The Mortgage Origination Program (MOP Loans)

 INTRODUCTIOn 

If you are 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.

To begin the eligibility process, your department chair would need to forward a request for a Mortgage Origination Program (MOP) allocation to the appropriate dean’s office.  This request must be submitted within the first two years of your MOP-eligible appointment.  

If you are not yet in a MOP-eligible series, 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.  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 requested on your behalf.  

If the dean (usually the Associate Dean for Academic Affairs) concurs with the request, it is sent to the Office of 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 for your use will be approved.  You would then be notified of the allocation approval by the Home Loan Program Manager (me) and your allocation reservation request will be submitted to the Office of Loan Programs (OLP) at UCOP (University of California Office of the President) and they will provide to you a unique and secure web address for the iApply online application system.  Allocations must be used within two years of reservation approval.

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.  Once all application materials have been submitted, electronically or faxed, a pre-approval letter can be issued within five working days.

MOP loans are variable rate loans with a rate adjusted annually on the anniversary date of the loan. The MOP rate is tied to the STIP rate of the University and as such does not fluctuate as typical residential or commercial mortgage rates do. As of February 1, 2107, the program minimum rate is 2.75%. The MOP rate has been holding at the minimum rate for approximately eight years, and you can view MOP rate history and comparisons online. The MOP rate is adjustable, but is only adjusted once annually on the anniversary of the loan, and 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 here.

For appointments effective prior to September 1, 2016, the maximum loan amount available under the program is $1 million. For appointments effective September 1, 2016 or later, the maximum loan amount is $1.4 million.  MOP loans are limited by a 90% loan-to-value ratio If combined with a Supplemental Home Loan Program (SHLP) financing, the combined loan-to-value ratio can rise to 95% (for combined financing under $1.43MM). SHLP loans are less common and must be funded by the department or the school.

The ratio of all secured monthly mortgage payments (principal + interest) to total verified monthly household income may not exceed 40% (the P&I/Income Ratio). If you are receiving secondary financing, this 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% (the Overall Debt/Income Ratio).

MOP loans must be used to purchase primary places of residence which are single family dwellings or condominiums.  They cannot be used for second homes, income property, duplexes, or TICs. No funds may be taken out in borrower equity or used for renovations.  

You must be in your eligible title within 180 days of loan funding, and we try to keep that window as narrow as possible for candidates whose appointments have not yet become effective.   If you are not in your MOP-eligible title within 180 days, the Office of Loan Programs can declare your loan due and payable immediately.  If you have an accepted offer letter, it is possible to begin the MOP eligibility process before your actual start or approval date. In the absence of an effective appointment, we will require a copy of the signed offer letter (inclusive of support for MOP participation) and a letter from the department stating that they have prepared and submitted your appointment packet for review and that they have every expectation that the appointment will be fully approved at all levels by a certain date.  

The Mortgage Origination Program is a pre-approval process, and it is  important that you have a signed pre-approval in hand before looking for a place or making an offer.  

See also: The Home Loan Programs Resources Page

Have you signed an offer letter but your full academic appointment is not yet final or not yet effective? It may be possible to initiate your particiaption in the program before your appointment has been approved at all levels of review. Early appointees can click here for more information.