Freddie Mac’s HFA Advantage Mortgage Colorado Housing and ... › participating-lenders ›...

Freddie Mac’s HFA Advantage Mortgage

Colorado Housing and Finance Authority (CHFA)

Tom Ward

May, 2016

NOTE: This document is not a replacement or substitute for the information found in the Single-Family Seller/Servicer Guide, and/or terms of your Master Agreement and/or Master Commitment.

HFA Advantage Mortgage:

…available exclusively through

participating

State or Local

Housing Finance Agencies

Maximum 97% LTV / 105% TLTV

HFA income limits

HFA homebuyer education

All delivery fees waived

Guarantee fees lowered

Charter-level mortgage insurance available

© 2016 Freddie Mac 2Colorado Housing and Finance Authority

Objective / Agenda

HFA Advantage is available exclusively to Housing Finance Agencies

Resources

Underwriting and

Processing Tips

Features and Benefits

General Requirements

Objective: Familiarize you with the benefits, key features and requirements for

Freddie Mac’s low down payment mortgage offering: HFA Advantage


Key Features: HFA Advantage

• 97% LTV / 105% TLTV (Affordable Seconds® only)

• No Minimum LTV

• Purchase/No Cash-out Refinance

• First-time homebuyers, repeat buyers

• 1- unit primary residence*

(Detached / attached, PUDs, Condominiums)

• All borrowers must occupy the mortgaged

premises as their primary residence, and

• May not, as of the note date, or the Effective

Date of Permanent Financing for Construction

Conversion and Renovation Mortgages, have

any other ownership interest in any other

residential properties.

*Manufactured homes are not eligible

• No reserves required

• Fixed rate

HOME

POSSIBLE

&

HOME

POSSIBLE

ADVANTAGE

Loan Prospector®

only(no manual underwriting)

HFA ADVANTAGE

Income Limits

Established

by HFA


Features and Benefits:

LTV Ratio

HFA Advantage

Mortgage Insurance

Coverage

Standard

Mortgage

Insurance

Coverage

Greater than 80% up to 85% 6% 12%



Greater than 95% up to 97% 18%

Flexible mortgage insurance options described in Section 4701.1 are not permitted.

Lender-paid and financed mortgage insurance premiums are not permitted if LTV > 95%.

Note: HFA paid upfront, single MI premium is acceptable.

Post-purchase and Early Delinquency Counseling: Borrower Disclosure

Mortgage Insurance:


HFA Advantage vs FHA: Insurance Costs


Check-In: Borrower Eligibility

Are the HFA Advantage Mortgage offerings

available only to first-time homebuyers?

No, but the borrower may not, as of the

note date*, have any ownership interest

in any other residential properties

*…or the Effective Date of Permanent Financing for

Construction Conversion and Renovation Mortgages


Qualifying Income / Income Limits

• Qualifying Income must

include all stable monthly

income for all borrowers.

• CHFA will determine income

eligibility based upon their

own income limits.


Sources of Funds

Flexible

Sources of Funds

Financing Concessions» 3% LTV/TLTV ratio > 90%

» 6% LTV/T LTV ratio > 75% < 90%

» 9% LTV/TLTV ratio < 75%

Premium Financing

Unsecured Loan: Originating Lender (Refer to Guide Section 5501.4)

Borrower Personal Funds

IDA: include matching funds only if

not subject to recapture tax

Rent Credits

Trade Equity

Community Savings

deposited by the Borrower

Depository accounts

Loan secured by Finan Asset

Sale of Borrower Asset

Cash on hand

Trust disbursement

Pooled funds

Other

Borrower Funds

Gifts–Related Person Gift/Grant: Agency or Seller

(as the originating lender)

Affordable Seconds Employer Assisted Homeownership

Benefit IDA: matching funds subject to recapture tax


Features and Eligibility:

All borrowers must participate in a homeownership

education program before the Note Date.* Homeownership

education program must be provided by CHFA

» A copy of a Homeownership Education Certification, or another

document with comparable information, to be retained in the mortgage

file

Homeownership Education

*…or the Effective Date of Permanent Financing for Construction Conversion and Renovation Mortgages

Purchase Transactions Require:

All borrowers must satisfy CHFA homebuyer

education requirements

© 2016 Freddie Mac 10Colorado Housing and Finance Authority 10

Underwriting & Processing Tips


Must be…

Submitted to Loan Prospector

No Manual Underwriting

Underwriting Path:


Loan Prospector Feedback Certificate

Compliance with HFA Income Limits is

a Selling Representation and Warranty


Sources of Funds: Affordable Seconds®*

Subsidized secondary financing or other financial assistance, evidenced in land

records, that is provided by an Agency and that meets the requirements of Section

4204.1

*HFA Advantage secondary financing source must be an

Affordable Second, and it may not be a home equity line of credit

Note: RHS Leveraged Seconds are not permitted with HFA Advantage

www.FreddieMac.com/singlefamily/expmkts/affprod.html

LP Data Entry Option: If the payment begins on

or after the 61st payment of the First Lien you

may enter the amount into the “Total Gift Fund”

field

» Do not include in qualifying ratios

» Manually calculate TLTV ratio

Variety of sources such as:

a municipality which includes any duly

authorized authority or agency of the federal,

state, local or municipal government; a nonprofit

community or religious organization (other than

a credit union); the borrower’s employer; or a

Regional Federal Home Loan Bank under one of

its affordable housing programs that meet the

requirements of Guide Section 4204.1.

Evidenced in land records


Wrap Up

How does it benefit

borrowers?

What are its key

features?

Who does it serve?

How can HFA Advantage be YOUR affordable lending solution?


Resources www.FreddieMac.com/singlefamily/hfa.html


HFA Advantage Program Contacts

Tamela Hartsfield 469-346-0292

[email protected]

Dennis Smith 571-385-7386

[email protected]

mailto:[email protected]

mailto:[email protected]


Please complete the online evaluation before exiting

today’s session

Thank you for your participation!

Freddie Mac’s HFA Advantage Mortgage Colorado Housing and ... › participating-lenders ›...

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