SS Memo 07-07
SELLING GUIDE REVISIONS: CONTACT UNDERWRITING
Date: November 06, 2007
Alaska Housing Finance Corporation was created by legislation in 1971 to provide affordable housing to state residents. Accordingly, Section 1004.01 of the Selling Guide reads: “All borrowers must be residents of the State of Alaska.” Residency as defined in part by State Statute reads: “A person establishes residency in the state by being physically present in the state with the intent to remain in the state indefinitely and to make a home in the state.” In addition, the statute defines a minimum period a person must be in the state to demonstrate intent.
AHFC has seen a number of loans made to borrowers whose plans to relocate to Alaska have changed for one reason or another. We recognize it may be desirable to secure housing in advance of actual relocation and offer generous commitment terms to meet that need.
Effective immediately, although AHFC will not impose a minimum period that an individual must be physically present in the state, the lenders loan file must contain evidence that borrowers have arrived in Alaska prior to presenting the loan for purchase by AHFC. Likewise, prudent underwriting practices dictate that receipt of any Alaskan income and allowances be documented with a pay stub.
Section 9001 of the Selling Guide has been revised to incorporate the use of Master Form and Short Form Security Instruments as recently announced by FNMA and FHLMC. The section has been reorganized to more clearly distinguish between the requirements for notes and deeds of trust.
Section 2000 has been amended by inserting a subsection (.03) that more clearly establishes the requirements for selection of an appraiser and the requirements of the appraiser.
Veterans Mortgage Program
Lenders are reminded that acceptable documentation to establish eligibility for the Veterans
Mortgage Program is:
- a Certificate of Veterans Eligibility or Title 38 Letter (obtained from the Veterans Administration), and
- a copy of the borrower’s DD-214, or Statement of Service (prepared and acknowledged by the military), which includes verification that the veteran has completed his/her initial military obligation and would have been entitled to a discharge or release under conditions other than dishonorable at the end of his or her initial period of duty.
When a home inspector or engineer has inspected a property and recommends repairs, lenders should rely on the home inspector or engineer to make the final inspection for completion. AHFC has seen an increased reliance placed on appraisers to determine which repairs should be required and to inspect for completion of the repairs. In those cases where a home inspection report requires only a few minor repairs, it may be reasonable to allow the appraiser to certify that they have been completed when he/she makes his inspection. However, when an appraiser states that repairs called for by the home inspector are not required, the lender should investigate further with the home inspector. Typically, AHFC will require that the home inspector certify that his/her required repairs have been completed.
Section 9001.02.A contains guidelines for title vesting; items four (4) and five (5) specifically refer to non-borrower spouses. Since 1999 (Memos 99-03 and 99-06), and following advice by legal counsel, a non-borrower spouse is required to sign the deed of trust, or the borrower must provide a signed notarized statement that he/she has not entered into a community property agreement with the non-borrower spouse. The non-borrower spouse must still satisfy the title company’s requirement for acknowledging homestead rights and providing AHFC with clear title with no right, title, or interest of the spouse noted as an exception on the ALTA policy.
Selling Guide Deletions – Sections 5010, 7006, and 7007
AHFC is deleting Sections 5010, 7006, and 7007 from the Selling Guide. Should a need arise for these programs in the future, these sections will be reinstated. Forms associated with these
programs will also be deleted.
Revised Audit Checklists
The Audit Checklists, forms UND-100 through UND-102 are revised as attached. Lenders should begin using the new forms immediately.