Welcome to the South Carolina State Housing Finance and
Development Authority Lender Forum
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express permission from Freddie Mac is prohibited.
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Speaker Introduction
South Carolina State Housing Finance
Development Authority
Claude Spurlock
Email: [email protected]
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Palmetto Home AdvantageCompetitive pricing. Flexible Options. Conventional Ease.
“Palmetto Home Advantage” is
designed to serve both first-time
and move-up borrowers.
The programs conventional option
offers mortgage insurance at reduced
rates based on the
Freddie Mac HFA Advantage.
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Program Features
• No First-time Homebuyer requirement –move up borrowers are eligible
• Conventional income limit is <= 80% AMI based on the property address (use qualifying income only)
• Maximum loan to value 97%
• Maximum debt-to-income ratio 50%
• Minimum FICO credit score 640
• Mortgage Insurance – 18% coverage on a 97% LTV loan
• New and existing homes are eligible
• 4% and 5% Forgivable Down Payment Assistance (based on loan amount)
• Rate lock to purchase = 60 days
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• 1 Unit properties (Single Family, PUD and Bank
Approved Condominiums)
• No manufactured housing
• No leasehold properties
• No manually underwritten loans
• No escrow holdbacks for repairs/completion
• No High Cost, or Homeownership Equity Protection Act
(HOEPA) loans
Palmetto Home AdvantageEligibility Criteria
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• Request for Eligibility Determination Form “PA-01”
• Notice to Borrower Form “PA-02” (Only required if
borrower is receiving down payment assistance)
• 1008 – Uniform Underwriting Transmittal Summary
• 1003 – Uniform Residential Loan Application
• LPA Findings
• MI Certificate
• Homebuyer Education Certification (at least one
borrower must complete)
Palmetto Home AdvantageCertificate of Eligibility
The following documents must be submitted to SC Housing prior to closing for compliance/eligibility review.
If acceptable, SC Housing will issue a Certificate of Eligibility:
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Palmetto Home AdvantageRegistration and Rate Lock
• Loans must be closed, delivered and purchased by
Lakeview Loan Servicing within 60 days of the initial
reservation/rate lock
• Loans that are not delivered by the delivery/expiration
date are subject to cancellation
• Loans aged more than 45 days from the note date and
receipt of the credit and closing file in fundable condition
will not be purchased by Lakeview Loan Servicing
• Do not lock the interest rate at the time of application
• Rate locks may only be extended once prior to
expiration
• Loans may be reserved/rate locked Monday – Friday
between 10:00 AM and 6:00 PM
• Rates are subject to change without notice
Thank You
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Speaker Introduction
James manages relationships with
lenders, housing finance agencies,
housing intermediaries and other key
stakeholders on behalf of Freddie Mac,
to educate and better serve, well
deserving families.
Affordable Lending Manager
James Hall
Email: [email protected]
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Making Home Possible for 50 Years
• Freddie Mac was chartered by Congress in 1970 and operates in the Secondary Mortgage Market
• Mission to promote liquidity, stability, and affordability in housing – nationwide, in all economic conditions
• Community mission
– Stabilize communities
– Prevent foreclosures
– Expand credit responsibly
– Educate future homebuyers and counsel homeowners
– Support affordable rental housing
• Three main business lines
– Single-Family (1- to 4-unit for-sale properties)
– Multifamily (5+-unit for-rent properties)
– Capital Markets
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express permission from Freddie Mac is prohibited.
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Leading the Future of Home
Insights
Insights through research studies, thought leadership,
speaking opportunities, expert contributions and data
to position our clients and partners for success.
Education
Events, training and financial literacy curricula to help
better prepare borrowers for homeownership and to
promote responsible and sustainable behaviors.
Mortgage Products
Mortgage offerings that meet borrower needs and
opportunities, now and in the future, to include: low
down payment options, energy-efficient properties,
factory-built housing and renovation mortgages.
Business Solutions
Services, resources, tools and technologies that enable
ecosystem professionals to serve as trusted advisors
and to select the best possible option for their borrower.
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express permission from Freddie Mac is prohibited.
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The Affordable Ecosystem
It takes many hands to
make home possible.
Partnership and
collaboration across the
affordable ecosystem are
critical to drive business
opportunities and make the
dream of home a reality for
families.
Mortgage & banking
executives
Loan officers
Real estateprofessionals
Housingcounselors
Housing finance
agencies
Non-profitorganizations
Builders &developers
Appraisers
Localgovernments
Stategovernments
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June 2018-June 2020 First-Time Homebuyer Demographics• 86% of Younger Millennials and 52% of Older Millennials were first-time home
buyers, more than other age groups.
• At 64%, the primary reason for purchasing a home was the desire to own a home of their own
• 88% of FTHB were 29 years and younger
• First-time buyers who financed their home typically financed 93 percent of their home
• Down payment sources – 78% savings; 24% gifts from friends or relatives
• 25% used FHA loans
• FTHBs plan to stay in homes for 10 years
First-Time Homebuyers
Source: National Association of Realtors 2020 Profile of Home Buyers and Sellers
9%
9%
18%
64%
FTHB
Unmarried Couple
Single Male
Single Female
Married Couple
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All In for First-Time Homebuyers
86% of Younger Millennials
were FTHB 86%
As housing demand moves from rent to own, first-time homebuyers
will continue to maintain an outsized role in the housing market
of borrowers are first-time
31% First-time homebuyer percentage has remained the
same from previous year Fifty-two percent of buyers
30 to 39 years and 88 percent of buyers 29 years
and younger were first-time home buyers.
Source: National Association of REALTORS®, Home Buyers and Sellers Generational Trends Report 2020
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The U.S. is Becoming More Diverse
Source: U.S. Census Bureau, 2019
Distribution of Race and Hispanic
Ethnicity by Age Groups
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Launched HFA Advantage® mortgage, our enhanced product for housing finance agencies, which includes:
• 97% LTV, 105% TLTV (1-unit)
• HFA income limits in lieu of Home Possible® Area Median Income limits
• HFA determines homebuyer education requirements
• Credit enhancement options including Charter-level mortgage insurance coverage
• Engage with master servicers who have relationships with smaller state and local HFAs
• Contact your state or local HFA for program details
Working with HFAs
Freddie Mac provides HFAs with a source of liquidity and supports their service to low- and moderate-income borrowers
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express permission from Freddie Mac is prohibited.
Your Next Steps to help make home possible for your client:
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HFAs Role and Impact
• For over 50 years, housing finance agencies
(HFAs) have played a key role in the nation’s
affordable housing ecosystem
• HFAs serve low- and middle-income
households, first time homebuyers, and other
specialty segments
• HFAs have delivered more than $450 billion in
financing for the purchase, development, and
rehabilitation of more than 7 million affordable
homes and rental apartments
Source: NCSHA- State Housing Finance Agencies: The
Center of the Affordable Housing System
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HFAs: An Opportunity for You
• Ideal for borrowers with limited funds for down payment and closing costs and those needing
extra flexibilities on credit and income sources
• Reach more potential homeowners through HFA programs that:
– Provide low down payment options
– Offer preferential pricing
• Majority of HFAs provide “true grant” funds or affordable secondary financing as part of their down
payment assistance programs
• An alternative to FHA financing
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express permission from Freddie Mac is prohibited.
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HFAs Reach Undeserved Borrowers and Markets
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express permission from Freddie Mac is prohibited.
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HFAs Often Lead in Serving Borrowers of Color
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express permission from Freddie Mac is prohibited.
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HFA Advantage® Mortgage
High loan- to-value (LTV)
conventional offering
that’s an excellent
alternative to FHA
lending requirements and
mortgage premiums.
Adopts the requirements
of Home Possible® but
with added flexibilities for
HFAs.
One-unit primary residence
Purchase and no cash-out refinancing
Maximum 97% LTV and 105% total loan-to-value (TLTV ratios)
Loan Product Advisor® manual UW or alternative UW process subject to prior approval
No reserves required
Income limits established by the HFA
Available to first-time homebuyers, repeat buyers, & borrowers seeking no cash-out refinances
Flexible funding options for down payment and closing costs
Flexible MI options available
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express permission from Freddie Mac is prohibited.
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HFA Advantage® Mortgage –Mortgage Insurance
LTV RatioHFA Advantage Mortgage
Insurance Coverage (Fixed rate only)
Standard Mortgage
Insurance Coverage(Fixed rate, term >20 years)
Greater than 80% up to 85% 6% 12%
Greater than 85% up to 90% 12% 25%
Greater than 90% up to 95% 16% 30%
Greater than 95% up to 97% 18% 35%
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express permission from Freddie Mac is prohibited.
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Why Choose HFA Advantage ® Mortgageover FHA?
HFA Advantage® FHA
Mortgage Insurance (MI)
ORMI ends when LTV < 80%
Conventional MI: monthly premium
MI only required if the LTV is 80% or higher
No upfront MIP
MI stays for the life of the loan
FHA: Upfront AND monthly premiums
MI required regardless of the LTV
Upfront MIP added to principal AND amortized
OR
OR
OR
With more funds applied toward the principal up front, an HFA
Advantage mortgage with PMI lets the borrower build equity faster
WHAT THIS
MEANS:
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Receive the Latest News and Updates
Sign Up For News and Updates: https://sf.freddiemac.com/about/single-family/subscription-center
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CreditSmart ® Financial Education
The CreditSmart® curriculum offers financial
education modules to meet the diverse
homeownership needs of consumers. It
features topics such as credit, money
management, homeownership, foreclosure
avoidance and more.
• Free, online program on a flexible, interactive platform
designed to be accessible from multiple access points
• Multi-lingual options available
• Also offered through webinars and in-person
workshops (where available)
Prepare future
borrowers for
sustainable
homeownership
Use CreditSmart
workshops to gain
entre to community
partners and future
homebuyers
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CreditSmart® Homebuyer U
• Available as a self-paced, online program that fulfills first-time homebuyer education requirements for obtaining a Home Possible® or HomeOneSM mortgage
• Six modules, each focused on a learning principle including credit, money management, and how to sustain and preserve your home purchase investment
• Interactive presentation of material including knowledge checks, ability to start/stop, videos, and voiceovers to provide a user-friendly experience
• Offered in English and Spanish
VISIT: Homebuyer U : Freddie Mac CreditSmart
Homebuyer U is a part of the CreditSmart ® suite that focuses on homebuyer education:
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Translated Mortgage and Homebuyer Education Documents
FHFA, Freddie Mac and Fannie Mae created an online,
industry-standard clearinghouse of translated
mortgage and homebuyer education documents for
housing professionals and their clients.
VISIT: https://www.fhfa.gov/mortgagetranslations
• Single repository of in-language tools to empower growing
limited English proficiency (LEP) borrower populations
• Addresses language barriers with clients to help navigate
all aspects of the mortgage life cycle
• Offers 500+ documents – English and translated Spanish
and traditional Chinese
• Features Spanish and traditional Chinese glossaries of
mortgage-related terms
• Vietnamese, Korean and Tagalog languages planned for
future enhancements
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express permission from Freddie Mac is prohibited.
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Borrower Segment eBooks - All For Home Insights
eBooks feature Freddie Mac data and insights to showcase needs, opportunities and solutions for critical borrower populations
• Hispanic Americans: A Driving Force in the Housing Market
– Read the eBook here: https://sf.freddiemac.com/content/_assets/resources/pdf/other/hispanic_borrower_ebook.pdf
• Key Opportunities for Building the Future of Home –Unlocking Solutions to Affordable Homeownership
– Read the eBook here: https://sf.freddiemac.com/resources/affordability-thought-leadership
VISIT: https://sf.freddiemac.com/working-with-us/affordable-lending/news-insights
Don’t miss the Freddie Mac eBook series on important borrower segments
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express permission from Freddie Mac is prohibited.
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• Freddie Mac recently announced the Fall 2019 launch of the Freddie
Mac Single-Family Home Starts Here podcast series.
• The podcast provides an opportunity to spotlight industry topics,
opportunities for the growth and perspectives of Freddie Mac thought
leaders and housing ecosystem experts and influencers.
• Each podcast is 10 - 15 minutes in length and provides a front row
seat to the conversations that are shaping the future of home.
• Listen and subscribe on Apple iTunes, Google Play or anywhere you
prefer to listen to your podcasts.
• You may also visit https://sf.freddiemac.com/news-insights/home-
starts-here-podcast/overview to find an overview of podcast episodes.
– All podcast episodes are currently audio-only
– Transcripts of sessions coming soon
Home Starts Here Podcast Series
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express permission from Freddie Mac is prohibited.
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Freddie Mac – HFA Resource Center
Housing Finance Agency Resource Center
• A digital information hub designed for HFA staff and their
business partners
• Compiles relevant Freddie Mac research, insights, and
thought leadership in one convenient place.
On the HFA Resource Center, you can now:
– Register for new HFA related events
– Download presentations from past events
– Read and share relevant insights and articles
– Listen to our Home Starts Here podcast episodes
VISIT:https://sf.freddiemac.com/working-with-us/housing-finance-agencies/hfa-resource-center
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express permission from Freddie Mac is prohibited.
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• YOU are the critical link to helping well
qualified homebuyers achieve their
homeownership objectives:
– Provide access to credit; originate loans to the full
extent of Freddie Mac’s credit box
– Utilize your mortgage finance expertise
– Explain the process and dispel the 20% down
payment myth
– Identify and match available financial resources in
your area (government, nonprofit, private
sources) with a sustainable mortgage solution
– Take advantage of Freddie Mac training and
resources for yourself and your borrower
• Homebuyer dream realized—and more
business for you—if you know your market
and where to find those affordability gap
solutions
YOU Are the Critical Link
Freddie Mac is here to help!
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express permission from Freddie Mac is prohibited.
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Speaker Introduction
James is responsible for managing the
Affordable team within Lender strategy
and Integration as well as providing
technical and operational strategy and
support to the East Region Housing
Finance Agencies.
Lender Strategy & Integration Manager
James Clement
Email: [email protected]
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Loan Product Advisor
Select HFA Advantage in the “Offering Identifier” field within the “Mortgage Type and Loan Terms” section of Loan Product Advisor.
If using a Loan Origination Software (LOS) system, please contact them to verify what field and value to enter. Some LOS systems may have you enter “251”.
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Loan Product Advisor Feedback Certificate
Verify the loan was
submitted correctly by
ensuring the value entered
in the “Offering Identifier”
field is showing HFA
Advantage. This is found
in the “Mortgage
Information” section of the
Loan Product Advisor
feedback.
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Purchase Restriction Messaging
• Purchase eligibility must be
“Eligible”.
• Ineligible reason messages
will be clearly displayed on
the feedback certificate
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800-FREDDIE
Specialists trained in HFA Advantage
Review individual loan scenarios
Assist with LPA Feedback