with Down Payment Assistance (DPA) Must be …

1 KHC Conventional Product Profile 1 of 39 10/28/2020 guidelines Subject to Change Tip: To find specific information for a product, Press Ctrl+F (or use Find from the Edit Menu) and then search for the information or topic you are looking for. If you don t find the topic the first time, try variations, different terms or fewer words. KHC CONVENTIONAL with Down Payment Assistance (DPA) Must be referred to AFS for Origination (loan cannot be originated by branch) DPA options subject to change based on market conditions Must confirm availability with Housing Authority.

2 30 Year Fixed LTV CLTV Purpose Units Occupancy Credit Score DTI Ratio 97 105 Purchase 1 O/O 660 50 PRODUCT NAMES KHC Conventional 30 Year Fixed KHC HHF 2nd DPA Note: The Hardest Hit Fund (HHF) DAP currently available in Christian County will come to an end on the last day of the year. Lenders need to reserve the HHF DAP on or before Tuesday, December 31, 2019. KHC Regular 2nd DPA KHC Affordable 2nd DPA ALLOWABLE ORIGINATION CHANNELS Retail Loans must be referred to the AFS department for origination.

3 SERVICER Master Servicer = Kentucky Housing Corporation COVID-19 ADDITIONAL REQUIREMENT Please refer to COVID-19 Informational document for guidance pertaining to topics such as Income/VVOE, Title/Recording, Appraisals. Until further notice the guidance in the informational document supersedes the information provided in the product profiles PRODUCT REQUIREMENT Housing Authority approval required. Loan must be submitted to the agency and approved by them in the required timeframe as outlined in the product profile and on their website.

4 Loan may not proceed to docs or funding without agency approval. DOWN Payment Assistance For loans reserved on or after 9/5/19: borrowers utilizing the Preferred Program and Charter MI Coverage are limited to 80% LTV. Loans reserved on or after 9/5/19 with AMI >80%: ineligible Borrowers qualifying under this program must utilize the down Payment Assistance associated with this program. The first trust deed is not allowed to be used without using the DPA. Housing Authority approval required. Loan must be submitted to the agency and KHC Conventional Product Profile 2 of 39 10/28/2020 guidelines Subject to Change approved by them in the required timeframe as outlined in the product profile and on their website.

5 Loan may not proceed to docs or funding without agency approval. Kentucky Housing Corporation offers three different types of Down Payment Assistance in the form of a second lien. The DPA is only available with the KHC Secondary Market Program and the funds are used for down Payment and closing costs. HHF DPA Up to $10,000, zero interest, secured in 2nd lien forgivable after 5 years. Available for properties located in Christian county only. DPA is subject to funds availability, must check with Housing Authority for status.

6 No new construction. Property has to have been previously occupied. Borrowers must be first-time homebuyers. Note: The Hardest Hit Fund (HHF) DAP currently available in Christian County will come to an end on the last day of the year. Lenders need to reserve the HHF DAP on or before Tuesday, December 31, 2019. Regular DPA Up to $6,000, interest rate monthly payments are amortized over 10 years and secured in 2nd lien. Affordable DPA up to $4,500, 1% interest rate monthly payments are amortized over 10 years and secured in 2nd lien.

7 Three-year tax returns or tax transcripts are no longer required for the KHC Homebuyer Tax Credit or HHF (Hardest Hit Fund) DPA, when available. Borrowers are still required to be first-time homebuyers, in non-targeted counties, for the Homebuyer Tax Credit, as well as the four counties for HHF DPA. Lenders will rely on information provided on both a credit report and initial loan application. Underwriting must ensure the borrower qualifies for the specific program. Tax returns may be requested if needed to substantiate the first-time homebuyer requirement.

8 This is a second lien that will subordinate to the Conventional first mortgage and must be considered secured borrowed funds On the loan application, Question H Is any part of the down Payment borrowed should show as Yes. The funds are used towards the Borrower s down Payment , closing costs, pre paid items and other related Mortgage Loan fees and expenses. No portion of the down Payment Assistance funds can be paid to the Borrower unless the Borrower is being reimbursed for an overage of his/her earnest money deposit to the extent the minimum Borrower contribution has been satisfied.

9 PRMG must receive a Commitment Letter from KHC to be eligible for purchase. PRMG will fund the down Payment Assistance at closing and will be reimbursed by KHC at the time or purchase. The DAP Assignment will no longer be needed EIN#: 61-0864674 KHC HHF DOWN Payment Assistance ON GFE, TIL AND HUD-1 Note: The Hardest Hit Fund (HHF) DAP currently available in Christian County will come to an end on the last day of the year. Lenders need to reserve the HHF DAP on or before Tuesday, December 31, 2019. The HHF DPA is not subject to TRID.

10 Therefore, a GFE, TIL and HUD-1 are required and provided within KHC s system. These loans will close in KHC s name and be funded by PRMG. KHC s system will provide a Note and Mortgage in KHC s name for the HHF DPA. PRMG is responsible to deliver all disclosures to the borrower(s) at time of origination and closing. The Terms and Condition Form needs to be completed at closing, this is available on KHC s Loan Reservation System. KHC requires previous year s tax transcripts for the HHF DPA. Additional loan must be created in FT360 to accommodate 2nd lien and should be created at the same time the 1st lien is created for disclosure, document and funding KHC Conventional Product Profile 3 of 39 10/28/2020 guidelines Subject to Change purposes.