Transcript Document

CHDAP 2nd Trust Deeds
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7/20/2015
The CHDAP 2nd Trust Deed
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FHA 1st TD at 96.5%
Combine with a CHDAP
3% 2nd TD
This program can only be done with an
FHA – 30 year fixed.
 After 2nd, it leaves only a .50% down
payment – and this can be a gift.
 Can be used with a FLIP loan.
 Compensation:
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Lender Paid – Paid as usual, depending on your
Broker Compensation Plan, Broker can be paid up to
2.75%
Borrower Paid: The maximum origination fee for the
1st can be 2% or $3,000.00 whichever is greater.
No payments on the 2nd; deferred for
the life of the 1st loan.
 The 2nd is due and payable when certain
events occur……
 CLTV cannot exceed 103%
 Term on 2nd needs to match term of 1st,
not to exceed 30 years.
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What is a first time homebuyer?
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 A first time homebuyer is defined as someone who has not
had any ownership in a primary residence within the last
three years (timeshares okay and n/o/o okay if currently
renting – and not from a family member).
 Federal income tax returns required for the previous 3
years. Borrowers not legally obligated to file must complete
Tax Return Affidavit.
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CHDAP 2nds
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Must be a first time home buyer
FHA 1st Trust Deed 96.5% financing
CHDAP 3% 2nd; deferred payments
The 2nd can be used for down payment or closing costs
.50% can be a gift
640 FICO requirement
45% max ratio (see co signer guidelines for higher ratios)
1st Time Homebuyer – no primary ownership in 3 yrs.
Borrower’s income can not exceed the CalHFA published income limits.
Only calculate the purchasing borrower’s income to qualify for the loan.
Non-0ccupant co-signers okay (see next slide); No non-occupant co-borrower;
You can use an MCC with this product, but it can not be used to reduce the ratios.
Homebuyer Education is required for one occupying borrower –The cost is $50, including
immediate access to their completed certification for printing. Follow up telephone interview
not required and is more costly. Go here for the training: http://ehomeamerica.org/calhfa.com
SFR’s, condos, and PUDS (no 2-4 units)
Five acres maximum; no income producing; hobby okay.
If garage has been converted, no stove allowed – gas needs to be capped; no 2nd kitchen.
Home Warranty not required.
DU or LP approvals.
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CHDAP
Co-signers
Helps with the ratios of
45% maximum.
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Additional Co-Signer Requirements
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 Cosigners may not have a financial interest in the transaction (seller,
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builder, real estate agent, MLO, etc., are ineligible).
Co signers must be closely related to the occupying borrowers.
Allowable relatives are parents, children, siblings, stepchildren,
aunts/uncles, nieces/nephews ONLY. Lexis-Nexis to show family
relationship and/or additional documentation may be required by
underwriting.
Cosigners must have a principal residence in the US exempted due to
military service or as US citizens living abroad.
Occupant borrower’s debt to ratios cannot exceed 46.99/56.99%.
Total DTI including co-signer’s income is 45%.
Full credit packages will be required for Cosigners (credit reports, full
income documentation and asset documentation, full disclosures in
accordance with FHA and total scorecard requirements).
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Lender vs. CALHFA Review of Income
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Notes of Interest on how CalHFA calculates maximum income for
family or anyone who is living in the house – not just borrowers .
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 Schedule C or E Income – do not add back in
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depreciation.
Negative is a wash, not deducted.
Do not back out 2106 expenses.
2013 and YTD income (no 2012 income is reviewed
since we are in 2014).
P&L’s are okay for 2014.
In question, CalHFA will always take the higher
income.
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CHDAP Program “Loan Amount” Limits:
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For a complete list of sale prices, go to:
http://www.calhfa.ca.gov/homeownership/limits/index.htm#income
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CHDAP INCOME LIMITS
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CHDAP INCOME LIMITS
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CHDAP Income Limits
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CalHFA CHDAP Submission Check List
All these Forms can be found at essexwholesale.com under Forms and Documents
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OTHER THINGS TO KNOW:
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___We will require 2 packages to be uploaded; the
1st and the 2nd; with 2 separate loan numbers.
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___The 1st mortgage – submit by using your FHA
Required Submission Forms list; exception CalHFA
requires 3 years tax returns on all borrowers.
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2nd:
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___ GFE & TiL on the
$250.00 origination fee
in Box 1 which will go to Essex Mortgage.
No other fees can be charged on the 2nd.
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Once a complete package is approved by Essex
Mortgage, your file will be submitted to Agency for
approval; turn times vary. Please check with your
AE.
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Prior Agency approval is required to locking your
loan.
Additional Forms:
___Borrower(s) Certificate of Completion of
Homebuyers Education Counseling – for all
borrowers and from acceptable source.
___Military Service Questionnaire – Borrower(s) to
complete, sign and date.
___CalHFA Tax Return Affidavit – Only for
borrowers not required to file 1040’s.
___Borrower Affidavit of Household Size
___Borrower(s) Certification and & Authorization
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When you add an CalHFA MCC to the CHDAP
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 When multiple CalHFA loan programs are used in combination, the
most restrictive income limits apply (such as combining with an
CalHFA MCC Tax Credit – the tax credit can not be used for credit
qualifying).
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