MOP Introduction and Next Steps for New Faculty

If you have been recently 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. Nomination to the Mortgage Origination Program (MOP) 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 primary residence in the Bay Area.

Program information:
MOP loans are variable-rate loans and the rate is indexed to the most recent four-quarter average rate of return of the UC Short Term Investment Pool (STIP). The minimum program rate is 3.25%. It is important to note that as the MOP rate is based on the STIP rate and not a federal or other lending index, the MOP rate does not fluctuate as typical residential or commercial mortgage rates do, and is a below-market mortgage rate. For over a decade, the STIP rate had been fluctuating below the minimum program rate and therefore the MOP rate had remained at the minimum program rate (3.25%). However, in recent quarters the calculated indexed rate has risen above the minimum program rate. The interest rate for mortgage loans approved for the Program during the period August 1, 2024 through October 31, 2024 will be 4.45%. The current MOP rate will always be published at https://www.ucop.edu/loan-programs/.

The MOP rate is adjustable, and active loan rates are adjusted annually on the anniversary of the loan. The MOP rate is prohibited from being adjusted either up or down by more than 1.0% at any adjustment period, and features a lifetime cap of 10% over the initial rate. It is likely that the MOP rate will drop back down to the minimum program rate in the coming quarters.

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 at http://www.ucop.edu/loan-programs/loan-programs/5-1mortgage-origination-program.html.

The maximum loan amount for UCSF is $1.9 million, subject to additional limits depending on funding available. The Mortgage Origination Program features a 90% loan-to-value ratio (LTV), meaning the maximum loan amount will be 90% of the appraised value of the property or the purchase price (whichever is lower), leaving 10% down (plus reserves and closing costs). 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.

If combined with Supplemental Home Loan Program (SHLP or Centrally-Funded SHLP) financing (https://tiny.ucsf.edu/supplemental), the combined loan-to-value ratio may rise to as much as 95% to ameliorate the down payment burden for smaller home purchases. Supplemental Home Loan Program loans must be offered and funded by the recruiting department; access to Centrally-Funded loans are limited but may be possible.

MOP loans must be used to purchase primary places of residence which are zoned as single-family dwellings (houses or 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 renovation/construction, nor is the MOP available for refinancing a current home.

The Mortgage Origination Program is a pre-approval program, and it is important that you have received a pre-approval certificate before placing an offer if you intend to utilize university financing.

Process:
The earliest a department can put forward a nomination for an allocation reservation and participation in the program is after the eligible appointment has been approved at the department level. This is signified by the certification of the appointment by the department chair in Advance, UCSF’s electronic appointment and advancement system. If you are not in your MOP-eligible title within 180 days, the Office of Loan Programs can declare your loan due and payable. Once the appointment has been submitted by the department to the dean’s level for review, the department can put forward the forms asking that a MOP allocation be reserved on your behalf.

The eligibility window for departments to nominate a candidate for participation in the Mortgage Origination Program for a recruitment candidate is two years from the effective date of the eligible appointment.

After the appointment has been approved (either fully approved or certified by the department chair) and you are ready to begin the eligibility process: e-mail your department manager or academic affairs manager and let them know you would like to request participation in the UC home loan program. The department will then submit a nomination for a Mortgage Origination Program allocation reservation to the academic dean’s office of your school. (Again, 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 you an invitation to Consumer Connect (CC), a secure online portal where you can complete your mortgage application online. Please note: If you are married, or if you have a partner you wish to be on the deed, you will need to complete the application as co-borrowers regardless if using the second income for qualifying purposes. Allocations must be used within two years of reservation approval. (So you have two years to ask for an allocation reservation, and then two years to use it.)

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 Estimating Calculator at http://mopqual.ucop.edu. Once all application materials have been submitted, a pre-approval letter can be issued within 10 to 20 working days.