MOP Introduction and Next Steps for New Faculty
If you have been appointed to a faculty position which confers membership in the Academic Senate (Ladder Rank, In Residence, or Clinical X), you may be eligible to participate in the UC home loan program. The program is restricted to full-time appointees in an Academic Senate or Senior Management title who do not own, and have not owned over the last 12-month period, a home in the Bay Area.
MOP loans are variable rate loans with an annually adjusted rate based on the most recent four-quarter average of the STIP (Short Term Investment Pool) rate of the University. As such, while the MOP loan is a variable- or adjustable-rate mortgage, the MOP rate does not fluctuate as typical residential or commercial mortgage rates do. For about a decade, the average STIP rate has been fluctuating below the floor rate, and so the MOP rate has been holding at the minimum program rate (3.25%). The MOP rate is adjustable, and if adjusted it can only adjusted once annually on the anniversary of the loan; furthermore the MOP rate is prohibited from being adjusted either up or down by more than 1.0% at any given adjustment time, with a lifetime cap of 10% over the initial rate. There is also a 5/1 MOP program which allows for a fixed rate for the first five years at a higher rate, after which the loan converts to a standard MOP loan. Details on the 5/1 MOP and the derived rate may be found online here.
The current maximum loan amount under the program is $2.37 million (adjusted annually based on the average new home price in California). MOP loans are limited by a 90% loan-to-value ratio. The ratio of all secured monthly mortgage payments (principal + interest) to total verified monthly household income may not exceed 40% (P&I/Income Ratio). If you are receiving secondary financing, this ratio is called the Combined P&I/Income ratio. The ratio of all monthly debt obligations (housing and non-housing debt) to total verified monthly household income may not exceed 48% (Overall Debt/Income Ratio). The maximum MOP term is 30 years.
Provision of a MOP loan is contingent on your ability to qualify for financing. You can estimate the amount for which you might qualify by using the MOP Qualifying Calculator.
If combined with Supplemental Home Loan Program (SHLP) financing, the combined loan-to-value ratio may rise to as much as 95% (for combined financing under $2.37MM) to ameliorate the down payment burden for smaller home purchases. SHLP loans are second mortgages with an additional monthly payment. SHLP financing does not assist in all cases, and SHLP loans are funded by departments who have set aside funds specific to this purpose and recruitment.
MOP loans must be used to purchase primary places of residence which are zoned as single-family dwellings (this includes condominiums). University financing cannot be used for second homes, income property, duplexes, or TICs. No funds may be taken out in borrower equity or used for renovations, nor is the MOP available for refinancing a current home.
The Mortgage Origination Program is a pre-approval process, and it is important that you have a signed pre-approval in hand before placing an offer if you intend to utilize university financing.
To begin the eligibility process: e-mail your department manager or department chair and let them know you would like to initiate your participation in the home loan program. The department should then submit a request for a Mortgage Origination Program allocation to the academic dean’s office of your school. This request must be submitted within the first two years of your MOP-eligible appointment. Once the dean for academic affairs reviews and concurs with the request, it is sent to the Office of Faculty and Academic Affairs (under the Vice Provost Academic Affairs) for review. If you are deemed eligible and funds remain in the campus allocation, an allocation reservation will be approved for your use. You will then be notified of the allocation approval by the Home Loan Program Manager and your allocation reservation request will be submitted to the Office of Loan Programs (OLP) at UCOP (University of California Office of the President) who will send to you via e-mail a unique and secure web address to the online application system. Allocations must be used within two years of reservation approval. (So you have two years to ask for an allocation, and then two years to use it.)
(If your appointment to a MOP-eligible title is not yet fully approved—and the offer letter begins the appointment process rather than completes it—there must be an appointment packet in process for you in Advance, and the appointment packet must be complete and include the Chair’s Letter. See Introduction and Next Steps for Pre-Appointees.)
Once all application materials have been submitted a pre-approval certificate can be issued within three-to-five working days.