disclosures for chfa second mortgages
CHFA will now permit Participating Lenders to generate their own Loan Estimate and Closing Disclosure for CHFA Second Mortgage Loans. Participating Lenders may choose whether they use the forms made available by CHFA or those generated by their LOS.
If you use your own Loan Estimate and Closing Disclosure, please include the following:
CHFA relies on its Participating Lenders to complete the CHFA Second Mortgage Loan Estimate and Closing Disclosure in compliance with TRID requirements. Please refer to the TILA-RESPA Integrated Disclosure Rule and Official Interpretations, and consult with your compliance or legal departments for additional information and guidance in completing required disclosures.
Loan Amount section
List the CHFA Second Mortgage Loan amount.
- Loan Terms table
Under the subheading “Does the loan have these features,” disclose
YES for the Balloon Payment and also disclose the amount of the balloon payment and the due date of such payment.
Example: “You will have to pay $5700 at the end of year 30.”
- Projected Payments table
Under the Principal and Interest and Estimated Total Monthly Payment, disclose the scheduled balloon payment or final payment reflecting the principal amount of the loan as disclosed on the Note.
- Cash to Close tables
Per program requirements, the borrower may not receive cash back on the CHFA Second Mortgage Loan. Therefore, cash back should not be reflected on the Second Mortgage Loan Estimate and Closing Disclosure.
- Additional Information About This Loan table
- Assumptions (Loan Estimate and Closing Disclosure): Mark the box for “will
not allow assumption of this loan on the original terms.”
- Partial Payments (Loan Estimate and Closing Disclosure): Mark the box for ”may accept payments that are less than the full amount due (partial payments) and apply them to your loan.”
- Negative Amortization (Closing Disclosure): Mark the box for “do not have a negative amortization feature.”
If you would like to use CHFA Second Mortgage Loan disclosures, these forms will continue to be available on the CHFA website and in HomeConnectionsm.
Participating Lenders must use
CHFA Form 305, CHFA Second Mortgage Loan Promissory Note, and
CHFA Form 310, CHFA Second Mortgage Loan Deed of Trust, for all CHFA Second Mortgage Loans.