Post on 17-Dec-2015
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
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
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
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
Example #1Example #1 Example #2Example #2
Nick and Nora file a joint return. Withheld= $11,000Actual Tax Liability = $9,800Homebuyer 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 = $5,000Actual Tax Liability == $7,200Homebuyer Tax Credit = $8,000
Result: Owe $2,200 additional, + $8,000 tax credit = $5,800 refund.
Examples of the Tax Credit
Homeowners in Trouble
Hope for HomeownersGSE RefinancingGSE Loan ModificationOther Resources
1 888 995 HOPE (4673)
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
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
GSE “Responsible Homeowners” RefinancingEXAMPLE
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 Years
27 30
Interest Rate 6.50% 5.16%
Monthly Payment
$1,308 $1,113
Savings $196 per month, $2,347 per year
Homeowner Stability Initiative
For homeowners who are at risk of foreclosureShared 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 guaranteesGuidelines for Loan Modifications
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 $213,431
Remaining Years
27 27
Interest Rate 7.5% 4.42%*
Monthly Payment
$1,538 $1,132
Savings $406 per month, $4,870 per year
What do Homeowners Do?
As of March 4, the programs are availableThe 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)
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.