Attention all Lenders—Change in Suspension Penalty Fee Structure

CHFA strives to be relevant in its programs and reasonable in its policies. We've heard the concern of many of our participating lenders and are trying to balance those concerns with the need for timely delivery of accurate loans.

Therefore CHFA has changed its suspension policy to allow 10 calendar days for participating lenders to clear all funding suspense items before CHFA assesses the suspension penalty of 0.25% of the Original Principal Balance (OPB). If a suspended loan is not cleared and approved for purchase by close of business (5:00pm MST) 10 days after the date of the original suspense letter, a suspension penalty of 0.25% of the OPB will be assessed and deducted from the purchase advice upon funding. The suspension penalty will only be assessed one time on each loan not approved for purchase.

This policy is effective for all loans reviewed for purchase beginning today, April 23, 2009, and thereafter. This policy is not retroactive. However, for all loans currently suspended for purchase, CHFA will waive the suspension penalty if your loan can be approved for purchase by 5:00pm MST Thursday, April 30. There will be no exceptions to this deadline. CHFA is in the process of updating the Seller's Guide and modifying its software to reflect these changes, so the standard suspense letters may be different for the next few weeks. If you have any questions about the suspend expiration date or this policy in general, please call the Home Finance Division.

This change in policy does not affect any other fees associated with CHFA's Loan Delivery Period Policy nor CHFA's Funding Period Policy.

A significant number of loans delivered for funding are being suspended, most due to errors on the Note and Deed of Trust for both the First Mortgage Loan and the CHFA Second Mortgage Loan. To minimize the likelihood of being assessed a fee or penalty, please carefully review documents prior to closing. Please take advantage of the CHFA Operations Training webinars, which are offered periodically. The schedule can be found on our website here. Additionally, please refer to the FHA Document Checklist, CHFA Form 735, for a detailed description of how CHFA reviews the critical documents required for loan purchase.


Please contact the Home Finance division with any questions.

303.297.7376 or 1.888.320.3688 Denver
970.241.2341 or 1.800.877.8450 Western Slope

Thank you,
CHFA Home Finance