Changes to Conventionally Insured CHFA Loans

In response to the changing market and a lack of opportunities for 100% conventionally insured mortgages, CHFA is pleased to report that we will continue to purchase all 100% LTV loans, regardless of property location.  This is applicable to all MRB First Step, Taxable Home Opener loans and HomeAccess loans. This policy is effective for all reservations made on or after Tuesday, February 19, 2008. 

• All 97.01 - 100% LTV conventional loans require 35% mortgage insurance coverage, regardless of the AUS findings.  There is no change to maximum CLTVs.
• Please contact your preferred mortgage insurance company if you are unclear how to order the correct level of coverage, have questions about FICO requirements, declining markets, etc.  Also remember that CHFA has special mortgage insurance rates from these companies; some have additional discounts for borrowers who take face-to-face homebuyer education.
• Please be aware that although the AUS findings may indicate a 20% coverage level, CHFA is requiring 35% coverage.  This will result in a nominal payment increase to the borrower, but does need to be reflected in the housing payment and ratios.
• As mortgage insurance may not be ordered at the time of Compliance underwriting by CHFA, we will be unable to validate that the proper level of coverage is in place at closing.  Therefore it is the Participating Lender’s responsibility to ensure that the proper level of coverage is in place before the underwriting is complete and closing transpires.  Loans submitted to CHFA for purchase will be suspended and potentially denied if the proper level of coverage was not used for underwriting and the loan closed.  Lenders will be required to re-underwrite the loan with the new mortgage insurance payment, make the proper corrections and disclosures with the borrower as well as an additional review by CHFA. This most definitely will delay purchase of the loan.
• There will not be any change to the interest rate, nor are there any loan level price adjustments.
• CHFA intends to monitor its risk and will continue to purchase 100% conventionally insured mortgages for all markets as long as there is mortgage insurance for these loans. 
• Any subsequent changes will be communicated to Participating Lenders with as much advance notice as possible.