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Flexible Alternative Advantage Loan Program - Up to 104% Financing

Flexible Alternative Advantage Loan Program - Up to 104% Financing

To: VHDA Originating Lenders

Date: January 21, 2004

From: Janice Burgess

VHDA is pleased to announce the addition of an exciting new program to our Flexible Alternative Product line - The Flex Alt Advantage. The Flex Alt Advantage provides the same flexible features as other Flex Alt products, including zero down payment, no mortgage insurance, flexible qualifying and higher income and loan limits. In addition, the Flex Alt Advantage allows borrowers to include up to 4% of the purchase price for the financing of closings costs, thereby further reducing the costs of purchasing a home.

On Wednesday, January 21, 2004, VHDA will begin taking reservations for the Flex Alt Advantage through our on-line reservation system. Simply choose the Flex Alt Advantage product type when making the loan reservation. The interest rate for this program will be slightly higher than the Flex Alt 100 and only the Standard Pricing Option is available at this time. The Flex Alt Advantage will be available for new reservations only. Should special circumstances arise on previously reserved loans that require the change to the Flex Alt Advantage - please fax a request to Gene Griffin (804-783-6728) to determine if special arrangements can be made.

Forms and Documents:
All standard VHDA Flexible Alternative documents can be used including the Flex Alt Loan Commitment and the Flex Alt Loan Program Disclosure. The Delegated Approval Notice has been updated to include the Flex Alt Advantage program. This updated version is available on VHDA's on-line Forms and Documents page.

Program Guidelines:
Flex Advantage program guidelines are attached. Please note that Fannie Mae Desktop Underwriter and Freddie Mac Loan Prospector approvals will not be accepted on the Flex Alt Advantage. Applicants must meet VHDA published guidelines or loan approvals through VHDA's FasTrak automated underwriting system will be accepted. The FasTrak system changes are anticipated to be available by Monday, January 26. With only a few exceptions, qualifying guidelines for the Flex Alt Advantage will be the same as are currently in effect for the Flex Alt 100. Although the Flex Alt Advantage might not be sufficient to cover all of the costs related with the loan, borrowers are not required to make a specified minimum investment from their own funds. See program guidelines for complete details.

We believe the Flex Alt Advantage is an exciting addition to our loan programs for first-time and repeat homebuyers. To inform your customers about this special program, VHDA has developed a flyer that outlines the loan's features. Feel free to distribute it to your customers.

We hope that both you and your customers will find the Flex Advantage loan program beneficial. Your comments and suggestions related to this program are important to us for future program development. Please feel free to contact the Single Family Development Department with any questions you may have related to this or other programs or to provide comments or suggestions at 1-800-227-8432 or e-mail

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