April 15, 2011
TO: ALL VHDA APPROVED LENDERS
FHA Mortgagee Letter 2002-01 delineates the requirements for HUD approval of Non-profits participating in federal Single Family activities. These activities include, but are not limited to, HOME (down payment assistance program), other non-federal down payment assistance programs, NSP and the purchase of HUD REO’s. Of particular concern is when these programs are coupled with a first mortgage insured by FHA.
Currently, the regulation places the responsibility for verifying the Non-profits compliance status with this approval process directly with the mortgagee. Previously, the Philadelphia Home Ownership Center (HOC) had not enforced this requirement and so, it appears that only a limited number of Non-profits are currently in compliance.
In order to participate in the VHDA program, all Non-profits must submit evidence of their current approval or their application submission to HUD to their VHDA lender no later than May 15, 2011. This documentation should be included in each loan file. After that date, if the Non-profit has not submitted their application, they will no longer be eligible to have a loan reserved on behalf of their borrower. Since it appears the process may take anywhere from two to three months to receive approval, VHDA will continue to allow those Non-profits, with applications pending at HUD, to continue to work within the framework of our program. VHDA will honor all loans currently in our reservation pipeline.
All Non-profit HUD approvals must be received prior to September 1, 2011 to ensure the Non-Profit can continue to work with the VHDA program. VHDA and HUD host two webinars to facilitate the Non-profit application submission process. The dates of the webinars are April 28 10:00 a.m. - 12:00 p.m. and May 12 10:00 a.m. - 12:00 p.m. Registration information will be sent at a later date. Please forward this information to all Non-profits you are currently working with to ensure they are aware of the webinars.
Should you have additional questions and concerns, please don't hesitate to contact staff within the Single Family Department at VHDA.
