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Information for Single-Family Lending and Real Estate Professionals
Program Announcement
June 13, 2019
Changes to Tacoma, Pierce County and ARCH Partnership Downpayment Assistance Programs
Dear Lending Partners:
Due to Fannie Mae's current Community Second program guidelines for deferred payment loans, the interest rate of the second mortgage must be no more than 75% of the rate of the first mortgage.
Example 1:
The interest rate on the Conventional 1st is 5.00% . 5% times 0.75 = 3.75%. Hence, any deferred-payment second mortgage could not have an interest rate greater than 3.75%.
Example 2:
The interest rate on the 2nd is 4.00% 4% divided by 0.75 = 5.333%. The Conventional first mortgage rate could not be lower than that, so it would have to be 5.375% or higher (since 1st rates price in 1/8ths).
If you are using a Home Advantage or House Key Conventional HFA Preferred first mortgage that does not meet the community second requirement the following downpayment assistance programs may not be eligible to be used:
Tacoma DPA
Pierce County DPA
ARCH-East King County DPA
We reached out to these jurisdictions for input and will keep you posted as we know more.
If you have additional questions, please email Corinna Obar