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Learn about the DC Open Doors program, including loan products, down payment assistance, program facts, FAQs, and the program process. Contact us for more information!
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Welcome to DC Open Doors Presentation Summary • Program Overview • Program Highlights • Loan Products • Down Payment Assistance • Program Facts • Program FAQs • Program Process • Reservation Process • Data Transmission • Pre-closing Review • Reservation Extensions • Direct Funding, Closing • Post-Closing • Process FAQs • Contact Information
Program Highlights • DC Open Doors allows participating lenders to offer affordable mortgages and down payment assistance to eligible homebuyers. • DC Open Doors has Continuous Funding for its mortgages AND down payment assistance! • Interest rates are posted daily at www.dcopendoors.com, Facebook (DC Open Doors) and Twitter (@DCOpenDoors). • U.S. Bank, National Association is the Master Servicer. • All participating lenders must: • Be approved by both U.S. Bank and DCHFA • Participate in all mandatory trainings • Lenders are encouraged to originate a minimum of $1 Million annually.
Program Highlights • FHA and Conventional Loan Types • Open Doors can provide 1st trust alone or 1st trust and DPAL • Open to First Time and Repeat Homebuyers • Open to all D.C. Neighborhoods and Wards • Maximum Borrower Income of $132,360 • No Household income test • $453,100 Maximum 1st Trust Loan Amount • No Sales Price Limitations • No Asset Test • U.S. Bank Overlays & Investor Guidelines Apply More Inclusive Affordable Homeownership!
Freddie Mac Super Conforming • Max loan amount of • $679,650 • No DPA • 3% Down • Charter Minimum MI
DC Open Doors Loan Products Conventional Government
DC Open Doors Down Payment Assistance
DC Open Doors – Program Facts • Interest Rates Not Credit Score Based • Rate Offered at Par (No Lender Credit, Points, etc.) • 50% Maximum Debt to Income Ratio on conventional loans • 45% DTI FHA loans • 640 Minimum Credit Score • The maximum loan amount of $453,100 can only be exceeded by the UFMIP on an FHA loan
DC Open Doors – Program FACTS • Charter minimum MI coverage for conventional loans – 18% at 97% LTV • Seller Contributions Allowable – Follow FHA/Fannie/Freddie Guidelines • Buyers can use their own funds plus DPAL for additional down payment or closing costs • DC Open Doors continues to offer 97% LTV on condominiums • Homebuyer education requirement can be completed online or face-to-face. Provider must meet standards defined by the National Industry Standards for Homeownership Education and Counseling = (follow FNMA/FHLMC guidelines) • No DCHFA Review/Requirement of the Home Inspection
DC Open Doors – Program FAQs • Why use HFA without DPAL? • The MI rates are lower on DC Open Doors than on standard conventional loans (HomeReady/Home Advantage) 18% @ 97% LTV 16%@ 95% LTV 12% @ 90% LTV 6%@ 85%LTV • Is there a maximum sales price for the program? • No, there is not a maximum sales price amount. However, the loan amount may not exceed $453,100 plus FHA MIP. • What income must be used to determine qualifications under the maximum income requirement? • All borrower income must be documented/verified, regardless of whether or not being used for qualifying purposes –however, NOT based upon household Maximum Income for all borrowers is $132,360 • Do you allow a non-occupant co-borrower? • Yes, following Investor/Insurer/Servicer guidelines. Income is counted for eligibility • Is there a maximum origination charge the lender is permitted to collect? • No, however it must be reasonable and customary
DC Open Doors – Program FAQs • Can the borrower buy down the interest rate? • No, all of our loans are quoted with 0 points only (no lender credits, either) • If I have more than one purchaser, but only one is going to be on the loan, can the other person be on the deed? • Yes, non-borrowers are permitted to be on the title. • Can the DC Open Doors programs be used for a refinance? • Yes, the HFA Preferred is also a refinance program up to 97% LTV/CLTV • Can my borrower own any other property at the time of closing on a DC Open Doors loan? • No, the borrower may not have ownership interest in any other property at the time of closing. • What types of non-resident aliens are allowed under the program? • We follow FHA/FNMA/FHLMC/U.S. Bank guidelines
DC Open DoorsProgram Process • No separate application for DC Open Doors – the borrowers meet with Lender and start loan application • DCHFA will pay the cost to record the DPAL Deed of Trust, negating the need for a Lender Estimate/GFE or Closing Disclosure/HUD1 • The only allowable fee on DPAL is the cost to record the DOT – NO TITLE INSURANCE ON DPAL • Lender reserves loan with DC Open Doors (via eHousingPlus website) at time of rate lock (must have ratified contract) • Reservation (Rate Lock) starts 70 Day reservation period (delivery & purchase) – recommended quote to borrower is 30 days
DC Open DoorsProgram Process • DC Open Doors does pre-closing review for all loans • DC Open Doors coordinates closing with Lender • Post-closing – eHousingPlus review & U.S. Bank review • DC Open Doors – always here to answer questions!
DC Open Doors – Reservation Process • Reservation = Official Program Rate Lock Date • Reservation date starts 70 Day period from lock to U.S. Bank purchase post-closing • Recommended quote of 30 days to borrower to allow sufficient time for post-closing • Reserve Loan Using Online Reservation System (eHousingPlus): • Input as much borrower/loan information into the reservation system as possible to reduce Pre-Closing Review processing time • Information must match what is submitted to DCHFA • Purchase Contracts MUST be Fully Ratified Prior to Reserving a Loan with DCHFA
DC Open Doors Data Transmission • DCHFA uses a secure FTP portal for receiving and sending all data, documents, etc. • FTP portal supports PDF, Word, Excel, etc.; • Lenders are responsible for transmitting all document submissions via FTP portal; • Documents are uploaded to DCHFA via secure FTP portal, with specific file naming: Last Name, First Name – Submission or Document Title • DCHFA will transmit DPAL closing documents (commitment letters, loan documents, settlement instructions, etc.) via FTP portal; • DPAL docs are NOT sent to lender via eHousingPlus – the FTP is a separate website; • Each Lender will be provided with login credentials FTP link: https://sftp.dchfa.org
DC Open Doors Data Transmission • Lenders must designate a system administrator to manage access to FTP portal • DCHFA will provide each individual lender with one set of log-in credentials for access. Credentials can be used by multiple parties (processors, underwriters, etc.)
DC Open DoorsPre-closing Review DCHFA reviews all loans for compliance and provides a “Clear to Close” Notice. DCHFA is reviewing for the following: • Loan Application Form 1003 for accuracy • Maximum Borrower Income of $132,360 • Proof of Income (*see checklist) • Ratified Purchase Contract • Homebuyer Education (If Applicable) • DPAL (If Applicable) • DPA Loan Funding Request form & Wiring Instructions • Need 3 business days to process DPAL funding *Always reference the Review Checklist to ensure your package is complete.
DC Open DoorsPre-Closing Review • Files reviewed on “first come, first served” basis; • We will receive an email alert when a loan file has been uploaded by a lender. Files will be logged upon receipt; • Files missing documentation will be taken out of the review queue and placed in pending queue until the files are complete; • DCHFA commits to a timely pre-closing review timefrom receipt of a completed package; • File Approved – DC Open Doors Sends ‘Clear to Close’ Notice
DC Open Doors Direct Funding and Closing – DPAL only • DCHFA prepares DPAL closing documents and uploads to FTP for lender to access • Lender downloads DPAL closing documents and sends to settlement company with 1st trust docs • DCHFA funds the DPAL directly to settlement company • DCHFA NEEDS 3 BUSINESS DAYS TO PROCESS FUNDING. PLEASE ENSURE DCHFA HAS SUFFICIENT TIME TO FUND THE DPAL • If a first trust loan contains deficiencies, or for any other reason cannot be purchased by U.S. Bank, the lender is responsible for reimbursing DCHFA for the DPAL • DCHFA will send a letter to the lender requesting reimbursement including wiring instructions and timing • Failure to reimburse DCHFA for a DPAL closed with a first trust loan that is not purchased by U.S. Bank could result in lender suspension.
DC Open Doors Post-Closing Three Parallel Processes Start Immediately After Closing: • DC Open Doors & DPAL • Copies of Executed Note, Closing Disclosure & DOT for 1st Trust Loan • Original Borrower Recertification, Note & Recorded DOT mailed to DCHFA • eHousingPlus Compliance Review • Package is sent to eHP in Weston, FL • eHP will follow DCHFA’s Post-Closing Review File Checklist for review: • Copy of checklist – available on eHousingPlus • Copy of the Borrower Recertification • Final executed 1003 • Copy of executed Closing Disclosure • Certified true copy of Executed DOT and Note for all financing • eHousingPlus compliance approval is required before U.S. Bank will purchase loan • U.S. Bank Purchase Review • Package is sent to U.S. Bank via docVelocity Imaging • Standard purchase file – please refer to US Bank for complete document list • Please ensure package is complete • Allow time for review and purchase – reservation timeline management is critical • eHousingPlus Approval & U.S. Bank Approval Required • Loan purchased!
DC Open Doors – Process Summary Pre-Closing thru Closing
DC Open Doors – Process FAQs and Tips • Subordinate financing listed as Source of Down Payment/Closing Costs on 1003 • All lender and DCHFA numbers required to reflect the same amounts • All files MUST have the MCC-001 Document whether or not there is an MCC with the loan or not!!!!!!!!!!!! • After an approval is issued, no changes to DU, 1003, U.S. Bank approvals, etc. can be made. If so, it must be reviewed again with revisions. • LENDERS DO NOT CANCEL DC OPEN DOORS LOANS IN SYSTEM • Please email us at SingleFamilyPrograms@dchfa.org to cancel a loan
DC Open Doors – Process FAQs and Tips • Lender should submit loan files as close to the loan settlement date as possible, but not less than 5 business days before; • Please coordinate with your Secondary/Loan Ops Department about locks (timing and how-to) • No specific MI company is required on DC Open Doors’ loans • Refer to U.S. Bank for a list of acceptable MI Providers • HFA Preferred (FNMA) loans must be run through DU and coded as “HFA Preferred” • Must receive DU “Approve/Eligible” Findings • HFA Advantage (FHLMC) loans must be run through LP and coded as “HFA”. • Must receive Accept findings.
Common Conditions • Correct Fees!!!!! on the LE & CD. • Property address mismatch on Flood Cert, Note and other Loan Documents. Example: Unit #XXX, #XXX, Unit XXX – ALL MUST MATCH!!! • Demand Feature not checked on the Closing Disclosure. • List of Service Providers not provided. • Source of Funds on 1003 must reflect Subordinate Financing/DC Open Doors (or Secured Borrowed Funds) for loans with DPA. • AU Findings must reflect program type (HFA Preferred or HFA Advantage) so that MI requirements are correct and findings are correct. • NO title insurance/fees other than cost to record! Let your title company know up front. • 1st Trust Closing Disclosure must reflect TOTAL DPAL amount and the cost to record needs to be reflected as paid by DCHFA
DC’s MCCs LETS START WITH THE BASICS • The Mortgage Credit Certificate (“MCC”) is NOT a down payment assistance program or a mortgage loan • The MCC program provides a federal income tax credit similar to the federal first-time homebuyer tax credit • The DC MCC is a federal income tax credit that may 1) Reduce the amount of federal income tax the borrower is required to pay 2) Provide more available income to pay the monthly mortgage payment • The Credit Amount for the DC MCC is 20% and there is NO annual cap on the amount!
DC’s MCCsWhat are the benefits? EXAMPLE 1 $280,000 Loan Amount 4.50% Interest Rate 1st Year’s Interest = $12,507 X 20% Tax Credit = $2,501 Benefit $46,150.02 $208 Monthly Benefit Borrower is still able to take a deduction for the remaining 80% of interest paid for that year. Don’t wait for tax time to reap the benefits! Adjust dependents on your W-4 Form so that you increase your net take home pay! Example is for illustrative purposes only. Please consult a Tax Advisor.
DC’s MCCsWhat are the benefits? EXAMPLE 2 $400,000 Loan Amount 4.50% Interest Rate 1st Year’s Interest = $17,868 X 20% Tax Credit = $3,573 Benefit $65,928.60 $297 Monthly Benefit Borrower is still able to take a deduction for the remaining 80% of interest paid for that year. Don’t wait for tax time to reap the benefits! Adjust dependents on your W-4 Form so that you increase your net take home pay! Example is for illustrative purposes only. Please consult a Tax Advisor.
DC’s MCCs DC’s MCC Loan Options • Option #1- DC’s MCC may be used as a STAND ALONE product with a Conventional, VA or FHA 30 Year Fixed Rate Mortgage or an FHA Adjustable Rate Mortgage • May not be used with bond loans OR • Option #2- DC’s MCC may be combined with a DC Open Doors Loan. If this option is utilized, the lender must follow the stricter of the program requirements
DC’smccswhat are the requirements? • Guidelines differ from the DC Open Doors Loan Programs: • Borrowers must be first time homebuyers • Must not have had an ownership interest in a principle residence within the most recent 3 year period • Exception for residences purchased in a Targeted Area (see chart) • Exception for Veteran’s utilizing a one-time exception • Maximum income is based upon HOUSEHOLDincome • Household income is the income of all members of the household, even if not taking an ownership interest in the home (excluding full-time student dependents) • Household Income Limits are based upon the household size • Acquisition costs (sales price) may not exceed Program Limits • Single Family residences, only (no 2-4 unit properties) • Can be provided in conjunction with a DC Open Doors loan program or without a DC Open Doors loan program
DC’sMccs Costs • DCHFA charges $450 as an MCC Issuance Fee when done in conjunction with a DC Open Doors Loan Program or VA Loan • DCHFA charges $1,500 as an MCC Issuance Fee when the MCC is issued without a DC Open Doors Loan Program • The lender is permitted to charge an additional $450 MCC Processing Fee • DO NOT FORGET THE EHOUSING PLUS FEE!!!!! ($275 for a stand alone MCC. $450 for an MCC with Open Doors)
Dc’smccs Income Limit: Sales Price Limits
DC’s Mccswhat are the targeted areas? • District of Columbia, Census Tract 34 • District of Columbia, Census Tract 47.01 • District of Columbia, Census Tract 47.02 • District of Columbia, Census Tract 64 • District of Columbia, Census Tract 74.01 • District of Columbia, Census Tract 74.03 • District of Columbia, Census Tract 74.04 • District of Columbia, Census Tract 74.06 • District of Columbia, Census Tract 74.07 • District of Columbia, Census Tract 74.08 • District of Columbia, Census Tract 75.02 • District of Columbia, Census Tract 75.03 • District of Columbia, Census Tract 75.04 • District of Columbia, Census Tract 76.05 • District of Columbia, Census Tract 77.08 • District of Columbia, Census Tract 78.08 • District of Columbia, Census Tract 78.09 • District of Columbia, Census Tract 88.04 • District of Columbia, Census Tract 89.03 • District of Columbia, Census Tract 89.04 • District of Columbia, Census Tract 92.04 • District of Columbia, Census Tract 95.01 • District of Columbia, Census Tract 96.01 • District of Columbia, Census Tract 96.02 • District of Columbia, Census Tract 97 • District of Columbia, Census Tract 98.02 • District of Columbia, Census Tract 98.03 • District of Columbia, Census Tract 98.10 • District of Columbia, Census Tract 98.11 • District of Columbia, Census Tract 99.04 • District of Columbia, Census Tract 99.06 • District of Columbia, Census Tract 99.07 • District of Columbia, Census Tract 104 • District of Columbia, Census Tract 109 Target Areas in DC
Community Based Organizations To apply for assistance or receive more information, please contact one of the following CBOs:
