RECOURSE LOANS

NHSA extends a standing invitation to every NeighborWorks® organization to sell loans with recourse to NHSA. The loan package can be of any size required to meet the NeighborWorks organization's cash flow needs. Recourse loans can be used for purchase, rehabilitation, closing costs, and down payment assistance. NHSA will also purchase Section 8 loans.

Additional Guidelines

• Loans must be originated by, or assigned to, a NeighborWorks organization.
• Subject properties must be owner occupied.
• Loans must be fully amortized, with the remaining term of forty (40) years or less, and the weighted yield of the group of loans offered for sale must be equal to or greater than NHSA's cost of funds.
• Loans must be current at the time of sale and are purchased with recourse. This means that any loans that become 90-days or more delinquent must be substituted with another current loan of equivalent value or repurchased back by the seller.
• A reserve of either loans or cash, or a combination of loans and cash, is required for the recourse loan purchase program.
• NHSA does not purchase delinquent, deferred or non-amortizing loans.

Recourse Reserve Policy

To increase leverage opportunities for NeighborWorks organizations that have established a record of strong performance, NHSA has established an enhanced leverage reserve requirement, allowing reserves to be provided in either performing loans or cash. Additionally, all loans that have paid on time for 24 consecutive months will no longer require reserves. Learn More

Resources

Recourse Loan Policies and Procedures—Summary

Standard Loan Sale and Servicing Agreement (LSSA) for
First-Time Sellers

Enhanced Loan Sale and Servicing Agreement (LSSA) for Repeat Sellers

Recourse Reserve Policy

Recourse Rate Sheet (Needs Password)

List of Mortgages Offered for Sale—Form (Excel Document)

List of Mortgages Offered for Sale—Instructions

Financial Underwriting Standards

Financial Underwriting Checklist

Financial Underwriting Excel Worksheet

Exhibit A: Purchase/Service Contract

Exhibit B: Sales Document Checklist

How to Send Recourse Loan Payments to NHSA