Georgia Dream Lender FAQ

Our Georgia Dream program provides opportunities for first-time homebuyers to receive funding – up to $7,500 – for down payments and closing costs. The success of this program is due to connections with many individuals, including lenders.

The following FAQ provides essential facts for lenders to continue to help thousands of Georgians reach their goals of purchasing a home.

Q: What is the FHA Amendatory Clause and when is it not required?

A: FHA requires the buyer, buyer’s agent, seller, and seller’s agent to sign FHA Amendatory Language which states that the buyer is not legally required to go through with a home sale if the appraised value comes back lower than the price listed in the sales contract. The Amendatory Clause is not required on HUD Real Estate Owned (REO) sales, FHA’s 203k mortgage program, sales where the seller is Fannie Mae, Freddie Mac, the Department of Veterans Affairs, Rural Housing Services, other Federal, State and local government agencies, mortgagees disposing of REO assets, or sellers at foreclosure sales.

Q: Is a dry closing permitted by DCA (not funding on the same date as the closing date)?

A: DCA requires a wet closing (funding the same date as the closing).

Q: Which closing documents does Georgia Dream permit for electronic signature?

A: Examples of documents which DocuSign/eSign are eligible: initial and final 1003, letters of explanation, initial and final disclosures, 4506T, and mortgage verifications. Examples of Documents which DocuSign/eSign are ineligible: Georgia Dream program forms, note, security instrument, FHA 92900a, or any document that requires a notary.

Q: How is the Georgia Dream Program funded?

A: The Georgia Dream Program is funded via Bond issuance from revenue via bond sales. The only Georgia Dream program that is currently federally funded is the Hardest Hit Program, but the last date for application reservations is June 30, 2020.

Q: Do Georgia Dream charge loan level pricing adjustments (LLPAs) and Early Payment Default (EPD) fees for loans that enter into a forbearance agreement after the purchase date?

A: Currently, Georgia Dream does not charge LLPAs or EPD fees for loans that enter into a forbearance agreement after the purchase date.

Q: How does Georgia Dream view a borrower who has a documented payment plan with IRS to repay non-lien delinquent federal tax obligation?

A: The delinquent tax debt may remain unpaid with the following:

  • Document valid repayment agreement with the IRS
  • Documents to support the borrower has paid a minimum of 3 consecutive payment according to the executed agreement. Prepayment is not permitted.
  • The monthly payment must be included in the borrower’s qualifying ration.
  • Public record check to verify the borrower does not have any federal liens.

Q: Do the Georgia Dream program guidelines require a verbal verification of employment during COVID-19?

A: The Georgia Dream program currently requires lenders to complete the verbal verification on or 10 days prior to the closing date. Georgia Dream is permitting the following temporary flexibilities for the verbal verification of employment until the date the flexibilities are rescinded by FHA and Fannie Mae.

  • The lender (participating lender employees) does not have knowledge of loss of employment and
  • The borrower has a minimum of 2 months reserves of Principal, Interest, Taxes and insurance (PITI) with source of funds documented according to FHA guidelines and one of the following:
  • A year to date paystub or direct electronic verification of income for the pay period that immediately proceeds the note date or
  • A bank statement showing reflecting direct deposit from the Borrower’s employment that immediately proceeds the note date. As a reminder, when delivering loans originated pursuant to the provisions of the agreement with DCA, the Lender warrants that the borrower is employed at the time the loan is purchased.

Q: COVID-19: Do the Georgia Dream program guidelines require a full appraisal during COVID-19?

A: The Georgia Dream program requires a full appraisal or will accept the temporary appraisal flexibilities provided by HUD and Fannie Mae until rescinded for purchase transactions with an optional Exterior-Only or Desktop-Only scope of work by the Appraiser. These flexibilities are not permitted on New Construction, Construction to Permanent, Building on Own Lands and 203(k) purchases. Refer to HUD Mortgagee Letter 2020-05 for detailed guidance.