Delaware State Housing Authority Homeownership Loan Programs Lender

Delaware State Housing Authority Homeownership Loan Programs Lender Training

DSHA is committed to following all aspects of the Fair Housing Act in our efforts to promote responsible homeownership and provide competitive and safe financing for same.

Agenda • • • 3 Recent Program Enhancements Eligible Loan Products Eligible Properties Credit Overlays Down payment & Closing Cost Assistance Products Income, Sales price/Purchase Price Limits DSHA Forms Loan Flow Pre-Closing Compliance File Delivery Pipeline Tracking Closed Loan Delivery DSHA Contact List

Recent Program Enhancements • DSHA Program Changes Effective May 1, 2018 • DSHA Launches its Preferred Plus product Suite – Preferred Plus 2% – 5% down payment assistance. • This program will eliminate the requirements to comply with TRID and RESPA thereby eliminating upfront and closing disclosures specifically for DSHA – The assistance amount and cost of recording will be required to be included on the primary mortgage closing disclosure • This will be in the form of a Soft Second Mortgage requiring a note and mortgage be completed at loan closing. • Income Limits of $97, 900 and Loan Maximum of $417, 000

Additional changes • DSHA is lowering the required FICO scores to 620 for FHA, VA, USDA and Conventional HFA Preferred (reduced MI) mortgages. • The rate lock time will be reduced from 75 to 60 days • Borrowers with FICO scores at 659 or below, will be required to attend HUD approved Housing Counseling. • DSHA will also be increasing Lender Compensation to 2. 25%. Lenders will still be able to charge the optional. 50% origination fee which could further increase compensation to 2. 75%.

Additional changes continued • SMAL will be available to customers whom you have currently in your pipeline which have applied under the specific program expectations.

Eligible Loan Products • FHA – 203(b); 203(b)(2); 234(c); 223(e); 203(ks) and other acceptable FHA products. • VA – Originated and guaranteed in accordance with VA guidelines under 1810 and 181 A. • USDA Rural Housing Service Loans – Originated and guaranteed in accordance with USDA guidelines. • Fannie Mae Conventional: HFA Preferred product(s) only o MI and No MI options available 7

FHA, VA, USDA Eligible Properties Owner Occupied Residential Properties • Single Family Units and Town Houses • Agency Approved Condominiums for FHA, VA or USDA only – Please refer to Section 4. 4 of the Seller’s Guide for specific guidelines • Planned Unit Developments (PUD’s) • 1 -4 Unit Properties (meeting DSHA purchase price limits and Agency guidelines for the loan product being originated) • Double Wide Manufactured Homes; FHA Only. All borrowers must have a minimum 660 FICO score. Properties Not Allowed: • Rental homes • Co-ops • Investment properties • Recreational, vacation, or second homes

Credit Overlays • Minimum FICO score of 620* • Follow DTI maximum limit • Must have a DU finding of Approved/Eligible *No manually underwriting is permitted for USDA, VA or Conventional loans. Manual underwriting is permitted on FHA loans in cases where the loan receives an Approved/Eligible DU finding but requires a manual downgrade due to additional information not considered in the DU decision that affects the overall insurability or eligibility of the loan. In these instances, the loans will be subject to a minimum FICO score of 660 and a maximum DTI of 43%

Homeownership Counseling • HUD approved homeownership classes are required for all borrowers with a FICO score of 659 or lower, regardless of loan product used. • A list of HUD approved Housing Counseling Agencies is available on the main DSHA website: www. destatehousing. com

FNMA HFA Preferred Credit Overlays HFA Preferred with MI • Maximum LTV 95% - CLTV 105% o 1 -4 Unit Properties • Maximum LTV 97% - CLTV 105% o 1 Unit Properties Only • Minimum 620 FICO Score HFA Preferred with No MI • Maximum LTV 95% - CLTV 105% o Minimum 680 FICO Score • Maximum LTV 97% - CLTV 105% o Minimum 700 FICO Score • • 1 Unit Properties Only Condos & Rural Properties not eligible All Loans must be underwritten through Fannie Mae DU with an Approved Eligible finding.

FNMA HFA Preferred Eligible Properties - Owner Occupied Residential Properties • Single Family Units and Town Houses • Planned Unit Developments (PUD’s) Ineligible Properties • Condominiums on loans with No MI • Multiple Unit Properties • Vacation/Second Homes • Co-ops • Investment/Rental Units • Manufactured Homes

Homeownership Program without MCC Income Limits County Household Income Limit New Castle, Kent & Sussex $97, 900 Income limits are subject to change. Income Limits: Mortgagor’s current total household income must not exceed the Program limits. 13

Homeownership Loans without MCC Loan Limits County Kent, New Castle & Sussex Loan Limit $417, 000 Loan limits are subject to change. Income Limits: Mortgagor’s loan amount must not exceed the program limits. 14

Homeownership Loans Using MCC Income Limits County Area New Castle Targeted Kent & Sussex Targeted 1 – 2 Person Households 3+ Person Households $83, 200 $95, 680 $99, 840 $116, 480 $74, 900 $86, 135 $89, 880 $104, 860 Income limits in effect as of 5/15/17 and are subject to change. Income Limits: MCC Mortgagor’s household income must not exceed the program limits. 15

Homeownership Loans using MCC Purchase Price Limits Property Location by County Purchase Price Limit 1 Unit 2 Unit 3 Unit 4 Unit New Castle County $349, 411 $447, 283 $540, 690 $671, 938 Kent County $248, 098 $317, 655 $383, 962 $477, 135 Sussex County $291, 176 $372, 752 $450, 552 $559, 933 Purchase price limits in effect as of 5/15/17 and are subject to change. Income Limits: Mortgagor’s purchase price must not exceed the program limits. 16

DSHA Forms All DSHA program specific forms are available on DSHA’s Lender Resource website at Lenders. De. State. Housing. com under the Homeownership Program Documents tab. DSHA training presentations, important links & contacts, Mitas user tips, as well as a calendar of holidays and scheduled closings are also available on the Lenders Resource Website. 17

Loan Flow 1. Lender pre-qualifies homebuyer per DSHA and Agency guidelines. 1. Lender registers loan(s) through DSHA’s Mitas Online Reservation System at https: //MITAS. destatehousing. com 2. Lender uploads compliance file to DSHA for eligibility review at least 72 hours before closing. • Income • Homebuyer Status o Qualified Veteran (if applicable) • Purchase Price/Acquisition Cost 3. Once “Committed”, Lender closes loan and delivers closed purchase file to Lakeview for funding. If using down payment assistance funds, lender submits the Wire Request Worksheet to request money with 24 hours notice. DSHA will wire funds to closing. 18

Loan Flow (continued) • Registrations are valid for 60 days. Closed loans must be funded by the Master Servicer within the reservation period. • DSHA will transmit registrations to Lakeview Loan Servicing. • A one-time 15 or 30 -day rate extension may be purchased prior to the expiration of the initial reservation period. The extension fee will be assessed at the time the extension is granted. Loans that are not purchased prior to the expiration of the reservation or extension period will be deemed expired and are subject to re-pricing. • Master Servicer will net any extension or other fees due at loan purchase. – Please review the Program Notice located on DSHA’s Lenders. De. State. Housing. com website for complete product details. 19

Pre-Closing Compliance File Delivery • The Compliance Package for each loan must be uploaded to DSHA at least 3 business days before closing. Note: Incomplete loan files are not placed in the queue for compliance review until all outstanding conditions have been satisfied. Therefore, it is of no benefit to submit an incomplete package ahead of time. – Please use the Transmittal of Loan Documentation for Compliance, located on the Correspondent Lending Website. – The $75 compliance review fee will be netted from the purchase wire or billed to lender if the loan does not close under the DSHA product. 20

Tracking Your Loan Pipeline in MITAS • Lenders should use MITAS to see status of files delivered to DSHA for Compliance Review for any Compliance Review conditions and DSHA staff assigned to file. • Lenders should cancel reservations of any "dead loans“ prior to reservation expiration to avoid non-cancellation penalty fees.

Closed Loan Delivery Closed loans must be delivered and purchased by Lakeview within the 60 day reservation period (75 or 90 days based on whether a 15 or 30 day extension was purchased). 22

DSHA Originations Contacts Telephone: 302 -577 -5001 Fax: 302 -577 -5021 Lender Resource Website: Lenders. De. State. Housing. com Housing Finance Manager Lender Support Karen Flowers Office Manager Initial Package Review-Pending Conditions Pamela Spencer Housing Mortgage Loan Officer 1 Compliance Review/ Lender Support 23

DSHA Post Closing Contacts Telephone: 302 -577 -5001 Fax: 302 -577 -5021 Brian Rossello Housing Finance Manager Post Closing Enid Beltran Mortgage Loan Officer II Post Closing Carol Orzechowski Administrative Assistant II Document Control 24