1. JERRY NAGY & MEGAN BOOTH NATIONAL ASSOCIATION OF REALTORS® Federal Housing Response

2. Federal Housing Programs FHA  Loan limits equal to 125% 2008 median home price – up to $729,750  3.5% downpayment – 6% seller concessions allowed  MIP = 1.75 upfront/.5-.55 annual/1.50 refi  No minimum credit score  Loan limits – https://entp.hud.gov/idapp/html/hicostlook.cfm VA  Loan limits equal to 125% 2008 median home price – up to $1,094,625  Zero-downpayment  Fees = 2.15% on zero-down (3.3% for repeat) – no fee if service-connected disability  No minimum credit score  Loan limits - http://www.homeloans.va.gov/docs/2009_county_loan_limits.pdf RHS  Income eligible up to 115% local area median income  Flexible downpayment (including zero-down)  Eligible areas - http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

3. Specific Loan Programs 203k rehabilitation mortgage  FHA Energy Efficient Mortgages  FHA  Freddie Mac/Fannie Mae Location Efficient Mortgages  Freddie Mac/Fannie Mae HECM  FHA HECM for Purchase  FHA

4. Homebuyer Tax Credit $8000 Tax Credit for first time homebuyers* *may not have owned a home in previous 3 yrs Any single family residence (including condos and coops) that is a principal residence Income Limits ($75,000-$95,000/$150,000-$170,000) Recapture if sold in first 3 years Effective January 1, 2009 – November 30, 2009

5. Use of the Tax Credit According to 2008 IRS Tax Tables  A single filer would need $46,600 in taxable income to have an $8,000 tax liability  A couple would need $58,600 in taxable income to have $8,000 in tax liability The median household income in 2007 was $50,233.00

6. Example #1 Example #2 Nick and Nora file a joint return. Withheld= $11,000 Actual Tax Liability = $9,800 Homebuyer Tax Credit = $8,0000 Result: $1,200 regular refund + $8,000 tax credit = refund of $9,200 Cesar and Maria file a joint return. Withheld = $5,000 Actual Tax Liability == $7,200 Homebuyer Tax Credit = $8,000 Result: Owe $2,200 additional, + $8,000 tax credit = $5,800 refund. Examples of the Tax Credit

7. Homeowners in Trouble Hope for Homeowners GSE Refinancing GSE Loan Modification Other Resources 1 888 995 HOPE (4673)

8. HOPE for Homeowners (H4H) Updates being debated in Congress Effective October 1, 2008 Voluntary for lender and homeowner New loan at 90% (93%) current appraised value FHA must approve loans and borrowers National loan limit of $550,400 (Incentives to lenders/servicers) More information at www.fha.gov/hopeforhomeowners

9. GSE “Responsible Homeowners” Refinancing Will allow refinancing for families who owe more than 80% the value of their home Designed for those making on-time payments, but have had their home value fall Loans must be for less than conforming loan limit Estimated to help 4-5 million homeowners

10. GSE “Responsible Homeowners” Refinancing EXAMPLE In 2006, the family took out a 6.5% 30-year fixed rate mortgage for $207,000 on a house appraised at $260,000. Home is now worth $221,000, and they owe $200,000. They would have a hard time refinancing because they don’t have 20% equity. They could refinance into today’s rates (near 5.1%), reducing their annual payment by $2,300. Existing Mortgage Refinancing Balance$199,584$203,575 Remaining Years2730 Interest Rate6.50%5.16% Monthly Payment$1,308$1,113 Savings$196 per month, $2,347 per year

11. Homeowner Stability Initiative For homeowners who are at risk of foreclosure Shared effort to reduce mortgage payments  Lender must reduce interest rate, so that the payment is no more than 38% of income  Federal government will further reduce interest rate to bring the ratio down to 31%  Interest rate stays low for 5 years, then gradually increased up to conforming rate at time loan was made  Payment incentives to homeowners to reduce principal (up to $1000/year) for up to 5 years  Incentives for servicers to participate and for lenders/servicers to reach borrower before delinquent  Partial guarantees Guidelines for Loan Modifications

12. Example of Homeowner Stability Initiative In 2006, the family took out a 7.5% 30-year subprime mortgage of $220,000 on a home worth $230,000. Today they owe $213,431, but their home is only worth $189,000. One member of the family also had had their working hours reduced, lowering their income. Existing Mortgage Loan Modification Balance$213,431 Remaining Years27 Interest Rate7.5%4.42%* Monthly Payment$1,538$1,132 Savings$406 per month, $4,870 per year

13. What do Homeowners Do? As of March 4, the programs are available The information a homeowner will need to provide:  #1- call lender and ask if you are Freddie/Fannie Loan  Gross monthly income of all borrowers, including pay stubs  Most recent income tax return  Information about any second (or third) mortgages  (only the first mortgage will be modified)  Payment information on all credit cards  Any payments on other loans (student, car)

14. CDBG – Neighborhood Stabilization Program $4 billion allocated to states/localities based on foreclosure rate, # of subprime mortgages, # homes in default or delinquency – additional $2b allocated in ARRA – competitive bid Funds provided through the CDBG Program Funds used to:  Provide financing  Purchase  Manage  Repair  Resell foreclosed and abandoned properties Homes must be:  used to assist individuals and families with incomes at or below 120% of area median income.  Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income.

15. Resources for More Information www.realtor.org/governmentaffairs www.fha.gov