Date: April 12, 2006
To: VHDA Originating Lenders
Re: Documentation Flexibilities
Program Disclosure's Revised
Reduction in Mortgage Insurance Coverage
Documentation Flexibilities- 1st Time Homebuyer Programs:
Tax Returns: VHDA requires all borrowers provide copies of federal tax returns filed with the IRS for three years prior to loan closing for VHDA's lst Time Homebuyer tax-exempt bond programs. Signed copies are requested, however, unsigned copies will be accepted. Note: Loans that close after April 15th will require 2005 tax returns or copy of extension filed.
Non-borrower Occupants:. Non-borrower occupants no longer need to provide the previous year's tax returns and will not be required to execute the Program Disclosure and Affidavit of Borrower.
Non-borrower Occupants Income: VHDA regulations state that all household members' income must be included in the calculation of maximum income. This includes the income of those who will not be liable on the loan. VHDA will now exclude the income of those household members who were identified as dependents on the most recent tax return if they will not be liable on the loan. Examples of this would be minors, students and elderly parents living in the household. Child support received for the support of a dependent must be included.
Non-borrower occupant income from household members that are not dependents must be disclosed on page 1 of the Program Disclosure and Affidavit of Borrower.
Any non-dependent household member that does not have income must be identified and $0.00 reflected in the annual income section. When this form is completed correctly, no further documentation of non-borrower income will be required.
VHDA will accept standard agency guidelines for Termite, Well and Septic Inspections.
- Conventional loans (including lst Choice & Flex) follow Fannie Mae or Freddie Mac guidelines
- FHA (including FHA Step & FHA Plus) follow FHA guidelines
- VA (including Step) follow VA guidelines
- RHS follow RHS guidelines
If the appraiser indicates that there is evidence of insects, dampness or settlement, he or she must comment on its effect on the marketability and value of the subject property. The lender must provide either satisfactory evidence that the condition was corrected or submit a professionally prepared report, indicating that - based on an inspection of the property - the condition does not pose any threat of structural damage to the improvements. The lender must make the final decision about the need for inspections and the adequacy of the property as security for the mortgage requested.
Program Disclosure Revisions:
VHDA has updated the Program Disclosure and Affidavit of Borrower and the Flexible Alternative Application Disclosure to incorporate several new program enhancements.
These forms are available immediately at www.vhda.com in the Forms and Documents area. These revised documents are currently not available through VMP Forms.
The changes are noted below.
Program Disclosure and Affidavit of Borrower
- Borrower Certification of Maximum Income - Page 1. Household income now excludes the income of non-borrower household dependents and instructs the lender to include non-borrower's names even when no income is received.
- Loan Servicing Disclosure - Page 2. Loan Servicing Disclosure information will serve as a supplement to the required Loan Servicing Disclosure provided by the lender at application. This amends previous instructions in announcement dated April 3, 2006 requiring the completion of this document within 3 days of loan application.
- Property Inspections - Page 4. Recommends that the borrower protect their investment by obtaining a whole house and termite inspection.
Flexible Alternative Application Disclosure
- Loan Servicing Disclosure as noted above
- Property Inspections as noted above
We have developed customizable brochures for VHDA's most popular programs.
These brochures allow lenders to add their specific contact information on a VHDA designed brochure. Brochures are available in color and black and white. These new brochures will be accessible to approved VHDA lender’s associates who have access to our Loan Reservations System on www.vhda.org. After logging into www.vhda.org, click the Loan Reservations link on the left hand menu, and then click the “Marketing Material” link under Reservations, Reporting Options & Marketing
Reduction of Mortgage Insurance Coverage:
In an effort to make VHDA loans more affordable, VHDA will now accept reduced mortgage insurance coverage for all conventional insured loans. These reduced mortgage insurance premiums along with VHDA's below market financing will provide even lower payments for low to moderate income first time homebuyers. Please contact your mortgage insurance company for applicable premiums based on these new coverage requirements. Required coverage is noted below:
Loan to Value
|100.1 - 103%
|97.01 - 100%
|95.01 - 97%
|90.01 - 95%
|85.01 - 90%
|80.01 - 85%