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Information for Single-Family Lending and Real Estate Professionals
 
Program Announcement

June 25, 2012
Introducing Home Advantage Program 7/1/12 & Manual

Buying a home just got easier

No First Time Homebuyer Requirements

No Acquisition Cost Limits

No Recapture Provisions

No IRS Forms

On July 2, 2012, the Washington State Housing Finance Commission anticipates releasing the new Home Advantage Program. Please check our website for the actual release date. The draft program manual has been posted for your advance review at http://www.wshfc.org/sf/downloads.html and there is a chart under the Online References link comparing the Home Advantage Program to the House Key Program. This new program does not use tax-exempt bonds. It is a daily priced open market program which also provides downpayment assistance in an amount up to 4% of the first lien loan amount. The downpayment assistance will be offered at 0% interest with deferred payments for 30 years and is due when the borrower sells, refinances or no longer occupies the home. No assessment of need or verification of liquid assets is required in order to receive the second mortgage.

Because tax-exempt bonds are not used in this program, the IRS guidelines followed in both the House Key Program are waived as per the Home Advantage Program Manual. There is no first-time homebuyer requirement, acquisition cost limit, business use of home limitations, IRS property restrictions, IRS forms, or recapture provision.

The income limit of $97,000 is applicable statewide for both the Home Advantage first and second mortgage. Income will not be calculated pursuant to IRS guidelines for future projected household income but instead will be calculated using the income determined per the final Automated Underwriting System (AUS) approval and underwriter’s signed 1008/92900-LT/VLA.

As an alternative to using the Home Advantage Downpayment Assistance Program, the lender may select a different downpayment assistance program offered at the Commission including HomeChoice, House Key Schools, House Key Veterans, House Key Plus Seattle, or House Key Plus ARCH as available. These specialty downpayment assistance programs all contain further restrictions including first-time homebuyer requirements and income limitations. Some of these programs also utilize compliance income. Please refer to the downpayment assistance manuals posted on our website. The Home Advantage Downpayment Assistance Program, however, replaces House Key Plus.

A Home Advantage loan may also be combined with the MCC Program. A separate reservation will be required for both the MCC and the Home Advantage first and second mortgages. When coupled with the MCC Program, all IRS requirements and guidelines per the MCC manual will apply.

Home Advantage loans incorporate extension fees if delivery dates are not met. Please review Section 7 of the manual carefully. Please check with your corporate office as they may have placed further restrictions on the locks as well.

Lenders cannot cancel a current House Key reservation and switch to the Home Advantage Program to receive a better rate or term. Transfers from House Key to Home Advantage are at the sole discretion of the Commission.

A web-based training module on the Home Advantage Program is also coming soon. Please stay tuned to our website.

For purposes of qualifying under the Home Advantage Program, the following sections of the Mortgage Origination Agreement are waived because compliance to the IRS code is not required:

Recapture requirements – 5th paragraph in Section 4.02; Section 4.13(v); Section 4.18(h)

First time homebuyer requirement – Section 4.04(b); Section 4.07; Section 4.12(d)(4); Section 4.18(c)

Acquisition Cost – Section 4.04(c); Section 4.04 paragraph 2 under (e); Section 4.06; Section 4.12(3)(6); Section 4.18(d)

Income limit calculation – Section 4.04(d)

Business Use of Home – 4.12(d)(2)

Please contact Lisa DeBrock with any questions at lisa.debrock@wshfc.org or 206-287-4461.

       

 
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