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Willingness is determined by credit scores or alternative credit pay history

Ability is based on income, debt and assets

The willingness and ability to pay

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+ Low down payment requirement-3.5%+ More forgiving with regard to credit scores and challenges+ Down Payment can be gifted+ Lower Interest rates than conventional financing+ Not just for First Time Homebuyers+ DTI (Max 50% plus)+ Can be refinanced+ Can be assumed+ Interest Rate and Mortgage Insurance lower than some conventional financing

premium, making the effective rate of interest and payment more affordable+ Seller can contribute up to 6% toward closing costs at 3.5% down.

Section 1: Federal Housing Administration (FHA)

Benefits of the FHA Loan

+ Up Front Mortgage Insurance + Monthly Mortgage Insurance-Paid for the life of the loan

if over than a 15 year repayments+ May require refinancing for loans over 15 years to get rid

of the mortgage insurance premium+ FHA Appraisal may require repairs (Health and Safety

issues)

Section 1: Federal Housing Administration (FHA)

Drawbacks of the FHA Loan

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The first part is the Upfront Mortgage Insurance Premium (UFMIP). FHA UFMIP is paid at the time of closing and is equal to 1.75% of your loan. This means that for every $100,000 in your loan size, your upfront mortgage insurance premium paid is $1,750.

The second type of FHA mortgage insurance is annual. Annual MIP rates vary based on the length of your loan, the amount you're borrowing, and your initial loan's LTV.

Section 1: Federal Housing Administration (FHA)

FHA Mortgage Insurance Premiums

How much is the annual mortgage insurance premium?

15-year >90% 0.70 percent annual MIP15-year 95% 0.85 percent annual MIP30-year

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Key Considerations

+ The work must begin within 30 days of execution of the Agreement. + The work must not cease prior to completion for more than 30 consecutive days. + The work is to be completed within six (6) months following the execution of the Agreement

Section 1: Federal Housing Administration (FHA)

FHA SPECIALTY PROGRAMS – Renovation Loans

+ Permits homebuyers and homeowners to finance from $5,000-$35,000 of minor remodeling and non-structural repairs into their mortgage

+ No consultant required, must use licensed contractor

+ Tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or an FHA appraiser.

Section 1: Federal Housing Administration (FHA)

FHA SPECIALTY PROGRAMS - Renovation Loans Limited 203(k) – AKA Streamline K

+ Make property repairs, improvements, or prepare their home for sale. + Make their new home move-in ready by remodeling the kitchen, painting the

interior or purchasing new carpet.

Limited 203(k)

Allows borrowers to finance up to $35,000 into their mortgage to make improvements

No minimum renovation amount

Allowed on limited improvement types

Can be 100% cosmetic improvements

Cannot be used for structural alterations or reconstruction

Limited 203(k) is subject to the same guidelines as Standard 203(k) – it’s the improvements and disbursement process that are “streamlined”.

Under the Limited 203(k) program up to three (3) contractors are allowed

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Standard 203(k)

Allows borrowers to make larger and structural improvements to their home, including room additions

A HUD Consultant is required on a Standard 203(k)

No limit on repair amount

Minimum $5,000 renovation amount which must be used towards eligible improvements on existing structure

Up to six months PITI can be included in the mortgage if the property is not habitable during construction

Under the Standard 203(k) program only one (1) contractor is allowed

DRAWBACKS

The federal government has quoted these disadvantages and pitfalls of reverse mortgages:

+ They can affect your eligibility for another type of loan. + This may affect the inheritance of the borrower’s heirs. + The borrower could lose his or her eligibility for Medicaid and Supplementary

Security Income (SSI).

Section 1: Federal Housing Administration (FHA)

FHA SPECIALTY PROGRAMS - Reverse Mortgages

+ Minimum 620 Credit Score/More Forgiving

+ 29/41 Debt to Income Ratios-with exceptions

+ 100% Gifts Allowed

+ No Maximum Loan Amount-some lenders have overlays

+ Fee added to loan, waived if disabled with a minimum 10% rating

Section 2: Veteran’s Administration (VA) Loan Programs

OVERVIEW - Veteran’s Administration (VA) Loan Programs

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SHA grants help Veterans with certain service-connected disabilities adapt or purchase a home to accommodate the disability. You can use SHA grants in one of the following ways:

Section 2: Veteran’s Administration (VA) Loan Programs

Special Housing Adaption (SHA) Grant

+ Adapt an existing home the Veteran or a family member already owns

in which the Veteran lives

+ Adapt a home the Veteran or family member intends to purchase in

which the Veteran will live

+ Help a Veteran purchase a home already adapted in which the

Veteran will live

Section 3: United States Department of Agriculture (USDA) Loan Programs

BENEFITS – USDA Loans

+ Primary Residence-Owner Occupied (can’t own other adequate housing)

+ 100% financing with a 1% Financed Guarantee Fee (101%) and a .35% Annual Mortgage Insurance premium, paid Monthly.

+ 30 Year Fixed Rate Program Only+ Seller contributions-up to 6% towards Closing Costs and

Prepaids. + Lender Credit OK with premium pricing.+ Reserves not required+ Minimum 580 Credit Score, lender overlays vary

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ELIGIBILITY – USDA Loans

Determine if home is located in eligible area-DON’T ASSUME!Check: http://eligibility.sc.egov.usda.gov

Determine if Applicant is eligible for Guaranteed HousingCheck: http://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityAction.do

Qualifying Income for Loan and Qualifying Income for ProgramNOTE: ALL income for applicants and household members over 18

If eligible for Direct Housing applicant should contact RD directly.Check: http://offices.sc.egov.usda.gov/locator/app

Section 3: United States Department of Agriculture (USDA) Loan Programs

Section 2: United States Department of Agriculture (USDA) Loan Programs

Eligibility | Section 502 Direct Loan Program – USDA Loans

APPLICANT

+ Be without decent, safe and sanitary housing

+ Be unable to obtain a loan from other resources on terms and conditions that can

reasonably be expected to meet

+ Agree to occupy the property as your primary residence

+ Have the legal capacity to incur a loan obligation

+ Meet citizenship or eligible noncitizen requirements

+ Not be suspended or debarred from participation in federal programs

Section 2: United States Department of Agriculture (USDA) Loan Programs

Interfaith Housing Mutual Self-Help Program – USDA Loans

This Purchase-Repair Homeownership Program provides affordable homeownership opportunities to families and individuals in Carroll, Frederick, and Washington counties.

Check Here: http://www.interfaithhousing.org

https://www.youtube.com/watch?v=g9laMfNt_O4

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SUPER CONFORMING

Loan Limits for High-cost Areas Super Conforming Mortgages

These minimum and maximum original loan amounts apply to super conforming mortgages that have Freddie Mac funding or settlement dates on or after January 1, 2021:

Units Maximum Loan Amount High Cost Areas (Calvert, Charles, Prince Georges, Mont., Fred)1 $548,250 $822,3752 $702000 $1,053,0003 $848500 $1,272,7504 $1,054.500 $1,571,750

These are the maximum potential loan limits for designated high-cost areas. Actual loan limits are established for each county (or equivalent) and the loan limits for specific high-cost areas may be lower. The original principal balance of a mortgage must not exceed the maximum loan limit for the specific area in which the mortgaged premises is located. For specific loan limits for each high-cost area, visit the Federal Housing Finance Agency conforming loan limits page .

Section 4: Government Secured Entity (GSE) – Conventional Loans

Overview - Government Secured Entity (GSE)

Conventional Basics

+ Down Payment Minimum 3% Federal National Mortgage Association (FNMA) aka

Fannie Mae

+ Down Payment Minimum 3% Federal Home Loan Mortgage Corp (FHLMC) aka

Freddie Mac

+ Mortgage Insurance Required if less than 20% equity

+ Mortgage Insurance can be paid monthly, paid at closing, lender paid or split

+ Loan Level Price Adjustments (LLPAs)

+ Desktop Underwriting used for approval FNMA

+ Loan Prospector used for FHLMC

Section 4: Government Secured Entity (GSE) – Conventional Loans

Private Mortgage Insurance (PMI) - Government Secured Entity (GSE)

Required by most lenders when there is less than 80% LTV

+ Private mortgage insurance fees vary-based on Risk

+ Down payment + Credit score+ Amortization

+ Borrower Paid or Lender Paid at closing+ Borrower Paid Monthly+ Split Premium+ Ranges from around 0.3 % to about 1.5 % of the original loan amount per year+ Cancellable at 80% LTV/May be tax deductible

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Section 4: Government Secured Entity (GSE) – Conventional Loans

Other Risk Factors - Government Secured Entity (GSE)

+ Condo with less than 25% equity in the home

+ Less than 25% equity (even at 740- .25%)

+ Investment property

+ 2-4 units

+ “Cash out" refinance with greater than 60% LTV

+ Having a second mortgage to subordinate

SECTION HIGHLIGHTS

+ Affordable Mortgages+ HomeReady/HomePossible+ Federal Home Loan (FHL) Banks+ Maryland HomeCredit Program-NOT AVAILABLE+ Section 8 Housing+ Self-help Homeownership Opportunity Program (SHOP)+ Habitat for Humanity International

Section 5: Other Loan Programs and Housing Initiatives

What is HomeReady and HomePossible?+ 3% down Purchase+ Refinance Options+ Income limits most are at 80% AMI $83,200, some lower or higher+ https://homeready-eligibility.fanniemae.com/homeready/

+ http://www.freddiemac.com/homepossible/eligibility.html

+ Lower Mortgage Insurance Factors-Use 25% instead of 30% coverage

Education requirements-ONLINEHomeReady- Free HomePossible- Free

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Section 5: Other Loan Programs and Housing Initiatives

Affordable Mortgages – Section 8 Housing

Section 8 Housing

Some families qualify for federal funding that provides a monthly housing voucher to supplement their own funds in paying the mortgage payment

+ Each Section 8 program is developed and administered by a local public housing authority

+ The Section 8 program must be combined with an eligible underlying conventional or government loan product

+ Lender may require the funds be deposited in an account that allows an automatic payment from the account for the full monthly mortgage payment amount

Section 5: Other Loan Programs and Housing Initiatives

Affordable Mortgages

Making Homes Affordable

Nationwide Habitat for Humanity InternationalTelephone: (229) 410-7513

Housing Assistance CouncilContact: Karin Klusmann Telephone: (202) 842-8600

IN CONCLUSION

Decent, stable housing provides more than just a roof over someone’s head, it provides:

+ Stability for families and children

+ Sense of dignity and pride

+ Health, physical safety

+ Increase of educational and job prospects

QUESTIONS?