No Prepayment Penalty
Ideal for first-time home buyers and move-up Borrowers
who lack the funds for down payment and closing costs,
and interested in obtaining maximum 15, 20, 25 or 30 year term financing.
With this loan program, the first-time homebuyers or move-up Borrowers get a loan that covers 97% of the homes value and also covers the 3% downpayment, resulting in 100% mortgage financing.
Key Features Overview
Purchase financing has to be a single family residence (no duplex or larger allowed)
Single Family Housing (1-Unit) $322,700 (2003), and up to $333,700 for 2004:
SFRs (Single Family Residence)
Modular (double-wide unit, at minimum, built after June 15, 1976)
PUDs (Property Under Development) (include: modular homes)
No down payment is required from the Borrower, however, the borrower is required to pay at least 3% of the sales price, all of which may be applied towards closing costs and/or prepaid items (i.e. insurance & taxes etc…).
Acceptable Sources of Down-payment and Closing Cost Funds
(contributions limited to 3% of the lesser of the sales price or appraised value)
Borrower funds on deposit including checking, savings, certificate of deposit, Individual Development Account or other depository accounts.
Borrower’s own secured assets, such as a 401(k) loan.
Grants, Gifts or unsecured loan from a relative, domestic partner, fiancé, or fiancée, nonprofit agencies, nonprofit community organization, government agency, or the Borrower’s employer that need not be repaid.
Unsecured loan from the Borrower’s employer, cannot be due and payable, and the Borrower must retain the right to continue making payments on it in the event that the Borrower no longer works for the employer.
Contribution plus the LTV may not exceed 100%. No Exceptions.
Premium pricing limited to 2% of value. (i.e. 2% of $200,000 = $4,000)
Unacceptable Sources of Funds
Maximum Financing (multiply home value by .05)
per these guidelines
Borrowers can finance up to 105%
Maximum LTV/CLTV (loan to Value/Combined Loan to Value): 100/105
LTV = Loan Amount divided by Home Value (as appraised)
CLTV = LTV + Secondary Financing
If the CLTV is greater than 100%, the subordinate financing may only be a Community Second. Funds from the Community Second can be applied toward closing costs and prepaid items. Any excess amount after satisfying closing costs and prepaid item requirements is to be applied towards the down payment.
The minimum LTV (Loan divided by value) is as follows:
With no secondary financing, 90% is the minimum LTV
With secondary financing, there is no minimum LTV
Mortgage Insurance (MI) Requirements
Borrower Paid only (TAMI not allowed)
Loans with a representative credit score less than 620:
Require delegated manual MI, and
A-minus rates may apply, and
An MI certificate must be in the loan file prior to closing
For MI requirements for energy-efficient mortgages may differ among lenders
All manufactured housing requires non-delegated manual MI.
An MI certificate must be in file prior to closing.
The certificate must be from PMI, RMIC, or Triad.
Bankruptcy – Discharged with confirmation
Foreclosure – Copy of Satisfaction of Debt (Cancellation of Debt issued by all creditors)