Version 2019 December Familiarize you with the benefits
Version 2019. December
Familiarize you with the benefits, key features and requirements for GMFS Purchase Advantage low down payment mortgage/no down payment offering: Purchase Advantage Powered by CAFA Purchase Advantage is a very select program offered by GMFS through a proud partnership with the Capital Area Finance Authority (“CAFA”). A large component and key feature of this program is the Freddie Mac Conventional Housing Finance Agency (“HFA”) Loan Product which is offered exclusively through HFAs such as CAFA. Purchase Advantage powered by CAFA 2
Purchase Advantage Powered by CAFA Eligible Products • Purchase Advantage FHA 30 yr • • • With 3% Down Payment Assistance With 4% Down Payment Assistance Purchase Advantage Conventional 30 yr* • • • With 0% Down Payment Assistance With 3% Down Payment Assistance With 4% Down Payment Assistance *Purchase Advantage Conventional is Freddie Mac’s Conventional Housing Finance Agency (“HFA”) Loan Product. Purchase Advantage powered by CAFA 3
Key Features: Purchase Advantage • Program Benefits No minimum borrower contribution • Purchase only • First time homebuyer or repeat buyers eligible • Available for Primary Residence Only • 30 year Fixed Rate • No Recapture Purchase Advantage Conventional • Underwrite through LPA • 97% LTV • Underwrite through DU • Lower Mortgage Insurance Premiums than Standard Conventional • 96. 5% LTV • No Reserves Required • Up to 6% Seller Concessions • Non QM • Freddie does not charge the standard LLPA Adjustment • Non QM Purchase Advantage-FHA Minimum FICO Purchase Advantage FHA 640 AUS / 680 Manual Purchase Advantage-Conventional 640 Accept / Eligible AUS Guidelines Approve / Eligible DU Debt-to-Income (DTI)* 45% AUS / 43% Manual 50% with AUS approval 115% AMI 140% AMI Income Maximums See Addendum for instructions on how to enter in LPA *Follow standard FHA or Freddie Mac Home Possible Advantage- HFA rules depending on program to determine which debts should be included in the ratio. Purchase Advantage powered by CAFA 4
Purchase Advantage powered by CAFA Mortgage Insurance coverage for Purchase Advantage Conventional program compared to Standard Conventional Coverage. Purchase Advantage Standard Mortgage Insurance Coverage Home Possible Advantage* 6% 12% 85. 01% up to 90% 12% 25% 90. 01% up to 95% 16% 30% 25% 95. 01% up to 97% 18% LTV Ratio Mortgage Insurance Coverage* 80. 01% up to 85% 25% *Important Notes to Remember: • • Grant Money may be used to cover Borrower Paid Single Mortgage Insurance Premiums are allowed to be financed up to 97% Lender-paid mortgage insurance option may not be used Conventional Loan Only Purchase Advantage powered by CAFA 5
Purchase Advantage powered by CAFA Pricing Sample comparing Purchase Advantage Conventional program with 0% Grant Option to other Conventional Products Loan Size: $276, 000 LTV: 97% FICO: 680 Traditional Home Possible Advantage Rate 3. 875% 3. 75% $1, 388. 00 P&I $1, 298. 00 $1, 278. 00 $305. 90 $384. 10 MI $225. 40 $264. 50 $1, 623. 90 $1, 722. 10 Total Payment $1, 523. 40 $1, 542. 50 Traditional Home Possible Advantage Rate 4% 4. 125% P&I $1, 318. 00 MI Total Payment Purchase Advantage Conventional LTV: 97% Purchase Advantage Conventional Loan Size: $276, 000 FICO: 640 LTV: 90% FICO: 680 Traditional Home Possible Advantage Traditional Freddie Loan Rate 3. 875% 3. 75% 4% P&I $1, 298. 00 $1, 278. 00 $1, 318. 00 MI $115. 00 $167. 90 Total Payment $1, 413. 00 $1, 445. 90 $1, 485. 90 These pricing samples are to show the difference in the borrower payments with discounted private mortgage insurance offered ONLY through this Purchase Advantage Conventional Loan Product. The interest rates used on this chart are based on a 0% Grant Option. Should the borrower choose to use Grant Money, the interest rate will be raised. Interest Rates Subject to change. Purchase Advantage powered by CAFA 6
Qualifying Income/Income Limits • Qualifying income must include all stable monthly income for all borrowers on the loan. • CAFA’s Income Limits are based on Area Median Income (“AMI”) per Parish • FHA income limits are set at 115% of AMI • Conventional income limits are set at 140% of AMI Purchase Advantage powered by CAFA 7
Approved Parishes and Income Limits AMI Purchase Advantage Conventional Purchase Advantag e FHA Acadia $61, 100 $86, 940 $70, 265 Allen $61, 100 $86, 940 Ascension $73, 500 Assumption AMI Purchase Advantage Conventional Purchase Advantage FHA Lafayette $66, 000 $98, 560 $75, 900 $70, 265 Lafourche $61, 100 $86, 940 $70, 265 $104, 720 $84, 525 Livingston $72, 100 $104, 720 $84, 525 $63, 100 $88, 060 $72, 565 Madison $61, 100 $86, 940 $70, 265 Avoyelles $61, 100 $86, 940 $70, 265 Ouachita $61, 100 $86, 940 $70, 265 Beauregard $62, 700 $87, 500 $72, 105 Pointe Coupee $72, 100 $104, 720 $84, 525 Caddo $61, 100 $87, 780 $70, 265 St. Bernard $67, 200 $91, 840 $77, 510 Calcasieu $61, 100 $86, 940 $70, 265 St. Helena $72, 100 $104, 720 $84, 525 Cameron $61, 100 $86, 940 $70, 265 St. James $67, 200 $90, 300 $76, 590 Desoto $61, 100 $87, 780 $70, 265 St. Landry $61, 100 $86, 940 $70, 265 East Baton Rouge $73, 500 $104, 720 $84, 525 St. Martin $61, 100 $98, 560 $70, 265 East Feliciana $73, 500 $104, 720 $84, 525 St. Tammany $61, 100 $91, 840 $70, 265 Evangeline $61, 100 $86, 940 $70, 265 St. Mary $67, 200 $86, 940 $77, 510 Franklin $61, 100 $86, 940 $70, 265 Tangipahoa $66, 300 $88, 620 $76, 245 Iberia $61, 100 $86, 940 $70, 265 Terrebonne $61, 100 $86, 940 $70, 265 Iberville $61, 100 $86, 940 $70, 265 Union $61, 100 $86, 940 $70, 265 Jackson $61, 100 $86, 940 $70, 265 Vermillion $61, 100 $86, 940 $71, 300 Jefferson $67, 400 $91, 840 $77, 510 Washington $61, 100 $86, 940 $70, 265 Jefferson Davis $61, 100 $86, 940 $70, 265 West Baton Rouge $72, 100 $104, 720 $84, 525 West Feliciana $72, 100 $104, 720 $84, 525 Purchase Advantage powered by CAFA 8
Flexible Down-payment & Closing-cost Sources for Purchase Advantage Conventional Flexible Sources of Funds Closing Costs • and Escrow • • • Financing Concessions • • • 3%LTV/TLTV ratio > 90% 6% LTV/TLTV ratio > 75% < 90% 9% LTV/TLTV ratio < 75% Other Eligible Sources of Funds Borrower Personal Funds • • • Depository accounts • Cash on hand Securities Retirement accounts Government bonds • Loan secured by borrower’s assets • Sale of borrower’s real property • Sale of borrower's • assets Borrower’s real estate commission Funds from a trust Pooled funds Individual Development Account (IDA): Include matching funds only if not subject to recapture tax Community Savings. Borrower contribution Cash value of life insurance policy Trade equity Rent Credits Purchase Advantage powered by CAFA Lender Credit Down Payment Allowance Down Payment Assistance from GMFS 9 • Gift funds or gift of equity: Related Person • Gift funds: wedding gift • Gift/Grant: Agency • Gift/Grant: seller as the originating lender • Employer-Assisted Homeownership Benefit • IDA : Matching funds subject to recapture tax
Sources of Funds: Cash on Hand for Purchase Advantage Conventional Cash on Hand • • Complete Monthly Budget and Residual Income Analysis (Exhibit 23), or another document containing the same information Credit report shows no more than 3 trade lines • Copies of 3 months’ statements • for any open revolving account that reveal cash advances are not the source of Borrower Funds Any cash advances must be explained and documented • Updated credit report approximately one week prior to closing to show no new accounts or increase in current accounts • 6 months’ cash receipts or other alternative documentation (refer to Freddie Selling Guide Section 5202. 2 (b)) • Evidence that funds for the down payment, Closing Costs, Financing Costs, Prepaids/Escrows and reserves are deposited in a financial institution or are held in an institutional escrow account prior to closing The mortgage file must have no indication that the borrower typically uses checking, savings or similar accounts Purchase Advantage powered by CAFA 10
Homeownership Education • When all borrowers are first-time homebuyers, at least one qualifying borrower must participate in a homeownership education program before the Note Date* • A copy of Homeownership Education Certification, or another document with comparable information , to be retained in the mortgage file-prior to closing! The requirement stresses the importance of utilizing a curriculum that contains the minimum core content specified by the National Industry Standards for Homeownership Education and Counseling. The standards help ensure quality education and counseling is delivered with fairness and respect to homebuyers and homeowners http: //www. thecafa. org/homebuyer-resources/ Purchase Advantage powered by CAFA 11
For Purchase Advantage Conventional Loans Loan Product Advisor Feedback Certificate *Must enter in LPA as “Home Possible Advantage for HFA” Loan Product Advisor Feedback Certificate Evaluation Summary Purchase Advantage powered by CAFA 12
Loan Product Advisor Feedback Certificate cont. Loan Product Advisor Feedback Certificate General Messages Code Messages JX If all Borrower(s) are First-Time Homebuyers, at least one qualifying Borrower must participate in a homeownership education program before the Note Date. Retain Homeownership Education Certificate or comparable document in the mortgage file. EW Seller is responsible for documenting and underwriting all Mortgages in accordance with the requirements of the Single-Family Seller/Servicer Guide and/or Master Agreement. NU Loan Submitted as Home Possible Advantage for HFA mortgage Purchase Advantage powered by CAFA 13
Resources • https: //gmfsmortgage. com/purchaseadvantage/ • http: //www. thecafa. org/homebuyer/programs/lacafa-grant-program • www. Freddie. Mac. com/singlefamily/hfa. html • http: //www. freddiemac. com/homepossible/eligibilit y. html • http: //www. freddiemac. com/creditsmart Purchase Advantage powered by CAFA 14
Updated 8. 1. 19
Pricing In Optimal Blue • In Optimal Blue you must select the appropriate county AND HFA Loan – YES. Otherwise the Purchase Advantage pricing will not show as an option. HFA stands for Housing Financing Agency. • Once the pricing populates, you first need to choose the appropriate price based on the Loan Program (Conventional or FHA) and Down Payment Assistance chosen. You have a 0% DPA (conventional only), 3% DPA option or a 4% DPA Option. Purchase Advantage powered by CAFA A. 2
Purchase Advantage Conventional Loans LPA Purchase Advantage powered by CAFA A. 3
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LPA Feedback Certificate Purchase Advantage powered by CAFA A. 5
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Purchase Advantage FHA Loans DU Purchase Advantage powered by CAFA A. 9
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