According to consumer research conducted by Fannie Mae, the primary barrier to homeownership for first-time home buyers is saving money for down payments and closing costs. In support of ongoing efforts to expand access to credit and support sustainable homeownership, Fannie Mae is announcing an increase in the maximum Loan To Value (LTV), Combined Loan To Value (CLTV) and High Combined Loan To Value (HCLTV) ratios for certain principal residence transactions.

Fannie Mae will offer 97 percent LTV financing to help home buyers who would otherwise qualify for a mortgage but may not have the resources for a larger down payment. The 97 percent LTV ratio updates will be available for new case files underwritten through Desktop Underwriter (DU) Version 9.2, which will be implemented the weekend of Saturday, December 13, 2014. Loan case files created in DU Version 9.1 and resubmitted after the weekend of December 13 will continue to be underwritten through DU Version 9.1. Click on Selling Guide Announcement SEL-2014-15 to see more specifics on this announcement.

In looking at the Kentucky Housing Corporation (KHC) 97 percent Conventional Programs versus Fannie Mae's new 97 percent My Community Mortgage and Standard 97 percent Non-My Community Mortgage Programs; KHC is still the best program for your borrowers!

With KHC's Conventional Programs, the home buyer does not need to be a first-time home buyer, unlike Fannie Mae's 97 percent Programs. KHC does not have any add-ons to the interest rate; however, Fannie Mae does have Loan-level Price Adjustments (LLPA). Reserves are not required with KHC, but may be required with Fannie Mae based on DU findings. Last but not least, KHC has both the Regular and Affordable DAP available for your borrower. These are a few of the benefits to the borrower utilizing KHC's Conventional Programs.

Be sure when utilizing KHC's Conventional Programs, you continue to select the Preferred or Preferred Risk Sharing Program when running through DU.

Online lender reports are being developed this month. We appreciate everyone managing their pipeline as the loans move from reservation status to post closing. The original reports in the old system are still available for loans in this system. But for all new reservations after September 29, 2014, the new system's reports are still under construction.  

For a copy of your company pipeline report, please contact Allison Craigmyle or Misty Tackett at 800-633-8896 or 502-564-7630, extensions 254 or 319, respectively; TTY 711; or email acraigmyle@kyhousing.org or mtackett@kyhousing.org, respectively.  

Stay tuned for updates as KHC is moving forward with our paperless vendor for release in early 2015!

As a friendly reminder, please see KHC's Fee structure, based on lender relationship below:

Third Party Originator Lender

• Administrative Fee $105, paid to KHC
• Underwriting Fee $495, paid to KHC

Correspondent Lender (No limit on customary and reasonable fees)

• Administrative Fee $105, paid to KHC
• Underwriting Fee $495, paid to KHC on RHS and Conventional Loans

Delegated Lender (No limit on customary and reasonable fees)

• Administrative Fee $105, paid to KHC
• MCC Review Fee $225

Tax Service Fee was eliminated on September 29, 2014, on new loans for all lenders.

For more specific lender compensation or fee structure, please refer to KHC's Secondary Market Program Guide.

Do you know that Delegated and Correspondent Lenders can fund DAPs? Once you have a loan approval, you could close without the time delay of requesting funds from KHC to fund the DAP. This allows the lender to avoid potential extension fees charged to the borrower, as well as meeting specific closing deadlines. So, consider funding all DAPs.