Will this disqualify or lessen chances for MHA

[alikeith]

Hi-
i have been reading up on the guidelines for MHA and the servicer incentives. I found this: Servicers will also receive “pay for success” fees –as long as the
borrower is successful at staying in the program – of $1,000 each
year for three years, subject to a de minimis threshold.

I read the de minimis threshold is 6%.

So in my case, my mortgage payment is 36.3% of my gross. They wont be able to reduce my payment the minimum 6% to get that incentive. Will this keep them from approving me possibly?

[ama125]

Originally Posted by alikeith

Hi-
i have been reading up on the guidelines for MHA and the servicer incentives. I found this: Servicers will also receive “pay for success” fees –as long as the
borrower is successful at staying in the program – of $1,000 each
year for three years, subject to a de minimis threshold.

I read the de minimis threshold is 6%.

So in my case, my mortgage payment is 36.3% of my gross. They wont be able to reduce my payment the minimum 6% to get that incentive. Will this keep them from approving me possibly?

This is how I am interpreting the de minimis threshold...your payment amount must be reduced by at least 6% from what you are paying now. In numbers, let's say hypothetically your gross monthly income is $5000. A payment at 36.3% of 5K = $1815. If modified to 31% of 5K, your payment would be $1550, resulting in a reduction of $265/mo. To satisfy the de minimis test, your current payment would only have to be reduced by 6% ($1815 * .06 = 108.90). In this scenario, your payment would actually be reduced by 14% so it would meet the threshold.

[ama125]

You can also plug in your numbers here: Making Home Affordable - Payment Reduction Estimator

[alikeith]

I get it! I think....
I thought it ment reducing from the 36% of my gross to the 31% being that is only 5%, So i was way off. In actuality from what i have figured, it would be reduced about 12%

Thank you!