welcome to the south carolina state housing finance and

Welcome to the South Carolina State Housing Finance and

Development Authority Lender Forum

© 2021 Freddie Mac. All Rights Reserved. Distribution outside your organization without

express permission from Freddie Mac is prohibited.

Financing Housing. Building SC.

Revised 2-25-14

Palmetto Home Advantage

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Speaker Introduction

South Carolina State Housing Finance

Development Authority

Claude Spurlock

Email: [email protected]

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Palmetto Home AdvantageCompetitive pricing. Flexible Options. Conventional Ease.

“Palmetto Home Advantage” is

designed to serve both first-time

and move-up borrowers.

The programs conventional option

offers mortgage insurance at reduced

rates based on the

Freddie Mac HFA Advantage.

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Program Features

• No First-time Homebuyer requirement –move up borrowers are eligible

• Conventional income limit is <= 80% AMI based on the property address (use qualifying income only)

• Maximum loan to value 97%

• Maximum debt-to-income ratio 50%

• Minimum FICO credit score 640

• Mortgage Insurance – 18% coverage on a 97% LTV loan

• New and existing homes are eligible

• 4% and 5% Forgivable Down Payment Assistance (based on loan amount)

• Rate lock to purchase = 60 days

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• 1 Unit properties (Single Family, PUD and Bank

Approved Condominiums)

• No manufactured housing

• No leasehold properties

• No manually underwritten loans

• No escrow holdbacks for repairs/completion

• No High Cost, or Homeownership Equity Protection Act

(HOEPA) loans

Palmetto Home AdvantageEligibility Criteria

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• Request for Eligibility Determination Form “PA-01”

• Notice to Borrower Form “PA-02” (Only required if

borrower is receiving down payment assistance)

• 1008 – Uniform Underwriting Transmittal Summary

• 1003 – Uniform Residential Loan Application

• LPA Findings

• MI Certificate

• Homebuyer Education Certification (at least one

borrower must complete)

Palmetto Home AdvantageCertificate of Eligibility

The following documents must be submitted to SC Housing prior to closing for compliance/eligibility review.

If acceptable, SC Housing will issue a Certificate of Eligibility:

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Palmetto Home AdvantageRegistration and Rate Lock

• Loans must be closed, delivered and purchased by

Lakeview Loan Servicing within 60 days of the initial

reservation/rate lock

• Loans that are not delivered by the delivery/expiration

date are subject to cancellation

• Loans aged more than 45 days from the note date and

receipt of the credit and closing file in fundable condition

will not be purchased by Lakeview Loan Servicing

• Do not lock the interest rate at the time of application

• Rate locks may only be extended once prior to

expiration

• Loans may be reserved/rate locked Monday – Friday

between 10:00 AM and 6:00 PM

• Rates are subject to change without notice

Thank You



Leading the Future of Home

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James manages relationships with

lenders, housing finance agencies,

housing intermediaries and other key

stakeholders on behalf of Freddie Mac,

to educate and better serve, well

deserving families.

Affordable Lending Manager

James Hall


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Making Home Possible for 50 Years

• Freddie Mac was chartered by Congress in 1970 and operates in the Secondary Mortgage Market

• Mission to promote liquidity, stability, and affordability in housing – nationwide, in all economic conditions

• Community mission

– Stabilize communities

– Prevent foreclosures

– Expand credit responsibly

– Educate future homebuyers and counsel homeowners

– Support affordable rental housing

• Three main business lines

– Single-Family (1- to 4-unit for-sale properties)

– Multifamily (5+-unit for-rent properties)

– Capital Markets



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Leading the Future of Home

Insights

Insights through research studies, thought leadership,

speaking opportunities, expert contributions and data

to position our clients and partners for success.

Education

Events, training and financial literacy curricula to help

better prepare borrowers for homeownership and to

promote responsible and sustainable behaviors.

Mortgage Products

Mortgage offerings that meet borrower needs and

opportunities, now and in the future, to include: low

down payment options, energy-efficient properties,

factory-built housing and renovation mortgages.

Business Solutions

Services, resources, tools and technologies that enable

ecosystem professionals to serve as trusted advisors

and to select the best possible option for their borrower.



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The Affordable Ecosystem

It takes many hands to

make home possible.

Partnership and

collaboration across the

affordable ecosystem are

critical to drive business

opportunities and make the

dream of home a reality for

families.

Mortgage & banking

executives

Loan officers

Real estateprofessionals

Housingcounselors

Housing finance

agencies

Non-profitorganizations

Builders &developers

Appraisers

Localgovernments

Stategovernments



Market Analysis

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June 2018-June 2020 First-Time Homebuyer Demographics• 86% of Younger Millennials and 52% of Older Millennials were first-time home

buyers, more than other age groups.

• At 64%, the primary reason for purchasing a home was the desire to own a home of their own

• 88% of FTHB were 29 years and younger

• First-time buyers who financed their home typically financed 93 percent of their home

• Down payment sources – 78% savings; 24% gifts from friends or relatives

• 25% used FHA loans

• FTHBs plan to stay in homes for 10 years

First-Time Homebuyers

Source: National Association of Realtors 2020 Profile of Home Buyers and Sellers

9%

9%

18%

64%

FTHB

Unmarried Couple

Single Male

Single Female

Married Couple

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All In for First-Time Homebuyers

86% of Younger Millennials

were FTHB 86%

As housing demand moves from rent to own, first-time homebuyers

will continue to maintain an outsized role in the housing market

of borrowers are first-time

31% First-time homebuyer percentage has remained the

same from previous year Fifty-two percent of buyers

30 to 39 years and 88 percent of buyers 29 years

and younger were first-time home buyers.

Source: National Association of REALTORS®, Home Buyers and Sellers Generational Trends Report 2020

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The U.S. is Becoming More Diverse

Source: U.S. Census Bureau, 2019

Distribution of Race and Hispanic

Ethnicity by Age Groups



Identifying Buyer SolutionsHFA

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Launched HFA Advantage® mortgage, our enhanced product for housing finance agencies, which includes:

• 97% LTV, 105% TLTV (1-unit)

• HFA income limits in lieu of Home Possible® Area Median Income limits

• HFA determines homebuyer education requirements

• Credit enhancement options including Charter-level mortgage insurance coverage

• Engage with master servicers who have relationships with smaller state and local HFAs

• Contact your state or local HFA for program details

Working with HFAs

Freddie Mac provides HFAs with a source of liquidity and supports their service to low- and moderate-income borrowers



Your Next Steps to help make home possible for your client:

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HFAs Role and Impact

• For over 50 years, housing finance agencies

(HFAs) have played a key role in the nation’s

affordable housing ecosystem

• HFAs serve low- and middle-income

households, first time homebuyers, and other

specialty segments

• HFAs have delivered more than $450 billion in

financing for the purchase, development, and

rehabilitation of more than 7 million affordable

homes and rental apartments

Source: NCSHA- State Housing Finance Agencies: The

Center of the Affordable Housing System

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HFAs: An Opportunity for You

• Ideal for borrowers with limited funds for down payment and closing costs and those needing

extra flexibilities on credit and income sources

• Reach more potential homeowners through HFA programs that:

– Provide low down payment options

– Offer preferential pricing

• Majority of HFAs provide “true grant” funds or affordable secondary financing as part of their down

payment assistance programs

• An alternative to FHA financing



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HFAs Reach Undeserved Borrowers and Markets



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HFAs Often Lead in Serving Borrowers of Color



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HFA Advantage® Mortgage

High loan- to-value (LTV)

conventional offering

that’s an excellent

alternative to FHA

lending requirements and

mortgage premiums.

Adopts the requirements

of Home Possible® but

with added flexibilities for

HFAs.

One-unit primary residence

Purchase and no cash-out refinancing

Maximum 97% LTV and 105% total loan-to-value (TLTV ratios)

Loan Product Advisor® manual UW or alternative UW process subject to prior approval

No reserves required

Income limits established by the HFA

Available to first-time homebuyers, repeat buyers, & borrowers seeking no cash-out refinances

Flexible funding options for down payment and closing costs

Flexible MI options available



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HFA Advantage® Mortgage –Mortgage Insurance

LTV RatioHFA Advantage Mortgage

Insurance Coverage (Fixed rate only)

Standard Mortgage

Insurance Coverage(Fixed rate, term >20 years)

Greater than 80% up to 85% 6% 12%






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Why Choose HFA Advantage ® Mortgageover FHA?

HFA Advantage® FHA

Mortgage Insurance (MI)

ORMI ends when LTV < 80%

Conventional MI: monthly premium

MI only required if the LTV is 80% or higher

No upfront MIP

MI stays for the life of the loan

FHA: Upfront AND monthly premiums

MI required regardless of the LTV

Upfront MIP added to principal AND amortized

OR

OR

OR

With more funds applied toward the principal up front, an HFA

Advantage mortgage with PMI lets the borrower build equity faster

WHAT THIS

MEANS:



Supporting Your Business with Freddie Mac Resources

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Receive the Latest News and Updates

Sign Up For News and Updates: https://sf.freddiemac.com/about/single-family/subscription-center



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CreditSmart ® Financial Education

The CreditSmart® curriculum offers financial

education modules to meet the diverse

homeownership needs of consumers. It

features topics such as credit, money

management, homeownership, foreclosure

avoidance and more.

• Free, online program on a flexible, interactive platform

designed to be accessible from multiple access points

• Multi-lingual options available

• Also offered through webinars and in-person

workshops (where available)

Prepare future

borrowers for

sustainable

homeownership

Use CreditSmart

workshops to gain

entre to community

partners and future

homebuyers

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CreditSmart® Homebuyer U

• Available as a self-paced, online program that fulfills first-time homebuyer education requirements for obtaining a Home Possible® or HomeOneSM mortgage

• Six modules, each focused on a learning principle including credit, money management, and how to sustain and preserve your home purchase investment

• Interactive presentation of material including knowledge checks, ability to start/stop, videos, and voiceovers to provide a user-friendly experience

• Offered in English and Spanish

VISIT: Homebuyer U : Freddie Mac CreditSmart

Homebuyer U is a part of the CreditSmart ® suite that focuses on homebuyer education:

https://creditsmart.freddiemac.com/paths/homebuyer-u/

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Translated Mortgage and Homebuyer Education Documents

FHFA, Freddie Mac and Fannie Mae created an online,

industry-standard clearinghouse of translated

mortgage and homebuyer education documents for

housing professionals and their clients.

VISIT: https://www.fhfa.gov/mortgagetranslations

• Single repository of in-language tools to empower growing

limited English proficiency (LEP) borrower populations

• Addresses language barriers with clients to help navigate

all aspects of the mortgage life cycle

• Offers 500+ documents – English and translated Spanish

and traditional Chinese

• Features Spanish and traditional Chinese glossaries of

mortgage-related terms

• Vietnamese, Korean and Tagalog languages planned for

future enhancements



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Borrower Segment eBooks - All For Home Insights

eBooks feature Freddie Mac data and insights to showcase needs, opportunities and solutions for critical borrower populations

• Hispanic Americans: A Driving Force in the Housing Market

– Read the eBook here: https://sf.freddiemac.com/content/_assets/resources/pdf/other/hispanic_borrower_ebook.pdf

• Key Opportunities for Building the Future of Home –Unlocking Solutions to Affordable Homeownership

– Read the eBook here: https://sf.freddiemac.com/resources/affordability-thought-leadership

VISIT: https://sf.freddiemac.com/working-with-us/affordable-lending/news-insights

Don’t miss the Freddie Mac eBook series on important borrower segments



https://sf.freddiemac.com/content/_assets/resources/pdf/other/hispanic_borrower_ebook.pdf

https://sf.freddiemac.com/resources/affordability-thought-leadership

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• Freddie Mac recently announced the Fall 2019 launch of the Freddie

Mac Single-Family Home Starts Here podcast series.

• The podcast provides an opportunity to spotlight industry topics,

opportunities for the growth and perspectives of Freddie Mac thought

leaders and housing ecosystem experts and influencers.

• Each podcast is 10 - 15 minutes in length and provides a front row

seat to the conversations that are shaping the future of home.

• Listen and subscribe on Apple iTunes, Google Play or anywhere you

prefer to listen to your podcasts.

• You may also visit https://sf.freddiemac.com/news-insights/home-

starts-here-podcast/overview to find an overview of podcast episodes.

– All podcast episodes are currently audio-only

– Transcripts of sessions coming soon

Home Starts Here Podcast Series



https://sf.freddiemac.com/news-insights/home-starts-here-podcast/overview

https://podcasts.apple.com/us/podcast/single-family-freddie-mac-home-starts-here/id1480276106?ign-mpt=uo%3D4

https://podcasts.google.com/?feed=aHR0cHM6Ly9mZWVkcy5idXp6c3Byb3V0LmNvbS81ODI4NzcucnNz

https://sf.freddiemac.com/news-insights/home-starts-here-podcast/overview

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Freddie Mac – HFA Resource Center

Housing Finance Agency Resource Center

• A digital information hub designed for HFA staff and their

business partners

• Compiles relevant Freddie Mac research, insights, and

thought leadership in one convenient place.

On the HFA Resource Center, you can now:

– Register for new HFA related events

– Download presentations from past events

– Read and share relevant insights and articles

– Listen to our Home Starts Here podcast episodes

VISIT:https://sf.freddiemac.com/working-with-us/housing-finance-agencies/hfa-resource-center



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• YOU are the critical link to helping well

qualified homebuyers achieve their

homeownership objectives:

– Provide access to credit; originate loans to the full

extent of Freddie Mac’s credit box

– Utilize your mortgage finance expertise

– Explain the process and dispel the 20% down

payment myth

– Identify and match available financial resources in

your area (government, nonprofit, private

sources) with a sustainable mortgage solution

– Take advantage of Freddie Mac training and

resources for yourself and your borrower

• Homebuyer dream realized—and more

business for you—if you know your market

and where to find those affordability gap

solutions

YOU Are the Critical Link

Freddie Mac is here to help!



Freddie Mac Loan Product AdvisorSM

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James is responsible for managing the

Affordable team within Lender strategy

and Integration as well as providing

technical and operational strategy and

support to the East Region Housing

Finance Agencies.

Lender Strategy & Integration Manager

James Clement


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Loan Product Advisor

Select HFA Advantage in the “Offering Identifier” field within the “Mortgage Type and Loan Terms” section of Loan Product Advisor.

If using a Loan Origination Software (LOS) system, please contact them to verify what field and value to enter. Some LOS systems may have you enter “251”.

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Loan Product Advisor Feedback Certificate

Verify the loan was

submitted correctly by

ensuring the value entered

in the “Offering Identifier”

field is showing HFA

Advantage. This is found

in the “Mortgage

Information” section of the

Loan Product Advisor

feedback.

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Down Payment Assistance:Non-Amortizing Subordinate Financing

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Down Payment Assistance:Amortizing Subordinate Financing

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Mortgage Details

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Purchase eligibility and AUS Risk Class

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Purchase Restriction Messaging

• Purchase eligibility must be

“Eligible”.

• Ineligible reason messages

will be clearly displayed on

the feedback certificate

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Caution Related Feedback Messaging

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Qualifying Ratios

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Loan Product Advisor- Mortgage Details

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Loan Product Advisor Feedback Certificate

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Message Summary

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MI Specific Messaging

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Data Quality Messaging

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800-FREDDIE

Specialists trained in HFA Advantage

Review individual loan scenarios

Assist with LPA Feedback

Thank You

