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CalSTRS Home Loan Program Special Programs

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REV: 9-07-11

About CalSTRS!

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CalSTRS History Loan Officer Certification General CalSTRS Home Loan Program Guidelines Standard Conventional Product Guidelines Home Connections Product Guidelines (effective 10-1-2011) Rate Locks and Float Downs Fees CalSTRS Marketing Guidelines CalSTRS Web site

CalSTRS Home Loan Program

· The CalSTRS Home Loan Program was created in 1984 and restructured in July of 2004. · Bank of America is the Program Administrator since July of 2004, with approved mortgage correspondents that originate, package and deliver closed loans on behalf of the CalSTRS Member. · The Program was designed to offer CalSTRS members a great choice of mortgage loans with competitive rates, along with first-class service. · Borrower Advantage:

­ Borrower's Money Works for the Pension Fund ­ Borrowers can obtain a great loan with a competitive rate--and their money works for them, since "Income derived through the Home Loan Program goes directly into the California State Teachers' Retirement Fund."


New Requirements for Loan Officers

· CalSTRS is enforcing additional requirements to lenders who originate loans under their program. This is to ensure the loan officer is knowledgeable of the program. · Unique id's will be assigned by Land Home for each CalSTRS approved loan officer. · Mandatory training for each loan officer and processor (conducted by lender).


CalSTRS Home Loan Program

· Standard Conventional Product · 80/17 Product (discontinued with locks 9-30-2011) · Home Connections (80/15) effective 10-1-2011


General CalSTRS Guidelines

· Eligible Properties

­ ­ ­ ­ ­ ­ Properties must be located within the State of California Owner occupied Principal residences Manufactured homes are not eligible Condos meeting Fannie Mae eligibility requirements No unpermitted additions or conversions to property


General CalSTRS Guidelines

· Eligible Borrowers

­ ­ ­ ­ ­ A member of the California State Teachers' Retirement System Employees of a California public school district Employees of a CA Community College CalSTRS Employees As proof of eligibility, a copy of a CalSTRS benefits statement, or a pay stub or VOE from a California public school district must be included in the file sent to underwriting at time of loan submission. ­ Borrowers must have a valid social security number


General CalSTRS Guidelines

· · · · Temporary and permanent buy-downs are not permitted Loans are not assumable No prepayment penalties are allowed Alt docs (paystubs, W2's, bank statements, etc.) are permitted, according to Fannie Mae and Freddie Mac guidelines. · Appraisal or property inspection required according to AUS cert, unless waived by AUS cert (fee assessed) · No Flips under 1 year allowed (Bank of America overlay)


Standard Conventional Loans

· Purchases · Refinances (including Cash Out Refi's) · 15 and 30 Year Fixed Rate Conforming


Standard Conventional Loan Summary

Eligible Properties Term Conforming Loan Amount Loan-to-Value (LTV) of 1st Mortgage Down Payment Sources of Closing Costs

Owner-occupied 2- to 4-units; attached and detached SFRs; condos; and PUDs 15 or 30 years Up to $417,000 95% Standard Fannie Mae Guidelines Standard Fannie Mae Guidelines

Standard Conventional Conforming Loans

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Loan Amounts up to $417,000 LLPA's are required for loan characteristics, adverse market, and escrow waiver. The LLPA's are the same as what is in use by Fannie Mae.

Standard Conventional Underwriting Guidelines

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Homebuyer education is not required Non-occupant co-borrowers and co-signers are permitted 5% minimum down payment from borrowers own funds Closing costs may be paid by third party Borrowers may not own other property. Non-permanent resident aliens are eligible CalSTRS will not require impounds on the Conventional Standard product loans if the LTV is below 89% · Conforming:

­ Ratios : Standard Fannie Mae/Freddie Mac Guidelines ­ Reserves: stricter of 2 months or AUS instruction


Mortgage Insurance

· Required on all loans exceeding 80% LTV · Any Bank of America approved MI Company is eligible to insure first mortgage loans. · Standard Fannie Mae required MI Coverage

Home Connections

· Purchase Transactions · 30-year Conforming Loans


Home Connections

Eligible Properties Term Conforming 1st Loan Amount Loan-to-Value (LTV) of 1st Mtg Loan-to-Value (LTV) of 2nd Mtg Max CLTV of 1st and 2nd Mtgs Down Payment Sources of Closing Costs 2nd Mortgage Loan Level Price Adjustments

Owner-occupied SFRs; approved condos; approved attached and detached PUDs 30 years (1st and 2nd mortgages) Up to $417,000 80% 15% 95% 5% Borrower's own funds, seller contributions up to 3%, gift from relative, or unsecured grant from approved government agency Fully amortizing 15% 2nd mortgage Refer to CalSTRS Price Guide

Home Connections Second Mortgage Loans

· Interest rates for the second mortgage loan carries the same rate as the first mortgage · 30-year term with no deferral period · CalSTRS Note and Deed must be used


Home Connections Loans













Home Connections Underwriting Guidelines

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Homebuyer Education is required for 1st Time Homebuyers Borrower(s) can not own any other property Non-occupant co-borrowers and co-signers are not permitted 5% down payment is required, a minimum of 3% must come from the borrower's own funds. Remainder may come from: ­ Gift from a relative if repayment is not required ­ Grant from a government agency or an employer- assisted housing program, which has been approved by Bank of America Title Policy for 80/15 must cover 1st and 2nd loan amounts and be disclosed on the 1st Mtg. GFE Recording fees should be disclosed on each the 1st and 2nd CalSTRS will requires impounds on all 80/15 loans. Non-permanent resident aliens are eligible Credit score of 640 is required for all combined loan amounts up to $400,000 Credit score of 740 is required for all combined loan amounts above $400,001

Home Connections Underwriting Guidelines

· Conforming:

­ Ratios: Standard Fannie Mae/Freddie Mac guidelines ­ Reserves: Stricter of 2 months or AUS instruction


Allowable Fees

· Origination Fee:

­ 1.00% Standard Conventional ­ 1.25% Home Connections (only on 1st loan)

· Discount Points:

­ Not allowed

· Other Closing Costs:

­ Normal and customary fees are allowed including the appraisal fee, credit report fee, survey fee, title insurance premium, and other closing, costs as permitted by the respective agency such as Loan Level Price Adjustments (LLPA's).


Fannie Mae Fees

· All CalSTRS Conforming conventional loans are subject to the Fannie Mae 0.25% Adverse Market Delivery Fee, in addition to the applicable loan level pricing adjustments per LTV and Credit score (LLPA table posted on the Extranet).


CalSTRS Interest Rate Lock and Float Down

· Interest Rate and Lock Period:

­ Programs priced daily by CalSTRS, posted on CalSTRS Website ­ 45 day rate lock, loans A one time free 15 day extension is available.

· Float Down Opportunity:

­ One-time free float down. Float down must be locked with CalStrs same day. Requests for float downs with prior dates will not be honored. ­ The float down may occur at any time during the 45-day lock period ­ The float down is not available after the 15-day extension period is exercised, regardless of when the extension is taken


Rate Locks and Commitment

· Locks for the Home Connections 1st and 2nd mortgages must be made concurrently · Property changes require a new lock · There is no fee for cancellations - All loans that will not be delivered must be cancelled · Loans may be locked with normal Land Home locking process through PC Lender, please ensure you are requesting the lock for both the 1st and the 2nd.


Marketing Guidelines

All marketing materials must be approved by Bank of America and CalSTRS. Marketing materials include hard copy advertisements (e.g., flyers, letters, ads, bulletins, etc.) as well as electronic advertising. Please do not post any CalSTRS advertising without prior approval from our marketing dept. You must be CalSTRS certified to in order to advertise CalSTRS products. For Information/training contact your local account executive. For Marketing Materials, please contact [email protected]


PCLender Program Codes

· CSTRS30-000

· · CSTRS8017-000 CSTRS2nd8017-000

CalSTRS Fixed 30

CalSTRS Fixed 30 (80/17/3) discontinued 9-30-2011 CalSTRS Fixed 30 Yr. 2nd (80/17/3) discontinued 9-30-2011

· CSTRS8015-000 · CSTRS2nd8015-000

CalSTRS Fixed 30 (80/15/5) CalSTRS Fixed 30 Yr. 2nd (80/15/5)


PCLender Process



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Once you have established your 1st Mortgage 80% CalSTRS loan in PCLender, prior to disclosure, simply Export the Record, then select Import in order to create the 2nd mortgage. After this record is created, you must go into the Mortgage data screen and change the applicable fields for the 15% 2nd Mortgage, including changing the lien position to "2nd". Next, you will need to go into the fee screen to ensure the only fee reported on the 15% 2nd Mortgage is the recording fee. Now you can generate disclosures to be issued to the client for both the 1st and the 2nd mortgages for customer review and signatures. Please refer to the Program Term Sheet to ensure you have recorded all applicable fees.


CalSTRS Website

· Home Loan Program

Great Rates. Great Programs. Great Service.

1355 Willow Way, Suite 250 Concord, CA 94520 Phone: 800-522-5263

Equal Housing Opportunity Lender. AMX is a Division of Land/Home Financial Services, Inc. NMLS# 1796. Land/Home only conducts business in states we are licensed in.

REV: 9-07-11


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