home possible mortgages webinar - mwf wholesale · *home possible advantage secondary financing...

Mountain West Financial and

Freddie Mac Training –

April 2017

Note: This document is not a replacement or substitute for the requirements set forth in the Freddie Mac Single-Family Seller/Servicer Guide (Guide), Loan Product Advisor® Functionality

Guide, and/or terms of your Master Agreement and/or Master Commitment.

Presenter: Jim Peronto

DRAFT

© 2017 Freddie Mac 22

Loan Product Advisor Functionality

Home Possible and

Home Possible Advantage

Agenda


Guide Chapter 4501


• Purchase/No Cash-out Refinance

• 1- unit primary residence

(Detached/Attached, PUDs,

Condominiums)

• All Borrowers must occupy the

Mortgaged Premises as their Primary

Residence

• 30 Year Fixed Rate

• Temporary subsidy buydown (1-to 2-

unit primary residence only)

General Requirements

• 95% LTV/TLTV/HTLTV

• 97% LTV / 105% TLTV

(Affordable Second® only)

There is no minimum LTV ratio


General Requirements

Area Median Income (AMI) Limit:

The maximum allowed qualifying income based on the median income

for the area in which the mortgaged premises is located

Guide Chapter 4501

Affordable Income and Property Eligibility

*All stable monthly income for all borrowers for qualifying. The Seller must attempt to verify all income reported on the

Form 65, Uniform Residential Loan Application, in accordance with the Guide. Any discrepancies, including

underreported income, must be corrected before submitting the mortgage to Loan Product Advisor. All income reported

on the Form 65 that has been verified and that meets the criteria for stable monthly income as described in Chapters

5300-5305 must be used to qualify the borrower and submitted to Loan Product Advisor® for Loan Product Advisor

Mortgages.

Qualifying Income* up to 100% of the AMI

Higher AMI limits in designated High Cost Areas

Lifted in Underserved Areas


General Requirements: Area Median Income

Loan Product Advisor Feedback Certificate

The loan meets Home Possible income limits based

on the property location for address entered

Employment & Income

Section: Feedback message

returned when either

Home Possible or Home

Possible Advantage

Offering Identifier

has been selected

*Applies to Conventional Conforming Mortgages

*General Messages

Section: Feedback

message returned when

Home Possible or Home

Possible Advantage

Offering Identifier

has NOT been selected


Home Possible Income & Property Eligibility Tool

www.FreddieMac.com/homepossible/AMI-eligibility/

http://www.freddiemac.com/homepossible/AMI-eligibility/


Search Results: Zip Code – 22102 (McLean, VA)


Search Results: City – Commack, New York


Search Results: Property Address –

929 Wheelwood Way, Richmond, Virginia


Offering Identifiers

Guide Chapter 4501

Home Possible

Home Possible

Advantage


Features and Benefits: Mortgage Insurance

Guide Section 4701.1

Refer to the chart below for coverage levels

Lender-paid* and financed mortgage insurance premiums described in Section 4701.2 are permitted

Standard Mortgage Insurance

Home Possible and Home Possible Advantage Mortgages

Transaction Type MI Coverage LTV Ratio

>80% & <85% >85% & <90% >90% & <95% >95% & <97%

Fixed-rate term Standard 12% 25% 25% 25%


Number of UnitsMinimum Contribution from Borrower Personal Funds

Reserves

Home Possible Advantage

1-unit primary residence None required None required

Home Possible Mortgages

1-unit primary residence None required None required

Features and Benefits: Borrower Contribution

and Reserves

Guide Chapter 4501


Check-In

Are the Home Possible Mortgage offerings

available only to first-time homebuyers?

Guide Chapter 4501

No, the borrower

does not have to be a

first-time homebuyer


Check-In

As of the note date*, can a Borrower

have ownership interest in any other

residential properties?

The Borrower is a

cosigner/guarantor on the

related Mortgage debt and

someone other than the

Borrower has made

payments on the debt

associated with the

property for the most

recent 12 months, as

documented with copies of

canceled checks or a

statement from the lender

The Borrower

inherited their

ownership interest

in the property and

shares ownership

with another party,

or

OR

The Borrower owns the

property with another

party and the debt

associated with the

property was assigned

to the other party by a

court order (e.g., a

divorce decree), or

OR

Yes, there are circumstances in which a Borrower may hold

ownership interest in a property that are compatible with the intent

of the program. To allow for these situations, we are permitting

ownership in other residential property provided the Borrower does

not occupy the other property, and:

*or, the Effective Date of Permanent Financing for Construction Conversion and Renovation Mortgages


When all borrowers are first-time homebuyers, at least one qualifying borrower must participate in a homeownership education program before the Note Date*

• A copy of a Homeownership Education Certification, or another document with comparable information, to be retained in the mortgage file

• Cannot be provided by an interested party to the transaction, the originating lender or Seller

Features and Eligibility: First-time Homebuyer

This requirement stresses the importance of utilizing a curriculum that contains the minimum

core content specified by the National Industry Standards for Homeownership Education and

Counseling. These standards help ensure quality education and counseling is delivered with

fairness and respect to homebuyers and homeowners

Homeownership Education

Guide Chapter 4501*or the Effective Date of Permanent Financing for

Construction Conversion and Renovation Mortgages

Purchase Transactions Required:

Post-purchase and Early Delinquency Counseling


Features and Benefits:

First-time Homebuyer (cont’d)

FreddieMac.com/creditsmart/tutorial.html


Flexible Down-payment & Closing-cost

Sources

Financing Concessions» 3% LTV/TLTV ratio > 90%

» 6% LTV/TLTV ratio > 75% < 90%

» 9% LTV/TLTV ratio < 75%

Borrower Personal Funds

Individual Development

Account (IDA): include matching

funds only if not subject to recapture tax

Community Savings deposited

by the Borrower

Trade equity

Rent Credits

Depository accounts

Sale of Borrower Asset

Cash on hand

Trust disbursement

Pooled funds

Loan secured by

Financial Asset

Credit card charges, cash advances or unsecured line

of credit: to pay fees associated with the mortgage

application process

Other

Borrower Funds

Gifts–Related Person Affordable Seconds Secondary Financing (Home Possible Only)

Employer-Assisted Homeownership Benefit

IDA: matching funds subject to recapture tax

Unsecured loan: Agency/Related Person, or Community Savings Systems (funds in excess of Borrower’s contribution)

Premium Financing

Unsecured Loan: Originating Lender (Refer to Guide Section 5501.4)

Flexible Sources of Funds

Clo

sing c

ost

s, P

repai

ds

and E

scro

ws

Guide Chapters 5501 & 4501


Subsidized secondary financing or other financial assistance, evidenced in land

records, that is provided by an Agency and that meets the requirements of

Section 4204.1

Sources of Funds: Affordable Seconds®

*Home Possible Advantage secondary financing source must be an Affordable Second, and it may not

be a home equity-line-of-credit

Note: RHS Leveraged Seconds are not permitted with Home Possible Advantage

www.FreddieMac.com/singlefamily/expmkts/affsec.html


Complete Monthly Budget and Residual Income Analysis (Exhibit 23), or another document containing the same information

Evidence that funds for the down

payment, Closing Costs, Financing

Costs, Prepaids/Escrows and

reserves are deposited in a financial

institution or are held in an

institutional escrow account prior to

closing

Sources of Funds: Policy Flexibility

Cash on Hand

Guide Chapter 4501

The Mortgage file must have no indication that the Borrower typically uses

checking, savings or similar accounts

Credit report shows no more than 3 tradelines

» Copies of 3 months’ statements for any open revolving account that reveal cash advances are not the source of Borrower Funds

» Any cash advances must be explained and documented

Updated credit report approximately one week prior to closing to show no new accounts or increase in current accounts

6 months’ cash receipts or other alternative documentation (refer to Guide Chapter 5202)


How does it benefit

borrowers?

What are its key

features?

Who does it serve?

How can Home Possible and Home Possible Advantage be

YOUR affordable lending solution!


Loan Advisor Suite – it’s the future of how

we’ll do business together!


Loan Assignment Function


New Features and Functionality (All Access

Methods*): Redesigned Feedback Certificate

New design: Move easily within the feedback results without having to scroll and search

Loan results: Highlights the total number of messages and total number by category

Simple design: Quickly identify and integrate results

Actionable messages: Placed into categories, like “Employment and Income,” for faster processing

*System-to-system interface and browser import based on LOS vendor update


Review Results

We are working with our regulator, FHFA,

on a potential future collateral rep and

warranty relief offering.

We’ll keep you posted!

Risk Class: ACCEPT

Representation and warranty relief

for credit reputation and ratios

Risk Class: CAUTION

No representation or warranty relief

Documentation Levels:

StreamlinedFewer documentation requirements than

traditionally underwritten loans for the

Accept risk class

StandardRequires Standard Guide documentation for

higher-risk loans


Review Results


Review Results

Resource: Understanding

Loan Product Advisor’s

Determination of Total Funds

to Be Verified job aid


Review Results: New Data Visualization


Review Results


Review Results: Categorized Feedback

Messages

Mes

sages

are

eas

ier

to n

avig

ate

and

loca

te


Review Results: Cash-to Close Messages

New messages

provide the detail

behind the Asset

Information

section fields

http://www.freddiemac.com/singlefamily/news/2017/0118_lpa.html

For a complete listing of the revised feedback messages related to income and assets:

http://www.freddiemac.com/singlefamily/news/2017/0118_lpa.html


Resources

www.FreddieMac.com/homepossible/hp.html

Refer to Exhibit 19 for applicable post

settlement delivery fees and Guide

Chapter 4501 for delivery fee

exclusions

www.FreddieMac.com/purchasemarket/

www.FreddieMac.com/learn/mp/homepossible.html


Freddie Mac Resources: The Learning Center

www.FreddieMac.com/learn/


Information

The Learning Center Updates page provides quick access to new and updated

training resources to help you with underwriting, mortgage products, selling,

servicing, and more: FreddieMac.com/learn/ch_ind/

FreddieMac.com/singlefamily/news/subscribe.html

Get the latest e-mails on single-family news, updates, alerts, and new training

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Thank you for your participation!

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