ATTM F- PALMETTO HOME ADVANTAGE (NON-BOND LOANS).pdf

PA-020 Palmetto Home Advantage Program Guide Consolidated (12.29.20)

Palmetto Home Advantage helps First Time homebuyers and Move-up or repeat buyers purchase a home. The program offers Conventional (with reduced MI) or Government financing all with forgivable down payment assistance (DPA) and follows Fannie Mae, Freddie Mac, FHA, VA and USDA programs respectively. Please follow the below requirements and consult the Lakeview Loan Servicing requirements provided in their program materials.

Fannie Mae

HFA Preferred Freddie Mac

HFA Advantage FHA USDA VA

COVID-19 Requirements Lender must follow all COVID requirements established by the insurer and those of Lakeview Loan Servicing.

Forbearance – Lakeview Loan Servicing will not purchase any loan where the borrower is seeking forbearance or any loan that is in an “active” forbearance status prior to purchase

Homebuyer Eligibility Program is not limited to first-time homebuyers. Move-up and repeat home buyers are also eligible.

Borrower(s) cannot have an ownership interest in more than two financed residential properties, to include the subject property as of the Note Date. Subject property must be owner occupied primary residence.

Non-Occupant Coborrower

NOT PERMITTED

Follow FHA and Lakeview Loan Servicing Requirements NOT PERMITTED

Purchase Price Limits/ Maximum Loan Amount

There are no purchase price limits, must be AUS approved.

Maximum loan amount cannot exceed USDA loan limits for the county in which the property is located.

The maximum loan amount (excluding the Financed Guaranty Funding Fee) cannot exceed VA loan limits for the county in which the property is located.

Loan Term 30 year

MAX LTC/CLTV 97 % / 105%

Max. CLTV’s may vary by MI Company 96.5 % / 105%

100%/105% USDA will only guarantee up to 100% of the appraised value plus the guarantee.

100% + VA Funding Fee

Loan Purpose • Purchase Money Transactions ONLY

• One-time close Construction/PERM loans are NOT ELIGIBLE

Palmetto Home Advantage (Non-Bond Loans) Conventional, FHA, USDA and VA

Fannie Mae HFA Preferred

Freddie Mac HFA Advantage FHA USDA VA

Income Limits Maximum Borrower Income Limit is 80% of AMI as determined by “Fannie Mae Area Median Income Lookup Tool”

– use the “HomeReady Income Limit”

(80% AMI)

https://ami-lookup-tool.fanniemae.com/amilookuptool

Income limits must be equal to the borrower(s) total income listed on the application including commission, bonus and overtime. Income limits vary by property address/census tract. Limits are not dependent on family size. Use standard credit qualifying income (not total household income). The income used for approval must be consistent on the 1003, 1008 and AUS.

Maximum Borrower Income Limit is 80% of AMI as determined by “Freddie Mac Home Possible Income and Property Eligibility Tool” : – use the “Home Possible Income Limit” (80% AMI) https://sf.freddiemac.com/working-with-us/affordable-lending/home-possible-eligibility-map

Income limits must be equal to the borrower(s) total income listed on the application including commission, bonus and overtime. Income limits vary by property address/census tract. Limits are not dependent on family size. Use standard credit qualifying income (not total household income). The income used for approval must be consistent on the 1003, 1008 and AUS.

$98,900

Use standard credit qualifying income (not total household income).

Income limits must be equal to the borrower(s) total income listed on the application including commission, bonus and overtime. Income limits vary by property address/census tract.

Limits are not dependent on family size. Use standard credit qualifying income (not total household income).

The income used for approval must be consistent on the 1003, 92900-LT and

AUS.

Income limits must be equal to the borrower(s) total income listed on the application including commission, bonus and overtime. Income limits vary by property address/census tract.

Limits are not dependent on family size. Use standard credit qualifying income (not total household income).

The income used for approval must be consistent on the 1003, 1008 and AUS.

In addition all households must fall within acceptable USDA income limits for the county in which the property is located.

Income limits must be equal to the borrower(s) total income listed on the application including commission, bonus and overtime. Income limits vary by property address/census tract.

Limits are not dependent on family size. Use standard credit qualifying income (not total household income).

The income used for approval must be consistent on the 1003, VA Loan Analysis and AUS.

https://ami-lookup-tool.fanniemae.com/amilookuptool https://ami-lookup-tool.fanniemae.com/amilookuptool https://sf.freddiemac.com/working-with-us/affordable-lending/home-possible-eligibility-map https://sf.freddiemac.com/working-with-us/affordable-lending/home-possible-eligibility-map https://sf.freddiemac.com/working-with-us/affordable-lending/home-possible-eligibility-map

HFA Preferred

Freddie Mac HFA Advantage FHA USDA VA

Eligible Properties • Single Family (1 unit)

• Owner-occupied, primary residence

• Townhomes

• Condominium (must follow

AUS/Fannie Mae requirements)

• PUD

• Property must be located in

South Carolina

• No Manufactured Housing or

Leasehold properties permitted

• Single Family (1 unit)

• Owner-occupied, primary residence

• Townhomes

• Condominium (must follow

AUS and Freddie Mac requirements)

• PUD

• Property must be located in

South Carolina

• No Manufactured Housing or

• Single Family (1 unit)

• Owner-occupied, primary residence

• Townhomes

• Condominium (must comply with HUD requirements or be on the FHA Approved Condo list)

• PUDs (Must comply with HUD Requirements)

• Off-Frame Modular Housing

• Property must be located in

South Carolina

• No Manufactured Housing or

Property addresses must be verified through 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

• Property must be located in

South Carolina

• No Manufactured Housing or

Leasehold properties permitted

• 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

• No Manufactured Housing or

Reservation/Rate Lock • All locks for the Palmetto Home Advantage program are for 60 days Do not lock the interest rate at the time of application, wait until ready to deliver to SC Housing for Compliance Review

• Rate Lock Expiration – Loans must be closed and fund by the master servicer “Lakeview Loan Servicing” by lock expiration

• Loans aged more than 45 days of the note date and receipt of the credit and closing file in fundable condition will not be purchased by Lakeview Loan Servicing

• Locks may be extended and must be requested prior to the expiration of the rate lock. Any request after the rate lock expiration is subject to relock at worse case pricing

• Extension fees are as follows - These fees will be deducted from lender SRP at funding from Lakeview Loan Servicing o 15 day – 0.125% o 30 day - 0.250%

• Loans may be reserved Monday – Friday between 10:00 AM and 6:00 PM

• Interest rates are subject to change without notice and are posted in Lender Online

• Note: If a lock is withdrawn or canceled, the lender cannot initiate a new lock for the borrower until 60 days after the withdrawal/cancellation date

• Exception: Each rate lock applies to a specific borrower and property. If the property is not purchased and the borrower places a contract on a different property, a new rate lock can be requested subject to current market rates.

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.

Appraisal Condition Rating of C5/C6 or a Quality Rating of Q6 are not eligible and will not be purchased.

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) – MANUAL UNDERWRITING NOT PERMITTED http://eligibility.sc.egov.usda.gov/

HFA Preferred

Freddie Mac HFA Advantage FHA USDA VA

Automated Underwriting All loans must be underwritten by the lender in compliance with Fannie Mae/DU automated underwriting guidelines. Freddie Mac LPA is not acceptable for delivery on this product.

Lender will follow all requirements of the DU findings as well as Fannie Mae’s selling guide. SC Housing will complete a Program Compliance Review prior to closing and issue a Certificate of Eligibility. Lenders must have Delegated Underwriting approval by Lakeview Loan Servicing.

• Must receive an Approve/Eligible

• In DU Select “HFA Preferred” on the DU Additional Data screen in the Community Lending Information section

• DU Findings must reflect the following Special Feature Codes o SFC 127 and 782 must be indicated on all o SFC 118 Community Second, if DPA

All loans must be underwritten by the lender in compliance with Freddie Mac Loan Product Advisor (LPA) automated underwriting guidelines. Fannie Mae DU is not acceptable for delivery on this product. Lender will follow all requirements of the LPA findings as well as Freddie Mac’s selling guide. SC Housing will complete a Program Compliance Review prior to closing and issue a Certificate of Eligibility. Lenders must have Delegated Underwriting approval by Lakeview Loan Servicing.

• Must receive an Accept Risk Class recommendation through Loan Product Advisor (LPA)

• In LPA Select “HFA Advantage” in the “Offering Identifier” field

• LPA Findings must reflect the following Special Feature Codes 251

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)

Lenders must have Delegated Underwriting approval by Lakeview Loan Servicing.

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

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

Lenders must have Delegated

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)

Lenders must have Delegated

Credit Score Requirements All borrowers must have a minimum credit score of 640

Age of Credit Documentation Follow applicable investor/insurer guidelines on the maximum age for credit documents

Derogatory Credit – Foreclosure/Bankruptcy Judgements/Collections

Follow applicable insurer guidelines.

For USDA loans, if a borrower is in Chapter12 or 13 BK, the applicant must obtain approval from bankruptcy court/trustee to enter into a mortgage transaction, if not obtain loan is ineligible

HFA Preferred

Freddie Mac HFA Advantage FHA USDA VA

Qualifying Ratios Maximum DTI - must have Approve/Eligible, Accept recommendation from AUS

• 45% with representative credit score 640-699

• 50% with representative credit score >= 700

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

Asset Documentation Follow AUS and insurer requirements

Employment /Income Verification and Tax Return/Transcript Requirements

• Follow AUS and Insurer requirements

• All sources of qualifying income must be legal in accordance with all applicable federal, state and local laws, rules and regulation, without conflict.

• A 4506-T/4506-C form is required to be signed at closing for all transactions.

• Transcript Requirements o W2/1099 transcripts will not be required for a borrower when all income for that borrower is derived from W-2 wage earner and/or 1099 fixed income sources o Tax transcripts are required in the following circumstances:

When the tax returns are used to qualify a borrower. The number of years provided must be based on the AUS findings. Income verified via tax returns includes but is not limited to the examples listed below:

• Self-employment income

• Rental income

• Other income sources (i.e. Dividend Interest, Capital Gains, Alimony, etc.)

o When a written VOE form 1005 is used as standalone income verification.

o Employment by family members o When amended tax returns have been filed, transcripts are required and must support the amended income

Mortgage Insurance Conventional loans with LTV’s above 80%

• MI can be Borrower Paid - Monthly, Financed, Split or Single Premium

• Lender Paid MI is not eligible

Minimum coverage requirements

• 80.01 – 85% LTV: 6%

• 85.01 – 90% LTV: 12%

• 90.01 – 95% LTV: 16%

• 95.01 – 97% LTV: 18%

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

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

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

Minimum Borrower Cash Contributions

None, unless required by AUS or MI Company guidelines None

Reserve Requirements None, unless required by AUS findings or insurer guidelines

HFA Preferred

Freddie Mac HFA Advantage FHA USDA VA

Assumability NOT ELIGIBLE WITH CONDITIONS NOT ELIGIBLE WITH CONDITIONS

Down Payment Assistance

(DPA)

Down Payment Assistance (DPA) must be used for down payment.

SC Housing will provide down payment assistance of 4% or 5% of the first mortgage loan amount through a forgivable second mortgage with a 10 year term and zero interest rate. This is not a grant. For borrower’s that do not need the assistance SC Housing offers a 0% DPA option.

• Borrower(s) may contribute their own additional cash resources for down payment and closing costs as allowed by applicable insurer guidelines

• No monthly payment

• All DPA liens must be closed on the required SC Housing note and mortgage, in the lender’s name and registered in MERS at delivery

• Lenders will be responsible for completing, and delivering the initial and final Loan Estimate and Closing Disclosure to the borrower prior to closing

• The only allowable closing costs on DPA second are those required to record the mortgage

Homebuyer Education Homebuyer education is required to be completed by at least one borrower on all loans, regardless of first time homebuyer status. Home Buyer Education may be offered/completed from the following providers:

• HUD Approved/Certified Home Buyer education course offered by a Counseling Agency or by an MI Company (currently ARCH and Essent, ONLY)

• Framework (Fannie Mae)

• Credit Smart (Freddie Mac)

The presence of a disability, lack of internet access, and other issues may indicate that a consumer is better served through other education methods (e.g., in-person classroom, 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 signed certificate of completion to be included in the loan file.

Fees and Costs

Origination and other lender fees:

• Lenders may charge what is usual and customary

• Recording fees are the only allowable fees on 2nd DPA liens

Discount Points:

• Program does not allow discount points to be charged to borrower(s)

Funds paid to Lender from Servicer (Lakeview Loan Servicing) at Purchase:

• 100% of the amortized balance of the 1st and 2nd DPA mortgage

• SRP 1.75% of the amortized balance of the 1st mortgage the date of purchase

• Accrued interim interest up to the date of purchase

HFA Preferred

Freddie Mac HFA Advantage FHA USDA VA

Fees paid to Servicer (Lakeview Loan Servicing) from Lender (netted at purchase):

• Flood Certification Transfer Fee $10

• Tax Service Fee $75

• Funding Fee $400

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) High Cost/HOEPA – Loans that fall under the provisions of High Cost, and/or Home Ownership Equity Protection Act (HOEPA) are not eligible High Priced Mortgage Loan (HPML) loans are acceptable in accordance with insurer guidelines

Property Insurance All property insurance coverage and deductible limits must comply with investor/insurer and Lakeview Loan Servicing’s requirements

Escrow Waiver Escrow accounts for taxes and insurance must be established on all loans. Escrow Waivers are NOT PERMITED

Eligibility/Compliance File Submission

Loan files must be submitted to SC Housing via Lender Online https://www.lol.schousing.com with documents in the order of the checklist. Files not delivered in order or missing documents may be returned for re-submission.

The following documentation is required by SC Housing prior to closing for determination of program compliance and eligibility. Upon review of acceptable documentation, a Certificate of Eligibility will be issued:

• Request for Eligibility Determination Form “PA-01”

• Notice to Borrower Form “PA-02”

• 1008 – Uniform Underwriting and Transmittal Summary (Conventional and USDA Loans)

• 92900LT – FHA Loan Underwriting Transmittal Summary (FHA Loans)

• VA Loan Analysis (VA Loans)

• 1003 – Uniform Residential Loan Application

• AUS Findings

• MI Certificate

• Homebuyer Education Certification

Delivery of Closed Loan File Seller must deliver the entire loan file (credit and closing package) to Lakeview Loan Servicing within 2 days of Lock Expiration Date. Consult Lakeview Loan Servicing delivery requirements for details. Loans aged more than 45 days from the note date will not be purchased by Lakeview Loan Servicing.

Closed Loan File may be delivered electronically to the Seller Portal located at www.lakeviewcorrespondent.com in accordance with delivery requirements and applicable checklist.

Final Documents Final Documents for first and second (DPA) including recorded mortgage and original title policy should be delivered to Lakeview Loan Servicing.

https://www.lol.schousing.com/ http://www.lakeviewcorrespondent.com/