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OHFA MARKET RATE PRODUCT

OHFA MARKET RATE PRODUCT. WHAT LENDERS SHOULD KNOW. OHFA’s Mission. OHFA’s mission is to open the doors to an affordable place to call home. We do this by offering competitive rates, down payment assistance and excellent customer service. The Basics .

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OHFA MARKET RATE PRODUCT

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  1. OHFA MARKET RATE PRODUCT WHATLENDERS SHOULD KNOW

  2. OHFA’s Mission OHFA’s mission is to open the doors to an affordable place to call home. We do this by offering competitive rates, down payment assistanceand excellent customer service.

  3. The Basics • All loans are currently serviced by US Bank. • Loans can be reserved/locked by participating lenders 9:45am- 8:00pm EST M-F, excluding holidays. • Once a loan is reserved any product changes must be approved by OHFA. • We ask for commitment packages to be submitted to us within 25 days of reservation. • Loans must be purchased by US Bank within 70 days of reservation to avoid extension fees.

  4. Definition of a First Time Homebuyer • A person who has not had ownership interest in a primary residence in the last 3 years. • A person buying in a target area. • Exception: Qualified military veterans who have received an honorable discharge are eligible even if they have previous ownership in a primary residence. Note: Rental income earned by the borrower is calculated towards total household income as follows: • 75% of grossrental income if the borrower is purchasing a 2-4 family primary residence or intends to rent out current primary residence after purchase of new primary residence (target areas or Next Home products only) • 75% of net rental income for rental property currently owned by the borrower.

  5. How are Lenders Notified of New Rates? • Rate sheet will be posted daily on Lender OnLine. • The Lenders main contact will receive a blast email with any rate change – all rate changes are immediate. • Mid-day rate changes are possible. • Lender On-Line is the final source for current rates.

  6. OHFA Rate SheetSample

  7. OHFA Rate Sheet – Up Close

  8. Loan Process & Purchase Timelines • Within 25 days of loan reservation, the Commitment Package must be submitted to OHFA. • Our docs do not need to be signed by the borrower prior to submission. We will prepare most of the documents (the commitment package) for the borrower to sign at closing. The lender is responsible to prepare the closing documents.

  9. Loan Process & Purchase Timelines • Within 70 days of loan reservation, the loan must be purchased by US Bank. • Within 3-5 days of loan closing, the loan should be submitted to OHFA for purchase approval and delivered to US Bank for purchase. • Failure to deliver the loan file to US Bank within 3-5 days may result in the servicers inability to purchase your loan within the allotted timeframe.

  10. OHFA Timeframes • Please DO NOT reserve loans that cannot meet thetimetable. This is particularly important with respect to: • New Construction • Foreclosures • Short Sales • Please wait to reserve funds. Loans not delivered within the timeframe will be subject to extension fees.

  11. 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 purchasing the same property, until sixty (60) days after expiration of the prior reservation period (including extension). • 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.

  12. Need More Time? How to Request an Extension • Loans not purchased with 70 days will automatically be charged an extension fee of .375% of the original loan amount upon purchase of the loan by US Bank. • The extension fee will be netted by U.S. Bank when the loan is purchased.

  13. TRID In order to meet RESPA requirements, our assisted loans are subject to the following: • GFE to be sent to the borrower within 3 business days of reservation. OHFA will provide the GFE to the borrower as we are aware some, if not all, lenders will no longer have the ability to generate a GFE. The GFE will be uploaded to the lender portal and will be available to lenders to print. • HUD-1 settlement statement to be provided to borrower at closing for the second mortgage and may only include the recording fee.

  14. Why OHFA Loans?

  15. #1: Down Payment Assistancein the form of a Forgivable Second • Down Payment Assistance Second Mortgage Loan • Grants for Grads

  16. #1 Your Choice DPA • Second mortgage amounts of either 2.5% or 5%. • Can be used for down payment, closing costs or prepaids. Lender and borrower determine the best use of funds. • The lien is forgiven and released after 7 years. * • If home is sold or first mortgage is refinanced prior to the 7 year anniversary the loan must be repaid in its entirety. • Will not be re-subordinated upon refinance of first mortgage. * 7 year repayment does not apply to Grants for Grads seconds.

  17. #2 Grants for Grads • Borrowers who have graduated from an accredited college within 48 months of the loan reservation date. • Borrower must provide evidence of graduation and date (copy of degree). • Rates are lower for Grads than for traditional First Time Home Buyer. • Second mortgage is forgivable at 20%/year for 5 years, however, if borrower sells home and provides proof of continued residency in Ohio any remaining balance can be forgiven. • May be re-subordinated.

  18. #3: Fannie Mae HFA Preferred • Up to 97% LTV Approve/Eligible through Fannie Mae DU. • No Loan Level Price Adjustment (LLPA). • Mortgage Insurance at charter minimum rates. • See Term Sheet for detail • May be combined with OHFA down payment assistance for CLTV up to 102%. • 1 unit SF properties only if LTV >95% (no condos).

  19. #4 Ohio Heroes Program • Eligible Heroes: Active Military and Veterans Fire Fighter/EMT/Paramedic Health Care Workers Police Officers Teachers • Rates are lower than traditional First Time Home Buyer • See Product Term sheet for detailed position description and documentation requirements.

  20. #5 Next Home Loan Program • Not required to be a first time homebuyer. • Can have ownership interest in a primary residence in the last 3 years. • Same guidelines/income/purchase price limits apply as First Time Home Buyer program. • All programs available as FTHB except Grants for Grads and MTC Plus. • Only available with down payment assistance.

  21. #6 MTC PLUS • All of our FTHB loans are now available with a Mortgage Tax Credit (aka Mortgage Credit Cert.). • Layered with OHFA first and second mortgage programs. • Tax credit of up to 40% for borrowers using MTC Plus. • We still offer MTC basic which is used in conjunction with lender first mortgage products. MTC basic offers up to 20%, 25% or 30% tax credit.

  22. MTC Example

  23. #7 Home Rehab, Repair &Weatherization • Limited FHA 203K loans for certain repairs, i.e. repair/replacement of roof, HVAC systems, flooring, etcup to $35,000 (see HUD ML 2005-50 for allowed repairs). • FHA 203B with repairs up to $5000 – refer to FHA 4155.1, Chapter 2, Section A, #5. • FHA Weatherization Program up to $2000 to assist the homeowner in reducing heating and cooling expenses. (see 4150.1 Rev-1, Chapter 12, section 12-15).

  24. Loan Requirements • Borrower Qualification– follow product term sheets • Eligible Properties – 1-4 unit properties, condo’s, PUD’s(please refer to term sheet for specifics per product) * • Income/Purchase Price Limits - see county limits on Lender Online • Down Payment Assistance – true second mortgage • Homebuyer Education - is now required for all OHFA Loan products except MTC Basic * No Manufactured Homes effective 12/1/15.

  25. OHFA credit score and DTI requirements * Max DTI of 45% for conventional loans with LTV > 95%

  26. Borrower Documentation • Income Calculations – Eligibility Income not Household income. Only income for those both living in the property and obligated on the Note is considered. • Federal Income Tax Returns - 3 years of Federal Tax Returns are required for all programs. • Current Pay Stubs- At least two(within last 60 days) or one recent paystub and a written VOE. • Copy of Degree – Grants for Grads program only • Heroes – see Term Sheet for qualification for various qualified occupations.

  27. HBE TIMELINE

  28. Fees Associated with OHFA Financing FTHB & Next Home Loans .50% Origination Fee Payable to Lender $400 Funding Fee Payable to US Bank $85 Tax Service Fee Payable to US Bank $100 Admin. Fee Payable to OHFA MTC Plus Loans .50% Origination Fee Payable to Lender $400 Funding Fee Payable to US Bank $85 Tax Service Fee Payable to US Bank $100 Admin. Fee Payable to OHFA $250 Loan Fee* Payable to OHFA MTC Basic $500 Loan Fee Payable to OHFA *Lender may charge total of $500 loan fee - $250 to OHFA/$250 to Lender

  29. What Happens After Registration?

  30. 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.

  31. What Can Change once a loan is reserved? What can change without prior approval • Correcting information initially entered incorrectly (i.e. SSN’s, etc.) What can’t change without prior approval • Changing a borrowers reserved mortgage rate. • 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.

  32. What Can Change once a loan is reserved? • 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 your OHFArepresentative or US Bank. • Please address change to amount, rate or type of reservations to OHFA Mortgage Funding dept.

  33. Marketing Materials • Available on Lender Online on Marketing Materials tab. You are able to fill in your contact information on these sheets.

  34. Homeownership Staff

  35. Whom Should I Call With My Questions? Training slides will be posted on the OHFA website : http://www.ohiohome.org/webinar/presentations.aspx

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