Presentation on theme: "What Lenders Should Know"— Presentation transcript:
1What Lenders Should Know OHFA Basic TrainingWhat Lenders Should KnowWelcome to OHFA’s Basic Training “what lenders should know”.I am Cleo Evans, a coordinator here at OHFA along with Lou Caresani, VP of Client Support at US Bank Home Mortgage, OHFA’s servicer.Lou will cover two presentations: Funding and delivery of your mortgage file plus underwriting.So before I begin the presentation, “What Lenders Should Know,” I would ask that you hold your questions until I we open the lines for questions.
2“We Open the doors to an affordable place to call home” Introduction“We Open the doors to an affordable place to call home”First-time Homebuyer ProgramsEarly 1980’sCreation of several loan products143,000 OhioiansHere at the Ohio Housing Finance Agency our mission is to “Open the doors to an affordable place to call home” and one way we are able to achieve this mission is through our First-time Homebuyer programs. Our FTHB has been around since the early 1980’s when people camped out all night for an opportunity to get a low interest rate mortgage. And we still offer competitive interest rates and mortgage options to buyers so they can realize their dream of homeownership. The FTHB program has been so successful that OHFA has created several loan products based on our flagship program to meet buyer’s needs.Currently, we have helped 143,000 Ohioians purchase homes.Next slide
3Agenda OHFA Programs – Know Thy OHFA Programs Down Payment Assistance Homebuyer EducationProgram FeesOHFA Lender PortalCompliance ProcessThe agenda is to answer the following questions:Know thy OHFA Programs: I will start with our flagship program First-time homebuyer because when you understand the basic of this program, then you would understand spinoff programs like our Grant for Grads, OHIO Heroes, New Home sweet home, etcDown payment assistance optionsHomebuyer Education – required for specific loansProgram fees – brief overview but Lou will cover this in detail during his presentationOHFA Lender Portal – our reservation system which is available 24/7Compliance process – general overview of OHFA’s compliance process
4OHFA Programs First-time Homebuyer Program Target area loan Ohio Heroes ProgramNew Home Sweet Home ProgramGrants for Grads-Plus ProgramDown payment Assistance GrantMortgage Credit Certificate ProgramWhat programs does OHFA offer?Our FTHB program. This title is a little deceiving because previous homebuyers can participate, which we will discuss later on.New Home Sweet Home ProgramOhio Heroes ProgramDown payment Assistance GrantGrants for Grads Plus ProgramMCC – Mortgage Credit Certificate Program – we will not be discussing this program today, but if you are interested in this program, please call us for further training details.So let’s discuss our flag ship program the FTHB
5A person that has: First-time Homebuyer Have never owned real estate; Have not owned or had an ownership interest in your principal residence in the last three years;Unless they are a qualified military veteran;Purchase a home in a target area.Minimum credit scores 640Meet income and sales price limitsQualify for the loan being requested
6Target AreaA target area is an economically distressed area designated by the U.S. Department of Housing and Urban Development (HUD).(OHFA download center)
7Loan Program Features All loans are 30 year fixed rate mortgages Acceptable loan types:FHA (including 203k and streamline)VAUSDA-RD,Fannie Mae/FreddieMac2 – 1 buy downs are permittedInterest rates
9Qualifying properties Existing homes: single-family dwellings, conforming condominiums, duplexes, and up to four-unit propertiesNewly built spec/nearly completed homes: one-unit single-family dwellingsModular/manufactured (mobile-style) homes: one-unit single-family dwellings, permanently affixed to a foundation (government loan)Follow underwriting guidelines for specific productsRead from script.
10Qualifying properties cont… Properties must meet purchase price limits by county2 acres – within municipal corporations5 acres – outside municipal corporationsExceptions permitted if required by local health or safety codeRead slide
11New Home Sweet Home Product All the benefits of our First-Time Homebuyer ProgramNew Construction HomesOne unit single family dwellingExtended period of timeAt a .25% higher interest rate
12All the benefits of our First-Time Homebuyer Program Ohio Heroes ProductAll the benefits of our First-Time Homebuyer ProgramAt a .25% lower interest rateProgram is available to the following full-time employees who are:Ohioans working in critical professions can also take advantage of a special first-time homebuyer program –it’s our “Ohio Heroes Program” – that has a quarter percent lower interest rate.Remember during the start of this program I stated there would be overlap, well Heroes applicants still must meet the criteria previously discussed with the FTHB program.Borrower must:Be a first-time homebuyerBe creditworthy: Minimum credit scores may applyHave a signed purchase and sales agreement for a qualifying propertyIncome and sales price limitsThis program is available to full-time hero employees that fall into one of the following categories. (click)
13Active Military and Veterans Ohio Heroes ProductActive Military and VeteransPersonnel, Armed services & Reserve forces90 days Active Duty for Reserve Forces (excluding boot camp)Veterans must have honorable dischargeProper documentation required(Read script)Proper documentation required like the DD214 to validate qualification
14Ohio Heroes Product cont… Firefighters, EMT or ParamedicsFull-time employees (1,200 hours)Certification cardLetter from payrollOHFA FormProper documentation required(Read script)FYI…Full-time is considered paid service for a minimum of 1200 hours per year.(next slide will have a OHFA work experience form)
15This is a form created by OHFA for Firefighters only.
16Ohio Heroes Product cont… Health Care WorkersCertified, accredited, or licensedEmployed full-timeMedical office, urgent care, nursing home, assisted living hospital, etc.Proper documentation required(Read script)
17Ohio Heroes Program cont… Police OfficersCommissioned as law enforcement officerEmployed full-timeGeneral power of arrestProper documentation required(Read Script)
18Ohio Heroes Product cont… TeachersCertified teacher, guidance counselor, administrator/principal or college level instructorEmployed full-timeMinimum of 12 credit hoursProper documentation required(Read script)Please remember that for all the Heroes categories, you must provide a paystub to prove full-time employment and credentials to validate position and/or profession.If you are not sure and you need clarification contact your OHFA representative.Next slide
19Grants for Grads (G4G) Product Be a first-time homebuyerMeet specific income guidelinesBe an Ohio residentGraduated from high school or have a GEDEarned an associate's, bachelor's, master's, doctorate or other postgraduate degreeWithin 24 months of applicationOne unit dwellingSo let’s talk about the first assistance option.The Grants for Grads program’s concept is to provide Ohio’s recent college graduates with the financial incentive to seek employment in Ohio and establish their home in Ohio rather than relocating to another state.Of course OHFA requires that the borrower be a FTHB like our flagship program and they must meet specific income guidelines, which are higher than our usual non-target limits.They must be an Ohio resident and have graduated from high school. You may want to make a note of this: We do not need a copy of their High School diploma. However, it needs to be noted on the Loan Commitment Voucher, if they attended high school in or out of the state of Ohio. Please note that we do need a copy of their college degree. They must have received their degree within 24 months of application. The degree can be from any college even outside of Ohio.
20Benefits equals 2.5% of purchase price Grants for Grads cont…Benefits equals 2.5% of purchase priceIssued as a second mortgage with a 0% interest rate with payments deferredThe loan is forgiven after five yearsThis program offers the qualified borrower 2.50% of the purchase price as a grant.Lenders are used to seeing the 2.50% assistance as a grant; however, OHFA has packaged the assistance in the form of a forgivable 2nd mortgage:that is forgivable after five years.However, If the borrower moves out of Ohio prior to that five year time frame, (Click)
21Down Payment Assistance (DAG) April 15, 2013First-time Homebuyer Program, New Home Sweet Home, or Ohio Heroes Program.50% above the FTHB unassisted rateBenefits equals 2.5% of purchase priceIssued as a second mortgage with a 0% interest rate with payments deferredThe loan is forgiven after five yearsYes, OHFA offers down payment assistance in the form of a grant and our grants for grads , which is in the form of a silent second.Both are 2.50% of the purchase price. In the case of a 203k or 203b with repairs then it’s calculated on acquisition cost stated on 203K worksheet (purchase price and repairs).As of January 24, 2013, OHFA directly funds this fee t o the title company..(Click)
22Grants for Grads / Down payment Assistance However, a prorated repayment of the remaining balance is due if the home is sold within five years.That borrower is responsible for paying back a pro-rated portion of that grant as this graph shows.Less that a year (12months) 100%12 months to 24 months 80%24 months to 36 months 60%36 months to 48 months 40%48 months to 60 months 20%It is important for your clients to know and understand this component of our G4G program.
23DPA Funding Authorization Form Advanced Notice3 Business Days$50 Wiring FeeCan be charged to borrowerTitle Co. forward check to OHFAForm needs to be completed by Title Co.3 Sections to be completedTransaction, Payee, and Banking informationrequests toLenders need to provide a 3 day advanced notice to OHFA, That is business days, keep in mind OHFA is not open on Saturday and Sundays, and Holidays. You must have commitment approval prior to forwarding the authorization form.OHFA does assess a $50 fee which can be charged to the borrower.So instruct the Title company that the $50 Wiring fee should be listed to Ohio Housing Financing Agency, because the tile company is responsible for forwarding the fee to OHFA.$50 fee needs to be forwarded from the title company in order to obtain OHFA purchase approval.The authorization form has three sections to be completed, transactions, payee and banking information.Please remember to forward the form to the DPA funding when completed.
24Any OHFA assisted loans Grants for Grads Down Payment Assistance Grant Homebuyer EducationAny OHFA assisted loansGrants for GradsDown Payment Assistance GrantConventional unassistedRequire Homebuyer Education counseling
25OHFA Streamlined education program Homebuyer EducationCourses offered through HUD-approved housing counseling agencies in each Ohio county-OR-OHFA Streamlined education programThe borrower has 2 options when completing their homebuyer education:They can either select courses offered thru a HUD-approved counseling agency in OhioOrThey can use OHFA’s streamlined education program.If you or your client decides to use OHFA streamline process (click)
26OHFA interactive area on website Homebuyer EducationOHFA interactive area on websiteWebsite contains Interactive maps where borrower can click and completed documents directly to the counseling agency.Borrower reservation will be confirmed electronically before granting access to site.It is interactive on OHFA’s website.Borrowers can utilize interactive maps where they can click and completed documents directly to the counseling agency.Also, the borrowers reservation will be confirmed electronically before granting access to the site. Borrower should wait at least 24 hours before they attempt to register for counseling.
27OHFA Streamline Homebuyer Education Borrower will need to:Review Homebuyer GuideComplete 25 question testFill out budget worksheetHomebuyer documents available:From lenderOn OHFA website:To complete the OHFA’s streamline process the borrower will need toReview the Homebuyer GuideComplete a 25 question testAnd complete a budget worksheetThese homebuyer documents are available from the lender or from OHFA’s website at
28To access the homebuyer education process, the borrower will need to go to OHFA’s website and select the Homeownership option circled in Red.
30Here are the menu options for Homebuyer education documents circled in red. The following are PDF files which can be downloaded:-Homebuyer Guide-Homebuyer Education Test-Monthly Budget FormAnd OHFA’s Fax Cover Sheet for those not using interactive systemThe red arrow identifies the link the borrower should click on to start the interactive counseling registration.
31Fax homebuyer information 614.995.0487 Expect 7 to 10 day process Homebuyer EducationFax homebuyer informationExpect 7 to 10 day processIf the borrower decides to use the manual process and fax their test and budget and have OHFA assign a counselor it can take up to 7 to 10 business days before your client is contacted, so we encourage the interactive process online.
32Test and budget to the appropriate agency. Homebuyer EducationTest and budget to the appropriate agency.Counselor will review answers and schedule a one hour telephone counseling session with buyer.After OHFA assigns a counseling agency we then forward the test & budget to the appropriate agency and the counselor will review the answers and schedule a one hour telephone counseling session with the buyer.
33Borrower will close on their loan. Homebuyer EducationBorrower will close on their loan.The $75 OHFA Administrative Fee, shown on the HUD-1 for the first mortgage, should be made payable to OHFA.The $75 fee must be included with the closing package.Once the borrower closes on their loan, and has used OHFA’s streamline process, the $75 OHFA Administrative Fee should be shown on the HUD-1 for the first mortgage and made payable to OHFA.The $75 Admin Fee must be included with the closing package.
34Loan Fees 1% Origination fee or Zero Origination $200 Funding fee (US Bank fee)$85 Tax service fee (US Bank fee)Not to exceed $90$75 Admin feeOHFA’s Streamline Homebuyer Education (if applicable)$50 Wire funding fee.25% Adverse market fee (Fannie Mae fee)Conventional loans onlyRead slideThis information is noted on OHFA’s “Notice of Rate Change” and on the Product’s Term Sheet, which is located in the bulletin board section in Lender Online.
35Are there any OHFA requirements? Borrower(s) must meet household income and purchase price limitsCredit score limitsReservation good for 60 daysSpouse releasing dower and Co-signersIncome of spouse releasing dower is part of household incomeCo-signer not considered co-borrower for OHFA purposesBoth are prohibited from being on the title and deed(Read Script)Reservations are good for 60 days. After 60 days our cancellation policy kicks in and we will automatically cancel loan.
36Are there any OHFA requirements? cont. The Federal Recapture Tax provision applies to:First-time Homebuyer ProgramOhio Heroes ProgramGrants for GradsNew Home Sweet HomeOHFA will reimburse recapture tax.Recapture applies to all loans purchased under our FTHB, Heroes and G4G’s and the Home Sweet Home ProgramIt applies when the home is sold – prior to 9 years, when there is a gain on the sale, and household income limit is exceeded.But the borrower won’t need to worry about that issue because we will reimburse any recapture that homebuyer that purchase their home (March 1, 2006 and after) under our program.
37How to register an applicant? Lender PortalUsername and passwordMain contact personAdd to favoritesTo register your applicant for one of our programs you would use Lender Portal. This is a reservation tracking system that allows our participating lenders to track loans reserved under our programs from the beginning to final purchase approval by OHFA.To access this system your main contact has to have assigned you an username and password.Lender Portal can be accessed through OHFA’s website To make it easier to reach later, add the site to your favorites.
38On the home page of our website in the lower right corner is the Lender Portal icon. Click on it ( next slide)
39And this screen should appear. I recommend adding this to your favorites so you won’t need to constantly go through our home page to get here.You will need a username and password to access Lender Portal. If you have not been assigned a username and password contact your person in charge to get one.If you have a username and password enter it…FYI…these fields are case sensitive
40Once you are in LOL click on the “New Reservation” tab. Screen should display reservation options to choose from based on applicants loans.Bond is for government loans like FHA, VA, and USDA-rural developmentFNMA are Fannie Mae loans.But you also need to determine if the loan is with an origination fee or without…please make sure you choose the right category because a lot of people miss this…with origination fee, use the OHFA Bond Series…without origination fee, use the Zero Point.Heroes are for people meeting categories discussed earlier in the presentationGrants for grads.Next you must know whether the property is in a target or non-target area. If you are not sure, you can utilize our Target Area Maps. You will need your Census Tract number too.And finally, you must also know whether you want our 2.5% assisted funds.Next slide
42This is the screen you will see if you select a 2.5% option. Notice next to “Program” it states what you have selected.Tab through the fields you need to complete, but I would like to request you complete as many fields as possible…even the current address fields.Next slide
43If you select Grants for Grads or an unassisted loan then you should (next slide)
44You will get an assigned reservation number. Print your reservation page.Now that you have reserved your loan …next slide
45Compliance Process What happens now Process LoanSubmit Commitment PackageWait for OHFA ApprovalSubmit DPA Funding RequestClose LoanSubmit OHFA Purchase PackageSend Mortgage file to US BankUS Bank Purchase MortgageWhat happens nowYour company should process the loan to ensure borrower(s) meet the requirements and underwriting guidelines for that product.Next submit our commitment package paperwork for review and approval so borrower can close. FYI…it depends on the volume of loans we receive each day that determines when we will review your loan. Also keep in mind that there may be errors or corrections needed before we can issue an approval. Most of us will notify the person noted on our Loan Voucher about corrections so they can get what we need in a timely manner. But if you don’t hear anything, check Lender On-Line’s Loan Status to check the status of the loan.All commitment approval letters will be available in Lender Portal – this commitment approval is good for 30 days.Close loan and submit OHFA its final purchase pkg. 20 days after closing and send US Bank the mortgage file so they can fund your loan once we have approved the final OHFA purchase package.
46Who should I call with my questions? OHFA RepresentativeUS Bank MRBP helpdeskRead Slide