product criteria

PROGRAM: West Virginia Housing

–Mortgage Revenue Bond

Program

30yr Fixed Rate Products INVESTOR CODE: 629 PRODUCTS:

BUSINESS TYPE: BOND

SERVICING: RELEASED REVISED: 06/10/2015

PRODUCT CRITERIA

1) PRODUCT BENEFITS: The program options outlined in this product profile are part of the West Virginia

Mortgage Revenue Bond Program. The first mortgage must be a West Virginia

Bond Loan.

NOTE: Higher Priced Mortgage Loans are not eligible for the West Virginia

Homeownership Program or the Movin’ Up Program.

THIS PRODUCT IS RESTRICTED TO MORTGAGE OFFICES IN WEST

VIRGINIA.

The product provides the following below market interest rate loans to finance home purchases for families of low and moderate income.



Qualified Mortgage Bond Program (QMB) : 30 year below market rate loan providing up to 97% financing. First-time buyer unless property is located in a target area. See exception for eligible veterans.



All borrowers must take title to the property and meet all compliance requirements.



Special benefits have been granted to veterans of the U.S. Armed

Forces which now exempts veterans and their spouses from the firsttime homebuyer requirement. This exemption applies to any qualified veteran who has been discharged or released under conditions other than dishonorable in the past 25 years. This is a one time exemption.

This exemption does not apply to persons still on active duty.



Applicants must meet gross household income limits and house price limits to qualify. If property is located in a non-targeted county, applicant must be first time homebuyer.

NOTE : For bond program qualifying purposes, the compliance income calculation includes the gross annual household income for all adults that intend to occupy the home within one year from loan closing .

All income must be included except for income received by persons under the age of 18, or income of dependents above 18, who are enrolled as a full-time student in a continual education program.

Supporting documentation is required.

 Movin’ Up Home Loan Program has been developed to help all moderate income homebuyers purchase a new or existing residence.

Unlike the QMB program, the borrower is not required to be a first-time buyer. This program is for borrowers who might have outgrown their current residence or just want to make a change. o No first-time homebuyer requirement o Three years tax returns not required – Tax returns are required per Fannie Mae guidelines as they relate to repayment calculations only (i.e. self-employed, commissioned income) o WV First time Homebuyer forms not required o No Recapture requirements o HomeBuyer Education: for all applications locked thorugh

WVHDF website on or after July 21, 2014:

NOT INTENDED FOR PUBLIC DISTRIBUTION

W:\COMMON\Product Profiles HMC\Housing_Bond\West Virginia Housing\WV Mortgage Revenue Bond

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–Mortgage Revenue Bond Program

 Conventional Financing: HB Education is required

 FHA/VA Financing HB Education is recommended but not required o Down payment/closing cost assistance available o Application and Seller Affidavits are not required with the Movin’

Up Program o Open to Conv, FHA, VA financing with appropriate mortgage insurance or government guarantee o Property eligibility includes single-family structures, including townhomes and approved PUDs and condominium projects.

New multi-sectional manufactured homes are also permitted.

Used manufactured homes are not eligible for the program. o Effective May 23, 2014 Income Limits: Use only the income of all parties on the note and/or taking title to the property. All borrowers qualifying for the loan must take title to the property.

 1-2 person household: $113,760

 3+ person household: $132,720. o Standard QMB purchase price limits will apply. o Use Product Code 6600 for all loan types when registering the loan on WVHDF’s reservation system .

Beginning with applications taken June 1, 2010, loan files must include documentation of the borrower’s identity and validation of qualified parties to the transaction. At a minimum a copy of the borrower(s) driver’s license or other documentation that includes the borrower’s photo such as a passport. Lender must also verify that parties to the transaction, including originators, processors, closers, underwriters, real estate agents/companies, appraisers/appraisal firms along with the title agent and title company are not on the federal General

Services Administration (GSA) Excluded Party List or HUD’s Limited Denial of

Participation (LDP) List.

Loans must be reserved on West Virginia Housings online system at https://www.wvhdf.com/extranet/index.cfm

.

NOTE: Processors are responsible for completion of all WVHDF documents required for closing. Specific instructions are to be provided to the closer regarding the additional bond documents to be signed at closing, in addition to any ATC conditions required by

WVHDF.

All WVHDF documents, including any 2 nd note and mortgage, if applicable, are to be returned to Huntington in the closing package.

Step 1: When entering the loan in Unifi, you will need to select “Bond” as the business type on the Loan Data Tab under Registration in order to be able to select the West Virginia Programs. Once the bond program is selected and you save the loan data tab, you will be asked to complete the MI screen, when that is saved and fees are calculated, the Alternate Pricing Requested Terms window will pop up requesting the origination fee, discount fee and rate. In order to get the 101.50% pricing, enter 1% origination, a -1% discount in the Alternate Pricing

Screen. Accounting will apply the remaining .5% on the back-end to obtain the

101.50% pricing. The rate at which the loan was reserved on the bond program system is the rate input as the requested and qualifying interest rate. This is also the rate at which the loan must be locked.


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2)

3)

GENERAL

DESCRIPTION:

TERM:

Step 2: See Screen Print of the Loan Pricing Series Screen linked here.

Since the borrower does not pay an origination fee or a discount on the WV

Bond Program, once the Alternate Pricing Screen is completed, you must go to the Loan Pricing Series screen and change the -1.00% BuyPrice/Discount and the 1.00% Origination Fee to 0.00% under Borrower (Closing Buy Price). This will force these fees to the overage/shortage column and remove them from the

Fee Disbursement Tab so that the GFE and the HUD do not show these fees.

WVHDF distributes a Rate Sheet daily.

30Yr CONV Fixed Rate (51180)

30Yr FHA Fixed Rate (54195)

30Yr FHA Fixed Rate w/Section 8 (54196)

30Yr VA Fixed Rate (55195)

USDA FINANCING DISCONTINUED UNTIL FURTHER NOTICE

See instructions under subordinate financing section for the Home

Ownership Assistance Program.

NOTE: when reserving a loan on West Virginia Housing’s reservation system it will be required that the WV product codes match the insurance type.

Minimum: 360 Months

Maximum: 360 Months

None 4) MINIMUM LOAN

AMOUNT:

5) MAXIMUM LOAN

AMOUNT:

QMB Program: Refer to Appendix B1 and B-2 for reservations prior to May 16,

2012of the West Virginia Housing Lender Guide for income and house price limits.

Acquisition Cost is defined as the cost of a completed residential unit. No portion of the proceeds of the QMB loan can be used to acquire appliances, furniture, or other personal property not permanently affixed to the residence. When a sales contract or the appraisal references personal items, the Personal Property

Worksheet must be completed to ascertain that QMB dollars are not financing these items. The WVHDF has established a value of $50 per used appliance

(i.e. stove, refrigerator, washer, dryer) remaining with the property. In the event that the property is a newly constructed home with appliances, then the actual invoice must be used for the value. Personal property other than appliances will need to have value established by a qualified person with the file containing documentation to support how the value was derived. No portion of the proceeds of the Homeownership loan can be used to acquire appliances, furniture, or other personal property not permanently affixed (i.e. washer/dryer, refrigerator, free standing range, portable dishwasher) to the residence. Personal property other than built in appliances will need to have a value established by the lender and the must contain documentation to support how the value was derived.

Acquisition cost does not include:



Usual and reasonable settlement and financing costs



Imputed value of services performed by the purchaser or members of his/her family, which include only the purchaser’s spouse, brothers and


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6) MAXIMUM LTV: sisters, ancestors, and lineal descendants in construction or completing the residence



The cost of land owned by the purchaser(s) for at least two (2) years before the date on which the construction of the residence begins.

West Virginia Housing Development Fund will not approve loan amounts greater than the appraised value of the property being purchased.

USDA Rural Development Loans – the amount of the guaranty fee can be added into the loan amount as long as the loan amount does not exceed the appraised value of the property. Closing costs cannot be rolled into the loan amount .

The new FHA loan limits do not supersede WVHDF purchase price limits .

Purchase Money ONLY

Program LTV CLTV Minimum FICO 6

FHA:

VA

CONV 1-Unit

CONV 1-Unit

CONV 2-4 Unit

CONV w/EAH

96.5% See

5

Below

100%

97% 1 , 3

95% 1 , 3

95%

97% 1,3

N/A 6

103% 2,3

103% 2,3

103% 2,3

100% 2,3

580 DU/620 Manual U/W 7

Follow DU/620 Manual U/W 7

680 7 / DU – HFA Preferred

Approve/Eligible ONLY No

Manual U/W

620

620

7

7

/ 660 Manual U/W

/ 680 Manual U/W

620 7 / Conv guidelines above for a Manual U/W

1. WV Housing permits 97% LTV on conventional financing for stick built or modular homes. Conventional loans with an LTV >95% (up to 97% must be underwritten through DU as an HFA Preferred Mortgage and receive an

Approve/Eligible Finding in DU. Note: Loans on Manufactured Housing are restricted to a 95% LTV.

2. My Community Mortgage loans with an LTV of 95% are acceptable provided the funds for down payment are obtained from an acceptable documented

FNMA source.

3. Effective March 9, 2009, MGIC requirements on Housing Finance Agency

(HFA) loans. See Section 20 of the product profile for MGIC minimum credit score, LTV, borrower contribution and reserve requirements.

4. Financed MI is permitted for this program; however, the LTV is restricted to

97%.

5. FHA loans utilizing a second mortgage from a state, county or local governm ent may be used for the borrower’s entire cash investment.

However, the sum of all liens (CLTV) cannot exceed 100% of the cost to acquire the property. The cost to acquire is the sales price plus allowable borrower paid closing, discount points, repair and rehab costs, and prepaid expenses. NOTE : the cost to acquire may exceed the appraised value of the property.

For second mortgage programs provided by a non-profit organization not considered an instrumentality of government, or private individuals, the

CLTV cannot exceed 96.5%. Follow FHA guidelines.

6. VA do not have a limit on the CLTV. However, payments on any subordinate financing must be included in the debt ratios cannot exceed the respective


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–Mortgage Revenue Bond Program guidelines. Payments on any subordinate loan cannot exce ed the borrower’s payment ability.

Itemization of fees on VA loans: Effective for all VA loans closed on or after

May 1, 2015, VA will require in the itemization of the following: a. Lender and seller credits in the 200 series on the HUD-1. If the credit is displayed as a lump sum, an accurate itemization of the individual credits, including a clear indication of the source is required.

b. Lenders are required to provide an itemized breakdown of the charge on HUD line 801.

c. Lenders are required to provide an itemized breakdown of HUD line

802. The breakdown of HUD line 802 should only consist of amounts for broker compensation and discount points or premium pricing. In the event there is only one credit or charge (points) on line 802, the lender must still show the single fee in an itemized breakdown.

d. A credit showing the Adjusted Origination Charge on line 803 cannot be used to pay or offset any unallowable fees including fees in line

801.

e. The itemizations can be done as an addendum or attachment to the

HUD-1. These addendums or attachments must be signed by the

Veteran.

7. The Huntington imposed minimum FICO score of 640 has been removed. A supervisory override will be required until Unifi is updated. Note that for conventional loans that receive an “Out of Scope” or “Ineligible” DU finding, the loan may be manually underwritten; however the minimum

FICO will still be 660 for 1-unit properties and 680 for 2-4 unit properties. See Underwriting Section for parameters for non-traditional credit

For any second mortgage programs other than the WVHDF second mortgage, prior approval must be obtained from WVHDF, regardless of the type of financing used.

NOTE: Declining Markets language has been removed.

7) PROPERTY TYPES: 

Newly constructed or existing 1-4 Unit, owner occupied residential dwellings

(2-4 unit dwellings* must have been occupied as a residence for more than five (5) years before the date of the execution of the mortgage and the borrower must occupy one unit.)



Condos (must be FNMA approved)*



Townhomes*



PUDs (must be FNMA approved)*



New manufactured double-wide units are acceptable. All manufactured units must have titles (use the DMV website to resurrect titles). Single-wide units are not permitted. Manufactured homes must be input as manufactured homes. It is not permissible to enter manufactured homes as a detached property in order to obtain an acceptable DU finding. o WVHDF will accept the cancelation of certificates of title per WV

Code Section 17A-3-12b on manufactured units.



§17A-3-12b. Canceled certificates of title for certain mobile and manufactured homes.

The commissioner may cancel a certificate of title for a mobile or manufactured home affixed to the real property of the owner of the mobile


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–Mortgage Revenue Bond Program or manufactured home. The person requesting the cancellation shall submit to the commissioner an application for cancellation together with the certificate of title. The application shall be on a form prescribed by the commissioner. The commissioner shall return one copy of the cancellation certificate to the owner and shall send a copy of the cancellation certificate to the clerk of the county commission to be recorded and indexed in the deed book with the owner's name being indexed in the grantor index. The commissioner shall charge a fee of ten dollars per certificate of title canceled. Upon recordation in the county clerk's office the mobile or manufactured home shall be treated for all purposes as an appurtenance to the real estate to which it is affixed and be transferred only as real estate and the ownership interest in the mobile or manufactured home, together with all liens and encumbrances on the home, shall be transferred to and shall encumber the real property to which the mobile or manufactured home has become affixed .

o On units that titles have been or are going to be cancelled, the properly recorded DMV-2-TR from the county in which the property is located must be provided in the deferred document package.

Follow MI co mpany or DE underwriter’s requirements on government-insured loans for acceptable titling procedures/documentation, as well as WVHDF requirements. o All loans secured by manufactured housing must have the Affidavit of Affixture executed by all parties, recorded and included with the deferred documents submitted to WVHDF. o The deed of trust must include a comprehensive description of the manufactured unit and the land in the property description section.

The description must include the serial number or VIN number or each unit, make, model, and size along with any other information that may be required by applicable law to definitively identify the home. o An ALTA Endorsement 7 is required when the unit is being treated as real property.

Mortgagee Letter 2009-16 outlines fol low HUD’s Manufactured Housing

Policy Guidance when FHA financing is used.

• The WVHDF Condo/PUD Questionnaire is to be completed on all established condos and PUDs. The Questionnaire along with a copy of the budget, homeowners Association's last minutes and copy of Hazard, Flood and Liability insurance.

• When properties contain multiple parcels, WVHDF will accept the following as a "one home site" and not require a survey; however, all parcels must be contiguous:

• Urban properties - up to /13 acre

• Suburban properties - up to 1/2 acre

• Rural properties - up to 1 acre

For properties that have multiple parcels that exceed the above acreage limits based on property location (urban, suburban or rural) WVHDF will require that the additional parcels be documented by a survey showing all improvements and that the parcels are contiguous. In addition, an appraisal with comps supporting that the acreage is common to the area will be required.



In no case may the land being financed exceed 5 acres without obtaining a waiver. The Waiver Request Form must be accompanied by the appraisal utilizing comparables of similar acreage and the residence has to be connected to a septic tank.

Flood Insurance: If flood insurance is not available in certain flood hazard areas because the community does not participate in the National Flood Insurance


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8) MARGIN:

9) INDEX:

10) INTEREST RATE

ADJUSTMENT CAP:

11) BUYDOWN:

12) CONVERSION:

13) ASSUMABLE:

Program, the property is not eligible for WVHDF programs.

• *When the property being purchased is “attached”, the file needs to contain documentation addressing maintenance of the party walls and roof lines as well as possible road maintenance. A new Road Maintenance Agreement

N/A

N/A

N/A form is available on the WVHDF extranet site for properties that have a privately maintained access road. This form is to be used when a legal document for maintenance meeting Fannie Mae guidelines is now available.

N/A

N/A



QMB Programs: loans are assumable by eligible borrowers upon prior written approval of WVHDF



USDA Rural Development loans are not assumable under any of the programs.



Home Ownership Assistance Loans are not assumable

UNDERWRITING

14) DOCUMENTATION

TYPES:

Full Doc

Alt Doc

Program income limits are attached (click on the link). Gross income is determined by multiplying gross monthly income by 12. Gross monthly income is the sum of monthly gross pay plus an additional income from overtime, parttime employment, bonuses, dividends, interest, royalties, pensions, VA compensation, net rental income, etc., and other income such as alimony, child support, public assistance, sick pay, social security benefits, unemployment compensation, income received from trusts, and income received from business activities or investments, workers’ compensation, and disability insurance.

NOTE: Rental income for properties that are more than one unit must be included in household income to determine income eligibility for the bond program. However, rental income is not to be included to determine qualifying ratios for the program.

For self-employed persons, income is the total of income shown on the last year’s personal tax return plus depreciation. A year-to-date profit and loss statement is needed if the application is dated 120 days or more after the tax year. In cases of “S” corporations, income used on their tax schedules must be included in addition to all requirements listed for self-employed borrowers.



Previous 2 years federal income tax returns and all schedules are required for the calculation of income for self- employed borrowers as well as two years’ business tax returns.



Returns must be signed and dated by the borrower.


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16) UNDERWRITING

GUIDELINES:

Reminder:



Signed federal income tax returns for the preceding three years showing no deduction for mortgage loan interest or property taxes on a principal residence



VOE/VOD must not pass throug h the borrower’s hands. Lender is responsible for the accuracy and integrity of the data provided.



When Bank Statements are used in lieu of VOD, the statements must provide the daily balance and all information as required by Fannie Mae

Telephone Certification of Employment for Alt Documentation – Must be on

Huntington Letterhead.

Treatment of Income in DU : Input in DU as “HFA Preferred” loan. To eliminate the finding that the borrower is over the income limits, adjustment may need to be made in Backdoor DU. See the instructions on the attached screen print.

Place a copy of the attached e-mail in each WV Bond loan file .

15) QUALIFYING RATIOS Follow DU/LP findings

Loans (in conjunction with EAH): 41% single ratio

For manual underwriting:

FHA/VA/USDA: 31%/43%

CONV (My Community): 43% single ratio

NOTE : IF LOAN IS INSURED THROUGH MGIC, THE MAX DTI IS 41%

REGARDLESS OF AUS RECOMMENDATION OR COMPENSATING

FACTORS

FHA / VA / FNMA Underwriting.

All loans must meet the Ability to Repay (ATR) rules established by the Consumer

Financial Protection Bureau (CFPB). The ATR Rule requires that a reasonable, goodfaith determination be made in determining that the consumer has a reasonable ability to repay the loan.

Generally, ATR must consider the current or reasonably expected income or assets the borrower will rely on to repay the loan; the current employment status, the monthly mortgage payment for the subject loan; the monthly payment on any simultaneous loans secured by the same property; the monthly payments for property taxes and insurance that the consumer is required to buy; debts, alimony & child support obligations; monthly debt-toincome ratio or residual income, calculated in accordance with the ATR final rule; and credit history

WV Bond loans will be MLP eligible with proper lending authority with a DU

Approve/Eligible finding. Loans receiving a “Refer w/Caution” or

“Approve/Ineligible” are not eligible for delivery to WVHDF. However, borrowers with no credit score may be manually underwritten using the non-traditional credit guidelines. Full file documentation as outlined in the Lender Checklist

(PR-36) will be required.

NOTE : Loans utilizing any form of down payment assistance must be


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–Mortgage Revenue Bond Program underwritten by Corporate Underwriting.

For all West Virginia Housing loans, the Inquiry Status Update form is to be generated by CBC with the credit report. The borrowers need to define clearly whether a new debt was acquired from the inquiry and all borrowers must sign and date the form. The Inquiry Status form is to be submitted along with the credit package for underwriter review. The attached Federal Compliance

Worksheet is an aid to help determine that the loan meets WVHDF compliance standards.

All conventional loans requiring mortgage insurance must be a “full loan package” underwritten by the mortgage insurance company insuring the loan.

A “full loan package” includes all credit, employment/income, asset, appraisal, and compliance documentation. This is effective with all mortgage insurance commitments currently being submitted for our review and the commitment must include a notation from the mortgage insurance company that the loan was underwritten as a “full loan package”.



All loans that exceed 95% LTV must be underwritten as HFA Preferred

Option in DU. This must be done by Corporate U/W through backdoor DU.

A DU Approve/Eligible recommendation is required. With the implementation of the DU 9.2 Update that went into effect the week-end of

December 13, which now allows 97% financing if at least one borrower on the loan is a first time homebuyer on the standard conventional or My

Community Mortgage Products, housing finance agency conventional loans are now receiv ing an “Approve/Ineligible” finding on the HFA Preferred program if at least one borrower is not a first time buyer. Lenders have been instructed to ignore the “Ineligible” finding as long as the only reason for the finding is the first-time buyer requirement. DU will not be updated in

April 2015 to accommodate the oversight on the HFA programs.



Note – loans underwritten through LP will not be accepted by WVHDF.

Drive Report



Acceptable DRIVE report required with a passing Drive score of >701.

Condition resolution is required for Drive scores of 0-700.

On all WV Bond loans, do not auto populate the liabilities section of the loan application (1003) from the credit report. Liabilities listed on the 1003 must be obtained from the borrower.



Recent Inquiries on the credit report: o Regardless of the DU findings, a detailed explanation letter that specifically addresses the purpose and the outcome of each inquiry should be obtained from the borrower. Generic credit explanation letters are not acceptable. As a result of recent inquiries the loan may be subject to additional requirements. o If additional credit was obtained, a verification of that debt must be provided and the borrower must qualify with the monthly payment.

The verification can be achieved through a direct verification with the creditor or use a credit supplement.



Undisclosed Liabilities: o Lenders must proactively identify any and all undisclosed liabilities, such as refreshing a credit report prior to closing to uncover additional debt or credit inquiries, investigating credit inquiries listed


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–Mortgage Revenue Bond Program on the credit report to determine whether the borrower opened additional debt resulting in repayment obligations.

Effective May 31, 2014, Huntington once again has delegated underwriting authority for all WV Bond Program loans. Use the Lender Checklist PR36A .



All loans should follow the appropriate Fannie Mae, FHA or VA guidelines.



It will continue to be the lender’s responsibility to obtain the appropriate mortgage coverage, including VA and FHA, commitments.

Any purchase contract that contains any of the following clauses will not be eligible for the WV Bond Program:



Make reference to the Seller and Lender being one and the same.



When survey is required, the Seller shall prepare such survey at purchaser’s expense.

 Limited Warranties within the contract that override WVHDF’s Builder’s

Warranty on newly constructed homes

 Reference to the home being “substantially complete on settlement date”.



Statement that no funds can be held in escrow for incomplete items.



Provisions of the contract which survive the delivery of the deed of conveyance at settlement.



Amount of on-cash and cash discounts exceed the FNMA allowable seller contribution



Seller can place easements after settlement against property with no additional consideration to applicant.



Restrictions on the resale of the property, including fees due to the seller upon a resale, i.e. shared equity.

 Removal of applicants’ rights to legal action after closing.



Use of Power of Attorney: A Power of Attorney along with an explanation of why the borrower(s) is unable to execute the documents or attend the closing should be submitted to WVHDF for review and approval prior to closing. The approved POA must be recorded along with the closing documents. A copy of the recorded POA will be required as part of the deferred documents.



Purchase contracts should be thoroughly reviewed and any questionable items need to be addressed prior to the loan being submitted to WV

Housing.

Other items of concern that may be in the purchase contract which could result in rejection of the loan:



If purchaser is denied financing, the purchaser is required to make application with another lender selected by the Seller.



Settlement shall be held at a place selected by Seller at a specific date and time when settlement shall actually occur.



Home shall be completed within 2 years from the date of execution of the contract.



Default charges to the applicant if closing does not take place.



Waiver of inspections that Seller requires from applicant.



Appraisal addendums with the borrower acknowledging that seller is not required to reduce the sales price should the house not appraise caused by the fact that no recent settlements have occurred to use as comparables.

Due to the vast array of addendums that may be included in the purchase contract, when any contract is submitted to the WVHDF, the lender must


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–Mortgage Revenue Bond Program provide certification that the contract submitted is complete.

Movin’ Up Program



Only the income from parties on the note and/or taking title to the property is required for determining income eligibility for th e Movin’ Up program.



Follow the appropriate agency guidelines



HomeBuyer Education: for all applications locked through WVHDF website on or after July 21, 2014: o Conventional Financing: HB Education is required o FHA/VA Financing HB Education is recommended but not required



Three (3) years tax returns are not required

 There is no recapture requirement on loan under the Movin’ Up program



WV Housing Homeownership Affidavits are not required for the Movin’ Up program.

QMB Program



Underwritten to Fannie Mae, FHA, or guidelines, as applicable . Loans must also comply with the requirement outlined in Chapter 4 and Chapter 5 of the WVHDF Lender Guide . (Once on the WVHDF website, log onto the

Partner Extranet Site to access the Lender Guide)



Homebuyer Counseling is required on all Conventional loans regardless of

LTV. This should be a PTC condition. The Certificate of Completion must be included in the closing package to be signed by the borrower at closing, if the Certificate has not been executed by the borrower prior to closing.



Sales contracts cannot provide for excessive seller concessions and/or incentive options.



The loan amount cannot exceed the appraised value of the property



If the borrower is obtaining the Second Deed of Trust loan the payment must be included in the housing ratio.



Child-care expense is not included in the debt ratios for qualifying purposes.



Nontaxable income can be “grossed up” 15% for qualifying purposes.



Self-employed borrowers need to have two (2) years of self-employment income to qualify.



Overtime, bonus, part-time and commission income should have a two-year history to include in qualifying for repayment calculation.



Rental income for properties that are more than one unit must be included in household income to determine income eligibility for the bond program.

However, rental income is not to be included to determine qualifying ratios for the program.

 Applicants’ funds for closing must be seasoned 60 days prior to loan application. WVHDF uses the lowest balance during the month as the seasoned funds available for closing.

 Gift funds need to be thoroughly documented, including the donor’s ability or provide gift funds. Gift funds cannot be used as reserves. Gift funds must be used as downpayment and/or closing costs. They cannot be held as reserves.



A bankruptcy must be discharged two (2) years prior to the loan application on all bond loans.



Prior approval must be obtained to use a power of attorney.



Any repairs noted on a n appraisal that is completed “AS IS” must be completed prior to closing.


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Non-traditional Credit (for loans that do not have a credit score) - Manual

Underwriting Criteria - All loans that require manual underwriting must be underwritten by HMG Corporate Underwriting. Full documentation must be provided as outlined in Lender Checklist (PR-36A) . WVHDF will require review and approval of the loan prior to closing.



Written credit explanations are required for any derogatory credit history with proof that the borrower has experienced extenuating circumstances.

Supporting documentation is required.



Manually underwritten loans are restricted to the following guidelines: o Conventional: A maximum LTV of 95% with a minimum borrower contribution of 3% from their own funds when conventional financing is used. The additional 2% can come from flexible sources. o FHA/VA: Follow the respective agency guidelines for nontraditional credit



Ratios not exceeding a housing ratio of 30% and total debt ratio of 38%



1-unit properties only for borrower with no FICO score



Reserves equal to 2 months PITI



Homebuyer Education is required regardless of the type of financing



A minimum of three (3) sources of credit must be obtained, one (1) of which must be housing related, i.e. rental housing payments. Remaining sources must be one of the following: o Tier I sources, such as utilities, telephone and TV cable; o Tier II sources such as medical insurance coverage (excluding payroll deductions), automobile insurance, life insurance policies

(excluding payroll deductions) and payments for household renter’s insurance) o Tier III sources such as payments to local department stores, furniture stores, appliance stores or specialty stores, rental payments for durable goods (i.e. automobile or furniture rental), medical bills, school tuition, child care. Loans from individuals also fall under the Tier III category but the repayment terms must be in writing and must be documented by copies of canceled check to indicate the payments are continuing in nature.

Evaluating non-traditional credit:



Credit must have been active for at least 12 months



There can be no history of delinquency on the rental housing within the past

24 months (or if the borrower has been making rental payments for less than 24 months, there can be no history of delinquency for the number of rental payments that have come due).



There can be no more than one 30 day delinquency on payment due to Tier

II creditors



There can be no collections or judgments of public record.



Under no circumstances shall the non-traditional credit history evaluation be used to offset derogatory credit.



For Conventional Financing ONLY - Special Feature Code (SFC) 818 must be used to identify MCM loans for borrowers with “thin files” that require manual underwriting in addition to entering the actual credit score.

SFC 818 should not be used for any other purpose outside of “thin file”

MCM loans

IRS Form 4506-T

A completed and signed Form 4506-T is required from all borrows at application


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–Mortgage Revenue Bond Program and closing. The 4506-T transcripts obtained from IRS prior to closing should be used to validate the income documentation provided by the borrower and used during the underwriting process. The transcript information and any subsequent explanation or documentation of discrepancies must be retained in the loan file. WV Housing has requested that for all loans closing on or after

June 1, 2015 that line #5 on the 4506-T that is signed at closing be completed with the following vender information:

Credit Interlink America (user: mpollack77)

6 Harris Ct.

Monterey, CA 93940

PH: 888.895.5145 Fax: 800.585.7894



The Authorization for the Social Security Administration to Release Social

Security Number Verification (Form SSA-89 ) is a new form that will be required to be completed and signed by the borrower at closing. This form allows WVHDF ’s third party vendor to verify social security information after the loan closes as part of their quality control process.

Verbal Verification of Employment



Base and Commission income: A Verbal VOEs are required for all borrowers within 10 calendar days prior to closing.



Self Employed Income: Verification of the business existence must be obtained within 30 calendar days prior to closing from a third party source such as a CPA, regulatory agency or licensing bureau. The source used to verify the business (internet, phone book) must be documented in the credit file for all income sources, along with the full name and title of the eligible contact person providing the information.

 UW/MLC’s are required to add ATC condition 710 to all applicable loan files, confirming this documentation will be obtained.

NOTE: Trailing Secondary Wage Earner Income is no longer considered as an eligible income source for credit qualifying; however, total household income is still required to determine program eligibility.

TIP Income may be used to qualify in the following instances:



Must be verified the borrower received tip income for the last two years and



Employer indicates the tip income will, in all probability, continue.

 An average of the past two year’s tip income is considered in qualifying the borrower.

Age of Credit Documents



The maximum age of credit documents is 120 days

 “Credit documents” include credit reports and employment, income, asset, and appraisal documentation



The time frame covered by the maximum age of credit documents goes from the date of the document to the date the note is signed .

Verification of Stocks, Bond, Mutual Funds, and Retirement Accounts

Due to recent volatility, determining the value of investments and retirement accounts as assets for reserves has been modified. Use the following calculations when determining the value of an asset being used for reserves:



Stocks, bonds, and mutual funds: 70% of the value may be used as reserves (reduced from 100%)



Retirement accounts: 60% of the vested value may be used as reserves

(reduced from 70%)

Stock options and non-vested restricted stock are not longer eligible for


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17) APPRAISAL

REQUIREMENTS: use as reserves

Condominiums

Complete the Condominium / PUD Project Review Form to determine project eligibility for mortgages secured by Condominium or PUD property types. The completed form, as well as any conditions or requirements, must be included in the Credit File.

For QMB loans: the following completed documents must be submitted for

WVHDF for approval:



A revised Underwriter Compliance form (PR-19) now includes the CLTV

103% limitation. Begin using the new form immediately.



Application and Seller Affidavits



Appropriate default insurance commitment – MI certificate, MCAW, RD commitment, etc.



Executed copies of the last three years’ federal income tax returns are to be included in the credit file, including for those borrowers purchasing in nontarget areas. Any documentation used to confirm tax information (i.e. tax transcripts from IRS) must be signed by the borrowers.

The borrower(s) has (have) a right to receive copies of all written property valuations sent to them free of charge, regardless of whether credit is extended, denied, incomplete.



Appraiser must be provided with the sales contract and other information concerning all interested party contributions for the subject property and related appraisal requirements



An Appraisal completed on Form 1004 or 1004C, with all attachments is always required on the QMB Program regardless of an automated system requirement. The site value and estimated economic life must be completed in the Cost Approach Grid. In no instance can the first loan amount exceed the appraised value.



The appraiser is to report any obvious items or areas that affect the safety, livability and marketability of the property. Correction of these items is required prior to loan closing.



Effective for all appraisals dated April 1, 2009 and later the Market

Conditions Addendum to the Appraisal Report ( Form 1004MC ) will be required. The Addendum is intended to provide a clear and accurate understanding of the market trends and conditions prevalent to the subject neighborhood.

 Appraiser is not required to check for “safety” items of hot water tank-pop off value and GFI’s



At least two (2) comps have to support the final value. Loans that do not have at least two (2) comps to support the final value will have a reduced value to what is supported by all comps provided.



When an appraisal report indicates dampness, the cause must be identified and any necessary repairs made.



When an appraisal indicates the need for further inspections the underwriter must determine what type of inspection is required and who can perform the inspection. The inspection must always be completed by a licensed inspector in the field that they are inspecting and a copy of their license is to be included in the loan file. o Inspectors should provide two (2) reports – the initial inspection stating what the problems are and how they are to be addressed


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18) INVESTOR APPROVAL

REQUIRED: and a final inspection stating that all required repairs from the initial inspection have been completed and the home is structurally sound. o In cases where the individual inspecting the property defers to another inspector for review, an additional inspection will be required with additional documentation. o Any repairs must be completed by someone licensed in the area of the repairs and a copy of their license will be required. o If inspections are required, a notarized hold harmless statement from the borrower(s) stating that they received/read copies of all reports and they accept the property holding the WVHDF harmless from issues that may arise in the future. The Hold Harmless agreement will be a prior to closing (PTC) condition. o Pest Inspection / Soil Treatment (DP-54 ): Required on all loan types except in the following cases:

 LTV is 80% or less;

 Borrower(s) has verified six months reserves after closing;

 A hold harmless signed by the borrower(s) at closing; and

 Property is not newly constructed. (Newly constructed property will always require soil treatment).



Health Department Approval – The Request for Evaluation of Well and/or

Sewer System must be received for the following:

Dwellings not serviced by public water and/or septic system: o If septic tank test is negative, the dwelling has not been vacant for more than 30 days, no sewer problems exist in the area and the lot is large enough for the septic tank to function properly, the Health

Department Approval is acceptable if it states “may be expected to function satisfactorily”. All septic tanks installed after June 30, 1970 must have been installed under a State Health Department permit and have full State Health Department approval.

o If a house has been vacant for over 30 days, an escrow must be established and administered by the lender or closing attorney.

The seller deposits funds in escrow equal to 1 ½ times the cost of a new system designed for the individual lot. (The escrow can be the actual amount of the estimated repairs as long as lender obtains a hold harmless agreement signed by the borrower that he/she will be responsible for any cost overruns that may occur.) If the septic tank test negative 90 days after the borrower first occupies the dwelling, the escrow can be released to the seller upon receipt of an acceptable Health Department approval and a negative dye test.

o If the septic system fails the dye test, repairs and/or replacement of the system must be completed prior to the loan closing.



A Builder’s Warranty and Certification is required on all newly constructed properties.



See attached for FHA guidelines on Lead Paint in FHA REO Properties

CLOSING INSTRUCTIONS:

1. Borrower may only receive cash back at closing only to the extent that they have paid out of pocket for prepaid items. If using WVHDF DPCC

Assistance program, WVHDF must approve the reimbursement of items paid outside of closing.

2. The Mortgage Insurance Certificate on all loans shall name the West

Virginia Housing Development Fund as the insured. The Certificate shall be


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19) SUBORDINATE

FINANCING: delivered with the purchase package. For USDA loans, the certificate must be submitted within 15 days of closing.

3. The Title Policy should read “Huntington Mortgage Group, its successors and assigns as their interests may appear.”

4. All escrows must be included in the payment.

5. Escrow payments and prepaid interest collected are to be payable to the

West Virginia Housing Development Fund. A Prepaid Escrow and Interest

Report (LS-4) must be completed and submitted with funds collected to the

WVHDF with the additional program loan documentation at the time of loan purchase.

6. Individual on-site water supply and/or Sewage Disposal System Evaluation

7. Tax / Payment Info (Form LS-5)

8. Closing Recapture Notice (Form DP-56)

9. Smoke Detector Notification Form

10. An Assignment (Form DP-53) will be required for the Second Mortgage for registrations.

A copy of the real estate tax ticket for the property being purchased must be included with the closing package when submitted for purchase.

A copy of the Deed of Trust and Promissory Note on any subordinate financing programs must be maintained in the loan file .

For all loans using FHA financing



The Employer Identification Number (EIN) will be required on all government, state, county, city municipalities and non-profit organizations providing secondary financing assistance, grants or gifts to the borrower when the borrower is receiving an FHA first mortgage.



The EIN is to be reflected on the new FHA Loan Underwriting and

Transmittal Summary on all FHA closings utilizing any secondary financing. Failure to collect this information will result in an uninsurable FHA loan .

The Employer Identification Number for WVHDF is 55-0515944.

Documentation of Governmental Entity DPA Seconds with FHA Financing

For loans with FHA financing, pursuant to Mortgagee Letter 2013-14 effective

July 1, 2013, when a borrower’s minimum cash investment is coming from a

Federal, State or local government agency or its instrumentality, in order to be eligible for endorsement, the file must be documented with one of the following:



A canceled check, evidence of wire transfer or other draw request showing that prior to or at the time of closing the Government Entity had authorized a draw of the funds on its account provided towards the borrower’s required Minimum Cash Investment from the Government

Entity’s account; or



A letter from the Government Entity, signed by an authorized official, establishing that the funds provided towards the borrower’s required

Minimum Cash Investment were funds legally belonging to the

Government Entity at or before closing.



The WVHDF second mortgage is funded by WV Housing at the time of closing. Therefore, a copy of the check or wire transfer will be required to be included in the loan file.

Down Payment and Closing Cost (DPCC) Assistance Loan

NOTE: MUST BE RESERVED ON WVHDF RESERVATION WEBSITE USING


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THE APPROPRIATE WVHDF PRODUCT CODE.

Effective with Second Deed-Of-Trust lock-ins on or after July 21, 2014,

2012, the DPCC Assistance Loan will be changed as follows:

Homeownership Program (Bond)





$10,000 for loans with LTV’s ≥ 90%

$15,000 for loans with LTV’s < 90%

Movin’ Up Program

 $5,000 for loans with LTV’s ≥ 90%



$8 ,000 for loans with LTV’s < 90%

The following terms will apply to all DPCC Assistance Loans:



Term will be 15yr fully amortizing



Rate on the 2 nd mortgage will be 2.5% fixed for the full 15yr term



The monthly payment will no longer be deferred so the monthly payment on the second mortgage must be included in the debt ratios.



The standard Fannie Mae mortgage and note forms will be used for the 2 nd Deed of Trust.



WEST VIRGINIA HOUSING WILL PREPARE THE INITIAL GFE AND

PRELIMINARY TIL, AS WELL AS THE FINAL TIL, HUD-1 and the

SECOND DEED OF TRUST NOTE AND MORTGAGE. USE THE

FORM LINKED HERE to request the document preparation.



The DPCC Assistance Loan is not assumable.



Loan must be paid in full if the property is refinanced or sold



Funds are applied first towards any standard closing cost that the borrower is obligated to pay with any remaining balance applied toward down payment. (These funds will count toward borrowers’ required 3% down on conventional loans.)



Borrowers can be reimbursed on the 1 st mortgage for approved items that they have paid outside of closing. Approval is in the sole discretion of WVHDF .



Any unused proceeds are to be returned to the WVHDF with the closing package in the form of a check to be applied as a principal reduction to the DPCC Assistance Loan .



It is mandatory that the WVHDF provide the funds for the DPCC

Assistance Loan at closing. Loan proceeds must be requested from

WVHDF by 9:30 a.m. the business day prior to loan closing. The loan must be approved and cleared for funding by the WVHDF Underwriter prior to the funding request being processed.

Other down payment assistance programs (i.e. HOPE VI, Federal Home Loan

Bank, etc.) must be submitted to WVHDF for approval prior to taking a loan application.

ENTRY OF THE WVHDF 2 ND MORTGAGE IN UNIFI & DU :



When WVHDF Down Payment Assistance 2 nd mortgage or other subordinate financing is part of the transaction, the subordinate loan must be entered in LP/DU or FHA Total Scorecard as subordinate financing. All subordinate financing must be included in the combined loan-to-value.



The amount of the WVHDF second mortgage will be treated as lien on


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20) MI REQUIREMENTS: the property. Therefore, the amount of the Second Mortgage should be entered in Unifi so that it shows as “ other liens ” in Unifi.



The Community Seconds indicator on the Additional Pricing Data

Screen must be checked. The Community Seconds indicator in DU must also be indicated as “Yes”.



Under the 1003 Application folder in Unifi, select the Property

Information and Purpose Screen , go to the Source of Down Payment,

Settlement and/or Subordinate Financing area and select “Secured” from the drop down box. Enter WVHDF 2 nd

Mortgage Program” in the

“DAP Program” field.

FUNDING OF THE WVHDF 2 ND MORTGAGE :



The WVHDF Second Mortgage will be funded by WVHDF at closing.

The amount of the Second Mortgage should be entered on the

Streamline GFE Screen under the Fee Disbursements tab using HUD line 222 .



The WVHDF will prepare the second mortgage documents for closing, including the Deed of Trust, Deed of Trust Note, Final TIL and HUD-1

Settlement Statement.

CONV (including EAH):

95.01% - 97% 18% Coverage

90.01% - 95% 16% Coverage

85.01% - 90% 12% Coverage

80.01% - 85% 6% Coverage



WVHDF will accept private mortgage insurance coverage from all approved Fannie Mae insurance providers. WVHDF will also require that all MI companies perform a manual underwrite of the loan file and

FHA the commitment must clearly indicate that the loan was fully underwritten by the MI company.

FHA Case Numbers assigned on or after January 26, 2015 will have the following premiums:



Upfront Insurance Premium (UFMIP) = 1.75%



Annual Premiums will decrease as follows:

LTV / Annual MIP, terms >15yrs Duration

< 90%

>90% ≤ 95%

> 95%

0.80%

0.80%

0.85%

11 years

Life of Loan

Life of Loan

FHA case numbers assigned prior to January 26, 2015:



Upfront Insurance Premium (UFMIP) = 1.75%



Annual Premiums will increase as follows:

LTV / Annual MIP, terms >15yrs Duration

< 90% 1.30% 11 years


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>90% ≤ 95% 1.30% Life of Loan

> 95% 1.35% Life of Loan

NOTE : FHA will temporarily approve Case Number Cancellation Requests for loans with FHA Case Numbers assigned but not yet closed to allow borrower to obtain the reduced annual MIP rate. Mortgagees may begin requesting Case

Number cancellations on January 15, 2015 through 11:59pm eastern time on

February 25, 2015. New case numbers should not be ordered until FHA

Connection confirms that the previous Case Number has been canceled. In order to obtain the reduced Annual MIP, new case number should not be ordered prior to January 26, 2015 .

If borrower chooses to have a new FHA case number issued to take advantage of the reduced Annual MIP, a new GFE and TIL must be provided to the borrower and a copy retained in the file that reflects the same payment amount as shown on the final HUD-1. Timelines for closing and delivery of loans must continue to be adhered to.

VA – VA Guaranteed

Active

Duty or

Veteran

Nat’l

Guard

/Reservist

Initial Loan with no down payment (First Time

Use)

2.15% 2.40%

For loans with a down payment of greater than

5% but less than 10% (First Time Use)

For loans with a down payment of 10% or more

(First Time Use)

Subsequent Use:

Purchase:

95.01% LTV and >

90.01% LTV to 95% LTV

90.00% LTV and less

1.50%

1.25%

3.30%

1.50%

1.25%

1.00%

0.50%

1.75%

1.50%

3.30%

1.75%

1.50%

1.00%

0.50%

Manufactured Housing

Assumptions (First Time or Subsequent Use)

Any loan approved under standard or investor guidelines must also be insurable. If Huntington is unable to obtain mortgage insurance on a loan for which it is required, the loan will be denied.

PROCESSING

21) ANCILLARY FEES: 

There is no tax service or insurance fee collected on WV Housing Bond

Loans. HUD Lines 806 and 843 should both be $0.00.



New one rate option (replaces all other rate options)



Bond loans currently priced at 101.50



FHA loans also require a 19 basis point (bp) rate add on.



WVHDF does not require the rate add on for Manufactured homes.



$7.50 Flood Certification, including life of loan tracking – tracking information to be transferred to WV Housing. The maximum deductible


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22) PROCESSING

DOCUMENTATION: amount for flood insurance is $1,000.



$370 Lender Fees (increased from $350) – lender may not collect fees over and above $370 in the aggregate to cover reasonable charges customarily made under its general lending policy, including processing, document review, underwriting, closing application, courier, and doc prep fees, etc.



Additional fees, not to exceed actual charges, to reimburse lender for appraisal fees, credit reports, and in the case of new construction, inspection fees may be charged.



Late Fee for WV Housing loans is $15.00 for both the 1 st and the 2 nd mortgage.



There can be no overages charged on the bond program.



Check daily rate sheet from West Virginia Housing for current rate under the Standard Bond Program Heading. Do not use Secondary

Market Rates.

The following Special Feature Codes will apply for loans with conventional financing:



HFA Preferred DU Loans & Manual U/W SFC 088 & 741 (Note loans with LTV > 95% cannot be manually U/W). SFC 741 replaces SFC

358. The SFC 741 will need to be handwritten on the 1008 and an override may be required on the DU Compare screen until the SFC is programmed into Unifi.



Community Seconds Transaction – SFC 118

 “Thin File” Traditional Credit – SFC 818

QMB Program

 Loans must be reserved on West Virginia Housing’s online system at https://www.wvhdf.com/extranet/index.cfm

.



For properties located in non-target areas, provide three (3) years signed federal income tax returns showing no deduction for mortgage loan interest or property taxes on a principal residence. There is no first time home buyer requirement nor a requirement for tax returns for properties in targeted counties.



Borrowers purchasing a home in a non-target area must not have had an ownership interest in their principal residence at any time during the three year period ending on the date the WVHDF loan is closed. o Borrowers with an ownership interest in a mobile home that was their principal residence will be considered as having a prior ownership interest if the mobile home was permanently attached to the land. Units installed under the code required by the State of WV are considered permanently attached to real estate even when placed on rental property. Therefore the waiver process on manufactured homes has been eliminated.



Borrowers must be a resident of the State of West Virginia or intend to immediately become a resident of the State.



The details of transaction on the application must be reflective of the funds required on the HUD-1. If the HUD-1 reflects more funds required than what was disclosed under the details of transaction, the loan needs to be resubmitted to underwriting to verify that the borrower has sufficient funds to close.



Borrower(s) must meet the income and sales price limits of the program.



Property must be primary residence. No more than 15% of the total area of


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–Mortgage Revenue Bond Program the residence can be used in a trade or business except in rental of a 2-4 unit property.



A realistic estimate must be computed for the monthly escrows. The escrowed amount for real estate taxes is based on the assessed value of improved land (i.e. value of both property and completed dwelling) for new construction and the actual taxes assessed for existing properties. Lender may contact the taxing authority which has jurisdiction over the property to obtain an estimate of the taxes to be assessed for newly constructed homes



A ll borrowers using conventional financing with West Virginia’s Closing Cost

Assistance Program must have a minimum investment of $500 of their own funds.



Conventional loans allow interested party contribution of up to a maximum of 3% for LTVs greater than 90%. These funds can be toward closing costs and pre-paids.



Aliens who are lawful permanent residents of the U.S. under the same terms that are available to U.S. citizens are eligible borrowers. Permanent resident aliens must hold acceptable evidence of permanent residency issued by the Immigration and Naturalization Service (INS). (See Chapter 1,

Section 5, paragraph 8 of the Lender Guide)



Acreage of property cannot exceed 5 acres



Seller Affidavit – When Seller Certification is signed by power of attorney, executor, etc., must have documents to support the signature.



Completion of 1003 – under the “Details of Transaction” the Estimated

Closing Cost must be itemized by estimated prepaid items and closing costs when the loan is submitted for underwriting. This will help eliminate some questions from the underwriter.



Hazard insurance premium needs to be included within the closing cost amount (unless it is already paid and a cancelled check is available for documentation). Otherwise, the borrower may be short the necessary funds to close and if using AUS the findings will be inaccurate in regards to necessary assets to be documented for closing.



Co-signers are not permitted on WVHDF Programs.



Execution of any loan documents by power of attorney on behalf of borrower(s) must be approved by WV Housing Development Fund.



Loans requiring a change or extension may be handled through the

WVHDF website on the reservation page by using the “change/extension form” icon. Faxed requests will no longer be accepted.



All expired loans will automatically be cancelled.



Expired loans can be re-locked by contacting WV Housing.



New lock-ins cannot exceed 30 days



Use the Change Request Form for changes to the loan after reservation

QMB Program :



All borrowers must qualify for the loan and take title to the property.



All parties on the deed of trust must meet the first-time home buyer requirement in non-target counties.



Household income is the total income of all persons who take title to the property.

DOCUMENTATION REQUIREMENTS:



A copy of the real estate tax ticket must be obtained and included with the closing package when the loan is shipped for purchase.



A Personal Property Worksheet must be used for loans that include


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23) PRODUCT SPECIFIC

DISCLOSURE: personal property on the sales contract or show on the appraisal that it is not being funded with Bond dollars. This form must be completed and submitted with the loan file whenever personal property is included.



Flood Determination Certifications must clearly identify whether or not the property is located in a flood zone. Flood Determination Certificates that identify the property as not mapped, cannot be financed by the WVHDF.



Completed Application Affidavit . If the loan application does not reflect the number of people in the household under borrower(s) and dependents as claimed on the Application Affidavit, you must note within the file the additional members by name and relationship used to arrive at household size listed on the Application Affidavit.



Income Tax Affidavit (A118) in the event borrower was not required to file income tax returns.



Heating Certification (AF-125)



Affidavit of Affixture is required on all manufactured housing units



For borrowers who want automatic payment, the WVHDF ACH form must be completed at closing and included in the submission package for loan purchase

Standard RESPA and Reg Z disclosures (see below)

Closing Recapture Notice – Form DP-56

Single Family Mortgage Brochure

RESPA Requirements



Initial GFE issued must be incompliance with Reg X and be complete and accurate.



Redisclosed GFE’s due to a Change of Circumstance must be documented and a Change of Circumstance re-disclosure log must be included in the loan package.



The Final HUD-1 must reflect the accurate GFE amounts in the GFE

Column and must match the last valid GFE disclosure.

Dodd-Frank Related RESPA Requirements



Effective for all applications taken on or after January 10, 2014: o A Homeownership Counseling disclosure must be provided to applicants within three (3) business days of receiving a loan application. Evidence must be included in the loan file that the disclosure was provided in the appropriate time frame required. o The disclosure must provide a clear and conspicuous written list of homeownership counseling organizations that provide relevant services in the loan applicant’s location (zip code) o The list provided to each loan applicant must be obtained no earlier than 30 days prior to the date the list is provided

Truth-in-Lending (TIL) Disclosure



The TIL disclosure must be complete and accurate and proper and accurate fees must be included in the finance charge calculations.



A new TIL disclosure must be provided when the APR is no longer considered accurate. (An APR is inaccurate if it increases by more than

.125% from the last disclosed APR.)



The loan may not close prior to the seventh business day after the initial disclosure was sent.


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

If the loan is re-disclosed, the loan may not close prior to the third business day after re-disclosure was received by the borrower.

24) AUDIT GUIDELINES: Standard HMC audit guidelines

25) HAZARD INSURANCE: Required



The Hazard/Flood insurance policy must contain the following mortgagee clause at closing:

The Huntington National Bank, its successors and assigns as their

26) SURVEY:

27) ESCROW

AGGREGATE interests may appear c/o The Huntington Mortgage Company

ISAOA/ATIMA

P.O. Box 182024



Columbus, OH 43218-2024

Hazard Insurance:



Coverage must equal at least the face amount of the 1 st mortgage note, or cover the face amount of the loan less site value from the appraisal.

If the site value option is used, the policy must contain replacement coverage on the dwelling and a temporary dwelling clause. This would be required to be carried for the life of the loan and the borrower must accept all policy increases.



Deductible: Unless a higher maximum deductible amount is required by state law, the maximum allowable deductible for a first mortgage is the higher of $1,000 or 1% of the face amount of the policy. The deductible clause may apply to either fire, extended coverage or both.



Note: Condo policies are not acceptable on townhouses.

Flood Certification:



The property flood zone must be clear marked on the certificate and must identify whether flood insurance is required.



Properties that are not mapped or non-participating communities are not acceptable and appear as “NO” not in flood zone.



Must have evidence that lender has requested flood certification company to transfer the life of loan tracking to WVHDF.



Flood insurance is required on Flood Zone A or any Zone A subcategory.



Coverage: the amount of coverage must be sufficient to equal the loan amount, or if the loan amount is more than the coverage amount limit provided by FEMA, then the maximum amount of coverage provided by

FEMA is required.



If the property is located in an area that does not participate in the

National Flood Insurance Program, the insurance must be obtained from the private sector.



Existing Property: If a Long Form Policy is used, a plat or survey dated or re-dated within 90 days of the closing, signed, certified and sealed by a licensed surveyor or engineer must be furnished (townhomes included). A survey is not required on condominiums.



New Construction: Must have a survey

Please refer to the HMG Escrow Waiver Policy


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ACCOUNTING:

28) POST

CLOSING/SHIPPING

Investor Closing Package Delivery Requirements

All loans must close by the expiration date and the closing package must be delivered within ten (10) business days of closing.



Post Closing Compliance Sheet (DP-50) Closing package must also include the Underwriting package as outline in the Lender Checklist PR-36A



WVHDF ACH Form – if applicable



Closing Funds Due – FA-73



Servicing will issue the letter to the Hazard/Flood Insurance

Provider in their normal process when the loan is purchase. The

Loss Payee is being amended as follows:

West Virginia Housing Development Fund, their Successors and/or assignees as their interests may appear

5710 MacCorkle Avenue, SE

Charleston, WV 25304



The Policy must provide that the insurance carrier will notify WVHDC at least 30 days in advance of the effective date of any cancellation, termination or non-renewal of the policy.

Late fees will be assessed as follows for loans submitted after the 10 th business day as follows:

Submission Time Frame

11 th business to 30 th calendar day

31 – 60 calendar days

Late Fees

1/8% of loan balance

¼ % of loan balance

Loans beyond 61 days are subject to repurchase by the participating lender.

If extenuating circumstances exists, lender should contact the Housing

Development Fund to discuss other arrangements.

Deferred Document Submission

D eferred documents must be submitted the attached form:



Submission of Deferred Documents



Manufactured Homes: o Effectively immediately, WVHDF will accept the properly recorded DMV-2-TR for manufacture housing units that have been or are going to be cancelled. o An Affidavit of Affixture (signed by all parties and recorded) along with an ALTA Endorsement 7 when the property is treated as real property is required on all manufacture housing units

% of SRP Payment Amount

¼ % of loan balance



Subject to repurchase

All Documents Submitted and/or Corrected w/in timeframe

91 – 120 days from closing



Over 180 days from closing *

* Repurchase requests will be mailed to the lender within 30 days of the loan reaching 180 days past closing. Under extenuating circumstances, an extension may be granted to the lender at the discretion of the Housing

Development Fund. There will be an extension fee due and payable by the


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–Mortgage Revenue Bond Program lender at the time the extension is granted that will be equal to 25 basis points of the original loan amount. This extension will be for a period of 90 days, after which the loan will be required to be repurchased if not completed.

LEGAL DOCUMENTS

29) NOTE:

30) RIDER:

31) SECURITY

INSTRUMENT:

CONV – Required Closing Document from Unifi

GOVERNMENT - Required Closing Document from Unifi

Promissory Note for Second Deed of Trust prepared by WVHDF for loans reserved with WVHDF prior to December 10, 2012.

Loans reserved with WVHDF on or after December 10, 2012 will use standard

Fannie Mae Deed of Trust Note.

The endorsement on the Note for the first and the second mortgage (for registrations on or after 9/15/06) should be as follows: “without recourse, pay to the order of West Virginia Housing Development Fund”

Deed of Trust Rider - must be recorded with the first mortgage on all Bond

Loans.

CONV – Required Closing Document from Unifi

GOVERNMENT - Required Closing Document from Unifi

Second Deed of Trust prepared by WVHDF for loans reserved with WVHDF prior to December 10, 2012.

Loans reserved with WVHDF on or after December 10, 2012 will use standard

Fannie Mae Deed of Trust.

Affidavit of Affixture – Manufactured Homes ONLY

OTHER

32) MARKET

RESTRICTIONS:

33) CONSTRUCTION

PERMANENT

MODIFICATIONS:

Property must be located in a county in the state of West Virginia. The Program is restricted for use by WV branches.

N/A

PRODUCT REVISION HISTORY

01/24/2012 WV Housing requirements for manufactured housing

03/01/2012

04/01/2012

05/18/2012

DRIVE Language added

New FHA MIP Premiums

Processors to complete all bond documents for closing with instructions for closer; new income limits

7/13/2012

7/18/2012

10/01/2012

12/20/2012

01/25/2013

2/11/2013

New 2 nd DOT Note and DOT Forms

New Payment and Escrow Information Sheet

New Income limits; revised compliance income calculation; HB Ed required on all conventional loans regardless of LTV

Revised WVBond 2 nd Mortgage Program; new seller affidavit, application affidavit and LS-4 Form

Movin’ up Program for non-first time buyers – Revised 2 nd Deed of Trust Program

Change in DPA funding on HUD line 222


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03/01/2013

05/01/2013

07/01/2013

01/10/2014

05/23/2014

06/06/2014

07/01/2014

08/24/2014

12/19/2014

01/22/2015

01/26/2015

05/18/2015

06/01/2015

6/10/2015

Increase in FHA Annual MIP for FHA Case Numbers issued on or after April 1, 2013

Increase in duration of FHA Annual MIP for case numbers issued on or after June 3, 2013

Increase in income limits for Movin’ Up program; Huntington imposed minimum FICO of 640 has been removed; Age of Credit Documents extended; Documentation requirements for DPA funds on FHA loans.

Incorporated ATR and RESPA, TILA & HB Counseling disclosure requirements

Revised Income & Purchase Price Limits

Clarification of requirements for Movin’ Up program

HMG has delegated authority to underwrite all WVHDF bond loans.

Changes in HB Ed requirements for Conventional loans on the Movin’ Up program and changes in down payment assistance a mount for the Movin’ Up program; Updated forms

Issue with DU 9.2 on 97% Conventional loans; New SFC 741 for HFA Preferred Loans;

Clarification on conventional loans with LTV > 95%. Must be underwritten through DU and receive an Approve/Eligible Finding – Manual Underwriting is not permitted on conventional loans that exceed 95%.

New FHA Annual Premiums effective with FHA Case Numbers issued on or after January 26,

2015

Itemization of fees for VA loans.

Identification of WV Housing third party vendor for obtaining tax transcripts.

Addition of Form SSA-89 to be completed and signed at closing


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product criteria

PRODUCT CRITERIA

UNDERWRITING

Upfront Insurance Premium (UFMIP) = 1.75%

Annual Premiums will decrease as follows:

Upfront Insurance Premium (UFMIP) = 1.75%

Annual Premiums will increase as follows:

PROCESSING

LEGAL DOCUMENTS

OTHER

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