For the FHA DPA 1st and 2nd lien programs, you will need to create, disclose, and submit 2 separate loans. 

Disclosing the 1st Lien Mortgage

To get started, click Add New Loan and follow the steps to import your MISMO 3.4 file for the 1st lien.

In Product Pricing & Lock, the loan should be priced as an FHA with subordinate financing: 

• FICO: Borrower's FICO score
• Loan Type: FHA
• Loan Purpose: Purchase
• Loan Amount: Up to 96.5% LTV
• Impounds: Required
• 1st Lien with Subordinate 2nd
• Subordinate Mortgage: Either 3.5% or 5%
• Compensation: Lender Paid and Borrower Paid allowed

Example of the 1st Lien FHA DPA Scenario

You can then pull credit, run Dual AUS, and generate initial disclosures as usual. 

IMPORTANT: If you attempt to submit the loan, you will be prompted to enter the Loan Number of the 2nd lien.

Disclosing the 2nd Lien Mortgage

Next, you will create a second loan for the 2nd lien. Click Add New Loan and follow the steps to import your MISMO 3.4 file for the 2nd lien.

IMPORTANT: The Submission Desk will be linking the 2nd Lien to the 1st at submission, meaning all the asset, income, and liabilities will be synced from the 1st and 2nd.

In Product Pricing & Lock, we recommend completing the following fields: 

• Loan Type: Second Lien
• Term (Years): 10 Years
• Loan Purpose: Purchase
• Loan Amount: Either 3.5% or 5% LTV
• 2nd Lien (Standalone or Piggyback)
• Total Existing Mortgage Amount: Amount of 1st lien
• Compensation: Borrower Paid (must be $0)

Example of the 2nd Lien DPA Scenario

In the pricing results, select a rate that is exactly 2.000% above the 1st lien rate. 

IMPORTANT: You are not required to run credit or Dual AUS at all on the 2nd lien. 

You are not allowed to collect a compensation on the DPA Second Lien. In Fees & Initial Disclosure, you will need to select a Borrower Paid Compensation amount even though $0 will print on the Loan Estimate. Choose BP % or BP $ and enter any number, such as 1% or $20.

Regardless of what is entered, no Borrower Paid Compensation amount will be displayed in Section A on the Loan Estimate.

You must still disclose any relevant title or recording fees.

IMPORTANT: There should not be any lender fees or flood certification fee, but there will be a Transfer Tax and MERS Registration.

Requesting for Submission Review

Once both loans have been disclosed, you can request submission. Upload all documentation to the 1st lien, note the loan numbers, then submit both.

On each loan, click Submit Loan and enter the DPA 1st or 2nd Loan Number. 

What's Next

Submission Desk Review

Your loan status will update to Sent to Submissions, which indicates that the Submission Desk will review your loan package before underwriting. Reviews are done based on our turn times.

If they encounter any issues or missing documents, our team will email Loan Officer and Processor. Your loan status will also change to Submission Incomplete, which indicates that there are outstanding items required for submission.

Additionally, they will link the two loans, so all income, assets, and liability information can be synced from the 1st and 2nd lien loan. 

Submitted to Underwriting Review

Once all required submission documents have been reviewed and verified, your loan status will be updated to Submitted. The turn times for initial decisions is posted online and begins when the loan status is Submitted.

Next, our underwriting assistants will index your loan files to prepare for initial underwriting, and our underwriter will review for initial decision. For more information about loan statuses, read Defining Wholesale Loan Status.

To learn more about conditions, read more Step 5: Requesting Underwriting Condition Review.