SS Memo 08-02

SELLING GUIDE REVISIONS: CONTACT UNDERWRITING

Date: March 18, 2008

Loan Limits

AHFC is pleased to announce that the temporary increase to the Federal Housing Administration single family mortgage limits resulting from enactment of the Economic Stimulus Act of 2008 (“the Act”) are applicable for loans purchased by AHFC and can be found at: https://entp.hud.gov/idapp/html/hicostlook.cfm. The Act also increased the loan limits for FNMA and FHLMC in certain high cost areas, but did not result in an increase for Alaska. Therefore, the maximum loan limits for conventional AHFC loans remain unchanged.

2008 Income Limits

The 2008 limits for AHFC income-restricted loan programs and program options, based on HUD’s FY 2008 income limits, are available; changes are effective immediately. Please note that Tax-Exempt Program Non-Targeted Area limits include an upward income adjustment for five (5) “High Housing Cost” areas. However, there is no guaranty this upward adjustment will continue into subsequent years. The following are attached:

  • Tax-Exempt Program Non-Targeted Areas
  • Tax-Exempt Program Targeted Areas
  • Interest Rate Reduction for Low-Income Borrowers
  • Affordable Homeownership Guaranteed Loan Program
  • State Veterans Preference
  • Rural Enhanced Loan Program

Form PRG-46 or PRG-46T (for targeted areas) dated 03/08 is required for all loans committed on or after March 1, 2008. Lenders are reminded that the PRG-46T is only for use on loans made in Targeted Areas.

Market Conditions

In light of recent announcements by FNMA and FHLMC regarding adverse market delivery charges and increased loan level price adjustments, AHFC is pleased to announce that similar fees are NOT being considered by AHFC. While many secondary mortgage investors relaxed underwriting guidelines during the recent housing boom, AHFC has held its lenders to the same sound underwriting standards that have served the Corporation well in the past, and does not see a need to impose further constraints.

Underwriting

(Section 4000)

AHFC has noticed an increasing number of audit files where the Lender did not adhere to AHFC credit guidelines regarding automated underwriting. Section 4000.02 of the Selling Guide states in part “AHFC will accept loan files underwritten by automated systems such as FNMA’s Desktop Underwriter (DU) and FHLMC’s Loan Prospector (LP). AHFC will only accept automated underwriting when the FNMA DU Findings Report reflects “Approve” or the FHLMC LP Feedback Certificate reflects “Accept.” For all other responses, the file must be manually underwritten to AHFC criteria as set forth in Part IV of this guide with full documentation that supports the underwriting decision.” Please note on Conventional, VA or RD loans, when automated underwriting findings conflict with AHFC credit guidelines, the Lender should comply with AHFC guidelines.

In all cases, the Lender's underwriter must carefully evaluate the overall credit of the borrower and the property offered as security, and the Lender's underwriter and the Lender must believe that the mortgage is acceptable to private institutional investors. The credit documentation should clearly demonstrate the borrower's ability and willingness to repay the loan and that the subject property is adequate collateral for securing the debt. Items such as adverse property conditions, limited liquidity or adverse credit conditions, such as previous foreclosures, deed-in-lieu of foreclosure, previous judgments, serious delinquencies, or other similar conditions, may constitute reason for less than maximum financing or possible declination.

SERVICING GUIDE REVISIONS: CONTACT SERVICING

SER-71 – Notification of Recommended Action

AHFC amended the SER-71 Loan Data input for Assessed Value to include separate dollar amounts for “Land” and “Building.” The revised form is attached and available in AHFC’s online Forms Guide.

FORMS GUIDE REVISIONS

Replacement forms are available in MSWord and PDF. (Adobe Acrobat is required to read and print PDF files.)

Revised Forms

  • PRG-46      03/08     prg46pageone.doc      prg46.pdf
  • PRG-46T    03/08     prg46tpageone.doc    prg46t.pdf
  • SER-71       03/08     ser71.doc      ser71.pdf

Attachments

  • Tax-Exempt Program Non-Targeted Areas
  • Tax-Exempt Program Targeted Areas
  • Interest Rate Reduction for Low-Income Borrowers
  • Affordable Homeownership Guaranteed Loan Program
  • State Veterans Preference
  • Rural Enhanced Loan Program