2 Lien FAQ 1. Do we need a separate Closing …

1 2nd Lien FAQ. 1. Do we need a separate Closing Disclosure (CD) or Loan Estimate (LE). for the second mortgage? No, the Partial Exemption Disclosure will serve as the CD/LE in essence. Makes it a little easier for the lender. 2. Does the Partial Exemption Disclosure will need to be sent out twice? Yes, the borrower will receive a draft version no later than at the time of reservation and a final copy at Closing . The form will be available under the Guide & Forms section outside of the Lender Portal so that lenders can print the form at reservation and it not be logged into the system. 3. For the Partial Exemption Disclosure, is it time sensitive? No, it is not time sensitive, however the first draft has to be provided to the borrower no later than the time of reservation.

2 4. Can the disclosure be e-signed? Yes, we'll accept e-signatures so long as the lender is set-up with us to do so. If they aren't, they need to reach out to Lender Management (800)562-5165 and request and complete an application to be approved to deliver files to us with e-signatures. 5. How should the DPA be entered into AUS? Follow FHA/VA/RD, Fannie or Freddie guidelines for correct input. 6. Is the DPA amount still provided by the lender? In the Home in Five program the lender will provide the DPA, In the Homebuyer's Solution Program the IDA provides the DPA at Closing . Bottom line, nothing has changed about this process at all. 7. Do I record the 2nd Deed of Trust?

3 Yes, the originating lender records the DOT (Deed of Trust) and returns it to Bank's Final Document Department. 8. Do I endorse the 2nd Promissory Note to Bank? No, the 2nd Promissory Note remains in the name of the HFAs. 6. Will the IDAs subordinate the 2nd so my borrower can refinance during the 3-year forgivable period? No. 7. Can my borrower make payments on the 2nd lien? No, because it's a non-repayable lien and no payments are required. It is only repayable if the borrower pays off, sells, transfers or refinances before the forgivable period is completed. 8. Will there be any changes to the FICO score options for the rates and grants available each day? No, the FICO/Rate/DPA grant options table will remain the same.

4 The Home in Five Advantage DPA is reduced by the origination fee that is moved to SRP, otherwise no. The only difference is that whatever percentage your borrower qualifies for is now in the form of a forgivable lien. 9. Are there specific disclosures required for the 2nd mortgage recording fee? The CFPB released a final rule regarding TILA and RESPA disclosures on HFA second mortgages in July. The final rule amends the RESPA exemption to clarify that any transfer taxes borrowers pay at Closing are an allowable fee. The rule also EXEMPTS state and local recording fees and taxes from being counted toward the 1% fee cap. 10. Are there recording fees listed on the 1st mortgage CD?

5 Yes, the recording fees are listed on the CD, but the lender's compliance group determines what section the fee should be listed. US Bank does not provide information on where those fees are to be listed. 11. Are there any other fees for the 2nd mortgage? No, just the recording fee. 12. When will the training slide deck be available? eHousing will post the presentations to the program's webpage 13. When will the updated guidelines be posted? eHousing will provide a draft on the program webpage as well, though it will have a watermark of Draft on each page with clear instructions on when they will be effective.