Table of Contents. Selling Supplement. Introduction

Transcription

1 Introduction Table of Contents Section 1 Introduction Utah Housing Corporation Overview Definitions Announcements, Notices, and Amendments... 6 Section 2 Lender Participation Evaluating Creditworthiness General Information Participating Lenders Security Requirements... 8 Section 3 Lender Restricted Access to UHC Website Lender Security Policy Lender Authorized Administrator Authorized Administrator Responsibilities... 9 Section 4 UHC Forms Section 5 General Loan Requirements Borrower Eligibility Construction to Permanent Loan Purchase Price, Income, and Loan Limits Occupancy Loan Payments and Terms Loan Assumptions Cash to Borrower Acreage Restrictions Mortgage Insurance and Guaranty FHA Mortgage Insurance Conventional Mortgage Insurance VA Guaranteed

2 Introduction 5.10 Attorneys-in-Fact and Power of Attorney Section 6 UHC Loan Programs UHC Loan Programs FirstHome Loan (FHA or VA) HomeAgain Loan (FHA or VA) Score Loan (FHA or VA) NoMI (Fannie Mae) Reserved for Future Programs Second Loan, Down Payment Assistance Streamline Refinance Subordination of Second Loan Section 7 Underwriting Borrowers Income Analysis Qualifying Income (HomeAgain, Score, NoMI) Household Income (FirstHome) Ratios Housing and Debt Ratio Credit Underwriting Credit Score Foreclosure, Short Sale, Deed-in-Lieu, Bankruptcy Automated Underwriting Systems Section 8 Property Eligibility Residence Definition and Use Acreage Limits Rental Prohibited Mobile Homes Manufactured Homes Cabins and Log Homes New Construction FHA Streamline 203(k)

3 Introduction (k) Escrow Repair Requirements Condominiums and Attached Planned Unit Developments (PUD) Condominium and Attached PUD Database Fidelity Bond Project Title Insurance Appraisal Standards Appraisal and Residence Repair Requirements Acceptable Appraisers Minimum Property Standards and Conditions Escrow Funds for Repairs Environmental Hazards Residential Water Facilities Culinary Water Sewage Disposal Facilities Water Rights and Water Stock Mechanical and Electrical Insurance Title Insurance Homeowners Insurance Condominium and Applicable PUD Homeowners Insurance Maximum Insurance Deductible Flood Insurance Standard Mortgagee Clause Assigns Section 9 Mortgage Purchase Agreement (Interest Rate Lock) Mandatory and Best Efforts Delivery Current Interest Rates MPA Requests Final Mortgage Delivery Date Enter an MPA Request Online Documentation Required for Manufactured Homes

4 Introduction MPA Modification MPA Delivery Date Extension MPA Cancellation Requests and Non-Delivery Fee Cancellations and Non-Delivery Requesting Another MPA for the Same Applicant Duplicate Social Security Numbers Section 10 Permitted Fees and Charges FirstHome Itemization of Origination Charge Permitted Fees First Loan Permitted Fees Second Loan Section 11 Closing a UHC Loan Closing and MPA Consistency Loan Terms Loan Closing Documents Attorneys-in-Fact and Power of Attorney Co-Signer Mortgage Closing Documents Closing Documents Manufactured Homes Escrow Officers and UHC Subordinate Loan Closings Participating Title Companies Section 12 Funding the Second Loan Lender Funds the Second Loan Section 13 Loan Delivery to UHC Final Mortgage Delivery Dates, Extensions, Expirations, and Fees Lender Reaffirmations Lender Restricted Electronic Delivery Uploading Files Submission Package Document Delivery

5 Introduction Endorsement by Authorized Signers Recorded Deed of Trust Section 14 Pre-Purchase Package Reviews and Fees Mortgage Insurance or Guaranty Certificate Right to Reject Section 15 Mortgage Purchase UHC Purchase and Disbursement of Loans Purchase First Loan Purchase Disbursement Second Loan Purchase Disbursement Section 16 Mortgage Electronic Registration System (MERS) Section 17 Post-Purchase Incomplete Loans (Post-Purchase) HUD Mortgage Record Change Procedures Post-Purchase Documents Section 18 Regulatory Compliance Ability to Repay and Qualified Mortgage Rules (ATR and QM) Higher Priced Mortgage Loans (HPML) Appraiser Independence Mandatory Reporting Selection of Appraisers Section 19 Appendix A: UHC Fee Schedule Section 20 Definitions

6 Introduction Section 1 Introduction 1.1 Utah Housing Corporation Overview Utah Housing Corporation (UHC) was created in 1975 by Utah legislation to serve a public purpose in creating an adequate supply of money with which Mortgage Loans at reasonable interest rates could be made to help provide affordable housing for Low and Moderate Income Persons. UHC provides Mortgage money to qualifying First-time and repeat Home Buyers as well as resources to developers building or renovating affordable apartment projects. In addition, UHC assumes several roles ranging from Lender to developer in creating solutions for difficult housing problems. UHC does not receive any funding from the State of Utah. It is totally self-supporting and each year raises hundreds of millions of dollars to fund its Home Buyer Mortgage and multifamily programs, and other programs. UHC forms partnerships with private sector banking and lending institutions, developers, real estate agents, and others to bring the maximum amount of expertise together in administering these extremely complex and sophisticated programs. UHC is committed to developing and strengthening all of its programs so it can be most responsive to those seeking affordable housing opportunities and, at the same time, being fiscally vigilant and responsible to continue to be one of the most successful state housing finance agencies in the nation. 1.2 Definitions As used in this Selling Supplement, unless a capitalized term is defined herein or has its meaning set forth in the Definitions section, its meaning will be that indicated by the context. 1.3 Announcements, Notices, and Amendments Lender shall at all times ensure that each of its employees or agents acting on its behalf with respect to Loans has access to the most current edition of the Participation Documents as amended. UHC will communicate any and all changes to the Participation Documents to the Lender s Designated Contact and Lender will be bound by any changes in the Participation Documents distributed to the Designated Contact address or posted on UHC s website, as may be updated from time to time. 6

7 Lender Participation Section 2 Lender Participation 2.1 Evaluating Creditworthiness UHC relies on the Lender to perform credit underwriting of each Loan as if the Lender were going to hold each Loan in its own portfolio and assume all risk associated with it. UHC may perform an analysis of the credit quality of the Borrower, but relies on the underwriting performed by Lender to ensure compliance with the specific policies of the Agency as well as sound underwriting practices. Loans not compliant with Agency requirements may be subject to Lender repurchase of the Loan. Lender must evaluate each Borrower's creditworthiness on a case-by-case basis. All standards for determining effective income must be applied to each Borrower in the same manner. Lender must determine that the Borrower evidences sufficient willingness and financial ability to justify and benefit from a Loan in the amount and on the terms stated. All information must be supported by written documentation maintained in the Loan file. 2.2 General Information The general policy of UHC with regard to the Origination and Closing of its Loans is that it is a Lender's responsibility to act in the most timely, efficient, and responsible manner to protect the interests of UHC as mortgagee and to afford proper service and fair treatment to the Borrower. UHC requires Lender to have well-trained personnel in adequately equipped Mortgage lending facilities to provide proper and professional Mortgage lending. 2.3 Participating Lenders UHC Loans can be generated in one of two ways: Loans are generally originated by Participating Lenders, subsequently sold to UHC on a servicing released or premium priced basis and then serviced by UHC. Participating Lenders may sell Loans to UHC that are the result of Lender entering into an agreement or relationship with another Lender or broker ( third-party originators ). Third-Party Originators (TPO) may take Loan Applications, or may originate and process Loans for sale by Lender to UHC provided that all requirements in the Participation Documents are fully met. However, 7

8 Lender Participation the Mortgage Purchase Agreement (MPA) must be requested by the approved Participating Lender and will be issued to the Participating Lender. TPO Loans must be closed in the name of the approved Participating Lender; underwritten, closed, and shipped to UHC by Participating Lender; serviced by UHC; and with a program approved for TPO Origination. TPO Loans are not eligible for the FHA Streamline Refinance or Fannie Mae Loan Program. 2.4 Security Requirements In accordance with the Participation Documents, the Lender is responsible for safeguarding passwords or other UHC-issued security information and shall only disclose UHC web security information to authorized persons who are employees of the Lender. The Lender may not send Nonpublic Personal Information to UHC via unless it is encrypted using a system acceptable to UHC. 8

9 Lender Restricted Access to UHC Website Section 3 Lender Restricted Access to UHC Website 3.1 Lender Security Policy UHC will initially send written instructions to Lender regarding the User ID and Password of each Lender. Instructions are included about how the required password should be changed periodically by a Lender Authorized Administrator as necessary Lender Authorized Administrator The utilization of an Authorized Administrator enhances the security of access to a Lender s Borrower information by requiring a password for each Lender-user of the Lender-restricted web page. The Lender must complete the UHC Mortgage Lender s Certification of Authorized Administrator. The Lender s UHC Authorized Signer must sign the form and return to UHC in order to access the Lender Login web page. UHC will set up the initial Lender Administrator (Admin). Once set up, the Admin can authorize users and additional Admins access to view Loan conditions, documents, and request Mortgage Purchase Agreements. Lender shall be responsible for safeguarding passwords and all other UHC-issued security information and shall only disclose such information to authorized persons Authorized Administrator Responsibilities The Authorized Administrator is empowered to add Lender-users and to set their permissions, and to authorize additional administrators (i.e., managers for each branch office). The Authorized Administrator should allow access only to the part of the Lender-restricted web page that is necessary for an employee to complete their job. The Lender-restricted web page provides different levels of access and views for the different processes of a UHC Loan, such as: Administrative Lock a Rate (MPA) and Locks in Progress Loans in Progress (Approved for Purchase, Pre-Purchase and Post-Purchase Conditions) Lock & In Progress Purchase Detail Report 9

10 Lender Restricted Access to UHC Website View All It is imperative that the Authorized Administrator delete users and any other Authorized Administrators who leave the company so they do not continue to have access to the Lender s Borrower information. 10

11 UHC Forms Section 4 UHC Forms UHC makes available specific forms the Lender must use in the case of the Origination, Closing, and sale to UHC of Loans. Copies of these forms may be downloaded by the Lender from the UHC website at in the Lender s section. A list of forms is located on the UHC Lender web page with the most current revision dates. UHC forms are amended from time to time. Lender must use the applicable form with the most current revision date when processing and Closing a UHC Loan. Lenders who have requested placement on UHC s notification will be notified of any revisions to the forms. The revised forms should be forwarded to Lender s document preparation company for inclusion in their document preparation for UHC Loans. Lenders may download UHC forms using Acrobat Reader from UHC Lender web page (Forms). Lender may generate reproductions and replicas of UHC forms, but the reproductions and replicas must be in the same format and contain, without deviation and in order, all language contained and information to be reported in such UHC forms. 11

12 General Loan Requirements Section 5 General Loan Requirements UHC has multiple Loan Programs that are described later in this document; however, the following general requirements apply. 5.1 Borrower Eligibility Borrower cannot have any outstanding UHC Loans at the time the new Loan is closed. Any previous UHC Loans must be paid off. For a NoMI Loan, the Borrower cannot own any other Property at time of Closing. The Lender must obtain legal verification of Social Security numbers for all Borrowers. Acceptable forms of verification may include Social Security card, W-2, or Military ID card showing the SSN, or Rapid Reporting SSN Verification. 5.2 Construction to Permanent Loan A UHC Loan may be used for a construction-period Loan or similar temporary initial financing having a term of 24 months or less as long as the Borrower has not occupied the Property prior to UHC financing. 5.3 Purchase Price, Income, and Loan Limits The cost to acquire the Property may not exceed the UHC Purchase Price Limits as shown on UHC s website and in the Participation Documents. Borrower s income may not exceed the UHC Income Limits as shown on UHC s website and in the Participation Documents. There is no minimum Loan Amount for a UHC Loan. 5.4 Occupancy UHC Loans must be secured by an owner-occupied Single Family Residence, as defined in the Participation Documents. 12

13 General Loan Requirements Borrower must occupy the Residence as Borrower s Principal Residence within 60 days of Closing and shall maintain the Residence as Borrower s Principal Residence and as a Single Family Residence throughout the term of the Loan. UHC will not purchase a Loan where a Borrower has intention to rent the Property, even if only temporarily. The Borrower may not use more than 15% of the total area of the Residence in a trade or business, or use the Residence as an investment Property or as a recreational home, and cannot rent the Residence or any part thereof. 5.5 Loan Payments and Terms The Combined Loan to Value (CLTV or HLTV) may not exceed 105%. UHC will rely on the final automated findings and/or the Underwriter signed FHA Form LT for calculation of the CLTV. Each Note shall have a 30-year (360-month) amortization, a level monthly payment due on the first day of the month. Each Loan delivered to UHC shall not contain any provisions that prohibit or impose charges for early payment of principal in whole or in part. Each Loan delivered to UHC shall contain a provision for a late payment charge in an amount not to exceed that allowed by the applicable Agency. In no case shall late charge provisions exceed 5% of the amount of the full payment. 5.6 Loan Assumptions Loans for FirstHome, HomeAgain, Score, Streamline Refinance, and UHC Second Loan may be assumed subject to the purchaser(s) meeting applicable UHC and FHA or VA requirements; written permission by UHC; and payment of any required fees. Conventional Loans and UHC Second Loans where the UHC First Loan has been paid off are not assumable. 5.7 Cash to Borrower 13

14 General Loan Requirements No cash proceeds of a Loan may be disbursed to the Borrower or to any other person for the benefit of the Borrower. No cash proceeds of a Loan may be disbursed to the Borrower for any reimbursement or value of land owned by the Borrower before Closing and secured by the Loan. Reimbursement of Earnest Money deposit, excess cash deposits, or cash down payment paid by the Borrower before Closing does not constitute cash proceeds and is permitted. 5.8 Acreage Restrictions For the FirstHome Loan, acreage is limited to one acre. Acreage may exceed one acre for all Properties where the appraiser has identified the Property as being in a highly rural area as defined by the Consumer Financial Protection Bureau (CFPB) as underserved counties. Properties in highly rural areas may not exceed five acres. Exception requests for a Property more than one acre but less than one and one-quarter acres may be submitted to UHC for review. Written approval from UHC must be obtained in advance of Closing. Exceptions may be granted depending on, but not limited to, land-to-value ratio, distance, and adjustment of comparables provided by the appraiser. For all other UHC Loans, Properties must comply with all FHA, VA, or Fannie Mae requirements, including land-to-value ratio and net and gross adjustments. UHC does not limit the size and area of the Property, but rather relies on underwriting to be compliant with FHA, VA, or Fannie Mae requirements. 5.9 Mortgage Insurance and Guaranty The cost of the Mortgage Insurance or the Guaranty varies depending on the Loan Program and the size of the down payment, and protects the Lender and UHC against Default by the Borrower. Lenders will be required to repurchase any Loan where Mortgage Insurance or a Guaranty has been revoked FHA Mortgage Insurance Upfront and Monthly FHA Mortgage Insurance is required for all FHA Loans, and a Mortgage Insurance Certificate (MIC) is required. Loans sold to UHC must be covered by a valid and enforceable FHA MIC. Lenders will be required to repurchase any Loan where an MIC has been revoked by FHA. When submitting a Loan to FHA for insurance all Loans which include a concurrent UHC Second Mortgage must be submitted to FHA with the down payment assistance coming from a governmental Agency and must include the following: 14

15 General Loan Requirements UHC EIN Number ; and UHC Mortgagee code is After receiving notification from UHC that it has purchased one or more of the Lender s Loans, the Lender must electronically complete the FHA Notice of Transfer for each Mortgage Loan Conventional Mortgage Insurance Mortgage Insurance (MI) may be required for certain UHC Conventional programs, the MI must be issued by a MI Company approved by UHC and a copy of the MI certificate must be included in the Loan submission package. MI companies offer several options for insurance, such as Lender paid, upfront, monthly, and refundable. A Borrower may choose the MI coverage that is best for them as long as it meets UHC program requirements. The MI must also meet UHC and Conventional coverage requirements for the Loan Program and be sufficient to protect UHC s interest VA Guaranteed A VA Funding fee is required for some VA Loans. When a VA Home Loan Guaranty is required, a valid and enforceable VA Guaranty is required for Loans sold to UHC Attorneys-in-Fact and Power of Attorney An attorney-in-fact may execute the Note, Deed of Trust, and any Rider to Deed of Trust on behalf of the Borrower, but only if a power of attorney gives the attorney-in-fact that power by specific or broad language. The Power of Attorney must include the specific Property. The Borrower s Power of Attorney cannot certify Household Income or sign the UHC Borrower Affidavit form for a FirstHome Loan. Refer also to Closing a UHC Loan. 15

16 UHC Loan Programs Section 6 UHC Loan Programs 6.1 UHC Loan Programs UHC Loan Programs allow a Home Buyer, with the help of a Participating Lender, to purchase a home with a Second Loan for Borrowers in need of down payment and Closing cost assistance. UHC Streamline Refi program allows Borrowers with a current UHC Loan to Refinance and Subordinate their existing Second Loan. UHC Loans are subject to certain limitations of the Borrower s total annual income, the size of the family, and the Purchase Price of the subject Property. For FirstHome Loans, there are further restrictions based on the county in which the Property is located. The UHC Loan Program Eligibility Matrix located on the UHC Lender web page provides a quick reference for UHC s Loan Program requirements FirstHome Loan (FHA or VA) FirstHome is a Loan insured by FHA or guaranteed by VA. This program is for a First-time Home Buyer purchasing a Single Family Residence in Utah with a minimum credit score of 660. This program may include a Second Loan in an amount of up to 6% of the First Loan Amount. Any Loan made under the FirstHome Loan program must comply with all FHA or VA requirements, as applicable. Refer to General Loan Requirements and Credit Underwriting sections of this document for requirements that apply to all UHC Loan Programs. FirstHome Loan sets the Gross Income Limit based on total Household Income, at time of Application, projected forward 12 months Maximum Household Income The Current Annual Household Income of a Borrower may not exceed the Income Limits for the area in which the Property financed by a Loan is located, as established and amended by UHC from time to time and referenced in the Participation Documents for the 12-month period beginning on either of the following: The date of Application if Closing occurs within four months of the date of Application The date of Closing if Closing occurs more than four months after the date of Application 16

17 UHC Loan Programs Income for all persons 18 and over expected to use the Residence as their Principal Residence during the Current Year must be included in Annual Household income calculations Qualifying Borrower Certification of Income In addition to completing and signing the initial and final Application the Borrower must complete and sign the UHC Qualifying Borrower Certification of Income form. By executing the form, the Borrower certifies that all sources of Household Income have been disclosed Credit At least one credit score is required for the primary Borrower and any non-occupant Co-Signers. Refer to Credit Underwriting for additional requirements. Credit Scores are not required for occupant Co-Borrower. The Co-Borrower s credit must meet FHA manual underwriting requirements for Alternative Credit. A tri-merged credit report must be provided and the report must show that the occupant Co-Borrower has insufficient credit to generate a credit score Affidavits of Borrower and Seller The Lender must deliver to UHC an affidavit, executed by the Borrower, in the form required by UHC. The Borrower must execute this affidavit, and not another person signing under the authority of a Power of Attorney. This affidavit is designated as the UHC Borrower and Residence Seller Affidavit form and may be amended from time to time by UHC. The affidavit shall be dated and delivered to Lender as of Closing, and shall be delivered to UHC before the purchase of the Loan by UHC Recapture Notice A FirstHome Loan may be funded with proceeds of tax-exempt bonds. The Internal Revenue Code of 1986, as amended, requires that under certain circumstances the Borrower s Federal income tax liability may be increased for the year in which the Property is sold. Refer to the UHC Recapture Notice form. Borrowers who are required to pay the IRS Recapture Tax may be eligible for reimbursement by UHC. Refer to UHC Loan Application Disclosure form. The Lender shall deliver to UHC a UHC Recapture Notice, executed by each Borrower of the Residence. This notice shall be dated and delivered to the Lender as of Closing and shall be delivered to UHC before the purchase of the Loan by UHC Rider to Deed of Trust 17

18 UHC Loan Programs Lender shall ensure that each FirstHome Loan contains provisions which authorize the Lender to accelerate the Loan if at any time events occur which may violate Section 143 of the Internal Revenue Code. Such provisions shall be contained in a form required by UHC and designated as a Utah Housing Rider to Deed of Trust ( Addendum ), which may be amended from time to time by UHC. Such Addendum shall be dated and executed by Borrower as of Closing and shall be attached to and recorded as part of the First Loan Deed of Trust by the office of the recorder of the county in which the Residence is located and shall be delivered to UHC Three Year Prior Home Ownership Restriction The Borrower cannot have had an ownership interest in any Principal Residence at any time during the three-year period preceding the date the related Loan delivered to UHC was executed (Settlement). This does not apply, however, under the following circumstances: Borrower is a Veteran as defined by the Veterans Administration. Borrower qualifies as a Single Parent Non-Occupant Co-Signer Non-Occupant Co-Signers are allowable for FirstHome Loans only and must comply with FHA nonoccupant Co-Borrower requirements. Co-Signer requirements are as follows: Co-Signer cannot take title to the subject Property or sign the Deed of Trust. The debt ratio cannot exceed 41% of Co-Signer s gross monthly income, excluding the Borrower s income, including the Loan payment for which they will co-sign and all other Co- Signer s debts and co-signed Loans, regardless of who pays them. The Co-Signer is neither the spouse of the Borrower nor an occupant of the Residence. The Lender underwrites the Loan in a manner that assures that the Co-Signer has sufficient financial strength to meet his or her own financial obligations (must have a middle credit score of at least 660 as outlined in this Selling Supplement); and make the Borrower s monthly UHC Loan payment, at full Note rate, and any other co-signed Loan payments, together with all other required payments on the Co-Signer s own indebtedness. 18

19 UHC Loan Programs Acreage Limit Refer to Acreage Restrictions for FirstHome acreage limitations HomeAgain Loan (FHA or VA) HomeAgain is a Loan insured by FHA or guaranteed by VA. This program is for Home Buyers purchasing a Single Family Residence in Utah who previously owned a home as well as for First-time Home Buyers who do not qualify for the FirstHome program and have a minimum credit score of 660 or higher. This program may include a Second Loan in an amount of up to 6% of the First Loan Amount. Any Loan made under the HomeAgain Loan program must comply with all FHA or VA requirements, as applicable. Refer to General Loan Requirements and Credit Underwriting sections of this document for requirements that apply to all UHC Loan Programs. HomeAgain Loans set the Income Limit based on Annual Qualifying Income of Borrower Maximum Qualifying Income of Borrowers The Loan Qualifying Income, calculated annually, cannot exceed the Income Limits as referenced on the UHC website. Refer to the Income Analysis section. The higher income as listed on the Automated Findings, Fannie Mae Form 1008, FHA Form LT, or VA Form , calculated annually will be used in determining Income Limit eligibility Credit At least one credit score is required for the primary Borrower. Credit Scores are not required for occupant Co-Borrowers; the Co-Borrowers credit must meet FHA manual underwriting requirements for Alternative Credit. A tri-merged credit report must be provided and the report must show that the occupant Co-Borrower has insufficient credit to generate a credit score No Prior Home Ownership Restrictions There are no restrictions to prior home ownership. HomeAgain is not limited to First-time Home Buyers and the Borrower may own another Residence as allowed by FHA. Home buyers with an unpaid UHC Loan at Closing are ineligible Non-Occupant Co-Borrowers and Co-Signers Non-Occupant Co-Borrowers and Co-Signers are ineligible for this Program. 19

20 UHC Loan Programs Score Loan (FHA or VA) The Score program is a Loan insured by FHA or guaranteed by VA. This program is for Home Buyers purchasing a Single Family Residence in Utah who previously owned a home, as well as for First-time Home Buyers who do not qualify for the FirstHome or HomeAgain programs and have a credit score of 620 or higher. This program may include a Second Loan in an amount of up to 4% of the First Loan Amount. Any Loan made under the Score Loan program must comply with all FHA or VA requirements, as applicable. Refer to General Loan Requirements and Credit Underwriting sections of this document for requirements that apply to all UHC Loan Programs. Score Loans set the Income Limit based on Annual Qualifying Income of Borrower Credit At least one credit score is required for all Borrowers included on the Loan Documents. Alternative credit is not acceptable for this Loan Program. A Borrower who does not have the type of credit that is traditionally reported to a credit repository is not eligible for UHC financing. Refer to Credit Underwriting for credit score requirements Maximum Qualifying Income of Borrowers The Loan Qualifying Income, calculated annually, cannot exceed the Income Limits as referenced on the UHC website. The higher income as listed on the Automated Findings, Fannie Mae Form 1008, FHA Form LT, or VA Form , calculated annually will be used in determining Income Limit eligibility Debt-to-Income Ratio For a Score Loan the Debt-to-Income ratio on the Automated Findings and the approved LT or VA Form cannot exceed 45% No Prior Home Ownership Restrictions There are no restrictions to prior home ownership. Score is not limited to First-time Home Buyers. Home Buyers with an unpaid UHC Loan at Closing are ineligible Multiple Property Restrictions 20

21 UHC Loan Programs The Borrower cannot own any other Property at time of Closing. A Borrower selling a home concurrently with the Closing of a UHC Loan must provide a copy of the Closing Disclosure (HUD-1 Settlement Statement) and the recorded transfer deed to verify owned Property was sold, title transferred and, if applicable, all Mortgages were paid off Non-Occupant Co-Borrowers and Co-Signers Non-Occupant Co-Borrowers and Co-Signers are ineligible for this program Homebuyer Education Homebuyer Education by a UHC approved educator is required for the Borrower prior to Closing. A copy of the Homebuyer Education Completion Certificate dated prior to Closing must be submitted to UHC prior to UHC purchasing the Loan. Refer to UHC website for a list of UHC Approved Homebuyer Educators NoMI (Fannie Mae) The NoMI program is a Conventional Loan without Mortgage Insurance (MI). This program is for Home Buyers purchasing a Single Family Residence in Utah who previously owned a home as well as for First-time Home Buyers who have a credit score of 700 or higher. This program may include a Second Loan in an amount of up to 4% of the First Loan Amount. Refer to General Loan Requirements and Credit Underwriting sections of this document for requirements that apply to all UHC Loan Programs. Following are requirements specific to the NoMI Loan Program. NoMI Loans set the Income Limit based on Annual Qualifying Income of Borrower. The Lender must follow Fannie Mae requirements as applicable regarding income analysis and verification of income Maximum Qualifying Income of Borrowers The Loan Qualifying Income, calculated annually, cannot exceed the Income Limits as referenced in the Participation Agreement. Income used to qualify the Borrower for the Loan is the higher of the income listed on the Desktop Underwriter (DU ) Findings or signed Fannie Mae Loan Transmittal (Fannie Mae Form 1008), as calculated annually Credit 21

22 UHC Loan Programs At least one credit score is required for all Borrowers included on the Loan Documents. Alternative credit is not acceptable for NoMI Loans. Refer to Credit Underwriting for credit score requirements. A Borrower who does not have the type of credit that is traditionally reported to a credit repository is not eligible for UHC financing for NoMI Loans Desktop Underwriter (DU), Early Check TM, and Collateral Underwriter TM (CU TM ) The Loan must receive a DU recommendation of Approve/Eligible under the Fannie Mae HFA Preferred Risk Share/Community Seconds program. A manual underwrite is not acceptable. The use of Loan Prospector (LP) is not permitted. DU findings and data must be accurate and verified prior to Closing. Lender must ensure that it has completed Fannie Mae Early Check and the Early Check Report does not contain any fatal errors. Lender must provide a copy of Fannie Mae s Collateral Underwriter (CU). The messages and warnings in the Submission Summary Report (SSR) are intended to alert users to potential issues and do not need to be cleared, but Lenders are responsible for determining whether further action is required. The CU Risk Score of 4 or 5 identifies the Property with possible Property eligibility or policy compliance violations and must be addressed by the Underwriter prior to Closing No Prior Home Ownership Restrictions There are no restrictions to prior home ownership. Home buyers with an unpaid UHC Loan at Closing are ineligible Multiple Property Restrictions The Borrower cannot own any other Property at time of Closing. Borrower selling a home concurrently with the Closing of a UHC Loan must provide a copy of the Closing Disclosure (HUD-1 Settlement Statement) and the recorded transfer deed to verify owned Property was sold, title transferred, and, if applicable, all Mortgages were paid off Non-Occupant Co-Borrowers, and Co-Signers Non-Occupant Co-Borrowers and Co-Signers are ineligible for this program Maximum Loan to Value For NoMI Loans, the maximum LTV is 97% and the maximum CLTV is 105%. 22

23 UHC Loan Programs Purchase Price The Purchase Price cannot exceed the amount listed on the UHC Lender web page Higher Priced Mortgage Loans (HPMLs) Higher Priced Mortgage Loans (HPML) are not eligible for the NoMI Loan Program Homebuyer Education Homebuyer Education by a UHC approved educator is required for the Borrower (may just be one of the Borrowers) prior to Closing. A copy of the Homebuyer Education Completion Certificate dated prior to Closing must be submitted to UHC prior to UHC purchasing the Loan. Refer to UHC website for a list of Approved Homebuyer Educators Condominium A Residence located in a Condominium project is not eligible for NoMI Loans Planned Unit Development (PUD) Attached and Detached The NoMI Loan Program may be used to finance a PUD unit identified as a Fannie Mae Type E (established PUD project where the developer has turned over voting control of the HOA to the unit purchasers) or Type F (new PUD project where the developer has not turned over voting control to the HOA to the unit purchasers). The PUD unit and PUD project must comply in all respects with Fannie Mae and UHC requirements. In instances where Fannie Mae determines the Loan does not meet program requirements the Lender may be required to repurchase the Loan. To be eligible, the following requirements for an attached PUD must be met: The Homeowners Association (HOA) managing agent or attorney of the association must complete and sign UHC Attached PUD HOA Questionnaire form. Answers to all questions on the form must be Yes or the Property is ineligible for UHC financing. Fannie Mae requirements for a new PUD project must include severability of interest/separation of insureds in its terms. Fannie Mae requires a specific endorsement to preclude the insurer s denial of a unit owner s claim because of negligent acts of the HOA or of other unit owners. HOA Policies that do not include this specific endorsement are not eligible for a UHC Loan Reserved for Future Programs 23

24 UHC Loan Programs Second Loan, Down Payment Assistance The Second Loan is a Loan to assist Borrowers with down payment and/or Closing costs and is permitted when Closed concurrently with a UHC First Loan that meets all the requirements as outlined in the Participation Documents. UHC Second Loans must be in second lien position and may not be subordinate to any other liens or riders. For each Second Loan funded and/or purchased by UHC without the associated First Loan, the Lender will be charged a fee of 6% of the associated First Loan. The fee will be netted from a future purchase. Any Second Loan made in conjunction with a NoMI Loan must comply with Fannie Mae s Community Second requirements. Refer to the Funding the Second Loan section for details on obtaining the funds for Closing and required documents and fees Maximum Loan Amounts The maximum Second Loan Amount for FirstHome or HomeAgain is limited to 6% of the Loan Amount listed on the First Note. The maximum Second Loan Amount for Score and NoMI is limited to 4% of the Loan Amount listed on the first Note Terms and Conditions Repair Escrows cannot be financed in the Second Loan, including $100 Down FHA Loans and HUD owned homes. The escrows can be financed in the First Loan if it complies with FHA requirements. Second Loans do not require their own policy of title insurance, but should be shown in Schedule B as a second lien on the title insurance policy. The Second Loan must be repaid and is secured by a UHC Subordinate Deed of Trust. It has a UHC Subordinate Note with a 30-year term and an interest rate as specified on the MPA. Subordinate Notes become due and payable upon Default of either the Mortgage Loan Notes; upon an unauthorized transfer of the Residence; or if Borrower fails to occupy the Residence. 24

25 UHC Loan Programs UHC will subordinate its Second Loan to a new UHC FHA Streamline Refinance. UHC will not subordinate its Second Loan to any other lien. Any Loan made under the Streamline Refinance Program must comply with FHA or VA requirements. Refer to the UHC Refi Delivery Checklist form for all required documents Foreclosure and Short Sales A Borrower who has had a loss on a previous foreclosure, pre-foreclosure short sale or bankruptcy on a Utah Housing Second Loan is not eligible for another UHC Second Loan. Borrowers who have had a foreclosure or pre-foreclosure short sale that did not include a UHC Loan must wait a minimum of three years before they are eligible for UHC s Second Loan. Borrowers who have had a bankruptcy that did not include a UHC Loan must wait a minimum of two years before they are eligible for UHC s down payment assistance. At least three years must have elapsed since the date the foreclosure, deed-in-lieu, or pre-foreclosure short sale was completed to qualify for a UHC Second Loan. A Borrower who has had a previous foreclosure, deed-in-lieu, or pre-foreclosure short sale on a UHC Second Loan is not eligible for another UHC Second Loan Bankruptcy Two years must have elapsed since the discharge of Chapter 7 Bankruptcy, or the pay-out period for Chapter 13 Bankruptcy. For any Bankruptcy where a judge has approved a bankruptcy cram down (a Mortgage divided in secured or unsecured lien position) or discharged a lien on a UHC Loan, the Borrower is not eligible for another UHC Second Loan. A Borrower who has had a previous bankruptcy that reduced the balance of a UHC Second Loan is not eligible for another UHC Second Loan Streamline Refinance The Streamline Refinance Loan (UHC Refi) product is exclusively for existing UHC customers whose UHC FHA Loan closed on or after June 1, The Loan is a 30-year, fixed rate, no cost refinance and premium priced in order to compensate the Lender for costs associated with Closing the Loan. The UHC Refi Loan must meet all FHA requirements for a no credit qualify, streamline refinance without appraisal. UHC will authorize the subordination of the Borrower s current UHC Second Loan when combined with an eligible UHC Refi. 25

26 UHC Loan Programs Streamline Loans do not have Income Limits Eligibility The Loan must meet the following requirements: The Loan must be originated, underwritten, and Closed by a UHC-approved Participating Lender. The Loan must involve no cash from the Borrower, except for minor adjustments at Closing (not to exceed $100). UHC will net from the purchase and apply the excess as a principal reduction to the First Loan. The following are exceptions to the $100 maximum Borrower contribution: o o o o The difference between the initial escrow deposit for the Refi Loan and the unused escrow balance Processing fee for the Subordination request (refer to the UHC Fee Schedule) Interest listed on the Closing Disclosure (HUD-1 Settlement Statement line 901), not to exceed $150 Any current or Past Due UHC Loan payment Credit Reports and Credit Scores A credit report, with credit scores is required for Loans originally Closed as a UHC Score Loan: The interest rate for the Borrower of an original Score Loan whose credit score has increased to 660 or higher (refer to Credit Underwriting ) will be eligible for the interest rate posted on UHC's website. The interest rate for the Borrower of an original Score Loan whose credit score is still below 660 will be reserved at an interest rate 0.5% higher than the posted rate Unused Escrow Credit UHC will allow a credit for the Unused Escrow Balance, as reflected on the UHC payoff according to FHA requirements to offset the cost of setting up a new escrow account. Lender must provide a Borrower signed copy of the UHC Streamline Application Disclosure form authorizing UHC to apply the Unused Escrow Balance to the unpaid balance of the underlying Loan. Sufficient escrow must be collected at Closing to pay for the hazard and Property taxes at renewal Subordination of Second Loan UHC will authorize the subordination of the Borrower s current UHC Second Loan when combined with an eligible UHC Refi. 26

27 UHC Loan Programs The UHC Second Loan cannot be subordinated to any debt other than the new UHC Refi First Loan, i.e., UHC's Second Loan cannot be put in a third lien position. UHC will not purchase a UHC Refi Loan where the UHC First Loan has not been paid off in its entirety and the UHC Second Loan was not accurately subordinated. Subordination Agreements are only authorized in conjunction with a UHC Refi. Lender will be charged a penalty of 6% of the original UHC First Loan in instances where the UHC Refi is not purchased by UHC and a Subordination Agreement was recorded. The penalty will either be invoiced to the Lender or netted from a future purchase, at UHC s discretion. The Title Company must complete and mail to UHC a prepared UHC Title Subordination Request form along with all required documents listed on the UHC Subordination Request Checklist form. UHC will charge a Subordination processing fee (refer to the UHC Fee Schedule, Appendix A) and a check, payable to Utah Housing, must be included in the Subordination Request submission package. Instructions and forms for the Subordination Request are posted on UHC s Title and Lender web page. 27

28 Underwriting Borrowers Section 7 Underwriting Borrowers The Definitions section includes specific definitions and exclusions related to the terms described in the Participating Documents. 7.1 Income Analysis Specific Income Limits and calculation of the Limits apply for each of the UHC Loan Programs as noted in UHC Loan Program Overview. A Loan Program may calculate Income Limits based on total gross Annual Household Income or Annual Qualifying Income. This section explains the difference between the two calculations Qualifying Income (HomeAgain, Score, NoMI) Monthly income used to qualify a Borrower for the Loan must be listed on the Automated Findings, FHA Loan Underwriting and Transmittal Summary, VA Loan Analysis, or Uniform Underwriting and Transmittal Summary and must be calculated annually. The document indicating the highest income must be used in calculating the Qualifying Income. Income used to qualify cannot be partial income (i.e., if using overtime to qualify, the Qualifying Income must include a two year average, not just the amount needed to stay within UHC s Qualifying Income Limits.) Household Income (FirstHome) Current Annual Household Income includes the income of all persons 18 and over who will occupy the Residence. For Current Annual Household Income limits refer to the UHC web page, Income and Purchase Price Limits. Current gross Annual Household Income is calculated at time of Application (or Closing in cases where Application was taken 120 days or more prior to Closing) and projected forward 12 months.) Current gross Annual Household Income is calculated for the 12-month period beginning the date of Application, if Closing occurs within four months of the date of Application; or the date of Closing, if the Closing occurs more than 120 days after the date of Application. To be eligible for a FirstHome Loan all Borrowers on the Loan whose income is being used to qualify must have received at least one full month s paystub(s). 28

29 Underwriting Borrowers Current gross Household Income is calculated as follows: For paystubs that show at three months or more year-to-date income: o Calculate the average monthly income from the current paystub and multiply by 12. For paystubs that show less than a three month year-to-date income: o o Obtain all the current paystubs. Add all the income listed on the paystubs then divide by the number of weeks represented on the paystubs and multiply by 52 and add to all other Household Income. In some instances the year-to-date paystub may include income earned from December of the previous year; the additional weeks may be included in the average Gross Income calculations. The source(s) of income documents indicating the highest Gross Income must be used in calculating the Current Annual Household Income. Lender shall document compliance with the FirstHome Loan Program requirements by obtaining verification of all Current Household Income (refer to Gross Income in the Definitions section, and the UHC Qualifying Borrower Certification of Income form.) Income Exclusion In general, if a source of income is not specifically excluded in the definition of Gross Income contained in the Definitions section of this Selling Supplement the income must be included in the calculation of Current Annual Household Income. Business expenses and depreciation may be deducted from Current Annual Household Income calculations in instances when an itemized and signed business expense report (if applicable) dated at the time of the Application is provided and verification of at least one full year of expense history is listed on the Borrowers signed most Current Year tax return and/or IRS Validated Tax Return Verification of Household Income Lender shall document compliance with FirstHome requirements by obtaining verification of all Current Household Income to include, but not limited to, the documents listed below and dated within 30 days of Application or Closing if Closing occurs more than 120 days after Application: Completed and signed UHC Qualifying Borrower Income Certification form. Verification of current employment, with one of the following: o A standard Verification of Employment form for Household members 18 and older (verification required even if income is not being used for qualification) 29

30 Underwriting Borrowers o A Verbal Verification of Employment signed by the Lender which includes the employment start date and meets FHA and/or VA requirements for alternative documentation Verification of previous employment for employers during the current 12-month period which includes employment start and ending dates. A verbal verification and/or documents meeting FHA or VA requirements for alternative documentation for previous employment are acceptable. Copy of paycheck stubs covering at least one full month income Paycheck stub for each current employer dated within two weeks of initial Application or within four weeks of Closing if the Loan is closed more than 120 days after initial Application. Handwritten paystubs or paystubs that do not include reduction for taxes require the following additional documentation: o o Copies of all paystubs for the past three months Verification Qualifying Borrower is salaried Copies of most current W-2s for all Household members 18 and older, as applicable. Income for Household members 18 or older does not have to be included in Current Household Income if documentation is provided to show they are a full time student. Most Current Year signed Federal tax return and/or IRS validated tax return. Verification of other income such as seasonal employment, Social Security, child support, alimony, interest earnings, capital gains, income (aid) to families with dependent children, selfemployment, etc. Copy of the initial Loan Application (Fannie Mae form 1003) with all sections completed, including the following: o o o o o Section III, Borrower Information, including marital status and ages of dependents Section VII, Declaration (owned a principal Residence in the past three years) At least two years employment and Residence history sections Form 1003 signed and dated by Borrower Loan Originator and Loan Origination Company NMLS numbers All other documents as required by FHA or VA Other Household Income Verification Other Household income verification is as follows: 30

31 Underwriting Borrowers Self-Employment Income: For Household members who have self-employment, a signed yearto-date profit and loss (P&L) statement dated at time of initial Application (or within 30 days of Closing if Closing occurs 120 days or more after initial Application) is required. Year-to-date P&L: This is required for all self-employment even if it may be a loss, is not included to qualify, or has not been included on the Federal tax returns. Bonuses and/or Commission: For Household members who receive irregular income (i.e., commission or a bonus paid quarterly or annually), verification must be provided to verify the current income. The irregular pay is averaged monthly, multiplied by 12, and added to all other gross Current Household Income. Dependent Children: If qualifying Borrower has legally awarded income for dependent children, documentation regarding verifying the awarded income for the dependent children is required: o o If Borrower is legally awarded income for dependents and/or other Household members and the income is not being received, verification must be provided (i.e., 12 months bank statements to verify income was not received). Verification Borrower does not receive the income is only required, if by adding the legally awarded income to Borrower s Household the income puts the Household Income over the FirstHome Loan Program Income Limits. Household Member(s) 18 and over: Income for all Household members 18 and over must be documented and verified. If dependent of Borrower is a full-time student at a primary or secondary education provider, the income is not required to be included in Household Income as long as documentation is provided to verify the dependent is a full time student. Married but Legally Separated: If Qualifying Borrower is married, but legally separated (as evidenced by a fully signed legal separation agreement or separation order, either of which have been filed with the clerk of the appropriate court of law), the Gross Income of the separated spouse does not need to be included in the Household income calculation if he/she will not occupy the Residence. If Qualifying Borrower is separated but not legally separated, the income for the separated spouse must be included in Household income. If Lender cannot satisfactorily reconcile multiple income documents, the source(s) indicating the highest income must be used in preparing Current Annual Household Income. All Income must be included in Household income calculations unless income in the Participation Documents specifically state the income is excluded (refer to Gross Income in the Definition section of this Supplement). 31

32 Underwriting Borrowers 7.2 Ratios The general policy of UHC with regard to the housing and debt ratio is that Lender will underwrite the Loan to comply with all Federal, State, and Agency requirements and to protect the interests of UHC as the mortgagee. Borrower's total obligations must not constitute an undue strain on the Borrower's ability to make all such payments promptly Housing and Debt Ratio The debt ratio compares the total debt (including total Loan payment) to the income. Limitations to the debt ratio for UHC programs are as follows: 45% for Score and NoMI Loans 41% for a Non-Occupant Co-Signer (Co-Signers are only allowed for the FirstHome Loan Program.) For all other Loans, refer to Agency requirements for determining acceptable Mortgage Payment-toincome and Total Fixed Payment-to-Income ratios. 7.3 Credit Underwriting Lender must evaluate each Borrower's creditworthiness on a case-by-case basis. Lender must determine that the Borrower evidences sufficient willingness to pay the Loan per the terms agreed to on the Closing documents Credit Score Lender must determine the Borrower has a sound credit reputation evidenced by a written credit report for each Borrower on the Loan Application. The credit report and credit scores must be based on data provided by all of the following national credit repositories Equifax, Experian, or TransUnion. The credit report must be complete and included in each Loan file submitted to UHC for purchase. If three repositories cannot furnish a credit score, Borrower is not eligible for a UHC Loan. The repositories may return different valid credit scores for each Borrower. UHC has different criteria for evaluating credit scores when determining eligibility, based upon the UHC Loan Program FirstHome and HomeAgain Loan Programs 32

33 Underwriting Borrowers If a Borrower has three credit scores returned from the credit repositories, one of the scores is permitted to be below 660. The table below explains which credit score(s) must be 660 or higher. FirstHome and HomeAgain Loans # of Credit Scores Credit Score Requirements 3 scores returned Middle and highest scores must be 660 or above. Lowest score may be below scores returned Both scores must be 660 or above. 1 score returned That score must be 660 or above. No score Borrower is not eligible for the programs Score Loan Program If a Borrower has three credit scores returned from the credit repositories, one of the scores is permitted to be below 620. The table below explains which credit score(s) must be 620 or higher. Score Loans # of Credit Scores Credit Score Requirements 3 scores returned Middle and highest scores must be 620 or above. Lowest score may be below scores returned Both scores must be 620 or above. 1 score returned That score must be 620 or above. No score Borrower is not eligible for the program NoMI Loan If a Borrower has three credit scores returned from the credit repositories, one of the scores is permitted to be below 700. The table below explains which credit score(s) must be 700 or higher. No MI Loans # of Credit Scores Credit Score Requirements 3 scores returned Middle and highest scores must be 700 or above. Lowest score may be below scores returned Both scores must be 700 or above. 1 score returned That score must be 700 or above. No score Borrower is not eligible for the program. 33

34 Underwriting Borrowers Alternative Credit for Occupant Co-Borrower Alternative (alt) credit is allowable for Occupant Co-Borrowers who do not have a credit score. FirstHome or HomeAgain: An Occupant Co-Borrower must meet FHA Manual Underwriting requirements for Alt Credit: A tri-merged credit report must be provided and the report must show the Co-Borrower has insufficient credit to generate a credit score. Loan must comply with all FHA Manual Underwriting Loan requirements, including maximum ratios. Score or NoMI: At least one credit score is required for all Borrowers included on the Loan Documents. Alt credit is not acceptable for these Loan programs. 7.4 Foreclosure, Short Sale, Deed-in-Lieu, Bankruptcy Lender must comply with all applicable Agency, local, State, and Federal law with respect to the Loan. Refer to Second Loan for financing restrictions for Loans where a Borrower was part of a foreclosure, pre-foreclosure short sale, deed-in-lieu, or bankruptcy. 7.5 Automated Underwriting Systems Automated Underwriting Systems (AUS), as authorized by Fannie Mae, FHA, or VA may be used to assist in determining the creditworthiness of Borrowers. However, Lenders must also remember to specifically check Borrower, Co-Signer, and Property Eligibility compliance with UHC policies. Commonly encountered items not considered by automated systems include requirements for Residences (acreage, rental prohibition, etc.), minimum credit scores and ratios for a Co-Signer or Score Loan, and Income and Purchase Price Limits. Specific UHC requirements for Loans are specified in the Participation Documents. Only automated Desktop Underwriter (DU) underwriting is acceptable for NoMI Loans. Traditional underwriting and Loan Prospector AUS are not acceptable. 34

35 Property Eligibility Section 8 Property Eligibility 8.1 Residence Definition and Use Each Loan must be secured by a Residence that meets all the requirements of this Selling Supplement. A Residence is a Single Family, owner-occupied Dwelling located within the State of Utah with an estimated remaining economic life equal to or greater than the term of the Loan. A Residence qualifies for financing by UHC within the meaning of the Act, the Participation Documents, and UHC s Rules. For purposes of definition, the Property includes the land, water rights, wells, and all improvements securing a Mortgage; may be a new home (never previously occupied) or an existing home (previously occupied) located in the State of Utah; may not include a Dwelling for which more than 15% of the total area is expected to be used primarily for a trade or business; and may not include a rental Dwelling, or a Dwelling containing a second utility meter. The Purchase Price of a Residence may not exceed the Purchase Price Limits established and amended by UHC from time to time and referenced on the UHC website. The Purchase Price must include the cost of land and all improvements. 8.2 Acreage Limits HomeAgain, Score, and NoMI: Acreage limitation is eliminated. The Loan must comply with all FHA, VA, or Fannie Mae requirements, including land to value ratio and net and gross adjustments. UHC does not limit the size and area of the Property, rather relies on underwriting to be compliant with FHA, VA, or Fannie Mae requirements. FirstHome: May not exceed one acre except for properties where the appraiser has identified the Property as being in a Highly Rural Area of the State where that amount of land is proved to UHC to be customary for Single Family Residences. Properties in highly rural areas as verified by the appraiser or are recognized by the Consumer Finance Protection Bureau (CFPB) as being in an underserved area may not exceed five acres. Exception requests for properties of more than one acre but less than 1.25 acres may be submitted to UHC for review. Exceptions may be granted depending on, but not limited to, land value ratio, appraiser 35

36 Property Eligibility comparable adjustments, and land acreage, and the amount of land is proved to be customary for Single Family Residences. 8.3 Rental Prohibited A Residence that is advertised or listed as a rental or possible rental, or comments by appraiser indicate the Residence is, has been, or can be, a rental is considered a rental and is not eligible for UHC financing. Properties where a portion of the living area is blocked or locked from accessing another living area in the Dwelling are not eligible. 8.4 Mobile Homes Mobile Homes as defined in the Participation Agreement and Definitions section of this Selling Supplement, or Motor Homes, Park Trailers, or Recreational Vehicles as defined in the Utah Code are not eligible. 8.5 Manufactured Homes A Manufactured Home or Modular Housing as defined in the Participation Agreement and Definitions section of this Selling Supplement is permitted for FirstHome, HomeAgain, Score, and Streamline Refinance Loans. Lender must complete all procedures required by Section 70D-1-20 of the Utah Code and provide the necessary documentation to protect UHC s interest in the Dwelling and the Property. Manufactured home must be at least two sections (i.e. no Single Wides homes.) A Manufactured Home or Modular Housing is not eligible for a NoMI Loan. Refer to the UHC Product Eligibility Matrix on the UHC website for a quick reference guide. Prior to requesting a Mortgage Purchase Agreement (MPA) the Lender must provide the required documents as listed on UHC s Manufactured Housing Checklist posted on UHC s Lender Manufactured Home web page. The documents listed on the checklist must be uploaded electronically through UHC s Lender-restricted Document Delivery Portal (on UHC s website) and UHC must review and approve the documentation provided prior to issuing an MPA. To be eligible for UHC financing, all of the following documents are required for Manufactured Homes including, but not limited to, the following: Copy of Institute for Building Technology and Safety (IBTS) report. 36

37 Property Eligibility Copy of the appraisal. Copy of Recorded Affidavit of Affixture and Receipt of Surrender of Title or Copy (State of Utah Form TC-672) OR o If the Title for the Manufactured home has been lost or stolen, the county where the Manufactured home is located does not have record of title and a completed TC-672 has not been recorded the following documents will be accepted in place of the TC-672: UHC Affidavit of Affixture and Notice of Lost or Destroyed Title form UHC Lender Affidavit for Lost or Destroyed Title form Copy of Foundation Certification dated within 180 days of Closing; all recommended repairs and improvements must be completed. Verification of serial number on the HUD Label or HUD Data Plate, IBTS Report, and all other applicable documents matches the appraisal. Evidence the Residence is of sufficient size to meet all applicable zoning and building requirements. All other Residence requirements including propane tanks, sewer, wells and water stock where water source is not public, and lot size restriction. For a Residence with a well or septic or propane tank located on the Property, an inspection, dated within 180 days of Application, by a certified non-related well, propane, or septic tank inspector must be provided to UHC prior to purchase. All recommended repairs, service calls, and improvements must be completed prior to Closing. If any of the foregoing required documents are not available or unable to be located the Loan is ineligible for UHC financing. 8.6 Cabins and Log Homes Cabins, log homes, and recreational use Residences and properties located in a recreational area typically used for a second home are not eligible for UHC financing. 8.7 New Construction A newly constructed Residence may not have portions left unfinished nor have fixtures or architectural appointments omitted or removed in order to reduce the cost of acquiring the Residence below the Purchase Price Limits posted by UHC. 37

38 Property Eligibility 8.8 FHA Streamline 203(k) FHA will purchase a qualified FHA Streamline 203k Loan. Subject to the requirements of Selling Supplement, Loans may be insured under the FHA 203(k) Streamline program for the purchase and Rehabilitation of a Residence. Lender may collect from the Borrower the supplemental Origination fee and cost reimbursements as allowed by FHA. Lender shall be responsible to insure full completion of all planned repairs or improvements and provide evidence all funds were distributed, repairs were completed, and Borrower did not receive any cash back from the escrowed amount. Repairs must be completed within 90 days of Closing. Loans insured under a 203(k) Streamline program shall only be eligible for purchase by UHC where the Dwelling is permanently fixed to the land on which it is located before the date of the agreement between the seller of the Dwelling and the Borrower to purchase such Dwelling (k) Escrow Repair Requirements For a Loan insured by FHA under its 203(k) Streamline program, the cost of completing the Rehabilitation (including any contingency reserve) must be included in the Purchase Price of such Residence. A contingency reserve of not more than 20% of the Rehabilitation amount may be included in the Loan. No proceeds of a Loan may be used to finance the purchase of a Residence to be moved to a new location and thereafter rehabilitated under the 203(k) Streamline program. The 203(k) Escrow Agreement signed by the Borrower must be delivered to UHC before the purchase of the Loan by UHC with an escrow repair completion date no longer than 90 days from Closing. Loans insured under FHA s 203(k) Streamlined program shall be handled in all respects in accordance with FHA requirements. The fully executed Escrow Agreement or other FHA approved Streamlined 203K forms itemizing the Streamlined 203K repairs is required and must include Underwriter s calculations of acquisition cost and maximum Loan Amount. Escrow documents must include all repairs and show a completion date of no later than 90 days after Closing. The Lender must deliver to UHC prior to releasing escrow funds copies of cash receipts for the completion of escrowed repairs. Repairs that were paid for with a Loan or charge card must be paid off with the 203K escrowed funds prior to releasing any funds to the Borrower. 38

39 Property Eligibility The Lender must deliver to UHC prior to releasing 203k escrow funds a copy of the final repair inspection with photos showing all repairs were acceptably completed within 90 days of Closing. The 203(k) Escrow Agreement signed by the Borrower must be delivered to UHC before the purchase of the Loan by UHC with an escrow repair completion date no longer than 90 days from Closing. Borrower cannot receive cash back from the escrow account, all escrowed funds must be used for the designated repairs; any excess of escrowed funds must be submitted to UHC to apply as a principal reduction to the First Loan. 8.9 Condominiums and Attached Planned Unit Developments (PUD) Some of UHC Loan programs accept Residences located in a Condominium Project or an attached Planned Unit Development (PUD) provided the unit includes the benefits of the use of all common areas and facilities, which are part of the Condominium Project or PUD Project. Any Loan secured by a Condominium or an attached PUD and submitted to UHC for purchase must meet all applicable Agency and UHC requirements. Condominiums are eligible for UHC FHA Loan Programs for units in a project that is FHA and/or VA approved. Condominiums are not eligible for the UHC NoMI (Conventional) Loan Program. Detached and attached PUDs are eligible for UHC Conventional Loan Programs for units in a project that comply with Fannie Mae requirements Condominium and Attached PUD Database In order for UHC to track its exposure in a particular Condominium or Planned Unit Development (PUD), UHC maintains its own database of Condo-PUDs through the UHC website. The UHC Condominium/PUD database does not include verification the Condominium-PUD is approved by FHA, VA, or Fannie Mae, Lender must verify with the applicable Agency the Condominium-PUD meets Agency requirements. The UHC database shows the four-character alpha code that Lenders need when making an MPA Request. If a project cannot be found on the UHC Condominium-PUD database on the UHC website, Lender must submit to UHC the UHC Condominium/PUD Certification form to confirm all of the following for each project: The number of fully completed units 39

40 Property Eligibility The location The number of stories Fidelity Bond For Condominium Projects containing 30 units or more, a fidelity bond or direct surety bond must be maintained at all times, and must cover all persons having access to, or responsibility for, operating funds or reserve funds, with coverage in an amount not less than one and one half times the amount of operating funds or reserve funds held for the project Project Title Insurance If a home owners' association owns the common elements, areas, or facilities of a project separately (or holds them in a leasehold estate), title insurance must have been issued and must continue in force on those areas to insure that ownership. The title insurance must insure the common elements, areas, or facilities are free and clear of liens and encumbrances, including any statutory liens for labor or materials related to improvements on the common areas that began before the title policy was issued Appraisal Standards Appraisals of properties financed by UHC must be in compliance with all applicable regulations and instructions of Fannie Mae, FHA, and/or VA regarding use of forms, Appraisal Data Standardization (UAD), photos of the Property, allowable fees, use of authorized appraisers, etc Appraisal and Residence Repair Requirements When an appraisal is made subject to repairs, alterations, or conditions, or subject to completion per plans and specifications, Lender must obtain and deliver to UHC a certification of satisfactory completion by a Fannie Mae, FHA, and/or VA approved inspector who, when possible, should be the original appraiser Acceptable Appraisers Lender is responsible to comply with the Appraiser Independence Requirements as summarized in the Participation Documents. Lender agrees to inform UHC immediately in the event Lender deems the work of an approved appraiser or inspector to be unacceptable. UHC may notify Lender that it will no longer accept appraisals made by a given appraiser or inspector, and Lender agrees not to use such appraiser or inspector with respect to Loans purchased by UHC. 40

41 Property Eligibility Minimum Property Standards and Conditions UHC will not purchase any Loan where the Appraiser has indicated the Property does not meet Minimum Property Standards and/or the Residence condition is a C6 rating and/or the quality rating is a Q6. Properties where the appraiser has indicated there are safety concerns, UHC requires an inspection from a licensed inspector and all recommended repairs be completed prior to UHC purchasing the Loan. Properties that are damaged or destroyed and cannot be rebuilt as a Single Family Residence are not eligible for UHC financing Escrow Funds for Repairs For required Residence repairs or improvements that cannot be completed prior to Closing due to inclement weather, Lender may escrow funds in an amount not to exceed the estimated or contracted price of incomplete items by the appraiser. Escrowed money cannot be financed into the Subordinate Loan. Escrowed money shall be held for the joint benefit of UHC and the Borrower in an account fully insured by the FDIC or NCUA. Escrowed moneys shall be released only upon satisfactory completion of the improvements and certification of such completion by a Fannie Mae, FHA, and/or VA approved inspector, as applicable, who, when possible, should be the original appraiser. Escrowed repairs must be completed within 90 days of Closing Environmental Hazards If the Mortgagee or Appraiser identifies a Property as contaminated by the presence of methamphetamine (meth), either by its manufacture or by consumption, the Property is ineligible due to this environmental hazard until the Property is certified safe for habitation. Lender must follow local, state and government regulations regarding Properties contaminated by meth and must provide UHC a certification from a licensed inspector indicating the Property is safe for habitation Residential Water Facilities Culinary Water A Residence must have culinary water facilities which are connected to completed and functioning municipal or other governmental culinary water systems or Stock Water Company systems; or 41

42 Property Eligibility if not connected to a municipal water system or Stock Water Company system, include a functioning well and related or similar systems which are wholly dedicated to the use of the Property, which systems are located wholly within the boundaries of the Property, and include all water rights and interests evidenced by the requirements of this Selling Supplement; and are in compliance with all building, health, and zoning codes, restrictions, regulations, and other codes and regulations of the city, town, or county in which the Dwelling is located. A well inspection, dated within 180 days of Closing, by a certified well inspector must be provided to UHC prior to purchase. All recommended repairs and improvements must be completed prior to purchase Sewage Disposal Facilities A Residence must have sewage disposal facilities which are connected to completed and functioning municipal or other governmental sewage disposal systems; or if not connected to a municipal sewage disposal system, shall include a septic tank and related drain fields and pipes which shall be wholly located within the boundaries of the Property; and are in compliance with all building, health, and zoning codes, restrictions, regulations, and other codes and regulations of the city, town, or county in which the Dwelling is located. A septic inspection, dated within 180 days of Closing, by a certified septic tank inspector must be provided to UHC prior to purchase. All recommended repairs and improvements must be completed prior to purchase Water Rights and Water Stock Water Rights When the drinking water for a Residence is obtained from wells, springs, or other water sources other than a municipal or other governmental culinary water system or a Stock Water Company, the following steps must be taken by Lender: If in the body of the appraisal or in the utilities section of the appraisal the Water is NOT marked PUBLIC the Lender and Title Company must document the source of the culinary water (i.e., water right(s)/water shares, etc.) and additional documents must be obtained prior to Closing. Refer to the UHC Water Rights Checklist form and the UHC Lender Certification of Water Rights form located on the UHC website. 42

43 Property Eligibility Lender must obtain from the Borrower or Seller of the Residence information concerning the source of the water and the type of ownership rights attendant to the water. Lender must verify that the Seller of the Residence has ownership rights and title to o o the subject Water Right(s) and interests; and all plumbing fixtures, waterworks, and all equipment related to the water system. Lender must verify that all applicable rights and interests of the Residence sellers described in this section will be conveyed to the Borrower at Closing by deed, assignment, and bill of sale. The Water Right(s) number must be listed on the Warranty Deed and assigned to the Borrower. Lender must verify through the Utah Division of Water Rights website that the Water Right(s) reflects a valid status and is of record allowing the Borrower to use it in the manner represented and that 100% of the Water Right(s) is being conveyed to the Borrower. The appraiser or licensed professional must verify that the well, plumbing fixtures, waterworks, and all related equipment are located on the Property. Lender must obtain a well inspection by a licensed well inspector to determine that the well water sample from the tests meets the requirements of FHA, VA, Fannie Mae, and any governmental authority with jurisdiction over the quality of drinking water. Any suggested repairs must be completed prior to Closing. Lender must add language on the Warranty Deed under the legal description to reflect: All of Grantors rights in and to water right(s) number(s). First and Second Deeds of Trust must state (under the legal description) All of Grantors rights in and to water right(s) number(s). Lender must record in the County Recorder's Office in the county where the Property is located. Lender must complete the UHC Lender Certification for Water Rights form. Lender must provide UHC a copy of the Report of Water Right Conveyance 100% (ROC). This form is located on Utah Division of Water Rights (UDWR) Contact the Utah Division of Water Rights for assistance with questions and help in navigating their website: o o The ROC form must be completed by licensed professional (i.e., Title Company, attorney). Section A, #1 of the ROC must be marked transferred by Warranty Deed. A Residence, which has as its source of culinary water a well, which is only partially owned by the Borrower or whose use is shared with another Dwelling or which is located off the Property, does not qualify as a UHC Residence. 43

44 Property Eligibility Water Stock When a Residence being financed under the Program receives water from a non-municipal water company, shares of stock in a water stock company are usually involved. When the Real Estate Purchase Contract or other sales agreement includes the transfer of stock in a water company (a "Stock Water Company"), a preliminary title report evidences the existence of shares in a Stock Water Company, or Lender discovers by any other means that the Residence receives its water from a Stock Water Company, Lender must perform the following additional steps in connection with the Closing: Verify that the Borrower or Residence sellers have ownership rights and title to o o the subject water rights and interests; and all plumbing fixtures, waterworks, and all equipment related to the water system. Verify that the well, plumbing fixtures, waterworks, and all related equipment are located on the Property. Complete and have the Borrower execute and have notarized the UHC Water Stock Security and Pledge Agreement form. The name of the Water Stock Company, the certificate number(s), and the number of shares must be inserted in the appropriate spaces of the form. Complete and have the Borrower execute the UHC Water Stock Power form. Obtain from the appropriate Stock Water Company or the Borrower the actual stock certificates, which reflect the stock ownership (water shares) of the Borrower: o o The original Stock Certificate(s) shall be sent to UHC in the Loan file with the UHC forms, Water Stock Security and Pledge Agreement form and the Water Stock Power form. After the Loan is repaid in full, UHC will release these three instruments to the Borrower. Verify with the State Department of Commerce, Division of Corporations, and Commercial Code (the Division ) the good-standing status of the corporation that issued the stock: o This can be done by phoning the Division and inquiring as to whether the Water Stock Company is in "good standing." Lender should prepare a memorandum to the file evidencing the date, to whom Lender talked, and what they were told by the Division. If the Stock Water Company is not in good standing, the Loan must not be closed until such good standing status has been achieved and verified. Notify the Stock Water Company in writing of the grant of security interest and pledge of the stock by the Borrower in favor of Lender, UHC, or its assigns. 44

45 Property Eligibility A Residence, which has as its source of culinary water a well, which is only partially owned by the Borrower or whose use is shared with another Dwelling or which is located off the Property, does not qualify as a UHC Residence Mechanical and Electrical A Residence must meet mechanical and electrical requirements, including the following: It must have electric and telephone utility service. It must have a mechanical or electrical system for heating all habitable rooms of the Dwelling. It must satisfy the requirements of FHA, VA, and/or Fannie Mae, as applicable Insurance Title Insurance Second Loans do not require their own policy of title insurance, but should be shown in the title insurance policy of the Loan in Schedule B. Second Loans must always be in second lien position and may not be subordinate to any riders to the Loan that secure sums in addition to the amount of the Loan. Refer also to Project Title Insurance topic in the Property Eligibility section for details regarding title insurance requirements for Condominiums and PUDs. Each Loan submitted to UHC for purchase must be the subject of (1) an ALTA Short Form title insurance policy or (2) an ALTA title insurance policy, either of which must be issued by an insurer acceptable to UHC. The title insurance must be in an amount at least equal to the outstanding principal balance of the Loan, naming UHC as the insured or containing endorsement 104.1, or its equivalent, insuring that the Loan constitutes a first lien on the Property, with an effective date no later than the final recording or rerecording date of the Loan. The policy must insure the estate of the mortgaged Property is held in fee simple by the Borrower. The policy must be subject only to current taxes and assessments not yet due and payable and permitted liens and encumbrances as described in this Part. Any Second Loan shall be shown in Schedule B of the policy. The policy must insure against mechanics or materialmen s liens for work performed or materials supplied before the date of the Loan. Any liens or encumbrances which may appear, including 45

46 Property Eligibility any liens for subordinate financing which have been approved by UHC, but for which UHC is insured against as first lien holder, must be shown on the policy of title insurance. Any liens or judgments (including tax liens) must be subordinated behind UHC s First and Second Loans. Although CLTA endorsements 100 and 116 are needed with the ALTA title insurance policy, they are not required when using the ALTA Short Form policy because equivalent coverage is already included. However, ALTA endorsement 8.1 or its equivalents must be furnished with either type of policy. For a Residence which is a Condominium Unit, a PUD Unit, or is Manufactured Housing, the policy must include ALTA endorsements 4, 5, or 7, respectively, or their equivalents. The legal description of real Property in any title insurance policy or other document must be the same as that set forth in the related Loan. For Condominium Units or a PUD Unit, the legal description must be stated in accordance with applicable law, must describe the unit securing the Loan, the percentage of undivided interest in common areas, any non-exclusive easement to use common areas and facilities, and any significant limited common areas or exclusive easements over common areas. Title Policy must include all recording, re-recording, and any Scriveners Affidavit recording information Homeowners Insurance Lender, to the extent permitted by law, hereby assigns to UHC on the date of delivery of a Loan all of its right, title, and interest in such insurance policies or contracts and any benefits which it has received or which it may receive in the future on all Loans delivered to UHC. UHC will not purchase a Loan where the Hazard Insurance has not been assigned to UHC Coverage Requirements The Property delivered to UHC shall be covered by a valid Hazard Insurance Policy issued by a company lawfully doing business in the State and meeting the requirements shown below. Insurance coverage in the following kinds and amounts is required on the Property: The scope of coverage must be equal to or greater than standard extended coverage that provides for claims to be settled on a replacement cost basis and must include coverage for both the exterior and the walls-in sections of the Property. Except for Condominiums and PUD projects (see below); the amount of coverage must equal the lesser of o o the replacement cost of any insurable improvements as determined by the insurer, the unpaid principal balance of the First and the Second Loan. 46

47 Property Eligibility Such insurance must be in effect on the date of delivery to UHC of the Loan for purchase, and o o the expiration date of each policy for a purchase Loan must be at least nine months after the date of delivery; and the expiration date of a Streamline Refinance policy must be at least 60 days after the date of delivery. For Insurance due within 60 days or less of delivering Loan to UHC a renewed policy is required, showing paid in full. If Lender has actual knowledge of, or if an appraisal indicates that the Property is exposed to any appreciable hazard against which fire and standard extended coverage does not afford protection, Lender shall obtain coverage against such hazard before delivery of the Loan to UHC. In addition, each insurance policy shall be sufficient in amount and scope of coverage to meet the requirements of Fannie Mae, FHA, or VA as applicable. Insurance coverage, which does not meet the requirements, specified in this section will be considered on a case basis by UHC upon request of Lender. UHC may require such additional coverage as it deems necessary concerning any case or group of cases Insurance Carriers Each Hazard Insurance Policy must be written by an insurance carrier licensed or authorized by law to transact business within the State that has been rated in the most recent Best s Key Rating Guide no lower than the following: Best s Ratings B Financial Size Category V Insurance policies written by an insurance carrier that does not meet these required ratings will be acceptable provided that a reinsurer meeting these same ratings has executed a Certificate of Reinsurance, a Treaty Contract, an Assumption Liability Agreement, or similar agreement or endorsement providing for 100% reinsurance of the insurer's policy, and the insurer has executed the reinsurance agreement and attached it to the policy. The reinsurance agreement must provide for a 90-day or three-month written notice of Termination to Lender, its successors or assigns, or to UHC. Policies are unacceptable that state any of the following: Under the terms of the carrier's charter, by-laws, or policy, contributions or assessments may be made against UHC or designee thereof. 47

48 Property Eligibility Contribution requirements or assessments may be made against the Borrower which could become a lien on the Property superior to the lien of the Loan. By the terms of the carrier's charter, by-laws or policy, loss payments are contingent upon action by the carrier's board of directors, policyholders, or members. The policy includes any limiting clauses (other than insurance conditions) which could prevent UHC or the Borrower from collecting insurance proceeds Condominium and Applicable PUD Homeowners Insurance A copy of the HOA Policy must be provided to UHC prior to UHC purchasing the Loan. The HOA hazard insurance and certificate of liability insurance must guarantee 100% replacement cost of the insurable costs of the project improvements and the policy must include the mortgaged unit in the PUD project. Insurance coverage for a Condominium Project or PUD Project containing a Condominium Unit or attached PUD Unit that secures a Loan must be in conformity with the following requirements Multi-Peril Policy A multi-peril type of policy is required covering the common areas and facilities of the project and the entire building containing the Condominium Unit or PUD Unit providing as a minimum all risk coverage that provides for claims to be settled on a replacement cost basis. The policy must comply with all UHC, FHA/VA, and State requirements for Residences with Home Owners Association insurance including, but not limited to, the following: A master Property insurance policy (HOA Policy) issued to an association may not prevent a unit owner from obtaining insurance for the unit owner s own benefit, i.e., a supplemental policy to cover a large deductible. The total amount of the coverage provided by the HOA Policy may not be less than 100% of full replacement cost of the insured Property. HOA Policy shall include coverage for any fixture, improvement, or betterment installed by a unit owner (including carpet, heating, plumbing, cabinets, etc.). Unit must be physically attached to another unit or an above-ground structure that is part of a common area of the facility. An HOA Policy must show each unit owner as an insured person under the policy, along with the USPS Property address. The Unit Owner and Property address must match Borrower name and the address as listed on the Deed of Trust. 48

49 Property Eligibility The HOA Policy effective date must be on or before the Borrower takes title. UHC will not purchase any Loan where an HOA Policy is insufficient to cover past or present expenses or the association is in a legal dispute with unit owners. Lender must provide an original or a photocopy of the insurance policy and if applicable the boiler and machinery insurance policy. Each such policy must contain the standard mortgagee clause which must be endorsed to provide that any proceeds shall be paid to the applicable Condominium Project or PUD Project owners association for the use and benefit of mortgagees as their interests may appear, or must be otherwise endorsed to protect fully UHC s interest HO-6 Policy In cases where the HOA Policy does not include interior unit coverage, including replacement of interior improvements and betterment coverage to insure improvements that the Borrower has made to the unit, the Borrower must obtain a walls in coverage policy (HO-6 Policy). The deductible for this policy must not exceed $2,500 and coverage must not be less than 100% of full replacement cost of the insured Property Maximum Insurance Deductible If any of the Borrower s insurance policies include a deductible exceeding $2,500 per occurrence evidence the Borrower has obtained a supplemental insurance policy covering the deductible amount in excess of UHCs maximum deductible of $2,500 per occurrence. The cost of the supplemental policy must be included in Borrower s monthly escrow and included in Borrower s calculations for qualification and the policy must show Utah Housing Corporation as the insured Flood Insurance Flood insurance is required and must be maintained at all times for a Residence if it is determined if the Residence or any portion of the mortgaged Property is located in a Special Flood Hazard Zone as evidenced by the appraisal report and/or a Life Time Flood Certification. The Flood Insurance Policy must be in the form of the standard flood insurance policy issued under FEMA s Natural Flood Insurance Program (NFIP) or by a private insurer. The terms and conditions of the flood insurance coverage must be a least equivalent to the terms and conditions of coverage provided under the standard policy of the NFIP for the appropriate Property type. The Policy Declaration page of a policy is acceptable evidence of coverage. The amount of flood insurance provided by the NFIP or by a private insurer must meet Fannie Mae s minimum coverage requirements for all UHC Loans for the appropriate Property type. In addition, 49

50 Property Eligibility private carriers must meet Fannie Mae s minimum rating requirements for insurance Underwriters as described in Fannie Mae Guide, Hazard Insurance Policy Requirements. The maximum deductible clause shall be the lesser of $2,500 or 1% of the policy face amount. All Loans delivered to UHC must include a Life-Time Flood Certification showing the Borrower and Property address. If any portion of the Property is located in a Flood Zone, Flood Insurance is required and a copy of the Flood Insurance Policy must be provided to UHC prior to purchase. Coverage must be in force at time of Closing and effective for at least 12 months following the date of Closing. The premium must be paid in full and an amount equal to 1/12 th of the annual premium must be escrowed and disclosed to the Borrower Condos and PUD Flood Insurance Should any part of the Condominium Project or PUD Project be located in a Special Flood Hazard Area, flood insurance must be maintained in force for the term of the Loan. A separate flood insurance policy is required for Condominiums, detached and attached PUDs unless the flood insurance is included in the Homeowners Association Master Policy. The unit allocation from the master policy must meet the flood insurance requirements as stated above Standard Mortgagee Clause All hazard and flood insurance policies must have the standard mortgagee clause commonly used by private institutional Mortgage investors. Such clause must provide that the insurer will notify the named mortgagee at least 10 days before any reduction in coverage or cancellation of the policy. The endorsement for the standard mortgagee clause must show the name of UHC followed by the phrase, its successors and/or assigns. The standard mortgagee clause of insurance policies obtained by PUD or Condominium Project owners' associations must be endorsed to fully protect the interests of UHC Assigns Any insurance policy required in connection with a Loan sold to UHC must be assigned to Utah Housing Corporation, PO Box 70569, Salt Lake City, UT 84170; and contain a standard mortgagee clause naming UHC, its successors or assigns. 50

51 Mortgage Purchase Agreement (Interest Rate Lock) Section 9 Mortgage Purchase Agreement (Interest Rate Lock) To obtain a Mortgage Purchase Agreement (MPA) from UHC, Lender must follow the procedures described in this section. In order to reserve funds for the Loan, the Lender must request UHC to issue a Mortgage Purchase Agreement (MPA) for the Applicant (Borrower), for a specific amount and for a specific Property. This is done by submitting an MPA request through the UHC Lender-restricted login web page (Lock a Rate) as described later in this section. UHC will generally issue an MPA in the order in which the request for an MPA is received and approved, usually within one business day. UHC provides notification via to the contact information entered on the reservation request informing Lender when the MPA is approved and when the Lender can print a copy of the MPA. Upon the issuance of an MPA, UHC agrees that it will purchase the Loans, subject to the delivery of the required documents by no later than the Final Mortgage Delivery Date in compliance with all the terms and conditions of the Participation Documents. Entering a reservation request online effectively serves as the lock and commitment. Refer to MPA Cancellation topic for instructions on cancelling a request. 9.1 Mandatory and Best Efforts Delivery Upon issuance of the MPA the Lender must deliver the qualified UHC Loan to UHC. Purchase Loans where an MPA has been issued and not purchased by UHC will be charged a non-delivery fee as outlined in this Supplement. Refer to the UHC Fee Schedule (Appendix A.) FirstHome Loans are a Mandatory Delivery and Lender will be charged a non-delivery fee if the loan is not purchased by UHC. HomeAgain, Score, Streamline Refinance and NoMI Loans are a Best Efforts Delivery. Loans where an MPA is issued as a Best Efforts Delivery will not be charged a non-delivery fee if (1) the Loan is delivered to UHC prior to the Final Mortgage Delivery Date and purchased by UHC OR (2) Lender completes and delivers the UHC MPA Cancellation Request to UHC prior to the Final Mortgage Delivery Date. Lender s failure to deliver a written MPA Cancellation Request to UHC prior to the expiration of the MPA will be charged a non-delivery fee. 1 1 Section 9.1 revised 10/7/15 51

52 Mortgage Purchase Agreement (Interest Rate Lock) When requesting an MPA, the Lender should be confident the Loan will Close under the terms requested. UHC will monitor Best-Effort Delivery performance and will contact Lender if, in UHC s estimation, its MPA cancellations are excessive. Any Borrower for whom an MPA is issued by UHC and which is subsequently cancelled or allowed to expire will be ineligible for another MPA for two months from the date the cancellation or expiration is recorded by UHC. When requesting an MPA the Lender is representing and warranting that the Residence and Loan comply with every requirement outlined in the Participating Documents. Lender s failure to either (1) deliver the Loan file or (2) complete the extension request prior to the Final Mortgage Delivery Date shall cause the MPA to expire. 9.2 Current Interest Rates UHC broadcasts via and publishes on its website interest rates by Loan Program. Interest rates will not exceed these rates for commitments issued during a specified time period. By referring to the UHC website, Lenders may know the maximum interest rate for which a Borrower must qualify. UHC interest rates can change any time throughout the day without advance notice. If an interest rate is not posted on UHC s website UHC is not issuing MPAs until further notice. 9.3 MPA Requests All requests for an MPA must be submitted through UHC s Lender-restricted website, following the procedure below, Enter an MPA Request Online. Once the reservation request has been entered online, the request is considered complete. UHC will provide notification via to the address that the MPA was issued. Upon receipt of MPA, Lender should review the MPA and verify the interest rate and Loan information on the MPA is accurate. 9.4 Final Mortgage Delivery Date Loan documents as listed on UHC s Loan Submission Checklist must be delivered to UHC prior to the Final Mortgage Delivery Date listed on the MPA. The documents must be uploaded through UHC Lender-restricted Document Delivery Portal on UHC s website. 52

53 Mortgage Purchase Agreement (Interest Rate Lock) In instances where the Lender is unable to deliver the Loan documents prior to the Final Mortgage Delivery Date the Lender must either request an extension to the Final Mortgage Delivery Date or send a written request to UHC requesting cancellation of the MPA. Refer to MPA Delivery Date Extension and MPA Cancellation in this section for the applicable costs and instructions to extend the delivery date or request an MPA cancellation Enter an MPA Request Online The Lender may request an MPA as soon as credit or automated approval has been received for any Borrower, Co-Borrower, and Co-Signer. To request an MPA by accessing UHC s Lender-restricted website, the Lender must use the login area on the UHC Lender web page Documentation Required for Manufactured Homes For any Manufactured Home, prior to Reservation, Lender must complete all procedures required by Section 70D-1-20 of the Utah Code and provide the required documentation to protect UHC s interest in the Dwelling and the Property. The required documentation is listed on UHC s Manufactured Housing Checklist posted on UHC s website. The documents listed on the checklist must be uploaded electronically through UHC s Lender restricted Document Delivery Portal and UHC must review and accept the documentation provided prior to issuing an MPA MPA Modification In certain cases, the Lender may wish to obtain a modification of an MPA. The Lender must make the request in writing and must provide appropriate documentation to substantiate the request. Lender may increase or decrease the Loan Amount specified on an MPA without requesting a modification of the MPA in an amount not to exceed 10% of the specified Loan Amount. Lenders needing to change the Program after an MPA has been issued must submit the UHC MPA Program Change Request to UHC authorizing the applicable fee to be netted from the purchase (refer to Selling Supplement, Appendix A). If the interest rate at the time of the request to modify the MPA is higher than the interest rate listed on the MPA, UHC, at its sole discretion, may amend the interest rate to the higher interest rate. 53

54 Mortgage Purchase Agreement (Interest Rate Lock) If UHC consents to a modification, UHC shall issue an amended MPA to the Lender. UHC is under no obligation to modify an MPA MPA Delivery Date Extension Extensions to the Final Mortgage Delivery Date may be granted providing that Lender completes an online extension request available through UHCs Lender-restricted login located on UHC website. The extension must be requested prior to the Final Mortgage Delivery Date and no more than one 30-day extension is available. Lender will be able to view and print an amended MPA upon successfully completing the on-line extension request. An extension shall extend only the Final Mortgage Delivery Date and shall result in the extension fee as listed in the Fee Schedule (Appendix A.) 9.6 MPA Cancellation Requests and Non-Delivery Fee When circumstances arise that prevent an existing MPA commitment from being used for a specific Applicant, written notification is required. The Lender must deliver to UHC a written notification of cancellation within two business days of the Lender s making the determination or have knowledge of the circumstances that require cancellation. The cancellation and/or non-delivery fee and any other applicable fees may be deducted by UHC from any future Loan purchase. In addition, UHC may take actions as outlined in the Participation Agreement should UHC identify a pattern of continuing non-deliveries. Refer also to the Fee Schedule (Appendix A) Cancellations and Non-Delivery For any MPA cancellation request received from the Lender, or for an MPA that expired or was cancelled by UHC (including those for which an extension has been issued), the Lender will, at the sole option of UHC, be charged a non-delivery fee together with any applicable file late-delivery fees or extension fees. Refer to the Fee Schedule (Appendix A.) Requesting Another MPA for the Same Applicant 2 Section revised 10/7/15 54

55 Mortgage Purchase Agreement (Interest Rate Lock) Any Applicant for whom an MPA is issued by UHC and which is subsequently cancelled or expired will be ineligible for another MPA Request for two months from the date the cancellation or expiration is recorded by UHC Duplicate Social Security Numbers On occasion, when submitting an MPA request, the Lender may receive an error message indicating a duplicate Social Security number is being used and the Lender is unable to proceed with the MPA request. This generally is indicative of the Borrower having another UHC Loan (which has been either paid off or will be paid off prior to Closing the new UHC Loan) and can be resolved by contacting the UHC Mortgage Banking department to determine if the Borrower is eligible for another UHC Loan. 55

56 Permitted Fees and Charges Section 10 Permitted Fees and Charges In no event may the fees and charges collected from any party concerning the making of any Loan exceed the amounts customarily charged in the State for similarly financed Loans. No discount points or a yield-spread premium may be charged or collected unless specified by UHC in the Participation Agreement FirstHome Itemization of Origination Charge To enable UHC to confirm Loan fee compliance with applicable laws and regulations governing its programs, Lender must include on the Closing Disclosure (HUD-1 Settlement Statement, Section 800), an itemization of all fees included in Our Origination Charge on all FirstHome Loans. The Origination fee included in Our Origination Charge cannot exceed 1% of the Promissory Note amount. The itemization may be listed in the Loan Costs section of the Closing Disclosure or the empty lines of the 800 Section as described in FHA Mortgagee Letter as previously announced, or if on Line 808 of the HUD-1 Settlement Statement the following language is inserted: See attached addendum for additional information Permitted Fees First Loan The following are permitted fees for a First Loan: Fees and charges permitted by FHA, VA, or FNMA A warehousing fee payable to the Lender not to exceed ½% of Loan Amount plus any supplemental underwriting and processing fees A $35.00 UHC Delivery Fee (this fee cannot be passed on to the Borrower or seller and will be netted from the purchase) A $79.00 Tax Service Fee for Purchase Loans A $39.50 Tax Service Fee for Refinance Loans A $30.00 Desktop Originator (DO) Fee assigned to UHC (This fee may be charged to the Borrower or seller only if the fee is compliant with the FHA, VA, Fannie Mae, or the REPC and will be netted from the purchase.) 56

57 Permitted Fees and Charges Any principal reduction to reduce the principal the Loan must be reflected on the Closing Disclosure (HUD-1 Settlement Statement) for the applicable Loan. After applying the Loan proceeds if the Closing Disclosures (HUD-1 Settlement Statements) reflect cash back in excess of the Earnest Money deposit or funds paid outside of Closing the excess funds can be used to reduce the principal of the Loan. No portion of the Loan may be disbursed to the Borrower or to any person on behalf of the Borrower Permitted Fees Second Loan All fees for the Second Loan must be reflected on the Closing Disclosure (HUD-1 Settlement Statement.) Lenders may not charge the Borrower additional fees associated with originating, processing, underwriting, and Closing the Second Loan except as follows: Lender may collect $250 at Closing from the proceeds of the Second Loan as a supplemental fee for originating and processing and Closing the Second Loan. Title may collect $200 at Closing for fees association with the preparation and Closing of the Loan. No portion of the Loan may be disbursed to the Borrower or to any person on behalf of the Borrower. Any principal reduction to reduce the principal of the Loan must be reflected on the Closing Disclosure (HUD-1 Settlement Statement) for the applicable Loan. The Borrower cannot receive cash back. After applying the Loan proceeds any excess funds can be used to reduce the principal of the Loan. 57

58 Closing a UHC Loan Section 11 Closing a UHC Loan In addition to the required UHC Loan Closing forms the Loan Closing documents must include all requirements of the Agency and any Federal, State, or local rule or regulation, or requirements of any agreement or contract of Mortgage Insurance or Guaranty. Closing documents also include those typical obligations, duties, and responsibilities that are in conformance with sound banking and Mortgage lending practices Closing and MPA Consistency Upon receipt of the MPA, Lender must close the Loan at the interest rate specified. UHC will be under no obligation to purchase a Loan closed at an interest rate that is different from that which is specified on the MPA Loan Terms Each Mortgage Note must meet the following requirements: Include the FHA Case Number, or VA Guaranty Number as applicable Include the MIN Number Include the Originator and Loan Origination Company NMLS number Be completed and signed without any errors, including a 30-year (360-month) amortization, with a fixed interest rate as listed on the MPA and its monthly payment due on the first day of the month Match the Mortgage Deed exactly Include endorsed Payable to Utah Housing Corporation, its successor and/or assigns, without recourse and signed by a UHC authorized signer Be accurately signed and dated Each Deed of Trust must meet the following requirements: Be recorded and include on the Deed the county recording information Be registered with the Mortgage Electronic Registration Systems (MERS) and include the MERS language and a MERS MIN number Include the Trustee and legal description 58

59 Closing a UHC Loan Match all information and terms listed on the Promissory Note, including the date Include the Originator and Loan Origination Company NMLS number Include all applicable riders and attachments Be accurately notarized, signed, and dated In no case shall late charge provisions exceed 5% of the amount of the full payment Loan Closing Documents The Deed of Trust must be signed by each owner of the Property. Any individual whose income and financial strength are needed in order to meet UHC underwriting requirements must sign the Note. The Mortgage Deed and the Promissory Note must also be signed by each individual whose signature is necessary under the applicable statutory or decisional law of the State to create a valid lien, pass clear title, waive inchoate rights to Property, or assign earnings Attorneys-in-Fact and Power of Attorney UHC will not permit the UHC Borrower and Residence Seller Affidavit form to be signed on behalf of the Borrower by an attorney-in-fact. Attorneys-in-fact may execute the Residence Seller Affidavit and other documents on behalf of the Residence Seller, only provided that a power of attorney gives the attorneyin-fact that power by specific or broad language. Each power of attorney must be filed in the office of the appropriate county recorder and a copy must be delivered to UHC Co-Signer Non-Occupant Co-Signers are allowed for UHC FirstHome Loans only. Co-Signers cannot have an existing UHC Loan; take title to the Property; and sign the Deed of Trust. Non-Occupant Co-Signers must sign and be listed on the Note and all other Application, Closing, and Compliance Documents. Non-Occupant Co-Signers are not allowed for HomeAgain, Score, and NoMI Loans Mortgage Closing Documents 59

60 Closing a UHC Loan Mortgage documents must meet all applicable statutory or decisional law to create a valid UHC lien, pass clear title, waive or clear any existing rights to Property. The Borrower must give the Lender and its successors and/or assignees a lien on the Property as collateral for the Loan Closing Documents UHC requires additional documents specific to the Loan Program in addition to the Loan documents required by Federal, State, or local rule or regulation, by any agreement or contract of Mortgage Insurance or Guaranty, and by the applicable Agency. Lender should refer to UHC Lender web page for the most current UHC Forms and Closing instructions when preparing the documents for Closing. All required documents must be fully executed and signed as noted on the form Manufactured Homes Closing documents specifically required for Loans for Manufactured Homes are as follows: Manufactured Housing Rider must be attached to and recorded with the First Loan Deed of Trust. The data on the Rider must match the IBTS (Institute for Building Technology and Safety) Label Verification Letter, Data Plates Compliance Certificate, Appraisal, and Preliminary Title Report. Conditions to close as required by UHC must be provided to Lender upon issuance of the MPA Escrow Officers and UHC Subordinate Loan Closings A Title Company Escrow Officer desiring to close UHC Subordinate Loans must submit to UHC an executed UHC Escrow Officer Closing Agreement form. Upon receipt of this form, UHC will add the Escrow Officer to the Title/Participating Title Escrow Officers section of UHC s website. If the Lender submits a wire request for an Escrow Officer who has not yet executed the Agreement, the funds will not be wired until UHC receives a fully executed Agreement Participating Title Companies A Title Company Escrow Officer desiring to close UHC Subordinate Loans must submit to UHC an executed UHC Escrow Officer Closing Agreement Upon receipt of this form, UHC will add the Escrow Officer to the Title/Participating Title Escrow Officers section of UHC s website. 60

61 Closing a UHC Loan If the Lender submits a wire request for an Escrow Officer who has not yet executed the Agreement, the funds will not be wired until UHC receives a fully executed Agreement. 61

62 Funding the Second Loan Section 12 Funding the Second Loan The Lender is responsible for the funding of the Subordinate Loan by sending its own funds to the Title Company. 3 The Loan must Close in the Lender s name Lender Funds the Second Loan The Lender must wire funds to the Title Company prior to Closing and UHC will purchase the Second Loan along with the First Loan after Closing. In compliance with HUD requirements, UHC will electronically sign the Mortgage Purchase Agreement, representing a legally enforceable obligation to provide down payment assistance funds toward the Borrower s required minimum cash investment. 3 Section 12 and 12.1 rev. 10/13/15 62

63 Loan Delivery to UHC Section 13 Loan Delivery to UHC 13.1 Final Mortgage Delivery Dates, Extensions, Expirations, and Fees Each Loan must be delivered to UHC prior to the Final Delivery date listed on the Mortgage Purchase Agreement. Loans must be delivered to UHC through UHC s Lender-restricted Document Delivery Portal on the UHC website in accordance with the requirements in this section Lender Reaffirmations By delivering a Loan to UHC, the Lender affirms that all information provided in the MPA is true and correct. The Lender further reaffirms its representations and warrants regarding its qualification as a Lender, and its obligations to UHC in accordance with the Participation Documents. These obligations remain in full force and effect regardless of the duration, assignment or transfer of servicing, status of payments, or payment in full Lender Restricted Electronic Delivery Any person may visit the UHC website and access a variety of helpful information. The restricted section for Lenders, however, is to be accessed only by Lender employees with whom the Lender has shared the required User ID and Password Uploading Files Lenders should refer to the Document Delivery Upload User s Guide, on the UHC website for specific instructions on uploading files to the document delivery portal. This User s Guide includes instructions on the following topics: How to create a new account How to access the Document Delivery Upload Portal How to upload files to UHC How to change your password 63

64 Loan Delivery to UHC How to obtain additional support 13.4 Submission Package Document Delivery For each Loan, the Lender shall deliver to UHC a Loan submission package in the document order specified by UHC on its current Pre-Purchase Loan Submission Checklist form Endorsement by Authorized Signers Each First and Second Promissory Note must include an endorsement, executed by a person on file with UHC as an authorized signer of Lender, and worded as follows: Pay to the order of Utah Housing Corporation its successors and/or assigns without recourse The person executing the endorsement must have been previously recorded on the UHC Mortgage Lender s Certificate of Authorized Signatures form as an Authorized Signer. A Power of Attorney is not accepted Recorded Deed of Trust UHC will require copies of the recorded First Deed of Trust and Second Deed of Trust to be submitted for review prior to purchase. Deeds of Trust requiring corrections due to errors on the document must be corrected and corrections initialed by the Borrower and re-recorded. In some instances, as noted below, an Affidavit may be acceptable in lieu of re-recording. If the Deed of Trust has any changes or alterations made after the recording, the Borrower must initial all changes and the reason for re-recording must be included on the re-recorded Deed of Trust. A Scrivener s Affidavit (a.k.a. Corrective Affidavit) is allowed to be recorded which is to put others on notice of a typographical or other minor error. The Scrivener s Affidavit does not have the effect of correcting an error (refer to Title Companies Attorney for allowable corrections by a Scrivener s Affidavit). In some instances, UHC may require a certification from Title Company that the error is considered a minor error per Utah statute. An Affidavit of Correction or Notarial Certificate (Notary Affidavit) may be used in the event there is an error in the notary acknowledgment contained in a recorded document. The original notary must prepare and sign the Notary Affidavit. If a document was recorded without a notary acknowledgment the Notary Affidavit is not acceptable and the document must be re-recorded. 64

65 Pre-Purchase Section 14 Pre-Purchase Upon delivery of each Loan submission package, the submitted materials are reviewed for completeness, document order, and legal compliance. For submission packages that are incomplete, not submitted in the required document order, or that contain excessive documentation UHC may, at their sole discretion, charge an Incomplete Loan Submission Package fee. Refer to UHC Fee Schedule, Appendix A Package Reviews and Fees The status of the Loan review can be monitored by accessing the Lender-restricted login page on UHC s website. Once logged in, Lender may select from the following links: Approved for Purchase: This link is for acceptable Loan submission packages and will show the Loan was reviewed, approved, and ready for purchase. File Receipt: This link shows the date the Loan was received by UHC and is awaiting review. Pre-Purchase Conditions: This link will show that the Loan submission package was submitted incomplete and requires additional documentation. Post-Purchase: This link shows Loans that have been purchased but additional documents are still needed to complete the document delivery requirements. In order for UHC to purchase the Loan, the Lender must provide all required documents for the listed conditions within one month from UHC underwriting review date. If within one month from the date of the review the required documents have not been received, UHC may take one of the following actions: Accept the package late and charge a pricing adjustment at time the Loan is purchased. Such adjustment will be netted from the purchase. Accept the package late and charge a reconsideration fee per month or part of a month beginning one month from the date the Loan was reviewed by UHC. (See UHC Fee Schedule, Appendix A.) Said fee will be netted from the next purchase. Re-assign the Loan to Lender and charge the non-delivery fee as listed in the UHC Fee Schedule (Appendix A). Any reconsideration fee or non-delivery fee at UHC s sole discretion may be deducted from the next purchase of one or more Loans from Lender. 65

66 Pre-Purchase 14.2 Mortgage Insurance or Guaranty Certificate Loans requiring a Mortgage Insurance or Guaranty Certificate are required prior to UHC purchasing the Loan. The certificate must be accurate and be consistent with the Closing documents. Minor corrections that will not jeopardize the insurance coverage for UHC may be conditioned post-purchase Right to Reject Notwithstanding anything in the Participation Documents to the contrary, UHC shall at all times have the right to decline to purchase any Loan delivered by Lender if, in the reasonable opinion of UHC, the Loan does not conform to the requirements of the Act, Fannie Mae, FHA and/or VA, UHC s Rules, the Participation Documents, or the applicable general Resolution. 66

67 Mortgage Purchase Section 15 Mortgage Purchase Lenders must sell the Loan and, where applicable, any Second Loan to UHC Servicing Released. If a servicing release fee or a premium is due as specified in the Participation Documents its amount will be based on the sum of the unpaid balance of the applicable Loan at time of purchase UHC Purchase and Disbursement of Loans Purchase UHC may purchase a Loan in a principal amount exceeding 10% of the Loan Amount specified on the MPA. The Loan Purchase Price shall be 100% of the outstanding principal balance thereof, plus unpaid accrued interest thereon as of the date of purchase, together with any other adjustments specified in this Selling Supplement. The Lender will retain the servicing of the First Loan and Subordinate Loan until UHC purchases both Loans, as applicable First Loan Purchase Disbursement Following a determination by UHC that the Loan is eligible for purchase, UHC will disburse funds to Lender or its designee. Disbursement will be in an amount equal to the Purchase Price of the First Loan including the following components: The amount of the First Loan Note Plus accrued interest from the date of the last paid installment to, but not including, the date of purchase by UHC Plus any amount due Lender for a premium or servicing release fee and interim servicing fee Less any Loan payment, including monthly escrow amount, whose due date is on or before the purchase date Less any applicable UHC fees Less the servicing fee of.33% per annum for the same period Less any applicable principal reductions to be applied to the Loan Less amounts to be kept by UHC for escrow 67

68 Mortgage Purchase All whole-month interest calculations are made using 30-day months, 360-day years. Interest calculations for periods of less than one month are based upon a 365-day year Second Loan Purchase Disbursement Following a determination by UHC that the Loan is eligible for purchase, UHC will disburse funds to Lender or its designee. Disbursement will be in an amount equal to the Purchase Price of the Second Loan including the following components: The amount of the Second Note Plus accrued interest from the date of the last paid installment to, but not including, the date of purchase by UHC Less any Loan payment whose due date is on or before the purchase date Less any applicable UHC fees Less any applicable principal reductions Less the servicing fee of.33% per annum for the same period Less amounts to be kept by UHC for escrow deposit or tax service fee All whole-month interest calculations are made using 30-day months, 360-day years. Interest calculations for periods of less than one month are based upon a 365-day year. UHC will not pay a servicing release premium for the Second Loan. UHC will wire the funds for the purchase of the Loan according to the Lender wire or Bailee instructions provided to UHC upon submission of the Loan documents. 68

69 Mortgage Electronic Registration System (MERS) Section 16 Mortgage Electronic Registration System (MERS) All First Loans and Second Loans must be secured by Deeds of Trust that include the required MERS language and the required MERS MIN numbers. The Correct MIN must be placed in a visible location on the first page of each Deed of Trust. Each UHC Loan must be registered with MERS and the Investor and Servicing rights transferred to UHC within the timeframe required by MERS. Lender must register the MIN number for the First and Second Deeds of Trust with MERS and transfer to Utah Housing Corporation prior to the Loan purchase. The First and Second Loan Investor and Servicing rights must be transferred from Lender to UHC in MERS within five days of UHC purchasing or funding the Loan. 69

70 Post-Purchase Section 17 Post-Purchase 17.1 Incomplete Loans (Post-Purchase) UHC may, at its sole option, purchase an Incomplete Loan, as defined in the Participation Documents. For any Incomplete Loan that UHC purchases, Lender shall have two months from purchase to provide to UHC any documents or information UHC reasonably requests to be delivered for completion of the Loan submission package. If Lender delivers the documents or information UHC requires within the applicable period, the Loan shall no longer be deemed an Incomplete Loan. If Lender fails to deliver the documents or information required by UHC to complete the Loan submission package within two months, UHC may, at its sole discretion, choose one of the following actions: Require repurchase of the Incomplete Loan one month from the date of written notice from UHC to Lender. Accept the required documentation late and charge Lender an Incomplete Loan late fee per month (or part of a month) beginning two months from the date of purchase of Loan. (See UHC Fee Schedule, Appendix A.) This fee will be netted from the next purchase of one or more Loans from Lender. If Lender fails to repurchase the Incomplete Loan, Lender shall be in Default and UHC is entitled to the remedies set forth in the Participation Agreement as follows: UHC may charge Lender a repurchase late fee equal to one month or part thereof (see UHC Fee Schedule, Appendix A) commencing one month from the date of UHC s written repurchase request to Lender. UHC, at its option, may deduct the repurchase late fee from the purchase of a Loan or from any other amounts UHC may owe to Lender HUD Mortgage Record Change Procedures The seller of the Loan (the Lender) must notify HUD within 15 days of the sale of the Loan to Utah Housing Corporation. 70

71 Post-Purchase Only the holder of record (the Lender) is able to report the identity of the new holder of record (Utah Housing Corp). Lender must ensure the data on the MIC is accurate prior to making the Loan Record Change. Data contained in HUD s Single Family Insurance System (SFIS) regarding a mortgagee s FHA-insured portfolio must be accurate (for all existing and new Loans) Post-Purchase Documents Due to the length of time to obtain certain documents UHC will consider the following documents to be acceptable Post-Purchase documents: Original Title Policy and endorsements Original Recorded Deed of Trust with any applicable Riders Original Deed of Trust for Second Loan Verification Mortgage Record Change was completed within 15 days of the sale of the Mortgage Verification Lender has transferred Servicing and Investor Rights to UHC in MERS Any additional conditions required by UHC at time of purchasing the Loan If applicable and required final repair inspection for repair escrow, copies of paid cash receipts to verify payment of repairs, evidence escrow has been issued, and check for principle reduction of Second Mortgage if receipts are less than amount escrowed on the Closing Disclosure (HUD-1 Settlement Statement) 71

72 Regulatory Compliance Section 18 Regulatory Compliance Lenders are required to comply with all Federal, State, and local laws and regulations which govern residential Mortgage lending, in addition to the following specific UHC requirements Ability to Repay and Qualified Mortgage Rules (ATR and QM) The final Ability-to-Repay and Qualified Mortgage Standards under the Truth in Lending Act (Regulation Z) and the Qualified Mortgage Definition for HUD Insured and Guaranteed Single Family Mortgages provide an exemption from the ability-to-repay requirements for extensions of credit made pursuant to programs administered by a housing finance agency. UHC will continue to purchase both FHA Insured Loans and NoMI Loans that are exempt from the ability to repay rules as long as such Loans meet UHC s requirements as contained in the Participation Documents; and HUD s existing underwriting standards or the eligibility and underwriting requirements described in the Fannie Mae Selling Guide Higher Priced Mortgage Loans (HPML) UHC will purchase a Second Loan and an FHA Higher Priced Mortgage Loan (HPML) assuming the Loan meets all UHC criteria and the Loan complies in all respects with the requirements of Regulation Z for HPML. UHC will not purchase a Conventional Loan considered an HPML. A copy of the HPML calculation, disclosing whether the Loan passed or failed the HPML test should be included in the Loan submission package for both the First and the Second Loan. UHC may require the Lender to repurchase a Conventional Loan where an HPML disclosure submitted to UHC is inaccurate and upon entering the correct information the HPML disclosure changes the HPML test from pass to fail. 72

73 Regulatory Compliance UHC will accept an HPML only as follows: Loan Program NoMI Loans FirstHome, HomeAgain, Score Loans Second Loan Acceptable? No Yes Yes 18.3 Appraiser Independence Lender will comply with the Truth-In-Lending Act (TILA) requirements governing appraisal independence as well as the implementing rules set forth in the Federal Reserve Board s Regulation Z, and related requirements administered by the Agencies and others. The following actions are prohibited in consumer-credit transactions secured by a consumer s principal Dwelling: Causing or attempting to cause the value assigned to the Property to be based on a factor other than the independent judgment of the appraiser, by compensating, coercing, extorting, colluding with, instructing, inducing, bribing, or intimidating a person conducting or involved in an appraisal Mischaracterizing or suborning any mischaracterization of the Appraised Value of the Property securing the extension of credit Seeking to influence an appraiser or otherwise encourage a targeted value in order to facilitate the making or pricing of the transaction Seeking to influence a person to report a minimum or maximum value for the consumer s principal Dwelling Withholding or threatening to withhold timely payment for an appraisal report or for appraisal services rendered when the appraisal report or services are provided for in accordance with the contract between the parties Withholding or threatening to withhold timely payment to a person because the person does not value the consumer s principal Dwelling at or above a certain amount Conditioning the compensation paid to a person on consummation of the covered transaction Implying that current or future retention of the person depends on the amount at which the person estimates the value of the consumers principal Dwelling 73

74 Regulatory Compliance Excluding a person from consideration for future engagements because the person reports a value for the consumer principal Dwelling that does not meet or exceed a predetermined threshold Causing or attempting to cause the value assigned to the Property to be based on a factor other than the independent judgment of the appraiser, by compensating, coercing, extorting, colluding with, instructing, inducing, bribing, or intimidating a person conducting or involved in an appraisal Mischaracterizing or suborning any mischaracterization of the Appraised Value of the Property securing the extension of credit Seeking to influence an appraiser or otherwise encourage a targeted value in order to facilitate the making or pricing of the transaction Seeking to influence a person to report a minimum or maximum value for the consumer s principal Dwelling Withholding or threatening to withhold timely payment for an appraisal report or for appraisal services rendered when the appraisal report or services are provided for in accordance with the contract between the parties Withholding or threatening to withhold timely payment to a person because the person does not value the consumer s principal Dwelling at or above a certain amount Conditioning the compensation paid to a person on consummation of the covered transaction Implying that current or future retention of the person depends on the amount at which the person estimates the value of the consumers principal Dwelling Excluding a person from consideration for future engagements because the person reports a value for the consumer principal Dwelling that does not meet or exceed a predetermined threshold Mandatory Reporting Lender will compensate a fee appraiser for performing appraisal services at a rate that is customary and reasonable for comparable appraisal services, considering the following determining factors: Type of Property Scope of work Time in which appraisal services are required to be performed Fee appraiser qualifications 74

75 Regulatory Compliance Fee appraiser experience and professional record Fee appraiser work quality If Lender reasonably believes an appraiser has materially failed to comply with the USPAP or ethical or professional requirements for appraisers, the matter will be referred to the appropriate state appraiser certifying and licensing agency within a reasonable period of time after it is determined that there is a reasonable basis for believing a material failure to comply has occurred Selection of Appraisers Lender will select, evaluate, and monitor the performance of appraisers and persons who perform evaluations in order to ensure that a qualified, competent, and independent person complete the appraisal or evaluation. Lender will maintain documentation to demonstrate that the person who performs the appraisal or evaluation has the relevant experience and knowledge for the market, location, and type of real Property being valued. 75

76 Appendix A: UHC Fee Schedule Section 19 Appendix A: UHC Fee Schedule Fees will either be invoiced to the Lender or netted from a future purchase, at UHC s sole discretion. Fee Name File Late-Delivery Fee Reconsideration MPA Program Change Fee 4 UHC Remedy Fees Fee Amount $250 per month or any part thereof $250 per month or any part thereof $300 (prior to Loan Closing.) The higher rate at the time of reservation or Program change will be applied. $300 (after Loan Closing) plus any applicable buydown pricing adjustment if the Program change results in a higher rate. Non-Delivery / MPA Cancellation Fee (Mandatory Delivery $400 FirstHome program) Non-Delivery/MPA Cancellation Fee (Best Efforts delivery $400 will be charged to Lender if Lender does not for HomeAgain, Score, NoMI) provide UHC form 202. Incomplete Mortgage Late Fee $250 per month or any part thereof Repurchase Late Fee $700 per month or any part thereof Fee for submissions not submitted in the required $100 document order or containing excessive documentation Extension Fees $400 per month or any part thereof (limit one 30-day extension) Second Loan funded and purchased without associated 6% of associated First Loan First Loan UHC Refi not purchased and Subordination Agreement 6% of the original UHC first Loan recorded UHC Processing Fees Fee Name Fee Amount Subordination Request Processing Fee (for UHC authorized $ Loans only) Loan Delivery and Review Fee (cannot be charged to $35.00 Borrower) Tax Service Fee (can be paid by Borrower or seller) $79.00 Tax Service Fee for Refinance Loans $39.00 Desktop Originator Fee assigned to UHC (may be charged $30.00 to the Borrower or seller only if the fee is compliant with the FHA, VA, Fannie Mae or the REPC and will be netted from the purchase) 4 Fee Schedule rev. 10/7/15 76

77 Definitions Section 20 Definitions Act means the Utah Housing Corporation Act, Title 9, Chapter 4, Part 9, Utah Code Annotated, 1953, as amended, from time to time. Addendum means UHC s Rider to Deed of Trust. Affiliate means any person or entity (including, but not limited to, a general partner or managing member, or an officer of either) that controls a Lender, is controlled by a Lender, or is under common control with the Lender. The term control means the direct or indirect power (under contract, equity ownership, the right to vote or determine a vote, or otherwise) to direct the financial, legal, beneficial, or other interests of the Lender. For the purposes of this definition, the term ownership means that the owning entity owns 100% of the total issued and outstanding ownership interests of the owned entity, whether such ownership interests are comprised of stock, partnership or membership interests, or otherwise. Agency means an FHA, VA, Fannie Mae, or Freddie Mac Loan. Applicant or Co-Applicant means a Borrower who has signed an Application for a Loan that has not been closed. Application means the completion of the initial and final Uniform Residential Loan Application. (Form 1003) Initial Loan Application includes sufficient information for the Underwriter and UHC to reach an informed decision whether the Loan meets UHC Income Limits. Final Loan Application signed by the Borrower includes all income and debts disclosed and verified during the Mortgage process. Appraised Value means an evaluation of a Property s value based on a given point in time that is performed by a professional appraiser during the Loan Origination process. Average Area Purchase Price means the most current Average Area Purchase Price under the safe harbor limitations from time to time published by the Department of Treasury for each applicable Metropolitan Statistical Area or other area within the State, stated separately with respect to Residences which have not been previously occupied and Residences which have been previously occupied; provided, however, that in lieu of such safe harbor limitations, the Average Area Purchase Price may be determined by UHC in accordance with the Code, but only upon receipt by UHC of an opinion of bond counsel that the use of the Average Area Purchase Price so determined by UHC shall not 77

78 Definitions cause interest on the related Bonds to be included in the Gross Income of the recipient thereof for Federal income tax purposes. Authorized Administrator means a person authorized by Lender to allow an employee to access UHC s secure website, to add and delete users, and to set their permissions for the different processes of a UHC Loan. The Authorized Administrator allows access only to the part of the web page that is necessary for an employee to complete their job. Best Efforts Delivery refer to Delivery Borrower, Co-Borrower, Mortgagor, or Co-Mortgagor means an Applicant (e.g., individually or jointly) person who will occupy the Dwelling and is obligated to repay a Loan; however, such terms shall not include a Co-Signer. Borrower Affidavit means an affidavit in a form prescribed by UHC given by the Borrower in connection with the execution of a Mortgage Note for a Mortgage Loan. Co-Signer means a person who promises to pay the Borrowers debt if that Borrower fails to do so. A Co- Signer will not occupy the Property, signs the Note but not the Deed, and does not take title to the Property. Closing means that Settlement has been completed and the proceeds of any new Loan have been delivered by the Lender to the escrow/closing office and the applicable Closing documents have been executed and recorded in the office of the county recorder. Combined Loan to Value means the principal balance(s) of all Loans on a Property divided by its Appraised Value or Purchase Price, whichever is less. In the case of a Streamline 203(k) or HUD REO it means the principal balances(s) of all Loans on a Property divided by its as completed Appraised Value or Purchase Price plus repairs, whichever is less. Condominium Project means a residential real estate project whereby two or more Dwelling units are separately offered or proposed to be offered for sale, created pursuant to Utah Law. Condominium Unit means a Residence, as defined herein, which is individually owned and a physical part of a Condominium Project. The condominium owner holds sole title to the unit, but owns land and common Property jointly with other unit owners and shares the upkeep expenses on the common- Property with them. Conventional Loan means a Loan that is not insured or guaranteed by the Federal government. A Conventional or conforming Loan adheres to the guidelines set by Fannie Mae. 78

79 Definitions Current Annual Household Income means the Gross Income of the Borrower s Household, for the Current Year. Current Year means the 12-month period beginning either: (1) the date of the Initial Application if Closing occurs within four months of the date of such Application; or (2) the date of Closing, if Closing occurs more than four months after the date of such Application. Deed of Trust means a Deed wherein legal title in the Property is transferred to a trustee which holds it as security for a Loan between a Borrower and Lender. The Borrower is referred to as the trustor, and the Lender is referred to as the beneficiary. Default means: With respect to a Loan, the failure of a Borrower to perform any obligation required under a Note, Deed, Rider to Deed, Borrower Affidavit, or any other Closing document. With respect to the Participation Documents, a failure of Lender to perform its obligations, duties, and responsibilities, or a failure of Lender to achieve and maintain an acceptable level of performance including, but not limited to, those items specified in the Participation Agreement. Delinquent or Past Due means, with respect to any Loan, one or more monthly Loan installment having not been received by the Servicer before the end of the month in which the installment is due. Delivery means the Lender enters into a commitment with UHC to sell a specific Loan at an agreed-upon price within a specified timeframe. A Mandatory Delivery is required for the FirstHome Loan and if Lender is unable to fulfill their commitment to deliver the Loan, the Lender may cancel the Loan and be charged a non-delivery fee. A Best Efforts Delivery option for a HomeAgain, Score, Streamline Refi and NoMI Loan is available and Lenders will not be charged a non-delivery fee if the Loan does not close and Lender submits required documentation. Dwelling means a Residence and any other structures that are connected to it. Escrow Payment means, with respect to a Property securing a Loan, all moneys collected to obtain or maintain Mortgage insurance and fire, flood, and other hazard insurance, and any payments required to be made to any governmental body or political subdivision or district for taxes or other assessments. Fannie Mae means the Federal National Mortgage Association. FDIC means the Federal Deposit Insurance Corporation. Federal means of or related to the government of the United States of America. 79

80 Definitions Federally Guaranteed means the guarantee of a Loan pursuant to the Servicemen s Readjustment Act, as the same may be amended from time to time ( VA Guaranteed ) or the guarantee of a Mortgage Loan pursuant to the provisions of the Rural Housing Service ( RHS ). Federally Insured or FHA Insured means insured by FHA. FHA means the Federal Housing Administration of the Department of Housing and Urban Development of the United States of America. First Mortgage means a Loan having the characteristics described in the Participation Documents whose lien position is senior to any other lien and whose lien is secured by an accepted FHA, Fannie Mae, or VA Deed of Trust. Final Mortgage Delivery Date means the final date on which a Loan may be delivered for sale to UHC as specified in the Mortgage Purchase Agreement. First-time Home Buyer means a Borrower who has had no present ownership interest in a Principal Residence (including, without limitation, any Manufactured Housing which is permanently affixed to real Property) at any time during the three-year period prior to the date of execution of the Loan. Freddie Mac means the Federal Home Loan Mortgage Corporation General Resolution means the applicable General Resolution adopted by UHC with respect to the Single Family Program under which Loans are purchased by UHC. Gross Income is the sum of all income not excluded in the following paragraph (before any payroll deductions), including, but not limited to, gross pay, net income from business or self-employment, any additional income from overtime, part time employment, shift differential, bonuses, allowances for automobiles, housing, uniforms, etc. (except that employee business expenses may be deducted), dividends, interest, royalties, pensions, compensation from the Department of Veterans Affairs (VA), net rental income, net farm income, etc.; and other income (such as alimony, child support, reimbursement for child care expenses, public assistance, sick pay, social security benefits, unemployment compensation, income received from trusts, and income received from business activities or investments). Overtime pay and bonuses must be projected for the Current Year in an amount consistent with the earnings history of each Household member. Gross Income shall not include casual, sporadic, or irregular gifts; amounts that are specifically for or in reimbursement of medical expenses; inheritances; insurance payments (including payments under health and accident insurance and workers compensation other than payments in lieu of earnings); reimbursements received under an employer s flexible benefit plan or cafeteria plan; settlement for personal or Property losses; amounts of educational scholarships paid directly to the student or the 80

81 Definitions educational institution and amounts paid by the government to a Veteran for use in meeting the costs of tuition, fees, books and equipment, but in either case only to the extent used for such purpose; special pay to a serviceperson who is exposed to hostile fire; foster child care payments; and the income of any Household member who is under 18 years of age or a full-time student (provided that no deduction shall be allowed for a person who executes the Mortgage, the head of the Household, the spouse of the head of the Household or a person who is secondarily liable on the Mortgage Loan). Gross Income may not be reduced by any losses incurred by Borrower except those reflected on IRS Schedule C, E, or F. Depreciation expenses may not be taken unless calculated on a straight line basis on applicable IRS Schedules and Forms and applicable profit and loss statements. All other depreciation expenses must be added back to net business, farm, or self-employment income shown on IRS Schedule C, E, or F. Hazard Insurance Policy means a standard Hazard Insurance Policy or any replacement policy, to be maintained for each Loan pursuant to the Participation Documents. Household means all persons expected to use the Residence as their Principal Residence during the Current Year, excluding children expected to be born following Closing. In a case when a child is the subject of a joint custody order of a court, the child may be considered a member of the Household provided that 50% or more of the child s time will be spent as a member of the Household. HUD means the Department of Housing and Urban Development of the United States of America. Income Limits means the Income Limits established and amended by UHC from time to time pursuant to the Rules. The Current Annual Household Income of the Borrower may not exceed the Income Limits established by UHC from time to time as published on the website. Incomplete Mortgage means a Loan for which the Loan Submission Package, as described in the Participation Documents, does not contain every document or all information required by UHC. IRS means the Internal Revenue Service of the United States Department of the Treasury. Lender means the bank, trust company, savings and loan association, credit union, Mortgage bank, or other financial institution which is the Lender under the Participation Documents incorporated herein by reference. Loan means a Mortgage as defined herein. Loan Amount means the unpaid principal amount of the Loan, Loan Amount is typically listed on the Note. 81

82 Definitions Loan Origination means the Lender obtains a variety of financial information from the Borrower to use to determine the type of Loan the Borrower is eligible for and what interest rate the Borrower will pay. Loan to Value (LTV) means the principal balance of the First Mortgage on a Property divided by its appraised value or Purchase Price, whichever is less. Low and Moderate Income Persons means persons irrespective of race, religion, creed, disability, national origin, or sex determined by UHC from time to time to require such assistance as is made available by the Act on account of insufficient personal or family income, in accordance with (9) of the Act. Mandatory Delivery refer to Delivery Manufactured Housing means a transportable factory-built Dwelling Manufactured on or after June 15, 1976, in accordance with the National Manufactured Housing and Safety Standards Act of 1974 that has the following: At least two sections (i.e. no Single Wide homes) A roof of wood shakes; asphalt, wood, or fiberglass shingles; concrete or metal tiles; slate or built-up gravel All running gear, tongues, axles, wheels, or other transportation equipment permanently removed A permanent site-built foundation meeting the requirements of local and State building codes to which it has been permanently affixed The status of improvement to real Property as a result of completion of the procedures required in Utah Code Section 70D-1-20 including, but not limited to, the recordation of the required Affidavit of Affixture Mobile Home means a transportable factory-built Dwelling Manufactured prior to June 15, 1976, in accordance with codes existing prior to the National Manufactured Housing and Safety Standards of A Mobile Home is not Manufactured Housing. Modular Housing means a Dwelling, built from sections, which are manufactured and transported to the building site where the sections are assembled to make a complete Residence. Mortgage, Mortgage Loan means a Loan or a First Loan in which Property or real estate is used as collateral. The Borrower enters into an agreement for a specified sum of money made by a Lender to a Borrower to finance a Property, and evidenced by a Note and secured by a related Deed of Trust which meets all of the terms and conditions of the Participation Documents. 82

83 Definitions Mortgage Insurance and Guaranty means an insurance policy which compensates UHC for losses due to the Default of a Loan. Mortgage Insurance can be either public or private depending on the insurer and the Loan program. Mortgage Purchase Agreement (MPA) means the UHC form furnished to Lender wherein UHC commits to purchase a Loan from Lender for a specific amount and a specific Property. Obtaining this form will evidence not only UHC s agreement to purchase a specific Loan, but the Lender s agreement to close, deliver, and sell the Loan by the Final Mortgage Delivery Date, and the Lender s promise to furnish all requisite documentation within the required time as required under the terms and conditions of the Participation Documents. Mortgage Purchase Agreement Request means a request by Lender, submitted online through UHC s website, requesting the issuance of a Mortgage Purchase Agreement for a specific amount, a specific Property, and a specific Borrower. Mortgagor see Borrower. NCUA means the National Credit Union Administration. Nonpublic Personal Information means any nonpublic information of an Applicant or Borrower that identifies that person or can be used to identify, contact, or locate that person. Nonpublic Personal Information may include, without limitation, name, address, phone number, address, credit account information, or Loan information. Note, Mortgage Note, Promissory Note means a legal financial instrument, in which the Borrower promises in writing to pay a determinate sum of money and interest to another under specific terms. Participation Documents means the UHC Participation Agreement, Mortgage Purchase Agreement, Selling Supplement, UHC Forms, and all other documents incorporated into the Agreement. Planned Unit Development (PUD) Project means a residential real estate project whereby two or more attached or detached Dwelling units are separately offered or proposed to be offered for sale. Said project, as established by an instrument of record, usually has common areas and an association or organization of homeowner members which owns or maintains the common areas. Planned Unit Development (PUD) Unit means a Residence, as defined herein, which is individually owned and a physical part of a PUD Project. The PUD owner holds sole title to the Property and has the right of use of the PUD Project s common areas or facilities by access or easement. Principal Residence means a Dwelling occupied by the Borrower for a minimum of 51% of the number of days in a calendar year. 83

84 Definitions Program means UHC Single Family Loan Programs as described in the Participation Documents or Rules. Property means the land, access, easements, Dwelling, and all improvements including utility connections and rights to water or water stock that are the subject of a Loan. Purchase Price means, the cost of acquiring the Property from the seller as a completed residential unit, including: (A) all amounts paid, either in cash or in kind, by the Borrower (or a related party or for the benefit of the Borrower) to the seller (or a related party or for the benefit of the seller) as consideration for the Property, (B) the Purchase Price of the land, and (C) if the Residence is incomplete, the reasonable cost of completing it (to the extent that the builder thereof normally completes work on similar Residences which he builds, and so that occupancy thereof is legally permitted). Acquiring the Property does not include (1) usual and reasonable settlement or financing costs, and (2) the value of services performed by the Borrower or members of Borrower s family ( family shall include only the Borrower s brothers, sisters, spouse, ancestors, and lineal descendants) in completing the Dwelling. In a circumstance when there is no seller of the Residence, such as an owner built Dwelling, the costs which must be counted toward the determination of the Purchase Price include the amounts paid in cash or in kind for land, materials, labor, overhead, architectural fees, plans, permits, construction Loan interest, and all other costs except those excluded in (1) and (2) in the preceding paragraph. In a circumstance when all or a portion of the land is given to the Borrower as a gift, the Purchase Price of the land paid by the donor of the gift shall be included within the Purchase Price. Purchase Price Limits means the Purchase Price Limit established and amended by UHC pursuant to the Rules. The Purchase Price Limits established and updated by UHC from time to time are set forth in the Participation Agreement, as applicable. Qualifying Income means the higher of the income listed on the Desktop Underwriter (DU) Findings or signed Fannie Mae Loan Transmittal (Fannie Mae Form 1008), as calculated annually. The Qualifying Income calculated annually cannot exceed the Income Limits as referenced in the Participation Documents. Regulations mean all Regulations and temporary Regulations promulgated by the United States Treasury Department or Internal Revenue Service with respect to Sections 103, 143, and 148 of the Code or with respect to similar sections of the prior code. Rehabilitation means the repairs, improvements, and construction contemplated for a Residence to be financed from the proceeds of a Loan insured by FHA under its Streamline (203k) program. Residence means the owner occupied Dwelling purchased with the proceeds of a Loan, which is the Borrowers Principal Residence as defined herein. 84

85 Definitions RHS means the Rural Housing Service of the United States Department of Agriculture. Rules means the Rules adopted by UHC pursuant to the Act governing the activities authorized by the Act to carry into effect the powers and purposes of UHC and the conduct of its business, as the same may be amended from time to time. Second Mortgage, Subordinate Mortgage means a Second Loan having the characteristics described in the Participation Documents whose lien position is junior to that of a UHC First Mortgage and whose lien is secured by the UHC MERS Subordinate Deed of Trust. The Subordinate Mortgage is senior to any other lien other than the First Mortgage. The proceeds of this Mortgage are used to assist homebuyers with down payment and/or Closing costs. Selling Obligations means the obligations, duties, and responsibilities that are required of a Lender in the Participation Documents, as well as those that are required of a Lender under any Federal, State, or local rule or regulation or by any agreement or contract of Mortgage Insurance or Guaranty, and those typical obligations, duties, and responsibilities that are in conformance with sound banking and Mortgage lending practices. Selling Supplement means the Single Family Mortgage Program Selling Supplement, part of the Participation Documents, as amended from time to time. The Supplement provides the requirements of originating and selling conventional and government loans to UHC. It includes loan programs, loan requirements, MPA procedures, and delivering a Loan to UHC for purchase. Servicer means any entity to which Borrowers pay their Loan payment and which perform other services for UHC Loans. Settlement means the date upon which Buyer and Seller have signed and delivered to the escrow/closing office all documents required by the Real Estate Purchase Contract, by the Lender, by the title insurance office, and by written escrow instructions or by applicable law. Any monies required to be paid by Buyer or Seller has been delivered to the escrow/closing office. Single Family means the Residence is owner-occupied by one household or family and consists of only one dwelling. Single Parent means a person who, at the date of Application (1) is the head of the Household, as the term Household is defined in the Participation Agreement, (2) has legal custody of at least one dependent minor child living in the Household at least 50% of each year, and (3) is the sole Household member receiving income. No other adults may be members of the Household except those who are Incapacitated. 85

86 Definitions Incapacitated means having at the time of Application a physical or mental illness or impairment (including any incidental to old age) which substantially reduces or eliminates the person s ability to work or to care for the dependent minor child. The illness or impairment must be reasonably expected to continue for at least six months beyond the date of Application. Evidence of the illness or impairment, and its duration, must be documented in Lender s Mortgage Loan file. State means the State of Utah. Supplement means the Selling Supplement. Suspension means the temporary cessation of privileges granted to Lender by UHC in the Participation Documents until a Default had been cured or a Termination is imposed. Termination means the cessation of privileges granted to Lender by UHC in the Participation Documents. UHC means Utah Housing Corporation, a public corporation of the State of Utah, created by the Act. UHC s website means or such other URL as UHC may designate from time to time. Underwriter means the person who will review the Application documents to determine if the Borrower qualifies for a UHC Loan. Utah Code means the Utah Code Annotated 1953, as amended, from time to time. VA means the Department of Veterans Affairs of the United States of America. Veteran means a person who served in the active military, naval or air service, and who was discharged or released therefrom under conditions other than dishonorable. Except for words and phrases which are defined herein, and unless the context clearly indicates another definition, words and phrases used herein shall have the same meanings as such words and phrases in the applicable General Resolution of UHC. 86