Broward County - Housing Finance and Community Development Division

Loan Underwriting Guidelines

Loan Underwriting Guidelines Housing Finance Authority of Broward County First Time Home Buyer Program
ITEM	UNDERWRITING GUIDELINES
INTEREST RATE:	Single Family Residences The interest rate will be set on the first business day of each month based on the Fannie Mae 30 year, 60 day mandatory delivery rate at par, minus .25 basis points, rounded to the nearest decimal. Rate information is available in the Wall Street Journal. The interest rate is effective for the entire month. Only fixed rate mortgages are available through this program.
PRIVATE MORTGAGE INSURANCE:	No Mortgage Insurance ( PMI) is allowed to be charged on any loans originated through the First Time Homebuyers Program.
RATE-LOCK IN:	Existing Properties: 60-day lock from date of the Real estate sales contract to Purchase. If a loan does not close by the end of 60 days, the ORIGINAL rate may be extended or the most current Lender’s Program rate may be applied AT LENDER’S DISCRETION. New (under construction) End Loans/Turn Key: 60 days prior to Estimated Certificate of Occupancy (C/O) issuance. New construction and Construction-To-Perm Loans: The rate will be the rate in existence 60 days prior to estimated Certificate of Occupancy (C/O) issuance. Pre-approvals: The interest rate will be locked at the time a Purchase Contract is provided to the Lender. Re-locks: If the rate expires re-lock at the current rate.
TERMS:	Up to 40-year fixed rate mortgage. (No Prepayment Penalty).
AUTHORITY FEE:	1% of the principle loan amount payable to the Housing Finance Authority of Broward County at closing. (Must be paid out of the borrower’s own personal funds)
CONSTRUCTION-TO-PERMANENT FEE:	.5% of the principle loan amount payable to the lender to cover the cost of administering the construction program administration. (Must be paid out of borrower’s own personal funds)
PURCHASE PRICE:	Existing and New construction sales price limits as established by the Board of Broward County Board of County Commissioners.
ASSUMABLE:	No
LTV:	Purchase – Not to exceed 97% LTV with no PMI Acquisition/Rehab – Up to 95% of the lesser of the final appraisal with improvements or the purchase price plus cost of improvement, which ever is less. To include cost break-down of improvements from a licensed contractor. NO CASH OUT. Refinance – Cash out at 75% LTV – NO cash out at 90% LTV. Home Improvements (owner occupied) – Up to 95% of appraised value of 95% of cost, whichever is less.
QUAL PROPERTIES:	Owner-occupied single family residences; Condominiums/Townhomes /PUDs (no warrantability)
APPLICATION FEE:	Due at time of application, non-refundable, must be credited towards cost at closing. Fee determined by lender not to exceed $350.00.
BORROWER’S QUAL:	Very Low, Low, and Moderate income persons with income not to exceed limits set forth in the Broward County Income Category Chart published annually. Applicants cannot have owned real property within the past 3 years as evidenced by prior 3 years signed Federal tax returns.
INCOME/DEBT RATIOS:	Housing ratio is 30%, total debt ratio is 45%.
ESCROW:	Required for taxes and insurance
MINIMUM REQUIRED DOWN PAYMENT:	3% minimum down-payment required with at least 1% of purchase price to be contributed from borrower’s own funds. The remaining 2% may be a gift from other sources (i.e., non profit housing agency or relative) Savings Club sources (such as Su-Su or Partner Funds) are acceptable when sufficient documentation is present (i.e., Treasurer or Banker provides bank information as it related to funds). Form letter documentation to be submitted.
CLOSING COSTS:	Can be a gift, seller concession, or down payment assistance funds. Lender may not charge origination or discount fees or points. Total Lender closing costs cannot exceed $800.00.
ALTERNATIVE INCOME SOURCES:	Disability payments, social security, pension, alimony, child support – follow standard Fannie Mae guidelines and documents, i.e., 1-year history and minimum 3 years remaining term. Social security etc. may be‘grossed up’ to 125% for qualifying purposes.
NON-RESIDENTS:	Borrowers pending receipt of a green card are allowed as long as they have a work permit, two years of employment, two years residing in the United States, and two years of established credit. Also, borrowers with political asylum (depending on the type of visa).
EMPLOYMENT/INCOME:	Per individual lender underwriting guidelines. Self Employed & Independent contractors:Income will be calculated as it appears on the Adjusted Gross Income line of the Income Tax return for the previous 2 years. Standard employment (W2 recipients): Income as derived from review of recent pay stubs, W2 for the last 2 years and completed Verification(s) of Employment.
ASSETS :	All assets must be verified by a Verification of Deposit and 3 months consecutive bank/institution statements.
CREDIT:	Per individual lender underwriting guidelines.
SELLER’S CONCESSIONS:	Up to 6% of the Sales Price.
CO-BORROWER: (non-occupying)	Use all income/all debts to arrive at ratios for qualification purposes only, cannot offset poor credit. Primary Borrower source of income must represent at least 50% of qualifying income.
INSPECTIONS:	Existing Property: A full Home Inspection by a Home Inspector is required to include: Roof, termite, electrical, plumbing, hot water heater, heating/cooling system and septic tank (if applicable). New Construction: Soil Treatment Inspection The Lender will be responsible for reviewing the home inspection report and determine which repairs must be done prior to or after closing. The Lender will sign off on the escrow release for the Title Company (if applicable).
RESTRICTION:	LIQUID ASSETS Borrower’s with liquid assets in excess of $50,000 after closing are not eligible for down payment assistance. IRAs, pensions, 401ks and other retirement accounts will not be included in asset calculation.
COMMUNITY HOME BUYER WORKSHOP:	Attendance is mandatory as evidenced by the workshop certificate. Workshop certificates have no expiration date.