The Loan Process
We are committed to making the loan process as straightforward as possible. We offer an Online Lender Services system for lenders to make reservations, lock in interest rates, check the loan pipeline, and download forms pre-filled with certain information.
The processes for both the FirstHome Mortgage (also referred to as the
MRB loan) and the Mortgage Credit Certificate (MCC) follow the same basic steps:
Lender pre-qualifies buyer
If eligible for the First Mortgage, the buyer can pre-qualify with a lender.
If a buyer is not eligible for the First Mortgage, we may be able to offer assistance through the Mortgage Credit Certificate Program.
Buyer submits loan application
After the buyer’s eligibility for a FirstHome Mortgage or MCC has been determined, the lender will take a formal application.
One special requirement is that the buyer must supply the last three years’ tax returns (unless the property is in a Targeted Area. In this case, only the previous year’s tax return is necessary.)
February 15 marks a new tax year for this purpose. If your client will be closing on a new house prior to February 15, 2007, that client will need the income tax returns for 2003, 2004, and 2005. If closing happens after February 15, 2007, your client will need the tax returns for 2004, 2005, and 2006.
For all three years, your client needs to provide all forms submitted, whether 1040A, 1040EZ, TeleFile tax record, or 1040.
For the most recent year, all W-2s of all wage earners in the household are also required.
If your client does not have tax returns for all of the previous three years, the missing returns will need to be ordered from the IRS.
To get the most recent year’s return, along with W-2s, your client will need to send IRS form 4506 along with a $39 payment to the IRS at the address listed on the form.
For returns not requiring W-2s (transcripts), your client can either call (800) 829-1040 and follow the directions on the voice prompts, or send IRS form 4506T to the IRS. There is no charge for transcripts and they should arrive in the mail within 10 business days.
Lender request reservation of funds
Lenders make reservation requests for the First-Time Home Buyer Mortgage funds through our Online Lender Services System.
Lender processes and approves the loan
The loans are processed using standard industry underwriting guidelines. In addition to verifying all income sources, assets, credit history, property values, etc., the lender will need to complete applicable Agency forms.
The lender collects the necessary information, underwrites and approves the loan, and submits the underwriting package to us for final approval.
Lender closes loan
After receiving approval from the agency, the lender will use the normal closing procedures and submit the closing package to us within 30 days of the loan expiration date.