state and local programs update webinar february 20, 2014 fern dannis director of housing programs...

State and Local Programs Update

WebinarFebruary 20, 2014

Fern DannisDirector of Housing ProgramsMaryland Association of REALTORS®

State (DHCD) Programs

Maryland Mortgage Program (MMP) Targeted Areas Initiative (CLOSED) Maryland Homefront (CLOSED) Save-A-Home Loan Program (MERGED) DHCD-Owned Foreclosure Program (2%) Conventional Mortgage Loan Conventional Refinance Program

DHCD/MMP

30-year  amortizing mortgages

Conventional, FHA, VA or RHS insurance

Fixed interest rates for the life of the loan

DAILY RATE CHART

FREE kit on website

Maryland Mortgage Program

Changes to eligibility/application First-Time Homebuyer Targeted Areas – CHANGE! Priority Funding Areas Eligible Properties Home Inspection Homebuyer Education Credit Scores & Ratios - CHANGE! Income & Purchase Price Limits – CHANGE! REALTOR® Information

Maryland Mortgage Program

Federal Definition: Borrowers who have not had a “present ownership” interest in a principal residence in the last three years

UNLESS Borrower is purchasing in a TARGETED AREA

INTEREST IN REAL PROPERTY (WHETHER OR NOT IT IS PRINCIPAL RESIDENCE) must be sold or transferred prior to settlement on MMP loan.

If current residence is deeded in the name of spouse/non-borrower only, the spouse/borrower can not also own a residence financed by MMP

“First-Time Homebuyers”

Maryland Mortgage Program

Veterans purchasing in a non-targeted area are exempt from the first time homebuyer rule and may have owned a home in the past three (3) years

The veteran may use this exemption only one time, and the loan does not have to be a VA loan. A copy of the DD-214 must be presented to the lender.

First-Time Homebuyers - Veterans

Targeted Areas

Targeted areas are designated by the Federal Government based on U.S. Census Tracts

70% or more of the families have an income that is 80% or less of the statewide median family income.

Buyers in targeted areas do not have to be first-time homebuyers.

Targeted Area vs. Priority Funding Area ***Different Meanings***

Targeted Areas (cont.)All of the following jurisdictions are designated targeted areas:

Allegany

Baltimore City

Caroline

Dorchester

Garrett

Kent

Somerset

Additionally, portions of the following counties are targeted areas (Communities and/or census tracts are listed for each county)

More…

Anne Arundel 7406.02  Baltimore County: City limits of East Towson; Oella;

West Catonsville;

Plus census tracts: 4009.00, 4011.02, 4013.02, 4023.05, 4027.01, 4210.00, 4211.01, 4213.00, 4301.01, 4303.00, 4505.03, 4505.04, 4513.00, 4523.00, 4906.05, 4914.01 

Frederick 7503.00, 7505.05  Harford 3029.01, 3065.00  Montgomery 7007.24, 7014.22, 7016.01, 7032.13 

More…

Prince George's: City limits of Brentwood; Capitol Heights; Colmar Manor; Fairmont Heights; Mt. Rainier; North Brentwood; Seat Pleasant;

Plus census tracts: 8002.10, 8019.08, 8020.01, 8021.04, 8022.01, 8032.00, 8034.01 8035.09, 8035.25, 8040.01, 8043.00, 8048.01, 8048.02, 8049.00 8051.01, 8052.01, 8056.01, 8056.02, 8059.06, 8059.07, 8059.08, 8059.09, 8067.13 

Washington: City limits of Hagerstown;

Plus census tracts: 0003.02, 0004.00, 0007.00, 0008.00, 0009.00 

Wicomico 0001.00, 0003.00, 0005.00, 0102.00 

Priority Funding Areas

Older community or locally-designated growth area where State and local governments already have a significant financial investment in the existing infrastructure

If new construction, it MUST be located in a Priority Funding Area

www.mdp.state.md.us/OurProducts/pfamap.shtml

Eligible Property Types

OWNER-OCCUPIED Detached

Attached

Semi-detached

Townhouses

Modular homes (with State-certification)

Condominiums

Housing Standards

Participating Lenders are required to certify on the Home Inspection Certification that a home inspection:

1) was completed (not required for new construction or substantial rehabilitation);

2) the borrower has reviewed it. The Home Inspection Certification is to be

included in the purchase package submitted to US Bank. (A copy of the home inspection report is not required in the purchase package.)

Asset Restrictions

An asset test is required for borrowers whose assets equal or exceed 20% of the purchase price.

A “gift of equity” (difference between the appraised value and the purchase price) in a non-arms length transaction is considered an asset.

Homebuyer Education

Homebuyer education is required for all CDA home-purchase loans

A certificate is required from the provider of the homebuyer education class (within 12 months of closing).

Lender’s Certificate of Completion Form is required.

NOTE: There are specific counseling requirements for borrowers purchasing in Anne Arundel, Baltimore City, Baltimore and Harford Counties

If purchasing in Baltimore City and receiving DPA funds, a first-time buyer must complete counseling from a Baltimore- approved counseling agency BEFORE entering into a contract of sale and, if not a first-time buyer, BEFORE closing.

Credit Scores & Ratios

640 minimum credit score Maximum DTI for 30 yr. amortizing loans

= 45% – no exceptions Lenders may have their own credit

overlays Lenders may limit total CLTV/CDA

limits to 103%

Income & Purchase Price Limits

www.mmprogam.org/incomes.aspx

Based on annual area median incomes, adjusted for family size.

Maximum Loan Amounts

Loan amount may not exceed the lesser of $417,000 or the insurer/guarantor’s maximum mortgage amount.

Maximum loan amount may only be exceeded by the FHA UFMIP. VA and RHS loans must be at or below $417,000 including the financed guarantee or funding fee.

DHCD-Owned Foreclosure Program

(DHCD-REO)

May be purchased by Homebuyers (Owner/Occupant), Investors, or Non-Profit Organizations

First Look Maryland - First 15 days to non-profit organizations, public housing authorities and community partners w/ favorable pricing/financing.

2% incentive rate until 6/30/14

For information about homes for sale, contact: Long and Foster or Cummings & Co.

www.mdhousing.org/website/programs/Reo/Default.aspx

Conventional Mortgage Loan

Conventional loans insured by PMI companies from approved list.

Loans are underwritten to Fannie Mae’s Preferred Guidelines

LTV not to exceed 97% (automated) Reduced MIP Conventional un-insured loans for purchases

with LTV at 80% or less Borrower must meet all MMP qualifications DSELP and Partner Match funds available

Conventional Refinance Program

30-year Fixed rate, fully-amortizing Limited cash out 97% LTV; minimum 680 credit score Lower MI premiums No DSELP available

Downpayment & Closing Cost Assistance Programs

Downpayment Settlement Expense Loan Program (DSELP) = “Down Payment Assistance”

House Keys 4 Employees w/ “Smart Keys”

Builder Developer Incentive Program (BDIP)

Community Partners Incentive Program (CPIP)

Only available with CDA loans

DSELP Facts

Up to $5,000 toward downpayment or closing costs

Available only on home purchases within CDA limits

0% interest rate deferred loan (subordinate lien)

Repayable in full upon sale or transfer of the property, or when the first mortgage is paid off or refinanced

Partner Match Programs

• House Keys 4 Employees Program (HK4E)

• Smart Keys 4 Employees (SK4E)

• Builder Developer Incentive Program

• Community Partners Incentive Program

• BRAC

These programs are only available with CDA loans!

Partner Match Programs (cont.)

Participating partners provide downpayment

and/or closing cost assistance to borrowers.

CDA will match dollar-for-dollar up to $2,500 in

the form of a 0% deferred loan.

Borrower must qualify for and receive an MMP

loan in order to qualify for a partner match

Partners can be employers, builder/developers,

community agencies and local governments.

Partner Match Programs (cont.)

The Partner Match from CDA is repayable

when the home is sold or transferred, or

when the first mortgage is paid off or

refinanced.

Partner Match Program funds can be

combined with DSELP for additional

assistance, as well as funds from other

jurisdictions.

Partner Match Programs (cont.)

DSELP $5,000

Employer contribution 3,000

HK4E, BDIP, CPIP match 2,500

Total closing cost assistance $10,500

Example 1:

Partner Match Programs (cont.)

SMART KEYS 4 EMPLOYEES (SK4E)

A “Smart Growth” enhancement to the House Keys

Employees (HK4E) Program that allows borrowers to

receive an additional $1,000 if:

Subject property is located in a Priority Funding Area

AND

Subject property is within 10 miles of borrower’s place

of employment OR within the boundaries of the local

jurisdiction

Smart Keys 4 Employees (cont.)

Participating HK4E Employer contribution $5,000

HK4E Match $2,500

Smart Keys 4 Employees Match +$1,000

Total contribution for closing cost assistance $8,500

Example 2:

HK4E – State of Maryland Employees

A State of Maryland employee can receive $1,250 from the State of MD (employer) and a $1,250 HK4E match for a total contribution of $2,500. (Only $1,250 is counted toward the match cap.)

State employees provide a copy of the borrower’s payment stub in lieu of standard HK4E form.

Employees of the University of MD system are not included in this program. (Employees of the UM Medical System have a ‘Live Near Your Work’ program.)

Combining Assistance Programs

• Combined total matching funds from

DHCD (HK4E, BDIP, CPIP) will not

exceed $2,500, unless using House

Keys 4 Employees with Smart Keys 4

Employees to add $1,000.

• Partner contribution must be present

at settlement – borrower’s

responsibility!

Combining Assistance Programs (cont.)

Example 3:DSELP $ 5,000

State of Maryland employer contribution

(not included in match cap) $ 1,250

Builder/Developer Contribution $ 2,000

HK4E match

(standard match for State employees) $ 1,250

BDIP Match (max. remaining w/in $2,500 cap) $ 1,250

SK4E Match (bonus) $ 1,000

Total Contribution for Closing Assistance $11,750

On-line Resources

www.mmp.maryland.gov (3/3/14)

www.mmprogram.org or www.mdhousing.org

Interest rate updates: www.mmprogram.org/rates.aspx

Download homebuyers kit:

www.mmprogram.org/documents/MMPKit.pdf

Maryland Homeownership Program for Individuals with Disabilities

One of the borrowers must have a disability, or a child of one of the borrowers (who resides with and is principally cared for by one of the borrowers),

"Certificate of Disability" required

All borrowers must meet program eligibility guidelines

Loan must conform to all underwriting criteria.

Individuals with Disabilities (cont.)

Counseling – required Home Inspection – required DTI – 30/38 (up to 32/40 with compensating factors) Credit History – 640 (non-traditional credit evaluated) Mortgage Insurance – not required 30-year term with 2.75% – 4.75% interest rate Fees - $1,000 (may be financed) and $500 minimum

cash down (may be gifted) Maximum household income - May not exceed

$106,100 in the Washington D.C. PMSA (Calvert, Charles, Frederick, Montgomery, and Prince George’s Counties), $89,400 in St. Mary’s County and $88,100 in all other areas of the State.

Improving a Home

Maryland Housing Rehabilitation Program - Single Family (MHRP-SF)•Preserve/improve single-family properties and 1-4 unit rental properties.•bring properties up to applicable building codes and standards. •Applicants must meet an income guideline.•Interest rates are based on income of tenants. Loans in excess of $5,000 or with deferred payments are secured by a mortgage.

Lead Hazard Reduction Grant and Loan ProgramReduce instances of lead poisoning of children by financing the abatement of lead paint in residential buildings. Owners of nonresidential buildings that provide services for children may apply for LHRGLP loans. Interest rates are based upon the occupant's or project's income.

Improving a Home (cont.)

Indoor Plumbing Program Loans for single family, owner-occupied houses and rental properties with one to 100 units that do not have indoor plumbing. Interest rates and loan terms are based on the incomes of the residents and owner occupant.

Special Targeted Applicant Rehabilitation Program

Bring properties up to applicable building codes and standards or a minimum housing quality standard. Loans are deferred but are secured by a mortgage.

Emergency Solution Grant Program

Funds may also be used for assisting sheltered persons make the transition to permanent housing and independent living. 

Accessible Homes for Seniors(Program is marketed through local area Agencies on Aging)

Promote accessibility related improvements to the homes of seniors (widening doorways, installation of accessible showers, ramps, grab bars, and lever handles). Additions to accommodate first floor bathrooms and laundry rooms will also be considered on a case-by-case basis.

0% interest, deferred loans for 30 years; max. loan is 110% of value Maryland residents with at least one resident age 55 or older;

principal residence. Seniors living with relatives will be considered on a case-by-case basis.

Property is structurally sound and free of health and safety hazards. No federal or state tax liens, open bankruptcy or foreclosure. Household income cannot exceed 80% of median income. If the

senior resides in the home of a relative, eligibility is based on the owner’s income.

All closing costs will be included in the loan.

Ground Rent Redemption Loan Program

Created in 2007 to provide loans to owner-occupants to buy out (redeem) ground leases.

Income limits – 80% of Statewide median A "ground lease" is a lease for a term of years

that is renewable forever and is subject to the periodic payment of "ground rent" by the leasehold tenant to the ground lease holder.

Redemption amount = annual ground rent fee divided by the capitalization rate

http://dhcd.maryland.gov/website/programs/GRRLP/Default.aspx

Energy Programs

Be SMART Home 410-514-7740Financing to improve home energy efficiency through replacement and upgrading of appliances, heating, cooling and ventilation systems and whole house envelope improvements

Be SMART Home ENERGY STAR - 6.99% Be SMART Home Complete loan – 4.99% DHCD-approved providers for weatherization/energy

efficiency Home must be ‘primary residence’ Verification of income Credit score of 640 or greater Debt-to-income ratio of up to 50%

Energy Programs (cont.)

Weatherization Assistance Program (WAP) Helps eligible low income households with the installation of energy conservation materials in their dwelling units.

EmPOWER Maryland Low Income Energy Efficiency Program Helps low income households with installation of energy conservation materials in their homes at no charge.Have account with one of the five participating utility companies (BGE, Delmarva, PE, Pepco and SMECO). Prove ownership of your home or your landlord must be able to prove ownership and agree to participate in the program. 1-855-583-8976

Homeownership Voucher Program

A HUD program, also known as the Section 8 Homeownership Program

Helps current Housing Choice Voucher Program participants purchase homes by converting their monthly rental assistance payments to mortgage payments

Offered through participating Public Housing Authorities (PHA's) throughout the State of Maryland. Contact your local PHA for more information. 

EXISTING LOCAL PROGRAMS

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