Transcript Mdhomeprograms.com - Maryland Association of Realtors

State and Local Programs Update
Webinar
February 20, 2014
Fern Dannis
Director of Housing Programs
Maryland Association of REALTORS®
State (DHCD) Programs
 Maryland Mortgage Program (MMP)
 Targeted Areas Initiative (CLOSED)
 Maryland Homefront (CLOSED)
 Save-A-Home Loan Program (MERGED)
 DHCD-Owned Foreclosure Program (2%)
 Conventional Mortgage Loan
 Conventional Refinance Program
DHCD/MMP
 30-year amortizing mortgages
 Conventional, FHA, VA or RHS insurance
 Fixed interest rates for the life of the loan
 DAILY RATE CHART
 FREE kit on website
Maryland Mortgage Program
Changes to eligibility/application
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First-Time Homebuyer
Targeted Areas – CHANGE!
Priority Funding Areas
Eligible Properties
Home Inspection
Homebuyer Education
Credit Scores & Ratios - CHANGE!
Income & Purchase Price Limits – CHANGE!
REALTOR® Information
Maryland Mortgage Program
“First-Time Homebuyers”
 Federal Definition: Borrowers who have not
had a “present ownership” interest in a
principal residence in the last three years
UNLESS
 Borrower is purchasing in a TARGETED AREA
INTEREST IN REAL PROPERTY (WHETHER OR
NOT IT IS PRINCIPAL RESIDENCE) must be sold or
transferred prior to settlement on MMP loan.
If current residence is deeded in the name of spouse/non-borrower only,
the spouse/borrower can not also own a residence financed by MMP
Maryland Mortgage Program
First-Time Homebuyers - Veterans
 Veterans purchasing in a non-targeted area
are exempt from the first time homebuyer rule
and may have owned a home in the past
three (3) years
 The veteran may use this exemption only one
time, and the loan does not have to be a VA
loan. A copy of the DD-214 must be presented
to the lender.
Targeted Areas
Targeted Area vs. Priority Funding Area
***Different Meanings***
 Targeted areas are designated by the
Federal Government based on U.S. Census
Tracts
 70% or more of the families have an
income that is 80% or less of the statewide
median family income.
 Buyers in targeted areas do not have to be
first-time homebuyers.
Targeted Areas (cont.)
All of the following jurisdictions are designated targeted areas:
Allegany
Baltimore City
Caroline
Dorchester
Garrett
Kent
Somerset
Additionally, portions of the following counties are targeted areas
(Communities and/or census tracts are listed for each county)
More…
 Anne Arundel 7406.02
 Baltimore County: City limits of East Towson; Oella;
West Catonsville;
Plus census tracts: 4009.00, 4011.02, 4013.02,
4023.05, 4027.01, 4210.00, 4211.01, 4213.00,
4301.01, 4303.00, 4505.03, 4505.04, 4513.00,
4523.00, 4906.05, 4914.01
 Frederick 7503.00, 7505.05
 Harford 3029.01, 3065.00
 Montgomery 7007.24, 7014.22, 7016.01, 7032.13
More…
 Prince George's: City limits of Brentwood; Capitol
Heights; Colmar Manor; Fairmont Heights; Mt. Rainier;
North Brentwood; Seat Pleasant;
Plus census tracts: 8002.10, 8019.08, 8020.01, 8021.04,
8022.01, 8032.00, 8034.01 8035.09, 8035.25, 8040.01,
8043.00, 8048.01, 8048.02, 8049.00 8051.01, 8052.01,
8056.01, 8056.02, 8059.06, 8059.07, 8059.08, 8059.09,
8067.13
 Washington: City limits of Hagerstown;
Plus census tracts: 0003.02, 0004.00, 0007.00, 0008.00,
0009.00
 Wicomico 0001.00, 0003.00, 0005.00, 0102.00
Priority Funding Areas
 Older
community or locally-designated
growth area where State and local
governments already have a significant
financial investment in the existing
infrastructure
 If
new construction, it MUST be located in
a Priority Funding Area
www.mdp.state.md.us/OurProducts/pfamap.shtml
Eligible Property Types
OWNER-OCCUPIED
 Detached
 Attached
 Semi-detached
 Townhouses
 Modular homes (with State-certification)
 Condominiums
Housing Standards
 Participating Lenders are required to certify on
the Home Inspection Certification that a
home inspection:
1) was completed (not required for new
construction or substantial rehabilitation);
2) the borrower has reviewed it.
 The Home Inspection Certification is to be
included in the purchase package submitted to
US Bank. (A copy of the home inspection report
is not required in the purchase package.)
Asset Restrictions
 An asset test is required for borrowers whose
assets equal or exceed 20% of the purchase
price.
 A “gift of equity” (difference between the
appraised value and the purchase price) in a
non-arms length transaction is considered an
asset.
Homebuyer Education
 Homebuyer education is required for all CDA home-
purchase loans
 A certificate is required from the provider of the
homebuyer education class (within 12 months of
closing).
 Lender’s Certificate of Completion Form is required.
 NOTE: There are specific counseling requirements for borrowers
purchasing in Anne Arundel, Baltimore City, Baltimore and Harford
Counties
 If purchasing in Baltimore City and receiving DPA funds, a first-
time buyer must complete counseling from a Baltimoreapproved counseling agency BEFORE entering into a contract
of sale and, if not a first-time buyer, BEFORE closing.
Credit Scores & Ratios
 640 minimum credit score
 Maximum DTI for 30 yr. amortizing loans
= 45% – no exceptions
 Lenders may have their own credit
overlays
 Lenders may limit total CLTV/CDA
limits to 103%
Income & Purchase Price Limits
www.mmprogam.org/incomes.aspx
Based on annual area median incomes,
adjusted for family size.
Maximum Loan Amounts
 Loan amount may not exceed the lesser of
$417,000 or the insurer/guarantor’s maximum
mortgage amount.
 Maximum loan amount may only be
exceeded by the FHA UFMIP. VA and RHS
loans must be at or below $417,000 including
the financed guarantee or funding fee.
DHCD-Owned Foreclosure Program
(DHCD-REO)
 May be purchased by Homebuyers (Owner/Occupant),
Investors, or Non-Profit Organizations
 First Look Maryland - First 15 days to non-profit
organizations, public housing authorities and community
partners w/ favorable pricing/financing.
 2% incentive rate until 6/30/14
 For information about homes for sale, contact:
Long and Foster or Cummings & Co.
www.mdhousing.org/website/programs/Reo/Default.aspx
Conventional Mortgage Loan
 Conventional loans insured by PMI
companies from approved list.
 Loans are underwritten to Fannie Mae’s
Preferred Guidelines
 LTV not to exceed 97% (automated)
 Reduced MIP
 Conventional un-insured loans for purchases
with LTV at 80% or less
 Borrower must meet all MMP qualifications
 DSELP and Partner Match funds available
Conventional Refinance Program
 30-year
 Fixed rate, fully-amortizing
 Limited cash out
 97% LTV; minimum 680 credit score
 Lower MI premiums
 No DSELP available
Downpayment & Closing Cost
Assistance Programs
Downpayment Settlement Expense Loan
Program (DSELP) = “Down Payment
Assistance”
House Keys 4 Employees w/ “Smart Keys”
Builder Developer Incentive Program (BDIP)
Community Partners Incentive Program
(CPIP)
Only available with CDA loans
DSELP Facts
 Up to $5,000 toward downpayment or
closing costs
 Available only on home purchases within
CDA limits
 0% interest rate deferred loan (subordinate
lien)
 Repayable in full upon sale or transfer of
the property, or when the first mortgage is
paid off or refinanced
Partner Match Programs
• House Keys 4 Employees Program (HK4E)
• Smart Keys 4 Employees (SK4E)
• Builder Developer Incentive Program
• Community Partners Incentive Program
• BRAC
These programs are only available with CDA loans!
Partner Match Programs (cont.)
 Participating partners provide downpayment
and/or closing cost assistance to borrowers.
 CDA will match dollar-for-dollar up to $2,500 in
the form of a 0% deferred loan.
 Borrower must qualify for and receive an MMP
loan in order to qualify for a partner match
 Partners can be employers, builder/developers,
community agencies and local governments.
Partner Match Programs (cont.)
 The Partner Match from CDA is repayable
when the home is sold or transferred, or
when the first mortgage is paid off or
refinanced.
 Partner Match Program funds can be
combined with DSELP for additional
assistance, as well as funds from other
jurisdictions.
Partner Match Programs (cont.)
Example 1:
DSELP
$5,000
Employer contribution
3,000
HK4E, BDIP, CPIP match
2,500
Total closing cost assistance
$10,500
Partner Match Programs (cont.)
SMART KEYS 4 EMPLOYEES (SK4E)
 A “Smart Growth” enhancement to the House Keys
Employees (HK4E) Program that allows borrowers to
receive an additional $1,000 if:
 Subject property is located in a Priority Funding Area
AND
 Subject property is within 10 miles of borrower’s place
of employment OR within the boundaries of the local
jurisdiction
Smart Keys 4 Employees (cont.)
Example 2:
Participating HK4E Employer contribution
$5,000
HK4E Match
$2,500
Smart Keys 4 Employees Match
Total contribution for closing cost assistance
+$1,000
$8,500
HK4E – State of Maryland Employees
 A State of Maryland employee can receive
$1,250 from the State of MD (employer) and
a $1,250 HK4E match for a total contribution
of $2,500. (Only $1,250 is counted toward the
match cap.)
 State employees provide a copy of the
borrower’s payment stub in lieu of standard
HK4E form.
 Employees of the University of MD system
are not included in this program. (Employees
of the UM Medical System have a ‘Live Near
Your Work’ program.)
Combining Assistance Programs
• Combined total matching funds from
DHCD (HK4E, BDIP, CPIP) will not
exceed $2,500, unless using House
Keys 4 Employees with Smart Keys 4
Employees to add $1,000.
• Partner contribution must be present
at settlement – borrower’s
responsibility!
Combining Assistance Programs (cont.)
Example 3:
DSELP
$ 5,000
State of Maryland employer contribution
(not included in match cap)
$ 1,250
Builder/Developer Contribution
$ 2,000
HK4E match
(standard match for State employees)
$ 1,250
BDIP Match (max. remaining w/in $2,500 cap)
$ 1,250
SK4E Match (bonus)
$ 1,000
Total Contribution for Closing Assistance
$11,750
On-line Resources
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www.mmp.maryland.gov (3/3/14)
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www.mmprogram.org or
www.mdhousing.org
Interest rate updates:
www.mmprogram.org/rates.aspx
Download homebuyers kit:
www.mmprogram.org/documents/MMPKit.pdf
Maryland Homeownership Program
for Individuals with Disabilities
 One of the borrowers must have a disability,
or a child of one of the borrowers (who resides
with and is principally cared for by one of the
borrowers),
 "Certificate of Disability" required
 All borrowers must meet program eligibility
guidelines
 Loan must conform to all underwriting criteria.
Individuals with Disabilities (cont.)
Counseling – required
Home Inspection – required
DTI – 30/38 (up to 32/40 with compensating factors)
Credit History – 640 (non-traditional credit evaluated)
Mortgage Insurance – not required
30-year term with 2.75% – 4.75% interest rate
Fees - $1,000 (may be financed) and $500 minimum
cash down (may be gifted)
 Maximum household income - May not exceed
$106,100 in the Washington D.C. PMSA (Calvert,
Charles, Frederick, Montgomery, and Prince George’s
Counties), $89,400 in St. Mary’s County and $88,100 in
all other areas of the State.
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Improving a Home
Maryland Housing Rehabilitation Program - Single
Family (MHRP-SF)
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Preserve/improve single-family properties and 1-4 unit rental
properties.
bring properties up to applicable building codes and standards.
Applicants must meet an income guideline.
Interest rates are based on income of tenants. Loans in excess of
$5,000 or with deferred payments are secured by a mortgage.
Lead Hazard Reduction Grant and Loan Program
Reduce instances of lead poisoning of children by financing the
abatement of lead paint in residential buildings. Owners of
nonresidential buildings that provide services for children may apply
for LHRGLP loans. Interest rates are based upon the occupant's or
project's income.
Improving a Home (cont.)
Indoor Plumbing Program
Loans for single family, owner-occupied houses and rental
properties with one to 100 units that do not have indoor
plumbing. Interest rates and loan terms are based on the
incomes of the residents and owner occupant.
Special Targeted Applicant Rehabilitation Program
Bring properties up to applicable building codes and
standards or a minimum housing quality standard. Loans
are deferred but are secured by a mortgage.
Emergency Solution Grant Program
Funds may also be used for assisting sheltered persons
make the transition to permanent housing and
independent living.
Accessible Homes for Seniors
(Program is marketed through local area Agencies on Aging)
 Promote accessibility related improvements to the homes of seniors
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(widening doorways, installation of accessible showers, ramps,
grab bars, and lever handles). Additions to accommodate first floor
bathrooms and laundry rooms will also be considered on a case-bycase basis.
0% interest, deferred loans for 30 years; max. loan is 110% of value
Maryland residents with at least one resident age 55 or older;
principal residence. Seniors living with relatives will be considered
on a case-by-case basis.
Property is structurally sound and free of health and safety hazards.
No federal or state tax liens, open bankruptcy or foreclosure.
Household income cannot exceed 80% of median income. If the
senior resides in the home of a relative, eligibility is based on the
owner’s income.
All closing costs will be included in the loan.
Ground Rent Redemption Loan Program
 Created in 2007 to provide loans to owner-
occupants to buy out (redeem) ground leases.
 Income limits – 80% of Statewide median
 A "ground lease" is a lease for a term of years
that is renewable forever and is subject to the
periodic payment of "ground rent" by the
leasehold tenant to the ground lease holder.
 Redemption amount = annual ground rent fee
divided by the capitalization rate
http://dhcd.maryland.gov/website/programs/GRRLP/Default.aspx
Energy Programs
Be SMART Home 410-514-7740
 Financing to improve home energy efficiency through
replacement and upgrading of appliances, heating, cooling and
ventilation systems and whole house envelope improvements
 Be SMART Home ENERGY STAR - 6.99%
 Be SMART Home Complete loan – 4.99%
 DHCD-approved providers for weatherization/energy
efficiency
 Home must be ‘primary residence’
 Verification of income
 Credit score of 640 or greater
 Debt-to-income ratio of up to 50%
Energy Programs (cont.)
Weatherization Assistance Program (WAP)
 Helps eligible low income households with the installation
of energy conservation materials in their dwelling units.
EmPOWER Maryland Low Income Energy Efficiency
Program
 Helps low income households with installation of energy
conservation materials in their homes at no charge.
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Have account with one of the five participating utility
companies (BGE, Delmarva, PE, Pepco and SMECO).
Prove ownership of your home or your landlord must be able
to prove ownership and agree to participate in the program.
1-855-583-8976
Homeownership Voucher Program
 A HUD program, also known as the Section 8
Homeownership Program
 Helps current Housing Choice Voucher
Program participants purchase homes by
converting their monthly rental assistance
payments to mortgage payments
 Offered through participating Public Housing
Authorities (PHA's) throughout the State of
Maryland. Contact your local PHA for more
information.
EXISTING LOCAL PROGRAMS
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