LoanCenter 203(k) Streamline Processing Flow Sheet

FHA Connection

Pull FHA Case Number. Appraiser License:______

  • Construction Code is: Substantial Rehabilitation
  • For Single Family: ADP 702- For Condo:ADP 804
  • Housing Program:Improvements (203K)
  • For 203k Consultant ID: input 203ks
  • Case Number with borrowers passed
  • Appraisal Logging
  • CAIVRS: B:_____ CO-B:_____
  • LDP & GSA
  • All Contractor’s on the Loan?

Verification from FHA website that Condo/townhome is approved.

PRMI FHA Overlay Credit and DTI Requirements for 203k loans

  • 640-659 – DTI above 45% - must have 2 compensating factors
  • 660-679 – DTI above 45% - must have 1 compensating factor, but Underwriter has discretion to ask for 2
  • 50.01 – 55% DTI must have 2 compensating factors (regardless of credit score)
  • Maximum DTI 55%

Compensating Factors defined as:

Reserves – 2 months PITI

LTV ≤ 90%

Residual Income >= 1.5 months PITIA

Payment shock of less than 25%, payment must be verified

Additional income not being used to qualify

Approve/Eligible required- No Manual’s allowed on program (I believe manual downgrades are acceptable now)

Refer to the 203(k) Streamline Calculation sheet at the back of this form for details on

how to input.

Verify Inspection fees with to calculate 203ks Worksheet:

  • Title______
  • Appraisal______

Escrow Requirements

  • Only upload the preliminary approved package from RR to Underwriting. This should be uploaded with the appraisal for the UW to review both at once.
  • Make sure the funding re-cap and HUD has the disbursements payable to the Contractor and the buyer. No fees for IPA invoice on HUD.
  • Make sure that we can legibly see all the numbers and signatures.
  • The names on the W-9 must match the Homeowner contactor agreement and the name on the HUD for disbursements
  • Does the cost consultant state that the home is uninhabitable and that we can escrow payments.only allowed on FULLs
  • Does the Cost Consultant verify that the utilities are on and in working order? Appraisal must state this for the congruency reserves as not always the IPA is in the file.

Appraisal Requirements

  • On a 203k of any type we cannot order the appraisal unless we have the Appraisal Order Package from RR. We only need to put the cost consultants write up and all bids.
  • On a 203k loan the property must have been completed for >1 year
  • If property is a HUD-repo, then verify it is eligible for the 203(k) Streamline financing.
  • Remaining economic life
  • Appraisers license
  • Homeowners Association? Is monthly fee in Encompass
  • Are the correct 203(k) Streamlines fees there and correct?

203k Inspection Fee

Title Update Fee

These fees cannot be paid by the seller and must be paid by borrower as part of cash to close. Are APR fees

Check TIL, make sure all boxes are filled out. (Make sure the FHA management screen has purpose of loan has both 203k and purchase/refinance box marked otherwise your TIL will be off)

Submission to Underwriting:

Double check everything

  • Rate on Lock
  • Assets on 1003 match VOD or Bank Statements
  • Income amount is correct
  • FHA case number passed
  • Disclosures are in compliance and all appropriate places are filled out

Run Final DO

Print final 1003

Print final 203(k)worksheet/MCAW

Prepare Submission Form (from Branch)

Cover letter to U/W (from Branch)

Upload to Document Trac

Underwriting Approval:

Go over with Branch

203K Streamline Purchase Input

Completing the 203k Max Loan Worksheet and associated forms

Borrower

  • Always start out entering known data ***key is not to force numbers!
  • Enter actual sale sales price
  • The down payment will show as a negative number and that is ok.

Go to 203k Max Loan Worksheet:

Type= owner occupied and purchase, check “X” for 203k Streamline or leave blank for a Full 203k

Section “A”

A1- Enter Contract Sales Price (mark existing debt for refinances. Amount will be entered into the FHA management section to populate here)

A2- As Is Value- Assume that it is same as Sales Price (refinances must have an as is value stated somewhere in the appraisal and that is used here)

A3- Estimate “After Improved” value…use same as loan amount for now…will be provided by Appraiser in report…

A4- Calculates automatically

A5- Borrower paid closing costs- You will come back and enter the amount after completing GFE. (make sure this is accurate for refinances as it is used in the calculation for loan amount)

Section “B”

B1- Actual or estimate amount of repairs

B2-Contingency- 15% is required if the property is vacant or if unable to verify utilities are on.

B3- Inspection Fees- required on all loans.

  • 1 per contractor at least…estimate $100.00 per inspection recommended. This is usually a final inspection only. Renovation ready always has 2 at $100/each and that is what is billed to PRMI on all streamlines
  • Title Update figure 1 only $75- $100.00. This ensures no liens from contractors on property. Renovation ready always has 2 for $50/each and is billed to PRMI this way
  • Check on the cost consultant write up or with the branch. Fees may vary state to state. (only for FULLs)

B4 Mortgage Payments Escrowed- only on the full and has to be deemed uninhabitable by the cost consultant and amount escrowed should not exceed the Cost consultants recommendation (must match exact payment)

B6 Architectural and Engineering Fee- typically on a Full 203k

B7 Consultant Fees- Only on a full

B8- Permits- these will be paid out at closing

B9- Other fees- rate? What do you mean rate???

B10 This is the total amount of the funds escrowed

B11- Rarely used by PRMI 203k group- is built into the PRMI rate product

B12- Rarely used by PRMI 203k group- must be bonified discount points

B13- Subtotal of funds disbursed at closing and underwriting closing conditions should match this.

B14- Total Rehab Cost cannot exceed $35,000 on a streamline. Must manually put on 1003 in details of transaction under alterations

Section “C”

C1- Lessor of Sales price or “As IS” value- check to make sure no as is value is listed on the appraisal.

C2 This line should equal B14

C3 min investment must go off the total value – change and all

NOTE: Manually check to make sure that your amount is the sales price plus rehab, unless the “AS-IS” Value is lower and then alert the branch that the borrower has to bring in additional funds. This could be the 110% value as well A4

NOTE: Condo’s are maxed at 100% of the value.

C4 – new mortgage amount to be copied to base loan amount (noticing this is not always copying over correctly so please double check)

Section “D” is for refinance and is not appropriate for purchase transaction

GOOD FAITH ESTIMATE

Origination Charge

Box 3

  • 203k Inspection Fee and amount,
  • 203k Title Update Fee and amount
  • Permits

Box 6

  • Cost Consultant Fee (only FULL)
  • Architectural/Engineer Fee (FULL)

None of the fees from the 203K loan may be paid by Seller and all are APR related except the permits

Select seller paid costs as appropriate and keep in mind the 6% maximum. Allocate fees to make sure APR is calculating correctly.

Details of Transaction

Purchase price should match sales contract

Alterations should match line B14 (underwriting will run out of datatrac with lines A+B)

203k credit should be for all fees on itemized fee worksheet for GFE purposes