National Home Buyers Golden State California
Down Payment Grant for FHA or Conventional
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| Mountain tops |
Some grants are second liens some others are outright gifts.
This is a second lien which is forgiven after time.
Read below for the ins and outs.
You no longer can refinance in six months to reduce the rate.
You must wait 36 months to refinance or sell without penalty
The interest rate is higher than standard market pricing.
No exceptions on FICO score or pricing
Interest rates are higher than the market and don't change as rapidly as market mortgage rates
There is one price per product, no rebate pricing allowed
• Borrowers qualifying under this program utilize the
down payment assistance associated with this program.
• Grant Funds available from
GSFA: • Credit scores 640-659 receive a non-repayable grant of up to 3.5%
•
Credit scores of 660+ receive a non-repayable grant of up to 4%
• Proceeds may
be used for down payment and/or closing costs;
• No cash back to
the borrower from the Grant Fund proceeds;
• GSFA’s EIN is 68-0322272. Lenders
are required to reflect GSFA’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.
• Lenders upfront the grant at closing to be reimbursed by the Servicer, on
behalf of GSFA, upon purchase of the Platinum First Mortgage.
Assistance consists of a 0.00% forgivable second mortgage of
up to 3.00% or 4.00% of the total first mortgage loan amount that is forgiven
after 3 years. There are no monthly payments
• Proceeds may be used for down
payment and/or closing costs;
• There must be no cash back to the borrower from
the Second Mortgage proceeds;
• Second Mortgage
is forgiven after 3 years;
• The outstanding principal amount of the Second
Mortgage is reduced by one-third (1/3rd) of the original principal amount on
each one-year anniversary date.
• Upon sale or refinance prior to the end of
the 3 years, the total loan forgiveness will be calculated pro rated on a
monthly basis with x/36 of the original principal amount being deducted from
the original principal amount, x being equal to the total number of whole
months completed since the date hereof.
• No subordination allowed.
• Lender
must conform to federal RESPA and Truth-in-lending laws in disclosing the terms
of the Second Mortgage.
• Lender upfronts the DPA amount at closing to be
reimbursed by the Servicer, on behalf of GSFA, upon purchase of the Platinum
First Mortgage Loan
• Borrower must have
one of the following occupations in California: • Peace Officers, Sheriff,
Border Patrol Agents, Correctional Officers and others serving in a Law
Enforcement capacity; • Firefighters, CalFire, paramedic, and Emergency Medical
Technicians (EMTs), including administrative staff that supports firefighters;
or • Current members of the California State Teachers Retirement System
(CalSTRS) or University of California Retirement Plan (UCRP), employees of a
California accredited Private, Charter or Public School District or California
State University, Junior College or Private College, including school
administration and staff.
• Lenders are required to upload documented evidence
of a borrower’s eligible occupation within five (5) business days of submitting
a loan reservation online. DOWN PAYMENT ASSISTANCE ON CLOSING DISCLOSURE
• All
down payment assistance proceeds must be disclosed on the Closing Disclosure,
Section L -Paid Already by or on Behalf of the Borrower at Closing. The down
payment assistance proceeds must be labeled accurately. For example:
"Second loan" is not appropriate if the assistance is a grant or
gift. Multi-purpose labels such as Second/Grant/Gift will not be accepted, it
must be specific to the transaction. If the borrower is receiving down payment
assistance from multiple sources, all assistance sources must be itemized on
the Closing Disclosure. Unless the CFPB comes out with guidance restricting it,
it is acceptable to place assistance proceeds as "Other Credits" if
necessary due to space limitations.
• Grant funds must be designated as “GSFA
Grant”
• US BANK "PLATINUM"
Recorded Training — Closed Loan, Delivery and Funding Training (For GSFA
Platinum Serviced by US Bank) Click the links below to view US Bank recorded
online trainings.
LOAN
DELIVERY AND PURCHASE • Participating Lender should refer to Servicer Website
for loan delivery and purchase guidelines as well as customer contact
information at:
https://www.allregs.com/tpl/viewform.aspx?source=TOC&formtype=toc&formid=0
a08c633-5c05-4d2c-9c6c-10f0f85c7c59
• The Reservation Confirmation from GSFA
must be submitted with the mortgage loan file. Servicer shall not purchase a
Mortgage Loan without the Reservation Confirmation.
• A fee of up to 6% of the
loan amount will be charged to lenders for closed loans with grants that are
not delivered to the Servicer for purchase, or are not eligible for purchase by
the Servicer. GSFA will reimburse the lender for the full grant amount with an
invoice for this non-delivery fee. Lenders with excessive non-deliveries will
be prohibited from participating in the GSFA Platinum Program. AGENCY LINKS
•
For additional reference, see Administrators Guidelines at:
http://www.gsfahome.org/programs/dpa/guide.shtml • In addition to any Product
Profile requirements, you must always meet the published HUD guidelines and
master servicer, U.S. Bank, lending criteria. If GSFA Platinum FHA Product
Profile 4 of 35 05/31/2019 Guidelines Subject to Change published HUD
guidelines or U.S. Bank are more restrictive then what is allowed in the
Product Profile, you must always defer to HUD Guidelines.
• For additional
information regarding U.S. Bank requirements
https://hfa.usbank.com/HFA_Division.html then click on U.S. Bank Lending
Manuals • All PRMG staff can access all end Agency guidelines though AllRegs
Online at http://allregs.elliemae.com. Instructions on how PRMG staff can
access the AllRegs service is available in the Resource Center. • Use the
following link to access the HUD Housing Handbooks site, and from there, obtain
access to the 4000.1 Handbook:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudcli
ps/handbooks/hsgh
• Access the All Regs version of the Handbook at: •
https://www.allregs.com/tpl/public/fha_freesite.aspx/
MINIMUM LOAN AMOUNT • No
Minimum Loan Amount MAX. LOAN AMOUNT
• With cases assigned prior to 1/1/2019,
max loan amount is lesser of $453,100 or the particular county’s maximum HUD
loan limit. HUD Loan Limits can be found here:
https://entp.hud.gov/idapp/html/hicostlook.cfm
• With cases assigned on or
after 1/1/2019, max loan amount is lesser of $484,350 or the particular
county’s maximum HUD loan limit. HUD Loan Limits can be found here:
https://entp.hud.gov/idapp/html/hicostlook.cfm GEOGRAPHIC RESTRICTIONS • GSFA –
California only • Please refer to PRMG’s “Eligible States” list, which can be
found at this link: http://www.eprmg.net/guidelines/Eligible%20States.pdf •
Verify eligibility, by ensuring the state appears in the following list:
http://www.gsfahome.org/programs/dpa/overview.shtml • Additionally, must be
PRMG eligible state (see eligible states list in Resource Center) MORTGAGE
TYPES • 203(b) Home Mortgage Insurance • 234(c) Mortgage Insurance for
Condominiums FEES AND POINTS • Servicer Website at:
https://www.allregs.com/tpl/Viewform.aspx?formid=00049604&f GSFA Platinum
FHA Product Profile 5 of 35 05/31/2019 Guidelines Subject to Change family
members). If multiple borrowers are qualifying on the loan, but the tax returns
are not filed jointly, and one borrower requires full returns, but the other
borrowers are qualified exclusively on W2 and/or fixed income then no
transcripts are required for the W2/fixed income borrower and 1040 transcripts
are required for the self-employed borrower/borrower requiring full returns.
When using this option, there can also be no tax returns included in the loan
file (including if tax returns are required to be reviewed by the PRMG
underwriter for MCC Approval or other purpose). If the borrower earns other
income that is used to qualify that would be able to be validated with 1040
transcripts (i.e., rental income from tax returns, etc.) then 1040 transcripts
are required to validate that income. A completed and executable (signed) 4506T
must be submitted with the loan file. For the borrowers where transcripts are
not required, be sure to select the W2/1099 option only when completing the
4506-T. Do not mark the 1040 or Record of Account option. • When tax returns
are required for a borrower or when borrower’s qualifying income is not made up
of W2 or fixed income reported on a 1099, validated 1040 tax transcripts are
required if borrower’s income is utilized as a source of repayment. If multiple
borrowers are qualifying but the tax returns are not filed jointly (when one
borrower requires full returns), then it is acceptable to provide no
transcripts for the salaried/fixed income borrower and 1040 transcripts for the
self-employed borrower/borrower requiring the tax returns. • Full 1040 tax
transcripts are required to support income used to qualify. When transcripts
indicate “Due to limitations, the IRS is unable to process this request"
one of the following must be documented in the file: 1. For salaried borrowers,
when available, utilize The Work Number’s Instant Access Database. This will
show employment and income records provided by the employer’s payroll system,
OR, Lender may order W-2 or 1099 transcripts when the only income used to
qualify is salaried/W-2 or 1099 reported income. 2. Request the most recent
1040s from the borrower(s), and proof of filing (cancelled check for tax
payment, or bank statement showing deposit of refund). 3. Request that the
borrower obtain the transcripts from the IRS.
• Tax transcripts must be
provided for the number of years of income documentation required to be in the
loan file, in accordance with the AUS findings and/or Agency requirements • Tax
transcripts must come to lender directly from the IRS or through a third party
vendor ordered/obtained by lender • When business tax returns are required by
AUS, business income is used to qualify or business income is used to offset a
loss on personal tax returns or is included in the loan file, a separate IRS
Form 4506-T must be executed (but not processed and must allow enough time to
be executed post-closing after delivery to investor) for each business for the
required number of years of income documented, for each self-employed borrower
on the loan transaction. Allowable signatures (per IRS): 1120/1120S: Borrower
must sign name with title and only the following titles are acceptable:
President, Vice President, CEO, CFO, Owner, 1065: Borrower must sign name with
title and only the following titles are acceptable: General Partner, Limited
Partner, Partner, Managing Member, Member • Letter of explanation is required
for borrowers who are self-employed or have non-W2 income/loss if there is a
variance of 10% or more between the total income on the tax transcripts and the
tax returns.
• Three years IRS 1040 Transcripts are required on all loans when
the borrower is employed by a relative or closely held family business.
•
Manual underwrite not allowed for reservations on or after 12/1/15, For manual
GSFA Platinum FHA Product Profile 6 of 35 05/31/2019 Guidelines Subject to
Change underwrites (including manual downgrades), a business credit report for
a self employed borrower who owns a corporation or s-corp is required (not
required with AUS Approval).
Debt does not need to be added to the transaction,
but should be reviewed to ensure business is credit worthy, not heavily loaded
with debt, etc.
•
C G CAROLINE
GERARDO BARBEAU | Mortgage Banker
CMG Financial | Corporate NMLS# 1820 | 949 South Coast Drive 240 Costa Mesa CA 92626
Office: 949- 784- 9699 | Email: cgerardo@cmgfi.com | NMLS#
324982
