SS Memo 09-01

SELLING GUIDE REVISIONS: CONTACT UNDERWRITING

Date: January 30, 2009

Credit Underwriting

(Part IV)

Part IV of the Selling Guide has been revised to clarify AHFC requirements for sound credit underwriting as follows:

Due to the high incidence of underwriting differences exhibited by the FNMA and FHLMC automated underwriting systems, and because AHFC does not employ risk based pricing for the loans we purchase, effective February 15, 2009, AHFC will no longer accept the approval of loans by an automated underwriting engine. Lenders may only submit fully documented loans that have been manually underwritten and approved by a lender’s underwriter in accordance with the AHFC Selling Guide.  All references to automated underwriting in Section 4000.02 have been replaced with a discussion regarding the appropriate use of compensating factors when analyzing the likelihood of satisfactory loan repayment for mortgage applicants. 

Section 4005.02 has been expanded to include a discussion of acceptable credit scores.

VA Funding Fee

(Section 6001.03)

Prior to February 1997, AHFC did not purchase loans which included the VA Funding Fee as part of the loan amount. At the time the change was made to allow financing of the funding fee, the amount of the fee was one percent (1%) of the loan amount and the maximum VA loan was $203,000. Today, the funding fee can be slightly more than three percent (3%) with a maximum loan amount in excess of $680,000.

AHFC considers that it is not in the best interest of a borrower to originate a loan that exceeds the value of the financed property, defined as the lower of sales price or appraised value. Therefore, effective February 15, 2009, no loan commitments for VA loans will be issued with a loan-to-value that exceeds 100%. Veterans may use gift funds to pay for the funding fee, or the seller may pay the funding fee.

Loan Information Review/Worksheet

(UND-3)

Page one of Form UND-3 has been revised, adding the Home Choice Certificate date, the Borrower Representative Credit Score, interest rate reductions, and buydown percentages. Page two of Form UND-3 has been changed to an Interest Rate Calculation Worksheet.  It is for the Lender’s use and no longer required to be submitted to AHFC. Please begin using the new form immediately but no later than February 15, 2009.

Delegated Lenders may now fax page one of Form UND-3 to the AHFC underwriting department at (907) 330-8475 when using their delegated underwriting authority. (Note: The revised Form UND-3 replaces Form UND-3a.) The faxed Form UND-3 must be received no later than 4:00 pm each day. Faxes received after 4:00 pm will be processed the next business day.  The resolution of your fax machine should be set at fine or higher to ensure legible fax copies are received at AHFC.

Online Mortgage Guide Format

The format of AHFC’s online Mortgage Guides is changing and delays in updating the online guide may occur. The revisions of Part IV, Section 6001.03, and Form UND-3 of the Sellers’ Guide are attached to this memo.


FORMS GUIDE REVISIONS:  CONTACT UNDERWRITING

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

Revised/Deleted Forms

UND-3                         Revised 01/09
UND-3A                      Deleted 01/09 

Attachments

Attachments are available in PDF.  Adobe Acrobat is required to read and print PDF files

Sellers’ Guide Part IV
Sellers’ Guide Section 6001.03
UND-3