SS Single-Family Memo 14-05
Date: June 27, 2014
SELLING GUIDE REVISIONS: CONTACT UNDERWRITING
AHFC is pleased to announce that the Selling Guide has been updated to amend the following:
Detached Properties – Expanded Acceptance
(2001.27, 5006.03, 5006.05.A)
AHFC financing for detached properties is currently limited to the Rural Non-Owner Occupied Program and two-unit detached properties under the Non-Conforming I Program. Effective with the date of this memo, AHFC will accept detached properties (duplex, triplex and fourplex) under the following programs.
- Veteran’s Tax-Exempt
- Taxable First Time Homebuyer
- Veteran’s Mortgage Program
- Non-Conforming I
- Non-Conforming II
- Rural Owner-Occupied
Lenders are reminded there are eligible property restrictions under various programs (i.e. no triplex or fourplex under TEP, and five-year occupancy requirements for TEP, VTEP and VMP). Also, there are limitations with regard to the amount of land that can be financed under programs that use qualified mortgage bonds (TEP, VTEP and VMP). Under these programs, the land is limited to the amount needed to maintain the basic livability of the residence and it cannot be subdivided during the life of the loan.
Home Inspections – New Requirements for IRRLIB and AHELP
(2001.11.B, 7001.05.E, 7000.05.B)
Due to the nature of the IRRLIB and AHELP options (i.e. loans with high LTV’s, higher total debt ratios and/or borrowers that may have limited residual income) there is concern about unexpected costs associated with major repairs incurred after closing and the potential burden on the low-income borrower. Therefore, AHFC requires a home inspection in connection with these loan options.
Presently under these low-income options, a home inspection generally is not required for homes built after June 30, 1992. AHFC has determined this requirement is outdated and does not adequately serve the needs of low-income borrowers.
Therefore, effective with loan applications taken on or after August 1, 2014, AHFC will require a home inspection for any home that is more than 10 years old at the time of loan application when a borrower will be using the IRRLIB and/or AHELP loan option(s).
Non-Conforming II – Documentation Requirements
Presently a home inspection is required for the NCII Program. However, a home inspection report will not be required if it is determined that a Certificate of Occupancy or a valid, recorded PUR-102 already exists. This change is effective immediately for any NCII that is currently in process.
For certification of the documentation requirements for NCII, Form PUR-103 has been revised accordingly. The new form may be used effective with the date of this memo.
On-Site Private Utilities – Clarification
Section 2001.12 has been updated to address cisterns and water holding tanks and to provide clarification on general requirements for on-site water and wastewater systems.
Uniform Instruments – Required Changes
Truth-in-Lending and Regulation Z require a lender to place the following information on the note and security instruments.
- Name of the loan originator’s employer
- Name of the individual loan originator
- NMLS ID number for each of the above
Lenders are reminded that these mandatory federal changes went into effect on January 10, 2014, and are encouraged to verify their originating documents are in compliance with these changes.
FORMS GUIDE REVISIONS: CONTACT UNDERWRITING
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