SS Memo 08-03
SELLING GUIDE REVISIONS: CONTACT UNDERWRITING
Date: June 27, 2008
Teachers and Healthcare Professionals
The Teachers’ and Nurses’ loan program, which allows 100% financing for eligible teachers and nurses when purchasing an owner occupied, single-family dwelling, was made available on August 21, 2003 with a sunset date of July 1, 2008. HB 325 was passed by the Legislature and signed into law by the Governor on June 26, 2008. In addition to extending the repeal date by five years to July 1, 2013, the new law expands the eligibility for the program to include licensed or certified health care professionals.
A “health care professional” is defined as an individual who is licensed or certified under
AS 08.Business and Professions, to practice the prevention, treatment, or management of illness and the preservation of mental and physical well-being. A list of eligible professions has been compiled from the State of Alaska Division of Occupational Licensing and incorporated into the Selling Guide as an Appendix.
Current market conditions have caused many mortgage insurance companies to limit their coverage to a maximum 97% LTV. If an applicant is able to secure financing of the remaining 3%, AHFC will allow a CLTV of 100% in this scenario only.
Section 7011 of the Selling Guide is being revised to reflect these changes which become effective July 1, 2008. All other program requirements remain unchanged.
(Section 1002.03, UND-40)
Under Program Compliance Underwriting, the lender is responsible for determination of the applicants’ credit worthiness, and adequacy of the subject property as collateral, based on the criteria set forth in the Selling Guide. Recognizing that Alaska has many unique properties, Section 1002.03, is being revised to add criteria for property review submissions. AHFC expects the lender to assume the responsibility for underwriting the property in all but the most unusual circumstances. UND-40 has been developed to aid lenders when requesting that AHFC review unusual properties and must be fully completed and submitted with a full appraisal (including color photos) and any other documentation pertinent to the property. Lenders are reminded that although AHFC does not underwrite the property on FHA/HUD insured loans, AHFC may not originate or purchase a loan for any property, which presents a threat to health or safety or, if not an immediate threat, through application of funds set aside to complete the repairs.
A recent increase in the number of lock-in requests and commitment submissions, combined with a marked increase in incomplete files, necessitates the following changes in order for AHFC underwriters to maintain a maximum three day turn-around time:
- All lock-in requests must be received no later than 4:00 pm each day. The attached revised UND-2 reflects the new time; please begin using this form effective immediately.
- Lock-in requests must be full-size and typed or computer generated. Handwritten requests will not be processed. (AHFC recommends a fax machine resolution of “fine” or higher to enhance readability.)
- Commitment submissions must be received no later than 4:00 pm each day.
- Commitments received after 4:00 pm will be processed the next business day and receive that day’s interest rate.
- Incomplete submission files will be returned to the lender.
- Unless submitted for property review as outlined above, files containing unnecessary documentation such as appraisals or inspection reports will be returned for proper packaging.
- Requests for changes to commitments will be processed within 24 hours of receipt.
Lenders are asked to please allow sufficient time for lock-in and commitment requests to be processed before calling to check on the status. Numerous calls for status only create further delays. It is suggested that the Lender first contact their home office for verification of a faxed lock-in confirmation or loan commitment. The Lender’s courier can also confirm the delivery date and time on commitment submissions.
Self-Employed Borrower Tax Returns and Automated Underwriting Approval
(Section 4000.02 & 4003.03)
Report findings for automated loan underwriting systems such as FNMA’s Desktop Underwriter and FHLMC’s Loan Prospector typically require that the lender obtain only one year of federal income tax returns to substantiate income for the self-employed borrower. AHFC credit guidelines require a two-year history of self employment demonstrated by signed federal income tax returns for the most current two years, and a year-to-date profit and loss statement if the loan application is dated more than 120 days after the end of the business tax year. In such cases, when AHFC credit guidelines and automated underwriting findings conflict, the lender should comply with AHFC guidelines, except on loans financed with FHA mortgage insurance.
Personal Property and Purchase Incentives
AHFC will not finance items of personal property. When the earnest money agreement and appraisal disclose items of personal property and/or purchase incentives, the value of these items must be included in the appraisal report. AHFC may deduct the value of non-realty items from the appraised value, and if necessary, establish value for the items.
FORM GUIDE REVISIONS
Replacement forms are available in MSWord and PDF. (Adobe Acrobat is required to read and print PDF files.)
UND-2 06/08 und2.doc und2.pdf und2-fillin.pdf
UND-40 06/08 und40.doc und40.pdf
Health Care Professionals