Colorado Housing and Finance Authority (CHFA) SmartStep Plus

Repayment shall be due and payable at the earliest of the following events:

• Transfer of title
• Sale of the property
• Payoff of the first loan
• Refinance of the first loan

With the new self-service features in HomeConnection, lenders can lock a loan for a past or current CHFA borrower. However, please keep in mind:

• A borrower may only have one active CHFA mortgage loan at a time.
• Any previous CHFA mortgage loans must be paid in full otherwise CHFA will not purchase the new loan.

See Today's Interest Rates. Borrower premium options are available for the CHFA FHA Streamline Refinance program.

No LLPAs.

2nd:

• Grant: Is a true grant forgiven at closing.
• CHFA Second Mortgage: 0%.

• CHFA uses borrower’s qualifying income, as calculated by lender.
• Any other individual who is expected to both live in the home and to be secondarily liable (e.g. co-signors, which CHFA currently does not allow) on the loan.

• 50% 620 -659 FICO
• 55% 660 and above

DACA status applicants are eligible to apply for FHA financing. The following FHA requirements include:

• The property will be the borrower’s principal residence.
• The borrower has a valid Social Security Number (SSN), except for those employed by the World Bank, a foreign embassy, or equivalent employer identified by HUD.
• The borrower is eligible to work in the U.S., as evidenced by the Employment Authorization Document issued by the USCIS; AND
• The borrower satisfies the same requirements, terms, and conditions as those for U.S. Citizens.

All other requirements per FHA’s 4000.1

Single family, one-unit condominium, PUDs, townhomes, manufactured homes. ADUs are acceptable  if:

• Zoned for Single Family occupancy.
• Cannot be zoned 2-4 units.
• Must meet investor guidelines and city/county zoning ordinances.
• May not be income-producing and must be for personal use only.

Loan limit: Lower of conforming limit of $766,550 or the limit shown on CHFA’s Program Matrix. Loan limit includes MI/MIP.

Sales price limit: No purchase price limits except for FirstStep, where lower of Program Matrix Loan Limit or FHA Mortgage Limits apply.

Impound accounts are required.

• CHFA will require proof of property tax payments prior to loan purchase.

• No additional fees may be charged to the 1st.
• MWF’s doc prep fee for DPA or Grant may not be charged.
• Home buying on-line counseling fee: $99 for first borrower, $49 for additional borrowers. Classroom course is no charge.
• $175 Form 1004D Appraisal Update and/or Completion Report if applicable.

• Closing fee charged by Title: TBD.
• Recording Fee: TBD.

CHFA Locks in “Reserved” status will automatically be canceled and a possible fee assessed unless one of the following actions has taken place prior to the Lock’s Expiration Date:

• If the Lock is no longer required, please cancel the Lock to avoid a cancellation fee of $100.
• If the Lock is still required and you will meet the expiration deadline, submit required documentation immediately.
• If additional time is needed, you may request a 30 day extension for 35% of the Original Principal Balance of the First Mortgage Loan. CHFA will allow a maximum of two 30-day extensions.

• The Originator or Processor will be responsible for issuing a Full Disclosure Package on the 1st, as the Originator or Processor does on a standard 1st mortgage file.
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• HPML is acceptable
• CHFA will purchase an FHA HPML assuming that:
  • The loan meets all other CHFA criteria; and
  • The loan complies in all respects to Reg Z requirements for HPML’s including underwriting and consumer protection requirements.

• DU App/Eligible, LPA Accept.
• No LPA with manufactured housing. DU only.

• FHA: Manual underwriting is allowed with a maximum DTI of 50%.
• Manual underwriting is not permitted with Manufactured Housing.

CHFA does not conduct a Compliance review on the Preferred and SmartStep Programs. Other CHFA programs require CHFA Compliance review.

CHFA accepts electronic signatures on CHFA Form 770, Condo Project Approval Certification, and CHFA Form 780, Affordable Housing Restrictions Approval Certification.

Identify CHFA as the secondary financing source in FHA Connection. Select ‘Government’ from the Source of Funds drop down memo in the Secondary Financing Section in FHA Connection. In addition, Lenders need to identify CHFA by the HUD Lender ID, which is ‘05366’, and not the EIN.

The Underwriter is to review and validate the Computation Worksheet completed by the Loan Processor. If the Underwriter makes any changes or corrections to the computation worksheet, he/she must re-run then DU.

CHFA will provide the DPA Award Letter after CHFA’s review and approval.

To obtain CHFA approval, Underwriter will provide the following to the branch. The branch will deliver the items to CHFA:

• If Conventional financing, CHFA needs: 1008, AUS findings, MI Approval.
• If FHA financing: 1008, Underwriting Transmittal.

Grant carries no lien position.

• 1st is to be registered in MERS with both ORG IDs: CHFA’s MERS Org ID number is 1008017. DMI (sub-servicer) Org ID is 1001484
• CHFA 2nds are not closed in MERS.
• The Transfer of Servicer (TOS)/Transfer of Beneficiary (TOB) must be completed within the MERS system using a transfer date within five (5) days of CHFA’s loan purchase.

A request for loan documents for the 2^nd TD MUST be sent to your Closer.

• CHFA requires a LE on the 2nd.
• The LE and CD are pulled from LQB.
• The 2nd Note and DOT, are to be completed in HomeConnection.
• The 1^st mortgage MERS # is not typed on the 2^nd deed of trust.

Effective Monday, February 6, 2023, CHFA will no longer require lenders to mail original copies of a CHFA Second Mortgage Deed of Trust or the title insurance policy on the CHFA First Mortgage Loan to CHFA.

Lenders are still required to record the original Second Mortgage Deed of Trust with the appropriate county.

Important Change: Recorded Deed of Trusts should be returned to the lender. Complete the Deed of Trust recording information by entering your company’s mailing information in the upper left corner.

After recording, the lender will upload the original Second Mortgage Deed of Trust through HomeConnection to create an electronic version. Lenders may retain the original at their discretion. Again, do not mail the original Second Mortgage Deed of Trust to CHFA.

Please upload documents to the appropriate line item in HomeConnection:

• CHFA Second Mortgage Deed of Trust = Security Instrument Recorded
• Title Policy for CHFA First Mortgage Loan = Title Policy Insurance

This new policy provides efficiencies and gets us a step closer to a fully electronic transaction.

CHFA must receive all final documents within 120 calendar days after CHFA purchase, otherwise a Final Document Late Fee is assessed. The Final Document Late Fee will increase from $150 to $250 and be assessed at day 121. Thereafter, a fee of $150 will be assessed every 31 days until the loan is in Post-Closing Complete status.