WHEDA Home News - April 2008

WHEDA® Underwriting and Product Changes Effective April 14th, 2008

Credit Scores

For all WHEDA Home Loans approved on or after April 14th, the minimum credit score required will be 620.

WHEDA will review pre-approvals on a case-by-case basis for borrowers whose middle credit score falls within the range of 575-619. If we determine that the borrower may be eligible, the lender will be instructed to send a duplicate file to our pool insurer.

Home Plus

The Home Plus Loan is being replaced by Easy Close. Originally created for WHEDA’s Partnership Neighborhoods, Easy Close will be offered statewide. Easy Close is a $4,000 loan that can be used towards down payment and closing costs. This smaller loan product meets Combined LTV guidelines and the smaller payment meets debt ratio requirements.

Any Home Plus loan application in process must be approved by WHEDA and a mortgage insurance commitment issued on or before April 11, 2008.

Loan- to- Value (LTV) / Combined LTV (CLTV)

The maximum LTV is 97%. The maximum CLTV is 97% with the following exceptions for applicants receiving down payment assistance:

Easy Close – CLTV 100%
Forgivable or deferred grant – CLTV 103%

Debt Ratios

Standard ratios of 33%/38% apply. Higher ratios may be acceptable based on the borrower’s credit history and mid-credit score. The maximum total debt ratio is 45%.

Zero Down Loan Program

Due to changes across the industry relating to maximum LTV guidelines, the Zero Down loan product will be suspended. Loans that have been rate locked prior to April 1 must be approved by WHEDA and the private mortgage company on or before April 11.

Quick Decision

Loans that have been rate locked as a Quick Decision loan need a private mortgage insurance commitment issued prior to April 14th. After that date, all loan packages must be submitted to WHEDA for a manual underwrite. We will continue to maintain same day underwriting on all full loan applications.

Automated Underwriting Systems

All loan applications after April 14th must be submitted to WHEDA for manual underwriting. Credit recommendations made by Automated Underwriting Systems including Desktop Underwriter (DU) or Loan Prospector (LP) will no longer be accepted.

Credit recommendations made by the eMagic pre-approval system will no longer be accepted.

Declining/Restricted Markets

We will follow the guidelines of our pool insurers – MGIC and Genworth. Contact your mortgage insurance representative for detailed guidelines.

Home Improvement Products

Both No Equity Express and No Equity Home Improvement are temporarily suspended.

Home Buyer Education Requirements

If the LTV exceeds 95%, a borrower will be required to complete home buyer education:

If the mid credit score is 660 or greater, on-line or face-to-face counseling is accepted.
If the mid credit score is less than 660, 6-8 hours of face-to-face home buyer education from an accredited housing counselor is required.

For borrowers using Gateway to Homeownership, the minimum credit score has been increased to 620. Borrowers will continue to benefit from a 10 basis point reduction in the mortgage insurance premium if they complete home buyer education from an approved Gateway counseling agency. Special underwriting guidelines will still apply.

For more information regarding WHEDA underwriting and program changes, please contact Pat Multerer at 800-334-6873 or e-mail her at pat.multerer@wheda.com.