Lender FAQs

Q. Where can I find a list of SoftSecond eligible homebuyer education classes?

Please refer to the Citizens Housing and Planning Association (CHAPA) website for information and schedules of upcoming classes. Use the calendar format to find a convenient class near you. Please call the provider listed on the calendar to sign up. Class times and prices will vary.

Q. Do all adults in the household have to take the first-time homebuyer education class?

MHP requires the borrowers who will be on the Deed, Mortgage, and Note to take an approve first-time homebuyer education class.

Q. How is the SoftSecond interest rate determined?

The participating lender sets the SoftSecond interest rate. Consult your daily rate sheet, or contact your manager for additional information.

Q. Are the interest rates the same on the first and second mortgages?

Yes.

Q. I have a borrower who is just over the 100% area median income limit, do you make any exceptions?

No exceptions are made to our income limits.

Q. How do I calculate compliance income for the program?

MHP requires that compliance Income (or Qualifying Income) for all adults in the household who are not full-time students be based on HUD Section 8 Guidelines. HUD Section 8 Guidelines includes total household income: overtime, part time jobs, commission etc. Evaluate the borrower's last three paychecks, and then project the income forward 12-months.

Q. I have a borrower who receives child support, but it is sporadic. Does this income have to be counted toward SoftSecond compliance income?

Yes. If there is a court order mandating child support, or a history of child support income, it must be counted toward the borrower's total household income.

Q. If a borrower or non-borrowing adult has a dependent on their tax returns over the age of 18 (regardless of the relationship) should that dependent's tax returns be evaluated for compliance income purposes?

Yes, a dependent may have earned income in the previous year (despite being classified as a dependent on someone else's tax returns). MHP should collect the tax returns or transcripts for the dependent in question.

Q. Why do Roth IRA's count toward the Asset Test?

Unlike traditional IRA's, borrowers can withdraw the money that they contribute to a Roth at any time. They are only penalized if they try to withdraw the interest earned on the account before they retire. Since the borrowers have access to the funds, they are liquid.

Q. Does MHP consider assets that are in a joint account held by the applicant and someone who is not an applicant, to be 100% the applicant's for the purposes of the asset limit? For example, if the borrower has a joint account with his mother, do we count the full balance as the buyer's assets or just 50% of the balance?

MHP would require the full balance of the joint account to be counted toward the asset test.

Q. Does MHP require that seller concessions be counted toward the asset test?

Yes.

Q. What types of properties can a borrower buy with SoftSecond

SoftSecond allows buyers to purchase condos, single-family, two-family, and three-family homes.

Q. For multifamily properties, what should the monthly rental figures be based on?

The Massachusetts licensed market appraisal.

Q. Would the matched funds of an IDA Savings Plan count toward the borrower's required 1.5% down payment?

Yes. The borrower's contribution, as well as the IDA match contribution would both count as the borrower's own saved funds.

Q. I have a borrower who is enrolled in the HUD family self-sufficiency (FSS) escrow savings program. Do the funds contributed by HUD count as the borrower's own funds?

If they are completing a standard SoftSecond prequalification/ final application, MHP will accept the HUD family self-sufficiency funds as the borrower's 1.5% required minimum down payment.

Q. We have a SoftSecond borrower who closed on their loan last year. They got a raise in their current position and would like to make additional (over) payment on their interest-only second mortgage to start paying the principle down. Does SoftSecond allow this?

No, per Section 6 of the Second Note, the lenders are required to apply any pre-payment or overpayment of the second mortgage to the first mortgage first. Once the first mortgage is paid in full, overpayments may be applied to the second mortgage.

Q. What is MHP subsidy and how does it work?

MHP subsidy represents public funds that are applied to some SoftSecond Loans in order to make the home more affordable. MHP subsidy will pay the difference between the borrower's monthly contribution to the second mortgage and the full cost of the interest only payment. The funds are applied as an interest subsidy, helping to partially pay the interest obligation on the borrower's Second Mortgage over the first nine years of the loan.

Q. Is MHP subsidy forgiven after a certain number of years?

Unlike other affordable mortgage programs MHP subsidy is typically not forgiven. The amount of subsidy used will be due back to MHP, unless a loss is documented through the sale of your property. Please contact MHP if you have questions about a required payoff amount.

For more information, email SoftSecond or call 617-330-9944 and ask for any of the following SoftSecond Program associates:

Elliot Schmiedl- x255  |  Viviana Scrugli- x286