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Announcing Exciting Program Enhancements

To: VHDA Originating Lenders
Re: Announcing Exciting Program Enhancements

Introducing new Program Enhancements

We’ve been listening to you! In an effort to align our program guidelines, VHDA will be providing the following program enhancements effective 08/15/2018.

  • Minimum 90% LTV on first mortgage with VHDA Plus Second Mortgage or DPA Grant.
  • Other non-VHDA down payment assistance allowed with VHDA Plus Second Mortgage or VHDA DPA Grant.
  • Additional eligible sources of acceptable funds will be allowed to meet the 1% asset requirement with VHDA Plus Second Mortgage (i.e. Gift funds, 401k loan, etc.).
  • Co-borrowers with no credit score may be allowed on the Fannie Mae programs if certain requirements are met.
  • Common and customary ancillary fees will replace the previous $1,000 cap.
  • Elimination of 3 years tax returns requirement to evidence first-time homebuyer (this can be applied to existing locks that have not closed as long as the revised Borrower Affidavit (Exhibit E2) and Originating Lenders Submission Cover Letter (Exhibit O) are executed.

Clarifications and Additional Resources

Based upon questions and feedback received from previously held training sessions, we would like to provide additional clarifications:

  • Income Documentation for Non-Borrowing Household Members:

    • Non-Borrower(s) on Title: Since three years’ tax returns will no longer be required for non-borrowers on title, current income documentation to verify household income will be required. His or her income must be disclosed on the Affidavit of Borrower (Ex E2, page 4) in addition to current income documentation (i.e. current paystub, etc.).
    • Other Household Members (not on title): When other household member’s income (not on title) must be included in the household income calculation, his or her income must be disclosed on the Affidavit of Borrower (Ex E2, page 4). Income documentation will be required if there are discrepancies with file documentation.
  • Tax Transcripts for Fannie Mae loans:
    • Currently VHDA requires two years’ tax return transcripts for all borrowers. With the release of the new program enhancements, VHDA is providing flexibility by requiring tax transcripts as defined by Fannie Mae (in addition to the executed 4506-T). The type of tax transcript required is based on the type of income used to qualify and AUS requirements (i.e. W2 tax transcript, etc.).

For more details, click on the Old versus New Program Guidelines Comparison matrix found on vhda.com

Revised Documents
Several VHDA documents have been updated to reflect changes supporting the new VHDA Plus Second Mortgage product and the above program enhancements. For more details, click on the New Documents and Forms Effective Dates matrix found on vhda.com.

Training Webinars
To learn more about the program enhancements and/or the newly introduced VHDA Plus Second Mortgage product, VHDA will be offering training classes. Scheduled classes have been posted on VHDA.com under the “Classes & Events” calendar. Click here today to go directly to the site and register to learn more about the new product and exciting program enhancements.

Please contact your assigned VHDA Business Development Officer or underwriting@vhda.com if you have any questions.

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