Mortgage Origination Program
The Mortgage Origination Programs was created by the University of California to offset the negative impact of California housing prices by providing competitive first mortgages to eligible Davis faculty and senior management to assist them in the purchase of a principal residence near their campus.
Eligibility: The eligible population for the program consists of full-time University appointees who:
- Hold senior management positions;
- Are members of the Academic Senate; or
- Hold academic titles equivalent to titles held by Academic Senate members; or
- Hold the title of Acting Assistant Professor
- Incoming international borrowers must have a visa specific to UC Davis and a Social Security Number or Individual Taxpayer Identification Number prior to starting loan application process
- Must be within 2 years of initial appointment start date.
Note: The program is further restricted to eligible appointees who do not currently own, and have not, within the 12-month period preceding the issuance of the loan, owned a principal place of residence within a reasonable distance (i.e. within a 90 mile radius) of the campus.
Loan Term: All loans are fully amortized with terms up to thirty years.
Loan Position: MOP loans must be secured on the property by a first deed of trust.
Loan Type: There are two types of loans, standard MOP and 5/1 MOP.
- MOP loans have a variable rate and charge no points, lender fees or private mortgage insurance. Standard MOP loans are 30 year adjustable rate mortgages. The current interest rate for these loans can be found on the Office of the President website at http://www.ucop.edu/loan-programs/.
- The 5/1 MOP is a 5 year fixed rate/25 year adjustable rate loan. The initial interest rate is the MOP rate plus 0.5%. Details on the 5/1 MOP loan is available on the Office of the President website.
Adjustment: The interest rate is adjusted annually, on the anniversary date of the promissory note.
The base rate will be adjusted up or down, to a maximum of 1% annually (with an interest rate cap of 10% over the start rate), to the most recently available four-quarter average of the STIP index. To derive at a new interest rate, the administrative fee of .25% will be added to this adjusted base rate.
Lifetime Adjustment Cap: The MOP loan has an interest rate cap of 10% over the start rate.
Amortization: MOP loans are fully amortized. They do not have any negative amortization. Maximum Loan Amount (for MOP loan as sole financing): Each campus determines maximum loan amounts. The current maximum loan allowed for the Davis campus is $750,000 for property purchased within 90 miles of Davis.
- Properties must be owner-occupied and must be a single-family residence (including condominiums and units within planned unit developments).
- Property must be the participant's principal place of residence.
- Property must be used primarily for residential non-income producing purposes.
- Property must be 50% or more participant owned.
- Property on more than 1 acre will be appraised for the home and 1 acre only with the MOP loan restricted to not more than 90% of this appraised value.
- Property must be occupied by the eligible MOP borrower no more than 60 days after the close of escrow.
Assumability: Loans under this program are not assumable.
Repayment: Monthly repayment is made through payroll deduction. Repayment in full is required six months after separation from the University, unless separation is due to retirement or disability.
Prepayment: MOP loans carry no prepayment penalties.