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Originating a Georgia Dream Loan
Hi. My name is Ron Ross. I'm with the Georgia Department of Community Affairs.
And the following presentation will help you in originating Georgia Dream Loans
If at any time you have questions please give me a call at (404) 368-7177.
As a general starting point to originate Georgia Dream loans it's very helpful to have the
brochure, a current copy of the seller guides to make sure all the current regulations and
guidelines are followed, the checklist, forms and a password. These passwords to get online
and to register your loans are issued by your internal lenders. We do not issue these passwords
for you. You need to contact somebody internally with your lender to get your own individual
user name and password. It is also very helpful to register to receive our rate sheets to
make sure that you are up to date with the most current info regarding rates and any
guidelines changes.
It is very helpful when starting the loan process to make sure that your customers have
the Georgia Dream brochures so they're up to date on the most current general guidelines
on how to qualify. They also have to go through homebuyer education at some point during the
process. The homebuyer education certificates are good for twelve months so if they do the
education part as early as possible they can spend the rest of the time getting their loan
approved. The lender is responsible for the underwriting and loan approval. We're certainly
here to help with overall guidelines, making sure they qualify for our program, but the
process itself is going to follow regular internal lender guidelines. We do not underwrite
these loans. Once you have the loan approved and you're ready to register the loan you
go to our web site and register and lock in the loan.
If you're going to use the Georgia Dream down payment assistance it has to be with the Georgia
Dream First Mortgage, and it cannot be layered with any other programs. So if somebody wants
Georgia Dream down payment assistance the only first mortgage you can use is our first
mortgage at our rate. However, if your customer is looking at another source of down payment
assistance you can look at our first mortgage. But again, you cannot combine our down payment
assistance with another first mortgage. Please call for additional information.
When you enter in the down payment assistance you must make sure that in your automatic
underwriting, or if you are using a FHA score card, it is entered as subordinate financing.
It's not a gift. It's not a grant. It's not an asset. It's suboardinate financing and
your DU findings or LP findings will acknowledge the right things to verify this it is coming
from an acceptable source.
One of the things that people seem to struggle with is making sure that the loan amount is
correct and reflective of the minimum investment that the customer must have in the transaction,
which is $1,000. This is a step by step calculation of how to do that. There also is an Excel
spreadsheet on the web site that helps you calculate these maximum loan amounts. But
be very careful with calculating the max loan amounts because it calculates to the penny,
and quite often an aggregate adjustment is made at the table. And you have to make sure
the customer has at least $1,000 in the transaction.
When comes time to prepare your estimate and the HUD-1 ...
... keep in mind are all third party fees, appraisals, credit report, attorney fees,
stay the same. There's no need at all to change any of those. When it comes to the origination
fees, per our guidelines, you are allowed to charge up to 2%.You cannot charge a discount
point. Please check internal guidelines. Many lenders who are partners with us have limited
their originators to charge only 1% even though we do allow up to two. If you are doing a
2 or 3K loan then you are allowed to charge the reasonable and customary extra charges
that FHA 2 or 3K loans allow. Keep in mind, as I've said all along, the customer has to
have $1,000 in the transaction. You could get cash back at closing; however, the customer
must net in $1,000. The maximum tax service fee is $67. You can close a loan as interest
credit. Please refer to Section 312.2 in the Seller Guide or give us a call to help you
do that.
RESPA announced some changes to how to close these loans. The second mortgage, down payment
assistance, now closes with its own HUD and there are some fees that can be charged. One
of the required items that we receive when we review the package is a copy of the good
faith estimate for the second. These are the fees that can be charged. You can charge up
to 1% origination fee on the second mortgage down payment assistance. If the attorney is
going to charge extra to close a Georgia Dream loan since there is a second mortgage package,
the maximum amount extra that can be charged is $150. If there are going to be filing fees
or recording fees, you may charge whatever you feel is appropriate for a ten page deed.
Many lenders charge $35 because they know that it will be very close to what their county
will charge. The Intangible Tax, $3 per $1,000, is charged. And the $10 GRMA fee is also charged.
So the maximum number of charges for down payment assistance is five.
This is the web address, www.Gadream.com. I mentioned earlier about receiving the rate
sheet. At the bottom left corner you'll see a section that says, "Sign Up for Weekly Georgia
Dream Rate Sheet." You enter in your email there. Then, every Thursday you'll receive
the rate sheet, and the most important part about that is to look through it and see if
you see anything where it says "update or pending changes" to make sure you are always
up to date with our current guidelines. This is also the links to all our information.
There is too much information to go into during this brief presentation, so as you go through
the different links please give us a call if you have any questions.
After reserving the loan, you need to generate your DCA Georgia Dream documents. There will
another presentation on how to reserve a loan. But once it's reserved look at the tabs across
the top. The middle one says "Loan Status," and you will click on that one to see all
the loans you have reserved at that point. To the left of your customer there are some
icons, and you will click the one that says "PDF Docs." That will open up every single
form we have in our system. Don't worry that you see all these forms on the left side,
you just click on the individual ones that you need for your origination.
Required forms are listed on the right, and will be "SF" and a number: SF-10, SF-12, SF-15,
SF-16 and either SF-72 or SF-72 REO. If you have an adult household member who is not
on your 1003 the SF-15 will need to be completed and you will need to tell us his or her income.
Either the SF-72 or SF-72 REO will be completed, depending on whether the seller is a person
or a foreclosed property. The last form is not an SF form. It is just a household income
worksheet. Once you check the forms you need, you click on the tab at the bottom where it
says "Generate Documents" and they will all come up for you. You hit the button that says
"Print All" and they open up as fillible PDF forms. However, most people just print them
out and type in the information.
One of our forms that we refer to quite often is the Underwriting Package Checklist. This
is the checklist in the stacking order for when people send us their forms for our review.
The Georgia Dream documents are only the first eight things on that list. Everything else
should be on a file.
Just to point out a couple of things on the Household Income Worksheet. Be very aware
that what we consider household income as money coming in the door, cash flow coming
into the entire household. It may not be what your qualifying income is. There are three
ways to calculate the household income. If you have any questions on which way is the
best one to use, give us a call. The three years rental history on the SF-12 is quite
often not filled out entirely. This is a little bit of extra information that we require that
your regular 1003 does not. Since you have to be a first time homeowner as defined by
the federal government, not owning a home in the prior three years, we do ask for documentation
about where they lived for those three years and who the landlord was. Please make sure
that is filled out in its entirety. The SF-16 and 72 and 72 REO are forms that are signed
by the buyer as well as the seller.
When it comes to underwriting, the credit decision is 100% on the lender's side of things.
Your underwriter is the final say so on all things credit. Depending on the mortgage insurer,
be it an FHA, USDA, or VA loan, they must follow those general guidelines.
The numbers you see on the screen are the main numbers to reach the DCA building but
by all means give me a call if you like.
My name is Ron Ross. My phone number is (404) 368-7177. We thank you so much for considering
originating a Georgia Dream loan, and let us know if we can help you.