Welcome to TSAHC Lender Training

TSAHC is a 501(c)3 nonprofit organization. Our mission is to serve the housing needs of low-income Texans and other underserved populations. We fulfill our mission through our concept of:

About Us

TSAHC’s homeownership programs were created by the Texas Legislature. Two types of assistance are made available to homebuyers:

Homeownership Opportunities

Loans with Down Payment Assistance

• 30-year fixed interest rate loan

• DPA is a gift to the home buyer

• No first-time home buyer requirement

• Government & conventional loan types

• TSAHC sets rates daily

Mortgage Credit Certificates

• Annual mortgage interest tax credit

• Exclusive for first-time home buyers

• Can be combined with TSAHC’s DPA

• Saves home buyer thousands of dollars

over the life of the loan

Depending on the borrower’s loan type and FICO score, they will have 3 DPA level options:

*FHA manually underwritten files will receive 1% less in DPA

• DPA is based upon total loan amount

• The lower the amount of DPA, the lower the interest rate (Check website for rates)

• DPA can be used to cover down payment, closing costs or reduce loan balances

Government Loan Options

Loan Type 2% 3% 4% 5% FHA* w/FICOs of 640 to 659

FHA* w/FICOs of 660 or higher

VA or USDA w/FICO’s 640 +

A special Fannie Mae conventional loan called HFA Preferred is only available to agencies like TSAHC

It has all the benefits of a traditional conventional loan with some added perks:

• 97% LTV (only 3% down payment required)

• You do NOT have to be a first time home buyer.

However, any residential property currently owned must be sold prior to loan closing.

• Lower minimum monthly mortgage insurance rates when compared to other loan types. Only 18% coverage required.

• No Loan Level Pricing Adjustments (LLPAs)

• Mortgage insurance can be cancelled when loan reaches 78% LTV

Conventional Loan Options

Loan Type 2% 3% 4% 5% HFA Preferred Conventional w/FICOs of 640+

Special Mortgage Interest Tax Credit

• Exclusive for first-time buyers

• Gives the homeowner the ability to take an annual tax credit of up to $2,000

• Potential of saving the homeowner thousands of dollars over the life of the loan

• Must occupy the home as their principal residence

• Can be combined with our DPA assistance options

• Credit amount can be used as additional income when qualifying for a mortgage loan

Unless combining with TSAHC’s DPA options, the lender qualifies the home buyer and offers going interest rates

• Must be a fixed rate mortgage product – no requirement on term or loan type

• Lender can sell loan to any investor/servicer

Mortgage Credit Certificate

MCC Example

40% MCC Rate

Loan Amount $125,000.00

Interest Rate X 4.50%

Interest 1st Year = $5,625

MCC Rate X 40%

Amount = $2,250

MCC Tax Credit (max) = $2,000

It’s the home buyer’s responsibility to take the mortgage interest credit

• The homeowner must have tax liability

• Must be filed with annual income tax

• Any amount over $2,000 can be rolled over into future years

What’s the difference between a tax credit and a tax deduction?

• While both tax deductions and tax credits can save you money, they work in different ways.

• Tax credits provide a dollar-for-dollar reduction of your income tax liability.

• Tax deductions allow you to lower the amount of your taxable income by the amount of the deduction.

A MCC allows you to take advantage of both forms of savings:

• Tax Credit = A $2,000 tax credit that reduces your taxes owed dollar-for-dollar by $2,000

• Tax Deduction = A reduction of your taxable income by $3,625 ($5,625 - $2,000 credit) resulting in $906.25 in savings – assuming a 25% tax bracket

Mortgage Credit Certificate

How does a individual qualify?

1. Profession and/or Income Level

Homes for Texas Heroes Teacher Nursing or Allied Health College

Professor Corrections Officer (TDCJ or TJJD)

Teacher’s Aide Veteran County Jailer

School Librarian Fire Fighter Security Officer

School Nurse EMS Personnel

School Counselor Peace Officer

• Don’t see your client’s profession listed above? They may still qualify.

Home Sweet Texas

• Not profession-specific • Individuals must be at or below 80% Area Median Family Income

Income Examples

Area Home Sweet Texas Texas Hero

Household Size N/A 1 to 2 3 or More

Austin $61,440 $76,800 $88,320

2. Borrower cannot exceed income based on County

• Household size is not a factor for Texas Heroes utilizing TSAHC's stand-alone DPA Program

• Household size requirements remain unchanged for Home Sweet Texas Loan borrowers regardless of program, and Texas Heroes utilizing the DPA/MCC or stand-alone MCC Programs

Examples:

• Stand-alone DPA Program (only qualifying 1003 income used)

• MCC or Combination DPA/MCC Programs (must consider entire household income)

Area Home Sweet Texas Texas Hero

Household Size N/A N/A

Austin $61,440 $88,320

3. Underwriting/Credit Requirements: Borrowers are required to meet standard underwriting requirements. We have the following overlays:

How does a individual qualify?

Loan Type Minimum FICO Maximum DTI

FHA Loans 640 45%

VA or USDA-RHS Loans 640 45%

VA or USDA-RHS Loans 660 50%

Conventional (FNMA HFA Preferred)

640 (LTVs of 95% or lower)

45%

Conventional (FNMA HFA Preferred)

660 (LTVs of 95% or lower)

50%

Conventional (FNMA HFA Preferred)

680 (LTVs of 95.01 to 97%)

45%

How does a individual qualify? 4. Borrowers need to complete a homebuyer education course prior to closing on the

home loan.

• A homeowner is 33% less likely to fall behind on their mortgage if they’ve taken a home buyer education course

• Met by attending a session through TSAHC’s network of housing counseling agencies

• Visit www.texasfinancialtoolbox.com to find a course near your borrower

• There may be a cost associated with this course.

How does a individual qualify?

5. Work with an approved participating lender

6. MCC Requirement ONLY: Must be a first-time homebuyer

• No ownership interest in any principal residence in the past 3 years, purchasing a home in a Targeted Area, or be a Qualified Veteran

• Homebuyers using the MCC Program could potentially be subject to Recapture Tax if ALL three of the following occur:

1. Sell the home within 9 years,

2. Make a net profit on the sale, and

3. Income increases 5% every year borrower lived in the home

Take the Eligibility Quiz

• Unsure if a client qualifies? Take the Eligibility Quiz under the Homeownership section of our site at www.ReadyToBuyATexasHomec.com.

A borrower may purchase any of the following types of homes:

• Not allowed: Rental homes, co-ops, investment properties, vacation and/or second homes.

Property Types

Government Loans

• New or existing homes; • Unit in a condo, townhouse, or PUD; • An entire duplex, triplex, or fourplex

(one unit must be owner-occupied)

HFA Preferred Conventional Loans

• New or existing homes, • Unit in a townhouse or PUD, • A condo (LTV of 95% or less only)

Program Fees: • $400 Funding Fee • $85 Tax Service Fee • $200 Compliance Review Fee • NEW! $500 MCC Flat Issuance Fee (if applicable)

Lender Compensation:

• Lenders may collect all reasonable and customary fees and closing costs • All fees and charges must be listed on the Closing Disclosure • DPA Programs

• Loans originated under TSAHC’s DPA Programs will be purchased by US Bank. • Compensated 2.5% in SRP for each FHA, USDA-RHS, or FNMA HFA Preferred loan. • Compensated 2.0% in SRP for each VA. • Lenders may not charge origination or discount points.

• MCC Program • Loans may be sold to any investor or retained for servicing by the lender. • Lenders are compensated like any other loan.

DPA Program Fees & Compensation

Important Takeaways!

• You do not need to be a first-time buyer to take advantage of our DPA options.

• DPA is a TRUE GRANT that does not need to be repaid – EVER!

• Our programs can be combined with other down payment assistance and MCC programs.

• Home buyers are not required to stay in the home for any number of years.

• Borrower can purchase anywhere in Texas.

• We serve more than just Texas Heroes. Remember, anyone at or below 80% AFMI may be eligible.

• For our Texas Heroes, there is no minimum time on the job required prior to or after using the programs.

• Turnaround times are fast! We require loans to close within 45 days of loan reservation.

Reservation & Origination Flow

Lender completes loan reservation in the Lender Portal

at www.tsm-online.org.

HFA Preferred loans must be run through DU and receive an

Approve/Eligible result. HFA Preferred loans with LTVs of 95.01 to 97% must then be

delivered to US Bank for underwriting.

All other loans will be underwritten by the lender.

Underwriter uploads the Underwriter Certification Form within 15 days of reservation to

the Lender Portal.

Lender delivers the Pre-Compliance Package to TSAHC

via the Lender Portal at least 10 days prior to closing.

Pre-Compliance Package is reviewed/approved by TSAHC.

A Compliance Commitment Letter is made available via the

Lender Portal.

Lender submits the Funding Request Form and Closing

Disclosure to wire.request@tsahc.org at least

2 days prior to closing date. Lender closes/funds the loan.

Lender submits Post-Compliance Package to

TSAHC via the Lender Portal within 10 days of closing

date.

Post-Compliance Package reviewed/approved by

TSAHC. Servicer notified of compliance approval and

loan purchased.

Loan Officer Responsibilities

• Pre-qualify borrower per Program Guidelines

• Must have an execute sales contract

• Ensure borrower does not exceed income limits/DTI aximums

• Ensure borrower has a minimum FICO of 640

• Complete the Loan Reservation

• Reserve the loan on the Lender Portal at http://www.tsm-online.org

Underwriter Responsibilities

• Lenders are responsible for underwriting all FHA, VA and USDA loans. Loans may be underwritten through:

• Automated Underwriting System (“AUS”), • Fannie Mae’s Desktop Underwriter (“DU”), or • Freddie Mac’s Loan Prospector (“LP”) • Manual Underwriting (FHA manually underwritten files will receive 1% less in DPA)

• HFA Preferred loans must be run through DU and receive an “Approve/Eligible”.

• Lenders, without approval by US Bank, are then required to submit those HFA

Preferred loans with LTVs of 95.01 to 97% to US Bank for further underwriting. • Please visit www.mrbp.usbank.com to access the US Bank Underwriting Guidelines. • Only HFA Preferred mortgage loans with LTVs of 95% or less may be underwritten

by the Lender following Fannie Mae underwriting guidelines.

Underwriter Responsibilities

• Additional credit and debt overlays: • FHA Loans

• A minimum FICO score of 640 with a maximum DTI of 45% • VA or USDA-RHS Loans

• A minimum FICO score of 640 with a maximum DTI of 45%, or • A minimum FICO score of 660 with a maximum DTI of 50%.

• FNMA HFA Preferred Conventional Loans • For LTVS of 95.01 to 97%:

• Minimum FICO score of 680 with a maximum DTI of 45% • For LTVs of 95% or Lower:

• Minimum FICO score of 640 with a maximum DTI of 45% • Those with a FICO score of 660 or greater, a maximum DTI of 50% will be

allowed.

• Within 15 calendar days of loan reservation the “Underwriter Certification Form” must be uploaded to the Lender Portal.

• Click “PDF Docs” button associated with your loan on the Lender Portal to find form.

• The stand-alone MCC program does not require an Underwriter Certification Form.

Processor Responsibilities

• Upload Pre-Closing Compliance Package

• Within 10 calendar days prior to closing this package will need to be uploaded to the Lender Portal.

• This package can be found through the “PDF Docs” button associated with your loan on the Lender Portal.

• Commitment Letter Issued by TSAHC

• This letter is to verify that the loan meets eligibility criteria.

• This letter can be found through the “PDF Docs” button associated with your loan on the Lender Portal.

Closer Responsibilities

• DPA or DPA/MCC Loans: Request DPA Funds from TSAHC

• Complete the “Funding Request Form” and email it and the Closing Disclosure to wire.request@tsahc.org at least 2 business days prior to closing.

• Close and Fund Loan

• Close and fund the loan according to Agency and Program Guidelines

• Upload Post-Closing Compliance Package

• Within 10 calendar days following loan closing this package must be uploaded to the Lender Portal.

• This package can be found through the “PDF Docs” button associated with your loan on the Lender Portal.

Shipper Responsibilities

• DPA or DPA/MCC Loans: Deliver the necessary documents to U.S. Bank per the “Closing and Funding” guidelines found in the Lender Manuals at www.mrbp.usbank.com.

• Must be approved by TSAHC, then delivered and purchased by U.S. Bank within 70 calendar days of loan reservation

• All Loans: Check the status of your loan periodically through the “Loan Status” tab on the Lender Portal

• DPA or DPA/MCC Loans: Once the Post- Closing Compliance Package has been approved by TSAHC, U.S. Bank will be authorized to purchase the loan (subject to U.S. Bank requirements)

• MCC Loans: Once the Post- Closing Compliance Package has been approved by TSAHC, the Mortgage Credit Certificate will be issued to the borrower.

Accessing the Lender Portal

• Participating lenders will reserve loans and submit compliance packages through TSAHC’s Lender Portal at www.tsm-online.org.

• One person from each Lender’s organization will be designated the “Administrator” of the TSAHC Lender Portal for purposes of granting access to company personnel.

• It will then be the Administrator’s responsibility to determine who within their company will have access and determine the level of access each employee will have.

TSAHC Lender Portal at www.tsm-online.org

1. Login to the TSAHC Lender Portal at www.tsm-online.org.

2. Click on Program Documents

Home Page

• Download and print the “Step-by-Step Origination Procedures” document to help you determine our timeline and the required documents for each program.

• Please refer to this document throughout the entire process.

Important Documents

Step by Step Procedures

1. Select the “New Reservation” tab in the upper left corner.

2. Select the appropriate Program from the list and complete the reservation form.

New Reservation

3. Fill out all appropriate fields using the completed 1003.

4. Required fields are designated with a red asterisk.

New Reservation

New Reservation 5. Once the Mortgage Loan is reserved, you will have the option to view or print your

reservation confirmation.

• The Lender Portal allows lenders to complete and submit electronic documents.

• All documents must be uploaded electronically. • No paper documents are required.

• Click on the “PDF Docs” button pertaining to the specific loan reservation to access the electronic documents.

TSAHC Electronic Documents

Underwriter Certification 1. Underwriters will select the “Underwriter’s Certification” Form. Then click “Generate

Documents”.

Underwriter Certification

2. The UW Form will appear with many fields pre-populated. Complete and/or update any blank fields.

3. Once this is complete, click on the “Upload Package” button at the bottom of the UW Form. • This will automatically upload the Form to the “eDocs” section of that specific loan file.

Underwriter Certification 4. Go back to the “Loan Status” button. NEVER use the back arrows or it will log you out of the

system.

5. Click the “eDocs” button associated with the loan to find the recently uploaded Underwriter’s Certification Form.

Underwriter Certification 6. You should see the uploaded UW Certification Form in the “Underwriter’s Certification”

section. 7. IMPORTANT: Click on the “Submit” button of this section.

• TSAHC will now be notified that the UW Certification Form has been delivered. • If you do not hit the “Submit” button, we will NOT know that you have uploaded

any documents!

TSAHC Compliance Packages 1. Click on the “PDF Docs” button to access the electronic Pre- and Post-Closing Packages. 2. These packages provide a checklist, listing all the required documentation. 3. TSAHC-specific documents required as part of these checklists are also available under this

section. 4. Select/generate the desired documents and ensure all required fields are completed. 5. If a form requires a signature, the form must be completed, printed, saved as a PDF, and

uploaded to the Portal.

1. Go back to the “Loan Status” button. NEVER use the back arrows or it will log you out of the system.

2. Click the “eDocs” button.

Uploading Program Documents

3. Click the “Add New” button to upload a saved document.

Uploading Program Documents

4. Click the “Click Here” button to access your computer files and select the document

to upload. Click “Choose File”, find the document, and then click “Open”.

Uploading Program Documents

#1

#2

#3

5. Name the document you are uploading by choosing an option from the drop-down list under “Select a document from the predefined list”.

• If you don’t see your document on the list, use the “Enter a customized document name” field to name the document you are uploading.

6. Then you MUST click SAVE! This will save the uploaded documents to the “eDocs” section of the loan.

Uploading Program Documents

7. Once all of the required documents have been uploaded to the Lender Portal, you will need to return to the “eDocs” button associated with the loan.

8. You should see the uploaded documents under the appropriate section. 9. IMPORTANT: Click on the “Submit” button associated with the each section.

Uploading Program Documents

If you do not hit the “Submit” button, TSAHC will NOT know that you have uploaded any documents!

• You can always check the stage of your loan by clicking on the “Loan Status” tab. • TSAHC will NOT notify you when your status has changed. You are responsible

for managing your own pipeline.

• For definitions of each stage, click on the “Program Documents” tab and download the “Step-by-Step Procedures” document.

Loan Stages

Frequently Asked Questions

• Loan Status Notifications- Lenders are responsible for managing their pipelines. Check the Lender Portal regularly to determine the status of the loans in your pipeline and take the appropriate action (clear conditions, upload required packages, contact TSAHC to cancel loans that fall out, etc.) You can click the VIEW icon on the portal for conditions.

• Underwriter’s Certification- The Underwriter’s Certification Form (DPA and combined DPA/MCC Programs only) must be uploaded through the Lender Portal within 15 calendar days of loan reservation.

• Loans that do not meet this requirement will be cancelled on day 16 after loan reservation.

• Pre and Post-Closing Compliance Packages- Both Packages must be uploaded to the Lender Portal within the published timeframes:

• Pre-Closing Package 10 calendar days prior to loan closing.

• Post-Closing Package within 10 calendar days following loan closing.

• Please do not send packages via mail.

Frequently Asked Questions

• Middle Names- During the reservation process, the Lender Portal will only accept a borrower’s middle initial – not the full middle name. Borrower names on our reservation forms don’t necessarily have to match your legal/credit documents.

• Rate lock- TSAHC locks the interest rate at the time the loan is reserved.

• Reservation Expiration- This is 45 calendar days from the reservation date. Loans must be CLOSED by this date. Contact TSAHC if you need more time.

• Commitment Expiration- This is 70 calendar days from the reservation date. Loans must be sold to US Bank by this date. Loans not purchased by this expiration date will charged $375 for a 30 day extension. Extension forms are found on the Portal in “Program Documents”.

• DPA Program Fees- US Bank will collect our DPA fees when they purchase the loan. Please DO NOT mail the Compliance fees to TSAHC.

• MCC Program Fees- For stand alone MCC loans, please send TSAHC the Compliance and Issuance fees. For the combination MCC/DPA loans, please send TSAHC the MCC Issuance fee only, US Bank will collect the Compliance fees at purchase.

• Borrowers have access to YOU!

• Links to the guidelines, forms and training information.

• Access to the TSAHC Lender Portal (www.tsm-online.org).

• Free marketing materials

• Speaking engagement requests

• A link to find home buyer education providers in your area via www.texasfinancialtoolbox.com.

Visit www.tsahc.org to find:

• Detailed programmatic information and daily interest rates

• Key steps, including an “Eligibility Quiz”

• Access to YOU… and other lenders, REALTORS and housing counselors

• A link to home buyer education providers at www.texasfinancialtoolbox.com

• FAQs

• Request marketing materials or TSAHC to speak to your group

Visit www.tsahc.org to find:

Homeownership Hotline: (877) 508-4611

Joniel Crim (512) 477-3561

jcrim@tsahc.org

Sarah Ellinor (512) 220-1171

sellinor@tsahc.org

Tim Almquist (512) 334-2156

talmquist@tsahc.org

Delia Davila (512) 334-2158

ddavila@tsahc.org

Have a Question?