CalHFA’s On Demand Training: FHA First Mortgage Products

[MUSIC PLAYING] Hello, and welcome to CalHFA's On Demand Lender Training Series My name is Molly Ellis

Our focus in this video is our FHA First Mortgage programs, basic guidelines, and the common ways to layer closing cost and down payment assistance programs to benefit your borrower First, let's talk about our CalHFA FHA program This is a standard FHA first mortgage with our lowest available interest rate It has a maximum loan-to-value of 965%, and a maximum combined loan-to-value of 105%, with a minimum credit score of 640

The maximum debt to income ratio is 45% The maximum loan amount is $424,100, and you must follow FHA loan limits If FHA allows you to go over the 424, you can But it would be considered a high-balance loan, and that comes with an additional fee Next is our CalPLUS FHA program

CalPLUS FHA is also a standard FHA insured first mortgage, but it comes with built-in closing cost assistance called Zero Interest Program, or ZIP CalHFA offers ZIP with a loan amount at 3% of the total first mortgage loan amount, or ZIP with the loan amount at 4% of the total first mortgage Please check out our rate page for pricing and the high balance fee Although ZIP has a zero interest rate with deferred payments, it is a loan and must be paid off when the borrower sells, or reifies, or at the end of the 30 year term The borrower must be a first time home buyer

Remember that the definition of a first time home buyer is someone who has not owned and occupied a principal residence in just the past three years The third FHA insured first mortgage will cover is our Cal-EEM + Grant program This is an FHA insured energy efficient mortgage with an additional 4% grant The borrower will get an additional 4% from CalHFA to use towards their energy efficient upgrades The 4% grant has to go towards energy efficient upgrades

It's a conditional grant, so CalHFA puts a lien on the property for the first three years Then, if the borrower occupies the property for that time, we release the lien and the grant is forgiven You can find a list of facilitators by clicking on CalHFA's Lenders/Realtors section of the website site Choose the Loan Program Handbooks tab, and then choose the Cal-EEM + Grant program Handbook link It is not mandatory that you use a facilitator, but CalHFA does recommend it

The work is finished after the close of escrow, so it doesn't delay your closing Your lender just has to be OK with managing the escrow holdback For all CalHFA FHA programs where the borrower is a first time home buyer, home buyer education is required for at least one borrower on the loan CalHFA allows for a manually underwritten loan with some overlays The minimum credit score would need to be 660, and the maximum DTI is at 43%

Remember, that's only on a manual underwrite If the loan has an automated approval, the minimum FICO is still 640, and max DTI is 45% What makes our program so great is our closing cost and down payment assistance, later are these programs with our first mortgages to increase affordability for your home buyers For example, you can layer our MyHome Assistance Program with any of the three FHA first mortgages we've just talked about MyHome is 3

5% of the sales price– or appraised value, whichever is less– which could get your borrower close to 75% in assistance when layered with CalPLUS and ZIP The interest rate is 25%, simple interest, with deferred payments, and the borrower has to be a first time home buyer MyHome has to be used with a CalHFA first mortgage, and must be in second lien position

The last program you can layer with CalHFA first mortgage is the Mortgage Credit Certificate Tax Credit program, or MCC Tax Credit program The MCC Tax Credit program is not a loan, it's a 20% federal income tax credit This is a statewide program offered in areas where localities have limited funding If your county already has an MCC Tax Credit program, we encourage you to apply through that agency's local, county, or city program first You can use the CalHFA MCC Tax Credit program with or without a CalHFA first mortgage eHousingPlus is our administrator for this program, so they will handle the processing on behalf of CalHFA

There is a $450 MCC fee paid to eHousingPlus when you use the MCC Tax Credit program behind a CalHFA first mortgage There's a $750 MCC fee when you use the MCC Tax Credit program without a CalHFA first mortgage You can use that program to income qualify your borrower per the investor's guidelines There's a mandatory training that you'll need to take through eHousingPlus You can find the link to this training by clicking on the Lenders/Realtors section of the website, choose the Loan Program Handbooks tab, then scroll down to the MCC Tax Credit Program section

Then, choose Access MCC Training On your screen is the website and the phone number for eHousingPlus, just in case you have questions regarding the CalHFA MCC Tax Credit program That covers our FHA first mortgage programs and the mortgage assistance that can be layered with them Now, let's move on to property requirements and maximum lender origination fees The property requirements for these programs, for the most part, follow FHA guidelines

Also, make sure you adhere to any lender or investor overlays The sales price of the property must be within CalHFA's published sales price limits A one year home warranty is required for first time home buyers unless they're purchasing new construction The property cannot exceed five acres, and manufactured homes are allowed with a minimum credit score of 660, and an automated approval There's no manual underwriting on manufactured homes

The property cannot have an income producing component Unless it meets FHA guidelines for an Accessory Dwelling Unit, then as allowed, you can count the rental income But don't forget to count it in the CalHFA income limit calculation too Now, let's talk about lender fees You must be a CalHFA approved lender

The maximum CalHFA allows the lender to charge in lender fees on the first mortgage is 3% This includes origination, processing, and underwriting It does not include any third party fees Our rates are at par, so you have to charge origination on these loans But with the closing cost and down payment assistance from ZIP and MyHome, the borrower will still have very little out-of-pocket expenses

CalHFA will allow you to charge an additional subordinate processing fee of $250 for MyHome, and an additional $50 processing fee for ZIP Also, you may not charge any additional lender fees like an origination fee on the subordinate loans We want to help make this easy, so we have provided some tools to help you process loans with CalHFA programs The loan program handbooks for each one of our programs includes all the details about the program in one easy handbook The CalHFA Government Loan Programs Matrix provides a quick view of terms and requirements for all CalHFA FHA programs

The very popular Loan Scenario Calculator will help you calculate loan amounts and print results for your borrowers You can find all these tools by clicking on CalHFA's Lenders/Realtors section of the website, then click on the Loan Program Handbooks tab for the program handbooks and the Tools, Affidavit & Docs tab for the CalHFA Government Loan Programs MATRIX and the Loan Scenario Calculator Now, let's look at the fun stuff before we close Our single family lender training team offers in-person training classes every month across the state Attend a four hour workshop to learn all about CalHFA's programs

Classes are announced each month on our website and through our monthly e-news announcements To sign up for class, visit CalHFA's website, choose the Training Calendar link under Lenders/Realtors, and sign up for a class that will work best for you We also provide customized marketing materials that can be downloaded from our website by clicking on the Lenders/Realtors section of the website, the Loan Officers link, then scroll down and choose the Sales, Tools, & Marketing Materials link For any questions you may have, contact Single Family Lending at 916-326-8033, or you can email our Lender Services division at lendertraining@calhfaca

gov Thank you so much for your time, now get out there and help more Californians have a place to call home [MUSIC PLAYING]

Source: Youtube

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