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City Officials <br />May 2, 1985 <br />Page 3 <br />Upon selection for participation in the Program, local communities would <br />be required to pay to MHFA a commitment fee of 3% of the original commit- <br />ment amount for a 12 -month commitment. This commitment fee will be <br />refunded to the local community on a pro rata basis as eligible mortgage <br />loans are purchased by MHFA. <br />Requirements of the MHFA Single Family Mortgage Loan Program: As indicated <br />above, local communities may receive a mortgage commitment under the MHFA <br />1985 Single Family Mortgage Loan Program (SFMLP) through the Municipal Home <br />Mortgage Program•(MHMP). The mortgage loans will be fixed rate, level <br />payment, fully amortizing loans. The mortgage interest rate is 9.95% per <br />annum, and the mortgage term is 30 years. The seller of the property will <br />be expected to pay 31 points discount on each loan closed. All loans shall <br />be conventional or insured conventional loans with a minimum downpayment <br />of 5 %, plus normal closing costs and fees. MHFA mortgage loans are not <br />assumable. <br />The MHFA SFMLP is regulated by the federal Mortgage Subsidy Bond Tax Act, <br />and MHFA may not waive any of the provisions of this Act. MHFA also has <br />implemented certain requirements and administrative procedures that it will <br />not waive. The following are key requirements and procedures of the SFMLP <br />to which local communities must adhere under the Municipal Home Mortgage <br />Program: <br />1. Borrowers must be first -time homebuyers (may not have had an owner- <br />ship interest in a principal residence for the previous three years). <br />2. Borrowers must occupy the home as a principal residence within <br />60 days of loan closing. <br />3. Borrowers must be a reasonable credit risk, and the adjusted house- <br />hold income must fall within the following limits: <br />New Existing <br />7 County Twin City Metro Area $34,000 $31,000 <br />Balance of State $26,000 $21,000 <br />"Adjusted" household income is actual gross income less certain <br />deductions allowed by MHFA. <br />4. Home purchase prices may not exceed the following limits: <br />New Existing <br />7 County Twin City Metro Area $83,000 $75,000 <br />Balance of State $62,900 $50,000 <br />38 <br />