Presentation on theme: "1) Phone Use during the Webinar 1)Please mute phone during the webinar, use (*6) 2)To un-mute phone use (#6) 2) Type all of your questions in the chat."— Presentation transcript:
1) Phone Use during the Webinar 1)Please mute phone during the webinar, use (*6) 2)To un-mute phone use (#6) 2) Type all of your questions in the chat box 1)Grantees- Direct your questions to Doug Ellis 2)All Others- Direct your questions to Monica Spradlin Our Program will begin shortly…..
Presented By: Virginia Department of Housing & Community Development Cheri L Miles
From Left to Right: Chris Thompson, Kiera Johnson, Denise Ambrose, Roxanne Marrs-Shears, Cheri Miles, Lisa Atkinson, Joanne Peerman, Doug Ellis & Monica Spradlin Meet the NSP Team
Virginia was awarded $38.7 million dollars to help stabilize neighborhoods hard hit by foreclosures. NSP purchases foreclosed homes, rehabs them & then resells them to Low, Middle, Moderate Income (LMMI) borrowers. To date we have: ◦ purchased 218 foreclosed homes ◦ Resold over 80 homes to NSP borrowers
DHCD is a state agency ◦ DHCD does not purchase properties directly ◦ DHCD does not rehab properties directly ◦ DHCD does not sell properties directly DHCD does work with Grantees ◦ Who are our 21 NSP Grantees: Local Government Units Non Profits Housing Authorities Community Development Corporations
The foreclosed home is purchased using NSP Grant Funds. The home is rehabbed using NSP Grant Funds and/or leveraged funds from another source. The home will not be sold until all rehab is complete Unraveling the Mystery
NSP Sales Price = Acquisition + Rehab (no profit) The home is marketed to an LMMI borrower Housing Counseling Programs Local Government/ Teachers Local Industries Realtors/ MLS
The Virginia NSP program allows the homes to be resold using a variety of first trust mortgages, with the following guidelines ◦ All mortgages must be 30 year fixed rate loans ◦ No prepayment penalties ◦ No predatory or subprime lending ◦ No negative amortization ◦ First trust liens may be VA, FHA, VHDA, Conventional, USDA or Habitat.
TCR- Tracking & Completion Report Sample in your packet ◦ Provided by Grantee/Housing Counselor NSP Sales Price Subsidies Closing Cost Assistance First Trust Loan Amount 2 nd DOT DHCD NSP Underwriting Explanation Letter Sample in your packet ◦ Provided by DHCD Outlines each category of NSP Assistance
Intake ◦ The clients meets the Housing Counselor Program explained Housing Counselor determines qualification per NSP TCR is completed (sections A,B,C) Subsidies are determined Backing Into a Loan Amount Counselor requests UW explanation letter from DHCD Community Rep (Doug/Monica) The Housing Counselor and the Loan Officer
Part C Homebuyers Numbers NSP Sales Price $ 182,000 AMI%- a= <50, b=51-80, c= , d=Habitat b NSP Subsidy $ 36,400 DHCD Match $ 15,000 Borrowers Dwn Payment/ EMD $ 1,000 Leveraged Dwn Payment Borrowers Loan Amount $ 129,600 Math Check- Should equal NSP SP $ 182,000 The Housing Counselor completes this form…..
Application ◦ The Client visits the Loan Officer Client provides all documents necessary for pre- approval Complete the pre approval Housing Counselor provides TCR First Trust Loan Amount required UW explanation letter The Housing Counselor and the Loan Officer
DHCD Match & Subsidy NSP Assistance
NSP Subsidy- Monies left in the deal ◦ Subsidies are based on LMMI income levels ◦ Grant funds ◦ 0% Interest ◦ No payments ◦ Forgiven after affordability period 5-15/yrs Up to $14, Years $15,000-$39, Years $Over 40, Years Housing Counselor Determines Subsidy Qualification
DHCD Match can never exceed 10% of discount As Is Appraisal 175,000 Acquisition 150,000 DHCD Match $ 14.29% DHCD Match $ 15,000 NSP has a required acquisition discount of 1% under the as is appraisal. The harder the Grantee negotiates with the REO the more the monies are left in the deal (additional subsidy) ◦ Acquisition Cost/As Is Appraisal = DHCD Match TCR – Section A
The subsidy is provided to the homebuyer at closing in the form of a Deed of Trust/Note. Subsidy = % x NSP sales price Subsidy Determined byClients AMI Under 50% AMI30% Subsidy 51-80% AMI20% Subsidy % AMI10% Subsidy
Determining the first trust loan amount TCR- Part A, B, and C
As Is Appraisal$197, Acquisition Price $195, ◦ NSP Dollars $195,030 ◦ Leveraged Dollars $0.00 Rehab Dollars $ 32, ◦ NSP Dollars $ 32,700 ◦ Leveraged Dollars $0.00 Client AMI 51-80% Borrowers Down Pymt$
This training reflects the new policy change regarding closing cost effective 3/8/11
NSP offers up to $8,000 in closing cost assistance per home. ◦ The Closing Cost Assistance is reported as NSP Paid Closing Costs on the HUD-1 and forgiven at closing. ◦ The Closing Costs assistance must match line 103 on the HUD-1 (NTE $8,000) TCR- The closing costs calculations are found in section D
Part D Closing Costs Total Closing Costs from HUD-1 $ 9, NSP Paid Closing Costs (NTE 8k) $ 8, Leveraged Closing Costs $ Borrower Pd Closing Cost $ 1, TCR- Section D Closing Cost Calculation
DHCD prefers the NSP DOT to be in 2 nd place ◦ We will consider 3 rd in some instances The NSP DOT includes: ◦ NSP Subsidy ◦ DHCD Match Funds The NSP Grantees are provided templates for the NSP DOT/NOTE and in most instances will prepare these documents for closing
DHCD allows 3.5% of the NSP sales price to be forgiven at closing. ◦ This reduces the CLTV ◦ Brings NSP in line with some secondary marketing requirements ◦ The 3.5% is subtracted from the total assistance PRIOR to determining the NSP DOT
GFE Closing Costs$7, ◦ Enter the estimated costs HUD-1 Closing Costs$8, ◦ Reenter the costs with prelim HUD-1 figure Line 103 on the HUD-1
◦ Grantees: Adjust the TCR once the HUD-1 draft is available and submit to DHCD for closing approval ◦ Grantees: Adjust the TCR with the final HUD-1 figure prior to submitting the final closing package to DHCD.
Underwriting ◦ File is approved with conditions ◦ Notify Borrower Schedule Closing Date ◦ Title Company/ Lender Set Closing Date Send NSP Closing Instruction Letter- Sample in Packet ◦ Notify Borrower Communicate ◦ Grantee & DHCD Closing Date Prelim HUD-1 minimum of 24 hours in advance
Grantee/Title Company complete the NSP DOT/ NOTE ◦ Remember: The NSP DOT contains the DHCD Match and Subsidy Prelim HUD-1 is provided to Grantee/DHCD for review and sign off **Client can not walk away with monies from the sale**
All players need to be available ◦ Title company ◦ Lender ◦ Grantee ◦ DHCD ◦ Borrower ◦ TCR overrides and revisions may occur the day of closing…DHCD strives to turn them around quickly as to not delay closing