Nov 5, 2013 13-25
HFA Preferred Conventional Loan Program-Maximum LTV and PMI Options
HFA Preferred Conventional Loan Program Maximum LTV
On November 16, 2013, in conjunction with the release of Desktop Underwriter (“DU”) Version 9.1, FNMA will reduce the maximum allowable loan-to-value (“LTV”) ratio from 97% to 95%. The new LTV guidelines apply to all FNMA insured loans, except for the HFA Preferred program, which will continue to allow for a 97% LTV.
Participating Lenders must reference the correct Special Feature Code in DU for the HFA Preferred program in order to receive a valid DU approval. The Special Feature Code and all other applicable HFA Preferred guidelines can be found on the HFA Preferred Term Sheet posted on the Housing NM website. Housing NM encourages Participating Lenders to review the DU Version 9.1 Release notes for additional information regarding the origination and delivery of HFA Preferred Program loans.
HFA Preferred Conventional Loan Program PMI Options
The HFA Preferred program allows for reduced PMI coverage, Loan Level Price Adjustments (“LLPA”), minimum credit scores and borrower cash contributions. Participating Lenders are not required to choose a specific PMI company for insuring an HFA Preferred program loan. However, not all PMI companies provide reduced coverage for the HFA Preferred program.
Currently, MGIC and Genworth Mortgage Insurance are the only PMI companies that offer coverage specific to the HFA Preferred program. Additional PMI companies may offer HFA Preferred coverage in the future.
Underwriting guidelines and rate coverage tables for both MGIC and Genworth are posted on Housing NM’s website and can be viewed. Housing NM encourages Participating Lenders to contact their PMI representatives for guidance on insuring an HFA Preferred program loan, as there may be additional PMI company overlays to the HFA Preferred program.
Thank you for participating in Housing NM’s program. Should you have any questions, please contact an Housing NM Homeownership Representative at 1(800) 444-6880 or (505) 843-6880
