PHFA Seller’s Guide

1 April 2021 Pennsylvania Housing Finance Agency ~ HOUSING FINANCE AGENCYHOMEOWNERSHIP PROGRAMSSELLER S GUIDEThe Pennsylvania Housing Finance Agency (PHFA) was created by the General Assembly in 1972, to provide affordable housing for older adults, families and individuals of modest means and persons with disabilities. For ten years, this mission was carried out solely through rental housing programs. In 1982, the first Homeownership Program was created, through which PHFA provides capital for single-family, home purchase loans. The Homeowners Emergency Mortgage Assistance Program (HEMAP) was created by Act 91 in 1983 as a foreclosure prevention program.

2 Rental housing, homeownership, and foreclosure prevention remain as PHFA s core components. Housing industry professionals are a key component of PHFA s homeownership programs. This group of experts includes housing counselors, real estate agents, builders, lenders, brokers, appraisers, title agents, housing authorities, and nonprofit organizations. PHFA s home loan products can help these professionals stretch their customers dollars further and/or lower their monthly mortgage payment. Together, PHFA and its housing partners ensure that eligible buyers can afford to become and remain homeowners, and that they aren t overwhelmed by the 2021 Page 2 of 121 Table of Contents PHFA Homeownership Programs Seller s Guide TABLE OF CONTENTS TABLE OF CONTENTS.

3 2 CHAPTER 1 - PARTICIPANT RELATIONSHIP .. OF PARTICIPANT .. 81. Participating Lender .. 82. Third Party Originator (TPO) .. ORIGINATION AND SALE AGREEMENT .. COMPENSATION AND ALLOWABLE FEES .. 91. Origination Compensation .. 92. Servicing Release Premium .. 103. Allowable Fees .. S BASIC DUTIES AND RESPONSIBILITIES .. TRAINING .. EVALUATION .. 121. Lender Score Card .. 12a. Pre-Closing Eligibility .. 12b. Loan Setup & Purchase .. 12c. Post Purchase .. 12d. Pre-Closing Performance WITH PARTICIPANT .. 13 CHAPTER 2 LOCK POLICY AND PIPELINE MANAGEMENT.

4 POLICY .. 141. New Lock Submission .. 142. Rate Publication and Lock Options .. 143. Revisions to an Active Lock .. 15a. Extension Policy .. 15b. Relocks .. 15c. Changes .. 15d. Lock Cancellation .. 161. Training for Pipeline Plus .. 17a. Log In Screen .. 17b. Forgot Password Link .. 17c. Request an Account Link .. 17d. Home Screen .. 17e. My Account .. 17f. User Accounts Admin .. 18g. My Administrators .. 182. Incomplete Locks .. 183. Loan Extensions .. 18a. Loans Available for Extensions .. 19b. Loans with Extensions .. 194. Loan Setup .. 195. Pipeline Loans (Loan Status).

5 196. Loan Details .. 197. Reports & Notices .. 20 CHAPTER 3 - FIRST MORTGAGE PRODUCTS .. GUIDELINES APPLICABLE TO ALL PRODUCTS .. 211. Credit Score Requirement .. 212. Total Debt to Income Maximum .. 213. Minimum Borrower Contribution .. 214. Homebuyer Education .. 215. Automated Underwriting Systems .. 22 April 2021 Page 3 of 121 Table of Contents 6. Loan Terms .. 237. Loan Use .. 238. Mortgage Insurance .. 23a. Conventional Loans .. 23b. FHA Insured 23i. FHA 203(k) loans .. 24c. RD Guaranteed Loans .. 24d. VA Guaranteed Loans .. 259. Co-Signers .. 2510.

6 Non-Liable Co-Occupants .. 2511. Subordinate loans .. 26a. Combination Loans .. 2612. Electronic Signatures .. PROGRAM .. 271. 272. Eligibility Requirements .. 27a. Loan Purpose and Terms .. 27b. Borrower Eligibility .. 29i. First Time Home Buyer .. 29ii. Minimum Borrower Contribution .. 29iii. PHFA Grant .. 29iv. Homebuyer Education .. 29v. Income Limit .. 30vi. Qualifying income .. 303. Property Eligibility .. 304. Lender Instructions and Procedures .. 31a. Lender Compensation .. 31b. Locking of Funds .. 31c. Underwriting Procedures .. 32d. DU Requirements.

7 32e. Manual Underwriting .. 32f. Appraisal Submission/UCDPSM .. 32g. Private Mortgage Insurance .. 33h. Closing Procedures .. 33i. Submitting the Purchase Package .. Renovation Program .. GOVERNMENT LOAN PROGRAM .. 371. Eligibility Requirements .. 37a. Borrower Eligibility .. 37b. Property Eligibility .. 382. Lender Instructions and Procedures .. 38a. Lender Compensation .. 38b. Locking of Funds .. 38c. Underwriting and Closing Procedures .. HOME LOAN PROGRAM (KHL) .. 391. Eligibility Requirements .. 39a. First-time Homebuyer .. 39b. Income Limit .. 40c.

8 Purchase Price Limit .. 42d. Recapture Tax .. 432. No Refinances .. 443. Loan &IMPROVEMENT PROGRAM .. 461. Mortgage Terms .. 462. Eligibility Requirements .. 46a. Eligible 46b. Eligible 46c. Eligible Repairs & Improvements .. 463. Borrower Instructions .. 474. Lender Instructions and Procedures .. 47a. Application/Origination .. 47b. 48c. Closing the Loan and Selling it to PHFA .. 48 April 2021 Page 4 of 121 Table of Contents d. Escrow Administration .. 48e. Funds Disbursement .. REFINANCE PROGRAM .. 491. 492. FHA Guidelines .. 493. VA Interest Rate Reduction Refinancing Loan (IRRRL) Guidelines.

9 505. Subordinate Loans .. 506. Additional PHFA Requirements .. 507. Lender Instructions and Procedures .. 51a. Lender Compensation .. 51b. Locking of Funds .. 51c. Underwriting Procedures .. 51d. Closing Procedures .. 53e. Submitting the Purchase Package .. 53 CHAPTER 4 - ASSISTANCE PROGRAMS .. ADVANTAGE ASSISTANCE LOAN PROGRAM .. 541. General Program Description .. 542. Loan Terms and Usage .. 543. Eligibility Requirements .. 54a. Liquid Asset Limitation .. 554. Lender Instructions and Procedures .. 55a. Locking of Funds .. 55b. Underwriting Procedures.

10 55c. Closing Procedures .. 55d. Post-Closing .. FORGIVABLE IN TEN YEARS LOAN PROGRAM (K-FIT) .. 561. General Program Description .. 562. Loan Terms and Usage .. 573. Eligibility Requirements .. 57a. Liquid Asset Limitation .. 574. Lender Instructions and Procedures .. 58a. Locking of Funds .. 58b. Underwriting Procedures .. 58c. Closing Procedures .. 58d. Post-Closing .. CREDIT CERTIFICATE PROGRAM .. 591. 592. Mortgage Requirements .. 603. Eligibility Requirements .. 60a. First-time Homebuyer .. 60c. Purchase Price Limit .. 614. Recapture Tax .. 625.