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Two MFA Program Updates Effective January 11, 2021

1.     NEW MFA PROGRAM OVERLAY IMPLEMENTATION: Maximum Debt to Income(DTI) Ratio to be 50.00%

Historically, MFA has endeavored to keep its program overlays to a minimum, in order to help as many homebuyers as possible qualify and to help facilitate a straightforward and uncomplicated origination experience for our lending partners.

We recognize that lower-income borrowers typically must allocate a larger-than-normal percentage of their income to housing costs; however, also having excessive consumer debt obligations makes it extremely difficult for them to sustain timely mortgage payments over the long-term.

Therefore, MFA is implementing a maximum debt-to-income ratio of 50.00% for all borrowers with applications dated on and after January 11, 2021. This overlay will apply to all FIRSTHome, NEXTHome and down payment assistance loan programs.

  • The 50.00% DTI will be determined using the lenders qualifying income calculation, not MFA’s program income.
    • Loan Transmittal and Final Desktop Underwriter (DU) must match and reflect a Total to Fixed Payments/Total Obligations to Income or DTI of less than or equal to 50.00%.
  • In PowerLender, the “Lender Application Date (URLA)” field located in the “Enter a Rate Lock” screen within the “Loan Terms” section (shown below) will be added as a required field. The initial application date (1003 date) must be entered in this field.

  • There are no exceptions to the 50.00% DTI overlay or to the 1003 application date. Any loan delivered for purchase with a DTI exceeding 50.00% and with a 1003 application date on or after January 11, 2021 will not be purchased.

 

2.     MFA’S HYBRID ELECTRONIC SIGNATURE POLICY

MFA’s electronic signature policy has been revised.

Effective with loan applications (1003) dated January 11, 2021, MFA’s electronic signature policy is as follows:

Electronic signatures completed through a signing software such as DocuSign®, AuthentiSign® (or a similar electronic signature application) will be accepted on the following documents, provided that the signature certificate accompanies and references the document. The chart below reflects common documents associated with an MFA transaction. An “X” indicates accepted signature form while “Not Accepted” indicates that MFA does not accept a signature format.

Effective: January 11, 2021

 

Third Party Document Signature Service

(DocuSign or equivalent)

Electronic Signatures via facsimile, 

Wet Signature

Compliance Review Documents

 

   

MFA Compliance Addendum

X

X

X

Borrower and Lender Letters of Explanation

X

X

X

YTD Profit and Loss statement (self-employed borrowers)

X

X

X

1008 Loan Transmittal (If signature required by agency)

X

X

X

1003/URLA

X

X

X

MFA Reservation/Lock Commitment

X

X

X

Verification of Rent (VOR)

X

X

X

Verification of Employment (VOE)

X

X

X

MFA Compliance File Checklist

X

X

X

Purchase Contract

X

X

X

       

Closing Documents

     

First and Second Mortgage

Not Accepted

Not Accepted

X

First and Second Note

Not Accepted

Not Accepted

X

Signature Affidavit

Not Accepted

Not Accepted

X

Affidavit of Purchaser

Not Accepted

Not Accepted

X

Affidavit of Seller

Not Accepted

Not Accepted

X

Notice of Potential Recapture

Not Accepted

Not Accepted

X

Second Mortgage Rider

Not Accepted

Not Accepted

X

VA Rider

Not Accepted

Not Accepted

X

Tax-exempt Financing Rider

Not Accepted

Not Accepted

 

Should you have any questions, please contact an MFA homeownership representative at 505-843-6880 or by email: singlefamily@housingnm.org

Thank you for participating in MFA programs.