December 2022 Page 3 of 122
Table of Contents
6. Loan Terms ................................................................................................................................................................................. 23
7. Loan Use .................................................................................................................................................................................... 23
8. Mortgage Insurance ................................................................................................................................................................... 24
a. Conventional Loans ................................................................................................................................................................................. 24
b. FHA Insured Loans.................................................................................................................................................................................. 24
i. FHA 203(k) loans ...................................................................................................................................................................................... 24
c. RD Guaranteed Loans ............................................................................................................................................................................ 25
d. VA Guaranteed Loans ............................................................................................................................................................................ 25
9. Co-Signers .................................................................................................................................................................................. 25
10. Non-Liable Co-Occupants ........................................................................................................................................................ 26
11. Subordinate loans ..................................................................................................................................................................... 26
a. Combination Loans.................................................................................................................................................................................. 26
12. Electronic Signatures .............................................................................................................................................................. 27
B. HFA PREFERRED™ PROGRAM ........................................................................................................................................................ 27
1. Overview..................................................................................................................................................................................... 27
2. Eligibility Requirements ............................................................................................................................................................. 27
a. Loan Purpose and Terms ............................................................................................................................................................................. 27
b. Borrower Eligibility .................................................................................................................................................................................... 29
i. First Time Home Buyer ............................................................................................................................................................................... 29
ii. Minimum Borrower Contribution ............................................................................................................................................................... 29
iii. PHFA Grant ............................................................................................................................................................................................... 29
iv. Homebuyer Education ............................................................................................................................................................................... 29
v. Income Limit .............................................................................................................................................................................................. 30
vi. Qualifying income ..................................................................................................................................................................................... 30
3. Property Eligibility ..................................................................................................................................................................... 31
4. Lender Instructions and Procedures .......................................................................................................................................... 32
a. Lender Compensation ................................................................................................................................................................................. 32
b. Locking of Funds ........................................................................................................................................................................................ 32
c. Underwriting Procedures ............................................................................................................................................................................ 32
d. DU Requirements ....................................................................................................................................................................................... 32
e. Manual Underwriting .................................................................................................................................................................................. 32
f. Appraisal Submission/UCDP
SM
.................................................................................................................................................................. 33
g. Private Mortgage Insurance ........................................................................................................................................................................ 33
h. Closing Procedures ..................................................................................................................................................................................... 33
i. Submitting the Purchase Package ................................................................................................................................................................ 34
5. HomeStyle
®
Renovation Program ............................................................................................................................................. 34
C. KEYSTONE GOVERNMENT LOAN PROGRAM .................................................................................................................................... 37
1. Eligibility Requirements ............................................................................................................................................................. 38
a. Borrower Eligibility .................................................................................................................................................................................... 38
b. Property Eligibility ..................................................................................................................................................................................... 38
2. Lender Instructions and Procedures .......................................................................................................................................... 38
a. Lender Compensation ................................................................................................................................................................................. 38
b. Locking of Funds ........................................................................................................................................................................................ 38
c. Underwriting and Closing Procedures ........................................................................................................................................................ 39
D. KEYSTONE HOME LOAN PROGRAM (KHL) ..................................................................................................................................... 39
1. Eligibility Requirements ............................................................................................................................................................. 39
a. First-time Homebuyer ................................................................................................................................................................................. 40
b. Income Limit .............................................................................................................................................................................................. 41
c. Purchase Price Limit ................................................................................................................................................................................... 42
d. Recapture Tax ............................................................................................................................................................................................. 43
2. No Refinances ............................................................................................................................................................................. 44
3. Loan Assumptions....................................................................................................................................................................... 45
E. KEYSTONE FLEX LOAN PROGRAM ................................................................................................................................................... 46
1. Eligibility Requirements ............................................................................................................................................................. 46
a. Loan Purpose and Terms ............................................................................................................................................................................. 46
b. Borrower Eligibility .................................................................................................................................................................................... 48
c. Income Limit ............................................................................................................................................................................................... 49
d. Qualifying Income ...................................................................................................................................................................................... 49
e. Purchase Price Limit ................................................................................................................................................................................... 49
f. Homebuyer Education ................................................................................................................................................................................. 49
2. Property Eligibility ..................................................................................................................................................................................... 49
a. Lender Compensation ................................................................................................................................................................................. 49
b. Locking of Funds ........................................................................................................................................................................................ 49