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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.

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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 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…..

2 Presented By: Virginia Department of Housing & Community Development Cheri L Miles

3 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

4  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

5  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

6 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

7 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

8  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.

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11  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

12  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

13 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…..

14  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

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16 DHCD Match & Subsidy NSP Assistance

17  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

18 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

19  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

20 Determining the first trust loan amount TCR- Part A, B, and C

21  As Is Appraisal$197,  Acquisition Price $195, ◦ NSP Dollars $195,030 ◦ Leveraged Dollars $0.00  Rehab Dollars $ 32, ◦ NSP Dollars $ 32,700 ◦ Leveraged Dollars $0.00  Client AMI 51-80%  Borrowers Down Pymt$

22 $179,734.00

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24 This training reflects the new policy change regarding closing cost effective 3/8/11

25  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

26 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

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28 Calculating NSP DOT & Forgiven Subsidy NSP Deed of Trust

29  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

30  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

31 TCR- 2 nd DOT Calculation Part E Loan Closing Borrowers 1st Trust Loan Amount $ 129,600 Junior Lien/ NSP DHCD Match $ 15,000 Subsidy $ 36,400 Subtotal NSP Assistance $ 51, NSP Forgivable Subsidy 3.5% $ 6, NSP 2nd DOT Amount $ 45, Total NSP Assistance $59,400.00

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33 Calculating the full Assistance TCR – Part E

34  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

35 ◦ 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.

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37  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

38  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**

39  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

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42 Borrower’s SideSeller’s Side Lines 204 thru208 NSP 2 nd DOT$45,030 NSP Pd Closing Cost (Up To)- NTE Line 103 $8,000 NSP Forgiven Subsidy $6,370 Lines 504 thru508 NSP 2 nd DOT$45,030 NSP Pd Closing Cost ( Up To) NTE Line 103 $8,000 NSP Forgiven Subsidy $6,370

43  The NSP 2 nd DOT  NSP Paid Closing Costs  NSP Forgiven Subsidy ◦ The gross proceeds to seller (Line 603) are reduced ◦ DHCD/Grantee do not send additional funds to closing

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45  Chris Thompson- Program Manager ◦  Cheri Miles – Policy Analyst ◦  Monica Spradlin- Community Representative ◦  Doug Ellis- Community Representative ◦


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