Transcript Slide 1

Affordable Housing
Homeownership
Programs:
An Overview
Michele Carter
AHP Programs Manager
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Housing & Community
Development Programs
• Affordable Housing Program (AHP) - Rental and
Homeowner
• Homeownership Set Aside Program (HSP)
– Rural First-time Homebuyer Program (RFHP)
– Targeted Ownership Program (TOP)
– Disaster area related assistance
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How does the AHP work?
• Each year, FHLBank allocates 10% of its previous
year’s net earnings for AHP subsidies.
• Awarded in one competitive round with application
deadline April 15.
• Provides partial funding of financial gap that exists
in a housing project or program targeted to LMI
households.
• Up to $400,000 for purchase, construction or
rehabilitation.
• Approximate AHP offering in 2011 $6.8 million.
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Homeowner Projects
• All homeowner units must be occupied by
households below 80% AMI.
• AHP funds may be used to pay for homeownership
counseling fees, but only on AHP assisted units.
• Retention requirement is five years.
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AHP Application Process
• Online application at:
www3.fhlbtopeka.com/ahp/default.aspx
• Scoring tips and technical assistance
• Pre-application review: 2 weeks prior
• Competition deadline: April 15, 2011 – Round will
open March 1, 2011
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Questions about
Affordable Housing Program?
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HSP: HOW IT WORKS
• Approximately $1.7 million available in HSP funds in 2011
– 425 homebuyers who may benefit this year
FUNDING AVAILABLE IN MONTHLY OFFERINGS
MARCH 1
MAY 1
NOV 30
Members can initially receive up to $250,000 in funds
thru May 1st ($4,000 per homebuyer) – Subject to
availability of funds
Any remaining funds after May 1 may be requested on a
first- come, first-served basis - Subject to availability of
funds
Requests will be accepted until 11/30/11 - Subject to
availability of funds
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HSP PROCESS
STEP 1:
Member
Registration
(HSP
Agreement)
STEP 2
Funding
Request
STEP 3:
Disbursement
Request
STEP 4:
Funds
Disbursement
STEP 5:
Closing and
Retention
Documents
Submitted
All forms are available at www.fhlbtopeka.com
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Eligible Uses
• Down payment
• Closing Costs
• Homebuyer education fees or rehabilitation costs
associated with the purchase of a home.
• Single-family homes, mobile homes, condominiums
and cooperatives.
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Eligible Uses (cont.)
Allowed in combination with:
1. Secondary market
2. Mortgage insurance
3. Non-FHLBank subsidy
• Cannot be used with AHP or TOP for the same
household.
• Any lender may be used, however, they will be
subject to cost reasonableness standards. If they
do not meet our standards, the request will be
denied.
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HSP/RFHP Criteria
• First-time homebuyer
• Household income < 80% MRB limits
• Home located outside the urbanized area of the
central city of an MSA
• Household’s primary residence
• Minimum of $500 down or documented sweat
equity
• Mandatory homebuyer education
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HSP/RFHP Criteria (cont.)
• Homebuyer has been qualified for financing.
(Income information must be based on the most
recent applicable income documentation).
• HSP household may not receive cash back in
excess of $250 at closing.
• Income must be documented and qualified based
on all members of the household age 18 and over
that reside in the home.
• Income must be calculated according to the
guidelines of FHLBank Topeka using forms and
instructions issued by FHLB Topeka.
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Retention Period – All HSP Programs
• 5-year retention secured by deed restriction requires:
• Notice of any sale or refinancing of the unit during that
period.
• If sold, repayment of a pro rata share of the subsidy upon
sale, reduced by 1/60 per month for every month the
HSP-assisted borrower owned the unit or sale to an HSPqualified buyer.
• If refinanced, FHLBank will subordinate its position to
the first lender.
• Check website March 1 for updated retention documents.
Outdated documents will not be accepted.
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FIRST-TIME HOMEBUYER:
DEFINITIONS
First-time Homebuyer: an individual and his or her spouse who have not owned a
home during the three-year period prior to the purchase of a home proposed to
receive assistance from the HSP. This includes a spouse or unmarried partner. (If
either meets the definition of first-time homebuyer, they are considered first-time
homebuyers.)
Also eligible for first-time homebuyer status are:
1.
A displaced homemaker, while a homemaker, owned a home with his or her
spouse. That individual has not worked full-time, full-year in the labor force
for a number of years and during that period, worked primarily without
remuneration to care for a home and family.
2.
A single parent, while married, owned a home with his or her spouse or
resided in a home owned by the spouse. A single parent is an individual
who is unmarried or legally separated from a spouse and has custody or
joint custody of one or more minor children.
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FIRST-TIME HOMEBUYER:
DEFINITIONS (continued)
Also eligible for first-time homebuyer status:
3.
4.
5.
6.
Any individual who did not purchase a home but holds legal
title to a home as a result of special circumstances, including health
or disability of a previous homebuyer or owner, subject to documentation
acceptable to FHLBank.
Any individual who has only owned a principal residence not permanently
affixed to a permanent foundation in accordance with applicable regulations.
Any individual who has only owned a property that was not in compliance
with State local or model building codes and which cannot be brought into
compliance for less than the cost of constructing a permanent structure.
Any homeowner in a rural area with damaged/destroyed
homes that are within federally declared disaster areas will be
eligible for rehabilitation, repair assistance and new construction funds
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HCD COST REASONABLENESS
STANDARDS
• Front ratio cannot exceed 38% without an explanation
• Cost per unit: Must be within maximum FHA limits
• Mortgage rate: Freddie Mac fixed rate plus 2.00% - based
on the date the disbursement request was received
• Mortgage term: 40 years
• Minimum owner down payment/POC: $500
• Education/Counseling fees: $500 maximum
• Loan discount fees cannot exceed 2 points
• Lender fees (borrowers and sellers) must not exceed 3%
(i.e., origination fee, processing fee, etc.)
• Any request with amounts outside these guidelines
requires an explanation, but may not be approved
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DISBURSEMENT REQUEST
• Accompanied by documentation:
– Loan application (signed by borrower or interviewer)
– Third-party income verification (VOE, pay stubs, etc.)
– Income Calculation worksheet (consistent with income
documentation). If using a pay stub we will need two consecutive
pay stubs.
– Draft closing/settlement statement
– Documentation of rehab expenses (if applicable)
– Draft RFHP note/subordinate mortgage - please use revised
documentation
– Homebuyer education certificate
– Truth in lending statement (TIL)
– Verification of disability for TOP funds
– Disaster-related request must submit insurance settlement
information.
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USING HSP TO PAY COUNSELING
COSTS
• HSP funds may be used to pay for counseling costs only
when:
– Incurred in connection with counseling of homebuyers who
purchase an RFHP-assisted unit.
– Costs have not been covered by another source, including the
stockholder bank.
– FHLBank will pay up to $500 per homebuyer for homebuyer
education. The $500 is not in addition to the $4,000 subsidy. In
most cases, the $500 is shown as a closing cost.
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MANDATORY HOMEBUYER
EDUCATION
• Complete “acceptable” homebuyer counseling program
prior to disbursement, includes, but not limited to,
training provided by:
– HUD-approved Housing Counseling Agency
– State Homebuyer Education Association Certified (i.e.,
REACH, OHEA)
• Provide certificate of completion or name of training
agency
• Training based on a recognized homebuyer education
program
• Does not apply to disaster repair assistance
• If homebuyer education is taken on online, the certificate
must be signed by the homebuyer
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$500 DOWN PAYMENT OR
EQUIVALENT
• Down payment
• Equity contribution
– i.e., lot on which new house was built or sweat equity
contributed through a self-help housing program)
• Costs paid outside of closing
– provide documentation of cost of appraisal, loan
application, inspections, etc., if POCs are not shown
on HUD 1
• Gifts cannot be used as part of the $500
• Documented sweat equity
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RURAL LOCATION
• Rural is defined as located outside of the urbanized area of
the central city of a Metropolitan Statistical Area (MSA)
• Examples of ineligible communities: Lincoln and Omaha,
Nebraska
• Examples of eligible rural areas: Grand Island, North Platte,
Columbus and Fremont, Nebraska
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LOAN CLOSING
• HSP funds may not be used for home purchases that were
closed prior to the first date that disbursement requests are
accepted each round. Further, members are discouraged
from submitting requests for disbursement of RFHP funds
after closing.
– EXAMPLE: If an RFHP request is submitted to FHLBank for
review after closing and found ineligible by HCD staff, the
request for the funds will not be approved.
• The entity that disbursed the funds before FHLBank
approval will be responsible for recovering their funds.
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Questions about
Rural First-time Homebuyer Program?
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HSP/Targeted Ownership Program
(TOP)
• Awards grant funds to stockholders to help firsttime homebuyers that have disabled household
members to purchase a home. This includes
purchase/rehab.
• Funds up to $4,000 per homebuyer. Funds can be
used for down payment, closing cost or
rehabilitation.
• In order to request funds a 2011 HSP agreement
must be completed first.
• Cannot be used for RFHP or AHP assisted
households.
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HSP/TOP Criteria
• First-time homebuyer (same definition as RFHP)
• Household includes an individual with a physical
or developmental disability
• Household income < 80% of MRB limits
• Home located in district in rural or urban location
• Household’s primary residence
• Completed HSP agreement form
• Minimum of $500 down
• Mandatory homebuyer education
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HSP/TOP Criteria (cont.)
• Proof of disability required at time of disbursement
of funds.
• Homebuyer has been qualified for financing.
(Income information must be based on the most
recent applicable income documentation).
• HSP household may not receive cash back at
closing in excess of $250.
• Income must be documented and qualified based
on all members of household. Anyone age 18 and
over who resides in the home.
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Disabled Household Member Defined
• Defined as:
– A household which includes a person with a
physical impairment or developmental disability
which substantially limits one or more major
life activities.
– Requires documentation of disability or
evidence of disability payment.
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HSP/TOP Application Process
• First-come, first-served pool opens March 1
• HSP agreement form must be completed prior to first
disbursement
• Disbursement to FHLB member bank demand deposit
account
• Original note, recorded mortgage and final closing
documents must be returned to FHLBank within 60
days following disbursement
• Lender may be anyone but they must adhere to
FHLBank cost reasonableness standards
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Questions about
HSP/Targeted Ownership Program?
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Disaster Area Related Assistance
• HSP funds can be used in federally declared disaster
areas.
• Household does not have to be a first time homebuyer.
• HSP funds must be used for costs related to damage
associated with the disaster.
• For disaster related requests, copies of insurance
settlements, disaster assistance or other assistance related
to the cost of the house being repaired or replaced are
required at the time of disbursement.
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Disaster Area Related Assistance
Questions about
Disaster Area Related Assistance?
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Top 6 Nebraska Members Using HSP in
2010
1. Charter West National Bank, West Point – 44 units for $150,000
2. Farmers and Merchants Bank, Milford – 26 units for $97,480
3. Equitable Bank, Grand Island – 18 units for $68,000
4. Nebraska National Bank, Kearney – 16 units for $64,000
5. First National Bank of Wahoo – 14 units for $56,000
6. First State Bank and Trust, Fremont – 14 units for $56,000
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FHLBank Topeka’s Housing and
Community Development Staff
Tom Thull, HCD Director (6029)
Mark Ward, Assistant Director of HCD (6037)
Dawn Harris, HCD Assistant (6030)
Noelle St.Clair, Community Programs Specialist (6033)
Casey Howard, HCD Compliance Specialist (6237)
Michele Carter, AHP Programs Manager(6032)
Utika Scales, AHP Specialist (6035)
Terri Smith, AHP Specialist (6289)
Jeff Ragsdale, AHP Specialist (6034)
Amy Apitz, AHP Specialist (6031)
Mark Orozco, AHP Specialist (6247)
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FHLBank Website
• Applications and Additional Resources
www.fhlbtopeka.com
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