Jun 19, 2017 17-12
Targeted Area Census Tract reservations for the First Home Program
MFA is observing an increase in number of reservations located in a targeted area census tract. In an effort to maintain existing approval timeframes, we want to remind lenders to perform a targeted area census tract screening before reserving a loan.
We also request that all participating lenders and staff review the benefits and procedures associated with targeted area census tract loans as outlined in the Compliance Manual.
Targeted Area Census Tracts
A “qualified census tract” is a census tract in which 70 percent or more of the families have income that is 80 percent or less of the statewide median family income. The Internal Revenue Service (IRS) determines qualified census tracts.
Targeted area Census Tracts Do Not Apply to the Next Home Program
Borrowers who purchase a property located in a qualified census tract are:
- Eligible to receive the lowest interest rate offered by MFA within a 12 month period from the date of reservation (lender must contact MFA’s Homeownership Department);
- Eligible to receive higher income and acquisition cost limits (lender must contact MFA’s Homeownership Department);
- Not required to be a first-time homebuyer
Census Tract screenings at the time of reservation
It is imperative that lenders perform a census tract search on all applications prior to reservation. Identifying targeted area loans early in the review process not only reduces review timeframes but also can potentially eliminate the need for resubmitting a loan package. This program also allows borrowers and lenders to take advantage of the three benefits listed above.
If your screening confirms the property is located in a targeted area:
- Contact MFA prior to completing the reservation to obtain the correct interest rate on the First Home Program Reservation/Lock Commitment for the loan,
- Enter the census tract into the System and answer YES to the targeted area question on the Property Information screen at the time of reservation. This informs all parties that the borrower can take advantage of the three benefits listed above.
MFA has several tools and resources available on our website to assist in the identification of targeted area properties. For your convenience, we have added hyperlinks to those resources:
- • The Federal Financial Institutions Examination Council (FFIEC) Geocoding Map and the qualified census tracts (maps with the boundaries) are posted on MFA's website at http://www.housingnm.org/lenders_realtors/targeted-area-census-tracts.
- • The higher qualified targeted area income limits are posted on MFA’s website at http://www.housingnm.org/homebuyers/first-home.
Please reference MFA’s Compliance Manual for the guidelines. The Compliance Manual can be found on MFA’s website at http://www.housingnm.org/lenders_realtors/policies.
Thank you for participating in MFA’s program. Should you have any questions, please contact an MFA Homeownership Representative.