Guidelines for Down Payment Assistance (Bond and Non …

1 Texas State Affordable Housing Corporation6701 Shirley Ave Austin, TX 78752 Guidelines for down Payment Assistance (Bond and Non-Bond) and Mortgage Credit CertificatesRevised: October 1, 2021website: phone: 888-638-3555social media: @TSAHCTSAHC Program Guidelines for Homeownership ProgramsTexas State Affordable Housing CorporationPage 2 of 36 Revised of RevisionsDateVarious-Revised to reflect Lakeview loan Servicing, LLC ( Lakeview ), as master servicer for the process for requesting rate lock extensions and fees for same3/30 package due within five (5)

2 Calendar days of closing4/06 Manual Underwrite 640 FICO Minimum4/19 active military to veteran definition in reference to Homes for Texas Heroes1/15 rental history requirement for first-time home buyers using MCC1/15 of Texas resident requirement for the Homes for Texas Heroes program1/15 of cosigner and non-occupying co-borrower requirements1/15 down Payment Assistance funding process1/15 , , 19-20 Addition of manufactured housing to eligible property types5/01 for using TSAHC Assistance multiple times5/01 , , 9-10 Clarified veteran definition in reference to waiving first-time home buyer requirement for Mortgage Credit Certificate5/01 completion by at least one borrower of home buyer education course5/05 , , , 19-20, 22-25 Introducing TSAHC s new soft second lien down Payment assistance8/20 soft second lien repayment requirement8/29 MCC credit rate from 40% to 30%2/04 usage of additional subsidy2/04 MCC credit rate from 30% to 20% and removed $2.

3 000 max credit2/27/2019 Various-Added Bond DPA-related provisions4/03/2019 Various-Added HFA Preferred PLUS product including additional second lien options4/03/2019 Various-Clarified changes to the HFA Preferred PLUS product9/05/2019 Disclaimer: The Texas State Affordable Housing Corporation (TSAHC) provides these Program Guidelines (these Guidelines ) as a service to its participating lenders ( Lenders ). While TSAHC strives to make the information in these Guidelines as accurate as possible, we make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of these Guidelines .

4 TSAHC expressly disclaims liability for errors and omissions in the contents of these Guidelines related to the eligibility and underwriting requirements of Lakeview loan Servicing, LLC, Fannie Mae, freddie Mac, FHA, USDA-RHS, and/or VA. For those requirements, Lenders should rely on their agreements with, and Guidelines published by, the relevant Program Guidelines for Homeownership ProgramsTexas State Affordable Housing CorporationPage 3 of 36 Revised back the option to combine the MCC to the HFA Preferred Conventional DPA9/05 rental history requirement for first-time home buyers10/01/2019 Various-Eliminated TSAHC s grant and soft second lien for use with conventional loan types11/29 , , , 19-20.

5 22-25 Introducing TSAHC s new 3-year Deferred Forgivable Second Lien for all loan types12/02 accepting freddie Mac HFA advantage with LPA AUS up to 115% AMFI12/02 Mae HFA Preferred Conventional limited to < 80% AMFI12/02 or non-occupying co-borrowers are now permitted on all government loans12/02 cosigners or non-occupying co-borrowers are not permitted on conventional2/03 IRS printouts to read IRS transcripts2/03 accepting Fannie Mae HFA Preferred Conventional up to 115% AMFI2/03 response to the COVID-19 pandemic, the following interim guidance will be effective with all locks on or after May 4,2020, the minimum FICO score for FHA, VA and USDA products is 700 when the DTI is >45%.

6 5/04 that the DPA is based on TOTAL loan amount9/2 that a principal reduction is acceptable use of DPA9/2 only occupying borrowers and non-purchasing spouses (NPS) may have an ownership interest in the subject property4/15 to reservation extension fees4/15 the minimum 700 FICO score when the DTI is >45% for FHA, VA and USDA products effective with new reservations April 29, purchase price limits for Non-Bond DPA when used by itself (no MCC).10/01/2021 TSAHC Program Guidelines for Homeownership ProgramsTexas State Affordable Housing CorporationPage 4 of 36 Revised of TableSECTION 1 - INTRODUCTION TO THE TSAHC HOMEOWNERSHIP GeneralSECTION 2 MORTGAGOR Eligible Income First-Time Home Buyer New Mortgage Requirement/No Principal Residence Residency Home Buyer EducationSECTION 3 loan Types of Purpose of Assistance Options Non-Bond DPA (with or without MCC)

7 , Bond DPA or MCC Using Additional Subsidy Mortgage Subsidy Recapture TaxSECTION 4 PROPERTY Eligible loan Qualifying Residences and Mortgage Purchase Price Targeted AreasSECTION 5 MORTGAGE loan UNDERWRITING AND General Mortgage Cosigners and Non-Occupant Co-BorrowersSECTION 6 PROGRAM FEES AND Program Lender Fees and Charges on the Closing DisclosureSECTION 7 loan RESERVATION, COMPLIANCE & FUNDING Lender Reservation, Compliance and Closing Electronic Submission of Required DocumentsSECTION 8 Changes in Current Change in Purchase Changes in Property Change in loan Lender s Obligation to Notify TSAHC of Material ChangesSECTION 9 ADDITIONAL Cancellation and Commitment Delinquent Closing Penalties for Borrower Revocations of Reissued Replacement MCCsSECTION 10 MCC Lender Record Keeping and Federal Report TSAHC ReportsAPPENDIX.

8 INCOME Guidelines FOR BORROWERS RECEIVING BOND DPA OR MCCsTSAHC Program Guidelines for Homeownership ProgramsTexas State Affordable Housing CorporationPage 5 of 36 Revised 1 - inTRoduCTion To The T sahC homeowneRship pRogRams. General The Texas State Affordable Housing Corporation (TSAHC) provides (1) fixed-rate mortgage loans with down Payment Assistance (DPA) to qualified mortgagors, and (2) mortgage credit certificates (MCCs) to qualified mortgagors. The DPA is provided from two different sources: (i) Non-Bond DPA which is financed through non-bond, market sales of mortgage-backed securities backed by the loans, and (ii) Bond DPA which is provided from the proceeds of tax-exempt single family mortgage revenue bonds issued under Section 143 of the Internal Revenue Code.

9 MCCs, which are issued under Section 25 of the Internal Revenue Code, provide a tax credit to the borrower based on the amount of the loan interest paid. MCCs may be issued with respect to (1) loans with Non-Bond DPA (but not Bond DPA) and (2) loans which are made by lenders which do not have Non-Bond or Bond DPA. Non-Bond DPA, Bond DPA and MCCs are available to teachers, veterans, police officers, corrections officers, fire fighters, and low- to moderate-income home buyers through our Homes for Texas Heroes Program and Home Sweet Texas loan Program (each a Program and together the Programs ).

10 TSAHC provides an online reservation and compliance system (Lender Portal) at where interest rates are locked and funds are reserved. TSAHC also provides these Program Guidelines (also referred to below as these Guidelines ) and applicable forms and affidavits, and reviews compliance packages to ensure TSAHC s eligibility requirements are met. The Program Guidelines describe the current rules and requirements, outline the role of TSAHC, and set forth the requirements for Lenders to participate. TSAHC may revise the Program Guidelines from time to time.