Chenoa Fund

1. CBCMA Training Series #3:Locks, Registrations,& Closing DocumentsFHA Product Line

2. Chenoa Fund by CBC Mortgage Agency: FHA Overview • Chenoa Fund is the program name for CBC Mortgage Agency’s suite of down payment assistance products, including second mortgages for FHA loans. • There are two FHA programs: the Rate Advantage, and the DPA Edge. • The Rate Advantage program has one product. CBCMA offers the Rate Advantage Product to provide a better first mortgage interest rate for the borrower, and better YSP/SRP for the lender. • The DPA Edge is split into two products, one for borrowers whose income is less than 115% AMI, and one for borrowers who income is greater than 115% AMI. • Only the DPA Edge program includes a forgivable second option. That option is available for borrowers with an income that is less than 115% AMI.

3. FHA Second Mortgages:The Rate Advantage Program

4. Rate Advantage Program • Qualifying Income: < or = 115% AMI • Requires monthly payment. • FICO Scores 640 minimum. • Second mortgage has a 10-Year term at an 8% Interest rate. • Non-occupant co-borrowers are not allowed. • No concurrent homeownership. • Max DTI 50% • Manual underwrites are not allowed. Note: Look to this one first to benefit you and your client.

5. FHA Second Mortgages:The DPA Edge Program

6. DPA Edge: Soft Second (1/2) • Qualifying Income: < or = 115% AMI. • No monthly payment. • FICO Scores 620 minimum. • 0% Interest Rate and 30-year Term. • Forgiven after 36 consecutive on-time payments on FHA 1st Mortgage. • Non-occupant co-borrowers are allowed. • DTI per AUS or FHA manual underwriting guides. • Only offered for single-family and two unit properties. • Three to four unit properties not allowed.

7. DPA Edge: Repayable Second (2/2) • Qualifying Income: > 115% AMI. • Requires monthly payment. • FICO Scores 620 minimum. • 10-Year term 0% interest rate. • 30-Year term 5% interest rate. • Non-occupant co-borrowers are allowed. • DTI per AUS or FHA manual underwriting guides. • Only offered for single-family and two unit properties. • Three to four unit properties not allowed.

8. Quick Comparison Matrix: FHA Products Rate Advantage a.) CBCMA offers 3.5% to cover down payment. b.) 2nd mortgage repayable. c.) 8% with 10 year term. d.) 640 minimum FICO score. e.) Qualifying Income less than or equal to 115% AMI. f.) Max DTI 50%. g.) Homebuyer education not required. h.) Please see HUD handbook 4000.1 for current upfront MIP rates. DPA Edge: Soft Second a.) CBCMA offers 3.5% to cover down payment. b.) 2nd mortgage forgivable. c.) Forgivable after 36 consecutive on-time payments on the 1st mortgage. d.) 620 minimum FICO score. e.) Qualifying Income less than or equal to 115% AMI. f.) DTI restrictions per AUS guidelines. g.) Homebuyer education required for borrowers with credit scores between 620-639. h.) Please see HUD handbook 4000.1 for current upfront MIP rates. DPA Edge: Repayable Second a.) CBCMA offers 3.5% to cover down payment. b.) 2nd mortgage repayable. c.) 0% interest with 10 year term or 5% interest with 30 year term. d.) 620 minimum FICO score. e.) Qualifying Income greater than 115% AMI. f.) DTI restrictions per AUS guidelines. g.) Homebuyer education required for borrowers with credit scores between 620-639. h.) Please see HUD handbook 4000.1 for current upfront MIP rates.

9. In regards to Homebuyer Education, Be sure to visit our Lender FAQs for more information on this topic. https://chenoafund.org/lender/lender-faq/ CBC Mortgage Agency offers pre-purchase counseling through Hope Loan Port, also known as Money Management International. This pre-purchase counseling is provided for borrowers with a FICO score of 620 to 639, which also means this counseling is only required for our DPA Edge products. The aforementioned counseling courses are paid for by CBC Mortgage Agency. As such, correspondent-lenders should never direct their borrowers with FICO scores 640+ to go to https://www.borrowersuccess.org/prepurchase. If borrowers without the proper FICO score attempt to access this course, they will be turned away, which will cause much stress, frustration, and confusion on many borrowers’ parts. For your borrowers that have a FICO score of 620 to 639, note that they will not be able to access the course until … 1.) they have been registered and/or locked by their lender in CBC Mortgage Agency’s portal. 2.) they have allowed for 24 hours to pass after the LO receives the relevant confirmation letter. 3.) they have a CBC loan number, provided for them by their LO (will start with “161”). Coborrowers outside the 620 to 639 range will not need to take the course. If you wish for your borrower with a FICO score 640+ to take Homebuyer Education through Hope Loan Port anyway, please utilize this link instead. https://www.moneymanagement.org/buying-a-home/online-homebuyer-courses. Here, the courses range from $75-$99. Feel free to contact info@chenoafund.org for even more information on Homebuyer Education.

10. Check out our Program Guidelines! A more detailed version of our product matrix can be found on chenoafund.org. Next, click on Program Guidelines. Finally, scroll down to pages 8-16. First, click on Lenders.

11. Calculating Area Median Income • Go to the HUD Area Median Income Site: https://www.huduser.gov/portal/datasets/il.html • Select the most recent fiscal year.

12. Calculating Area Median Income • Select the state. • Select the county. • Click “View County Calculations.” Note: This is a third party site. CBCMA State Restrictions still apply, even if you see the option here.

13. Calculating Area Median Income: Primary Method • For the primary method, you’ll want to pull the number from the “Median Family Income” column. This is outlined in red. • You determine the AMI by multiplying the Median Family Income by 115%. Example: $69,100 x 115% = $79,465 Note: Pick the method that will best match your borrower to their desired program!

14. Calculating Area Median Income: Alternative Method There is an alternative calculation method allowed within the UW comments on the 1008. • First, locate the appropriate family size underneath the “Persons in Family” column, in the “Very Low (50%) Income Limits” row. • Find the appropriate income limit, and then multiply that number by two. • Then, multiply that number by 115%. Example, using a family of 6: $40,100 x 2 = $80,200 X 115% = $92,230 Note: Pick the method that will best match your borrower to their desired program!

15. Registering and Locking Loans Through the ChenoaFund.org Portal

16. Upcoming Covered Topics • Some Reminders • How to Gain Access and Log In to CBCMA’s Portal • How to Register or Lock the First Mortgage • How to Enter the Second Mortgage Information to Get the File Approved • How to pull Documents Directly from the Website • How to Draw Closing Documents

17. 1003: Important To Remember Both the First and Second Mortgage require a full set of TRID compliant disclosures, which should include the … • 1003 • LE • Initial CD • Final CD For a comprehensive list of all the documents we require the borrower to sign, please refer to our Program Guidelines, which can be found at ChenoaFund.org.

18. Important To Remember • You can register or lock the first mortgage, and receive a confirmation BEFORE the file has been approved. • You will NOT be able to obtain an FOL or any disclosures until we have reviewed and approved the file. • It is important that you register with the correct program, or the file may need to be changed before it can be approved.

19. Documents Received at Registration After your file has been approved, you will receive the following via email. Please allow for our standard processing times. • CBCMA loan Registration Confirmation or a Lock Confirmation.* • Funding Obligation Letter. • Loan Estimate Package (for Secondary Financing).** For a comprehensive list of all the documents we require the borrower to sign, please refer to our Program Guidelines, which can be found at ChenoaFund.org. *Note: All documents can be generated directly from our website, once the file has been approved. ** Companies that use their own doc prep software may not receive LE package.

20. How to Gain Access and Log In to CBCMA’s Portal

21. First Gain Access, then Log In When registering a Chenoa Fund loan, or obtaining any relevant closing documents, be sure to use the ChenoaFund.org portal in addition to your usual process. • First, confirm with your Lock Desk that your email address has been granted access. • Then, select “Correspondent Lender Login” at the top center of the webpage.

22. How to Retrieve Your Password When you go to the ChenoaFund.org portal for the first time, you will need to retrieve your password. • Enter your work email address, then click on password retrieval/account lockout reset. • When you receive the appropriate email, follow the instructions to set up your permanent password.

23. How to Register or Lock the First Mortgage

24. Where to Begin Registrations Select ‘Loan Registration/Lock/Pricing’ from the side bar menu. Note: All interactions with open loans will take place in this section.

25. Global Loan Status Homepage • ‘Global Loan Status’ will display a list of all the loans that you have previously locked and registered. Note: You can Search loans by the borrower’s loan number or last name. • When adding a new loan, select ‘Add New Loan’ from the left side bar menu.

26. Adding New Loan When adding a new loan into the system, follow the below steps. • ‘Select ‘Choose File’ (Image: Indicator 1) • Locate the Fannie Mae 3.2 file you wish to upload. • Select ‘Upload’ (Image: Indicator 2) • Don’t forget to complete any required fields. Anything marked with a red asterisk should be completed. (Image: Indicator 3) Our system will extract information from the FNM file so you should not be entering all the data manually.

27. Select the Correct Program 1.) Select the correct program type you wish to utilize. Keep in mind that our system may display up to five separate products, so make sure you understand each one before selecting. Each program has its own DTI and/or credit score requirements.

28. Select the Correct DPA 2.) Select the correct DPA type you wish to utilize. Keep in mind that our system may display up to four separate DPA types, and each DPA type is matched with a specific program. Each program has its own DPA requirements.

29. Calculate the Base Loan and DPA Amount • This example registration screen information has been extracted from a Fannie Mae 3.2 file. • Notice that fields such as Property Information and Loan Information have been automatically filled. • To calculate the base loan amount and the DPA amount, click ‘calculate’. The fields will auto populate.

30. More Details • The data fields above the horizontal black line are for the First Mortgage registration. • The data fields below the black line are for Secondary Financing. • You can register and lock the first mortgage without completing Secondary Financing information, but the file cannot be approved until both sections are completed. • You can enter all the information below the line now to speed up the process. • All required fields regarding the Secondary Financing must be filled out even if you will be producing your own LEs. • Please use the comment box to add any important information.

31. Lock/Register the First Mortgage • To register the loan, complete all asterisked (*) items above the black line (arrow 1) and then select the ’Price’ button. • Please check the lock period. All of our locks are to be set at 45 days. This is our most common error. Once your loan has been registered and/or locked, you cannot make any additional changes to the information in the data entry form above the black line.

32. Loan Price Results The Loan Price Results screen will show you your price. At this point you may: • FLOAT the first mortgage by selecting ‘Register.’ • LOCK the first mortgage by selecting ‘Lock Price.’ • Or you may REJECT the pricing and return to the input screen.

33. Something to Keep in Mind If the pricing looks significantly lower than you expect, please check the time. • CBCMA’s Lock Desk closes at … • 5pm Eastern Time • 4pm Central Time • 3pm Mountain Time • 2pm Pacific Time

34. Print Confirmation Once you register or lock your loan, click the ‘Print Confirmation’ button to obtain your Registration Confirmation or Lock Confirmation.

35. Sample Registration Confirmation • This is a sample Registration/Float Confirmation. • This form of confirmation means that the first mortgage is floating. • If you have a document that looks like this, you will need to come back in and lock the loan at a later date to ensure delivery.

36. Sample Lock Confirmation • This is a sample Lock Confirmation. • This document breaks down when the loan was locked, the lock term, and, most importantly, the lock expiration. • The lock period needs to go through clearing for purchase. NOTE: After printing the Registration or Lock, close the tab, which will return you to the previous screen

37. How to Enter the Second Mortgage Information to Get the File Approved

38. Get the file approved. • To receive approval, you must complete the asterisked (*) data below the black line. Reminder: Once your loan has been registered and/or locked, you cannot make any additional changes to the information in the data entry form above the black line.

39. Add Fees for Second Mortgage • If you are using your own doc prep software to prepare the LE, you don’t need to enter fee information. (make sure we are aware of your process) • Check the box by each fee charged for closing the secondary financing. • Also ensure the fee is placed in the appropriate column.

40. Finish the Process Once all fields are complete click “Update” to save the info, and wait for file to be approved. This serves as a save button.

41. Once the file has been approved you will receive… CBC Mortgage Agency’s Submissions team will automatically send the relevant documents to the contact on file, once it has been approved. You can email submissions@chenoafund.org for copies of those documents. • CBCMA loan Registration Confirmation or a Lock Confirmation.* • Funding Obligation Letter. • Loan Estimate (for Secondary Financing). *Note: We will show you how to obtain these documents from our website in the following slides. All documents can be obtained from the website, once the loan has been approved.

42. How to Obtain The Documents Directly from the Website

43. Global Loan Status Homepage You will find yourself in the Global Loan Status. This is where you will be able to see a list of all the loans that you have previously locked and registered. • Search loans by borrower’s loan number or last name.

44. Funding Obligation Letter & Lock Confirmation • You can locate your funding obligation letter by clicking the ‘Open Folder’ icon. If you don’t see the icon, you haven’t secured an approval from CBCMA yet. • If you would like to print the confirmation (Lock or Float), click on the ’Padlock’ icon.

45. Funding Obligation Letter The funding obligation letter is required in the Closed Loan package for all programs. Most importantly, the letter states… • Where the down payment is coming from, and • CBC’s promise to reimburse your company for the secondary financing. Image: Soft Second FOL

46. How to Obtain LE Package From the Website • The Loan Estimate can be drawn once the file has been reviewed and approved by CBCMA. • Once the file has been approved, you can go back to the Global Loan Status.

47. Global Loan Status Homepage You can search for your loan using the borrower’s loan number or last name.

48. Click on Draw My Own Docs Once you have entered the loan, you can again click on the “Draw My Own Docs” button.

49. Draw My Own Docs After you click “Draw My Own Docs,” a second screen will open with the package selection options. Note: in order for this to work, you must have pop-ups enabled.

50. Draw My Own Docs • Select the package you are requesting and click “Prepare Package.” • It can take up to several minutes for your package to generate, depending on internet speed and other variables.