CHDAP 2nd Trust Deeds

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FHA 1st TD at 96.5%FHA 1st TD at 96.5% Combine with a CHDAP 3% 2nd TDCombine with a CHDAP 3% 2nd TD

This program can only be done with an FHA – 30 year fixed. No 203K’s

Borrower contribution to down payment not required – can all be gift.

Can be used with a FLIP loan. One Year Home Warranty

Required Compensation: Lender Paid – Paid as usual, depending on

your Broker Compensation Plan, Broker can be paid up to 2.75%

Borrower Paid: The maximum origination fee for the 1st can be 2% or $3,000.00 whichever is greater.

No payments on the 2nd; deferred for the life of the 1st loan.

The 2nd is due and payable when certain events occur……

CLTV cannot exceed 103% Term on 2nd needs to match term

of 1st, not to exceed 30 years.

The CHDAP 2nd Trust Deed

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What is a first time homebuyer?

A first time homebuyer is defined as someone who has not had any ownership in a primary residence within the last three years (timeshares okay and n/o/o okay if currently renting – and not from a family member).

Federal income tax returns required for the previous 3 years. Borrowers not legally obligated to file must complete Tax Return Affidavit.

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CHDAP 2nds

Must be a first time home buyer FHA 1st Trust Deed 96.5% financing; 30 year fixed (no 203k’s) CHDAP 3% 2nd; deferred payments The 2nd can be used for down payment or closing costs Borrower contribution to down payment not required .50% down payment can all be a gift 640 FICO requirement 43% max ratio (see co signer guidelines for higher ratios) 1st Time Homebuyer – no primary ownership in 3 yrs. Borrower’s income can not exceed the CalHFA published income limits. Only calculate the purchasing borrower’s income to qualify for the loan. Non-0ccupant co-signers okay (see next slide); No non-occupant co-borrower; You don’t need to be married but all income must be considered and total family members. You can use an MCC with this product, but it can not be used to reduce the ratios. Homebuyer Education is required for one occupying borrower –The cost is $50, including

immediate access to their completed certification for printing. Follow up telephone interview not required and is more costly. Go here for the training: http://ehomeamerica.org/calhfa.com

SFR’s, condos, and PUDS (no 2-4 units); flips okay over 90 days. Five acres maximum; no income producing; hobby okay. If garage has been converted, no stove allowed – gas needs to be capped; no 2nd kitchen.. DU or LP approvals. One Year Home Warranty required.

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CHDAP Co-signers

Helps with the ratios of 45% maximum.

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Additional Co-Signer Requirements

Cosigners may not have a financial interest in the transaction (seller, builder, real estate agent, MLO, etc., are ineligible).

Co signers must be closely related to the occupying borrowers. Allowable relatives are parents, children, siblings, stepchildren, aunts/uncles, nieces/nephews ONLY. Lexis-Nexis to show family relationship and/or additional documentation may be required by underwriting.

Cosigners must have a principal residence in the US exempted due to military service or as US citizens living abroad.

Occupant borrower’s debt to ratios cannot exceed 46.99/56.99%. Total DTI including co-signer’s income is 43%. Full credit packages will be required for Cosigners (credit

reports, full income documentation and asset documentation, full disclosures in accordance with FHA and total scorecard requirements).

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Lender vs. CALHFA Review of Income

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Notes of Interest on how CalHFA calculates maximum income forfamily or anyone who is living in the house – not just borrowers .

Schedule C or E Income – do not add back in depreciation.

Negative is a wash, not deducted.Do not back out 2106 expenses.2013 and YTD income (no 2012 income is

reviewed since we are in 2014).P&L’s are okay for 2014.In question, CalHFA will always take the

higher income.

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CHDAP SALES PRICE LIMITS

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2014 Sales Price Limitations

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2014 Sales Price Limitations

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CHDAP INCOME LIMITS

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CHDAP INCOME LIMITS

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CHDAP Income Limits

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CalHFA CHDAP Submission Check List

All these Forms can be found at essexwholesale.com under Forms and Documents

___We will require 2 packages to be uploaded; the 1st and the 2nd; with 2 separate loan numbers.

___The 1st mortgage – submit by using your FHA Required Submission Forms list; exception CalHFA requires 3 years tax returns on all borrowers.

___ GFE & TiL on the 2nd: $250.00 origination fee in Box 1 which will go to Essex Mortgage.

No other fees can be charged on the 2nd.

Additional Forms: ___CalHFA Borrower & Lender Affidavit of

Loan Analysis Comparison ___CalHFA Borrower Affidavit (for non-MRB

loans)

OTHER THINGS TO KNOW:

Once a complete package is approved by Essex Mortgage, your file will be submitted to Agency for approval; turn times vary. Please check with your AE.

Prior Agency approval is required to locking your loan.

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When you add an CalHFA MCC to the CHDAP

When multiple CalHFA loan programs are used in combination, the most restrictive income limits apply (such as combining with an CalHFA MCC Tax Credit – the tax credit can not be used for credit qualifying).

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Subordination Procedures

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When Subordinating the CHDAP

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