Memorandum

Fannie Mae/MyCommunityMortgage Program Waivers for MFA

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Housing Finance Agency (HFA) Signature Version of MyCommunityMortgage

MFA, along with a number of other State HFA’s, has negotiated variances to the MyCommunityMortgage Product that includes a number of enhancements not available in the standard (revised) version of MyCommunity. These variances are detailed below:

• Interested Party Contributions up to 6%
  
  For MyCommunityMortgages with LTVs greater than 90%, the maximum allowable amount of interested party contributions may be up to 6% of the lesser of the properties sales price or appraised value. The lender may ignore the following DU/DO message:

  Based on the data entered, the total amount of interested-party contributions exceeds the maximum allowable contributions of 3 percent for this CLTV. In order for the loan to be eligible for delivery, the amount paid by interested parties that exceeds the maximum allowable contributions must meet requirements stated in the Selling Guide, Part X, Chapter 6, Section 602

  I addition to all applicable special feature codes required, the Lender is required to use Special Feature Code “207” to identify MyCommunityMortgages with LTV’s greater than 90% where the amount of the interested party contributions is greater than 3.00% but less than or equal to 6.00%

• Maximum U/W Ratio for Manual Underwrite MyCommunityMortgages

  The maximum underwriting ratio shall be 45% for the total-expenses-to- income ratio (“single qualifying” ratio as apposed to a separate housing- expense-to-income and total-expenses-to-income ratios). This variance only applies to manually underwritten MyCommunityMortgage loans.

• Non-Occupant Co-Borrower or Non-Occupant Co-Signer Income
  
  1. Manually Underwritten MyCommunityMortgages
     
     The income of a non-occupant co-borrower or non-occupant co-signer may be aggregated with the income of the occupant-borrower, subject to the Lender performing both of the following tests:
     
     1. In considering the income of only the occupant-borrower, the maximum underwriting ratio shall be 55% for the single qualifying ratio; and
        
        
     2. In considering the aggregate income for the occupant-borrower and the non-occupant co-borrower or non-occupant co-signer shall be 45% for the single qualifying ratio.
        
        
  2. MyCommunityMortgages processed through DU

     The income of the non-occupant co-borrower or non-occupant co-signer may be aggregated with the income of the occupant-borrower in underwriting the MyCommunity Mortgage, subject to the following:

     • The Lender may ignore the following message:
       
       This case is ineligible because the subject property must be the principle residence for all borrowers when the loan is a Community Lending product. The lender may determine if this case is eligible for delivery under Community HomeChoice. The Lender must follow all guidelines for Community HomeChoice outlined in the MyCommunityMortgage Terms and Conditions.
       
       and
       
       
     • The Lender must manually calculate the single qualifying ratio, considering only the income of the occupant-borrower, and such ratio may not exceed 55%.
       
       
• Loan Level Price Adjustments for MyCommunityMortgage Product

  There will be no loan level price adjustments related to MyCommunityMortgages originated with tax-exempt or taxable mortgage revenue bond programs administered by MFA (Mortgage$aver or HERO First). MyCommunityMortgage loans originated outside a program administered by MFA will be subject to a 1.0% loan level price adjustment, per Fannie Mae guidelines.

• EA-II Expanded Approvals

  Mortgage loans that are EA-II level loans shall continue to be eligible as MyCommunityMortgage loans as long as the loans are sold to Fannie Mae under pool purchase contracts and purchase commitments entered into with Fannie Mae prior to March 13, 2008. MFA will notify lenders when EA-II will no longer be eligible.
  
  When underwriting a MyCommunityMortgage in DU, the loan will only be eligible as a MyCommunityMortgage if the following message is received:

  This case is ineligible because MyCommunityMortgage loans with an EA- II, EA-III and RWC/IV recommendations are not eligible according to DU MyCommunityMortgage guidelines.

  Any message from DU that references that a MyCommunityMortgage loan is ineligible due to minimum credit guidelines, LTV/CLTV, etc., is not included in the MFA variance for EA-II loans.

Please contact MFA or your Master Servicer regarding any questions to the above referenced variances to the MyCommunityMortgage program.

Thank you for your participation in MFA’s programs. If you have any questions, please contact the Homeownership Department at 505-843-6880 or 1-800-444-6880.