MOP Introduction and Next Steps for New Faculty

Candidates recruited to a faculty position in a Ladder Rank, In Residence, or Clinical X title at the Assistant may be eligible for support under the UC home loan program.  Nomination to the Mortgage Origination Program (MOP) is restricted to full-time appointees in an eligible title who do not own, and have not owned over the last 12-month period, a primary residence in the Bay Area.

Mortgage Origination Program support is an additional recruitment incentive to be strategically offered by the schools and departments based on the funding available and their identified recruitment priorities.  This is not an entitlement program and is not available to all faculty.

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

If a MOP allocation reservation is approved, candidates will have one year to utilize this reservation to fund a home purchase.

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.  While the minimum program rate may be 3.25%, the actual rate will be the MOP rate calculated on the index at the time of loan commitment.  The calculated rate is determined and published every quarter, and the current MOP rate will always be published online 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.

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 $1.5 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 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 SHLP 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 candidates have received a pre-approval certificate before placing an offer in order to utilize university financing.

Process:
Nominations from the schools are limited by the funding available and identified recruitment priorities.  Identified recruits may be nominated for MOP support before the appointment has been fully approved at all levels of review.  The earliest a department can put forward a nomination for an allocation reservation and participation in the program is at the approval of the eligible appointment 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.

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

It is important for departments to submit the nomination and allocation reservation request only at the candidate’s prompting and they are ready to begin their home hunting. If a MOP allocation reservation is approved, candidates will have one year to utilize this reservation to fund a home purchase.

Once the appointment has been submitted by the department to the dean’s level for review, or the appointment action has been fully approved and effective, the department can put forward the forms requesting a MOP allocation reservation to the dean’s office.

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 the candidate is deemed eligible and funds remain in the campus allocation, an allocation reservation will be approved.  The candidate will then be notified of the allocation approval by the Home Loan Program Manager and the allocation reservation request will be submitted to the Office of Loan Programs (OLP) at UCOP (University of California Office of the President) who will issue the candidate an invitation to Consumer Connect (CC), a secure online portal where candidates can complete their mortgage application online.  Please note: married candidates, or those with a partner they wish to be on the deed will need to complete the application as co-borrowers regardless if using the second income for qualifying purposes.

Allocations must be used within one year of reservation approval. So candidates have three years to activate an allocation reservation, and then one year to use it.

Provision of a MOP loan is contingent on the ability to qualify for financing.  Candidates can estimate the amount for which they might qualify by using the MOP Estimating Calculator at https://mopqual.ucop.edu.  Once all application materials have been submitted, a pre-approval letter can be issued within 10 to 20 working days (this period was been extended due to significantly increased loan volume but candidates may receive a pre-approval sooner).