West Virginia Code of State Rules › Agency 88 - Housing Development Fund › Title 88 - LEGISLATIVE RULE WEST VIRGINIA HOUSING DEVELOPMENT FUND › Series 88-01 - Refiling Of Administrative Rules Pertaining To Administration Of Single-Family Mortgage Loans › Section 88-1-3 - Determining eligibility for programloans

Current through Register Vol. XLI, No. 28, July 12, 2024
3.1. General. -- In order to be eligible for
				a Program Loan, a person or family must meet the definition of an Eligible
				Borrower as provided in these regulations and must (i) be a resident or intend
				immediately to become a resident of the state, (ii) intend to make the Eligible
				Single-Family Dwelling his principal residence within a reasonable time after
				the Program Loan is closed, (iii) possess the legal capacity to contract for
				and understand the obligations of the Program Loan, (iv) agree not to rent the
				Eligible Single-Family Residence during the term of the Program Loan without
				the written consent of the Housing Development Fund, (v) have a general
				financial standing acceptable to the Housing Development Fund, and meet the
				underwriting standards provided in these regulations.
3.2. Determination and evaluation of
				applicant's income. -- In all cases, the applicant must produce copies of his
				federal income tax return for each of the two (2) years preceding the date of
				his application as a basis for determining the applicant's family income for
				said two (2) years. Whether the applicant's family income exceeded fifty
				thousand dollars ($50,000) for either of said years shall be determined by
				reference to the applicant's "Adjusted Gross Income" (line 10) in the case of
				Form 1040A tax returns or to "Total Income" (line 21) in the case of Form 1040
				tax returns. In addition, if the applicants are husband and wife and were not
				married during the entire two (2) year period, each applicant will provide
				copies of all W-2 forms for that period with respect to himself or herself and
				the former spouse and such other information as the Participating Lender may
				request in order to determine the gross income attributable to each applicant
				during such two (2) year period. The following additional procedures must be
				followed by Participating Lenders in regard to determining and evaluating the
				income of a Program Loan applicant:
(a)
				Compliance with applicable law; information to be current. -- Participating
				Lenders must comply with the Federal Equal Credit Opportunity Act, Regulation B
				of the Federal Reserve System and all other laws applicable to taking,
				evaluating and acting upon loan applications. Verification of income data must
				not be over sixty (60) days old.
(b) Temporary income. -- Temporary income
				such as VA educational allowances and unemployment compensation will not be
				considered except insofar as it will probably be continued for a period long
				enough to affect the applicant's ability to repay the Program Loan.
(c) Income from alimony, child support and
				maintenance. -- Income from alimony, child support and maintenance payments
				will be considered only to the extent it is likely to be consistently made.
				Factors which the Participating Lender may consider in determining the
				likelihood of consistent payments include, but are not limited to, whether the
				payments are received pursuant to a written agreement or court decree, the
				receipt of which has been verified, the length of time the payments have been
				received, the regularity of receipt, the availability of procedures to compel
				payment, and the credit-worthiness of the payor, including the credit history
				of the payor where available to the Participating Lender under the Fair Credit
				Reporting Act or other applicable laws. The Participating Lender must submit to
				the Housing Development Fund evidence adequate to support its
				determination.
(d) Overtime income.
				-- Overtime will not be considered in evaluating repayment ability of an
				applicant unless:
(i) Income is derived due
				to shift work differential;
(ii)
				scheduled by the hour, scheduled to work forty-two (42) hours per week, has
				been worked one (1) year previously, and the employer states the scheduled
				hours will remain the same in the future; and
(iii) any income derived from mileage as in
				the case of a truck driver, which is a regular part of salary, must be
				considered and substantiated by previous two (2) years income tax
				returns.
(e)
				Commissions. -- When all or a major portion of the applicant's income is
				derived from commissions, it will be necessary to establish the stability of
				such income if it is to be considered in the loan analysis for the repayment of
				the mortgage debt or short term obligations. In order to assess the value of
				such income, lenders should obtain written verification of the actual amount of
				commissions paid to date and the manner in which they are paid. The length of
				the borrower's employment in this type of occupation is a very important
				factor. If the borrower has been employed for a relatively short time, the
				commissions would not be considered stable. If commissions are to be considered
				as stable income, the borrower would need to have been on his present job a
				minimum of one (1) year.
(f) Second
				job. -- Income from a second job will be considered only if the job has been
				worked for at least two (2) years and it is likely that the job will be
				retained by the applicant.
(g)
				Self-employment income. -- Income to a self-employed applicant will be
				considered only if it has been received for at least two (2) years as
				substantiated by signed federal income tax returns.
(h) Retirement income. -- Retirement income
				will be considered only if substantiated by pension fund documentation or
				information from the Social Security Office or the Veteran's
				Administration.
(i) Construction
				work verification. -- Construction workers who are in a union and are assigned
				jobs by the union must be documented and underwritten in the following manner:
(1) Verification of employment from the
				union;
(2) Verification of
				employment from the construction company;
(3) If less than three (3) years on the
				present job, submit previous verification of employment or a job history for
				preceding three (3) years.
(j) Stability of employment. -- Ordinarily, a
				minimum of four (4) months with the present employer shall be required of each
				applicant. An exception to the above may be granted if it can be determined
				that there is no probation period, employment is in the same field as previous
				employment, and the employment is of a stable nature. Employment verifications
				must be submitted to cover a full three (3) years. Three (3) or more employment
				changes by the applicant within the previous five (5) years or three (3)
				changes of residence must be explained in writing by the applicant.