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Counselor Connection 2013

Pier 5 Hotel

Baltimore, MD

May 14,2013

Martin O'Malley

GOVERNOR

Anthony G. Brown

LT. GOVERNOR

Raymond A. Skinner

SECRETARY

Clarence J. Snuggs

DEPUTY SECRETARY

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Maryland Mortgage Program (MMP)

Presented by Barbara E. Schmitt

Community Development Administration

Martin O'Malley

GOVERNOR

Anthony G. Brown

LT. GOVERNOR

Raymond A. Skinner

SECRETARY

Clarence J. Snuggs

DEPUTY SECRETARY

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Program Overview

• 30-year mortgage

• Fixed interest rate - entire term of loan

• FHA, VA, Conventional, or RHS loan types

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Eligible Borrowers

• May be single or married. If married, both spouses are not

required to apply. If separated, a Separation Affidavit must

be completed. Co-signers are NOT permitted

• Must intend to occupy the property as a principal residence

within 60 days of closing

• Cannot own any other real property at the time of closing

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Eligible Borrowers (continued)

• Must have a valid social security number and be

eligible to work in the United States

• Citizenship of the United States is not required to

obtain a CDA loan

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Eligible Borrowers (continued)

Must be a First Time Homebuyer

• Federal Definition: Borrowers who have not had a

“present ownership” interest in their principal residence

in the last three years

UNLESS

• Borrower is purchasing in a TARGETED AREA

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Eligibility Guidelines (continued)

• 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

• A veteran may use this exemption only one time (does NOT have to be a VA loan)

• A copy of the DD-214 must be presented to the Lender

First Time Homebuyers - Veterans

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Income & Purchase Price Limits

• Total projected annual household income may not exceed applicable income limit

• Projected income for all household members (including overtime, part-time, commissions, etc.) is utilized to determine income

Income Limits

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Income & Purchase Price Limits (continued)

• Purchase price and income limits vary from county

to county

• See chart on website for income and purchase

price limits by location

http://www.mmprogram.org/incomes.aspx

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Eligibility Calculator on website under “Tools”

www.mmprogram.org/tools.aspx

The eligibility calculator will assist you in obtaining an estimate of the monthly loan

payment

Income & Purchase Price Limits (Continued)

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Assets

• 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

Asset Restrictions

Attachment F-

Asset Test

Worksheet

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Assets (continued)

• Retirement funds that are not being used to

purchase the home and any secondary financing

are NOT included in the calculation

• Relocation benefits under the Uniform Relocation

Act in connection with condemnation proceedings

are not included in the calculation

Asset Restrictions

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Credit Scores

• Government Loans - 640 Middle Credit Score

• Conventional Loans - 680 Middle Credit Score

• 45% DTI – all loan types, no exceptions

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Homebuyer Education Requirement

Homebuyer Education

• Required for all borrowers

• A counseling certificate is required from the homebuyer education class

provider. Certificate must be less than 12 months old at closing

• There are specific requirements for Baltimore City, Anne Arundel,

Baltimore and Harford Counties.

NOTE! Baltimore City and Baltimore County require that the full

homebuyer education be completed and a certificate issued PRIOR

TO the contract being signed!

• Refer to http://www.mmprogram.org/counseling.aspx for additional

information on counseling requirements

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Maximum Loan 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

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

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Eligible Property Types

• Detached

• Attached

• Semi-detached

• Townhouses

• Modular

• Condominium

Per directive 2012-14, manufactured homes

are not currently an eligible property type

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Eligible Property Types (continued)

• Urban/Suburban: The lot size may not

exceed the greater of one acre or the

jurisdictional minimum

• Rural: The lot size may not exceed the

greater of 3 acres or the jurisdictional minimum

Maximum Lot Size

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Eligible Property Types (continued)

• A home inspection must be completed (not

required for new construction or substantial

rehabilitation)

• NOTE! CDA does not review the inspection.

Borrowers must sign a Home Inspection

Certification showing that they have reviewed the

home inspection

Housing Standards

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Targeted Areas

• Targeted areas are designated by the Federal

Government based on the U.S. Census

• Targeted areas are those in which 70% or more of

the families have an income which is 80% or less

of the statewide median family income

Targeted Areas

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Targeted Areas (continued)

• Targeted Area list: www.mmprogram.org/documents/target_areas.htm

• Census Tract #: http://www.ffiec.gov/geocode/default.aspx

• Targeted & PFA Verification: http://www.dhcd.maryland.gov/website/DHCDmapper.aspx

Areas shaded green represent Targeted Areas.

The following jurisdictions are designated targeted areas:

Allegany Co. Baltimore City Caroline Co. Garrett Co.

Dorchester Co. Kent Co. Somerset Co.

8 other counties have pockets that are Targeted Areas

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Priority Funding Areas (PFA)

• If new construction, the property must be located

in a Priority Funding Area (PFA)

• PFA’s are older communities or locally-

designated growth area where State and local

governments already have a significant financial

investment in the existing infrastructure

Priority Funding Areas

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Mapper Process

Go to: http://www.dhcd.maryland.gov/website/DHCDmapper.aspx

• Accept the conditions. On the far right, to the right of the blue circle with

the house, there is a small double right arrow. Click this to change

from Multifamily (there is no heading for Single Family)

• In the “Find Address” box, enter: Street Address, City, Zip Code

(separated by commas). Press GO

• Results will show on the left. If it is a PFA or Targeted Area, that

information will be shown. Print page for submission in the package

• For a new construction property that is too new to show on the mapper,

email abutler@mdp.state.md.us (can take two weeks)

PFA’s and Targeted Areas

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PFA’s and Targeted Areas (continued)

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Flip Policy

• Properties acquired within six months of prior sale will be subject to additional valuation and appraisal requirements

• CDA will allow the HUD 90-day waiver for all property sellers, including private sale transactions, but prohibit FHA financing for properties owned less than 90 days IF the sales price is increased by more than 20% over the seller’s acquisition cost

• The 90 days is calculated from the seller’s acquisition date to the purchase contract date of the new transaction

Flip Policy

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Recapture Tax Reimbursement

This 9-page

form is signed at closing

by the borrower(s)

Borrower(s) sign & date last page

Form version changes yearly

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Contract Ratification

• Contracts must be fully ratified prior to reservation

CDA reserves the right to cancel any reservation or

refuse to purchase a loan from the Lender if the

loan does not have a fully ratified contract, signed

by all parties, prior to reservation date

This includes third party (Lender) approval

for short sale transactions

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Down Payment & Settlement

Expense Loan Program (DSELP)

Martin O'Malley

GOVERNOR

Anthony G. Brown

LT. GOVERNOR

Raymond A. Skinner

SECRETARY

Clarence J. Snuggs

DEPUTY SECRETARY

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DSELP

• Available only with a CDA loan

• $5,000 toward downpayment or closing costs in the form of a 0% deferred loan

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

Downpayment & Settlement

Expense Loan Program (DSELP)

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Partner Match Programs

Martin O'Malley

GOVERNOR

Anthony G. Brown

LT. GOVERNOR

Raymond A. Skinner

SECRETARY

Clarence J. Snuggs

DEPUTY SECRETARY

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Partner Match Programs

• Partners can be employers,

builder/developers, community agencies

and local governments

• A list of participating partners is posted on

the MMP website

Who are the Partners?

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Partner Match Programs (continued)

• Borrower must qualify for an MMP loan and be

eligible to receive funds from the partner.

Borrower provides the partner’s signed verification

form to their CDA lender

• Participating partners provide downpayment

and/or closing cost assistance to borrowers at

settlement. CDA will match funds up to $2,500 in

the form of a 0% deferred loan

How does it work?

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Partner Match Programs (continued)

• The partner match from CDA is repayable

when the home is sold or transferred, or

when the first mortgage is paid off or

refinanced

• The terms of the partner contribution vary

from partner to partner. It can be a grant or

a loan

Terms

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Partner Match Programs (continued)

• House Keys 4 Employees (HK4E) with

Smart Keys 4 Employees (SK4E) component

• Builder/Developer Incentive Program (BDIP)

• Community Partners Incentive Program (CPIP)

www.mmprogram.org/downpayment.aspx

• Employees relocating to Maryland as a result of BRAC may

receive additional match funds in the amount of $2500;

Refer to Directive 2010-22 for details

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Partner Match Programs (continued)

SMART KEYS 4 EMPLOYEES (SK4E)

A “Smart Growth” enhancement to the House Keys 4

Employees (HK4E) Program that allows borrowers to

receive an additional $1,000 of match funds if:

• Property is located in a Priority Funding Area

AND

• Property is within 10 miles of borrower’s place of

employment or within the boundaries of the local jurisdiction

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Combining Assistance Funds

Partner Match Program funds

can be combined with DSELP funds for

additional assistance, as well as with

funds from jurisdictions such as

Baltimore City or Hagerstown

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Combining Assistance Funds (continued)

Example 1: Partner Contribution $3,000

DSELP $5,000

Partner contribution $3,000

HK4E, BDIP or CPIP maximum match $2,500

TOTAL ASSISTANCE $10,500

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Combining Assistance Funds (continued)

• Combined total match funds from CDA MMP

(HK4E, BDIP, CPIP) may not exceed $2,500

• Unless qualifying for Smart Keys 4 Employees and

thereby receiving an additional $1,000

• Partner contribution must be present at

settlement—this is the borrower’s

responsibility

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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 Program

Match for a total contribution of $2,500

• State of MD employees provide a copy of the borrower’s

paystub in lieu of a signed Verification of Partnership

Contribution form

• Employees of the University of MD system are not considered State of MD

employees for the purposes of this program

Combining Assistance Funds (continued)

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Additional resources are offered by partners in Baltimore City,

which is a fully targeted area

•Baltimore City Housing Authority has Live Near Your

Work and Vacants-to-Value initiatives, which can offer

significant downpayment assistance. Baltimore City now

offers State employees a partner match of $2,500!

http://www.baltimorehousing.org

•Healthy Neighborhoods, Inc. (HNI) offers low interest

loans, rehabilitation loans, and downpayment assistance.

www.healthyneighborhoods.org

Partner Resources

Combining Assistance Funds (continued)

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Combining Assistance Funds (continued)

Example 2: State of Maryland Employee

DSELP $ 5,000

HK4E: State of MD Employer contribution $ 1,250

HK4E: State of MD Match contribution $ 1,250

SK4E: CDA match for employee who lives

and works in a PFA and within a jurisdiction $ 1,000

Baltimore City Live Near Your Work

contribution (grant) $ 2,500

TOTAL ASSISTANCE $11,000

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CDA

MMP Products

Martin O'Malley

GOVERNOR

Anthony G. Brown

LT. GOVERNOR

Raymond A. Skinner

SECRETARY

Clarence J. Snuggs

DEPUTY SECRETARY

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CDA MMP Products

• Homefront: The Veterans and

Military Family Mortgage Program

• Save-A-Home

• Conventional Mortgages

• Refinance Loans Now Available!

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CDA MMP Products (continued)

• One-half of a percent discount (.50%) lower than the

prevailing MMP rate

• $10,000 assistance from the Downpayment and

Settlement Expense Loan Program (DSELP)

• Don’t Forget: Qualified veterans can receive a

waiver for the first-time homebuyer requirement.

MD Homefront: The Veterans and Military Family Mortgage Program

Directive 2012-20

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SAVE-A-HOME PROGRAM

•Short sale properties and

non-DHCD-owned foreclosures

•Interest rate is the same as the prevailing

MMP interest rate, but DSELP is increased to

$6,500

•Documentation of property status must be provided

to CDA Lender to qualify

CDA MMP Products (continued)

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CDA MMP Products (continued)

Conventional Mortgage Loans

• With Private Mortgage Insurance:

• Loans must be underwritten to current Fannie Mae HFA

Preferred underwriting guidelines

• Insurer must be on CDA’s Participating Private

Mortgage Insurance Companies List

• Uninsured:

• For purchases where the loan-to-value (LTV) ratio is

80% or less.

• Maximum combined LTV is 105%.

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CDA MMP Products (continued)

• 18% for LTVs > 95% and <=97%

• 16% for LTVs > 90% and <=95%

• 12% for LTVs > 85% and <=90%

• 6% for LTVs > 80% and <=85%

Reduced Mortgage Insurance Premiums

For Conventional Loans Coverage required by HFA Preferred

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CDA MMP Products (continued)

• Borrower can get a more affordable monthly

payment by paying the mortgage insurance

premium up front OR the monthly payment can be

terminated when a 78% LTV is reached

• LTV cannot exceed 97% under Fannie Mae’s HFA

Preferred Program, even if the mortgage insurance

company has a higher LTV

Conventional MIP

Conventional vs. FHA

Community Development Administration

Conventional Refinance Program

Martin O'Malley

GOVERNOR

Anthony G. Brown

LT. GOVERNOR

Raymond A. Skinner

SECRETARY

Clarence J. Snuggs

DEPUTY SECRETARY

97% LTV Conventional Refinance Loan Program

Refinance Loans!

97% LTV Conventional Refinance Loan Program

30-year, fixed rate, fully amortizing, limited cash out

Higher LTV limit ~ Lower MI premiums

(No DSELP available)

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97% LTV Conventional Refinance (continued)

• Minimum credit score 680

• Zero points

• Limited cash out

• Max LTV 97%, even if the mortgage insurer will accept a higher LTV

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RESOURCES

Maryland Mortgage Program

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http://www.mmprogram.org/lenders.aspx

Lenders

• MMP loans can only be obtained from

approved CDA lenders

• Currently there are 48 CDA lenders Not all CDA lenders offer the full range of

products—we are working on posting that to our

website soon!

Resources

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Interest Rates

• Interest rates are calculated daily

• In a fluctuating market, rates may change

more than once daily

• Interest rates are posted online and a

notice is emailed rates change

(You can request to be on this email list—

email SingleFamilyHousing@mdhousing.org)

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Check current interest rates:

www.mmprogram.org/rates.aspx

Interest Rates (continued)

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Interest Rate Sheet – updated every weekday or more often

PROGRAM Maryland Mortgage

Program (regular MMP) Save-A-Home Loan Program

DHCD-owned Foreclosure Program

POINTS 0 POINTS 0 POINTS 0 POINTS

GOVERNMENT INTEREST RATE 3.750% 3.750% 1.000%*

APR (FHA) 4.628% 4.628% 1.638%

CONVENTIONAL** INTEREST RATE 4.125% 4.125% 4.125%

APR*** 4.621% 4.621% 4.621%

Maximum DSELP Loan Amount

$5,000 $6,500 $5,000 (plus any applicable Partner Match Program funds)

PROGRAM MARYLAND HOMEFRONT: The Veterans and Military Family Mortgage Program

SUB-PROGRAM Maryland Mortgage Program Save-A-Home Loan Program DHCD-owned Foreclosure Program

POINTS 0 POINTS 0 POINTS 0 POINTS

GOVERNMENT INTEREST

RATE 3.250% 3.250% 1.000%*

APR (VA) 3.419% 3.419% 1.149%

APR (FHA) 4.082% 4.082% 1.638%

CONVENTIONAL** INTEREST RATE 4.125% 4.125% 4.125%

APR*** 4.621% 4.621% 4.621%

Maximum

DSELP Loan Amount $10,000 (plus any applicable Partner Match Program funds)

PROGRAM MBS 97% LTV Conventional Refinance Program

INTEREST RATE 4.125% APR*** 4.621%

Maximum DSELP Loan

Amount NOT AVAILABLE

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Points of Contact

If you have questions, you can call or email:

• Vicki Jones 410-514-7519

• Ed Anthony 410-514-7528

• SingleFamilyHousing@mdhousing.org

They will take your question and make sure

that you receive a timely response

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Website

www.mmprogram.org Website contains information on programs,

rates, initiatives, counseling, downpayment

assistance, approved lenders, directives, and

more.

Please consider attending future training classes to stay

informed of CDA’s latest changes and updates!

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Resources – website: www.mmprogram.org

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MMP Kits

Seven Quick

Steps to

Getting

Started

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HOPE Hotline

1-877-462-7555

The HOPE Hotline is available 24 hours

daily for consumers who have questions

regarding mortgage delinquency,

foreclosure and assistance available from

the State of Maryland

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Questions?

Martin O'Malley

GOVERNOR

Anthony G. Brown

LT. GOVERNOR

Raymond A. Skinner

SECRETARY

Clarence J. Snuggs

DEPUTY SECRETARY