ATTM E- SC HOUSING HOMEBUYER PROGRAM GUIDE (BOND LOANS).pdf

(SF-095) SC Housing Homebuyer Program Guide-CONSOLIDATED (08.17.20)

This program guide is a summary of the requirements for the “SC Housing Homebuyer Program”. The program includes Conventional, FHA, USDA and VA financing options with competitive first mortgage rates and down payment assistance (DPA). This program includes a “First Time Homebuyer Exception” for qualified borrowers, and an “Extended Rate Lock with Float Down Option” for new construction properties.

Conventional 97 FHA USDA VA

Temporary

COVID-19

Requirements

The following requirements are in addition to our standard guidelines. For further information on these items, please refer the COVID-19 Questions and Answer document located in the Lender Online portal.

Verbal Verification of Employment (VVOE) – Lender must obtain a verbal verification of employment (VVOE) 24 within loan closing in addition to documentation of employment income (e.g., most current pay stub and/or bank statement reflecting a deposit of income). In cases where the borrower(s) have experienced a reduction of income, the lender must reevaluate the borrower’s eligibility and provide documentation that the borrower(s) still qualify based upon the reduced income.

COVID-19 Certification - Borrower(s) must execute a COVID-19 Certification at closing attesting that COVID-19 has not impacted their employment status or their ability to make a mortgage loan payment in a timely manner.

SC Housing Appraisal Requirements - As each insurer/guarantor (FHA, VA, USDA, Fannie Mae and Freddie Mac) has made modifications to their current requirements for acceptable appraisal inspections, SC Housing will follow the temporary requirements established and in place by the insurer/guarantor.

Homebuyer Eligibility Requirements

Borrowers purchasing property in the following non-targeted counties must not have had an ownership interest in another property within the three years prior to loan closing:

Aiken Anderson Charleston Greenville Greenwood Lancaster Lexington Oconee Pickens Richland Spartanburg York

The First Time Homebuyer requirement in non-targeted counties will be waived for the following:

• Single Parents - Must be an unmarried, head of household, custodial parent (or legal guardian) of at least one minor child or dependent. If the borrower is currently married, a separation agreement or evidence that the couple has lived apart for at least six months prior to loan application must be provided.

• Veterans – Must have served on active duty in the U.S. Armed Forces (other than active duty for training) and received a discharge other than dishonorable within the past 25 years.

• Individuals or Families with Disabilities – Borrower or spouse must be permanently 100% disabled/handicapped as determined by SSDI/SSI OR be the custodial parent or legal guardian of a least one dependent (regardless of age) that is permanently 100% disabled/handicapped as determined by

SSDI/SSI.

SC Housing Homebuyer Program Guide – BOND LOANS Conventional, FHA, USDA and VA

Conventional 97 FHA USDA VA

Borrowers purchasing properties in all other targeted counties cannot have an ownership interest in another property to include a mobile home taxed as real property at the time of loan closing, but may have had an ownership interest in a principal residence within the past three years. Unimproved land is allowed.

This requirement applies to all adult household occupants.

Eligible Borrowers

Individuals only

• A Social Security number is required

• A Tax I.D. Number alone is not acceptable

• VA ONLY – In addition, borrower must have eligible VA Entitlement. Lender must obtain a valid VA Certificate of Eligibility (COE) via webLGY, VA’s

Information Portal and provide a copy in the SC Housing Eligibility Package

Permanent Resident Aliens: For borrowers holding a “Green Card” (an Alien Registration Receipt Card, INS USCIS Form I-551), the loan is eligible under the same guidelines/terms as a loan made to a U.S. citizen. A copy of the front and back of the Green Card, clear copy of Driver’s License and Social Security Card must be included in the file. An approved Green Card application will not be acceptable.

Sales Price Income Limits

Sales price and income limits are county-specific. Refer to the SC Housing Homebuyer Sales Price and Income Limits that can be found in Lender Online and are subject to change without notice.

USDA – In addition to meeting SC Housing sales price and income limits, all households must fall within acceptable USDA income limits set forth for the county in which the property is located.

For detailed information on how to calculate Household Income for program compliance, see the SC Housing Program Manual also found in Lender Online.

Loan Term 30 year

MAX LTV/CLTV

97%/105% 96.5 % / 105% 100%/105% - USDA will only guarantee up to 100% of the appraised value plus the upfront guarantee fee.

100% + VA Funding Fee

Loan Purpose • Purchase Money Transactions ONLY

• Take – Out loans (Property must be New Construction, not previously occupied and less than one year old. The original construction loan term cannot exceed 24 months).

NOTE: One-time Construction/PERM loans are NOT ELIGIBLE.

Eligible Properties

• Single Family (1 unit)

• Owner-occupied, primary residence

• Townhomes

• Condominium

• PUDs

• Off-Frame Modular

Housing

• Property must be located in South Carolina

• Land value cannot exceed

40% of the total appraised value of the subject property

• Properties containing multiple parcels are not eligible

• Properties cannot exceed 5 acres

• Single Family (1 unit)

• Owner-occupied, primary residence

• Townhomes

• Condominium

• PUDs (Must comply with

HUD Requirements)

• Off-Frame Modular Housing

• Property must be located in

South Carolina

• Land value cannot exceed

40% of the total appraised value of the subject property

• Properties containing multiple parcels are not eligible

• Properties cannot exceed 5 acres

All property addresses must be verified through the USDA Rural Development – Rural Housing Property Eligibility Website to determine if the property is in an acceptable area. The site is located at:

http://eligibility.sc.egov.usda.gov/ eligibility.welcomAction.do In addition, the property must meet the following eligibility requirements:

• Single Family (1 unit)

• Owner-occupied, primary residence

• Condominium (Must be Fee

Simple and approved by USDA)

• Property must be located in

South Carolina

• Land value cannot exceed 40% of the total appraised value of the subject property

• Properties containing multiple parcels are not eligible

• Properties cannot exceed 5 acres

All eligible properties must be

• Single Family (1 unit)

• Owner-occupied, primary residence

• Townhomes

• Condominium (Must be Fee

Simple and approved by VA or

HUD)

• PUDs

• Property must be located in

South Carolina

• Land value cannot exceed

40% of the total appraised value of the subject property

• Properties containing multiple parcels are not eligible

• Properties cannot exceed 5 acres

Appraisal A full appraisal and all applicable addendums are required. All appraisals must be AIR and UAD compliant. All appraisals must be uploaded to the UCDP portal for both Fannie Mae and Freddie Mac. SC Housing does not accept any Fannie Mae Property Inspection Waiver (PIW) issued in DU Findings or Freddie Mac Automated Collateral Evaluation Waiver (ACE) in LPA findings/report.

Condo Requirements

• Condo projects must be Fannie Mae approved

• Lender must provide evidence of project approval from the Condo Project Manager system

Condo Project must be HUD Approved

NOT ELIGIBLE Must be Fee Simple and approved by VA or HUD http://eligibility.sc.egov.usda.gov/

Reservation/ Rate Lock

Rate locks will be accepted from 10:00 AM – 6:00 PM Monday - Friday; excluding state recognized holidays and days that the US Financial Markets are closed for business. Rates are posted daily at https://lol.schousing.com and are subject to change without notice.

Rate Lock Periods

• 60 days – Existing Construction

• 120 days – New Construction

Extensions are available for an additional fee

Extended Rate Lock with Float Down Option – New Construction

SC Housing offers an Extended Rate Lock with Float Down Option at no additional cost to the borrower or lender for new construction properties.

• Reservation/Rate Lock will be for 120 days

The Float-Down Option allows the borrower to float down to SC Housing’s current rate ONE TIME ONLY during the construction period. The Float Down can be requested anytime during the lock period, up to 15 days prior to closing. The interest rate will not automatically be reduced when SC Housing’s rates change.

Tax Return Transcripts

IRS tax transcripts are required for all borrowers and wage earning occupants, 18 years of age and older, that will be living in the property. Lender must provide the most recent 3 years transcripts for properties located in Non-Targeted counties. For properties located in Targeted Counties, lender must provide the most recent year’s IRS tax transcripts.

• Files received after June 15th must have tax transcripts from the previous tax year

• All returns for current tax year must be filed by April 15th. If returns are completed, Signed/Dated Tax returns with proof of filing will be accepted prior to June 15th.with evidence IRS transcripts are not yet available.

• Tax Return Extensions will not be accepted by SC Housing

If the borrower or occupants are not required to file tax returns an “Affidavit of Non-Taxpayer” must be in the file along with evidence that tax returns have not been filed for the applicable number of years.

Underwriting Credit underwriting authority is delegated to the participating lender. Loans must be underwritten and approved by the lender prior to submission to SC Housing. SC Housing will complete a compliance review on all loans prior to issuing a Certificate Of Eligibility (COE).

Automated Underwriting

Loans must be underwritten in compliance with Fannie Mae/DU or Freddie Mac Loan Product Advisior (LPA) automated underwriting guidelines:

FNMA AUS Findings

• Must receive an

Approve/Eligible

• Must select “HFA

Preferred” on the DU

Loans must be underwritten in compliance with HUD/FHA automated underwriting and FHA Total Scorecard requirements.

Must receive an Approve/Eligible recommendation through Desktop Underwriter (DU) or Accept risk class recommendation through Loan Product Advisor (LPA)

USDA loans must be underwritten in compliance with all USDA automated underwriting requirements.

Must receive an Accept/Eligible recommendation through Guaranteed Underwriting System (GUS).

Loans must be underwritten in compliance with VA Underwriting and all automated underwriting system requirements.

Must receive an Approve/Eligible recommendation through Desktop Underwriter (DU) or Accept risk class recommendation through Loan Product Advisor (LPA) https://lol.schousing.com/

Additional Data screen in the Community Lending Information section.

• DU Findings must contain all applicable Special Feature Codes to include “781 / 782” to indicate file has been evaluated as an “HFA Preferred” loan.

FHLMC LPA Findings

• Must receive Accept risk class recommendation

• Lender must enter DPA amount in the gift field or subordinate financing field

• Asset Holder should be shown as Agency

The closed loan file and final application signed at closing must match the information submitted to AUS.

Credit Score Requirements

Borrower(s) must meet the requirements of AUS

• All borrower(s) must have at least 2 “Active” trade lines that are open with recent activity (within the past 6 months)

• Middle FICO Score of 640 o When the borrower has 3 scores available, use the middle o When the borrower

Borrower(s) must meet the requirements of AUS

• All borrower(s) must have at least 2 “Active” trade lines that are open with recent activity (within the past 6 months)

• Middle FICO Score of 620 o When the borrower has

3 scores available, use the middle o When the borrower has

Borrower(s) must meet the requirements of Guaranteed Underwriting System (GUS)

• All borrower(s) must have at least 2

“Active” trade lines that are open with recent activity (within the past 6 months)

• Middle FICO Score of 640 o When the borrower has 3 scores available, use the middle

Borrower(s) must meet the requirements of AUS

Non-traditional credit is not allowed.

• All borrower(s) must have at least

2 “Active” trade lines that are open with recent activity (within the past 6 months)

• Middle FICO Score of 640 o When the borrower has 3 scores available, use the middle has 2 scores available, use the lowest

Collection Accounts – All collections must be submitted through AUS. SC Housing will follow Insurer and AUS requirements for collection account repayment.

Any outstanding judgment or tax lien must be satisfied prior to issuance of the COE.

2 scores available, use the lowest

Collection Accounts – All collections must be submitted through AUS. SC Housing will follow Insurer and AUS requirements for collection account repayment.

Any outstanding judgment or tax lien must be satisfied prior to issuance of the COE.

o When the borrower has 2 lowest must be submitted through GUS. SC Housing will follow USDA/GUS requirements for collection account repayment.

Any outstanding judgment or tax lien must be satisfied prior to issuance of the COE.

o When the borrower has 2 lowest must be submitted through AUS. SC Housing will follow Insurer and AUS requirements for collection account repayment.

Any outstanding judgment or tax lien must be satisfied prior to issuance of the COE.

Qualifying Ratios

Maximum debt to income (DTI) is 45% with DU approval.

Maximum debt to income (DTI) is 45% with DU approval.

Maximum debt to income (DTI) is 45% with GUS approval.

Maximum debt to income (DTI) on any VA transaction is 45% with DU approval. Max DTI must also conform to any LTV restrictions established by

VA.

Asset Documentation

Lender must provide a minimum of the two month’s bank statements for all borrower(s), regardless of AUS recommendation.

Bankruptcy Foreclosure

Lenders must comply with SC Housing timing requirements. In addition they must meet all insurer requirements for previous bankruptcy or foreclosure.

Bankruptcy (All Loan Types)

• Chapter 13 – 3 years from discharge date

• All other Chapters, to include 7 & 11 – 4 years from discharge date

Foreclosure (All Loan Types)

• FHA/USDA/VA – 4 years from date of title transfer

• Conventional – 7 years from date of title transfer

Interested Party Contributions

3% MAX - CLTV greater than 90% 6% MAX – CLTV less than or equal to 90%

6% MAX – must meet HUD/FHA guidelines

6% MAX – must meet USDA guidelines 4% MAX of the established reasonable value of the property as established on the Notice of Value (NOV)

Mortgage Insurance

LTV Coverage

• 90.01-97% 25%

Standard MI coverage for LTVs of 90% or less

All FHA loans must be Direct Endorsement (DE) approved and HUD/FHA insured.

All USDA loans must have a Conditional Commitment and a Loan Note Guarantee issued by USDA.

All VA loans must be LAPP/SAR approved and a Loan Guaranty Certificate issued by VA.

Acceptable MI Companies

• Arch

• Essent

• Genworth

• MGIC

• Radian

Gifts Gifts are permitted when provided by a relative, domestic partner, or fiancé/fiancée only. A relative is defined as a borrower’s spouse, child, or any individual related by blood, marriage, adoption or legal guardianship.

Lender must meet all documentation and transfer requirements of the insurer. Gifts used to pay debt off for qualifying purposes must include evidence that the accounts have been satisfied. The document validating the donated gift must indicate that repayment of the gift is not expected and how the funds will be transferred to the borrower.

An executed gift letter is required and evidence of the transfer of funds to the borrower by one of the following:

• Copy of the donor’s withdrawal slip and the borrower’s deposit slip in the amount of the gift,

• Copy of the donor’s cancelled check and the borrower’s deposit slip in the amount of the gift,

• Copy of the donor’s check to the closing agent.

Note: If the funds have not been transferred prior to settlement, the lender must document that the donor gave the closing agent the gift funds in the form of a certified check, a cashier’s check, or other official check, and must be evidenced on the Closing Disclosure.

Minimum Borrower Cash Contribution

NONE

Reserve Requirements NONE

Mortgage Credit Certificate(MCC) NOT ELIGIBILE

Federal Recapture

All SC Housing Homebuyer Program 1st and DPA loans are subject to Federal Recapture. SC Housing will reimburse any borrower that is required to pay a recapture tax to the IRS.

Assumability NOT ELIGIBLE WITH CONDITIONS NOT ELIGIBLE WITH CONDITIONS

Down Payment Assistance (DPA)

SC Housing offers Forgivable Down Payment Assistance (DPA) to all qualified borrowers. DPA is available in the amount of $7,000 and may be used towards a borrower’s down payment, closing costs and/or prepaid items. Borrowers must meet sales price and income limits, in addition to SC Housing’s first mortgage requirements.

Forgivable DPA – This is a second mortgage with either a ten (10) year or twenty (20) year term (based on Household income). Borrowers who are at or below

80% AMI will receive the 10 year term. Borrowers who are above 80% AMI will receive a 20 year term. The interest rate is zero and there are no monthly payments. The borrower must occupy the subject property for the term (10 or 20 years) of the lien for the assistance to be fully forgiven.

• No monthly payments required

• All liens must be closed in the lender’s name and assigned to SC Housing at delivery

• Lenders are responsible for completing, delivering and documenting all required TRID disclosures

• The final Closing Disclosure, any addendum and seller certification must be signed by all parties

• Lenders will be responsible for sending the Good-Bye letters (First and Second DPA) in accordance with RESPA

Homebuyer Education

Home Buyer Education is required on all loans.

Home Buyer Education may be completed by a HUD Certified or Approved Counseling Agency and must be completed by at least one borrower on the loan prior to approval by SC Housing. Home Buyer Education certificates may also be obtained by completing any approved MI companies web based training course. The following MI company courses are acceptable – Arch, Genworth, MGIC, and Essent.

The presence of a disability, lack of Internet access, and other issues may indicate that a consumer is better served through other education modes (e.g., in-person classroom education, telephone conference call, etc.). In these situations, consumers should be directed to a HUD-approved counseling agency that can meet their needs. The counseling agency that handles the referral must provide a certificate of completion to be included in the loan file.

Fees and Costs Origination Fee:

• Lender may charge up to a 1.00% origination fee

Discount Points:

• Discount points may not be charged to borrower(s)

Allowable Fees:

• Any customary fee paid to a third party

• VA Loans – Lender to ensure only allowable costs established by VA are passed on to the veteran

• Only mortgage recording fees where applicable may be charged for 2nd DPAs

• Usual and customary fees charged by the lender (may be charged as a lump sum or as individual fees)

Funds to Lender from SC Housing at Purchase:

• 100% of the amortized balance of the first mortgage on the day of purchase

• Accrued interim interest up to the day of purchase

• SRP 1.50% of the amortized balance

• 100% of the amortized balance of the DPA

Fees to SC Housing from Lender (SC Housing nets at purchase):

• Funding Fee $400

• Tax Service Fee $82

• Extension and late delivery fees, if applicable

Cash Back to borrower at time of loan closing cannot exceed the borrowers documented contribution (e.g., earnest money deposit, credit report fee, appraisal fee).

HPML/HOEPA – Loans that fall under the provisions of Higher Priced Mortgage Loans (HPML) and/or Home Ownership Equity Protection Act (HOEPA) are not eligible.

Property Insurance Requirements

All property insurance coverage must comply with Insurer requirements, as applicable.

Lender must ensure that the deductibles for insurance coverage do not exceed the following limits established by SC Housing.

Coverage Type Max. Deductible Hazard Insurance The greater of 2.5% or $2500 Wind/Hail The greater of 2.5% or $2500 “Walls-In” (HO-6) The greater of 2.5% or $2500 Flood Insurance The greater of 5.0% or $5000

All percentages are on the face amount of the policy

Condominiums and attached townhomes must have a separate HO-6 Policy if walls-in coverage is not included in the Master Policy. The minimum HO-6 dwelling coverage allowed is 20% of the appraised value of the property.

Property Inspections

Survey Only required if, any of the following;

• If required in the purchase contract or appraisal

• Title Commitment/ Binder takes exceptions to matters of a survey

• An ALTA – 9 Comprehensive Endorsement must be included

CL-100 / Soil Treatment

The property securing the loan must have been inspected for termites in accordance with the requirements of the mortgage insurer.

• A clear CL-100 must be completed, signed and dated within 45 days of closing by the borrower on all existing homes

• Soil Treatment Certification is required for all new construction properties

File Submission For Compliance Review

Loan files must be submitted to SC Housing with documents in the order of the checklist Form SF-022 (Request for Determination of Eligibility). Files not delivered in order or missing documents may be returned for re-submission.

Delivery Requirements

Closed Loan File SC Housing is the servicer on all SC Housing Homebuyer Program (BOND LOANS). First mortgage and second DPA must be delivered to SC Housing within 15 days of closing.

Servicing Package The lender must submit the Servicing Package to SC Housing within 20 days of purchase using the Servicing Package Checklist (Form SF-050)

Final Documentation The lender must submit all final mortgage loan documentation for the first mortgage and second DPA mortgage purchased by SC Housing. All final mortgage documentation must be delivered to SC Housing within 120 days of loan closing.

SC Housing Contact Information

Lender Help Desk 803.896.2211 mortgage.production@schousing.com

Underwriting Questions/File Submission and Status Updates under.writing@schousing.com

SC Housing ID’s FHA – 4723009993 VA – 679535 USDA – 591585639 MERS - 1008745 SC Housing EIN 59-1585639 mailto:mortgage.production@schousing.com mailto:under.writing@schousing.com