Flexible Alternative Pricing Options
To: VHDA Originating Lenders
Date: March 19, 2003
From: Janice Burgess
VHDA is pleased to introduce a variety of pricing options for our Flexible Alternative loan program. These options will provide interest rate and discount point choices to best
accommodate individual customer needs and changing market conditions. These changes will enhance the special features of the Flexible Alternative program.
Customers will be provided the current "Standard Pricing" for Flexible Alternative loans and two additional options to choose from:
"Standard Pricing" Current Flex Alt Pricing Example:
6.25% 1 + 1.5
"Option 1" Higher rate/lower points Example:
6.50% 1 + .5
"Option 2" Lower rate/higher points Example:
6.00% 1 + 2.5
Pricing Options will be available on VHDA's on-line reservation system. When reserving a Flex Alt 100 loan you may choose the "Display Option" link on the screen after choosing the Flex Alt 100 loan program (see screen below).
You can then choose the option by clicking on the option name.
(Note - adjustment for 700 greater credit score has not been displayed)
The rate and points will be displayed on the confirmation page and email confirmation.
For your convenience, we have updated our Reservations User's Guide with these additional procedures. To access this guide, go to http://www.vhda.com/sf/guides.htm. Rates for these new pricing options will also be online and available on the VHDA telephone Rate Line.
VHDA's Flex Alt 100 is now available with these new pricing options. Flex Alt Home Enhancer and Home Access will not have these options initially.
Lenders will receive the same fees regardless of the pricing option chosen. A one percent origination fee will be charged on all loans and paid to the lender. The one percent service release fee will be paid to the lender on all loans regardless of the discount points paid. Lenders may not charge higher or lower rate or different discount points than is stated for the available options.
Borrowers will still be granted the 1/2% reduction in discount points for credit scores of 700 and greater. However, under no circumstances will the discount points be lower than zero (0). The lowest fees available - regardless of loan to value or credit score will be: 1% Origination Fee and 0% Discount Point. Based on the Flex/Alt program structure, these new options will provide a benefit primarily to loan to values of 95.01% and greater.
FasTrak - On Line Automated Underwriting:
The "standard pricing" in effect at the time the loan is submitted to the FasTrak system will be automatically input for underwriting unless another Pricing Option is chosen. These pricing options are available under the product options on the FasTrak Loan Application screen. Choose the pricing option that has been reserved or if a reservation has not yet been made, select the pricing option which you anticipate the customer will most likely choose. If a different pricing option is reserved after submission to FasTrak - the lender may select the different pricing option or contact VHDA for assistance. Please note that the new pricing options will not be available for applications previously submitted through FasTrak.
Pricing Options for new reservations are effective immediately. These options will not be available for loans that have been previously reserved. Should special circumstances arise on a previously reserved loan, which requires the change to one of the Flex Alt pricing options - please fax a request to Gene Griffin (804-783-6728) in VHDA's loan reservations area to determine if special arrangements can be made.
Flex Alt Pricing Worksheet:
The loan reservation confirmation will clearly identify the interest rate and discount points which have been reserved. For lender reference prior to reservation, the Flexible Alternative Quick Reference Pricing Chart has been developed. This will assist lenders in determining the accurate discount points based on loan to value and credit score for each pricing option. The Flex Alt Pricing Worksheet has not been revised. It is no longer necessary to submit this form to VHDA, however lenders may still find it helpful in determining the correct rate and points to be quoted to the customer.
Please contact VHDA Single Family Development Department via email or at 1-800-227-8432 with any questions regarding this program change.