Selling Guide

Published December 16, 2020

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B5-6-03, HomeReady Mortgage Loan Pricing, Mortgage Insurance, and Special Feature Codes (02/28/2017)

Introduction

This topic contains information about HomeReady mortgage loans, including:


Loan-Level Price Adjustments

LLPAs may apply to HomeReady mortgage loans. These LLPAs are in addition to any other price adjustments that are otherwise applicable to the particular transaction. For the current LLPAs, see the Loan-Level Price Adjustment (LLPA) Matrix.

Loans where at least one borrower completed housing counseling from a HUD-approved agency are eligible for an LLPA credit. The housing counseling must meet the requirements of, and be documented on Form 1017 in accordance with, B2-2-06, Homeownership Education and Housing Counseling. The loan must be delivered with SFC 184.


Mortgage Insurance Coverage

For mortgage insurance coverage requirements see B7-1-02, Mortgage Insurance Coverage Requirements. Financed borrower-purchased mortgage insurance is allowed for one-unit properties under HomeReady. Refer to B7-1-04, Financed Borrower-Purchased Mortgage Insurance, for additional information about financed mortgage insurance.


Special Feature Codes

Special Feature Code 900 must be delivered for all HomeReady mortgage loans.

In addition, one or more of the following special feature codes may also be required for HomeReady mortgages:

  • loans with a Community Seconds —118,

  • loans where at least one borrower completed housing counseling —184,

  • loans with financed mortgage insurance — 281, and

  • loans for borrowers with “thin” traditional credit files — 818.

For additional information about these codes, see Special Feature Codes.

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