single family programs · lower down payment required with hfa advantage conventional monthly...
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SINGLE FAMILY PROGRAMS ARKANSAS DEVELOPMENT FINANCE AUTHORITY
MASTER SERVICER: ServiSolutions
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ADFA.ARKANSAS.GOV » FORMS » SINGLE FAMILY
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WHO IS ADFA?
1985 Established State Agency
ENABLING LEGISLATION
Authorize to borrow money
and issue bonds for Affordable Housing,
various business & economic development projects, and
capital improvements for state agencies.
NO State General Revenue
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ADFA PROGRAMS
ADDI
DPA
MCC+
AIS* GRANT
MOVE-UP+ FIRST MORTGAGE
SECOND MORTGAGE
SECOND MORTGAGE
TAX CREDIT
* Conventional only. + Available: Stand Alone
MOVE-UP ADFA FIRST MORTGAGE PROGRAM FEATURES
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MOVE-UP PROGRAM GENERAL GUIDELINES
First Lien - 30 Year Fixed Mortgage Program: VA, RD, FHA, or HFA Conventional 95% or 97%
Conventional Conforming Loan Limits ($484,350) FHA Conforming Loan Limit ($314,827)
Reservations made from 9:00am to 7:00pm; Working business days only Rate is set daily and sent to all participating lenders
Non Occupant Co-Borrowers allowed with FHA Loans only
Follow Product Guidelines from each program: Looking for ACCEPT Recommendation, on LPA; and APPROVE/ELIGIBLE, on DU. 6
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MOVE-UP PROGRAM GENERAL GUIDELINES
No 1st Time Homebuyer Requirement: Primary Residence only
No Income Limits; except when matched with MCC or ADDI
Conventional Loans only: Affordable Income Subsidy Grant (AIS) available, must qualify! Stackable with ADDI or DPA, and MCC.
Manufactured Housing allowed for FHA Loans only
NEW Reduced Loan Funding Fee ($200) & Reduced Tax Servicing Fee ($71.50) BOTH: netted at purchase by Master Servicer. SRP = 1.75% ; VA= 1.25%; Origination Fee (optional)= 1.00%
$
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MOVE-UP PROGRAM GENERAL GUIDELINES
MOVE-UP, FIRST MORTGAGE FHA VA RD HFA ADVANTAGE
CONVENTIONAL Credit Score 660 640 Max DTI 45% Underwriting DU or GUS LPA only
** No Manual Underwriting ** Benefits No Income Limits for 1st Mortgage
No first Time Homebuyer Requirement ADFA Programs available with Move-Up
Cash Back DPA: POC Items + $100 available at Closing ADDI: POC Items
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HOMEBUYER EDUCATION CLASS FOR ADFA PROGRAMS
ADFA Homebuyer Education Course Requirement
One Borrower Both Borrowers None
Any Loan + ADDI
HFA Advantage Conventional + DPA
*
FHA + DPA
VA + DPA
RD + DPA
*Course must be completed by at least one borrower, if all are first time homebuyers by Freddie Mac guidelines. Follow each programs specific guidelines to meet compliance.
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HFA ADVANTAGE FREDDIE MAC HFA CONVENTIONAL LOAN
MOVE-UP: 1ST MORTGAGE
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HFA ADVANTAGE PROGRAM GENERAL GUIDELINES
Freddie Mac HFA Advantage Maximum Rations 97% LTV ; 105% TLTV Credit Score 640 Debt-To-Income Maximum is 45% Underwriting LPA (No Manual Underwriting permitted) Restrictions No Income Limits
Sales Price Conforming Loan Limits Primary Residence Only
Benefits Affordable Income Subsidy Grant (AIS): At or Below 50% AMI $2,500
or Above 50% but at or Below 80% AMI $1,500 11
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Affordable Income Subsidy Grant (AIS) Limits as published by FREDDIE MAC
Borrowers at or below 50% of AMI (Area Median Income) are eligible for an AIS Grant for $2,500.
Borrowers above 50% of AMI but at or below 80% AMI are eligible for an AIS Grant of $1,500.
Income Limits for the AIS Grant are determined by the county location of the home.
If borrower qualifies, they may receive the AIS Grant, ADFA DPA or ADFA ADDI, and a Mortgage Credit Certificate—these programs are stackable.
Eligible Usage: Down Payment, Closing Cost and Post Closing Items only.
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MORTGAGE INSURANCE COVERAGE: CONVENTIONALS COMPARISON
Lower down payment required with HFA Advantage
Conventional monthly mortgage insurance automatically ends when the LTV drops to 78%. Single Premium coverage is Life of Loan with no additional cost.
Lower monthly payments for HFA Advantage can result in substantial savings over time.
HFA Advantage is easier to originate.
LTV Standard Conventional
HomeReady Conventional
HFA Advantage
95.01 - 97.00% 35% 25% 18% 90.01 – 95.00% 30% 25% 16% 85.01 – 90.00% 25% 25% 12% 80.01 – 85.00% 12% 12% 6%
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FHA & HFA ADVANTAGE COMPARISON with 3% DOWN PAYMENT ASSISTANCE
FHA* 96.5% LTV Rate 5.375% **Upfront $ monthly MI
HFA Advantage 97% LTV Rate Rate 5.750% Borrower paid monthly MI
HFA Advantage 97% LTV Rate Rate 5.750% Non-refundable single premium (1.77%) paid by the borrower or use HFA DPA or closing cost assistance funds
Down Payment $6,125 $5,250 $5,250 Down Payment Savings $875 $875 Monthly Payment $1,481 $1,474 $1,391 Upfront MI 1.75% 0.00% 1.77% Monthly MI Rate 0.85% ***0.59% 0.00% MI Term Life of Loan Cancels at 78% LTV Life of Loan, no other cost
**5 year Est. MI Cost $9,765 $4,980 $3,005
Monthly Cost Savings (1 Year) **Private MI Cost Savings vs. FHA for 5 years (60mo MI payments + any upfront MI premium)
$7 $90 $4,785 $6,760 17
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ADDI ARKANSAS DREAM DOWN PAYMENT INITIATIVE
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ADDI PROGRAM QUALIFICATIONS
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INCOME RESTRICTED: 80% Area Medium Income or Below
HOMEBUYER EDUCATION COURSE: due prior closing by both borrowers
HEALTH QUALITY & SAFETY INSPECTION: Additional Inspection required
5 YEAR REQUIREMENT: Second Mortgage is forgivable, with no payments, after living in the property for 5 years
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ADDI HOUSEHOLD INCOME LIMITS
Household Income Limits at 80% of Median Income. Income is based on the number of household residents. 20
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PROGRAMS » ADDI » PRE-PURCHASE HOMEBUYER EDUCATON CLASS
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ADDI PROGRAM GENERAL GUIDELINES
NEW! 10% of purchase prices, up to $10,000
Soft 2nd Mortgage (No payments): Forgivable after 5-year term
Can be used for Down Payment, Closing Cost, and POCs
Income Restricted: 80% of area Median Income or below
No 1st time homebuyer requirement: Primary Residence only
Requires Homebuyers Education class for all borrower (s), due prior closing
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ADDI: HQS HEALTH QUALITY & SAFETY INSPECTION
U.S. Department of Housing & Urban Development requirement
New! You may pick your inspector
ADFA pays initial & final inspection ($125 + 42¢ / Mile) ADFA must dispatch inspectors in order to pay them
Inspection Duration: 20-30 minute maximum
Tech-Savvy inspector (Scan Docs & Email)
ADDI Funds cannot be use for repairs or to pay down debt. Only available with ADFA Move-Up (No Stand-Alone) 23
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ADDI HEALTH QUALITY & SAFETY INSPECTION
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DPA DOWN PAYMENT ASSISTANCE
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DPA PROGRAM GENERAL GUIDELINES
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From $1,000 up to $10,000
10-year Amortization Term, 2nd Mortgage
Rate: Same as 1st Mortgage No First Time Homebuyer requirement
No Additional Inspections Requirements by ADFA
No Household Income Limit
No Prepayment Penalties
Can be used for Down Payment, Closing Cost, and POCs. Cannot be used for repairs or to pay debt to qualify
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** Borrower can receive POC items back at closing, plus additional $100
ADDI & DPA PROGRAM COMPARISON
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ADDI & DPA: Affordable 2nd Mortgages DPA ADDI Amount $1,000 to $10,000
10% of purchase price,
up to $10,000 Term 10-Year Amortization,
2nd Mortgage 5-Year Forgivable, Soft 2nd
Mortgage* Rate Matches 1st Mortgage N / A ADFA Program Move-Up Move-Up Homebuyer Education Course
Program Guidelines Requires Pre-Purchase Homebuyer Education Class
Household Income Limits
No Limits 80% Area Median Income or Below
Inspection No Inspection HQS Inspection Required+
Fees NONE NONE
* No monthly payments. Pro-Rated over 60-months. + ADDI: Income verification needs to be approved before ordering HQS Inspection. 28
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RESERVATIONS MOVE-UP, ADDI, DPA, & MCC 70-day purchase timeline remains in effect from date loan is reserved or ‘locked’ in our Reservation System.
30-day extension allowed, with a $375 free to ServiSolutions
71-days after closing ServiSolutions will email lender asking for a label to ship your loan package back and the loan will not be purchased.
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ADFA recommends to make your loan reservation near closing. ADFA highly encourage sending your closing
package within 30 days.
MCC MORTGAGE CREDIT CERTIFICATE
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MORTGAGE CREDIT CERTIFICATE
We are not Tax Professionals and cannot give tax advice. We will provide examples of how the MCC
works. We recommend that borrowers seek the advice of a qualified tax professional when
deciding whether or not to take advantage of an MCC.
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MORTGAGE CREDIT CERTIFICATE Dollar-for-Dollar Federal Tax Credit
50%
50%
EXAMPLE*: $7,000 MORTGAGE INTEREST
50% you might use as a deduction, just as normal.
MCC might allow you to deduct up to 50% of the mortgage interest owed up to a maximum of $2,000.
*This example is use for ADFA MCC Education purposes only and shall not be use as a guide or tax advice, for the MCC, or any other of our programs; and shall not represent the ADFA nor any of its employees. Please consult with a professional to see what best benefits your financial picture.
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WITHOUT MCC example: GROSS INCOME $50,000
MORTGAGE INTEREST $7,000 DEDUCTION TAXABLE INCOME $43,000
FEDERAL INCOME TAX $6,450
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WITH MCC example: GROSS INCOME $50,000 50% $3,500 MORTGAGE INTEREST $7,000 DEDUCTION $46,500 TAXABLE INCOME $43,000 “Taxed @15%” $6,975 FEDERAL INCOME TAX $6,450 Max MCC Credit $2,000 TOTAL TAXES DUE $4,975 SAVED $1,475 34
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MORTGAGE CREDIT CERTIFICATE Dollar-for-Dollar Federal Tax Credit
BORROWER MUST BE ONE OF THE FOLLOWING: A. 1st Time Homebuyer (no primary residence ownership within last 3 years) B. Purchasing home in a Targeted County C. Be a Veteran or spouse of a Veteran
INCOME RESTRICTED: IRS Income restriction by County, and number of household occupants
PURCHASE PRICE LIMIT: $270,000
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MORTGAGE CREDIT CERTIFICATE Dollar-for-Dollar Federal Tax Credit
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SELF REPORTING TAX: Borrower claims Tax Credit when they file their Form 1040 annually, and must use Form 8396 to claim the credit.
Each county has an Income Limit that the household cannot exceed based on the size of the household.
Federal Tax Credit: 50% of Mortgage Interest up to $2,000 per year
Homebuyer can adjust federal withholdings to increase take home pay by $166 per month.
FREE with ADFA Mortgage products Stand-Alone MCC available: 1/2 Percent Issuance Fee
Always recommended to obtain advice from a Tax Professional
MORTGAGE CREDIT CERTIFICATE RECAPTURE TAX DISCLOSURE
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I. Your home is sold or disposed of within 9 years of being purchased, for reasons other than death; and
II. There is a capital gain on the sale of your home, and
III. Your household income for the year in which you sell your home exceeds federal recapture tax limits.
MCC CAN’T reduce your Federal Income Tax if you don’t owe any taxes!
We estimate that 97% of the borrowers will not be subject to the Recapture Tax. For more information regarding this provision,
please contact the IRS or a tax professional.
ALL MUST
BE MET
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ServiSolutions CONTACT INFORMATION HOURS OF OPERATION:
8 AM to 5 PM, Central Time Monday through Friday
BY TELEPHONE:
If you only want to make a payment by phone and do not need to speak to a customer service representative, select OPTION 1 from the phone menu. Please have your account information ready. 334.244.4350 866.339.2432 (Toll free)
BY FAX:
Please ensure your loan number is listed on your fax request.Customer Service: 334.271.3104
BY EMAIL: [email protected]
TO ADDRESS A MORTGAGEE CLAUSE:
ServiSolutions, a division of the Alabama Housing Finance Authority ISAOA ATIMA P.O. Box 242967 Montgomery, AL 36124-2967
If you have any questions, email [email protected].
ALL OTHER INQUIRIES:
P.O. Box 242967 Montgomery, AL 36124-2967
FOR DELIVERIES AND PAYOFFS:
7460 Halcyon Pointe Drive, Suite 200 Montgomery, AL 36117
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ADFA CONTACT INFORMATION OUTREACH TEAM Tim Wooldridge Director of Outreach (870) 926-8758 [email protected] Kyle Putman Outreach Specialist-Northwest (501) 551-1276 [email protected] Issac Morales Outreach Specialist-Central (501) 765-6543 [email protected]
Derrick Rose Public Information Officer (501) 682-5904 [email protected]
COMPLIANCE TEAM Denise Wells Single Family Assistant Manager (501) 682-5466 [email protected] Dean Norman Single Family Compliance (501) 682-5935 [email protected]
Virginia Wright Single Family Compliance (501) 682-5923 [email protected]
Leslie Quisenberry Single Family Compliance (501) 682-5930 [email protected]
900 W Capitol Ave, Suite 310 Little Rock, AR 72201
(501) 682-5900
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