What Lenders Should Know OHFA Basic Training What Lenders Should Know Welcome 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.

“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 Programs Early 1980’s Creation of several loan products 143,000 Ohioians Here 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

Agenda OHFA Programs – Know Thy OHFA Programs Down Payment Assistance Homebuyer Education Program Fees OHFA Lender Portal Compliance Process The 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, etc Down payment assistance options Homebuyer Education – required for specific loans Program fees – brief overview but Lou will cover this in detail during his presentation OHFA Lender Portal – our reservation system which is available 24/7 Compliance process – general overview of OHFA’s compliance process

OHFA Programs First-time Homebuyer Program Target area loan Ohio Heroes Program New Home Sweet Home Program Grants for Grads-Plus Program Down payment Assistance Grant Mortgage Credit Certificate Program What 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 Program Ohio Heroes Program Down payment Assistance Grant Grants for Grads Plus Program MCC – 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

A 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 640 Meet income and sales price limits Qualify for the loan being requested

Target Area A target area is an economically distressed area designated by the U.S. Department of Housing and Urban Development (HUD). http://www.ohiohome.org/homebuyer/publications.aspx#target (OHFA download center) http://www.ffiec.gov/Geocode/default.aspx

Loan Program Features All loans are 30 year fixed rate mortgages Acceptable loan types: FHA (including 203k and streamline) VA USDA-RD, Fannie Mae/FreddieMac 2 – 1 buy downs are permitted Interest rates www.ohiohome.org

Qualifying properties Existing homes: single-family dwellings, conforming condominiums, duplexes, and up to four-unit properties Newly built spec/nearly completed homes: one-unit single-family dwellings Modular/manufactured (mobile-style) homes: one-unit single-family dwellings, permanently affixed to a foundation (government loan) Follow underwriting guidelines for specific products Read from script.

Qualifying properties cont… Properties must meet purchase price limits by county 2 acres – within municipal corporations 5 acres – outside municipal corporations Exceptions permitted if required by local health or safety code Read slide

New Home Sweet Home Product All the benefits of our First-Time Homebuyer Program New Construction Homes One unit single family dwelling Extended period of time At a .25% higher interest rate

All the benefits of our First-Time Homebuyer Program Ohio Heroes Product All the benefits of our First-Time Homebuyer Program At a .25% lower interest rate Program 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 homebuyer Be creditworthy: Minimum credit scores may apply Have a signed purchase and sales agreement for a qualifying property Income and sales price limits This program is available to full-time hero employees that fall into one of the following categories. (click)

Active Military and Veterans Ohio Heroes Product Active Military and Veterans Personnel, Armed services & Reserve forces 90 days Active Duty for Reserve Forces (excluding boot camp) Veterans must have honorable discharge Proper documentation required (Read script) Proper documentation required like the DD214 to validate qualification

Ohio Heroes Product cont… Firefighters, EMT or Paramedics Full-time employees (1,200 hours) Certification card Letter from payroll OHFA Form Proper 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)

This is a form created by OHFA for Firefighters only.

Ohio Heroes Product cont… Health Care Workers Certified, accredited, or licensed Employed full-time Medical office, urgent care, nursing home, assisted living hospital, etc. Proper documentation required (Read script)

Ohio Heroes Program cont… Police Officers Commissioned as law enforcement officer Employed full-time General power of arrest Proper documentation required (Read Script)

Ohio Heroes Product cont… Teachers Certified teacher, guidance counselor, administrator/principal or college level instructor Employed full-time Minimum of 12 credit hours Proper 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

Grants for Grads (G4G) Product Be a first-time homebuyer Meet specific income guidelines Be an Ohio resident Graduated from high school or have a GED Earned an associate's, bachelor's, master's, doctorate or other postgraduate degree Within 24 months of application One unit dwelling So 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.

Benefits equals 2.5% of purchase price Grants for Grads cont… Benefits equals 2.5% of purchase price Issued as a second mortgage with a 0% interest rate with payments deferred The loan is forgiven after five years This 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)

Down Payment Assistance (DAG) April 15, 2013 First-time Homebuyer Program, New Home Sweet Home, or Ohio Heroes Program .50% above the FTHB unassisted rate Benefits equals 2.5% of purchase price Issued as a second mortgage with a 0% interest rate with payments deferred The loan is forgiven after five years Yes, 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)

Grants 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.

DPA Funding Authorization Form Advanced Notice 3 Business Days $50 Wiring Fee Can be charged to borrower Title Co. forward check to OHFA Form needs to be completed by Title Co. 3 Sections to be completed Transaction, Payee, and Banking information Email requests to DPAfunding@ohiohome.org Lenders 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 e-mail when completed.

Any OHFA assisted loans Grants for Grads Down Payment Assistance Grant Homebuyer Education Any OHFA assisted loans Grants for Grads Down Payment Assistance Grant Conventional unassisted Require Homebuyer Education counseling

OHFA Streamlined education program Homebuyer Education Courses offered through HUD-approved housing counseling agencies in each Ohio county -OR- OHFA Streamlined education program The borrower has 2 options when completing their homebuyer education: They can either select courses offered thru a HUD-approved counseling agency in Ohio Or They can use OHFA’s streamlined education program. If you or your client decides to use OHFA streamline process (click)

OHFA interactive area on website Homebuyer Education OHFA interactive area on website Website contains Interactive maps where borrower can click and email 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 e-mail 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.

OHFA Streamline Homebuyer Education Borrower will need to: Review Homebuyer Guide Complete 25 question test Fill out budget worksheet Homebuyer documents available: From lender On OHFA website: www.ohiohome.org To complete the OHFA’s streamline process the borrower will need to Review the Homebuyer Guide Complete a 25 question test And complete a budget worksheet These homebuyer documents are available from the lender or from OHFA’s website at www.ohiohome.org.

To access the homebuyer education process, the borrower will need to go to OHFA’s website and select the Homeownership option circled in Red.

Select the menu option circled in red

Here 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 Form And OHFA’s Fax Cover Sheet for those not using interactive system The red arrow identifies the link the borrower should click on to start the interactive counseling registration.

Fax homebuyer information 614.995.0487 Expect 7 to 10 day process Homebuyer Education Fax homebuyer information 614.995.0487 Expect 7 to 10 day process If 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.

Test and budget to the appropriate agency. Homebuyer Education Test 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.

Borrower will close on their loan. Homebuyer Education Borrower 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.

Loan 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 fee OHFA’s Streamline Homebuyer Education (if applicable) $50 Wire funding fee .25% Adverse market fee (Fannie Mae fee) Conventional loans only Read slide This 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.

Are there any OHFA requirements? Borrower(s) must meet household income and purchase price limits Credit score limits Reservation good for 60 days Spouse releasing dower and Co-signers Income of spouse releasing dower is part of household income Co-signer not considered co-borrower for OHFA purposes Both 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.

Are there any OHFA requirements? cont. The Federal Recapture Tax provision applies to: First-time Homebuyer Program Ohio Heroes Program Grants for Grads New Home Sweet Home OHFA will reimburse recapture tax. Recapture applies to all loans purchased under our FTHB, Heroes and G4G’s and the Home Sweet Home Program It 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.

How to register an applicant? Lender Portal Username and password Main contact person www.ohiohome.org Add to favorites To 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 www.ohiohome.org. To make it easier to reach later, add the site to your favorites.

On the home page of our website in the lower right corner is the Lender Portal icon. Click on it ( next slide)

And 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

Once 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 development FNMA 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 presentation Grants 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

This 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

If you select Grants for Grads or an unassisted loan then you should (next slide)

You will get an assigned reservation number. Print your reservation page. Now that you have reserved your loan …next slide

Compliance Process What happens now Process Loan Submit Commitment Package Wait for OHFA Approval Submit DPA Funding Request Close Loan Submit OHFA Purchase Package Send Mortgage file to US Bank US Bank Purchase Mortgage What happens now Your 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.

Who should I call with my questions? OHFA Representative US Bank MRBP helpdesk 800.562.5165 mrbp.helpdesk@usbank.com Read Slide