The Mortgage Origination Program (MOP Loans)

 INTRODUCTIOn and Overview

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.

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. Currently, the average STIP rate is well below the floor rate, and has been for nearly a decade, and so the MOP rate has been holding at the minimum program rate, which is now 2.75%. The MOP rate is adjustable, and only adjusted once 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 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 at online here.

The maximum MOP term is 30 years. The ratio of all secured monthly mortgage payments (principal + interest) to total verified monthly household income may not exceed 40% (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 loan amount under the program is $1.62 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 may rise to as much as 95% (for combined financing under $1.62MM).

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

To begin the eligibility process, ask your department manager and department chair submit a request for a Mortgage Origination Program (MOP) 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 (i.e. you have two years from your effective date to request participation in the program).

If your appointment to a MOP-eligible series is not yet fully approved (an offer later starts 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.  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.  

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.  

Once the dean for academic affairs reviews and 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 will be set aside for your use.  You will 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, where you can complete your mortgage application online.   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.) Once all application materials have been submitted, electronically or faxed, a pre-approval letter can be issued within five working days.

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 if you would like to utilize university financing.  

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.