Welcome New Down Payment Assistance Funding Process September 23, 2015 Conference Dial-in Number: (641) Participant Access Code: #

Webinar Agenda Introductions Background for change in DPA funding process Overview of DPA funding process Forms and Checklists Delivery of Closed Loans Additional Training 2

New DPA Funding Process 3 Why change the DPA funding process? TILA-RESPA Integrated Disclosure Rule (“TRID”) Currently, MFA is considered the “creditor” on DPA second mortgage loans Participating Lender’s are considered a third-party originators (“TPO”) As the “creditor”, MFA is responsible for providing accurate and timely disclosures on second mortgage DPA loan. MFA does not have the infrastructure or capacity to effectively manage the TRID disclosure process DPA closed in the Participating Lender’s name, funded at closing by the lender and assigned to MFA mitigates the “creditor” risk to MFA

New DPA Funding Process 4 What’s new? Compliance Review/Approval process Funding of DPA by Participating Lender Purchase of DPA loans/reimbursement of DPA grants Delivery of DPA second mortgage closed loan files Assign/transfer of ownership/servicing rights to MFA

New DPA Funding Process 5 Timelines and Effective Dates New DPA funding process is effective October 1, 2015 for all types of DPA (loans or grants) On MFA first mortgage loans that are closed on or after October 1, 2015 and have DPA, the lender will fund the DPA at closing Up to September 30, 2015, MFA will table fund DPA Wire requests will be processed and sent per the current procedure The new DPA funding process applies to all DPA, not just the new DPA programs It is likely that the lender will have to close and fund Mortgage Booster, HERO Grants, Mortgage$aver Plus Grants as well as First Down and Next Home Grants

New DPA Funding Process 6 The Lender will close the DPA second mortgage loan in their name and fund the DPA at the closing table, including DPA grants. The Lender will not need to use a MFA program specific Note and Mortgage for any DPA loans closed after October 1, 2015 Lenders will use standard FNMA security instruments (Note and Mortgage) on all DPA loans closed on or after October 1, 2015 The Lender will transfer/assign DPA loan to MFA using MFA’s MERS ID MFA will provide the MERS information/procedure to lenders prior to roll-out The Lender will transfer/assign the first mortgage loan to Master Servicer using the Master Servicer’s MERS ID

Overview of DPA Funding Process 7 Lender may close and fund the first mortgage loan and DPA at any time after Compliance Approval After closing, the first mortgage closed loan file and the second mortgage closed loan file (with a copy of the Note) is delivered electronically to the Master Servicer for purchase/reimbursement Lender delivers original DPA second mortgage Note to MFA If there is a DPA second mortgage, the Master Servicer will purchase the first mortgage loan and the second mortgage loan concurrently If there is a DPA Grant, the Master Servicer will purchase the first mortgage loan and reimburse the DPA grant to the lender concurrently MFA will service all DPA second mortgage loans

Overview of DPA Funding Process 8 Compliance Review Process Lender will submit a Compliance File to MFA for review Follow current process After Compliance Approval Lender will receive a “Compliance Approval/Loan Purchase Commitment” for each first mortgage and DPA second mortgage loan Lender will also receive a “DPA Funding Commitment” for DPA loan or grant Lender closes first mortgage loan and funds the second mortgage loan or grant at the closing table Other than the pre-closing Compliance Approval, no additional approval from MFA is required prior to closing MFA will no longer wire funds to closing DPA second mortgage loans closed in the name of the lender

Overview of DPA Funding Process 9 Compliance Review Process For DPA Grant Funds The “DPA Funding Commitment” acts as the reimbursement invoice It provides the terms and conditions by which the Master Servicer will reimburse the grant Also provides documentation for the credit file regarding the source of DPA funds, MFA’s commitment of the funds prior to closing, and a gift letter for the borrower For DPA second mortgage loans The “Compliance Approval/Loan Purchase Commitment” provides the terms and conditions for the purchase of the DPA second mortgage loan The “DPA Funding Commitment” provides the lender documentation regarding the source of DPA funds, MFA’s commitment of the funds prior to closing and a secondary financing disclosure

Forms and Checklists 10

New DPA Funding Process 11 Forms “Compliance Approval/Loan Purchase Commitment” MFA’s commitment to purchase the loan from the Lender Details the terms and conditions by which the Master Servicer will purchase the loan Loan that is delivered to Master Servicer must match the terms and conditions of the “Compliance Approval/Loan Purchase Commitment” It is the Lender responsibility to ensure that the “Compliance Approval/Loan Purchase Commitment” is accurate prior to loan closing

New DPA Funding Process 12 Forms “DPA Funding Commitment” Provided for DPA second mortgage loans and DPA grant MFA’s commitment to purchase the DPA loan or reimburse the grant to the Lender Includes information required by FHA/FNMA regarding DPA secondary financing (if applicable), source of DPA funds, commitment of DPA funds by MFA and a gift letter (if applicable) for the borrower It is the Lender’s responsibility to ensure that the “DPA Funding Commitment” is accurate prior to loan closing MFA will only purchase/reimburse for the amount listed on the “DPA Funding Commitment” and “Compliance Approval/Loan Purchase Commitment”

New DPA Funding Process 13 Checklists “Closed Loan Delivery Checklist” Specific loan delivery checklists First Home and Next Home will have specific MFA document checklists to be delivered to the Master Servicer along with the first mortgage Master Servicer checklist First Down and any Mortgage Booster loans closed October 1 or after will have one checklist to be delivered to the Master Servicer Lender will be provided with a template prior to roll out It is the Lender’s responsibility to ensure that the correct loan delivery checklist is included in the closed loan file

Delivery of Closed Loans 14

Delivery of Closed Loans The first mortgage loan file (including grant documentation) and the DPA second mortgage loan are delivered to the Master Servicer Uploaded via the Lender Connection DPA second mortgage closed loan files will no longer be delivered to MFA through the online reservation system The lender will assign/transfer the DPA second mortgage to MFA Via MERS or through a paper assignment MFA prefers that Lenders utilize MERS for transfer to MFA The original Note is delivered to MFA concurrently with the closed loan packages to the Master Servicer Once MFA has the original DPA second mortgage loan Note, the Master Servicer will be authorized by MFA to purchase the DPA second mortgage loan DPA Grants will be reimbursed by the Master Servicer without authorization from MFA 15

Delivery of Closed Loans (cont.) The lender will have to provide a “welcome letter” to the borrower for interim servicing of the DPA second mortgage loan prior to sale to the Master Servicer The Lender will also have to provide a “goodbye letter” to the borrower when servicing is transferred to MFA MFA will service all DPA second mortgage loans 16

Additional Items MFA will provide MERS information to lender prior to roll out MFA will provide the lenders with a reference manual on the specific requirements regarding DPA funding, DPA purchase/reimbursement and DPA closed loan delivery prior to roll out More detailed Closed Loan delivery training will be provided shortly after October 1,

Questions? 18