Form 11: Sample Refinancing Policy


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NameForm 11: Sample Refinancing Policy
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Form 11: Sample Refinancing Policy


[Date]
Dear [Homeowner]:
Thank you for contacting us to inquire about the process to refinance your affordable home. As the Monitoring Agent, we must review and approve all requests to refinance in writing before you may close on a new loan.
Submittal Requirements

To begin the review process, please provide us with a letter requesting approval to refinance or obtain a second mortgage. The letter should state the full address of the property, the amount of the refinance or second mortgage requested, a phone number where you can be reached during the day, the full name of the lending institution and the name and contact number for the loan officer.
You will also need to submit the following:
1. A copy of your complete loan application to the lending institution.
2. A copy of the commitment letter from the lender, outlining the terms of the loan.
3. A copy of the Good Faith Estimate provided by the lender outlining estimated closing costs.
We may also require the following, depending on your particular situation:


  • A copy of the Affordable Housing Restriction (also referred to as the Deed Rider). The Affordable Housing Restriction is the document signed at closing which was recorded with your deed that describes the resale and refinance provisions for your particular property.




  • A complete copy of an appraisal report for the property, completed by a certified residential appraiser within the last 120 days. The home should be appraised as a market-rate property.


Information on your monthly condominium fee (if any), your town’s current tax rate per thousand, and your monthly homeowner’s insurance amount.



Refinancing Requirements
Your proposed new first or second mortgage should meet the following guidelines:


  • For first mortgage refinancing the loan amount cannot exceed 97% of the Maximum Resale Price, as determined by MassHousing.




  • For a second mortgage financing, the combined amount of the first and second mortgages may not exceed 97% of the Maximum Resale Price, as determined by MassHousing.




  • Must be a fully-amortizing, fixed-rate mortgage with a down payment of at least 3%, at least half of which must come from the buyer’s own funds.




  • Must be made by an institutional lender.




  • Must have a current fair market interest rate.




  • Must not have more than 2 points




  • May not be co-signed by non-household members, including relatives.


We may deny your request to refinance, or require that you consult with a non-profit credit councilor if the benefit of the loan is unclear. Examples of this may include loans with high closing costs, a higher interest rate than you currently hold, or loans that roll in unsecured debt into your mortgage. Additionally, we strongly suggest that you compare rates and loan costs from several lenders.


Sincerely,
_________________________________________

Monitoring Agent


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