Transcript A presentation to: Moody’s Investors Service

First Look Maryland
New Tools and Funding for
Homeownership and Neighborhood
Stabilization
August 9, 2012
Martin O'Malley
GOVERNOR
Anthony G. Brown
LT. GOVERNOR
Raymond A. Skinner
SECRETARY
Clarence J. Snuggs
DEPUTY SECRETARY
1
COMMUNITY DEVELOPMENT
ADMINISTRATION
2
New CDA Programs
Martin O'Malley
GOVERNOR
Anthony G. Brown
LT. GOVERNOR
Raymond A. Skinner
SECRETARY
Clarence J. Snuggs
DEPUTY SECRETARY
3
CDA Progams
• Homefront
• An initiative for military families and veterans
• Lower interest rate
• Higher DSELP
• Targeted Areas Initiative• Interest Rate Reduction
• Move up or down buyers
• Save-A-Home
• Lower Interest Rate
• DHCD REO
4
New CDA Programs
MD Homefront:
The Veterans and Military Family Mortgage Program
• One half of a percent discount off the
prevailing MMP rate
• $10,000 assistance from the Downpayment
and Settlement Expense Loan Program
(DSELP)
• Effective until the allocated funds have been
expended.
5
New CDA Programs
$30 Million Targeted Areas Initiative!
• Interest rate of 2.875% (APR 3.675%) for a
home purchase loan in a targeted area
• Effective for loans reserved on or after 10:00
a.m. on May 31, 2012 and continuing until the
allocated funds have been expended.
6
$30M Targeted Areas Initiative
WHAT IS A
TARGETED AREA?
7
$30M Targeted Areas Initiative
Targeted Areas
• The following jurisdictions are designated
targeted areas:
Allegany Co.
Caroline Co.
Dorchester Co.
Somerset Co.
Baltimore City
Garrett Co.
Kent Co.
8
$30M Targeted Areas Initiative
Targeted Areas (continued)
• In addition, portions of other counties are
targeted areas
• To determine if a specific area is targeted:
http://www.mmprogram.org/TargetedAreas.aspx
9
$30M Targeted Areas Initiative
Not a First-Time Homebuyer?
Maryland Mortgage Program loans are usually for
first-time homebuyers, BUT
• Borrowers who are purchasing in a TARGETED
AREA do not have to meet the first-time
homebuyer definition
• Veterans qualify for a one-time waiver of this
requirement
10
Save-A-Home
• Short Sales and Foreclosed Homes
• Lower Interest Rate
11
Interest Rates
Rates effective July 31, 2012 (subject to any major market moves however)
Maryland Mortgage
Program (MMP)
PROGRAM
Interest Rate
APR
Maximum
DSELP
Amount
Non-Targeted
DHCD-owned
Foreclosure Program
Non-Targeted
Targeted
(0.25% below the
MMP rate)
Targeted
(Non-Targeted and
Targeted)
3.500%
4.355%
2.875%
3.675%
3.250%
4.082%
2.875%
3.675%
1.000%
1.638%
$5,000 (plus any applicable Partner Match Program funds)
Maryland Homefront: the Veterans and Military Family Mortgage
Program*
PROGRAM
Non-Targeted
Interest Rate
APR (VA)
APR (FHA)
Maximum
DSELP
Amount
Save-A-Home Loan
Program (formerly
"Homeward Bound"
Program)
Non-Targeted
(0.50% below the
MMP rate)
Targeted
(0.50% below the
MMP rate)
Targeted
(Non-Targeted and
Targeted)
3.000%
3.167%
3.809%
2.875%
3.041%
3.675%
3.000%
3.167%
3.809%
2.875%
3.041%
3.675%
1.000%
1.149%
1.638%
$10,000 (plus any applicable Partner Match Program funds)
Check current interest rates at:
www.mmprogram.org/rates.aspx
12
Maryland Mortgage Program Loans
MMP LOANS HAVE:
• 30-year loan terms
• Fixed interest rate - entire term of
loan
• FHA, VA, or RHS loan types
• Minimum credit score of 620
13
MMP Eligibility Criteria
• Must be a First Time Homebuyer unless the borrower is a qualified
veteran using a waiver or the property is in a targeted area
• Minimum Credit Score: 620
• Maximum Debt-to-Income (DTI) Ratio : 43% with exceptions up
to 45% with strong compensating factors
• Maximum Loan Amount: $417,000 (which must include the FHA
Up Front Mortgage Insurance Premiums, VA funding fees, or RHS
guarantee fees)
• Principal Residence: Must occupy home as principal residence;
non-occupant co-borrowers are not permitted
• Income & Purchase Price Limits: Total annual household income
may not exceed Income Limit (see chart on website at
http://www.mmprogram.org/incomes.aspx for income and purchase
price limits by location)
14
Homebuyer First Steps
• Contact a housing counseling agency. A counseling certificate must be
received prior to the execution of a contract of sale. If you are requesting a
DSELP loan (Downpayment and Settlement Expense Loan Program, 0%
deferred), there may be particular counseling agencies for your jurisdiction.
Go to http://www.mmprogram.org/counseling.aspx to find a counselor.
• Enter into a contract of sale on an eligible property. This can be done with
the assistance of a realtor chosen by you. (Newly constructed homes must be
in a Priority Funding Area).
• Contact a CDA approved lender. The lender will do a preliminary review of
the borrower's eligibility and reserve funds for the loan. Approved lender list is
found at http://www.mmprogram.org/lenders.aspx.
• For More Information: Contact Single Family Housing at
[email protected] or call 410-514-7530
15
Maryland Mortgage Program Loans
Homebuyer Education is Required
• A counseling certificate is required from the homebuyer
education class provider
• If utilizing DSELP or matching funds, specific requirements
for Baltimore City, Anne Arundel, Baltimore and Harford
Counties must be followed
• Refer to www.mmprogram.org for additional information on
counseling requirements.
16
Down Payment & Settlement Expense Loan Program
(DSELP)
• $5,000 toward downpayment or closing costs
0% deferred loan
• Repayable in full upon sale or transfer, or when
the first mortgage is paid off or refinanced
• Available with all MMP loans!
17
Partner Match Programs
• House Keys 4 Employees (HK4E) with
Smart Keys 4 Employees (SK4E) component
• Builder/Developer Incentive Program (BDIP)
• Community Partners Incentive Program (CPIP)
These programs are available with an MMP loan
www.mmprogram.org/downpayment.aspx
18
House Keys 4 Employees
Workforce Housing Initiative
Additional downpayment assistance through
employer matching contributions
An employer partnership initiative that
matches funds from employers to help their
employees who want to buy a home
19
House Keys 4 Employees
(continued)
What is it?
• Provides additional downpayment and
closing cost assistance; can be used in
addition to DSELP
• May only be used in conjunction with CDA
mortgage loans
• Refer to CDA’s website for current list of
participating employers
20
House Keys 4 Employees
(continued)
• DHCD will match dollar-for-dollar up to
$2,500 from a participating employer toward
downpayment and closing costs
• The HK4E match from DHCD is a 0%
deferred loan, repayable when the home is
sold or transferred, or when the first
mortgage is paid off or refinanced
21
Smart Keys 4 Employees
A “Smart Growth” enhancement to the House Keys
4 Employees (HK4E) Program allows borrowers to
receive additional matching funds if:
• Subject property is located in a Priority Funding Area
• Subject property is within 10 miles of borrower’s
place of employment or within the boundaries of the
local jurisdiction
• DHCD offers a bonus match of $1,000 for borrowers
that meet this criteria
22
Builder/Developer Incentive Program (BDIP) & Community
Partner Incentive Programs (CPIP)
These incentive programs enable eligible
homebuyers to receive supplemental
downpayment and/or closing cost assistance
IN ADDITION TO DSELP.
23
Builder/Developer Incentive Program (BDIP) & Community
Partner Incentive Programs (CPIP)
• The BDIP or CDIP match from DHCD is a 0%
deferred loan, repayable when the home is sold
or transferred, or when the first mortgage is paid
off or refinanced
• DHCD will match dollar-for-dollar up to $2,500
from a participating builder/developer or
community partner toward downpayment and
closing costs
• Refer to CDA’s website for current list of
participants
24
Maryland Mortgage Program
Combining Assistance Programs
• House Keys for Employees (HK4E),
Builder/Developer (BDIP), the Community Partner
and (CPIP) can be utilized either as stand alone
forms of assistance, OR
• These programs can be combined with DSELP
25
For more information…
www.mmprogram.org
26
27
DHCD Owned Properties
28
Purpose
• The Maryland Department of Housing and Community
Development’s (DHCD), administers the “First Look Maryland”
program through the Division of Credit Assurance (DCA). The
program is an effort to give non-profits, public housing authorities,
and other community focused entities the first opportunity to
purchase DHCD owned Single Family properties.
• The” First Look Maryland” program, offers approved program
participants the first opportunity to purchase newly listed DHCD
real estate owned (REO). For the first 15 days, we will only accept
offers from the First Program participants.
• Special financing available to qualified Maryland Mortgage
Program (MMP) borrowers who purchase the homes from
program participants. Currently a 1% (1.638% APR) is available.
29
Eligibility
• All nonprofits, PHAs and other community
focused groups wishing to participate in the First
Look Maryland Program must register with
DHCD.
• The First Look Maryland Program is available to
nonprofits with proof of 501-C3 status for a
minimum of two years, and to registered public
housing authorities.
30
Requirements
• In order to begin the process of becoming DHCD-approved,
please submit the following documents via mail or fax for review
by the Department:
• An application in the form required by the Department.
• A certification in the form required by the Department that the
nonprofit organization shall abide by all requirements of:
1. Titles VI and VII of the Civil Rights Act of 1964 as
amended, Title VIII of the Civil Rights Act of 1968 as
amended,
2. The provisions of the Governor’s Code of Fair Practices,
as amended,
3. Governor’s Executive Order 01.01.1989.18 relating to
drug-free and alcohol-free workplaces, and any
Department regulations adopted to carry out the
requirements of that order;
31
Cont’d
• A contract affidavit in the form required by the Department;
• A copy of the following organizational documents for the
nonprofit organization:
1. A letter from the Internal Revenue Service granting
tax-exempt status under 501(c)(3) of the Internal
Revenue Code,
2. Article of Incorporation or other applicable documents,
3. Bylaws,
4. Certificate of good standing, and
5. A resolution authorizing for the participation in the
Program and purchase for a particular property where
applicable, and designation of the person or persons
authorized to sign on behalf of the organization; and
• Any other documents required by the Program.
32
Additional Requirements
• The nonprofit organization shall be in good standing
and may not be under suspension or debarment from
any of the Department’s programs in any action under
COMAR 05.01.05.
• The nonprofit organization may not be in default
under any loan from the Department.
• At the time of settlement, the nonprofit organization
shall have all necessary legal and corporate
authorizations to purchase the property.
• DHCD reserves the right to remove any nonprofit,
especially ones that do not go to closing
33
FAQs
• Q: Once my organization is approved, how do I find out which
DHCD Homes are available to purchase?
A: In order to determine what properties are available, go to DHCD’s web page. Once
there, click on the link to Real Estate for Sale and this will allow you to view the current
listings. This site is updated regularly with available properties.
• Q: How long does my DHCD approval last?
A: Unless revoked by the Department, each nonprofit organization approved for the First
Look Program is subject to recertification every two years. This recertification should be
requested by the organization within 30 days of the expiration of their previous approval.
• Q: What are the experience requirements a nonprofit must meet to
obtain DHCD approval?
A: The nonprofit must have a minimum of two consecutive years, within the last four
years, of housing development experience. Housing development experience is defined
as acquisition, rehabilitation, and sale to low-to-moderate income persons. The
experience must include the renovation and resale or renovation and rental of single
family residences. The nonprofit is not required to market only to a homeowner, but some
special conditions may only apply to qualified MMP Buyers. If you do not meet the
experience requirement submit a business resume.
• Q: Can the nonprofit hold the property and rent it out?
A: Yes
34
• For more information, please contact:
Division of Credit Assurance
Maryland Department of Housing and Community Development
100 Community Place
Crownsville, MD 21032
(410)514-7571
Fax: (410) 987-4238
[email protected]
35
36
Id Number: _______________
Date Received: _______________
Maryland
Department of
Housing and
Community
Development
Please find enclosed the application form you have requested to
participate in the Maryland Department of Housing and Community
Development’s “First Look Maryland” program.
Also include the following information when returning the application
form:
Divison of Credit Assurance
1. Letter from the Internal Revenue Service granting tax exempt
status under § 501©(3) of the Internal Revenue Code
100 Community Place
Crownsville, MD 21032
2. Certificate of Good Standing from the Maryland State
Department of Assesment and Taxation
3. Copy of Bylaws
(410) 514-7571
1-800-756-0119
Fax : (410) 987-4238
http://www.dhcd.state.md.us
First Look Maryland Application
Dear Non-Profit Organization,
4. Articles of Incorporation or other applicable douments
5. A resolution authorizing application for participation in the
Preview Program and purchase and financing for a particular
property where applicable, and the designation of the person or
persons authorized to sign on behalf of the organization.
Maryland Department of Housing and Community Development
Division of Credit Assurance
Date___________________
Name of Non-Profit or PHA: __________________________________________________________________
Address: ___________________________________________________________________________________
City_____________________ County_________________ State__________ Zip Code_____________________
Telephone Number: (_____) ______________ Fax Number (____) ______________
Email Address_______________________________________
Contact Person: ______________________________________________ Contact Number: ______________________
General Area of Operation (briefly describe):
__________________________________________________________________________________________________
_________________________________________________________________________________________________
Years in Operation: ________ Year(s)
Our non-profit has _____ year(s) experience in rehabilitating houses for sale or rental.
Our non-profit has _____ year(s) experience in sales of houses to home owners.
After completeing and supplying all requested information, mail to:
Martin O’Malley
Governor
Anthony G. Brown
Lt. Governor
Raymond A. Skinner
Secretary
Clarence J. Snuggs
Deputy Secretary
C/o Ms. Tiera Hawkes
Division of Credit Assurance
100 Community Place
Crownsville,MD 21032
Sincerely,
Tiera Hawkes
Portfolio Administrator
Our non-profit has _____ year(s) experience in financial counseling of individuals/families.
Our non-profit works with or is part of the community organization(s) for this area. ___Yes ____No
In submitting this application for approval to participate in the Department of Housing and Community Development
“Preview Program”, the _______________________________, non-profit, finds that if approved, participation will
further the efforts to stabilize, renew and enhance the neighborhood and community.
______________________________
____________________
Authorized Official Signature
Date
______________________________
Title of Official
Send to: Department of Housing & Community Development, C/o Tiera Hawkes, 100 Community Place Crownsville, MD
21032
37
DSELP INCENTIVE
Special DSELP Incentive!
The first five organizations to purchase a property under
the First Look Maryland program will receive a certificate for
an additional $5,000 in assistance from our Downpayment
and Settlement Expense Loan Program (DSELP) for use by
the borrower who purchases the property from them.
DHCD will send the DSELP certificate to the organization
along with the First Look certificate. These should be
passed on to the purchasing homebuyer—both must be
used within six months with a qualifying CDA loan.
38
First Look Maryland Certificate
39
40
Neighborhood Revitalization
41
Neighborhood Conservation Initiative
• $14 million from the Attorney General Settlement
• For neighborhood stabilization activities similar to
those funded with HUD NSP funds, including
• Acquisition, rehab, resale / rent
• Down Payment assistance to homebuyers
• Targeted to areas still struggling with the impact
of housing foreclosures -- locally designated
“Neighborhood Conservation Areas”
42
Neighborhood Conservation Goals
• Increase affordable and workforce housing
opportunities in neighborhoods affected by
foreclosure
• Maximize revitalization impact through leverage
and coordination with other public and private
resources
• Encourage innovation between public and private
sectors through new approaches to household
and neighborhood stabilization
43
NCI Timeline
RFP AVAILABLE SOON, www.mdhousing.org
• Eligible Applicants:
• Local governments or non-profit community development
organizations
• Target Areas:
• Neighborhood Conservation Areas
• Training Dates: TBD
• Application Due Date: TBD
44
Neighborhood Conservation Initiative
Eligible Activity:
Acquisition and
rehabilitation of houses
for resale or rental
Montgomery County
45
Neighborhood Conservation Initiative
Eligible Activity:
Downpayment
Assistance
Charles County
46
Neighborhood Conservation Initiative
Eligible Activity:
Acquisition of
blighted or
abandoned
property for new
housing or
community facilities
Allegany County
47
Neighborhood Conservation Initiative
Goal is to return
blighted neighborhoods…
Cornerstone Hill, Cumberland
48
Neighborhood Conservation Initiative
Back into attractive, vibrant neighborhoods
Cornerstone Hill, Cumberland
49
Neighborhood Conservation Tax Credit
• HB 923,
Neighborhood Conservation Act of 2012
• Enabling authority for local governments to
design a property tax credit for homes
purchased in locally designated areas –
Neighborhood Conservation Areas
50
Strategic Demolition & Smart Growth
Impact Fund (SGIF)
• SFY13 appropriation: $2.5 million
• Provides grants or loans for capital projects:
•
•
•
•
Site acquisition and land assembly
Demolition
Site development, including public infrastructure improvements
Construction-level architectural and engineering designs
Right:
College
Park,
Property
acquisition
Left: Route 1
infrastructure
improvements
51
SGIF Outcomes
• Desired Smart Growth Outcomes:
•
•
•
•
•
•
Accelerate compact mixed-use development
Catalyze development around State-designated TODs
Develop healthy local economy – augment tax base
Create local jobs
Provide a range of housing choices
Demonstrate environmentally
sensitive development practices
52
SGIF Timeline
RFP AVAILABLE NOW, www.mdhousing.org
• Eligible Applicants:
• Local governments or non-profit community development organizations
• Target Areas:
• Sustainable Community Areas
• Training Dates:
•
•
Tuesday, August 28, 10am – 12noon OR 2pm – 4pm (DHCD Crownsville)
Wednesday, August 29, 10am – 12noon OR 2pm – 4pm (NR office, Baltimore)
• Application Due Date:
• Friday, October 12, 2012
53
Questions?
• Smart Growth Impact Fund:
• Kevin Baynes, 410-209-5823, [email protected]
• Mary Kendall, 410-209-5810, [email protected]
• Neighborhood Conservation Initiative:
• Cindy Stone, 410-514-7256, [email protected]
• Neighborhood Conservation Tax Credit
• Carol Gilbert, 410-514-7229, [email protected]
54