PENNSYLVANIA HOUSING FINANCE AGENCY
UNDERWRITING/PROCESSING
TRAINING
Tom Wolf, Governor
Brian A. Hudson, Executive Director
PHFA Mission
In order to make the Commonwealth a better
place to live while fostering community and
economic development, the Pennsylvania
Housing Finance Agency provides the capital
for decent, safe and affordable homes and
apartments for older adults, persons of modest
means and those with special housing needs.
www.phfa.org
PENNSYLVANIA HOUSING FINANCE AGENCY
Agenda
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What is PHFA?
Allowable Fees
Programs for Homebuyers
Assistance Programs
Underwriting Guidelines
Property Guidelines
Programs for Homeowners
Closing Requirements
PENNSYLVANIA HOUSING FINANCE AGENCY
PHFA, who are we?

Created in 1972

Non-profit; Quasi Government Agency

Headquarters in Harrisburg, PA

Considered an “Investor”
Compensation and Allowable Fees
Seller’s Guide, Chapter 1
PENNSYLVANIA HOUSING FINANCE AGENCY
Compensation


The lender locks the interest rate as well as the
price that PHFA will pay for the loan
Price includes the origination and the servicing
release premium (SRP)
 The
loan price includes the SRP, and .625% will be
withheld at the time of purchase and paid when the
file is cleared according to the payout schedule

Borrowers will be able to pay up to two discount
points in exchange for a lower rate, or they may
choose a higher rate for a credit to help towards
closing costs
PENNSYLVANIA HOUSING FINANCE AGENCY
Compensation


The maximum a lender may retain from the loan price is 103
percent of the loan amount
Additional compensation above 103 must be provided to the
borrower in the form of a credit towards their closing costs
and shown as such on the GFE and HUD1



If less than the minimum is given, PHFA will deduct the applicable
amount from the loan proceeds, apply it to the principal balance and
require the lender to revise the HUD1 accordingly.
Credit may not be used to fund any portion of the borrower’s
downpayment
An extra $250 would be paid for Access Mod loans
PENNSYLVANIA HOUSING FINANCE AGENCY
Allowable Fees: For Purchases

Actual amount (or your standard fees) for items
including, but not limited to:
Credit report
 Appraisal fee
 Filing and recording fees
 Wood-destroying insect report
 DU/LP
 Tax certification fees can only be charged on conventional
loans if it’s a pass thru fee to a third party.
 $750 Administrative fee to cover overhead such as
underwriting, processing and doc prep

PENNSYLVANIA HOUSING FINANCE AGENCY
Loan Process
Lender
Application
Process &
Underwrite
Close
Turn-around time
PHFA
Lock
Rate
Review
Loan
Purchase
Loan
PENNSYLVANIA HOUSING FINANCE AGENCY
Programs for Homebuyers
Seller’s Guide, Chapter 3
PENNSYLVANIA HOUSING FINANCE AGENCY
Homebuyer Products
Conventional Financing
Government Financing

HFA Preferred Risk SharingTM

Keystone Home Loan

HFA PreferredTM

Keystone Government (K-Gov)
loan

Keystone Home Loan (80% max)
PENNSYLVANIA HOUSING FINANCE AGENCY
Conventional Financing
Seller’s Guide, Chapter 3
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/
HFA PreferredTM Loan Programs
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM

For purchase and limited cash-out refinance
 Rate

& term refis only – more details later
Fully amortized MyCommunityMortgage…BUT
 No
loan level pricing adjustments
 30 year, fixed-rate term only

And…
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM
HFA Preferred Risk Sharing™
 No mortgage insurance is required
 Risk is assumed by PHFA and Fannie Mae, NOT the
lender (Normal reps & warrants per the Sellers
Guide and the original MOSA apply)
HFA Preferred™
 Mortgage insurance provided by a Fannieapproved insurer

Genworth, MGIC, Radian, United Guaranty, CMG, National MI & Essent
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM


No first-time homebuyer requirement, the borrower
may not have an ownership interest in any other
residential dwelling at the time of loan closing.
Must meet HFA income limits
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Appendix B
Gross, annual income projected over the next 12 months
Calculated on ALL adults who intend to occupy the home within
one year from loan closing
Loan amount cannot exceed the current Fannie Mae
standard loan limits
High cost areas do not apply
PHFA delegated authority can not be used with these
loans
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM No MI/HFA PreferredTM Lo MI


Desktop Underwriter (DU)

Use the “Additional Data” screen and select “HFA Preferred Risk
Sharing” or “HFA Preferred

Borrowers must have a FICO of at least 620

up to 97% LTV regardless with a DU finding of Approve/Eligible

Max CLTV 105%

Borrowers must contribute lesser of 1% or $1000 of own funds
Approve/Eligible only

Qualifying income, ratios, reserves, and credit score determined
by DU

No flexibility on PHFA’ s part

No exceptions
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM No MI/HFA PreferredTM Lo MI

Manual underwriting permitted
 Max LTV of 95%; Max CLTV of 105%
 Borrowers must have a FICO of at least 680
Maximum DTI for borrowers with FICO scores between 680 and 700
is 36%
 Maximum DTI for borrowers with FICO scores 700 or higher is 45%

Borrowers with no credit scores or “thin” files are not
acceptable
 Borrowers must invest lesser of 1% or $1000


Balance of required funds to close may come from PHFA
Advantage loan and/or Fannie approved
CommunitySeconds®
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM

Homebuyer Education:
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All borrowers with middle credit scores below 680 must complete
an in person class session prior to closing
Use PHFA approved counseling organizations
No online courses are acceptable
All borrowers must sign Form 68, Borrower’s Authorization
for Post-Purchase Counseling (purchase & refis)

This gives PHFA authorization to refer the borrower to a counseling
agency if they fail to make a mortgage payment
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM No MI/HFA PreferredTM Lo MI

Homebuyer Education:

For loans where all borrowers have a middle credit score
of 680 or higher:


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
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must complete the counseling session prior to closing;
however, it only needs to be completed by one borrower.
Use PHFA approved counseling organization OR PHFA online
course OR PHFA approved mortgage insurance company
online course.
Online courses or telephonic counseling are acceptable ONLY
for these borrowers
At least ONE borrower MUST attend counseling for
each loan; method determined by credit score
No Homebuyer education is required on refi’s
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM

Eligible Properties

One unit properties only


Condos and PUDs are acceptable

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

Condos project must be warranted by the lender, PHFA will not
review and/or approve their acceptance
Must meet Fannie Mae guidelines
No manufactured housing
Property must be primary residence


No duplexes
Non-occupying borrowers are not permitted
Review Appendix I for additional property guidelines
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA PreferredTM

Mortgage Insurance Coverage requirements:
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18% coverage for LTVs > 95% and <= 97%
16% coverage for LTVs > 90% and <= 95%
12% coverage for LTVs > 85% and <= 90%
6% coverage for LTVs > 80% and <= 85%
Eligible Plans

Monthly, Single Premium, and Split Premium
Single Premium must be paid by the borrower (not
lender paid)
 Single & Split Premium: borrower may finance the
upfront premium in the first mortgage or in the
subordinate Advantage Loan

PENNSYLVANIA HOUSING FINANCE AGENCY
Mortgage Insurance
When using HFA Preferred you must adhere to
the Mortgage Insurance Companies Guidelines
even if they are more restrictive; no exceptions.
PENNSYLVANIA HOUSING FINANCE AGENCY
Desktop Underwriter (DU)


97% LTV products require DU® access
Lenders that are not DU® approved can be set up
to run DU® through PHFA
 Main
contact should get in touch with Tammy Miller at
tmiller@phfa.org
 Lenders will first need access to Desktop Originator
(DO®)
 For information on how to register for DO®, visit
https://www.efanniemae.com/is/brokcorresp/index.jsp
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Home Loan: Conventional
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Home Loan -Conventional
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Maximum LTV is 80%, due to lack of mortgage
insurance options
Borrowers must have a 620 minimum credit score
Maximum DTI 45%
Financing available in conjunction with FHA, VA and
RD
No Keystone Advantage on Conventional KHL
Appendix A for Income and Purchase Price limits
Specific program guidelines will follow
PENNSYLVANIA HOUSING FINANCE AGENCY
Recap of Conventional Financing
Products
HFA Preferred Risk Sharing/HFA Preferred
Keystone Home Loan
• For Purchase and limited cash out refinance
• Max LTV 97% w/DU Approve/Eligible
• Minimum FICO of 620
• Max LTV 95% w/manual underwriting
• Minimum FICO of 680
• Max DTI 36% for scores 680 to 700
• Max DTI 45% for scores 700 or higher
• CLTV 105%
• Must contribute the lesser of 1% or $1000
• Downpayment & CCA available through
Advantage
• Mortgage Credit Certificate (MCC) available
• Max LTV 80%
• Combination Loans
• 80/10/10 or 80/15/5
• Appendix A for Income and purchase price
limits
• No CCA available
• Borrowers must have a 620 minimum credit
score
• Max DTI 45%
• Can not be used with MCC
PENNSYLVANIA HOUSING FINANCE AGENCY
Government Financing
Seller’s Guide, Chapter 3
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Home Loan: Gov’t
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Home Loan-Government

Income and purchase price limits
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


Borrowers must contribute at least the lesser of 1% or $1000 from their
own funds for FHA loans.
Borrowers must have a 620 minimum credit score
FHA, VA or RD financing available


Appendix A
Gross annual income of all adult occupants
Following gov’t entity guidelines
First-time homebuyer requirement

Waived in 39 Target counties & 13 census tracts
Waived for Veterans

Applies to all non-target areas




3 Year rule
May own other real estate; not primary residence
Downpayment and/or closing cost assistance available through Keystone
Advantage
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Home Loan

PHFA Forms:
 Form
3: Mortgagor’s Affidavit
 Upfront
 Form
& at closing
4: Recapture Tax
 Upfront
or at closing
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Government (K-Gov) Loan
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Government Loan (K-Gov)
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Loans insured/guaranteed by FHA, VA or RD
Borrowers must contribute the lesser of 1% or $1000
from their own funds for FHA loans.
Borrowers must have a 620 minimum credit score
No PHFA- specific limits
No first-time homebuyer requirement
FHA non-occupant co-borrowers are permitted
Downpayment/CCA available through Keystone
Advantage for eligible buyers
PENNSYLVANIA HOUSING FINANCE AGENCY
Recap of Government Financing
Products
Keystone Home Loan
• FHA, RD &VA financing
• Income and purchase limits- Appendix A
• Borrowers must contribute the lesser of
1% or $1000 from their own funds.
• Borrowers must have a 620 minimum
credit score
• Max DTI 45%
• Must meet first time homebuyer
requirement, but waived in 39 targeted
counties &13 census tracts
• Can own other residences but not primary
residence
• Downpayment & CCA available through
Advantage
• Can not be used with MCC
Keystone Gov’t (K-Gov)
• FHA, RD & VA financing
• No PHFA income or purchase price
limits
• Downpayment & CCA available
through Advantage
• Borrowers must contribute the
lesser of 1% or $1000 from their
own funds.
• Borrowers must have a 620
minimum credit score
• Max DTI 45%
• Non-occupant co-borrowers
acceptable
• Mortgage Credit Certificate (MCC)
available
PENNSYLVANIA HOUSING FINANCE AGENCY
PENNSYLVANIA HOUSING FINANCE AGENCY
Assistance Programs
Seller’s Guide, Chapter 4
PENNSYLVANIA HOUSING FINANCE AGENCY
Mortgage Credit Certificate (MCC)
PENNSYLVANIA HOUSING FINANCE AGENCY
What is a Mortgage Credit Certificate?
MCC = Homebuyer Tax Credit


An MCC is an actual paper certificate that allows a homebuyer to
claim an annual federal tax credit for the life of the original
mortgage, as long as it remains the homeowner’s principal
residence.
•
Homeowners can claim a tax credit of up to 50% of the mortgage
interest they pay each year, not to exceed $2,000 annually.
•
The remaining mortgage interest paid may be claimed as a
deduction per IRS guidelines.
•
The tax credit can not be more than the tax liability (unlike the
First-time Homebuyer Tax Credit)
PENNSYLVANIA HOUSING FINANCE AGENCY
MCC Example
Mortgage Amount
$125,000
Mortgage Interest rate
($6,250)
X
5%
MCC percentage
X
.50
Eligible Credit Amount
$ 3,125
•
The credit can not exceed the amount of the federal tax owed after
all other credits and deductions have been taken and can never
exceed $2,000 in any given year. In this example, the borrower is
entitled to a maximum of $2,000 in the form of a tax credit and the
remaining $4,250 as a standard mortgage deduction using
Schedule “A” of their annual federal tax return.
•
To claim the credit, the homeowner completes and submits IRS
Form 8396 along with their federal tax returns.
PENNSYLVANIA HOUSING FINANCE AGENCY
MCC Requirements
•
An MCC can be used in conjunction with any PHFA purchase loan
except for the Keystone Home Loan.
•
Eligible borrowers must meet the requirements for the PHFA first
mortgage program, in addition to the requirements for the
Keystone Home Loan program since the funding for the MCC
program comes from the same source.
•
The following Keystone Home Loan eligibility requirements must be
met:
 First-time Homebuyer
 Income Limit
 Purchase Price Limit
PENNSYLVANIA HOUSING FINANCE AGENCY
Lender Responsibilities





The Participating Lender must file an annual report with the IRS
using IRS Form 8329 for prior calendar year it made any loans with
associated MCC’s.
PHFA is not permitted to file the report on behalf of the lender, but
we will provide the lender with the necessary data for the prior
year’s MCC activity, if any
PHFA will provide reminder letters to all applicable lenders in mid
December
A copy of the report must be submitted to PHFA, along with proof
it was submitted to the IRS
Records of the annual reports must be maintained by the lender
for six years
PENNSYLVANIA HOUSING FINANCE AGENCY
Reissuance of Mortgage Credit Certificate
•
If the homeowner chooses to refinance, the MCC may be able to be
reissued with the approval of PHFA
•
There will be a reasonable fee of $100
•
MCC Benefit continues after refinancing, unlike the MRB program
PENNSYLVANIA HOUSING FINANCE AGENCY
Program Recap
If your borrower:
 Is eligible for a PHFA 1st mortgage – Any program except the
Keystone Home Loan Program (not refinances)
 Meets the income and purchase price limits of the MRB program,
Appendix A
 And is a First Time Homebuyer,
They may be the very lucky recipient of a 50% mortgage interest tax
credit – worth thousands of dollars via
a Mortgage Credit Certificate!
PENNSYLVANIA HOUSING FINANCE AGENCY
Mortgage Interest Paid
$120,000
Loan Amount
K-Gov Interest
Paid (4.25%)
Effective K-Gov
Interest (4.25%)
With MCC
Savings
Year 1
$5,061
$3,061
$2,000
Years 1-10
$46,171
$26,171
$20,000
Years 1-20
$79,307
$42,739
$36,568
Years 1-30
$92,518
$49,345
$43,173
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan



Downpayment and/or closing cost assistance for
eligible homebuyers
Borrowers must have a minimum credit score of 660
Can be used with these PHFA first mortgages:
Preferred Risk SharingTM
 HFA PreferredTM
 Keystone Home Loan (Government loans only)
 Keystone-Government (K-Gov)
 HFA
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan





Amortized subordinate mortgage (Second Lien)
For existing homes: Loan amount = 4% of sales
price or up to $6K, whichever is less
For new construction (homes never occupied): Up
to $6K
0% interest with a 10 year term
Asset Limitation
$50,000 borrowers liquid assets
 Retirement accounts excluded unless drawn without
penalty

PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan

Must require maximum financing
 FHA,
VA, RD requirements apply
 Not available on KHL Conventional loans

Funds locked simultaneously with first mortgage
 Via
Pipeline Plus
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan

Eligible County Assistance Programs Acceptable
 Review
Appendix D – Subordinate Financing
Requirements
 Utilize assistance programs first
be in 3rd lien position
 Copy of the note and the recorded county program
mortgage is required (need to verify PHFA is in second
position)
 Must

Advantage Loan Payment
 Must
be included in front end ratio
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan


Assistance amount must be indicated in the
“Details of Transaction” section 1003
Lender provides HUD1, TIL and GFE
 May

use PHFA Form 56ADV or standard TIL
Actual amount must be listed on HUD1
 Rounded
to nearest dollar
 Standard Paid Outside of Closing (POCs) items may be
reimbursed to borrower

Funded by the lender, reimbursed at loan
purchased
PENNSYLVANIA HOUSING FINANCE AGENCY
Keystone Advantage Assistance Loan

The first payment on the assistance loan begins at
the same time as the first mortgage (no deferment
period)
PENNSYLVANIA HOUSING FINANCE AGENCY
HOMEstead Loan
PENNSYLVANIA HOUSING FINANCE AGENCY
HOMEstead Loan








Downpayment and/or closing cost in conjunction with a PHFA
first mortgage
Not eligible in all counties- Appendix 1 & 2
Conventional, FHA, VA and RD financing available
Borrowers must have a 620 minimum credit score
Borrowers must contribute the lesser of 1% or $1,000 from
their own funds (FHA loans only)
Can be used to lower an eligible buyer’s front end ratio to 30%
$1,000 to $10,000, based on need
Non-interest bearing loan with no monthly payment
PENNSYLVANIA HOUSING FINANCE AGENCY
HOMEstead Loan









Forgiven at 20% a year, over five years
Income and purchase limits apply
For areas that don’t receive federal HOME funds
First time homebuyers only
Homebuyer Education required regardless of FICO
Liquid assets after closing may not exceed $5,000
Can’t be tenant occupied when Sales Agreement is signed
Built after January 1, 1978 (some exceptions)
Amount determined by Need Assessment Form (Appendix 3)
PENNSYLVANIA HOUSING FINANCE AGENCY
Access Modification Loans
For Persons with Disabilities
PENNSYLVANIA HOUSING FINANCE AGENCY
Access Home Modification Loan





With any PHFA home purchase program
Conventional, FHA or RD
$1,000 to $10,000 soft/silent subordinate
mortgage
Repayment is not required as long as buyer
occupies home
Modifications to be completed within 90 days of
closing
PENNSYLVANIA HOUSING FINANCE AGENCY
Access Downpayment &CCA






Used with a PHFA first AND a PHFA Access Home
Modification Loan
Household income can’t exceed $53,280
$1,000 to $15,000
Subordinate loan
Borrowers must need maximum financing (may
not have more than 3-5% down)
No>$5,000 in liquid assets after closing
PENNSYLVANIA HOUSING FINANCE AGENCY
Asset Documentation
$50,000 asset limitation for all borrowers under the Keystone
Advantage
$5,000 household liquid assets to other PHFA Assistance programs
Must be provided for all adult occupants


Verification of Deposit (VOD) with average balance completed OR
Two months of bank statements
Please note:
For FHA loans: large deposits can not be greater than 2% of the sales
price
For Conventional loans: large deposits can not be greater than 50% of
the borrowers total monthly qualifying income
PENNSYLVANIA HOUSING FINANCE AGENCY
Recap of Downpayment and/or Closing Cost
Assistance Programs
Keystone Advantage
Assistance Loan
HOMEstead
Access Modification Loan
Access Downpayment and
Closing Cost Assistance
•
•
•
•
The lesser of 4% of sales price, max $6K, for existing homes
0% interest with a 10 year term
Must have a minimum credit score of 660
Used with KHL (gov’t), K-Gov and HFA Preferred Risk SharingTM
and HFA PreferredTM
• Up to $10K
• Forgiven 20% a year over 5 years
• Up to $10K -Soft second
• Modification completed within 90 days
• Used with Conventional, FHA and RD financing purchase products
• Can be used with the Access Modification Loan
• Up to $15K- Soft lien
PENNSYLVANIA HOUSING FINANCE AGENCY
PENNSYLVANIA HOUSING FINANCE AGENCY
Underwriting Guidelines
Seller’s Guide, Chapter 6
PENNSYLVANIA HOUSING FINANCE AGENCY
Preliminary Determinations




PHFA does not issue preapproval or
prequalification letters.
Form 1 can be used to review questionable PHFA
compliance issues prior to uploading the
underwriting package
The lender must determine if the loan is approved
under FHA, VA, RD or Fannie Mae guidelines
For HFA conventional loans-DU approval is
required with 97% LTV loans
PENNSYLVANIA HOUSING FINANCE AGENCY
Underwriting Guidelines

Job Stability
 Two
year history showing stability
 Tenure, opportunity, education, training, etc.

If a non-liable co-occupant is listed on the deed
they should also appear on the mortgage, title,
assignment of mortgage and TIL but not the note
A
processor’s certification must be in the underwriting
file with name and SS#

A Residential Mortgage Credit Report is required
PENNSYLVANIA HOUSING FINANCE AGENCY
Procedures


Lender underwrites the file and uploads underwriting
package via BlitzDocs to PHFA for review
Use Form 51 (Compliance Package Checklist- Purchase)
for required documents and submission instructions



Use Form 51R for Refinance programs
All loans must be locked with PHFA prior to uploading
Compliance package
Allow up to 5 business days for PHFA to make a
decision
PENNSYLVANIA HOUSING FINANCE AGENCY
Form 51/Form 51R




Complete the top portion and follow the instructions
below it
Check off each applicable item
Place COPIES of documents in the correct order (or
originals for conventional loans)
Upload and submit to PHFA via BlitzDocs
PENNSYLVANIA HOUSING FINANCE AGENCY
Underwriting Results


All notices and reports can be retrieved via Pipeline
Plus
Approval Notice:
The loan is eligible for sale to PHFA
 Contains Purchase Conditions (these documents should
be uploaded with the Purchase package)

PENNSYLVANIA HOUSING FINANCE AGENCY
Underwriting Results

Suspense Notice:
PHFA can not complete its review due to missing
documentation or incomplete info
 This notice specifies the additional required info or
documents
 All documents for suspended loans should be uploaded via
BlitzDocs at one time


Denial Notice:
PHFA can not approve the loan
 May be based on underwriting criteria or program
compliance issues

PENNSYLVANIA HOUSING FINANCE AGENCY
Income Documentation
Programs
Income Docs
For Borrower(s)
Income Docs for
Adult Occupants
Use Income for
PHFA limits
HFA Preferred Risk
Sharing
Full VOE OR Verbal VOE, Current
Paystubs, 2yrs W-2s
Current Paystubs,
2yrs W-2s
Yes
HFA Preferred
Full VOE OR Verbal VOE, Current
Paystubs, 2yrs W-2s
Current Paystubs,
2yrs W-2s
Yes
Keystone Home
Loan
Full VOE OR Verbal VOE, Current
Paystubs, 2yrs W-2s
Current Paystubs,
2yrs W-2s
Yes
K-Gov
Full VOE OR Verbal VOE, Current
Paystubs, 2yrs W-2s
N/A
N/A
* Self-employed borrowers two years of tax returns. Profit
and Loss statement after the first quarter.
PENNSYLVANIA HOUSING FINANCE AGENCY
Sources of Funds

Seller concessions (Conventional loans)
 3%
if LTV > 90%
 6% if LTV < 90%


If FHA, VA, RD those guidelines apply
County programs acceptable if approved by PHFA
or Fannie Mae depending on loan program
 See
Appendix D – Subordinate Financing
Requirements for details
PENNSYLVANIA HOUSING FINANCE AGENCY
Proof of Mortgage Insurance



For FHA loans, the signature section of the Loan
Underwriting Transmittal Summary (LUTS) must either
indicate a DU Accept or LP Approve AND the ZFHA
number, OR it must be signed by the DE underwriter
(either way, the DE underwriter must also complete
the Conditional Commitment)
Electronic signatures are acceptable on all
conventional compliance documents
FHA insured/guaranteed loans, electronic signatures
will be accepted on third party docs only, such as sales
agreement, per FHA guidelines.
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Guidelines
Seller’s Guide, Chapter 8
PENNSYLVANIA HOUSING FINANCE AGENCY
Appraisal

Full appraisal on all PHFA loans; the only acceptable form is
1004. Also 1004MC (Market Condition Addendum)





For HFA PRS &HFA Preferred programs also submit appraisal
through FNMA’s Universal Collateral Data PortalSM (UCDP)
A “successful” UCDP Summary Report must be submitted in
underwriting package
All additional commentary must be included
Submitted in the underwriting package
For existing properties, original photographs of the front,
rear and street scene along with internal photos of the
subject property must be included
PENNSYLVANIA HOUSING FINANCE AGENCY
Appraisal




Cont’d
The census tract (if applicable) must be listed
Include the Conditional Commitment/Direct
Endorsement Statement of Appraised Value for FHA
loans (HUD 92800.5b)
Include the Certificate or Notification of Reasonable
Value for VA loans
Appendix I - PHFA Appraisal Review Sheet
PENNSYLVANIA HOUSING FINANCE AGENCY
Manufactured Homes

Loan files for Manufactured Homes must contain
the following documentation:
the original vehicle title was retired for the file to be
purchased by PHFA
 completed and endorsed PennDOT Form MV 16


If the home was purchased new from a dealer and
in the dealer’s possession for less than 6 months,
the original certificate of origin is required as proof
it was never titled.
PENNSYLVANIA HOUSING FINANCE AGENCY
Manufactured Homes





The VIN number should be referenced in the deed and
the legal description of the mortgage
Closings for this home type should not be scheduled
until proper documentation is obtained
If the title was never retired, it must be located to
determine the date it was titled and if there are any liens
Additional research with PennDOT may be required
Manufactured Home Affidavit of Affixation Rider to be
used for all manufactured homes (PHFA Form 60)
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Eligibility
Programs
Acceptable
Property Types
Notes
HFA Preferred Risk SharingTM &
HFA PreferredTM
1 units only, PUDs, Condos
Must meet FNMA guidelines
No manufactured housing
Keystone Home Loan
One or two units; condos,
PUDs, manufactured
housing
Must meet respective gov’t
entity guide or conventional
guidelines (FNMA standards)
K-Gov
One or two units, condos,
PUDs, manufactured
housing
Must meet respective gov’t
entity guidelines
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Eligibility






New or existing located in PA
Principal residence occupied by owner within 60
days of closing and for life of loan
No > 4 acres (up to 10 if meet exceptions)
Remaining economic life > 30 years
No > 15% of home used for business
Taxes and insurance are ALWAYS escrowed
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Standards

Wood Destroying Insect Certification



Existing homes only - all buildings included in appraisal
 E.g. detached garage
Report must be dated within 120 days of closing
A CLEAR wood-destroying insect certification must be included
in the Purchase Submission, signed by the inspector.
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Standards



If evidence of infestation was observed, the commentary
must be provided. This should be signed by the
borrower(s) and the inspector.
If infestation was active, proper control measures must
have been taken and addressed prior to closing. Sellers
often pay for this service.
If structural damage resulted from the infestation, provide
proof that the damage was satisfactorily repaired prior to
closing. Sellers often pay for the repairs.
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Standards

Private Water Supply

Appraiser must note the type of private water supply; “onsite” alone is not sufficient.
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Standards

Private Sewage Disposal




Appraiser must note the type of system; “on-site” alone is not
sufficient.
If appraiser recommends or requires a septic certification OR if
there is indication in the appraisal or sales agreement of an
existing or potential problem, a clear septic dye test must be
included in the Purchase Submission.
Rural properties forced to utilize “wildcat disposal systems”
because there is no alternative, may be acceptable under certain
conditions (See Appendix W).
When you encounter a non-traditional form of sewage disposal,
contact the Agency for possible acceptability of it.
PENNSYLVANIA HOUSING FINANCE AGENCY
Property Standards

Privately Owned and Maintained Streets




For a property on a community or privately owned and
maintained street, provide proof that an adequate, legally
enforceable private road maintenance agreement was recorded.
A copy of it, with recordation notation, must be included in the
Purchase Submission.
Provide proof of ingress, egress and regress.
NOT required if the street is maintained by an HOA.
Dirt basements


Acceptable if appraiser notes they are common and typical for
the area.
The amenities (furnace, etc.) should be on concrete slabs.
PENNSYLVANIA HOUSING FINANCE AGENCY
Homeowner’s Insurance






Term- at least one (1) year
Fire and Extended Coverage Required

Protection against loss or damage from fire and other hazards covered by
standard extended coverage endorsement

In an amount equal to the LESSER of the loan amount OR the
maximum insurable value of the improvements (subtract the land
value from the final reconciliation of value on appraisal)
Maximum deductible is $3,000 or 1% of the face amt of policy
Mortgagee Clause - Endorsed in favor of PHFA and/or its
successors or assigns, as their interest may appear; address is
on Form 53 (closing instructions)
Copy of HO6 (contents) coverage for condos
Taxes and Insurance are ALWAYS escrowed
PENNSYLVANIA HOUSING FINANCE AGENCY
Flood Insurance




Required for properties where any portion of the
improvements are in a flood zone
The maximum deductible permitted by PHFA is $5,000
unless the mortgage insurer/guarantor (such as FHA) requires
a lower amount, but the borrower must still qualify at the
lowest deductible permitted.
If needed for a condo, obtain proof of Condo Association’s
insurance.
All PHFA loans require a “Life of Loan Certification” issued by
a Flood Insurance company

Insured as “Pennsylvania Housing Finance Agency, its
Successors and Assigns” OR include a “Notice of Servicing
Transfer” with the purchase package
PENNSYLVANIA HOUSING FINANCE AGENCY
Flood Insurance




Mortgage qualification purposes, the standard policy rate
should be utilized in calculating the debt to income ratios.
The standard rate will also be the amount escrowed and
included in the monthly PITI payment.
PHFA uses Corelogic when conflicts arise
Clay Rose, Product Account Executive
800.447.1772 ext. 3132 OR 512.977.3132, crose@corelogic.com

Brenda Gould, Product Account Executive
800.447.1772 ext. 3128 OR 512.977.312,
brgould@corelogic.com
PENNSYLVANIA HOUSING FINANCE AGENCY
Elevation Information


In the 'Elevation Information' section of an application, the
lowest floor, base floor, and base flood elevation must be
listed and must match the elevation certificate
If the ‘Elevation Difference’ is less than zero and the full risk
(i.e., non-subsidized) NFIP premium at the lowest possible
deductible is not provided, then the premium used to
underwrite the file will be the lesser of 10 percent of the loan
amount or $12,000

If you’d like to underwrite with the actual full risk rates, which may be
significantly lower, ask insurance agents to provide completed
applications
PENNSYLVANIA HOUSING FINANCE AGENCY
Flood Insurance





Elevation Certs are not acceptable documentation to waive
the flood insurance purchase requirement
No one can waive the flood insurance requirement if the
structure is shown to be located in the Special Flood
Hazard Area on the FEMA Flood Insurance Rate Map
except FEMA via Letter of map Amendment, etc.
Flood insurance for properties in a participating
Community must be written through the National Flood
Insurance Program (NFIP)
NFIP Publications can be ordered online at
www.fema.gov/business/nfip/libfacts.shtm
Review Chapter 12 for additional details
PENNSYLVANIA HOUSING FINANCE AGENCY
Taxes and Assessments

Special Assessments
 Any
special assessments, tax assessments OR any then
due taxes or past due taxes must be paid by closing
 This includes unpaid lienable water/sewer rents and
unpaid Condo/PUD Association fees
PENNSYLVANIA HOUSING FINANCE AGENCY
PENNSYLVANIA HOUSING FINANCE AGENCY
Programs for Homeowners
Seller’s Guide, Chapter 3
PENNSYLVANIA HOUSING FINANCE AGENCY
Homeowner Products
Refinancing: Conventional

HFA Preferred Risk SharingTM

HFA PreferredTM
Refinancing: Government

FHA/VA Streamline Refinance
PENNSYLVANIA HOUSING FINANCE AGENCY
Allowable Fees: For Refinances

Actual amount (or your standard fees) for items including, but
limited to:







Credit report (not needed for FHA/VA Streamline)
Appraisal fee (not needed for FHA/VA Streamline)
Filing and recording fees
DU/LP (not needed for FHA/VA Streamline)
Tax certification fees can only be charged on conventional loans
if it’s a pass thru fee to a third party.
$750 Administrative fee to cover overhead such as underwriting,
processing and doc prep- for conventional financing
$350 Administrative fee for FHA/VA Streamline Refinance
program
PENNSYLVANIA HOUSING FINANCE AGENCY
Refinancing: Conventional
Seller’s Guide, Chapter 3
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/
HFA PreferredTM Loan Programs
Refinance Option
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM

For purchase and limited cash-out refinance
 Rate
& term refis only
 Available for all loan types

Fully amortized MyCommunityMortgage…BUT
 No
loan level pricing adjustment
 30 year, fixed-rate term

Same guidelines as mentioned in the homebuyer
section but…
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM




Limited Cash Out refinances (rate & term refi)
Cash back limited to lesser of 2% of the balance of
the new loan or $2000
Must be obtaining maximum financing-determined
by DU findings 95% vs. 97%
Cash back must be used towards closing costs if
the Advantage Assistance Loan is requested
PENNSYLVANIA HOUSING FINANCE AGENCY
HFA Preferred Risk SharingTM/ HFA PreferredTM

Acceptable Uses:
 Pay
off the unpaid principal balance of the existing
first mortgage
 Pay off only subordinate mortgages used to purchase
property
PENNSYLVANIA HOUSING FINANCE AGENCY
Refinancing: FHA/VA
Seller’s Guide, Chapter 3
PENNSYLVANIA HOUSING FINANCE AGENCY
FHA/VA
Streamline Refinance Loan
PENNSYLVANIA HOUSING FINANCE AGENCY
FHA Streamline Refinance


Only for existing FHA homeowners
New loan can only include:
 The
outstanding principal balance (from payoff stmt)
 Odd day’s interest
 Minus the applicable refund of the UFMIP
 Plus the new UFMIP up to a maximum amount of
97.75% of the original appraised value
 One month of annual MI for the current payment due
on the existing loan may also be included
PENNSYLVANIA HOUSING FINANCE AGENCY
VA Interest Rate Reduction Refinancing
Loan (IRRRL)

New VA loan can include
 the
outstanding principal balance
 plus the VA funding fee and eligible closing costs.

Lenders must follow VA’s streamline refinance
guidelines in effect at the time of loan application
per VA Pamphlet 26-7, Revised -- Chapter 6,
Section 1 and sections of chapters 5, 7 and 8 as
they pertain to the VA IRRRL’s requirements.
PENNSYLVANIA HOUSING FINANCE AGENCY
FHA/VA Streamline Refinance


Any and all subordinate loans must be resubordinated or paid off by the borrower; they
cannot be paid off with the new loan.
A lien search is required on all loans



Title commitments are acceptable
PHFA seconds will only be re-subordinated if the
new refinanced loan is coming through PHFA
Copy of the deed
PENNSYLVANIA HOUSING FINANCE AGENCY
FHA Guidelines

Lenders must follow the FHA’s guidelines in effect
at the time of loan application for the Streamline
Refinance per the HUD Handbook 4155.1, Chapter
3, Section C and Chapter 6, Section C.

Reference Mortgagee Letter 12-4 for information
on premiums, as they differ depending on when
the original loan was endorsed.
PENNSYLVANIA HOUSING FINANCE AGENCY
FHA Guidelines
Mortgagee Letter 12-4
Streamline Refinance transactions for existing FHA loans
ENDORSED ON OR BEFORE MAY 31, 2009, the UFMIP
will decrease from 1% to 0.01% of the base loan
amount.
 The Annual MIP for refinanced FHA loans ENDORSED ON
OR BEFORE MAY 31, 2009 will be 55bps regardless of
the base loan amount.
 Please review the entire Mortgagee Letter which also
discusses premium increases that went into effect on
or after April 9, 2012.

PENNSYLVANIA HOUSING FINANCE AGENCY
Additional PHFA Requirements
For FHA/VA Streamline Refinance Loan Program
PENNSYLVANIA HOUSING FINANCE AGENCY
PHFA Requirements






30 year fixed rate only
Owner occupied
One or two units, principal residences only
Both the existing and new loan must meet this
requirement
Non credit qualifying option is acceptable without an
appraisal but a verbal VOE is required on all refis
Maximum mortgage limit is $417,000
Real estate taxes and insurance must be escrowed
regardless of the LTV
PENNSYLVANIA HOUSING FINANCE AGENCY
PHFA Requirements

For loans currently serviced by PHFA:

The amount needed to pay off the borrower’s existing PHFA
loan will be reduced by the balance in the borrower's existing
escrow account. The payoff statement used must come
directly from PHFA staff
The calculation of the new loan amount would still be done
normally per the applicable program guidelines.
The lender will perform the standard escrow analysis to
ensure sufficient funds are collected to pay for any taxes and
insurance due within the next 12 months, and will also
provide the initial escrow account disclosure statement.


PENNSYLVANIA HOUSING FINANCE AGENCY
PHFA Requirements

Non-occupying co-borrowers cannot be added to
the new loan
 Permitted
only when they were on the original FHA
loan

Co-borrowers on the original loan can be removed
from the new loan with additional documentation
 These
must be underwritten according to FHA's credit
qualifying guidelines, although an appraisal is not
needed.
PENNSYLVANIA HOUSING FINANCE AGENCY
Lender Instructions and Procedures


PHFA will review the HUD1 to verify that the
premium was accurately applied
The allowable lender administration fee is $350 (not
$750)
Less paperwork for these loans
 No additional fees may be charged except for the
reasonable and customary third party fees and closing
costs


Lock the loan with PHFA via Pipeline Plus – see
chapter 2 of the Sellers Guide for details
PENNSYLVANIA HOUSING FINANCE AGENCY
Lender Instructions and Procedures
Underwriting Requirements and Documentation
 If a co-borrower is being removed, the loan must be
underwritten and documented using FHA’s Credit
Qualifying Streamline Refinance guidelines without
an appraisal.
 The following items will be required:
Credit report
 Income verification
 A full loan application (1003) with all sections completed


PHFA’s overlays would apply
PENNSYLVANIA HOUSING FINANCE AGENCY
Lender Instructions and Procedures



PHFA delegated underwriting system is not
permitted
The underwriting/compliance package must be
submitted to PHFA using Form 51R prior to closing
PHFA specific documents are not required:
 Mortgagor’s/Seller’s Affidavit
(Form3)
 Recapture Tax Notice (Form 4)
PENNSYLVANIA HOUSING FINANCE AGENCY
BlitzDocs Instructions
Appendix E
PENNSYLVANIA HOUSING FINANCE AGENCY
Accessing Blitzdocs

Utilize Appendix E – BlitzDocs Instructions


Can be found at www.phfa.org/lenders/forms.aspx#
Log into the PHFA Pipeline Plus system



To access BlitzDocs each person must have a PHFA Pipeline Plus
account
Continue to use the PHFA Pipeline Plus system to check loan
status and view reports/notifications
PHFA will make sure existing Pipeline Plus account users have a
corresponding BlitzDocs account when requested
 Account Administrators would add the BlitzDocs menu option
to those users submitting any portion of a file to PHFA
PENNSYLVANIA HOUSING FINANCE AGENCY
Accessing BlitzDocs

When creating new Pipeline Plus accounts for an
employee that needs access to BlitzDocs, the
administrator must email lenders@phfa.org



PHFA will contact BlitzDocs to obtain login info
Select BlitzDocs from your menu and click the link to
launch BlitzDocs in a new window
When a compliance package is submitted via
BlitzDocs the purchase package must also be
submitted via BlitzDocs
PENNSYLVANIA HOUSING FINANCE AGENCY
Accessing Blitzdocs

“Submission Contact”


File size limited to 50MB


Determines who will receive the submission confirmation email
from BlitzDocs and can be different for each submission
If larger submit two separate uploads
PHFA Employees files cannot be sent via BlitzDocs
Paper files must be sent directly to PHFA marked “Personal
and Confidential”
 Compliance packages sent to Tammy Miller
 Purchase packages sent to Karen Zapotosky

PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting New Compliance Package

Only create a folder when ready to submit a
complete compliance package


Do not create multiple folders for the same borrower
When completing the Folder Attributes, you must
use PHFA Loan Number
Listed on the reservation confirmation
 In PHFA Pipeline Plus system

PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting New Compliance Package

Submission Contact entered should be the person
who will receive email notifications for the loan

For the PHFA Delegated Loan section
 Only
select “PHFA-Delegated” if you are an approved
PHFA Delegated lender AND the file you are submitting
has been entered into PHFA’s Delegated Underwriting
System
 For all other lenders, select “PHFA Non-Delegated”
PENNSYLVANIA HOUSING FINANCE AGENCY
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting New Compliance Package




Compliance package must be in the stacking order of
Form 51/51R
Upload Compliance Package: Documents>>Upload;
Document Type: **To Be Indexed**
Crucial final step! Select: File Submission >> Submit
New Compliance Package to PHFA.
Upload the original version of the Appraisal if at all
possible

If completed separately, you can select Appraisal as the
Document Type
 Must be an adobe version not XML
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting New Compliance Package




Please do not click File Submission more than once
You can verify if your field was properly submitted by
checking the notes section within the loan folder
There will be a note with the description of
“Submitted New Compliance Package to PHFA” if it
was successful
Please avoid submitting duplicates of any document
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting Conditions: Approval, Suspense
& Denials

Review Compliance notifications posted to PHFA
Pipeline Plus

Search in BlitzDocs for folders in status of Approved,
Suspended and/or Denied/Cancelled

Make sure you have the necessary documentation
please wait to upload the information before
submitting conditions

Only complete submissions will be reviewed.
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting Compliance Conditions: If Suspended

Obtain suspense notification from PHFA Pipeline Plus
system


Review and collect ALL outstanding items
 All conditions are to be submitted at one time
All mail is to be submitted through BlitzDocs
DO NOT send documents via email to
compliance officer or to
HOPcompliance@phfa.org
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting Compliance Conditions: If Suspended

Upload Suspense Conditions: Documents>>Upload;
Document Type: Compliance Suspense Conditions

Crucial final step! Select: File Submission >> Submit
Compliance Suspense Conditions to PHFA.
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting Compliance Conditions: If Suspended




Please do not click File Submission more than once
You can verify if your field was properly submitted
by checking the notes section within the loan folder
There will be a note with the description of
“Submitted Suspense Conditions to PHFA” if it was
successful
Please avoid submitting duplicates of any document
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting Compliance Conditions: If Denied

Review Compliance Denial notification via Pipeline
Plus system

If denial can be disputed, collect and upload any
supporting documentation: Documents>>Upload;
Document Type: Change Request Conditions
Crucial final step! Select: File Submission >> Submit
Change Request to PHFA.
If the denial cannot be disputed: No action is
required


PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting Compliance Conditions: If Denied




Please do not click File Submission more than once
You can verify if your field was properly submitted
by checking the notes section within the loan folder
There will be a note with the description of
“Submitted Change Request to PHFA” if it was
successful
Please avoid submitting duplicates of any document
PENNSYLVANIA HOUSING FINANCE AGENCY
Submitting Compliance Conditions: If
Approved




Review Compliance Approval Notification and
collect all outstanding items
These documents must be submitted when the
purchase submission package is uploaded
There’s no file submission action for approval
conditions
Documents will not be reviewed until the
completed purchase package has been uploaded
and submitted
PENNSYLVANIA HOUSING FINANCE AGENCY
Change Requests

The “Submit Change Request” should not be used to
upload approval or suspended compliance
conditions

This option is used for major changes to the loan
that need to be made and reviewed before closing
PENNSYLVANIA HOUSING FINANCE AGENCY
Notifying PHFA of Cancelled/Denied Loans

If a loan previously submitted via BlitzDocs will be
cancelled or denied by your organization, you must
cancel it on the Pipeline Plus System

Be sure to include the reason for cancellation.
PENNSYLVANIA HOUSING FINANCE AGENCY
PENNSYLVANIA HOUSING FINANCE AGENCY
Contact Information

Business Development Unit
Coleen Baumert cbaumert@phfa.org 717.780.1871
 Michael Brightbill mbrightbill@phfa.org 717.780.1801
 Justin Coleman
jcoleman@phfa.org 717.780.3993


Compliance Unit
Tammy Miller
tmiller@phfa.org
717.780.3884
 Denise Wolfgang dwolfgang@phfa.org 717.780.3923
 Betsy Stilo
bstilo@phfa.org
717.780.4321

PENNSYLVANIA HOUSING FINANCE AGENCY
Contact Information

Purchasing/Final Docs Unit
Karen Zapotosky kzapotosky@phfa.org 717.780.3973
 General purchasing questions: sfpurchasing@phfa.org
 General final docs questions: sffinaldocs@phfa.org


Secondary Marketing Unit
Jordan Laird secondary@phfa.org
 Leah Finley
secondary@phfa.org


717.780.3843
717.780.1872
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PENNSYLVANIA HOUSING FINANCE AGENCY
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3/10/15
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