Transcript Document

Welcome
Compliance Processing and File Delivery
Dial in number: (209) 647-1000
Participant Access Code: 965519#
Homeownership Staff
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Erik Nore, Director of Homeownership
Anita Racicot, Homeownership Specialist
Cynthia Marquez, Compliance Specialist
Shawn Rasmussen, Lending Specialist
Lisa Romero, Lending Specialist
Barbara Tashkandy, Lending Coordinator
Teri Baca, Homeownership Representative
Eunice Duran, Homeownership Representative
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Reservation Process
• Reservation of Funds – Household Size
 Even though the income may not be counted, loans must
be reserved showing all household members so that the
correct household size is referenced on the Mortgage
Purchase/Funding Agreements
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Reservation Process
All Programs
• Availability of On-Line Reservation System
 The MFA On-Line Reservation System is available
from 9:00 am – 5:00 pm Monday – Friday (excluding
federal or bank holidays) MST
 On-line reservation system will not accept
reservations before or after the available time.
 Be sure to submit and complete the
reservation request prior to 5:00 pm
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Reservation Process
All Programs
• Reservation period
 Loan must be purchased by Master Servicer no later
than 60 days from the loan reservation date
 First mortgage loans that are not purchased
within the applicable timeframe must be
extended or cancelled by the Lender. No
exceptions, for any reason will be made to the
reservation policies.
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Reservation Process
First Mortgage Loan Products
• Changes between loan programs are not
permitted.
 A loan reservation is for a specific loan program and is
attached to the borrower
 A loan reservation cannot be transferred between
programs (i.e. $aver to Zero, Zero to Plus, Plus to HERO,
etc.)
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Reservation Process
All Programs
• Extension Fees
 Lender can request either a 15 day or a 30 day extension
for the loan delivery, for a fee:
 15 day extension (0.1875% of the loan amount)
 30 day extension (0.3750% of the loan amount)
 Only ONE extension is allowed
 Extension fee applies to first mortgage only
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Reservation Process
All Programs
• Extension Fees
 In the event that a loan is not purchased by the Master
Servicer within 60 days of loan reservation, a 30 day
extension will automatically be applied, unless the Lender
requests a 15 day extension from MFA prior to the 60 day
loan reservation expiration date.
 The extension fee may be charged to the borrower
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Reservation Process
All Programs
• Extension Fees
 If loan is not purchased within 75 (15 day extension)
or 90 (30 day extension) days of the date of
reservation (including extension), loan can still be
delivered, but will be purchased from Mortgage
Lender on a worst case, Mark-to-Market basis that is
determined at the time of purchase.
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Reservation Process
Mortgage$aver Programs
• Targeted Areas
 When reserving property in Targeted Area (Census
Tract) the lender is required to contact MFA to obtain
the lowest rate in the last 12 months from the
reservations date and to receive Targeted Area
acquisition cost and income limits.
 Targeted Area Maps can be accessed at
housingnm.org/targeted-area-census-tracts
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Reservation Process
Mortgage$aver Programs
• Section 184 Indian Housing Loan
 When reserving property using a Section 184 loan on
Federally Designated Tribal Land or Fee Simple Land
the lender is required to contact MFA to receive
Targeted Area acquisition cost and income limits.
 If property is on Fee Simple Land, the borrower will
receive the current applicable program interest rate.
 If property is on Federally Designated Tribal Land
ONLY, the lender is required to contact MFA to obtain
the rate (0.50% below the applicable program interest
rate).
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MFA Guidelines
• Definition of “Household Income”
 Income that is considered “Household Income”
includes:
 All forms of income from the mortgagor (Borrower) or comortgagor (Co-Borrower) will be considered as Household
Income for the purposes of qualifying for the single-family
loan program.
 If the Borrower is taking title as sole and separate, all forms
of income from the non-purchasing spouse
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MFA Guidelines
• Definition of “Household Income”
 Income that is not considered “Household Income”
includes:
 All forms of income earned by a family member or household
member that do not have ownership interest in the property
and are not liable for the mortgage debt.
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MFA Guidelines
• Definition of “Household Income”
 Only the borrower or co-borrower’s income will be
included in the income calculation for the Compliance
Review
 If the borrower is married, the income of the spouse
must be included in the income calculation for
Compliance Review
 Income from any other person living in the home
(family member, significant other, etc.) will not be
included in the income calculation for Compliance
Review
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MFA Guidelines
• Definition of “Household Income”
 However, the definition of “Household Income”
remains “all household members age 18 or over” for
the Payment$aver and Helping Hand Programs
because of the Federal HOME Guidelines.
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MFA Guidelines
• Definition of “Ownership Interest” for the
3-year Requirement
 For purposes of documenting the 3-year requirement
(i.e. no ownership interest in a principle residence at
any time during the 3 year period prior to the date the
mortgage is executed)
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MFA Guidelines
• Definition of “Ownership Interest” for the
3-year Requirement
 “Ownership Interest” is defined as including the
following:
 A fee simple interest
 A joint tenancy, a tenancy in common or tenancy by the
entirety
 The interest of a tenant-shareholder in a cooperative
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MFA Guidelines
• Definition of “Ownership Interest” for the
3-year Requirement
 “Ownership Interest” is defined as including the
following:
 A life estate
 A land contract (i.e. a contract pursuant to which possession
and the benefits/burdens of ownership are transferred,
although legal title is not transferred until some later time)
and
 An interest held in trust for the mortgagor, whether or not it
was created by the mortgagor
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MFA Guidelines
• Definition of “Ownership Interest” for the
3-year Requirement
 Prior “Ownership Interest” by the spouse of the
borrower is considered prior “Ownership Interest” of
the borrower, regardless of when the borrower and
spouse were married
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MFA Guidelines
• Electronic/Digital Signature Policy
 MFA now accepts electronic/digital signatures on all
documents except for the following:
 Income disclosure letter
 Any Borrower explanation letter
 Lender certification/letter of explanation
 YTD Profit and Loss for self-employed borrowers
 Rental verification letters from Landlords
 Original Note
 Original Mortgage
 Signature Affidavit
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MFA Guidelines
Tax Returns (For ALL Borrowers on the loan
and if applicable Non-Purchasing Spouse)
 Three (3) years Tax Returns are not required if
borrower has at least one creditor with a three year
credit history on their credit report
 Two (2) years Tax Returns are required for all SelfEmployed borrowers, only, unless they do not have a
three year credit history, then three years of Tax
Returns are required
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MFA Guidelines
• Minimum Credit Score of 620
 Except for manual underwrite with HFA Preferred
Product which has a minimum of 660
If credit report provides 3 credit scores (tri-merge),
then the middle credit score must be at least 620
for each borrower
If credit report only provides 2 credit scores, the
lowest credit score must be at least 620 for each
borrower
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MFA Guidelines
• Minimum Credit Score of 620/660
 If the credit report only provides 1 credit score that
score must be at least a 620/660 for each borrower
 If either borrower has no credit score, due to
insufficient or stale credit, MFA will accept a manually
underwritten loan. In addition, the loan must be
underwritten to applicable secondary market
guidelines
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MFA Guidelines
• Minimum Credit Score of 620/660
 When reserving a borrower without a credit score, the
system will not allow you to move to the next screen
without entering a score. A 620 score must be entered
to get to the next page. After the reservation is
complete you must call MFA so that the score can be
changed and notes added to the reservation screen.
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MFA Guidelines
• Minimum borrower cash contribution
 MFA requires a minimum borrower cash contribution
of $500.00, regardless of program type. HERO
Program requires a $1,000.00 contribution.
 Funds must be from the borrower and cannot be
derived from any type of gift, grant, pro-rated taxes or
down payment.
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MFA Guidelines
• Minimum borrower cash contribution
 MFA requires the lender to provide proof of
borrower’s funds on the Final First Mortgage
Application in Section VII and on the Final HUD 1
 If the borrower contributes more than $500 to the
transaction (i.e. Earnest Money, POC Appraisal Fee)
the borrower can get those funds back at closing
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MFA Guidelines
• Use of Mortgage Booster Funds
 May only be used for minimum down payment and
allowable closing costs
 MFA will allow a principal reduction of up to $100 if
the final Mortgage Booster loan is too high. The
principal reduction must be applied to the first
mortgage
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MFA Guidelines
• Reasons for Sole and Separate
 One Spouse of a married couple is not able to enter
into a contract (i.e. not of legal age), the spouse that is
able to enter into a contract will be allowed to
purchase the home as their Sole and Separate
property.
 Proof that spouse is not of legal age must be provided
** All household income needs to be counted toward
income eligibility **
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MFA Guidelines
• Reasons for Sole and Separate
 One spouse of a married couple has insufficient credit
history (no credit score), which does not allow for the
married couple to qualify for the mortgage jointly, the
spouse with the credit score will be allowed to
purchase the home as their Sole and Separate
property.
 Proof of no credit history must be provided
** All household income needs to be counted toward
income eligibility **
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MFA Guidelines
• Reasons for Sole and Separate
 One spouse of a married couple does have a Social
Security number and the other spouse does not have
a Social Security number or has an Individual Tax
Identification Number (ITIN), the spouse with the
Social Security number will be allowed to purchase the
home as their Sole and Separate property.
 Proof of no Social Security number or proof of ITIN must be
provided
** All household income needs to be counted toward
income eligibility **
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MFA Guidelines
• Reasons for Sole and Separate
 One spouse of a married couple has a poor credit
history (a credit score of less than 620), which does
not allow for the married couple to qualify for the
mortgage jointly, the spouse with the credit score
above 620 will be allowed to purchase the home as
their Sole and Separate property, with the following
restrictions;
**All household income needs to be counted toward
income eligibility **
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MFA Guidelines
• Reasons for Sole and Separate
 A maximum debt-to-income (“DTI”) of 45% for the
purchasing spouse, regardless of the automated
underwriting system (“AUS”) approval criteria.
 Both spouses need to provide proof that they both qualify
for any and all First Time Homebuyer Requirements that
might apply, including total household Income and prior
homeownership. (First Time Homebuyer Requirements do
not apply to the HERO Program)
 Proof of poor credit history must be provided
**All household income needs to be counted toward
income eligibility **
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MFA Guidelines
• Mandatory Homebuyer Counseling
 All MFA Borrowers are required to take pre-purchase
homebuyer counseling regardless of program type.
 HERO Program only if the borrower is a first-time
homebuyer
Counseling Certificates cannot be older than
One (1) Year
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MFA Guidelines
• Mandatory Homebuyer Counseling
 The pre-purchase homebuyer counseling will be either:

Face to Face pre-purchase housing counseling provided in
either a classroom or one-on-one setting by an MFA approved
housing counseling agency
 Face to Face counseling must be used for the
Payment$aver and Helping Hand Programs (the
on-line counseling is not acceptable for these two
programs
 Borrowers preferring to go to a counselor instead
of taking the eHomeAmerica class on-line is also
acceptable for the Mortgage$aver, HERO and
Mortgage Booster Programs
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MFA Guidelines
• Mandatory Homebuyer Counseling
 Pre-purchase homebuyer counseling

eHomeAmerica on-line Housing counseling

Borrowers may take the course married, unmarried or jointly
for one fee of $45 paid at the time of registration. When
registering type both names so that the certificate of
completion will print correctly.

The $45 fee can be reimbursed at closing and included with
the closing costs included in the second mortgage loan
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MFA Guidelines
• Mandatory Homebuyer Counseling
 Pre-purchase homebuyer counseling
 Link to the eHomeAmerica site is on the MFA Home
Page
 Be sure to refer all borrowers to the MFA Home Page
to ensure MFA is chosen as their administrator.
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HFA Preferred Loan Program
Special Housing Finance Agency Conventional Loan Product
• Definition of “Ownership Interest” for the HFA
Preferred Loan Program
 An ownership interest is defined as a borrower whose
name appears on the deed to any residential property.
Residential properties include single family detached,
townhomes, condos, manufactured homes,
investment properties and vacation homes.
 MFA requires the borrower to be a first-time
homebuyer.
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HFA Preferred Loan Program
Special Housing Finance Agency Conventional Loan Product
• Eligible Occupancy for the HFA Preferred Loan
Program
 The property must be owner-occupied and the
borrower may not have an ownership interest in any
other residential dwelling at the time of loan closing.
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HFA Preferred Loan Program
Special Housing Finance Agency Conventional Loan Product
• Term Sheet
 Posted on the MFA website
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Questions?
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MFA Guidelines
HERO Program
• Eligible Borrower(s)

The borrower does not have to be a first-time
homebuyer (FTHB) under the HERO Program
• Homebuyer Counseling
 Required for first-time Homebuyers (FTHB) only
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MFA Guidelines
HERO Program
• Owning Property
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
Old Definition: The borrower may not own any other
Real Property at the time of closing
New Definition: The HERO program may only be used
to purchase a primary residence and the borrower
must occupy the property within 60 days of closing
• Documentation submitted for Compliance
Approval regarding ownership of property
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
Old Definition: Verification of no other real property
is owned by borrower at loan closing
New Definition: Verification that the property
financed will be the borrower’s primary residence
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MFA Guidelines
HERO Program
• Eligible Program Type:

FHA ONLY
• Eligible Property Type:

Must be owner-occupied single family residence
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Questions?
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Mortgage Booster
• Use with Mortgage$aver OR Mortgage$aver Zero
with FHA, Conv, RHS, or HUD Section 184 (not
allowed with VA)
• Maximum loan amount of $8,000 (must follow
loan guidelines for CLTV)
 Use of funds are limited to cover the minimum down
payment and allowable closing costs
• 30 year amortization, 6.00%
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Second Mortgage RESPA
• Lender must provide a Truth in Lending (TIL)
Statement and Good Faith Estimate (GFE) to the
borrower for the Mortgage Booster Program per
RESPA Guidelines
 Lender must re-disclose for MFA if the
loan amount increases
 NOTE: The Payment$aver and Helping
Hand programs are exempt because they
are 0.00% non amortizing loans
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Second Mortgage Allowable Fees
Lender may charge an Origination Fee for
Mortgage Booster only of:
Recording Fee (DPA Mortgages)
Actual Cost
Daily Interest Charges
Actual Cost
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$100.00
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Questions?
01/06/2015
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Compliance Guidelines
• Completing the FHA Loan Underwriting and
Transmittal Summary when there is a second
mortgage

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
MFA’s EIN# must be completed – 85-0252748
Check the Government box
Enter 2nd mortgage loan amount
2nd mortgage is not a gift
If using CHUMS ID # as ZFHA make sure DU Findings
are attached
 If not using ZFHA then underwriter must sign
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Compliance Guidelines
• Completing the FHA Loan Underwriting and
Transmittal Summary when there is premium
pricing (Mortgage$aver Plus or HERO)
 MFA’s EIN# must be completed in the Gift section –
85-0252748
 Check the Government box
 Enter total “Gift” amount including the cents
 If using CHUMS ID # as ZFHA make sure DU Findings
are attached
 If not using ZFHA then underwriter must sign
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Compliance Guidelines
• Income Calculation
 ALL Household income is considered
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Example: John Doe is purchasing a home and
is married. John Doe is taking title as his Sole &
Separate property because his wife has bad credit.
The wife’s income must be counted toward
household income according to MFA Guidelines.
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Compliance Guidelines
• Income Calculation
 Common mistake with the current pay stub
 The date that MUST be within 30 days of
submitting the package is the pay period paid
through date NOT the check date or the pay date.
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Compliance Guidelines
Verification of Employment Income
Monthly gross income includes, but is not limited to:
Monthly gross pay
(wages, salary, tips, etc.)
Overtime
Part-time
Interest and dividends
Bonuses
Business Income
VA Compensation
Child Support
Alimony
Rental Income
SSI
Disability Income
Other Income
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Compliance Guidelines
• Compliance File Documentation Requirements
 MFA has revised and simplified the documentation
requirements
 One year, most recent Verification of Rent (VOR)
 One month most recent bank statement from each bank
account (No VODs). However, VODs or two months of bank
statements are required for the Payment$aver and Helping
Hand programs.
 NEW Income Disclosure Letter to be signed by all borrowers
at application.
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Compliance Guidelines
• Loan Break Down Form
 Preliminary Loan Break Down Form to be completed
at the time of submitting the Compliance Package
(This is an estimate of the down payment and closing
costs)
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Payment$aver & Helping Hand
Compliance Guidelines
• Borrower is not allowed to have more than 6
months income in the bank as cash assets at the
time of closing
• If liquid assets exceed $5,000 an asset test is
required to be performed per the following
example:
 Borrower has $20,000 in liquid assets
 $20,000 × 2% = $400.00
 $400.00 ÷ 12 (months) = 33.33
 $33.33 will be added to borrower’s monthly income
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Payment$aver & Helping Hand
Compliance Guidelines
• Face to Face Homebuyer Counseling is
required by MFA Approved Housing
Counseling Agency
• Non-Profit Agency providing the counseling
will provide the lender with the following
completed forms:
 Completion Certificate
 Request for Reimbursement
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Payment$aver & Helping Hand
Compliance Guidelines
• HQS (Housing Quality Standards) Inspection is required if
home was built prior to 1978 (no matter what type of
loan the first mortgage is)
• HQS inspection is required for homes built after 1978 if
loan type is Conventional (FNMA), VA or Rural Housing.
(Except if home is a new construction or if there is an
FHA appraisal)
• List of HQS inspectors available from MFA
 HQS Inspector will provide
 Copy of signed inspection indicating if the property failed or passed
 Request for Reimbursement(s) (If the property failed need two
separate Reimbursements, 1 for the pass and 1 for the fail)
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Payment$aver & Helping Hand
Compliance Guidelines
• Fund Use Form
 Preliminary Fund Use Form to be completed at the
time of submitting the Compliance Package (This is an
estimate of the down payment and closing costs)
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Payment$aver & Helping Hand
Compliance Guidelines
• Original completed, signed and dated
Certification of Asset Form
• Certification of Status Form (Documentation
regarding disability status form signed by doctor)
(Required for Helping Hand loans only)
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Payment$aver & Helping Hand
Compliance Guidelines
• Bank Statements
 Copies of full 2 months bank statements OR
 1 printout from bank showing average balance over
the last 2 months OR
 Written statement from bank that borrower does not
have a 2 month history but has X months history with
them and average balance over X months OR
 If borrower does not have a bank account an original
signed and notarized statement will be accepted
Note: If a printout is received from the bank in must be
stamped and signed or initialed by bank personnel.
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Payment$aver/SmartChoice
• With Mortgage$aver or Mortgage$aver Zero
• Maximum loan amount is 8% of the sales price
OR $8,000 which ever is less
• SmartChoice Program – Borrower must be in
possession of a Section 8 Housing Voucher. Loan
amount is $15,000, no more and no less
• 0% non-amortizing loan due on sale, transfer or
refinance
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Payment$aver/SmartChoice
• Borrower may finance down payment, temporary buydowns, closing
costs (excluding pre-paids)
 Use of funds are limited to cover the down payment and
allowable closing costs. Borrower may finance additional down
payment if needed to help in qualifying.
• Income limits vary by county and household size
• Face to face Housing Counseling class required by MFA approved
Housing Counseling Agency
• Available statewide except in the City Limits of Albuquerque
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Helping Hand
• One person in the household meets the ADA definition of
disabled
• With Mortgage$aver or Mortgage$aver Zero
• Loan amount is $8,000, no more and no less
• 0% non-amortizing loan due on sale, transfer or refinance
• Available statewide including in the City Limits of
Albuquerque
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Helping Hand
• Borrower may finance down payment, temporary buydowns, closing
costs (including pre-paids)
 Use of funds are limited to cover the down payment and
allowable closing costs. Borrower may finance additional down
payment if needed to help in qualifying.
• Income limits vary by county and household size
• Face to face Housing Counseling class required by MFA approved
Housing Counseling Agency (Suggested agency is ILRC/Housing
Division)
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Compliance File Delivery
• Checklists redesigned and simplified.
 Descriptions of the required items relocated to the
Compliance Manual
• Checklists available on MFA website
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


Mortgage$aver and Mortgage$aver Zero
Mortgage$aver Plus
Mortgage$aver and Mortgage$aver Zero with Booster
Mortgage$aver and Mortgage$aver Zero with Payment$aver or
Helping Hand
 HERO
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Compliance File Delivery
• Use most current check list and forms from MFA’s
web site
• Two hole punch and Accofasten package (no
paperclips)
• Do not place in file folder
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Review of
Compliance
Checklist
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Compliance File Review
• Compliance review time is:

Three (3) business days after receipt of file
• Clearing suspense conditions:
 Please send all suspense conditions at once – this will
speed up the process.
 Policy for clearing conditions on loans with less than 5
conditions 24 (business) hour turnaround time. Files
with 5 or more conditions 48 (business) hour
turnaround time.
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Questions?
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DPA Funding Process
• Per HUD’s Directive, MFA must fund DPA directly to the
title company
 DPA must be Compliance Approved prior to MFA
sending the wire to the title company
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DPA Funding Process
• Lender must provide to MFA 24 hours prior to
closing
 Wire Request Form (Current form from MFA
website)
 Wire Instructions to the Title Company
 Copy of the FINAL pre-close HUD 1
Need two (2) HUDs, if borrower obtaining a
Mortgage Booster, Payment$aver, Helping Hand
along with the MFA First Mortgage Loan
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DPA Funding Process
 Copy of unsigned documents for funds being wired to
title company
Note and
Mortgage
 E-mail Wire Request and Attachments to
[email protected]
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DPA Funding Process
• MFA prepares wire requests once a day
 Cut off time to receive wire requests/corrections is
10:00 am for wire to be sent out same day
 Wires will be sent out by 3:00 pm to arrive at the title
company by 5:00 pm same day
 If property is a HUD or Bank owned property the funds
need to be at title at the time of signing, be sure to
request the funds to be sent to title the day before
closing.
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DPA Funding Process
• Mortgage$aver Plus DPA
 MFA will wire 3.50% of final loan amount (must be entire 3.50%
including cents)
• HERO DPA
 MFA will wire 3.00% of final loan amount (must be entire 3.00%
including cents)
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Thank you from all
of us at the MFA for
your participation
in our programs
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