Program Update Announcement December 4, 2023

*Correction: Temporary Buydowns was moved from section 7.17.1 | Documentation – Further Requirements to 7.17 | Documentation – General Requirements.

Effective Monday, December 4, 2023, 2-1 and 1-0 buydowns are allowed for Chenoa Fund Down Payment Assistance. This change effects the following sections in the guide:

5.21.2 Seller Credits

CBC Mortgage Agency allows seller credits as long as they meet FHA/HUD Handbook 4000.1 requirements.

Keep in mind that converting seller credits to seller-paid fees must be done prior to or at closing. Seller credits used to offset points and fees must be disclosed on the initial and final CD; they cannot be corrected after closing and must be reflected on the purchase contract prior to closing.

The Interested Parties’ contribution of up to 6% of the sales price would include temporary interest rate buydowns.

7.17 | Documentation—General Requirements

CBC Mortgage Agency requires that each loan conforms to and complies with all applicable HUD and FHA underwriting, lending, selling, and servicing requirements, as well as all Ginnie Mae requirements for the inclusion of the mortgaged loan in a Ginnie Mae MBS pool.  In addition to all FHA credit qualifying and documentation requirements, the loan must also include:

• An electronic fraud detection report covering standard areas of quality control, i.e., borrower validation, social security validation, property information, and MERS verification
• Compliance testing for adherence to QM/ATR, APR, and Points and Fees for the first mortgage
• The copy of the deed of trust, stamped as “True and Certified” by the settlement agent
• A completed tax information sheet
• The 4506-C address, set to match the last filed tax transcripts
• Verbal verification of employment within ten (10) calendar days of the Note date, per agency guidelines, and an independently obtained phone number or address for employer with source documented
• Evidence the FHA UFMIP has been paid
• A W-9 where borrowers have selected a Federal Tax Classification
• A Life of Loan flood certificate
• Closing Protection Letter (CPL)
• Final settlement ALTA statement, signed by the settlement agent
• 1-0 or 2-1 Buydown Escrow Agreement
• 1-0 or 2-1 Subsidy Payment Schedule

Additionally, the loan must be fully eligible for FHA insurance, and it must already be insured by HUD or will be insured by HUD within sixty (60) days of the purchase date for CBC Mortgage Agency.