2017 REGIONAL

KHC’s 45th Anniversary• Created by the 1972 General Assembly.• Self-supporting, public corporation of the Commonwealth

of Kentucky.• Governed by a 15-member Board of Directors.• Quasi-governmental agency.• Administratively attached to the Finance and Administration Cabinet.

• KHC works with many partners across the state to invest in and create affordable housing opportunities.

KHC has made the American Dream possible for more than 94,000 Kentuckians since 1972.

New Executive Director

Edwin King

RECENT CHANGES

2017 Recent KHC Changes• KHC’s Home Buyer Tax Credit.• Income and Purchase Price Limits.• DAP.• Single Pay Upfront option for Mortgage Insurance.• Student Loan debt through Fannie Mae Programs.• Electronic Welcome Letter from KHC to New

Homeowners.• KHC’s Minimum Credit Score Requirements.• GUS Access on RHS Loans for TPO Lenders.• Affordable DAP.• Fees.• Reservation Extension Policy.

KHC’s Home Buyer Tax CreditEffective January 1st

• Tax Credit increased from 25% to 35%.

• New Home Buyer Tax Credit Pamphlet.

• Redesigned Home Buyer Tax Credit page with FAQ’s

• Redesigned Home Buyer Tax Credit flier

Income and Purchase Price LimitsEffective May 1st

• Secondary Market.• Purchase Price Limit: $282,000.• Income Limit Range: $98,875 - $130,725.

• MRB/KHC’s Home Buyer Tax Program.• Purchase Price Limit: $253,800.• Income Limit Range: $53,200 - $104,580.

Jefferson:$116,200

Fayette:$116,550

NKY:$130,725

Warren:$108,500

Jefferson:$66,400 $76,360

Fayette:$66,600$76,590

NKY:$74,700$85,905

Warren:$62,000$71,300

Down Payment Assistance Program Effective May 1st

• First Mortgage Loan not required to be at maximum LTV.• KHC’s DAPs take a second lien position.• As long as KHC’s DAP remains in second position other

Down payment Assistance Programs can be used.• Welcome Home Funds.• City/Government Monies.• Employer Assistance Funds.

• DAPs can work with seller paid closing costs, gifts and borrower’s own funds.

Minimum Credit Score lowered Effective May 25th

• Conventional Programs. • 660

• Government Programs.• 620

• KHC’s foreclosure and default rates well below the national average.

• KHC’s default rate in April was a historic low at 2.63%• Thanks to our lender partners, for continuing to make

“sustainable” & affordable mortgages through KHC!

Conventional is Better than FHA• No Upfront MI option.• Reduced MI.• Less documentation.• No case number to order.• Mortgage Insurance can be cancelled or avoided.

A lower monthly payment to the borrower!!!

Terms FHA With DAP

Conventional No MI With DAP

Conventional With MIWith DAP

Interest Rate 4.25% 5.125%

*Higher Rate* 4.625%

Base FirstMortgage $144,750 $145,500 $145,500

Financed MI $2,533 N/A N/A

Total First Mortgage Amount

$147,283 $145,500 $145,500

Monthly MI

$102 N/A $101

MonthlyPayment $827 $792

*Lower Payment*$849

MonthlySavings N/A $35 savings vs FHA $22 higher than FHA

**Can Drop MI**

Based on $150,000 purchase price, 97% LTV, 30 year fixed interest rate.

KHC Conventional vs. Home ReadyMortgage Insurance Rates

HFA Preferred & Preferred Risk Sharing

• Higher Income Limits.• Secondary Market.

• KHC DAPs.• No MI Option.• Lower MI Payments.• Counseling from multiple

sources.

Home Ready / Home Possible

• Lower Income Limits.• 100% AMI.

• No KHC DAP.• Higher MI Payments.

KHC Conventional vs. Home Ready• KHC’s Charter Coverage

• 97 – 95.01% = 18%• 95 – 90.01% = 16%• 90 –85.01% = 12%• 85 –81% = 6%

• Home Ready• 97 – 95.01% = 25%• 95 – 90.01% = 25%• 90 –85.01% = 12%• 85 –81% = 6%

Mortgage InsuranceBorrower paid monthly

• Approved MI Companies.• Arch MI• Essent• Genworth• MGIC• National MI• Radian• United Guaranty

• Cancelled automatically when the LTV based on the original value reaches 78%.

Mortgage InsuranceEffective March 8th – Single Pay Premium

• Single Pay Premium – Upfront.• Borrower, Lender, or DAP paid.• Paid entirely at closing.• Often the lowest monthly PITI payment of the MI options.• Refundable or non-refundable.

TermsConventional

HOME READY

KHC Conventional

No MIWith DAP

KHC Conventional w /monthly MI

With DAP

KHC Conventional With Single Premium MI

With DAPInterest Rate 4.625% 5.125% 4.625% 4.625%

Base FirstMortgage $142,500 142,500 $142,500 $142,500

Financed MI N/A N/A N/A $4086.16

Single PremiumTotal First Mortgage Amount

$142,500 $142,500 $142,500 $142,500

Monthly MI

25%$111

N/A 16%$99

N/A

MonthlyPayment $843 $775 $831 $732

MonthlySavings N/A $68 savings vs

Home Ready$12 savings vs Home Ready

$111 savings vs Home Ready

$23 savings vs Conventional NO MI

Based on $150,000 purchase price at 95% LTV, 30 year fixed interest rate.

Fannie Mae Announcement Effective April 25th -- SEL-2017-04

• If a payment amount is provided on the credit report, that amount can be used for qualifying purposes.

• If the credit report does NOT identify a payment amount (or reflects $0), the lender can use either:• 1% of the outstanding student loan balance, or • A calculated payment that will fully amortize the loan based on the

documented loan repayment terms.

***The only exception to use the $0 payment (reported on credit report) is if documentation can be provided to show the

IBR payment is $0***

Electronic Welcome Letter from KHCEffective March 2017

• New borrowers of closed loans.• Monthly basis.

• Survey.• Experience through the loan process.• Links to Loan Servicing for auto draft.

• Share feedback and highlight in KHC’s eGrams.• Lenders need to complete email address of all borrowers.

• Loan Review tab.

Welcome Letter ResultsMarch 2017• 369 Emails sent.

• 54% Opens• 30% Clicks.

• 3 Positive Responses out of 5 completed surveys.• Chase Blume: Century Mortgage Company.• Clayton Farris: Stockyards Bank & Trust Company.• Ravi Patel: Option Financial, LLC.

Welcome Letter ResultsApril 2017• 221 Emails sent.

• 54% Opens.• 43% Clicks.

• 4 Positive Responses out of 4 completed surveys.• Becky Bleemel: Caliber Home Loans.• Elayne Havens: American Mortgage Service Company.• Keith Swisher: Statewide Mortgage, LLC.• Seldon Sullivan: PrimeLending, a Plains Capital Company.

Welcome Letter ResultsMay 2017• 256 Emails sent.

• 56% Opens.• 49% Clicks.

• 5 Positive Responses out of 5 completed surveys.• Daniel Rettig: InterLinc Mortgage Services, LLC.• Elayne Havens: American Mortgage Service Company.• Kyle Wheatley: Century Mortgage Company.• Maggie Clark: Cumberland Valley National Trust Bank.• Racee Greene: Century Mortgage Company.

GUS Access for TPO LendersEffective May 25th

• TPO Lenders have access to GUS through KHC.• Select KHC as lender.

• Manual Underwrite allowed (only with RHS) when an Approval is not received through GUS.• Must submit GUS Findings.

Affordable DAPEffective June 1st

• Applicant’s Income Only.• Based on County.• Higher Income limits.

• Household size no longer a factor.

This change makes more borrowers eligible for Affordable DAP at 1% over 10 years!

Jefferson:$53,120

Fayette:$53,280

NKY:$59,760

Warren:$49,600

New FeesEffective July 1st

• Administration Fee.• $125

• Appraisal Fees for TPO Lenders:• Government: $495• Conventional: $425• Final Inspection: $150

Reservation Extension PolicyEffective June 22nd

• 7 days for .125% -- NEW option• 15 days for .25%• 30 days for .50%• KHC will extend any reservation free of charge that

expires on a weekend or holiday through the next business day.

Borrower always has a total of 75 days (45 + 30) before worst case pricing!

KHC VALUE

Community Reinvestment Act Is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low-and moderate-income neighborhoods.

Value of KHC • CRA Credit.• How can KHC help you with CRA?

• Lower income borrowers.

• Send KHC lower loan amounts to a minimum of $15,001! • Interest Rate “It is what it is” – no add on pricing.

• Lower loan amounts.• Credit Score.• Manufactured housing.

DESKTOP UNDERWRITERVersion 10.1 Release Overview

DU Version 10.1Coming the weekend of July 29, 2017

• Updated DU Risk Assessment.• Credit history (age), payment history, late payments, public records,

foreclosures, deed-in-lieu, inquiries.

• Maximum DTI of 50%.• No longer require compensating factors.

• Disputed Tradelines.• DU will first access using all tradelines reported as disputed by the

borrower. If Approve recommendation – no further documentation is needed.

• When an Approve recommendation is not received – lender will confirm if account belongs to borrower an accuracy of the information. If borrower’s account then may be downgraded to manual underwrite.

DU Version 10.1Coming the weekend of July 29, 2017

• Self-employment Income Documentation.• Eligible for one year of personal and business tax return

documentation.• Employment Offer Message.

• Policy is being updated to provide the option for delivery of the loan prior to the borrower starting employment when additional eligibility requirements are met (waiting on specific requirements from Fannie Mae).

• Treatment of Timeshares.• Certain timeshare installment loans are reported in the credit report

data as mortgage related and are considered a mortgage in DU Version 10.0.

• DU Version 10.1 will no longer treat timeshare loans as a mortgage.

KHC RATIO GUIDELINES

Ratio GuidelinesEffective July 29, 2017 with DU 10.1

• KHC is increasing back-end ratio limit of 45% to 50% on all conventional loans with DU Approval.

SELLER CONTRIBUTIONSFannie Mae

Seller Contributions – Fannie MaeEffective August 1, 2017

• Fannie Mae is raising allowable seller contributions on LTV’s greater than 90%.• From 3% to 4%.• Only with HFA Preferred and Preferred Risk Conventional

programs.• Special Feature Code: 849 for the 4% seller contribution.

NEW DOWN PAYMENT SOURCESEffective July 18, 2017

AFFORDABLE CLOSINGCOST GRANTConventional Loans

Affordable Closing Cost Grant• $1,500 grant.• Applicant(s) income must be under Affordable DAP income

limits.• Available on conventional loans only.• Shown as a lender credit on the first mortgage LE/CD.• KHC will fund or include in purchase monies for eligible loans.• Funds are limited.

• Loan must be closed by end of 2017.

***System still being updated…email khcuw@kyhousing.orgthe reservation number to add the Affordable Closing Cost

Grant***

Jefferson:$53,120

Fayette:$53,280

NKY:$59,760

Warren:$49,600

HHF DAPNew Reservations as of July 18, 2017 at 2:00 PM ET

HHF DAP$4 million -- $3 million new money ($1 million announced in Christian County)

• $10,000, 0 percent interest, forgivable over a 5 year term.• Income and purchase price limits follow funding source.• Property located in Christian, Hardin, Jefferson or

Kenton County.• No new-construction properties.• Property must have been previously occupied.

• Borrower must be first time home buyer• Most recent 3-year federal tax returns or tax transcripts required.• Pre-purchase home buyer education required for ALL borrowers.• Cannot go below 81% LTV on conventional loans.

• Dodd Frank Certification form must be completed.• GFE, TIL and HUD-1.

USE THESE FUNDS TO THE FULLESTSales Tips

Scenario #1• Repeat Homebuyer.• Purchasing $145,000 (fixer upper) property in Bullitt County.• Property Appraised at $160,000.• Credit Score 750. • Borrower’s own funds ($13,000) from previous sale to use

for upgrades or required appraisal repairs.• Self-Employed with adjusted Gross Income of $51,000.• No seller concessions.• Does not want to pay MI.

What would be the best option for this customer?

Affordable DAP with Affordable CC Grant• 2MK Conventional 97% NO MI product.

• Affordable DAP with Affordable Closing Cost Grant.

• 5.125% first mortgage interest rate. • Affordable DAP Income limit $53,120.• Total Cash to Close $7750.• Down payment $4350. • CC & prepaids $3400.• Affordable DAP $4500 at 1% over 10 years.• Affordable Closing Cost Grant $1500.• Borrower funds $1750.• Borrower has $11,250 remaining for upgrades.

Scenario #2• First Time Homebuyer. • Purchasing $130,000 home in Jefferson County.• $46,000 Gross Annual Income. • Credit Score 688. • $4,000 Gift from Parents.• $2,000 Seller Concessions.• You are competing for this client with a national lender

who has “rocketed” to popularity based on their smart phone based technology and catchy marketing.What KHC products can you offer this client that

the missile can’t touch?

HHF DAP with Affordable CC Grant• 2MK Conventional 90% LTV w/MI.

• HHF DAP with Affordable Closing Cost Grant.• Add a KHC Home Buyer Tax Credit.

• 4.625% first mortgage interest rate.• Affordable DAP Income limit of $53,120.• Total Cash to Close $16,200.• Down payment $13,000.• CC & prepaids $3,200.• Affordable Closing Cost Grant $1,500.• HHF DAP $10,000 5 year forgivable second mortgage.• Gift from parents of $4,000.• Seller Concessions $2000.• ZERO cash from borrower.

KHC QUICK REFERENCE CARDS

THINGS TO COMESTAY TUNED!MRB Special Funding

MID-YEAR STATISTICS

Top 10 Delegated/Correspondent Lenders1. CENTURY MORTGAGE COMPANY2. AMERICAN MORTGAGE SERVICE COMPANY 3. STOCKTON MORTGAGE CORPORATION 4. COMMONWEALTH BANK & TRUST COMPANY 5. FIRST LIBERTY FINANCIAL 6. CALIBER HOME LOANS7. ENVOY MORTGAGE LTD8. INTERLINC MORTGAGE SERVICES LLC 9. HOMESERVICES LENDING, LLC 10. FAIRWAY INDEPENDENT MORTGAGE CORPORATION

Top 10 TPO Lenders1. STATEWIDE MORTGAGE, LLC 2. CUMBERLAND VALLEY NATIONAL BANK AND TRUST 3. CITIZENS NATIONAL BANK OF SOMERSET 4. INDEPENDENCE BANK OF KENTUCKY5. HERITAGE BANK MORTGAGE SERVICES6. NEW PERSPECTIVE MORTGAGE LLC 7. SWAN FINANCIAL CORPORATION 8. AMERICAN MORTGAGE SOLUTIONS INC 9. SOUTH CENTRAL BANK INC 10. CITIZENS FIRST BANK INC

Top 10 Loan Officers1. Elayne Havens 2. Ravi Patel 3. Lindsay Ballard 4. Josh Price5. Clayton Farris 6. Josh M. Hay7. Christie Brown 8. Michael Clark 9. Dustin Mistelske 10. Tracy Holtsclaw

Top MCC Lenders / Loan OfficersLenders1. American Mortgage Service Company2. Stockton Mortgage Corporation3. Stock Yards Bank & Trust Company4. Commonwealth Bank & Trust Company5. Caliber Home Loans6. Republic State Mortgage Company7. Century Mortgage Company8. Envoy Mortgage LTD9. Option Financial, LLC10. Cumberland Valley National Bank & TrustLoan Officers1. Clayton Farris, Stockyards Bank & Trust 2. Elayne Havens, American Mortgage Service Co 3. Ravi Patel, Option Financial Mortgage

QUESTIONSOpen Discussion

KHC MAKING AN IMPACTIn Kentucky

Beverly Haskins / Louisville, KY After losing her job, Beverly received assistance from the Unemployment Bridge Program (UBP) to help pay her house payment. UBP gave Beverly time find employment and eventually open her own business.

Jennie & Emery Mullins / Whitesburg, KYEmory and Jeannie love their two-story farmhouse in Letcher County, but it lost cool air in summer and allowed cool air inside in winter. Through KHC federal weatherization grant funding, low-income homeowners, like Emory and Jeannie, can make their homes more energy efficient and lower energy bills. Just a week after their energy audit, Emory and Jeannie’s home repairs were completed, sealing air leaks and making their home more comfortable and cost-effective all year long.

Beverly Raines / Frankfort, KYBeverly Raines rented for many years before pursuing homeownership through a KHC mortgage two years ago. Now she, her son, Barrett, and their dog, Bella, live in a beautiful home in Franklin County. Beverly appreciates having her loan serviced by KHC rather than a call center out of state and enjoys the ease of having taxes and insurance paid through her escrow account.

Breondra Cork / Paducah, KYBreondra worked full time to support her family and decided to delay her education. She just needed a little support to achieve her dream of an advanced education. Through KHC’s investment in construction and rental assistance for Scholar House locations, single parents can obtain rental assistance, receive counseling and parenting education, and gain support from neighbors and staff, while working on academic or vocational coursework as full-time students. With KHC’s support, Breondra completed her associate degree and is working on her bachelor’s degree.

Wes Farmer / Bowling Green, KYWes is a resident of the Men's Addiction Recovery Campus (MARC) in Bowling Green. Recovery Kentucky is a joint effort by the Department for Local Government, the Department of Corrections, and KHC to build ten housing recovery centers across the state. As supportive housing developments, each center uses a recovery program model that includes peer support, daily living skills training, job responsibilities, and challenges to practice sober living.

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Celebrate Affordable Housing

Recent Success Story

ContactsCindy Bradley502.564.7630 Ext. 347cbradley@kyhousing.org

Jamie Swindler502.564.7630 Ext. 329jswindler@kyhousing.org

KHC Hotline502.564.7630 Ext. 291khcuw@kyhousing.org

THANK YOU