Virginia Housing continues to monitor market conditions resulting from the COVID-19 pandemic and are making the following change to the VHDA Fannie Mae Reduced MI Program:
Effective with new loan applications dated on and after April 10, 2020, Fannie Mae’s Loan Level Price Adjustments (LLPAs) will apply when qualifying income exceeds 80% of Fannie Mae’s Published AMI Limit until further notice. We understand the challenges everyone is facing and appreciate your willingness to adjust to this change.
Our rate sheet received daily is base pricing. If LLPAs apply, base pricing will be adjusted with the applicable LLPAs. A link to the LLPA matrices will be provided on the rate sheet.
Below is a partial list (not all-inclusive) of loan level criteria impacting pricing:
- Credit Score and Loan-to-Value (LTV) Ratio;
- Mortgage Insurance – Standard Coverage versus Reduced Coverage; and
- Property Type of Condominium (not detached condominium).
Note: Subordinate Financing LLPA(s) will not apply as Virginia Housing only allows Fannie Mae Eligible Community Seconds.
Mortgage Insurance Coverage
Charter MI coverage (Reduced MI percentage): LLPA(s) ONLY apply when qualifying income exceeds 80% of Fannie Mae’s AMI Limit. Note: The LLPA for Charter MI is driven by Credit Score and Loan-to-Value (LTV) ratio.
Standard MI coverage (higher MI percentage): LLPA(s) DO NOT apply and can be used in lieu of Charter MI coverage to avoid LLPA(s).
Fannie Mae’s Published AMI (Area Median Income) Limits
Fannie Mae uses qualifying income to determine if income exceeds 80% of their published AMI Limits. Keep in mind Virginia Housing’s Household Income limits still apply. Virginia Housing published a Household Income Matrix that is a useful tool, although information regarding the 80% AMI and LLPAs is not included at this time.
Virginia Housing’s LOS Mortgage Cadence
- Mortgage Insurance:
A dropdown for MI Coverage Type has been added to the Mortgage Insurance screen. This field must be completed accurately to lock a loan. The Percent of Coverage continues to be a required field. - Application Date:
Caution! Application Date field in Mortgage Cadence is locked upon issuance of a loan lock confirmation. The Originating Lender’s loan application date has been and continues to be required to lock a loan in Mortgage Cadence. Once the application date is entered into Mortgage Cadence, it cannot be updated/changed. If the application date was entered incorrectly, the Originating Lender must upload a copy of the Loan Application (URLA) confirming the correct application date and email LockDesk@VirginiaHousing.com requesting an update to this field.
- Before Closing:
If a locked loan is updated that affects the pricing (causing an addition or removal of LLPAs), after clicking the Save button a message will appear letting the Originating Lender know a new Lock Information Form has been generated with the updated pricing. This can occur up until the closed loan package is received by Virginia Housing. - After Closing/Purchase Review:
If the lender has incorrect information within Mortgage Cadence that affects the pricing of the loan and it is corrected during purchase review, Virginia Housing will contact the Originating Lender notifying them of the price change prior to loan purchase.
Changes to Loans affecting LLPAs:
Virginia Housing’s Program Guidelines and other reference material available on VirginiaHousing.com will not be updated at this time, but a message will display on the top notifying the Originating Lender to refer to this announcement. Virginia Housing will communicate any additional changes in the future.
Virginia Housing’s Fannie Mae No MI program is not impacted at this time.
We continue to offer this program. Any potential changes will be communicated.