adjustable rate and fixed rate option, with reduced Principal limits of approximately 15% compared to the current Standard program.
Initial Draws and MIP:In addition to the reduced Principal Limits, the first year draws will be restricted as follows:
a)Borrowers could access up to 60% of the available principal limit in the first year, and have an Initial MIP charge of just .50%
b)They could also access an additional 10% of the available principal limit for a total of 70%, but anytime they take more than 60% their Initial MIP jumps to 2.5%.
c)If they have mandatory obligations, including closing costs, payoffs and liens, they could access up
to 100% of the available principal limit if needed, but the Initial MIP would be 2.5%.
Subsequent Draws:For Fixed Rate loans there will be no subsequent draws available. What is taken at the close will be all that can be drawn. For adjustable loans, the balance after the initial draw, not exceeding 100% of the available principal limit, can be accessed after 12 months.
Counseling:This needs to be done prior to requesting a case number.
Financial Assessment:of the borrowers will start this coming January. Up to now lenders only looked to equity now borrower's income and credit will be reviewed for borrower's ability to pay the property tax bill, property insurance and any other debt attached to the property. If they do not have the ability they will be required to maintain an impound account. More details on this at later.