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CHDAP 2nd Trust Deeds

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Title: CHDAP 2nd Trust Deeds


1
CHDAP 2nd Trust Deeds
2
The CHDAP 2nd Trust Deed
  • FHA 1st TD at 96.5
  • Combine with a CHDAP 3 2nd TD
  • This program can only be done with an FHA 30
    year fixed. No 203Ks
  • Borrower contribution to down payment not
    required can all be gift.
  • Can be used with a FLIP loan.
  • One Year Home Warranty Required Compensation
  • Lender Paid Paid as usual, depending on your
    Broker Compensation Plan, Broker can be paid up
    to 2.75
  • Borrower Paid The maximum origination fee for
    the 1st can be 2 or 3,000.00 whichever is
    greater.
  • No payments on the 2nd deferred for the life of
    the 1st loan.
  • The 2nd is due and payable when certain events
    occur
  • CLTV cannot exceed 103
  • Term on 2nd needs to match term of 1st, not to
    exceed 30 years.

3
What is a first time homebuyer?
  • A first time homebuyer is defined as someone who
    has not had any ownership in a primary residence
    within the last three years (timeshares okay and
    n/o/o okay if currently renting and not from a
    family member).
  • Federal income tax returns required for the
    previous 3 years. Borrowers not legally
    obligated to file must complete Tax Return
    Affidavit.

4
CHDAP 2nds
  • Must be a first time home buyer
  • FHA 1st Trust Deed 96.5 financing 30 year fixed
    (no 203ks)
  • CHDAP 3 2nd deferred payments
  • The 2nd can be used for down payment or closing
    costs
  • Borrower contribution to down payment not
    required
  • .50 down payment can all be a gift
  • 640 FICO requirement
  • 43 max ratio (see co signer guidelines for
    higher ratios)
  • 1st Time Homebuyer no primary ownership in 3
    yrs.
  • Borrowers income can not exceed the CalHFA
    published income limits.
  • Only calculate the purchasing borrowers income
    to qualify for the loan.
  • Non-0ccupant co-signers okay (see next slide) No
    non-occupant co-borrower
  • You dont need to be married but all income must
    be considered and total family members.
  • You can use an MCC with this product to improve
    the ratios.
  • Homebuyer Education is required for one occupying
    borrower The cost is 50, including immediate
    access to their completed certification for
    printing. Follow up telephone interview not
    required and is more costly. Go here for the
    training http//ehomeamerica.org/calhfa.com
  • SFRs, condos, and PUDS (no 2-4 units) flips
    okay over 90 days.
  • Five acres maximum no income producing hobby
    okay.
  • If garage has been converted, no stove allowed
    gas needs to be capped no 2nd kitchen..
  • DU or LP approvals.

5
CHDAP Co-signers
  • Helps with the ratios of 45 maximum.

6
Additional Co-Signer Requirements
  • Cosigners may not have a financial interest in
    the transaction (seller, builder, real estate
    agent, MLO, etc., are ineligible).
  • Co signers must be closely related to the
    occupying borrowers. Allowable relatives are
    parents, children, siblings, stepchildren,
    aunts/uncles, nieces/nephews ONLY. Lexis-Nexis
    to show family relationship and/or additional
    documentation may be required by underwriting.
  • Cosigners must have a principal residence in the
    US exempted due to military service or as US
    citizens living abroad.
  • Occupant borrowers debt to ratios cannot exceed
    46.99/56.99.
  • Total DTI including co-signers income is 43.
  • Full credit packages will be required for
    Cosigners (credit reports, full income
    documentation and asset documentation, full
    disclosures in accordance with FHA and total
    scorecard requirements).

7
Lender vs. CALHFA Review of Income
8
Notes of Interest on how CalHFA calculates
maximum income forfamily or anyone who is living
in the house not just borrowers .
  • Schedule C or E Income do not add back in
    depreciation.
  • Negative is a wash, not deducted.
  • Do not back out 2106 expenses.
  • 2014 and YTD income (no 2013 income is reviewed
    since we are in 2015).
  • PLs are okay for 2015.
  • In question, CalHFA will always take the higher
    income.

9
CHDAP SALES PRICE LIMITS
10
2014 Sales Price Limitations
11
2014 Sales Price Limitations
12
CHDAP INCOME LIMITS
13
CHDAP Income Limits
14
CHDAP Income Limits
15
CalHFA CHDAP Submission Check ListAll these
Forms can be found at essexwholesale.com under
Forms and Documents
  • ___We will require 2 packages to be uploaded the
    1st and the 2nd with 2 separate loan numbers.
  • ___The 1st mortgage submit by using your FHA
    Required Submission Forms list exception CalHFA
    requires 3 years tax returns on all borrowers.
  • ___ GFE TiL on the 2nd 250.00 origination
    fee in Box 1 which will go to Essex Mortgage.
  • No other fees can be charged on the 2nd.
  • Additional Forms
  • ___CalHFA Borrower Lender Affidavit of Loan
    Analysis Comparison
  • ___CalHFA Borrower Affidavit (for non-MRB loans)
  • OTHER THINGS TO KNOW
  • Once a complete package is approved by Essex
    Mortgage, your file will be submitted to Agency
    for approval turn times vary. Please check with
    your AE.
  • Prior Agency approval is required to locking your
    loan.

16
When you add an CalHFA MCC to the CHDAP
  • When multiple CalHFA loan programs are used in
    combination, the most restrictive income limits
    apply (such as combining with an CalHFA MCC Tax
    Credit the tax credit can not be used for
    credit qualifying).

17
Subordination Procedures
18
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19
When Subordinating the CHDAP
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