Mississippi home corporation single family mortgage revenue

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Mississippi Home Corporation Single Family Mortgage Revenue Bond Program

INVITATION FOR APPLICATION

The Mississippi Home Corporation (the "Corporation") hereby invites you to apply for participation (the "Invitation") in the Corporation's Single Family Mortgage Revenue Bond Program (the "MRB Program"). Under the MRB Program, the Corporation will issue single family mortgage revenue bonds for the purpose of providing funds to purchase (a) fully-modified pass-through mortgage-backed securities (the "Ginnie Mae Securities") of the Government National Mortgage Association ("Ginnie Mae") evidencing a guarantee by Ginnie Mae of the timely payment of monthly principal and interest of qualifying FHA, USDA/RD or VA mortgage loans, (b) mortgage-backed securities (the "Fannie Mae Securities") of the Federal National Mortgage Association ("Fannie Mae") evidencing the guarantee by Fannie Mae of monthly principal and interest of qualifying conventional mortgage loans and (c) mortgage-backed securities (the "Freddie Mac PCs") of the Federal Home Loan Mortgage Corporation ("Freddie Mac") evidencing the guarantee by Freddie Mac of monthly principal and interest of qualifying conventional mortgage loans. Qualifying lending institutions participating in the Program (the "Lenders") will originate the FHA-insured, VA-guaranteed, USDA/RD-guaranteed and conventional mortgage loans (the "Mortgage Loans") and, if applicable, sell such Mortgage Loans to certain mortgage Servicers under the Program (the "Servicer"), all for the purpose of financing the acquisition of owner-occupied, single family residences qualifying under the Program ("Residences") within the State. The Ginnie Mae Securities, Fannie Mae Securities and Freddie Mac PCs are referred to herein, collectively, as the "Program Securities".

EACH LENDER THAT IS (a) A GINNIE MAE -APPROVED ISSUER-SERVICER OF FHA, VA OR USDA/RD MORTGAGE LOANS OR A FANNIE MAE or FREDDIE MACAPPROVED ISSUER-SERVICER OF CONVENTIONAL MORTGAGE LOANS, AS APPLICABLE, (b) AN AUTHORIZED ISSUER OF PROGRAM SECURITIES AND (c) OTHERWISE SATISFIES THE SERVICER QUALIFICATIONS SET FORTH IN THE MRB ORIGINATION AGREEMENT AND THE MRB SERVICING AGREEMENT MAY ACT AS A SERVICER WITH RESPECT TO MORTGAGE LOANS ORIGINATED BY SUCH LENDER UNDER THE PROGRAM. EACH LENDER THAT IS NOT A GINNIE MAEAPPROVED ISSUER-SERVICER, FANNIE MAE-APPROVED ISSUER-SERVICER, OR FREDDIE MAC-APPROVED ISSUER-SERVICER AS APPLICABLE, MUST ARRANGE TO HAVE A QUALIFIED SERVICER PURCHASE MORTGAGE LOANS ORIGINATED BY SUCH LENDER AT A PRICE TO BE NEGOTIATED BETWEEN SUCH LENDER AND SUCH QUALIFIED SERVICER.

THIS PROGRAM WILL UTILIZE AN ONLINE RESERVATION SYSTEM FOR THE ALLOCATION OF AVAILABLE FUNDS. THE CORPORATION WILL APPROVE RESERVATIONS ON A FIRST-COME, FIRST-SERVED BASIS AS DESCRIBED HEREIN UNDER THE HEADING "RESERVATION PROCEDURE." LENDERS WILL NOT RECEIVE, NOR WILL LENDERS BE REQUIRED TO PAY FOR PROGRAM ALLOCATIONS IN ORDER TO PARTICIPATE IN THE PROGRAM.

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Mortgage Loans must be originated and closed by the Lenders and, if applicable, sold to a Servicer during the origination period described in the Program Notice, if applicable, delivered by the Corporation in connection with the issuance of a series of Bonds (the "Origination Period"). Such Mortgage Loans must be originated in accordance with the Mortgage Revenue Bond Mortgage Origination Agreement (the "MRB Origination Agreement") to be executed by the Corporation, the Lender and the Servicer designated by such Lender, a copy of which is distributed with this Invitation. Program Securities backed by Mortgage Loans must be issued on or before the date set forth in the Program Notice, if applicable, delivered in connection with the issuance of a series of Bonds. LOANS SHALL BE PURCHASED BY THE SERVICER AT A PRICE TO BE DETERMINED BY THE CORPORATION, WHICH IN ANY EVENT WILL NOT BE LESS THAN 100% OF THE OUTSTANDING AGGREGATE PRINCIPAL AMOUNT OF SUCH MORTGAGE LOANS.

Qualifying Mortgage Loans must be either FHA, VA, USDA/RD or conventional Fannie Mae or Freddie Mac Mortgage Loans, depending upon any Servicer overlays, which are made to eligible borrowers in Mississippi whose adjusted income level does not exceed the limits set forth in Exhibit A hereto. The Mortgage Loans will be 30 year, fixed rate loans with level payments and full amortization. In addition, qualifying Mortgage Loans are subject to certain purchase price limitations, loan-to-value ratios determined by loan type and any Servicer overlays, if applicable, insurance requirements and other conditions of the Corporation as more completely described in the MRB Origination Agreement. The MRB Origination Agreement also provides that the residence acquired must be the principal residence of the mortgagor, and, except with respect to a mortgagor acquiring a residence located in one of the areas in the State identified in the MRB Origination Agreement as a "Targeted Area", each mortgagor must not have held an ownership interest in a principal residence at any time during the three years immediately preceding the date of anticipated closing for a Mortgage Loan (a "First Time Homebuyer"). THE MRB ORIGINATION AGREEMENT IS THE PRINCIPAL DOCUMENT SETTING FORTH THE RIGHTS AND OBLIGATIONS OF THE LENDERS UNDER THE PROGRAM. ADDITIONAL COPIES OF THE MRB ORIGINATION AGREEMENT MAY BE OBTAINED FROM THE MISSISSIPPI HOME CORPORATION LENDERS/REALTOR LINK FOUND ON THE MHC WEBSITE OR BY CONTACTING:

Mississippi Home Corporation 735 Riverside Drive Jackson, MS 39202

(601) 718-4642

Attn.: Betty Temple-Putnam

MORTGAGE LOANS WILL BE SERVICED BY EACH SERVICER PURSUANT TO A MORTGAGE REVENUE BOND SERVICING AGREEMENT BETWEEN THE CORPORATION AND EACH SERVICER (THE "MRB SERVICING AGREEMENT"). IN ORDER TO PARTICIPATE IN THE PROGRAM, A LENDER MUST ARRANGE TO HAVE A QUALIFIED LENDING INSTITUTION (WHICH MAY BE THE LENDER) EXECUTE

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THE MRB SERVICING AGREEMENT RELATING TO THE MORTGAGE LOANS TO BE ORIGINATED BY THE LENDER UNDER THE PROGRAM. THE QUALIFICATIONS TO PARTICIPATE AS A SERVICER UNDER THE PROGRAM ARE SET FORTH IN THE MRB ORIGINATION AGREEMENT AND THE MRB SERVICING AGREEMENT AND INCLUDE, AMONG OTHER THINGS, THAT SUCH LENDING INSTITUTION IS A GINNIE MAE-APPROVED ISSUER-SERVICER OF FHA, VA OR USDA/RD MORTGAGE LOANS, FANNIE MAE OR A FREDDIE MAC-APPROVED ISSUER-SERVICER OF CONVENTIONAL MORTGAGE LOANS, AS APPLICABLE, AND AN AUTHORIZED ISSUER OF GINNIE MAE SECURITIES, FANNIE MAE SECURITIES OR FREDDIE MAC PCs, AS APPLICABLE. A QUALIFIED LENDER MAY SERVE BOTH AS LENDER AND SERVICER.

Mortgage Loan Interest Rate; Deferred 10-Year Second Mortgage

The interest rate with respect to the Mortgage Loans are set on a weekly basis and are subject to change weekly. The Program allows for the available spread between conventional mortgages and tax exempt or taxable, as the case may be, bond funded mortgage rates to be delivered to borrowers either in the form of a Cash Advance or a 10-year deferred 0% second mortgage to be applied towards the origination fee, closing costs, the down payment of the borrower and the FHA MIP, VA Funding Fee, RD Guarantee Fee or PMI (such second mortgage assistance shall not be used to either (a) reimburse the borrower for items paid outside of the closing unless the seller paid such items and the sales contract provides that the buyer shall reimburse the seller for such items, or (b) items prepaid at closing. For example, while a traditional tax-exempt bond funded mortgage loan might bear interest at 3.99% in today's market conditions, the Program enables the Corporation to structure its Mortgage Loans to provide an interest rate which is comparable with current conventional mortgage loan rates but with a second mortgage of $7,000 (subject to change). Under current market conditions, it is anticipated that the Corporation will elect to provide an interest rate on the Mortgage Loans which is comparable with conventional mortgage loan rates and provide a second mortgage to borrowers.

Reservation Procedure

Funds made available for the origination of Mortgage Loans will not be allocated or assigned to any particular Lender, but will be reserved on a first-come, first-served basis for all Lenders. Lenders may reserve available funds for Mortgage Loans through the Corporations online reservation system on a case-by-case basis. The online reservation system will issue a Reservation Confirmation to applicable qualifying borrowers. It is a condition to any such reservation that within ten (10) Calendar Days following any such online reservation, the Corporation must receive from the Lender the following with respect to each reservation that the Lender will upload into the Corporation's reservation system: (a) a copy of the real estate purchase contract executed by both the proposed mortgagor and seller, included all applicable addendums; (b) a copy of the executed Mortgage Loan application; (c) a copy of the Reservation Confirmation; (d) MRB Reservation Form; (e)MRB Checklist; (f) Notice to Borrower ? Second

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Mortgage form; (g) the executed Notice to Mortgagor Regarding Potential Recapture Tax; (f) a copy of the Homebuyer Education Certificate; and (g) Housing Assistance for Teachers (HAT) Loan Agreement, if applicable (Original must be mailed to MHC). MHC highly suggests that loans should be approved by Lenders underwriters prior to reserving a loan.

Participation Procedure

Each lending institution desiring to become a Lender under the Program is required to submit to the Corporation an executed copy of the Application to Originate Mortgage Loans (the "Application"), enclosed herewith.

In addition, prior to approving reservations, the Lender shall have provided the Corporation with the following:

1. Two MRB Origination Agreements executed by the Lender and the Servicer (which Servicer may also be the Lender) prior to providing it to the Corporation; and

2. Two MRB Servicing Agreements executed by the Servicer (which Servicer may also be the Lender), only if applying to become a Servicer of the MRB program.

The Application and all other materials described above shall be delivered to:

Mississippi Home Corporation 735 Riverside Drive Jackson, MS 39202 Attn: Betty Temple-Putnam, Sr. Vice President of Single Family Programs

Following submission of the Application and Mortgage Origination Agreement, the Corporation will review the qualifications and experience of each Lender and its ability to originate Mortgage Loans. Upon completion of its review, the Corporation will provide each Lender with either a Letter of Acknowledgement or Notice of Rejection with respect to the Program and a copy of the Agreement(s) the Corporation has executed.

THE CORPORATION RESERVES THE RIGHT TO REJECT ANY AND ALL OFFERS TO PARTICIPATE FOR ANY REASON WHATSOEVER, AND FURTHER RESERVES THE RIGHT TO WAIVE ANY INFORMALITY OR IRREGULARITY IN THE DOCUMENTS SUBMITTED BY THE LENDERS FOR CONSIDERATION BY THE CORPORATION. IN ADDITION, THE CORPORATION RESERVES THE RIGHT TO APPROVE ADDITIONAL LENDERS FOR PARTICIPATION IN THE PROGRAM AT ANY TIME.

Summary of the Program

The following is intended only as a summary of certain provisions of the MRB Program

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and is subject to the more complete description of the rights, duties and obligations of the Lenders, the Corporation and the Servicers contained in the MRB Origination Agreement and MRB Servicing Agreement. THE MRB ORIGINATION AGREEMENT, SERVICING AGREEMENT AND THE APPLICATION SHOULD BE READ CAREFULLY IN THEIR ENTIRETIES. Unless otherwise defined herein, all capitalized terms and phrases utilized in this summary shall have the meanings set forth in the MRB Origination Agreement.

1. General Requirements to Submit Offer. Every lending institution (including commercial banks, savings and loan associations and mortgage bankers) which is (a) currently participating in the local private home lending market in Mississippi, (b) an FHA-approved mortgagee (with direct endorsement underwriting authority preferred), a USDA/RD-eligible lender, a Fannie Mae or Freddie Mac-approved lender in good standing acceptable to a PMI Insurer or a VA-approved lender (with VA automatic approval authority preferred), (c) able to make the representations, warranties and covenants set forth in the MRB Origination Agreement and (d) willing to originate fixed rate single family residence mortgage loans in conformity with its customary mortgage origination standards, the mortgage origination standards of Fannie Mae, Freddie Mac, FHA, USDA/RD and/or VA, and the mortgage origination procedures of Ginnie Mae, Fannie Mae or Freddie Mac, as applicable, and which meets the requirements set forth in the MRB Origination Agreement and this Invitation, shall be permitted to submit an offer to participate in the Program.

2. The Program. Under the Program only FHA, USDA/RD, VA and conventional Mortgage Loans shall be originated.

All Mortgage Loans must be originated in accordance with the Ginnie Mae Guide, Fannie Mae Guide or Freddie Mac Guide, as applicable, to be eligible for inclusion in a Ginnie Mae pool, Fannie Mae pool or Freddie Mac pool, as applicable. The principal amount of each Mortgage Loan may not exceed the limits established from time to time by Fannie Mae, Freddie Mac, FHA, USDA/RD, and VA, as applicable, provided, however that in no event shall the principal amount of a Mortgage Loan exceed the applicable Maximum Permissible Acquisition Cost described herein. In addition, with respect to any Mortgage Loan guaranteed by VA, the VA Guaranty cannot exceed applicable VA regulations, and with respect to Mortgage Loans guaranteed by USDA/RD, the Mortgage Loans must be made under the USDA/RD Section 502 Single Family Rural Housing Loan Program.

3. Origination Generally. Applications for Mortgage Loans will be processed on a first-come, first-served basis.

All Mortgage Loans must be originated in accordance with the provisions of the MRB Origination Agreement. Upon receipt of a reservation with respect to a Mortgage Loan, the Lender must upload the Reservation Package documents to the Corporation's online reservation system within 10 calendar days of reserving the loan and upload the Compliance Package documents with respect to such Mortgage Loan to the Corporation's online reservation system within 45-days on new/existing properties and 120-days on proposed

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construction. The Corporation shall notify the Lender within three Business Days of receipt of a Compliance Package whether or not the Corporation has approved such Mortgage Loan for closing and, if the Mortgage Loan will not be approved, the reasons therefor. The Lender may attempt to cure any defect in the Reservation and Compliance Package and resubmit such defects to the Corporation. With respect to all Mortgage Loans approved by the Corporation, the Corporation will provide access to the Lender to print a Conditional Commitment. No Mortgage Loans shall be closed by a Lender without receipt of the Conditional Commitment. Finally, the Lender must upload the Purchase Certification Package documents to the Corporation through the Corporation's online reservation system within 30-days of closing. Upon the Corporation's approval of such Purchase Certification Package, the Lender will have access to print the Purchase Certification from the online reservation system, the Servicer may pool such Mortgage Loan to form a Ginnie Mae pool, Fannie Mae pool or Freddie Mac pool, as applicable, or sell such Mortgage Loan to the applicable Servicer.

Each Lender must use its best efforts to originate Targeted Area Mortgage Loans. Notwithstanding the reservation procedure described above, the Corporation will reserve 20% of the available reservations solely for Mortgage Loans with respect to residences which are in Targeted Areas.

4. Mortgage Loans Generally--Origination Fees and Interest Rate for Mortgage Loans. Except as otherwise described herein with respect to the second mortgage, the Lender may collect from the borrower and/or seller origination fees which in the aggregate are not in excess of 1.50 point and may collect all reasonable and customary closing costs.

The Mortgage Loan will be due and payable 30 years from the first date of payment of principal and interest and must provide for substantially level monthly debt service payments. The interest rate with respect to the Mortgage Loans will be set each Monday, excluding holidays and are posted to the Corporation's website. It is currently anticipated that the interest rate with respect to such Mortgage Loans will be comparable with the current interest rate on conventional mortgage loans but that the Corporation will utilize the unique pricing features of the Program to provide a second mortgage with respect to each Mortgage Loan. Such second mortgage is expected to be $7,000, subject to change. The second mortgage is a 0% 10-year deferred loan. If the borrower remains in the home for the full 10year period, the second mortgage is forgiven, and the Corporation will then release the lien on the second mortgage. If the borrower sells or refinances the loan prior to the end of the 10-year period, the amount will be repayable to the Corporation. The Lender sends the $7,000 to the closing attorney and closing attorney shall (i) pay up to the 1.50 point origination fee to the Lender and (ii) apply the remainder of the second mortgage to offset the amount of the down payment and/or closing costs paid by the borrower, including mortgage insurance; provided, however, that such second mortgage shall not be used to reimburse the borrower for either (i) items paid outside of closing unless the seller paid such items and the sales contract provides that the buyer shall reimburse the seller for such items

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