Minimum credit score of 640 is required for all loan types. IHDA Mortgage will accept less than three scores as long as the lowest score, or only score, is 640 or higher and AUS is Approve/Eligible. Co-borrower with no credit scores is acceptable if AUS is Approved/Eligible.

Keywords: FICO, Credit, minimum

We updated our guidelines in August 2023 to allow up to 50% depending on the loan type and/or credit score. All files above 45% DTI are required to complete the Finally Home! pre-purchase education. Please see the charts below for details:

Max DTI Allowed By FICO and Loan Type

Pre-Purchase Education Required Per DTI Ratio

See chart below for compatible types and the respective AUS systems allowed.

GSE	​Loan Template	AUS System Allowed
	Fannie Mae HFA Preferred	Desktop Underwriter® (DU) only
​	Freddie Mac HFA Advantage	​Loan Product Advisor® (LPA) only
​	FHA 203(b)	​Desktop Underwriter® (DU) OR ​Loan Product Advisor® (LPA)
​	VA Guaranteed	​Desktop Underwriter® (DU) OR ​Loan Product Advisor® (LPA)
​	USDA Section 502 Guaranteed	​Guaranteed Underwriting System (GUS) only

All IHDA conventional loans should be run either:

• Through DU as FNMA IHDA Mortgage loans should be run through AUS as HFA Preferred

• Through LPA as FHLMC HFA Advantage.

HomeReady and other conventional loan programs are not acceptable.

LPA is only acceptable when using FHLMC, FHA, and VA loans. FHLMC cannot be run through DU. VA and FHA must be run through DU or LPA with the appropriate 30-year purchase loan template selected.

All USDA loans must be run through GUS (Guaranteed Underwriting System) with an approve/accept decision.

AUS Systems Allowed By Loan Type

No, IHDA does not allow manually underwritten loans.

No, anyone on the Mortgage and Note must also occupy the subject property as their primary residence.

High cost is not allowed by US Bank and/or IHDA Mortgage. IHDA Mortgage has no overlay regarding higher priced mortgaged loans. See excerpt from our procedural guide for details:

• High Cost

  • NOT allowed by U.S. Bank and/or IHDA Mortgage

• High Price

  • U.S. Bank and IHDA Mortgage allow when U.S. Bank runs a test via the Federal Financial Institutions Examination Council (FFIEC).

No, IHDA Mortgage does not have a minimum loan amount. High cost loans are not accepted.

MAX LTV BY LOAN TYPE

*Conventional files must utilize the HFA Preferred or HFA Advantage Loan Type.

We do not have an overlay on CLTV. Please defer to the Agency guidelines for the appropriate loan type.

No, the rate reserved in TPO Connect is the rate at which the loan must close.

Yes, we have no overlays restricting this. Upon delivery of the closed loan to U.S. Bank, the lender must provide pay history.

Borrowers can leave the table with $250 plus anything above and beyond the borrower’s minimum investment of 1% or $1,000, whichever is greater (all other funds should be used for principal reduction).

How to calculate:

Any amount greater than the Maximum Cash Back to Borrower or any non-borrower contributed credits (tax proration, seller credit, lender credits, etc.) that may be due to the borrower must be applied to principal reduction. IHDA Mortgage does not have a maximum principal reduction overlay.

IHDA Mortgage loans may not close in trust. Please remember to check the U.S. Bank HFA guide for additional credit and closing requirements.

The ONLY fee allowed to be charged on an IHDA 2nd mortgage is the recording fee.

Both Fannie Mae HFA Preferred and Freddie Mac HFA Advantage allow for reduced/discounted PMI coverage if the qualifying income (as entered into AUS) is at 80% AMI or lower per their own income limits (not IHDA’s).

Here are the guidelines for HFA Preferred or HFA Advantage for FNMA and FHLMC:

• FNMA: https://singlefamily.fanniemae.com/media/8661/display

• FHLMC: https://sf.freddiemac.com/content/_assets/resources/pdf/faq/hfa_factsheet.pdf

The Fannie/Freddie limits and income amounts can and usually will vary from the IHDA income calculator, since they are separate limits, and use different calculation methods.

Use the FNMA/FHLMC lookup tools linked below to confirm which category the file falls in, enter the income amount used in AUS for qualifying (not the IHDA income calculator amount).

• FNMA: https://ami-lookup-tool.fanniemae.com/amilookuptool/

• FHLMC: https://sf.freddiemac.com/working-with-us/affordable-lending/home-possible-eligibility-map

Your AUS feedback should reflect the correct required coverage if you have it running through as HFA Preferred/HFA Advantage.

IHDA does not approve MI companies, lenders are required to use a U.S. Bank approved MI company.

Please note, this list may change. If a company is not listed that you believe is permitted, please refer to U.S. Bank's AllRegs for confirmation.

IHDA Mortgage follows TRID guidelines on all 1st and 2nd mortgages and requires an LE & CD for both mortgages, regardless of whether either lien requires a payment. On the 2nd mortgage, only recording fees are allowed to be listed on the closing disclosure.

No, it may be requested if the pay stubs show that any borrower receives a bonus, overtime, or other sporadic income or when total income calculation puts income near the income limit.

For prior employment, a verbal VOE is acceptable.

IHDA Mortgage does not have overlays regarding homeowner's insurance coverage. See below for U.S. Bank Requirements (as of 03-01-21). Check U.S. Bank's AllRegs to confirm the amounts are still current.

HOMEOWNERS INSURANCE MAXIMUM DEDUCTIBLE - SEL-2021-005 Effective with Correspondent locks and new HFA loan reservations as of March 1, 2021, in alignment of agency requirements, U.S. Bank is updating our maximum deductible on Conventional loans as follows:

• Conventional Loans – Deductible does NOT exceed 5% of the face amount of the policy.

The maximum deductible for the following remains unchanged:

• FHA & VA Loans – Deductible does NOT exceed the greater of $2,500 or 2.5% of the face amount of the policy.

• USDA – Deductible does NOT exceed the greater of $1,000 or 1% of the face amount of the policy unless state law requirements differ.

For IHDA tax code compliance, a person is either married or single; there is no gray area. Both borrower AND spouse need to be qualified in cases where spouse is not borrowing. It must be verified that borrower AND spouse are first-time homebuyers or Exempt, even if the non-borrowing spouse will not be residing in the property.

Include in the file:

• IHDA Borrower Affidavit (HO-12) signed prior to closing, there is a signature line specifically for non-borrowing spouses (see below).

Non-Borrowing Spouse Acknowledgement

Please see below, as taken from the IHDA Procedural Guide:

Borrower must contribute a minimum investment to the transaction, which is required to be the greater of 1% of the purchase price or $1,000.00, which will be evidenced on the Loan Estimate and Closing Disclosure.

• The borrower may not use the tax proration toward the borrower's minimum investment, those funds must be from the borrower's own funds or if allowable by the AUS (DU, etc.) from properly sourced gift funds.

• Earnest money, appraisal paid by borrower, inspection paid by borrower, pre-paid insurance paid by borrower, and money brought to the table can count towards their minimum investment. Please list any borrower pre-paid items on the CD as “POC.”

IHDA requires both first and second mortgages to be in compliance with the State of Illinois Anti- Predatory Lending Database (APLD) program requirements.

For information regarding APLD requirements, refer to the APLD website (https://www.ilapld.com/Overview.aspx).

No, future rental income should NOT be included in the income calculator. Defer to the agency guidelines for the loan type when using it as income to qualify.

IHDA has no overlays regarding student loan payment calculation, defer to the agency guidelines specific to the loan type.

No, transactions utilizing the FHA 203k loan type are currently not eligible for IHDA assistance.