Preferred Program®

Downpayment Assistance Made Even Easier

PreferredProgram® Code of Conduct

I. Relations with Service Providers

PreferredProgram is a downpayment assistance provider striving to fulfill its mission of enabling more Americans to gain an equity position of homeownership through relationships with Mortgage Lenders, Home Builders, real estate sales professionals, and other service providers—all of whom are referred to as Homeownership Professionals. We may also maintain direct contact with both purchasers and Sellers in order to identify opportunities to provide downpayment assistance to qualifying prospective Home Buyers, and have established the following practices in order to guide Homeownership Professionals in their relationships with Home Buyers and Sellers:

Compensation and Pricing

• PreferredProgram will not participate in any transaction in which a Homeownership Professional or person affiliated with such professional gives or receives a portion, split, or percentage of any fee for processing a request for Funds.
• PreferredProgram will not participate in any transaction in which a Homeownership Professional or person affiliated with such professional obtains a downpayment assistance grant and, in return, charges a fee or requires payment of any kind beyond the stated fee.
• PreferredProgram will terminate its relationship with a Homeownership Professional or person affiliated with such professional should we suspect or have reason to believe that a home's selling price has been raised to offset downpayment assistance.
• PreferredProgram will publicize and promote to Homeownership Professionals and persons affiliated with such professionals the fact that raising a home's price above the asking price in order to accommodate downpayment assistance is viewed as unethical and will be discouraged and discontinued.
• Any Homeownership Professional or person affiliated with such professional will not be entitled to any compensation or commission from PreferredProgram in which they are the Mortgage Originator, Builder, Realtor or service provider.

Deductibility

PreferredProgram will apprise any Homeownership Professional that although we function as a nonprofit downpayment assistance provider, the Seller's contribution paid to The Genesis Foundation is not tax deductible as a charitable contribution because the Seller derives the full benefit of the contribution through the sale of a home. For questions or clarification, please contact your personal tax advisor.

II. Administrative Matters

PreferredProgram has a well-established system of checks and balances as well as internal controls designed to minimize the risk of fraudulent practices. Our strict adherence to the following practices and procedures has been crucial to our success in providing downpayment assistance:

Program Documentation and Disclosure

• PreferredProgram has developed a comprehensive set of internal company policies, practices, procedures, template forms, documents, and program guidelines, all of which are available to those with whom we associate, including employees, contractors, beneficiaries, Home Buyers, Sellers, consultants, and other Homeownership Professionals.
• PreferredProgram records all Gift Fund Requests. All related documentation is provided for the Homeownership Professional(s) and he/she must retain signed documentation in the loan file. Specifically, the following information is requested to be signed and kept in the mortgage file for review at the request of regulators and auditors:
  • A Gift letter provided to the Buyer reflecting the dollar amount of the Gift.
  • A Seller participation letter disclosing the service or processing fee and contribution required.
• PreferredProgram provides all program participants with a written explanation of the Gift Funds and the fact that the Funds need not be repaid by the Home Buyer.
• PreferredProgram provides all parties involved in a transaction and responsible for payment of the fee with a written fee statement disclosing the amount due.
• Regardless of whether the underlying financing of the transaction is an FHA-insured loan, PreferredProgram will neither directly nor indirectly promote the decrease or elimination of debt, the payment of fees or charges, or the purchase of goods or services beyond the scope allowable pursuant to HUD. We will not use Gift Funds—the maximum amount of which may not exceed $25,000—for any purpose other than downpayment, closing costs, prepaid items, and buy downs associated with the purchase of the home. Likewise, the recipient of Gift Funds may not use the Funds for any purpose other than downpayment and closing costs associated with the purchase of the home.
• All participants and beneficiaries of PreferredProgram have unlimited access to online assistance as well as telephone access to customer service representatives, with hours of availability clearly indicated and maintained.

Quality Control and Data Maintenance

• PreferredProgram conducts regularly-scheduled internal audits as well as random audits of Gift Fund transactions to ensure proper compliance with our policies, practices, and procedures. We consistently document any incorrect or invalid information, and only when such information has been corrected do we allow the Gift Fund transaction to continue.
• PreferredProgram maintains a comprehensive and secure data filing system to store active and inactive information pertaining to Gift Fund transactions. This system allows us to maintain the privacy of personal information and protect it against unauthorized access, use, or disclosure.
• To protect against fraudulent activity, PreferredProgram adheres to prudent administrative and managerial guidelines designed to prevent and uncover any fraudulent Gift Fund transaction activity and abuse of the program.
• PreferredProgram gathers and verifies contact information from Homeownership Professionals before allowing them to participate in our program. Such information may include, but is not limited to, office address, telephone number, e-mail address, closing office TIN, and Federal Reserve Bank routing information. Any invalid, incomplete, or incorrect information provided by the Homeownership Professional automatically will prevent the transaction from going forward until the information is corrected.
• As part of its due diligence in preventing fraudulent activity, PreferredProgram also internally verifies all closing offices prior to providing Gift Funds.
• PreferredProgram will remove any persons associated with a Gift Fund transaction whose activities or allegiance runs counter to the program's charitable purpose, fails to comport with the program's practices and procedures, or demonstrates fraudulent intent.