIDENCE REQUIREMENTS
- For GNMA, new or existing, one- or two-unit dwellings, detached or attached, condos, town homes. Manufactured homes are allowed. See U.S. Bank website for Bulletins and Guidelines on credit overlays.
- For Fannie Mae HFA Preferred and Freddie Mac HFA Advantage, only new or existing Single-Family properties, detached or attached PUD’s / Townhouses and Condos are allowed.
- Manufactured homes are eligible under FNMA HFA Preferred. oA duplex may be financed under FNMA HFA Preferred as long as one unit of the duplex is occupied by the Eligible Borrower as their Principal Residence.
- We place no additional overlays for a borrower who owns other real estate. If the Agency / GSE guidelines for the respective new underlying first mortgage allow for ownership in other real estate, we will as well. We will simply follow Agency / GSE Guidelines. (The conventional mortgages impose a maximum limit of two financed properties, which would include the new subject property. For more information see Freddie Mac Bulletin 2019-7 and Fannie Mae Selling Guide Update SEL-2019-03)
- Manufactured Homes - manufactured homes are eligible under the HOME+PLUS program with the following U.S. Bank overlays:
- FHA w/ 3% DPA or FHA w/ 4% DPA
- minimum credit score of 680, maximum DTI 45% o FNMA HFA Preferred w/ 4% DPA & w/ 5% DPA – under 80% AMI or o FNMA HFA Preferred w/ 3% DPA & w/ 4% DPA – over 80% AMI
- minimum credit score of 680, maximum LTV / CLTV 95% / 105%, maximum DTI 45%
- See the HTS / Lender Online reservation system for the six DPA options and corresponding interest rates when the subject property is a manufactured home o No manual underwritings allowed. o Doublewide manufactured homes only o Must meet FHA, FNMA HFA Preferred & US Bank manufactured housing guidelines
- AzIDA does not have or maintain an approved condo project list for the HOME+PLUS program, we will follow our master servicer, US Bank’s approved condo project list. For further details please see Section 800: Condominium Project Review section 810.1, 820.2 and 820.3 within the US Bank lending manual
- If the project is approved at the time of closing, nothing further is required. If the project is declined, it is ineligible. If the condo project is not located on either list, see Section 815.06 Condominium Guidelines for Delegated Lenders for guidance, details and the approval process lenders are to follow.
- HUD/FHA Single Unit Approval is allowed with a maximum LTV of 90%
- Direct inquires can be made at email@example.com OR firstname.lastname@example.org
Mobile, recreational, seasonal or other types of vacation or non-permanent homes are not permitted. Properties purchased in the HOME+PLUS Program must be residential units and the Eligible Borrower must occupy the property as their Principal Residence within a reasonable time (not to exceed 60 days) after the financing is provided.
- Under the HOME+PLUS Program, Government Loans (FHA, VA, and USDA-RD) are available Statewide. Eligible areas include Apache, Cochise, Coconino, Gila, Graham, Greenlee, La Paz, Maricopa, Mohave, Navajo, Pima, Pinal, Santa Cruz, Yavapai and Yuma Counties.
- Under the HOME+PLUS Program, Fannie Mae HFA Preferred and Freddie Mac HFA
Advantage are available Statewide. Eligible areas include Apache, Cochise, Coconino, Gila, Graham, Greenlee, La Paz, Maricopa, Mohave, Navajo, Pima, Pinal, Santa Cruz, Yavapai and Yuma Counties.
- Eligible areas are subject to change in the discretion of AzIDA; in such case, the Program Guidelines will be amended.
ADDITIONAL PROGRAM REQUIREMENTS
- Pre-Closing Homebuyer Education Course Required: A minimum of ONE borrower (does not apply to non-occupant co-signors) must complete a pre purchase homebuyer education course before closing. Completing the education course post-closing will result in a nonsaleable transaction.
The homebuyer education requirement may be met by taking a pre purchase course through a HOME Plus approved online provider or in person through another HUD-approved homebuyer education provider. The course completion certificate is good for one year and must be completed prior to closing (and copies included in both the credit and DPA compliance files). None of the Pre-closing homebuyer education providers are specifically tied to the new underlying first mortgage type.
HOME+PLUS Approved ONLINE Providers:
- eHomeAmerica https://www.ehomeamerica.org/
- Finally Home (with life of loan counseling support) finallyhomecourse.com
- FrameWork Homeownership http://www.frameworkhomeownership.org/
- Hometrek https://www.incharge.org/housing/homebuyer-education/hometrek/
- CreditSmart (with certificate) http://www.freddiemac.com/creditsmart/
- NOTE: When a home buyer selects the eHomeAmerica online option, they are required (via their process) to select a sponsoring counseling agency; which in our market, is Trellis, Greater Phoenix Urban League, Greenpath, Money Management, Newtown and Chicanos por la Causa. The eHomeAmerica course is approved by HOME+PLUS regardless of the sponsoring counseling agency. It should be noted however, each of these counseling agencies (Trellis, Greenpath, Greater Phoenix Urban League, Money Management, Newtown and Chicanos por la Causa) is also an approved in-person provider.
HOME+PLUS Approved IN-PERSON Providers:
Simply click on the following link and call the Counseling Agency to reserve space at their next in-person pre purchase / homebuyer counseling class.
- Escrow/Impound Account Requirements: The borrowers must establish an impound/escrow account for monthly collection (1/12) and annual /semi-annual disbursement of the property taxes, homeowner’s insurance premiums and private mortgage insurance (if applicable) and flood insurance (if applicable).
- No Asset Test/Reserve Requirements: There are no minimum/maximum reserve requirements under the HOME+PLUS The HOME+PLUS Program does not have liquid asset overlays, restrictions or requirements, furthermore the HOME+PLUS Program does not impose restrictions on a homebuyer putting/ providing additional funds for the down payment/closing costs OR retaining his/her liquid assets in reserves and using just program funds for down payment / closing costs. If any reserves are required, these are determined by the type of financing used (i.e. FHA, VA, USDA-RD, Freddie Mac HFA Advantage and Fannie Mae HFA Preferred) and/or the mortgage insurance provider.
- Dodd-Frank Financial Reform Act. This information is not intended to provide legal advice. Lenders should consult their own legal counsel to ensure compliance with these rules. For further clarity please reference USB Lender Bulletin 2014-01 USB Lender Bulletin L-2016-019 or email@example.com
- Higher-priced Mortgage Loans (HPML) – our master servicer U.S. Bank will purchase Higher-Priced mortgage loan (HPML).
- High-Cost Loans - our master servicer U.S. Bank will NOT purchase High-Cost loans.
- Ability to Repay (ATR) / Qualified Mortgage (QM) – mortgage loans that are originated and closed by Lenders participating in a program administered by an HFA, Housing Finance Agency, like HOME+PLUS are exempt from the ATR/QM requirement.
(HFA loans are NOT exempt from the new HOEPA requirements as they relate to High Cost and the TILA requirements for higher-priced mortgage loans. The lender should still have been ensuring that higher priced loans followed HOEPA & TILA regulations and comply with HOEPA (5%) and State (5%)).
- Non-Occupant Co-Signors/Co-Borrowers: Non-occupant co-signors/co-borrowers are allowed on underlying FHA mortgages, per FHA agency guidelines and on Fannie Mae HFA Preferred, per GSE selling guidelines. The non-occupant co-signor cannot occupy the property. Follow Agency/GSE guidelines for required/allowed documents that the cosignor/co-borrower must sign. Non-occupant co-signors are not allowed on Freddie Mac HFA Advantage underlying mortgages.
- On FHA transactions the non-occupant co-signor (as well as non-occupant co-borrower) income will NOT count against the program income limit
- On Fannie Mae HFA Preferred transactions there are two different options when a non-occupant co-signor (as well as non-occupant co-borrower) is used.
- the non-occupant co-signor (as well as non-occupant co-borrower) income will count against the program income limit when using Fannie DPA options – Series 3. Fannie/DU – under 80% AMI
- the non-occupant co-signor (as well as non-occupant co-borrower) income will NOT count against the program income limit when using Fannie DPA options – Series 3A. Fannie/DU – over 80% AMI
- Escrow Holdbacks – escrow repairs / holdbacks for minor repairs are allowed and the Lenders responsibility to manage. Escrow holdback for swimming pools or other major construction / repairs is not allowed. S. Bank has some items that cannot be escrowed, items that impact the immediate habitability of the property, health safety issues, nonfunctioning utilities, or repairs related to Codes C4 or worse and / or Q5. Full details can be found in U.S. Bank’s Lending Manuals
- Tax Transcripts - For HOME+PLUS Program compliance, since we no longer use mortgage revenue bonds as financing source; tax transcripts or any other income documentation (and first-time homebuyer requirements) are not necessary for DPA program compliance.
- Hazard Insurance – see U.S. Bank lending manual for First Mortgage Loss Payee Clause and allowable deductible requirements. hfa.usbank.com The DPA 2nd lien does not require a loss payee clause
- AUS Findings – On conventional mortgages the respective AUS must match the mortgage type.
- If reserved as a FHLMC HFA Advantage, LPA must be run, Offering Identifier 251 Home Possible HFA Advantage
- If reserved as a FNMA HFA Preferred, DU must be run, as Community Lending Product, Special Feature Codes (SFC) 118 “Community Second, (SFC) 782 “HFA Preferred”
- To deliver a conventional mortgage with a miss matched AUS could result in a cost to cure or potentially an unsellable transaction.
- Cash back - to the borrower is not permitted. However, borrowers are permitted a reimbursement of overage of earnest money deposit to the extent any minimum contribution has been satisfied and permitted by Agency guidelines. The borrower can also be reimbursed for the cost of the appraisal if they paid the appraisal outside of closing. Proper documentation must be included with the DPA compliance file if this action is taken.
- Additional gift funds may be used for the down payment, closing costs, debt payment, to establish reserves for the borrower(s), or any other Agency / Insurer allowed purposes. Since this is not the borrower(s)’ own funds, a refund of any excess gift funds is not considered “cash back” for HOME+PLUS Program purposes and therefore, is permitted. When refunding gift funds, include a copy of the Agency / GSE required Gift Letter in the DPA compliance file.
- Adhere to Agency / Insurer guidelines when applying a principal reduction for cash back other than those received from gift funds.
- Power of Attorney – A specific power of attorney (“POA”) is allowed; follow all U.S. Bank requirements for the POA and include a copy of the POA in the DPA Compliance file.
- E-Signature – A Lender must request directly from U.S. Bank and receive written eSignature approval before implementation. Further details can be found in U.S. Bank’s Lending Manuals, Section 400.4.1
- Non-Borrowing Spouse or Other Party – A non-borrowing spouse or other party may have a title or beneficial interest in the subject property and must sign the mortgage/deed of trust for both the first mortgage loan and the HOME+PLUS DPA Second Loan. The non-
borrowing spouse is NOT required to sign the first or second mortgage notes. Further details can be found in U.S. Bank’s Lending Manuals, Section 900.K
- No Minimum Loan Amount: There is no minimum loan amount required under the HOME+PLUS If a minimum loan size applies, it is determined by the type of financing used (i.e. FHA, VA, USDA-RD, Freddie Mac HFA Advantage and Fannie Mae HFA Preferred). The maximum loan amount will follow the respective Agency / Insurer guidelines for the underlying first mortgage type.
- Prepayments: A HOME+PLUS First Mortgage Loan may be prepaid at any time without penalty. A HOME+PLUS DPA Second Loan is also subject to prepayment at any time; however, the original principal amount of the loan will be forgiven ratably on a monthly basis (1/36th each month) over the term of the three-year term. Should the borrower sell, refinance or in any way pay off the HOME+PLUS First Mortgage Loan, or if the conditions of the HOME+PLUS DPA Second Loan are violated prior to the end of the 36 month term, any remaining unforgiven principal amount is subject to repayment, as detailed in the promissory note.
- Loss Payee Clause – It is not necessary for the HOME+PLUS DPA Second Loan to be listed on the borrowers Homeowners Insurance Policy.
- Assumability – the HOME+PLUS DPA Second Loan is not assumable.
- The HOME+PLUS Program is available for purchase money transactions only.
- Seller cannot advance funds, solicit or induce funds to be advanced by another, directly or indirectly, for the payment of any amount required by the HOME+PLUS DPA Second Loan;
- No Construction-to-Perm Loans: Construction loans convertible to permanent loans (“construction-to-perms”) are not
- Home Inspection: It is the homebuyer’s option to obtain a home inspection. This is for their benefit and does not need to be provided to the Lender, U.S. Bank, AzIDA or HTS. The fee for this inspection can be covered by the proceeds of the HOME+PLUS DPA Second Loan.
LENDER COMPENSATION SUMMARY
- The Lender receives a Service Release Premium (“SRP”) of 2.50% on all FHA, Fannie Mae HFA Preferred, Freddie Mac HFA Advantage, VA and USDA. The respective SRP is paid upon purchase by the master servicer, less any applicable extension charges.
- The Lender can charge an origination fee. HOME+PLUS does not impose a cap on the Lender’s origination fees and / or any reasonably and customary charges. Total Lender compensation, which includes the SRP and the Lenders origination fee will be determined by each Lender. It is the Lender’s responsibility to ensure compliance to Agency / GSE / CFPB guidelines in relationship to any charges and fees.
- Discount points are not allowed.
HOME+PLUS PROGRAM FEES
COMPLIANCE FEE – Hilltop Securities (HTS)
Compliance Review Fee -- $225. Please provide the wire instructions to the title company as found on the post-closing HTA checklist.
MASTER SERVICER FEES – U.S. Bank
Tax Service Fee -- $80 Funding Fee -- $400
Please list fee on LE/CD according to the U.S. Bank Lender Bulletin L-2017-11, dated March 17, 2017. Fees should NOT be made payable to U.S. Bank.
DPA SECOND LOAN RECORDING FEE
The recording fee amount will vary by County.
The only fee allowed on the AzIDA HOME+PLUS DPA Second Loan is the recording fee for the Deed of Trust. A Title Insurance, Escrow Fee, Endorsement Fee, Protection Letter or any other fee is not necessary or allowed in association with the HOME+PLUS DPA Second Loan.
OTHER LENDER FEES
Lender Fees are fees paid to the Lender for services rendered (i.e. Processing Fees, Underwriting Fees, Administrative or Administration Fees and Doc Prep Fees). An Application Fee must include no more than the actual costs of allowable items such as appraisals.
U.S. Bank provides Lender support for TRID-related issues at:
HOME+PLUS DPA SECOND LOAN REQUIREMENTS
Set forth below are certain requirements relating to the HOME+PLUS DPA Second Loans. See Section 6(e) of the Mortgage Origination Agreement for detailed provisions relating to the closing, recording, servicing, early repayment and other aspects of these loans.
Recording. The HOME+PLUS DPA Second Loan must be recorded. The Lender is responsible for coordinating the recording of the DPA Second Loan deed of trust with its title company. If the DPA Second Loan deed of trust is not recorded, then U.S. Bank as master servicer will not reimburse the Lender for its advance of the DPA Second Loan funds to the borrower. Also, if the related first-lien Mortgage Loan is not purchased by the Servicer, the Lender will not be reimbursed for the funding of the HOME+PLUS DPA Second Loan.
Servicing. The Lender is required to service the HOME+PLUS DPA Second Loan until the related Mortgage Loan is purchased by the master servicer (and the DPA Second Loan is reimbursed to the Lender); afterward, the master servicer will service the DPA Second Loan.
Early Repayment. If a Mortgage Loan is repaid prior to the purchase of the Mortgage Loan by the master servicer, the Lender will collect the amount repayable with respect to the HOME+PLUS DPA Second Loan and immediately pay such amount to the Authority. Upon receipt of such funds, the Authority shall reimburse the Lender for the amount initially advanced to the Eligible Borrower under the HOME+PLUS DPA Second Loan.
Repurchases. If the Lender is required to repurchase a Mortgage Loan for any reason, the Lender is also required to repurchase HOME+PLUS DPA Second Loan from the Authority for an amount equal to its outstanding principal balance.
LENDER MINIMUM PRODUCTION REQUIREMENTS
New Lenders will be subject to a 6-month probationary period and will be required to close and deliver to the master servicer at least 3 Mortgage Loans during the 6-month period.
After the 6-month period, Lenders will be required to close and deliver a minimum of 12 Mortgage Loans within a 12-month period. Ongoing recertification reviews will be conducted by AzIDA annually on January 2 for the applicable 12-month period.
- Lenders failing to meet loan origination (production) requirements (either new Lenders within the probationary period or existing Lenders) will receive a warning letter for lack of production, allowing a Lender 90 days for remediation. Lenders will be required to produce 5 closed/delivered Mortgage Loans within the 90-day remediation period.
- Lenders failing to achieve the production requirement during the remediation period will receive a 30-day advance notice of termination. Upon termination, the Lender will lose system access for any new reservations, while existing reservations will be processed by the Lender through completion.
- Any Lender so terminated must wait 6 months before applying for reinstatement, and as part of such application process must provide a statement of production projections satisfactory to AzIDA and the master servicer. If reinstated, such Lender must sign a new Mortgage Origination Agreement.
LENDER USER CREDENTIALS
Each Lender, upon submission of their completed and signed Lender Profile will receive Administrator Access for the designated personnel they have selected to maintain and manage user access to the HTS / Emphasys- Lender Online reservation system. Your designated user with Administrator Access can set-up new users, set-up additional users with administrator access, reset passwords, activate or inactivate users, change access levels and delete users.
HOME+PLUS self-paced training modules can be found on our consumer facing website, within the Lender Support section. Visit www.HomePlusLenders.com
Each of the training modules covers a different topic, i.e. how to reserve/lock a new transaction, how to generate HP closing documents, etc. etc. They are detailed yet brief, accessible without credentials, downloadable for future reference and targeted to a specific function.
While “program certification” is not a HOME+PLUS requirement some lenders have an internal policy requiring it. If this is the case, please email Dirk@HomePlusAZ.com and a program certificate test with instructions will be provided.
NEW LOAN RESERVATION REQUIREMENTS
Buyers MUST HAVE A FULLY- EXECUTED SALES CONTRACT FOR A SPECIFIC PROPERTY in order to have funds reserved. The contract may be dated prior to the date of the loan application. Buyers may be pre-qualified. However, if the buyer does not have a contract on a property, program funds cannot be reserved for the buyer until such time as the buyer presents a valid contract. To assure that loans are purchased, please follow the Processing, Delivery and Purchase Timetable below. Please DO NOT reserve loans that cannot meet the timetable.
SUMMARY OF THE ORIGINATION PROCESS
1. LOAN RESERVATION
Once the Lender determines the borrowers(s) is program eligible the transaction can be reserved in the HTS / Emphasys – Lender Online reservation system at https://lenders.housing.az.gov. The interest rate on the first mortgage is locked and the down payment assistance is set at the time of reservation, the 60-day delivery timeline also begins. It is strongly recommended that Lenders do not reserve too early as exceeding the 60-day delivery timeline will result in an extension fee and a reduction of the Lender compensation. Reserving the first mortgage automatically reserves the down payment assistance. The Lender will receive a loan number and message confirming the successful completion of the reservation. The reservation follows the borrower not the property.
CHANGES TO AN EXISTING LOAN RESERVATION:
The Lender can make certain loan changes after reservation. Once in the specific transaction within the HTS / Emphasys Lender Online system - Click on the “view” icon in loan status, then click the “edit” button.
The following fields may be changed:
- Property Purchase Price
- Property Appraised Value
- Property Address – house number, street name and unit number.
Any other changes made to a completed loan reservation will need to be made by the Reservation / DPA Compliance Administrator, Hilltop Securities (HTS). Please contact Hilltop Securities Inc.:
2. UNDERWRITER CERTIFICATION
Lenders underwrite and are responsible for all credit decisions relating to the origination of the HOME+PLUS First Mortgage Loans. U.S. Bank, as master servicer, does not re-underwrite these loans. Following credit approval and after the HOME+PLUS First Mortgage Loans has been reserved in the HTS/Emphasys – Lender Online reservation system, the underwriter validates the accuracy of the information in the reservation system, generates the Underwriter Certification form, signs, and dates the document. The underwriter then must upload and submit the completed Underwriter Certification form within the applicable borrower authorization. Closing related Program documents cannot be generated until this process and the underwriter certification steps, including upload have been completed.
3. PROGRAM COMPLIANCE FORMS
Following the Underwriter Certification, Lenders will have access and be able to generate all HOME+PLUS Program related documents specific to the borrower, within the borrowers reservation within the HTS / Emphasys – Lender Online reservation system. All HOME+PLUS Program related forms must be signed at closing and will be required in the HTS DPA Compliance File.
Pre CLOSING FORMS
- AzIDA Truth in Lending (TIL) Disclosure Form • Underwriter Certification Document • Extension Request
- Mortgagor Certificate • Legally Enforceable Obligation Letter (complies with ML 19-06) • HOME+PLUS DPA Second Loan Deed of Trust • HOME+PLUS DPA Second Loan Promissory Note • Post-Closing Compliance File Checklist • Extension Request Form
4. MORTGAGE CLOSING / SETTLEMENT
It’s important to provide accurate closing instructions to the closing agents. All program docs must be returned to the Lender. At closing the borrower will sign the (1) Mortgage Certificate and the (2) Legally Enforceable Obligation Letter (3) the Deed of Trust for the HOME+PLUS DPA Second Loan and (4) the Promissory Note for the HOME+PLUS DPA Second Loan. It is the Lender’s responsibility to have the Title Company record the Deed of Trust for the HOME+PLUS DPA Second Loan. The original documents remain with the Lender, with copies to the borrower(s), U.S. Bank, HTS DPA Compliance (and in the FHA Case Binder if applicable). NOTE: the closing agent or Lender is to wire the $225.00 compliance review fee payable to “Hilltop Securities Inc.” Please reference the borrower and/or our loan reservation number. Wire instructions can be found on the closing package checklist.
5. SUBMIT CREDIT & DPA COMPLIANCE FILES
There are two (2) files uploaded post-closing and it is extremely important that the Lender submits both and timely manner.
- Mortgage File – Credit Package.
The mortgage file, including the credit package is sent to U.S. Bank. Note: Effective June 1, 2016 U.S. Bank no longer accepts paper files, as detailed on the April 7, 2016 Lender Operations Update, L-2016-009. Credit Packages must be delivered via U.S. Bank’s DocVelocity Imaging
System. For further information, please contact HFA Hotline at 800 562-5165, Option 2. The U.S. Bank Loan Delivery Checklist may be found on the U.S. Bank web site, www.hfa.usbank.com Click on U.S. Bank Lending Manuals.
Pop-up box will appear, click on Continue
Web page will be redirected to U.S. Bank All Regs site Click on Housing Finance Authority folder
2. HOME+PLUS /HTS DPA Compliance File
Electronic upload and submission of full DPA Compliance file within the respective reservation for the borrower. All files are to be submitted electronically in the Lender portal. NO PAPER FILES will be accepted.
Documents required for HOME+PLUS /HTS DPA Compliance File
1. Post-Closing DPA Compliance Checklist 2. Executed Mortgage Certificate 3. Copy of the DPA Second Loan Deed of Trust 4. Executed DPA Promissory Note 5. Executed TIL 6. Executed Final Loan Application (URLA / 1003) 7. Executed Legally Enforceable Obligation Letter 8. Executed Final TRID Complaint Closing Disclosure 9. Executed Purchase Contract 10. Executed Pre Purchase Homebuyer Education Certificate 11. Other (Those Qualifying for Military Increased Assistance)
- Veterans using increased Assistance provide copy DD214 included in compliance file.
Check the HTS / Emphasys reservation / Lender Portal 24 – 48 hours after submission. Click the “view” icon for DPA Compliance package approval or conditions.
In a non-compliance exception occurs with respect to a HOME Plus first or second loan, AzIDA will charge the lender a non-compliance fee of $250.
MORTGAGE LOAN DELIVERY / PURCHASE / EXTENSIONS
Lenders must close, fund, deliver and clear conditions on the First Mortgage Loans with the Servicer (U.S. Bank National Mortgage Association) within sixty (60) calendar days of the date the First Mortgage Loan is reserved on the Lender Portal. Adequate time should be allowed for U.S. Bank to perform a compliance review of the credit loan package in order to cure any conditions prior to their approval to purchase the loan. It is strongly recommended to submit closed credit files to U.S. Bank no later than the 35th day from reservation. The first mortgage loan will not be purchased by U.S. Bank until post-closing DPA compliance documents have been uploaded, reviewed and cleared by HTS DPA Compliance.
The First Mortgage Loan must be purchased by the Servicer within sixty (60) calendar days of the date the First Mortgage Loan is reserved on the Lender Portal. If a Mortgage Loan is not purchased within such sixty (60) day period, an extension is available for a fee that is applicable to the extension time necessary.
Rate Lock Extension
REQUEST FOR EXTENSION PROCESS
If necessary, an interest rate lock extension can be requested at any time once it is known the 60day delivery timeline will be exceeded and the required extension period confirmed. Once in the specific transaction within the HTS / Emphasys Lender Online system, click the “PDF Docs” icon, check the “Extension Request Form” and generate the document. Complete, sign and email the Extension Request document to firstname.lastname@example.org The HTS team will process the lock extension request, update the reservation and return an accepted and signed copy of the extension to the Lender for their records.
These fees will be netted out of the Lender service release premium (SRP) upon loan purchase by U.S. Bank.
To the extent that Assistance is advanced on loans that do not close, are not purchased by the Servicer under the Program or are to be repurchased by the Lender prior to being pooled into a mortgage-backed security, the Lender will be required to reimburse AzHFA with respect to such Assistance so advanced.
CANCELLATION AND COMMITMENT EXPIRATIONS
The Lender is responsible for cancelling all Mortgage Loans subject to a reservation if the First Mortgage Loan will not be delivered under the applicable HOME+PLUS Program. In a case where the Borrower cancels or withdraws his or her application, the reservation of funds must be cancelled by contacting HTS / Emphasys Reservation and Compliance Administrator. Please note, should the Lender cancel a reservation, the Lender will be prohibited from making another reservation for that Borrower for a period of 60 days or unless otherwise authorized by the Program Administrator.
All relock requests within the noted 60-day timeline, will be reviewed by the Program Administrator. The most common request occurs due to issue with the subject property and a new property substitution. In this event the Lender and borrower have two options:
- Forward a copy of the borrower’s cancellation of the original purchase contract and a copy of the executed new purchase contract to the Program Administrator, Dirk Swift. Upon review and approval if determined the situation warrants a new reservation, the system will be open for a new reservation and the interest rates, program type and reservation date will all be based upon the date of the new reservation.
- The existing reservation can be updated by emailing email@example.com with the new property details, purchase price, loan amount, etc. maintaining the currently reserved interest rate AND original reservation date.
COLLATERAL PACKAGES – Delivery Instructions
Recorded AzIDA 2nd DOT & Original AzIDA 2nd lien Promissory Note
ATTN: CIC HFA Final Docs EP-MN-X3CI
9380 Excelsior Blvd
Hopkins, MN 55343
For questions about a loan reservation, the process, or Reservation System / Lender Portal, please contact Hilltop Securities Inc.: firstname.lastname@example.org
Nick Cendejas Nick.email@example.com 310.401.8052
Sharon Gonzalez Sharon.Gonzalez@hilltopsecurities.com 214.953.4122
Lori Wood Lori.Wood@hilltopsecurities.com 214.953.4231
For questions on the HOME+PLUS DPA program, requirements, or requests for additional training, please contact AzIDA:
Dirk Swift Dirk@HomePlusAZ.com 602.319.9620
For questions to the master servicer, U.S. Bank please email: HFACustomerCare@usbank.com