Jul 23, 2019 19-17
MFA Conventional Loan Product Suspension
TO: Participating Lenders
FROM: Rene Acuna, Director of Homeownership
DATE: July 23, 2019
RE: Memo No. 19-17
MFA Conventional Loan Product Suspension
Fannie Mae recently announced revisions to the HFA Preferred Program. Unfortunately, the time available to implement the updated program changes is short. Fannie Mae will require applications (Application date refers to the first DU submission date as opposed to 1003 or MFA reservation date. The DU Summary of Findings references the first submission date.) dated on or after September 5, 2019 follow the new program parameters.
These program changes eliminate the mortgage insurance and pricing benefits previously offered on HFA Preferred loans to borrowers with an Area Median Income (AMI) over 80 percent. The table below reflects key changes from the current program parameters. These changes are effective on September 5, 2019.
Current HFA Preferred
Income Levels: All
LLPA's: Risk Based LLPA's waived
MI Coverage: Charter Minimum e.g. 18% on 95.01-97 LTV
Future (Sept 5 onward) HFA Preferred
Income Levels: <= 80 AMI
LLPA's: Risk Based LLPA's waived
MI Coverage: Charter Minimum e.g. 18% on 95.01-97 LTV
Future (Sept 5 onward) HFA Preferred
Income Levels: > 80AMI
LLPA's: Risk Based LLPA's Apply
MI Coverage: Standard e.g. 35% on 95.01-97 LTV
Unfortunately, as a result of these changes MFA must temporally suspend accepting new conventional loan reservations for the FirstHome and NextHome programs on August 19, 2019. MFA does not currently offer Freddie Mac’s HFA Advantage product.
We recognize this impacts future homeowners in our state. Our commitment to providing homeownership opportunities remains unchanged. Your MFA team is pursuing mutually beneficial alternatives to provide conventional loan products for borrowers with incomes less than 80 percent as well as greater than 80 percent of AMI.
We continue to offer government loans. MFA will continue to originate and purchase FirstHome and NextHome government loans using the current MFA income limits . Details surrounding MFA’s revised conventional loan programs will be forthcoming. Thank you for participating in MFA’s programs.
