OHFA
Everything you’ve ever
wanted to know about OHFA loans and more!
Overview
We will discuss the following :
•
•
•
•
•
Various loan products available with OHFA
Fees that you can charge
How to reserve a loan with OHFA
Required documentation from your borrower
Loan process
What’s so special about OHFA loans?
By using OHFA you can help a borrower
with limited funds become a homeowner
Down Payment
Assistance Second
Mortgage Loan
Ohio Heroes
Grants for Grads
PROGRAMS OFFERED THROUGH OHFA
What types of programs does OHFA offer?
First-Time Homebuyer program for low- to moderate-income Ohioans
Target Area Loan product for buyers purchasing homes in HUD's designated target
areas (we will discuss target areas a little later)
Ohio Heroes product for first-time homebuyers who work in critical professions
(Firefighter, Police Officer, Teacher, Medical profession)
Grants for Grads for recent college graduates
These products offer qualified buyers access to:
• Competitive mortgage rates on 30-year, fixed-rate loans
• Down payment and closing cost assistance in the form of a Down Payment
Assistance grant or the Grants for Grads product.
• .50% origination fee
• Generous purchase price and income limits
First-Time Homebuyer Program
Consists of Target areas, Ohio Heroes, Down Payment Assistance, and
Grants for Grads programs
Applicants for the First-Time Homebuyer Program must meet OHFA income limits,
and properties must meet purchase price limits. The limits vary by county.
To qualify for OHFA's First-Time Homebuyer Program, you must meet at least one of
the four qualifying categories:
1. Someone who has never owned real estate.
2. Someone who has not owned or had an ownership interest in his/her principal
residence in the last three years.
3. Be a qualified military veteran.
4. Purchase a home in a target area.
All OHFA qualified borrowers must meet each of the following three criteria:
1. Meet credit score requirements. The credit score for borrowers using OHFA's First
Time Homebuyer Programs must equal at least 640 or higher.
2. Have a signed Purchase and Sales Agreement for a qualifying property.
3. Qualify for the loan being requested. Lenders will assess the ability to afford a
home by considering income, assets, job stability, liabilities, and other criteria.
Additional property requirements:
•
Properties are limited to two acres within a municipal corporation and five acres
outside a municipal corporation unless additional acreage is required by local
health or safety code.
Qualifying properties include:
• Existing homes: single-family dwellings, conforming condominiums, duplexes, and
up to four-unit properties
• Newly built spec/nearly completed homes: one-unit single-family dwellings
Loan Types for first time homebuyer’s:
To meet each homebuyer's needs, OHFA offers several different loan products including:
• Fannie Mae conventional loans with special features and flexible terms
• Government-insured loans including traditional FHA, VA, and USDA-RD loans
Loan Features/Benefits:
•
•
•
•
•
•
Available to any qualified homebuyer
For new or existing homes
Competitive market, 30-year fixed interest rate
Flexible rate options
Available in all 88 Ohio counties
Generous purchase price and income limits
Loan Fees:
The following fees may apply to your OHFA loan:
• .50% origination fee
• $575 processing fee
• $550 underwriting fee
Target Area Loan Product
OHFA's Target Area Loan product helps revitalize federally-designated target areas by
making our affordable first-time homebuyer loan products and competitive interest
rates available to ANY qualifying buyer purchasing a home in these areas.
What is a Target Area?
A target area is an economically distressed area designated by the U.S. Department of
Housing and Urban Development (HUD). Most Ohio counties contain both target and
non-target areas.
On the next slide you can see a map of the targeted areas
To determine if a property is eligible that is in the partially
targeted area:
Counties with partially
targeted areas can be seen in
detail by clicking on the
corresponding county
Next you would click on
the blue grid cells in the
area you are looking for
more details
Any area shaded in blue is
In a target area:
Target Area Loan product applicants do not have to be first-time buyers, however, the
following program requirements apply.
To qualify for an OHFA Target Area Loan product, you must:
•
•
•
•
Meet OHFA's income and purchase price limits. The limits vary by county. Please
note that income and purchase price limits may be higher for target area loans.
Be creditworthy. Minimum credit scores may apply.
Have a signed Purchase and Sales Agreement.
Qualify for the loan being requested. Lenders will assess your ability to afford a
home by considering income, assets, job stability, liabilities, and other criteria.
Additional property requirements:
•
•
Loans are available for properties up to two acres (unless additional acreage is
required by local health or safety code).
Qualifying properties include:
• Existing homes: one-unit single-family dwelling and duplexes up to four units
• Spec/Nearly completed homes: one-unit single-family dwellings
Loan Types (target areas)
To meet each homebuyer’s needs, OHFA offers a variety of loan products including:
• Fannie Mae conventional loans with special features and flexible terms
• Government-insured loans including traditional FHA, VA, and USDA-RD loans
Loan Features/Benefits
•
•
•
•
•
•
Available to any qualified homebuyer
For new or existing homes
Competitive market, 30-year fixed interest rate
Flexible rate options
Available in all 88 Ohio counties
Generous purchase price and income limits
Loan Fees
The following fees may apply to your loan:
• .50% origination fee
• $575 processing fee
• $550 underwriting
• .25% adverse market fee (conventional loans only)
Ohio Heroes Program
Ohio heroes make a difference in our lives by working hard in
critical jobs every day. Through OHFA's Ohio Heroes product
Ohio's heroes can receive all the benefits of our First-Time
Homebuyer program at a .25% lower interest rate.
The Ohio Heroes product is available to the following full-time
employees who are:
Active Military,
Active Reserve, or
a Veteran
• Qualified Active
Duty Service
personnel include
Armed Services
or Reserve
Forces.
• Qualified veterans
include military
members
honorably
discharged from
any branch of the
U.S. Armed
Forces.
Firefighters,
Emergency
Medical
Technicians or
Paramedics
• Sworn paid
members of a fire
department
whose regular
duties include fire
suppression or
prevention,
emergency
medical
response,
hazardous
materials
response.
Health Care
Workers
• Certified,
accredited, or
licensed health
care workers who
are employed fulltime as a medical
resident or fellow,
dental hygienist,
nurse, nursing
assistant,
pharmacist,
pharmacy
technician,
physician’s
assistant, medical
technician,
technologist, or
therapist.
Police Officers
Teachers
• Individuals
commissioned as
a police officer by
a federal, state,
county, or
municipal or
township
government, or a
public or private
college or
university; must
be sworn to
uphold, and make
arrests for
violations of
federal, state,
county, municipal,
or township law or
respond to
terrorism.
• Individuals
employed fulltime by an
accredited or
state recognized
public school,
private school, or
federal, state,
county, or
municipal
educational
agency as a
state-certified
classroom
teacher or
administrator in
grades K-12 or
higher education.
Full-time
instructors must
teach a minimum
of 12 credit hours
per academic
term. License and
paystub from
education facility
required to
validate
credentials.
Applicants for the Ohio Heroes product must:
•Meet OHFA's income and purchase price limits. The limits vary by county.
•Be a first-time homebuyer—someone who has not owned or had an ownership interest in his/her
principal residence in the last three years.
•Be creditworthy. Minimum credit scores may apply.
•Have a signed Purchase and Sales Agreement for a qualifying property.
•Qualify for the loan being requested. Lenders will assess your ability to afford a home by considering
income, assets, job stability, liabilities, and other criteria.
Loan Types:
To meet each homebuyer's needs, OHFA offers several different loan products including:
• Fannie Mae conventional loans with special features and flexible terms
• Government-insured loans including traditional FHA, VA, and USDA-RD loans
Loan Features
• Available to any qualified homebuyer
• For new or existing homes
• Competitive market, 30-year fixed interest rate
• Flexible rate options
• Available in all 88 Ohio counties
• Generous purchase price and income limits
Loan Fees
The following fees may apply to your loan:
• .50% origination fee
• $575 processing fee
• $550 underwriting fee
• .25% adverse market fee (conventional loans only
Down Payment Assistance
If paying for a down payment and closing costs have kept your borrower from getting into
a home, OHFA's Down Payment Assistance may be able to help.
Second Loan with a 5 year term, no accrued interest, due upon sale or refinance.
• Sized at exactly 2.5% of the home purchase price rounded down to the nearest dollar.
Funds are automatically reserved once the Mortgage Loan is reserved and confirmed on
the OHFA reservation system.
• May be applied against the Borrower’s down payment, closing costs, prepaids and
other related program and mortgage loan fees and expenses.
• The obligation to repay the Second Loan is secured by a Note and Subordinate
Mortgage recorded in OHFA’s name as beneficiary.
Keep in mind that while the assistance will greatly reduce your expenses, the borrower
may still be required to pay for some costs out of pocket.
The Second Loan is subject to recapture if the property is sold or refinanced
within the first 5 years from when the Mortgage Loan closed. For each year the
Borrower remains in the property, 20% of the obligation to repay shall be
forgiven, until the 5th year, at which time the obligation to repay is forgiven free
and clear.
• In the event there are surplus funds remaining, the Borrower may be
reimbursed for any earnest money, advances or overpayment of fees per OHFA
Guidelines.
• May not be combined with Grants for Grads.
Grants for grads product
Recent college graduates can now receive down payment and closing cost assistance and a
favorable mortgage interest rate from an OHFA participating lender with the Grants for Grads
product. Eligible borrowers can use the product to reduce the out-of-pocket expenses associated
with buying a home.
If you have an income-eligible first-time homebuyer that has graduated from high school or has
a GED and has earned an associate's, bachelor's, master's, doctorate or other postgraduate
degree within the last 24 months and have not had ownership interest in a principal residence in
the past 3 years, your borrower can take advantage of the Grants for Grads product.
•OHFA will issue a grant in an amount of 2.5% of the home's purchase
price.
•You can use the grant to pay for the down payment, closing costs, or other
prepaid expenses incurred prior to closing. Keep in mind that while the
grant will help cover some of your up-front costs, your borrower may still
be required to contribute some money as well.
•The grant will be issued as a second mortgage with a 0% interest rate with
no payment due. The loan is forgivable after five years. However, if you
move out of Ohio prior to the five-year mark, you are responsible for paying
a portion of the grant back to OHFA as indicated below.
Months resided in home
Amount of grant owed to OHFA if you move out of state
Less than 12 months
100%
12 months to 24 months
80%
24 months to 36 months
60%
36 months to 48 months
40%
48 months to 60 months
20%
Fannie Mae HFA Preferred
Ohio Housing Finance Agency (OHFA) qualifies as
a HUD approved Provider of Secondary Financing.
OHFA’s down payment assistance programs meet
the Fannie Mae standards for Community Seconds.
Eligible Properties
• 1-4 unit single family properties (Grants for Grads Program limited to 1-unit only)
• Condominiums, Planned Unit Developments (PUDs)
• New Construction (90% completed)
• 2 acres or less – within municipal corporations
• 5 acres or less – outside municipal corporations
• Properties must be owner-occupied and may not be used for investment purposes.
Questions on property eligibility should be addressed to US Bank.
Borrower Investment
No minimum Borrower investment is required by OHFA,
other than those required per FHA, VA, USDA-RD, Fannie
Mae HFA Preferred and Mortgage Insurer guidelines
Credit Score Minimum
640 minimum credit score for all borrowers and co-borrowers
applying for Program with or without OHFA Down Payment
Assistance. Additional restrictions for certain products.
Questions regarding credit score calculations should be
addressed to US Bank.
Maximum LTV/CLTV
Maximum Fannie Mae HFA Preferred - 97%/100% for 1-unit properties
Maximum Fannie Mae HFA Preferred - 95%/100% for 2-4 unit
properties
Fannie Mae HFA Preferred Loans DU findings
DU Approve Eligible or manual underwriting.
HFA Preferred is available through DU using the “Additional
Data” screen; select “HFA Preferred.” Lender may ignore any
DU message indicating the loan is ineligible because the
LTV/CLTV exceeds DU limits, as long as the loan conforms to
the LTVs specified herein. Manual underwriting is subject to the
related section within Fannie Mae’s Eligibility Matrix.
Required Mortgage Insurance Coverage
For Fannie Mae HFA Preferred Loans:
18% charter coverage for 95.01-97% LTV Loans
16% charter coverage for 90.01-95% LTV Loans
12% charter coverage for 85.01-90% LTV Loans
6% charter coverage for 80.01-85% LTV Loans
Private Mortgage Insurance (PMI)
• Insurers must be approved by Fannie Mae.
• Lender or borrower paid PMI is acceptable following Fannie Mae
Guidelines.
• Lender is responsible for activating any PMI policy and remitting any
PMI payments due to the Mortgage Insurer prior to the sale of the
loan to US Bank. Lender is also responsible for transferring the PMI
policy to US Bank after the loan sale.
• PMI rates, pricing, and guidelines may differ among the participating
Mortgage Insurers and are subject to change. Lenders should consult
the current Housing Finance Agency PMI guidelines at each company
to determine the terms and conditions by which such loans will be
insured.
WHAT ARE THE BENEFITS OF
UTILIZING OHFA?
So why use OHFA?
Even if your borrower does not need assistance the it is possible OHFA can
provide a better interest rate, see below for current rates:
Home Buyer Education Timeline
OHFA requires homebuyer education for anyone obtaining a conventional loan through
one of our homeownership loan products or for anyone choosing to take advantage of our
Down Payment Assistance or Grants for Grads product.
Borrower Documentation
•
Income Calculations - Household income calculations apply.
•
Federal Income Tax Returns - Signed and dated copies of Federal Tax Returns for 3 years
are required except for borrowers purchasing a home in a targeted area or for qualified
veterans.
•
Recent pay stubs
Lender Compensation
Discount Points: No discount fees may be charged.
Lender Fees: Reasonable and customary charges for out of pocket expenses and
costs only.
PLEASE NO JUNK FEES !
US Bank/OHFA Fees:
Lender Compensation:
Origination Fee:
Please refer to Term Sheet for details.
2.5%
.50% charged to borrower
TOTAL LENDER COMPENSATION 3.0% plus our $1125.00
2.5% (Lender) + .50% (Origination Fee) = 3.0% !!!
Other Pricing Adjustments
Lenders will receive the greater of 2.5% compensation or $1500 for lower
loan amounts, however the minimum compensation will now apply to loans
of $60,000 or less.
HOW DO I GET A LOAN STARTED
WITH OHFA?
Loan Process
The loan purchase timeline must be followed
Reserving Funds
• Lenders may reserve program funds:
– Between 9:30 AM and 8:00 PM Eastern time
– Monday through Friday, excluding holidays
•
No changes to rate or product will be permitted after
Reservation.
*We will go over how to reserve funds a little later
How are Lenders Notified of New Rates?
Rate sheet will be posted on Lender On Line (LOL).
Please request access to LOL from your Team Leader.
Lenders will be advised of a rate change when they sign into
the Lender Online system.
Assisted rates will be set higher than the unassisted rates.
The amount of spread may change based on market conditions.
OHFA Rate Sheet
MARKET RATE PROGRAM
RATE SHEET
27-Sep-13
FHA, VA, USDA-RD 30-Year Fixed Rate Loans
Program
Loan
Rate
Rate Lock
(to Lender)
Purchase
By
2nd
Loan
Discount Origination Purchase
Points
Fee
Price
Without Down Payment Assistance
First Time Homebuyer
Ohio Heroes
4.000%
3.750%
70 Days
70 Days
12/06/13 0.00%
12/06/13 0.00%
0.00%
0.00%
0.50%
0.50%
102.50%
102.50%
First Time Homebuyer 4.500% 70 Days 12/06/13 2.50% 0.00%
Ohio Heroes
4.250% 70 Days 12/06/13 2.50% 0.00%
Grants for Grads**
4.000% 70 Days 12/06/13 0%** 0.00%
** Grants for Grads has a 2.5% grant to the borrower. No second loan.
0.50%
0.50%
0.50%
102.50%
102.50%
102.50%
With Down Payment Assistance
Program Notes and Overlays:
Extension Fee
0.3750%
Rate Lock contingent on OHFA pre-close and pre-purchase review
30 Days
Origination Fee is Optional: Lender may charge 0.50% Origination Fee to the borrower
Income Limits by County and family size; 640 minimum credit score
Homebuyer Education required by:
10/12/2013
FNMA HFA Preferred Only
Program
Loan
Rate
Rate Lock
(to Lender)
Purchase
By
2nd
Loan
Discount Origination Purchase
Points
Fee
Price
Without Down Payment Assistance
First Time Homebuyer
Ohio Heroes
4.875%
4.625%
70 Days
70 Days
12/06/13 0.00%
12/06/13 0.00%
0.00%
0.00%
0.50%
0.50%
102.50%
102.50%
First Time Homebuyer 5.500% 70 Days 12/06/13 2.50% 0.00%
Ohio Heroes
5.250% 70 Days 12/06/13 2.50% 0.00%
Grants for Grads**
4.875% 70 Days 12/06/13 0%** 0.00%
** Grants for Grads has a 2.5% grant to the borrower. No second loan.
0.50%
0.50%
0.50%
102.50%
102.50%
102.50%
With Down Payment Assistance
Program Notes and Overlays:
Rate Lock contingent on OHFA pre-close and pre-purchase review
Origination Fee: Lender charges 0.50% Origination Fee to the borrower
Income Limits by County and family size; 640 minimum credit score
Homebuyer Education required by:
10/12/2013
Extension Fee
30 Days 0.3750%
OHFA Rate Sheet – Up Close
What Happens After Registration?
Process loan &
Underwrite Loan
Processor
submits
Commitment
Package to
OHFA
US Bank
Funds Loan
Process Flow
Submit
Purchase
Package to
OHFA &
Mortgage File
to US Bank
Wait for OHFA
Approval &
OHFA
Commitment
Letter
Close &
Advance
Funds
OHFA Timeframes
To assure that loans are purchased, please follow the Processing, Delivery and
Purchase Timetable
Please DO NOT reserve loans that cannot meet the timetable.
This is particularly important with respect to:
– New Construction
– Foreclosures
– Short Sales
Please wait to reserve funds. Loans not delivered within the timeframe cannot be
purchased.
OHFA Timeframes
25 Days From Loan
Reservation to
Underwriter
Certification and
Commitment Package 1.
45 Days From Loan
Reservation to
Pre-Purchase
Compliance Package to
OHFA
60 Days From Loan
Reservation Date to
Loan Delivery to US Bank
70 Days From Loan
Reservation to the final Loan
Purchase by US Bank 2. 3
1. If approved, OHFA will issue a Commitment Letter within 3-5 business days. Failure to abide by these deadlines will result
in the cancellation of the loan reservation.
2. Loans may not be re-reserved for a borrower(s) for a period of 60 days from the date of the expiration of the previous
reservation, including any extension.
3. Lender may request a 30- day extension for a 0.375% extension fee, otherwise the loan reservation will be cancelled. Only
one reservation extension is available.
Loan Reservation & Underwriting Timelines
• Lenders reserve loans in the OHFA system when they are reasonably
certain that the loan will qualify.
• Following full credit approval AND WITHIN 25 CALENDAR DAYS
OF LOAN RESERVATION, your underwriter will complete the on-line
Underwriter Certification.
Loan Process & Purchase
Timelines
•
•
•
Within 25 days of loan reservation, the Pre-Close Compliance (Commitment) Package
must be submitted to OHFA (Processing does this once all supporting docs and signed
RESPA are received)
If approved, OHFA will issue a Commitment Letter within 3-5 business days.
Failure to meet the 25-day deadline will result in cancellation of the loan reservation.
In order to meet this deadline it is important that you submit all supporting docs and signed
RESPA to processing as soon as possible, the clock starts ticking from the reservation date
Loan Process & Purchase
Timelines
• Within 45 days of loan reservation, the Pre-Purchase (post-closing,
closing department) Compliance Package should be submitted to OHFA.
• If the package is clean, OHFA will give US Bank approval to purchase
the loan within 3-5 business days.
• The 45 day timing is suggested to allow sufficient time for the loan to be
purchased at day 70.
Loan Process & Purchase
Timelines
• Within 60 days of loan reservation, the loan should be delivered to US
Bank for purchase (post closing)
• Failure to deliver the loan file to US Bank within 60 days may result in
US Bank’s inability to purchase your loan within the allotted
timeframe.
• Within 70 days of loan reservation, the loan must be purchased by US
Bank.
Need More Time?
How to Request an Extension
• Loans not purchased with 70 days are ineligible for purchase unless
Lender chooses a one-time, 30-day extension.
• The cost of a 30-day extension is .375 of the original loan amount.
• A borrower is eligible for only one extension.
• The extension fee will be netted by U.S. Bank when the loan is
purchased.
• If an extension is permitted but the loan does not close, the
Lender will be billed the extension fee by OHFA.
• Outstanding fees owed by the Lender may result in that
Lender becoming ineligible to participate in the program.
In the future, if you need more time, wait longer
to reserve your loan!
New Reservation
Limitations for the Same Borrower
•
•
•
If the reservation period expires and the loan has not closed, no new Reservation
may be made for the same Borrower, until sixty (60) days after expiration of the
prior reservation period (including extension).
Loans not purchased within 101 days will automatically be cancelled and cannot
be reinstated.
In the event that Participant originates a Mortgage Loan that also has Down
Payment Assistance with it, and the Mortgage Loan cannot be purchased by
Servicer, the Participant may submit the Down Payment Assistance to OHFA
to be purchased by OHFA in accordance with the procedures defined in the
Lender Guide. For each occurrence of this event, an administration fee will be
charged to Participant.
Lender Responsibility
for Loan Pipeline
•
Lenders are expected to register loans for the OHFA program once a
determination has been made of its likelihood to close.
•
Lenders are responsible for keeping their reservation pipeline clean and current
at all times.
•
Lenders are expected to cancel reservations for loans that will not close, within
24 hours of the change in status.
Lender Responsibility
for Loan Pipeline
• OHFA will cancel reservations if the Pre-Close Compliance
(Commitment) Package is not received within 25-days of loan
reservation.
• Lenders who develop a history of excessive cancellations may be
removed from the program.
• All changes to a reservation must be completed through Lender OnLine.
• Lender OnLine will be relied upon as current and accurate.
What Can I Change
on Existing Applications?
ACCEPTABLE
•
•
Increasing or decreasing the first mortgage amount by $10,000 or less
Call George K. Baum
NOT ACCEPTABLE
•
•
•
•
Changing a borrowers reserved mortgage rate, for a fee.
Increasing or decreasing the 1st mortgage amount more than $10,000.
Changing the product you have selected:
– Move from a government loan to a conventional loan (or vice versa)
– Move from an unassisted loan to an assisted loan (or vice versa)
Canceling and re-reserving a borrower at a lower rate.
What Can I Change
on Existing Applications?
• Once a reservation is made, the rate is committed to the borrower.
• You may not take advantage of subsequent lower rates unless you wait
the required 60-days from the expiration of the last reservation,
including any extensions, to re-reserve the loan.
• Please address questions regarding borrower or property eligibility to
OHFA or US Bank.
• Please address change to amount, rate or type of reservations to George
K. Baum (GKB).
Whom Should I Call
With My Questions?
Question
Whom to Call
Program Compliance or
Down Payment Assistance
OHFA Representative
Loan Purchase or
Underwriting
US Bank MRBP helpdesk
800-562-5165 or
mrbp.helpdesk@usbank.com
Changes in Loan
Reservations
GKB Mortgage Markets LLC:
800-729-7204
Feedback & Suggestions
MarketRate@ohiohome.org
RESERVING FUNDS WITH OHFA
Reserving your loan with OHFA
Once you have
logged in click on the
New Reservation tab
Select Single Family Market Rate (+) sign and
then select your loan program type
It is very critical that you complete as much as possible when filling in the reservation info.
Use the income calculation form to calculate and enter correct income.
The form can be found in the LO tool box
Once you hit submit you will receive a confirmation
window, print the confirmation and send to the lock
desk to update your file in MB.
Once your loan has been reserved you need to create
the OHFA package to send to processing.
The documents do not have to be signed up front,
just create them and send them to processing.
Click on the Loan Status
tab to access your loan
and create the documents
Find your borrower and select the PDF Docs option
Select Market Rate
Commit Pkg. and then
click on Generate
Documents
A Generated Documents box will
appear, click on the PDF to
open/generate the docs.
After you have generated the docs save
and send them to processing.
Now we will go to the Lender on-line and reserve a test loan
Time for