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Homeownership Preservation Advance (HPA)
HPA credit may be used to modify or refinance mortgage loans for low- and moderate-income homeowners who may be at risk of losing their primary residence because of delinquency or default on their mortgage loan.
Uses
Refinance or modify existing mortgages to help homeowners avoid foreclosure by lowering their mortgage payments. Give homeowners facing unaffordable interest rate resets on their adjustable rate mortgages the opportunity to obtain a fixed rate mortgage. Provide reverse mortgages to enable elderly homeowners to preserve homeownership.
Key Advantages
Interest rates are generally lower than rates on regular Bank advances Available in a variety of maturities for an array of credit products HPA applications may be made at any time Using HPA credit may help you meet your community investment goals HPA credit may be used in tandem with the Homeownership Preservation Subsidy program
Key Features
Credit Products Available
Interest Rate/Price
The interest rate on HPA credit will vary according to credit product and maturity. Interest rates on HPA credit are generally lower than the rates offered under the Bank's regular advance programs. Members are encouraged to pass through the favorable rates on HPA credit to borrowers.
If the Bank determines that a participating member has not complied with the terms and conditions of the program or has not provided acceptable documentation to verify compliance, the Bank may change the interest rate on each outstanding HPA borrowing, retroactive to its funding date, to the rate in effect on the funding date for a comparable advance under the Bank's regular advance programs.
Conditions of Use
HPA credit may be used to fund the refinancing or modification of mortgage loans, each of which must meet all of the following conditions of use
The total household income is at or below 115% of area median income at the time of restructuring. The loan is a first lien residential mortgage loan on the borrower's primary residence. The loan is a refinanced or modified loan and (i) has a fixed interest rate for at least 3 years, with no negative amortization during that period, or (ii) is a reverse mortgage, such as a Home Equity Conversion Mortgage. The interest rate, points, fees, and all other charges are, at all times during the term of the loan, reasonable and customary and do not exceed the thresholds of the Home Ownership and Equity Protection Act of 1994 and its implementing regulations (Federal Reserve Board Regulation Z). The loan complies with applicable federal, state, and local anti-predatory lending laws, regulations, and orders designed to prevent or regulate abusive and deceptive lending practices and loan terms. The first-mortgage closing does not include single-premium credit life insurance. The household does not receive cash greater than $500 from the refinancing transaction (except for a reverse mortgage).
HPA credit may be used for eligible financing originated up to 90 days before the HPA funding date, or up to 12 months after the HPA funding date (but before the advance maturity date, if the advance has a term of less than 1 year).
Documentation Requirements
To request HPA credit, the member must complete the Homeownership Preservation Advance (HPA) Credit Application. Within 12 months of the HPA funding date or, if the advance has a term of less than 1 year, prior to the HPA maturity date, the member must demonstrate its HPA-qualifying lending activity in the full amount of the HPA credit. To do so, the member must provide the Bank with a certification supported by acceptable documentation demonstrating that the activity conformed to the conditions of use described above and that the qualifying loans were originated no more than 90 days before the HPA funding date and no later than 12 months following the HPA funding date or, if the advance has a term of less than 1 year, prior to the HPA maturity date. If the eligible loans were made up to 90 days prior to the submission of the HPA application, the certifications and accompanying documentation may be submitted with the application.
Limit Per Member
The Bank has established an aggregate limit on the amount of advances that an individual member may borrow each year under the Bank's Community Investment Cash Advance (CICA) credit programs: the Community Investment Program, Advances for Community Enterprise, and HPA. The member may borrow up to the maximum amount under just one or any combination of programs until it reaches the aggregate limit.
The maximum amount of CICA credit that an individual member may borrow in aggregate each year will depend on the member's total assets as of the previous yearend, as follows:
| Total Assets |
Annual CICA Credit Limit |
Up to $20 million
$20 million to $4 billion
$4 billion and over
|
$1 million
5% of total assets as of previous yearend
$200 million
|
Total Funding Limit
The Bank may limit the total amount of HPA credit to be made available to all members in a calendar year on a first-come, first-served basis. Once the limit is reached, a member may not obtain additional HPA credit even if the member has not reached its individual limit.
Collateral
All HPA borrowings must be fully collateralized. HPA-qualifying loans may or may not be eligible to be pledged to the Bank as collateral. Please refer to the Bank's Collateral Guide for a detailed description of the Bank's collateral eligibility requirements.
Other Terms and Conditions
Other terms and conditions for HPA credit are the same as for other Bank advances.
Last Modified: June 2008
|
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|
|
|
Homeownership Preservation Advance (HPA)
HPA credit may be used to modify or refinance mortgage loans for low- and moderate-income homeowners who may be at risk of losing their primary residence because of delinquency or default on their mortgage loan.
Uses
Refinance or modify existing mortgages to help homeowners avoid foreclosure by lowering their mortgage payments.
Give homeowners facing unaffordable interest rate resets on their adjustable rate mortgages the opportunity to obtain a fixed rate mortgage.
Provide reverse mortgages to enable elderly homeowners to preserve homeownership.
Key Advantages
Interest rates are generally lower than rates on regular Bank advances
Available in a variety of maturities for an array of credit products
HPA applications may be made at any time
Using HPA credit may help you meet your community investment goals
HPA credit may be used in tandem with the Homeownership Preservation Subsidy program
Key Features
Credit Products Available
Interest Rate/Price
The interest rate on HPA credit will vary according to credit product and maturity. Interest rates on HPA credit are generally lower than the rates offered under the Bank's regular advance programs. Members are encouraged to pass through the favorable rates on HPA credit to borrowers.
If the Bank determines that a participating member has not complied with the terms and conditions of the program or has not provided acceptable documentation to verify compliance, the Bank may change the interest rate on each outstanding HPA borrowing, retroactive to its funding date, to the rate in effect on the funding date for a comparable advance under the Bank's regular advance programs.
Conditions of Use
HPA credit may be used to fund the refinancing or modification of mortgage loans, each of which must meet all of the following conditions of use
The total household income is at or below 115% of area median income at the time of restructuring.
The loan is a first lien residential mortgage loan on the borrower's primary residence.
The loan is a refinanced or modified loan and (i) has a fixed interest rate for at least 3 years, with no negative amortization during that period, or (ii) is a reverse mortgage, such as a Home Equity Conversion Mortgage.
The interest rate, points, fees, and all other charges are, at all times during the term of the loan, reasonable and customary and do not exceed the thresholds of the Home Ownership and Equity Protection Act of 1994 and its implementing regulations (Federal Reserve Board Regulation Z).
The loan complies with applicable federal, state, and local anti-predatory lending laws, regulations, and orders designed to prevent or regulate abusive and deceptive lending practices and loan terms.
The first-mortgage closing does not include single-premium credit life insurance.
The household does not receive cash greater than $500 from the refinancing transaction (except for a reverse mortgage).
HPA credit may be used for eligible financing originated up to 90 days before the HPA funding date, or up to 12 months after the HPA funding date (but before the advance maturity date, if the advance has a term of less than 1 year).
Documentation Requirements
To request HPA credit, the member must complete the Homeownership Preservation Advance (HPA) Credit Application. Within 12 months of the HPA funding date or, if the advance has a term of less than 1 year, prior to the HPA maturity date, the member must demonstrate its HPA-qualifying lending activity in the full amount of the HPA credit. To do so, the member must provide the Bank with a certification supported by acceptable documentation demonstrating that the activity conformed to the conditions of use described above and that the qualifying loans were originated no more than 90 days before the HPA funding date and no later than 12 months following the HPA funding date or, if the advance has a term of less than 1 year, prior to the HPA maturity date. If the eligible loans were made up to 90 days prior to the submission of the HPA application, the certifications and accompanying documentation may be submitted with the application.
Limit Per Member
The Bank has established an aggregate limit on the amount of advances that an individual member may borrow each year under the Bank's Community Investment Cash Advance (CICA) credit programs: the Community Investment Program, Advances for Community Enterprise, and HPA. The member may borrow up to the maximum amount under just one or any combination of programs until it reaches the aggregate limit.
The maximum amount of CICA credit that an individual member may borrow in aggregate each year will depend on the member's total assets as of the previous yearend, as follows:
| Total Assets |
Annual CICA Credit Limit |
Up to $20 million
$20 million to $4 billion
$4 billion and over
|
$1 million
5% of total assets as of previous yearend
$200 million
|
Total Funding Limit
The Bank may limit the total amount of HPA credit to be made available to all members in a calendar year on a first-come, first-served basis. Once the limit is reached, a member may not obtain additional HPA credit even if the member has not reached its individual limit.
Collateral
All HPA borrowings must be fully collateralized. HPA-qualifying loans may or may not be eligible to be pledged to the Bank as collateral. Please refer to the Bank's Collateral Guide for a detailed description of the Bank's collateral eligibility requirements.
Other Terms and Conditions
Other terms and conditions for HPA credit are the same as for other Bank advances.
Last Modified: June 2008
© 2000-2008 Federal Home Loan Bank of San Francisco
Grant Programs
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