chfa program changes
Effective today, Monday, November 5, 2018, CHFA implemented the below changes
for new reservations:
Please see the
eNews dated October 30, 2018 for details.
- Statewide Income Limit (excluding CHFA FirstStepsm, CHFA Very Low Income Program (VLIP) and CHFA HomeAccesssm programs)
- Elimination of CHFA HomeOpenersm programs
- Elimination of Debt-to-income (DTI) Overlays
- Manual Underwriting Available on all Programs
- Additional Property allowed with Freddie Mac loans
- Elimination of Borrower Premium on CHFA Refinances (excluding CHFA FHA Streamline
- New Lender Premium on CHFA FirstStep Loans with No Down Payment Assistance (DPA)
As a result of these changes, CHFA has received the following questions:
Why has CHFA established a statewide income limit?
A statewide income limit provides CHFA and its participating lenders greater operational efficiencies and advances CHFA’s mission on affordable housing investment in the following ways:
The statewide income limit serves as the maximum income allowed for participation in CHFA’s programs. Borrowers with qualifying incomes at or below CHFA’s statewide maximum income limit are deemed to be within CHFA’s income limits.
- The statewide income limit takes into consideration Colorado’s varied housing needs and accommodates high-cost areas while still addressing the needs of lower-income borrowers.
- By eliminating income requirements based on county or household size, CHFA’s participating lenders will have a consistent set of criteria to help their borrowers better understand and utilize CHFA.
- This change will help CHFA complete loan reviews more quickly, so borrowers using our products are able to compete more successfully in today’s dynamic housing market.
To reiterate, this statewide income limit applies regardless of county, targeted or non-targeted area, or household size. Whether an individual borrower or a family of four or more, borrower(s) income cannot exceed $115,600 based upon credit qualifying income anywhere in Colorado
(excludes CHFA FirstStepsm, CHFA VLIP and CHFA HomeAccesssm programs.
The maximum loan limit under CHFA’s homeownership programs for any mortgage loan remains the same - the lower of $453,100 or the loan limit required by FHA, VA, USDA-RD, Fannie Mae or Freddie Mac, as applicable.
Why are the CHFA HomeOpenersm programs no longer available?
The CHFA HomeOpener programs served borrowers with slightly higher incomes than allowed under the CHFA SmartStepsm programs. The statewide income limit provides a higher income limit in most counties, making these programs unnecessary.
For example, prior to the change, a family of three purchasing in El Paso County could not exceed an income of $94,900 to qualify for CHFA SmartStep. They could not exceed an income of $107,300 to qualify for CHFA HomeOpener. The new statewide income of $115,600 exceeds the CHFA HomeOpener income limit, making CHFA HomeOpener unnecessary.
Why do CHFA FirstStepsm, CHFA VLIP and CHFA HomeAccesssm income limits remain the same?
These programs are, or have the potential to be, funded with tax-exempt financing requiring CHFA to utilize specific income limits based upon IRS requirements, including considerations as to county, targeted or non-targeted area and/or household size.
How does this change affect existing reservations?
Participating lenders may cancel a loan and reserve a new loan for the same borrower and property for the sole purpose of utilizing the new income limit. Please note the new reservation will be subject to worst case pricing or the Original Expiration Date. Please contact
CHFALockDesk@chfainfo.com for questions.
Does CHFA still require a minimum credit score?
Yes. If a borrower has credit scores, the following mid score must be met:
A mid credit score of 620 is required to be eligible for CHFA financing, excluding CHFA Advantagesm, which requires a mid credit score of 680.
If no scores exist, follow the applicable manual underwriting guidelines for the loan type.
What is the DTI limit on manually underwritten loans?
CHFA has removed its DTI overlays, regardless of how a loan is underwritten. Should a loan not receive an AUS approval, or if the lender is required to downgrade a loan to a manual underwrite, lenders may choose to manually underwrite loans in accordance with FHA, USDA-RD, VA, Fannie Mae, or Freddie Mac manual underwriting guidelines, as applicable.
Have a question not listed? Please
send us an email and we’ll add common questions to the
webpage dedicated to informing lenders about these changes.