Offered through
FIRST MORTGAGE CORPORATION
Desktop Underwriter is a registered trademark of Fannie Mae. Loan Prospector is a registered trademark of Freddie Mac. This presentation is a summary and is not complete. This information is for mortgage professionals only and should not be distributed to or used by consumers or other third-parties. Information is accurate as of the date shown below and is subject to change without notice. 3/17/2015

• Introductions
• “Sapphire” Program
– Program Overview
– Eligibility Highlights
– Income Calculation
– Underwriting Guidelines
– Maximum Allowable Fees
• Process Flow
• Reservation and Locking

 Purpose of the Program… o Provide financing to families and individuals who can afford a mortgage loan but do not have the resources for the down payment and closing costs.
 What we provide… o First Mortgage Corporation offers affordable financing designed to increase homeownership opportunities to low-to-moderate income individuals and families in
1.
CALIFORNIA
2.
ARIZONA
3.
NEVADA
4.
TEXAS
5.
UTAH

Former name:
New Name effective June 1, 2014:

What the Sapphire Program Offers…
 1 st Mortgage Loans: o FHA and VA available products o Available throughout the States of CA, AZ, NV, TX, UT o Interest Rate available at the Reservation Portal at https://nhfresportal.nhfloan.org
o The published rate is subject to change at any time
 Grant: o May not exceed 3% or 5% of total 1 st lien loan amount (including upfront MIP or VAFF) o Proceeds can be used for:
 Down Payment
 Closing Costs
 Prepaid Items
 Earnest money
 MIP o Not a 2 nd lien; does not need to be calculated into the DTI/CLTV o There must be no cash back to the borrower from the Grant Fund proceeds

Topic Guidelines
Income Limit  115% of HUD AMI
PROGRAM
Income Limit
Link
USE THE LINK under “TRAININGS” from any one of our
FMC websites!!!

Topic
Borrower
Qualifying
Income
Guidelines

Qualify Borrower based on Qualifying (Repayment) Income ( not Household
Income)
 Only the income used for Qualifying is considered in order to meet the
Program Income Limits. Eg.,
 DU Income – Income you input in DU to see if borrower qualifies for loan
 UW Income – Income used by UW to calculated Debt to Income Ratios to qualify borrower for loan
NOTE: Underwriting will NOT ignore any income documented in the file that the borrower receives on a consistent basis, and meets FHA’s ‘effective’ income guidelines for qualifying (eg., 2+ yr. history and likely to continue).
Eg., Retirement Income, Overtime Income, Bonus Income, etc.
 If you use income to qualify the borrower for repayment (DTI), UW will use it towards the program qualifying income limit to determine eligibility for the program.

Sample: Husband, Wife, 2 kids, Grandma will be moving into home (5 ppl)
Who has earned income?
 Husband & Wife both work – 2+ yr history
 Son works PT – 6 month history
 Grandma gets SSI
– 2+ yr history
Who’s going on the loan?
 Husband
 Wife
 Son
Who’s income do we use to qualify borrower for the Program?
Qualifying
Income
(ACCESS)
USE ONLY INCOME from:
 Husband

Wife
Do not use income from:
 Son: because he doesn’t have 2 year required to be effective income
 Grandma: because she’s not going on the loan

Borrower must meet the following requirements:
 Be a US Citizen, permanent resident alien, or qualified alien
(Eligible Veteran for VA financing)
 Occupy the residence as their primary residence
 Non-occupant co-borrowers/co-signers – NOT allowed
 Borrower qualifying income cannot exceed NHF Income limits for the county in which the property is located
 115% Area Median Income (AMI)
 Minimum Credit Score of 620
 Meet all required agency Guidelines (FHA HUD 4155 / VA
Handbook, plus FMC overlays)

Properties Allowed:
 Single Family Units
 FHA Approved Condominiums
 Planned Unit Developments (PUDS)
 2-Unit properties
Ineligible Properties:
 3-4 Unit properties
 Manufactured housing
 Investment properties
 Rental Homes
 Co-ops
 Recreational, vacation, or 2 nd homes

st

Topic Program Description
State Restriction Available throughout the STATES OF CALIFORNIA, NEVADA,
ARIZONA, TEXAS AND UTAH ONLY!
Program Types  FHA 30 Year Fixed
 VA 30 Year Fixed
Max LTV  FHA - 96.50%
 VA – 100%
Max CLTV Follow FHA and/or VA guidelines
Maximum Loan
Amount
FHA: The lesser of $417,000 (not including MIP) or FHA allowable limit
VA: The lesser of $417,000 (including VAFF) or VA allowable limit
Loan Purpose Purchase
Occupancy Owner Occupied
Down Payment
Assistance •
GRANT : 3% or 5% available
CAN be used to fulfill the borrower’s equity contribution required on
FHA 1 st Mortgage, closing costs, pre-paids, VA allowable fees per
VA guidelines

Topic
Underwriting
Method
Guidelines
Allowable underwriting method:
 Fannie Mae Desktop Underwrite (DU) allowed –

Must be risk scored by FHA Scorecard

Approve/Eligible recommendation
 Manual UW allowed – FMC Overlays apply
**Unless specifically specified, follow standard FHA guidelines
PLUS First Mortgage FHA overlays**
Minimum Credit
Scores
 620
 Non-Traditional Tradelines NOT allowed
Max Debt Ratio

DU Approved loans
– Follow DU approval to max 50% DTI
 Manual UW loans – Follow investor guidelines plus FMC overlays
Reserves  NONE required – Follow agency guidelines
Mortgage Ins.

Follow standard FHA MIP

Topic
Homebuyer
Education
Guidelines
 NOT required
Non-Occupant Coborrowers/Co-signers

NOT ALLOWED
Gift Letter  Gift Letter is required, per HUD insuring requirements
Tax Transcripts
Property Flips
 Follow FMC’s standard 4506-T policy
 Allowed – Follow HUD guidelines PLUS FMC overlays

Topic
Seller
Contributions
Gift Funds
Prepayment
Penalty
Assumability
No Prepayment Penalty
Not allowed
Guidelines
Allowed up to 6%
Allowed from family members – Follow 4155
*** All other requirements – Follow FHA 4155.1 guidelines
PLUS FMC overlays***

Topic
Interest Rates
Guidelines

Available on the Reservation Portal, OR the FMC Rate Sheets
Max Origination
Fee
 Contact your FMC Support Team for fees and compensation
Discount Fees

NONE allowed
Rebate Pricing  None available – PAR pricing only
Allowable Fees

Program Code
•
•

Must be reasonable and customary and fully disclosed to the borrower in accordance with all agencies, federal, state and local laws - Refer to ML 2009-53 for HUD exception to itemizing fees
Contact your FMC Support Team for allowable fees
FHA: F30FMP
VA: V30FMP

Borrower must meet the following requirements:
1.
Loan Officer pre-qualifies borrower for Sapphire loan and
NHF income limit.
2.
FMC Branch submits the fully processed file to Underwriting for loan approval
3.
FMC underwrites the loan
4.
Upon loan approval, the Branch is notified to reserve funds and lock loan
5.
FMC close/pre-fund 1 st mortgage loan
6.
FMC includes the grant on our lenders instructions and we over wire the amount when we fund our loan which means, we no longer wait an additional 24 hours to fund a Sapphire loan.

 NHF’s EIN #:
42-1549314
 We are required to reflect NHF’s EIN on HUD’s FHA
Loan Underwriting and Transmittal Summary in conjunction with secondary financing assistance, grants or gifts to the borrower when the borrower is receiving an FHA First Mortgage.

Borrower must meet the following requirements:

Reservations will be handled at the FMC Branch level using the
Reservation Portal on the NHF website www.nhfloan.org
 The Reservation Portal can be accessed Monday through Friday between
9:00 AM and 4:00 PM PST.
 In order to access the Reservation Portal, a “User ID” must be used.
 One user ID and Passcode will be assigned to each branch by the Vendor
Support team at FMC. All prior user ID’s have been de-activated.

The Reservation Portal will identify whether a loan registration initially qualifies based on Income and Credit Score Limits information provided, and provide an electronic confirmation (Commitment Confirmation) of the registration which must be provided in the loan file.


Modifications to a reservation will require approval from the
Administrator/Manager (NHF).

You may cancel the loan registration via the Reservation Portal, which will provide electronic confirmation of cancellation. NHF charges a cancellation fee of $400 for each cancelled loan. This fee if applied will be passed on to the Branch (Broker for Wholesale transactions).

If you cancel a loan, you may re-register the loan only after 30 calendar days from cancellation date via the Reservation Portal.
 You automatically reserve funds for Down Payment Assistance at the time of loan registration via the Reservation Portal.

An extension to a reservation will require approval from the
Administrator and will be subject to market conditions. A minimum fee of 0.375% of the loan amount will be applied to extensions. Fees may be higher depending on market conditions.


Reservation Period: 30 days

FMC requires reservations to be done at time of Docs (after loan approval)

Cancellations may require a $400 fee

Cancellations require a waiting period of 30 days before rereserving

Lock Period: 30 days

A copy of the reservation confirmation must be forwarded to the Doc Department with the Doc Order
Request

Program Additional Documents
 The following forms are required in all Sapphire loan files:
1. NHF Funding Commitment Confirmation
2. NHF Gift Letter
 NHF has implemented a new Grant/Gift Letter that now requires the borrower(s) signature. This new letter is printed out with your reservation once funds are reserved and must be signed by the borrower(s) before they request the grant.
 Grant amount must be rounded to the highest dollar.
• Make sure the loan approval and the LT reflects the exact loan amount rounded to the highest dollar to avoid delays in docs/funding.

Program Additional Documents

WEB SITE
FMC WEBSITES:

Rate Sheets

Training Materials

Guidelines

Forms

Marketing

Tools

Calculators
TRAININGS
First Mortgage offers FREE Weekly
ONLINE Trainings
See the FMC website for the March
2015 Training schedule
Trainings for March 2015:

3/3 – FMC Product Overview
Presentation

3/5 – ACCESS/FIRSTDOWN Program
 3/10 – FHA Streamline Training

3/12 – NEW: FK Program Training

3/17 – Sapphire Program Training
 3/19 – TENTATIVE NEW Training??
SUPPORT
Retail: Loan Help
Wholesale/Correspondent:
Your FMC Account
Executive
For help with your:
•
Scenarios
• Pricing / Fees
•
Guidelines
•
Loan
Submissions
•
Trainings

On behalf of First Mortgage, thank you for joining today’s training and we hope the information provided will help you build your business!
The main purpose of First Mortgage Corporation’s (FMC) training documents is to assist real estate and mortgage professionals in developing entry-level competence with loan programs.
While FMC staff, employees, contractors and contributors take care to ensure the accuracy of the content of training documents, FMC makes no warranties as to the accuracy of the information contained within these materials. Furthermore, every user of this material uses it understanding that he or she must still conduct his or her own original legal research, analysis and drafting. In addition, every user must refer to the relevant legislation, case law, administrative guidelines, rules and other primary sources.
FMC specifically disclaims any liability for any loss or damage any user may suffer as a result of information contained within this training material.
While the information contained in FMC’s training material addresses guidelines and issues surrounding mortgage programs, these materials do not constitute legal advice. All non-legal professionals are urged to seek legal advice from a lawyer.