Factsheet

HOMESAVER REFINANCE MORTGAGE PROGRAM
Fact Sheet and Underwriting Guidelines

The Community Development Administration’s (CDA) Homesaver Refinance Mortgage Program (Homesaver) provides a refinancing option to Marylander’s who may be facing financial difficulties after purchasing a home with an adjustable rate mortgage. For the Homesaver Program, the minimum “representative” credit score is 580, the mortgage being refinanced may be delinquent, but not more than two months past due at the time of loan application, and the borrower(s) may be experiencing difficulties as a result of a mortgage default, low credit scores and/or a mortgage greater than the current value of their home. This program allows CDA to refinance “qualified subprime loans”, defined as an adjustable rate, single family mortgage loan made after December 31, 2001 and before January 1, 2008 that CDA determines would be reasonably likely to cause financial hardship to the borrower(s) if not refinanced. One of the following criteria must exist for consideration of a financial hardship for refinancing eligibility:

Borrower’s housing expense to income ratio based on the current payment or next anticipated rate adjustment will be greater than 31% of current income; or
Borrower’s housing expense to income ratio based on the lifetime capped interest rate (fully indexed) will be greater than 35% of current income; or
The lifetime capped interest rate exceeds the rate offered by CDA by more that 2%; or
An involuntary reduction of household income of at least 5% or increase in expenditures related to the death of the borrower or co-borrower, permanent disability or serious illness or injury

Overall Eligibility

All judgements/liens against the property must be included in the refinance
The property must be the borrower’s primary residence.
Mortgage(s) may not be more than two months past due at the time of application

Income Limits

Click here for: Income limits

Maximum Appraised Value

Click here for: Appraisal limits. Current appraised value of the home must not exceed the “Maximum Appraised Value” limits

Maximum Loan-to-Value (LTV) and Combined Loan-to-Value (CLTV)

LTV: 105% (MHF’s 2.75% upfront mortgage insurance premium may be financed in the mortgage)
CLTV: 110% (with all second mortgages, including forgivable grants)

Minimum “Representative” Credit Score for Borrower or Multiple Borrowers

580

Maximum Debt-to-Income (DTI) Ratio

Not to exceed 50%.

Co-Signers

Permitted, if acceptable to the mortgage insurer/guarantor

Mortgage Products Offered

30- and 40- year amortizing loans only

Points

May be rolled into the principal amount of the refinancing

Current Interest Rates
(subject to change)

	2 Points	0 Points
30-Year Amortizing	7.750% (8.077% APR)	8.000% (8.115% APR)
40-Year Amortizing	7.875% (8.165% APR)	8.125% (8.228% APR)

Downpayment/Closing Cost Assistance

Not available

Closing Costs

All closing costs, including pre-payment penalties and CDA’s points, may be rolled into the principal amount of the refinancing.

Mortgage Insurance

Compliance with CDA’s Mortgage Insurance Policy. Thirty-five percent coverage is required on conventional loans.

Ownership Interests in Certain Property

Prohibited; refer to Section 6.3 F of the Lender’s Manual for detail

Asset Test

Must be performed for borrowers whose liquid assets equal or exceed 20% of the current appraised value.

Processing

Loans are processed through a CDA-approved Lender. Manual underwriting is required.

Counseling

Required for all borrowers

Home Inspection

Not required.

Cash Out Option

Not available; any excess funds to be applied as a principal curtailment.

Future Subordinations

Not permitted

CDA Approved Lenders:

Click here for the current list of lenders approved to originate Homesaver Refinance Program Mortgages.

updated on 3/17/2009

Legal Notices and Privacy Policy