Cal Strs Home Loan Prog
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80/17 purchase program for CA public school or community college employees. ...

80/17 purchase program for CA public school or community college employees.
Borrowers qualify off 80%LTV first only as 2nd is silent for 5 years.

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  • 1. February 20, 2009
  • 2. CalSTRS HOME LOAN PROGRAM The CalSTRS Home Loan Program was created in 1984 and restructured in July of 2004. Countrywide is the Program Administrator since July of 2004. The Program was designed to offer CalSTRS members a great choice of mortgage loans with competitive rates, along with first- class service. Money Works for Pension Fund - Borrowers can obtain a great loan with a competitive rate—and their money works for them, since income derived from mortgage payments goes directly into the Teachers’ Retirement Fund. February 20, 2009
  • 3. Agenda General CalSTRS Home Loan Program Guidelines Standard Conventional Product Conforming Non-Conforming Second Loan Products 80/17 95/5 (Suspended) Underwriting Guidelines Rate Locks and Float Downs Countrywide Fees CalSTRS Marketing Guidelines February 20, 2009
  • 4. CalSTRS Home Loan Products ¾ Standard Conventional ¾ 80/17 February 20, 2009
  • 5. General CalSTRS Guidelines Eligible Properties Properties located within the State of California Owner occupied Principal residences only No Manufactured Homes February 20, 2009
  • 6. General CalSTRS Guidelines Eligible Borrowers Employees of a California public school district and/or a member of the California State Teachers' Retirement System Employees of a CA Community College As proof of eligibility, a copy of a CalSTRS benefits statement, or a pay stub or VOE from a California public school district must be included in the purchase file sent to Countrywide Borrowers must have a valid social security number Qualified inter vivos revocable trusts are permitted February 20, 2009
  • 7. General CalSTRS Guidelines Temporary and permanent buydowns are not permitted All CalSTRS loans require escrow impounds regardless of LTV Loans are not assumable No prepayment penalties are allowed Title Policies are required Title Policy for 80/17 must cover 1st and 2nd loan amounts, including recording info of 2nd Alt docs are permitted, according to Fannie Mae and Freddie Mac guidelines, Appraisal or property inspection required according to AUS cert, unless waived by AUS cert (fee assessed) February 20, 2009
  • 8. Standard Conventional ¾ Purchases ¾ Refinances (including Cash Out Refi’s) ¾ 15 and 30 Year Fixed Rate Conforming ¾ 15 and 30 Year Fixed Rate Non-Conforming February 20, 2009
  • 9. Standard Conventional Summary Owner-occupied 2- to 4-units; attached and detached SFRs; Eligible Properties condos; and PUDs Term 15 or 30 years Conforming Loan Amount Up to $417,000 Non-Conforming Loan Amount $417,001 to $834,000 Loan-to-Value (LTV) of 1st Mortgage 95% Down Payment Standard Fannie Mae Guidelines Sources of Closing Costs Standard Fannie Mae Guidelines 2nd Mortgage Standard Fannie Mae Guidelines – LIMITED TO 80% CLTV February 20, 2009
  • 10. Conforming Standard Conventional Loan Type Units Max Min FICO Loan-Level Pricing Adjustment LTV/CLTV Conf Purch/Rate and 1 90.01% - 95% 700 Term Refi < = 90% 680 Conf Purch/Rate and 2 90.01% - 95% 700 Term Refi < = 90% 680 Conf Purch/Rate and 3-4 80% 680 Term Refi Conf Cash-Out Refi 1-2 70% 680 Conf Cash-Out Refi 1-2 70.01% - 80% 720 Conf Cash-Out Refi 1-2 80.01% - 90% 720 Refer to Conf Cash-Out Refi 3-4 70% 680 Platinum CalSTRS Price Conf Cash-Out Refi 3-4 70.01% - 75% 720 Guide. February 20, 2009
  • 11. Non-Conforming Standard Conventional Loan Amount $417,001 to $834,000 Non-Conforming Parameters Loan Level Price Adjustment Loan balances > $650,000 to $834,000 & 0.25% credit score < 660 Condos 0.375% 2-unit property 0.375% 3-4 unit property 1.00% LTV > 65% and CLTV 80.01% - 90% 0.25% LTV > 65% and CLTV 90.01% - 95% 0.375% February 20, 2009
  • 12. Non-Conforming Standard Conventional February 20, 2009
  • 13. Standard Conventional Underwriting Guidelines Homebuyer education is not required Non-occupant co-borrowers and co-signers are permitted 5% minimum down payment from borrowers own funds (Subject to MI availability) Closing costs may be paid by third party Automated underwriting approval required DU- Approve/Eligible LP- Accept Borrowers may own other property, but only one CalSTRS loan at a time Non-permanent resident aliens are eligible on the Standard Conventional Program ONLY (LTV is limited to 75%) Conforming: Ratios and Reserves: Standard Fannie/Freddie Guidelines Non Conforming: Ratios: 41% Reserves: 2 months *Please see Seller’s Guide in Platinum for Countrywide Standard Guidelines February 20, 2009
  • 14. Mortgage Insurance Required on all loans exceeding 80% LTV Any CHL approved MI Co is eligible to insure first mortgage loans. If DU allows reduced coverage for Standard Conv loans, it must be given to the borrower. Lower Cost MI is an option, if borrower pays for it LTV Standard MI% Reduced MI% No Cost 80.01% to 85% 12% N/A 85.01% to 90% 25% 17% 90.01% to 95% 30% 25% February 20, 2009
  • 15. 80/17 Product 80/17 Purchase Only 30 Year Conforming 30 Year Non-Conforming February 20, 2009
  • 16. 80/17 Summary Owner-occupied SFRs; approved condos; approved attached and Eligible Properties detached PUDs Term 30 years (1st and 2nd mortgages) Conforming 1st Loan Amount Up to $417,000 Non-Conforming 1st Loan Amount $536,082 Loan-to-Value (LTV) of 1st Mortgage 80% Loan-to-Value (LTV) of 2nd Mortgage 17% Maximum Combined Loan-to-Value (CLTV) of 1st and 2nd Mortgages 97% Down Payment 3% Borrower’s own funds, seller contributions up to 3%, gift from Sources of Closing Costs relative, or unsecured grant from approved government agency 2nd Mortgage Deferred payments on the 17% 2nd mortgage for the first 5 years Loan Level Price Adjustments Refer to Platinum CalSTRS Price Guide February 20, 2009
  • 17. Second Mortgage Loans Interest rates for the second mortgage loan carries the same rate as the first mortgage 30-year term with a five-year deferred payment structure Simple interest calculation will be used for years 1 through 5, no principal or interest payments shall be due during the first 5 years / 60 months. CalSTRS Note and Deed must be used Year 6 / payment number 61: The accrued simple interest balance from the deferral period will be added to the original loan balance. The new loan amount will be amortized over the remaining 25 years / 300 months, and the borrower will then make monthly payments for the remaining life of the 2nd loan. February 20, 2009
  • 18. 80/17 st nd Loan Type *LTV: 1 *LTV: 2 Max Loan Max Loan Max Max st nd Amt: 1 Amt: 2 Combined Purchase Loan Amt Price Conforming 80% 17% $417,000 $88,612 $505,612 $521,250 Non- 80% 17% $536,082 $113,918 $650,000 $670,103 Conforming February 20, 2009
  • 19. 80/17 Underwriting Guidelines Homebuyer Education is required for 1st Time Homebuyers Borrower(s) cannot own other property Non-occupant co-borrowers and co-signers are not permitted 3% down payment is required, a minimum of 1% must come from the borrower’s own funds. Remainder may come from: Gift from a relative if repayment is not required Grant from a government agency or an employer- assisted housing program, which has been approved Countrywide A FICO score of 620 is required for all combined loan amounts up to ƒ $400,000 A FICO score of 680 for combined loan amounts between $400,001 ƒ to $650,000. Conforming: Ratios and Reserves: Standard Fannie/Freddie Guidelines Non Conforming: Ratios: 38% Reserves: 2 months February 20, 2009
  • 20. UNDERWRITING GUIDELINES Lenders are responsible for underwriting all mortgage loans that they originate. ƒ Automated underwriting approval required (DU Approve/Eligible or LP Accept) The 80/17 Program loans run through DU will have Flex underwriting criteria. ƒ Effective August 25, 2008, indicate that the second mortgage is a Community ƒ second. NOTE: If CLOUT is used, the second mortgage cannot be input as a community second. Therefore, it may not receive as favorable finding; please go to DU directly for this product. February 20, 2009
  • 21. UNDERWRITING GUIDELINES February 20, 2009
  • 22. Second Loan P& I Calculation Example 2) INTEREST Interest will be charged at the rate of ___________________________________ percent (_______%) on the unpaid principal until the full amount of principal has been paid. I will pay simple interest until one month before the first payment date shown in Section 3(B) and then compounded interest until the earlier of the Maturity Date (as defined below) or the date this Note is repaid in full. Example: $59,160 loan amount x 7% interest rate _________ $4141.20 accrued interest x 5 yrs deferral period ________ $20,706.00 total accrued interest for 5yrs +$59,160.00 original loan balance __________ $79,866.00 + $ 147.49 13 days of interest from 7/19/2007(sett date) on 08/01/2007(one month prior to 1st payment) __________ $80,013.49 $80,013.49 amortized for 25 years = $565.52 February 20, 2009
  • 23. Additional Fees All CalSTRS conforming conventional loans are subject to the Fannie Mae 0.25% Adverse Market Delivery Fee and the new loan level pricing adjustments per LTV and FICO. New Fannie Mae Adverse Market Delivery Fee and Loan Level Pricing Adjustments Announcements: Fannie Mae Announcement 08-24 Fannie Mae Announcement 08-18 Fannie Mae Announcement 07-21 Fannie Mae Announcement 07-16 February 20, 2009
  • 24. Rate Locks and Commitment Locks for 80/17 1st and 2nd mortgages must be made concurrently Property changes require new lock No fee for cancellations, all loans that will not be delivered must be cancelled Worst Case Extension Loans that have not closed after all other extensions have been exhausted: Rate will be the higher of original lock or current market rate with a .125% fee February 20, 2009
  • 25. Fees Origination Fee: 1.00% Standard Conventional 1.25% 80/17 (only on 1st loan) Discount Points: not allowed Other Closing Costs: Normal and customary fees including an appraisal fee, credit report fee, survey fee, title insurance premium, and other closing costs as permitted by the respective agency. Must be fully disclosed on the HUD-1. February 20, 2009