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  • Introduce yourself - Who you are and what you do.
  • You can list the 22 benchmarks set by WSHFC: Advantages/Disadvantages of Owning a Home Steps to Homeownership The Players in the Homebuying Process The Benefits of Getting Loan Pre-Qualified & Pre-Approved Before Searching for a Home Shopping for a Lender How Much Can You Afford? Risk Layering and Compensating Factors Identifying Credit Issues and How to Address Them How Much Money Will You Need? Selecting a Loan Program and How Downpayment and Past Credit Affect Loan Choices Secondary Market Explanation Budgeting/Saving for the Downpayment and Closing Costs How to Shop for a Real Estate Professional – Understanding Agency Representation Selecting a Home and Negotiating a Purchase Price The Importance of a Home Inspection House Key Program Issues – Recapture Tax, Occupancy and Property Restrictions The Loan Closing – What to Expect, Review Sample Loan Documents Foreclosure Prevention and Early Delinquency Intervention Home Maintenance Consumer Protection Resources Community Resources for Further Counseling or Other Assistance. Fair Housing Predatory Lending
  • State the agenda for the class: Review breaks, certificates, scantron forms, housekeeping issues etc. We will answer questions such as : The Home Buying Process : What are the steps to homeownership? Is homeownership for everyone? Lender Curriculum : How much can you afford? What do lenders look for when they approve mortgage loans? How can you improve your chances to get better terms on your loan? The Real Estate Curriculum : Why is a real estate agent important? What should you know before you start looking for your home?
  • You can use the eight steps recommended by the Washington Homeownership Center: Education – Such as this fantastic first-time homebuyer class you are attending! Credit History – Find out what’s on your credit report and what’s your score Budget – Do a budget and determine how much you can comfortably spend monthly for a mortgage Research – Research first-time homebuyer programs and down payment assistance programs and see if you qualify Loan Pre-Approval – And of course, it’s best to choose a lender and become pre-approved before you start shopping homes so you can figure out which options are within your price range. Your Priorities – What is most important to you in a home? Amenities, bedrooms, bathrooms, location… The Search – Find the right real estate agent to help you with your search. It’s best to find an agent who you trust and enjoy spending some time with. You’re Home – You close escrow on your home and get the keys… Congratulations!
  • Provide an example of appreciation of a home over time (historically 5% per year) versus renting: For Example: Suppose you purchased a home in 2004 for $200,000 and decided this year you wanted to upgrade to a bigger home. If your house is now worth $300,000, that’s $100,000 in appreciation that you can apply to a new home. Of course there are inherent costs in selling a home but that is money that if you had been renting you wouldn’t see.
  • Note: At the very least, homeownership may be thought of as forced savings, however, there have been times historically when renting and investing those funds that otherwise would have been spent on a mortgage provided a better return than homeownership alone.
  • Review the role of: Housing Counselor – Helps you determine which incentivized loan and down payment assistance programs you may qualify for. They also help with credit repair and preparing the homebuyer for homeownership Lender – AKA, loan officer/mortgage banker/ mortgage broker etc… Works with the homebuyer to arrange financing options for you to choose Loan Processor – Counterpart to loan officer who manages the loan file and interfaces with underwriting Underwriter – Determines credit worthiness and approves or declines loan Real Estate Agent – Assists the homebuyer with finding the right home, putting in an offer on that home, and finally closing escrow on that home. Appraiser – Contracted by the lender to determine whether the home you are purchasing is “average condition” and the value is consistent with the market Inspector – Contracted by the prospective homebuyer to inspect the home for potential problems that may or may not be easily seen Insurance Agent – Sets up the new insurance policy that will protect the homeowner from damages and liability after purchase. (Fire, damage, etc) Title Officer – Performs the title background check to determine what liens are attached to the property Escrow Officer – Assists the homebuyer with signing all of the closing documents and distributes proceeds of loan and down payment to appropriate parties. Loan Closer – Representative from lender who orchestrates transferring funds from the bank to escrow after they confirm appropriate signatures, dates, and initials are on all of their documents.
  • What documents and information will the lender look at? (pay stubs, W2s, tax returns, bank statements, divorce decree / separation agreement, business license if self employed, etc) A loan pre-approval is a full underwriting approval on the loan program listed on the approval letter. A pre-qualification does not involve an underwriter and can often result in problems with the loan or last minute conditions being added. A pre-approval allows you to know how much the bank is willing to loan you as a maximum. But that maximum may not always be affordable… which is why it’s so important to do a budget up front. A pre-approval also tells sellers and real estate agents that you are serious about buying and that there won’t be any issues with your financing. The process to become pre-approved will also uncover any potential problems and provide a list of remaining conditions for the buyer to satisfy before closing. How to read a good faith estimate: Good Faith Estimate – You should receive a good faith estimate shortly after application along with other disclosures in the mail (banks are required to create and mail within 3 days of application) Truth In Lending (TIL ) – Many people find this document confusing specifically because it includes the Annual Percentage Rate (APR). The APR is not the interest rate on your loan but takes into account several other factors such as costs associated with loan like the appraisal, discount points, escrow costs, etc. So expect that the APR will always be higher than the actual interest rate on your loan because of the associated costs involved. Review a sample Good Faith Estimate & Truth in Lending
  • Other questions clients should ask : How long have you been in the industry? Are you familiar with the state bond programs? Are you familiar with other first time buyer programs? Are you familiar with first-time homebuyer assistance programs other than those offered by your institution? (i.e.: city, county, non-profit programs) If so, which ones? What costs can I expect to see with a mortgage through you? What are the types of mortgage programs you offer? Be aware : Make sure that you receive a good faith estimate and loan disclosures early in the process. Are you comfortable with the service you are receiving? Are they listening to you? Are they answering your questions?
  • Give example of what the cost to the consumer is over time with a higher interest rate For Example : For a $200,000 loan, the difference in the monthly payment between 6% and 7% is $131 monthly and over $1500 annually! Who wouldn’t want an extra $1500 in your pocket at the end of the year? What makes up your credit score? Positives – No late payments, long positive payment histories, low ratio of outstanding credit debt to maximum credit limit on credit cards) Negatives – Late payments, charge-offs, collections, high ratio of debt to maximum limits on credit cards. EG. $4000 high credit, $3800 outstanding) Discuss credit report vs. credit score: Credit report shows all accounts you have ever had with histories. Shows addresses, name & social security variations that have appeared over time. Credit score is mathematically driven rating system that speculates the likelihood you will repay debt. www.freecreditreport.com (Experian) is not really free: Quote from their website: “When you order your free report here, you will begin your free trial membership in Triple Advantage Credit Monitoring.” If you don't cancel your membership within the 30-day trial period, you will be billed $12.95 for each month that you continue your membership. www.annualcreditreport.com is free but does NOT include a credit score
  • Your credit history includes all open and paid credit within last 7-10 years. Payments, balances, payment histories both positive and negative. How long is credit information retained on credit record?: Credit and collection accounts and public record information – 7 years Chapter 7 or Chapter 11 bankruptcy – 10 years Inquiries in last 3-24 months. (Credit inquiries include all mortgage companies, retail credit accounts, cell phone providers, auto dealers, etc) Contact all three credit bureaus to request an investigation if you find any errors. Write a letter to be included in your credit file that lists any mistakes on your report. Contact creditor directly to request written correction be sent to each credit bureau. Make photocopies of any documentation that supports your claim. ***Always pay your housing expense and other bills on time*** Contact creditors immediately if you are unable to make payments on time. Work out a mutually agreeable repayment solution. Check rates and fees on your credit cards (Discuss universal disclosure on credit cards and how late behavior on one card can affect interest rates on all of your credit cards). Deal with collections – they are not going to go anywhere and they are often willing to settle the balances for far less than the initial amount. Remember: Lenders don’t want liens on property Option : Review Fair Isaac brochure – “Your Credit Scores” As a general rule, the higher your credit scores are, the better the mortgage program will be and it will have more favorable terms.
  • These are some of the agencies that can work one-on-one with prospective homeowners and clients to help overcome credit obstacles that have prevented them from obtaining a mortgage. Western Washington Clallam, Grays Harbor, Jefferson, Kitsap, Mason and Thurston Counties Consumer Counseling Northwest - 800-244-1183 Kitsap County Consolidated Housing Authority - 360-535-6120 American Financial Solutions – 888-864-8699 Bremerton Housing Authority - 360-792-8506 Housing Authority of Thurston County - 360-664-2485 NeighborWorks of Grays Harbor County - 360-533-7828 Island, King, San Juan, Snohomish, Skagit, and Whatcom Counties HomeSight – 888-749-4663 Urban League of Metropolitan Seattle - 800-368-1455 El Centro de la Raza – 206-957-4610 International District Housing Alliance – 206-957-1316 ACORN Housing - 206-243-4663 ext. 200 Solid Ground - 866-297-4300 Consumer Counseling Northwest - 800-244-1183 Kulshan Community Land Trust (Whatcom County) - 360-671-5600 ext. 7 Home For Good in Snohomish County- 425-672-9098 Parkview Services - 206-529-4114 Disability Resource Connection - 800-315-3583 OPAL Community Land Trust - 360-376-3191 Pierce, Clark, Cowlitz, Klickitat, Lewis, Pacific, Skamania, and Wahkiakum Counties Consumer Counseling Northwest - 800-244-1183 Martin Luther King Housing Development Association - 253-627-7171 Pierce County Coalition for Developmental Disabilities - 253-564-0707 ext. 105 Community Housing Resource Center for SW WA - 360-690-4496 ext 101 for home buying and ext 102 for default counseling Columbia Non-Profit Housing - 360-993-9555 Family Finance Resource Center - 360-423-9197 Homeownership Center of Tacoma - 253-627-6560 Eastern Washington Benton, Chelan, Douglas, Franklin, Grant, Kittitas, Okanogan, Walla Walla, and Yakima Counties Consumer Credit Counseling Services of Tri Cities- 509-737-1973 Consumer Credit Counseling Services of Yakima Valley- 800-273-6897 OIC of Washington - 509-452-2611 North Columbia Community Action Council - 509-766-4152 Okanogan County Community Action - 877-641-0101 Chelan County/Wenatchee Housing Authority - 509-663-7421 SHARE CLT of Leavenworth - 509-548-0408 Adams, Asotin, Columbia, Ferry, Garfield, Lincoln, Pend Orielle, Spokane, Stevens, and Whitman Counties Spokane Neighborhood Action Programs - 509-456-7106 ARC of Spokane - 509-328-6326 ext. 206 Rural Resources Community Action - 509-684-8421 Community Action Center of Whitman County - 509-334-9147 ext. 5 Community Action Partnership for SE WA – 800-326-4843 Consumer Credit Counseling Services of the Inland Northwest - 866-309-9170
  • Do you have a clear picture of your income and expenses right now? Do you usually have money left over at the end of each pay period? Can you pay more than you are paying now? Try out new payments – live as if making a higher house payment Automatic withdrawals: Put money in a savings account for down payment
  • Goal setting: What are your goals? How are you going to reach them? Are you going to need a down payment? New furniture? Lawn mower? You will want to account for future periodic expenses such as cleaning or replacing gutters, house painting, and increases in homeowners association dues or insurance costs. Tip to help class participants to payoff credit card debt: Determine the % of your income that you can add to a minimum payment of the card with the highest interest rate. When that card is paid off, add same amount to card with next highest interest rate, and so on… Start with the card with the lowest balance – gives a sense of accomplishment.
  • Review Budgeting Worksheets Radian – pages 28-31 PMI – pages 77-78 (page 79 maximum mortgage payment at 38% debt ratio) MGIC – VIII-1 through VIII-11 RMIC – pages 11-13 cover the 6 steps for making a budget (no worksheets) United Guaranty – Section II Budgeting: Worksheets 6-13 Additional Resources: www.thebeehive.org/money/budget www.betterbudgeting.com www.foxway.com
  • Start living as if you are making a house payment by putting the extra into a savings account. Try out new payments – live as if making that higher house payment
  • It is important to keep your paperwork together – and you will want to keep any new statements that come in the mail in the event your mortgage requires them. Most programs also require verification of your rent payments and will need a statement from your landlord and possibly cancelled rent checks for 12 months.
  • Fixed Rate Mortgage : Interest rate is fixed for term of loan and is generally considered the safest option Adjustable Rate Mortgage : ARM, interest rate is fixed for specific time and will adjust based upon market conditions after that term. The benefit of an ARM is that it has a lower interest rate than the fixed option and therefore a lower payment. Can be a riskier option than fixed rate mortgage if borrower plans to keep house for a long time but can make sense for a family that plans to relocate and sell in a few years. Interest Only : Borrower can always pay more monthly but minimum payment is only the interest on the loan and affords lowest payment option of the three. Drawback for this option is that the outstanding principal balances don’t decrease unless borrower pays more than minimum. Also good to mention: Negative Amortization Reverse Mortgages for Seniors HELOC
  • Debt to Income Ratio : Calculated as the amount of expenses monthly divided by total after tax income. So a borrower who makes $3000 with $1500 in monthly expenses would have a 50% debt ratio. An ideal debt ratio would be less than 45% but there are programs that allow for higher ratios. But keep in mind your budget and ensure the total monthly payment is affordable. The 3 C’s: Credit – what is the probability you will repay loan? Capacity – do you make enough money to repay the loan? Collateral – is there sufficient equity in the property to offset the risk that you may not repay your loan? Down Payment: Down payment may not necessarily be required for every loan program but investing some of your own funds can lower your monthly payment, possibly lower your interest rate or allow you to qualify for a more favorable loan product, and sometimes even make it easier for an underwriter to approve a marginal borrower.
  • (Gross income is before taxes) This scenario calculates a maximum debt ratio of 41% minus the monthly debt payments of $300. The resulting $930 payment is the maximum mortgage payment for this example. Keep in mind that if you are looking at a condo, you may not qualify for as much due to homeowners dues associated with that housing development. Your realtor can find out how much the dues are for the development you are looking in.
  • (20% coverage MI estimated)
  • The acceptable total expense ratio will depend upon the type of loan you are applying for. (FHA, VA, conventional, community lending). 38-45% Is common and ideal but again, each program is different. Your lender will be able to tell you the acceptable ratio for the program you choose.
  • Often it’s easier to secure financing and/or the interest rate is less if you contribute some of your own money towards the purchase of the home. The amount varies depending on the type of mortgage you choose, the purchase price of the home, and your financial situation. One of the biggest obstacles facing first-time homebuyers is the amount of cash they’ll need for down payment and other costs. But programs are available to reduce the amount of cash needed. Mortgage Insurance (or MI) is usually required when the down payment is less than 20% since there’s very little or no equity in the property. The amount of the PMI due at closing can vary from no PMI payment due, one month PMI due, or one-year PMI due (based on the plan selected). An option to finance the entire mortgage insurance premium into the loan amount may also be available. Lender paid PMI (LPMI) Discuss programs available requiring no PMI (for instance an 80/20, subprime) What goes into escrow/impounds - how escrow works for paying insurance and taxes Points discount/origination, taxes, insurance Third-party fees such as attorney, title, home inspections, recording fees Earnest money deposit – deposit to show commitment to buying the home Application fee, appraisal and credit fee Prepaid interest due to loan at closing Homeowners Association dues – They can go up over time. As a new homeowner you are responsible for the property taxes from the point you assume ownership of the home. Often the taxes have already been paid therefore you are required to reimburse the seller for the portion of the taxes you are responsible for. You are also required to pay the first year’s insurance policy up front as well .
  • The House Key Program is available for first-time homebuyers or repeat buyers purchasing in a targeted area, and limited VA repeat buyers. The House Key Program can used with underlying approval for a Conventional, FHA, VA, USDA 502 guaranteed loan. House Key Program Typically offers a lower-than-market interest rate but has a few restrictions: Income: Depending on the county and family size $65,000 – 97,000 Acquisition Cost: Cannot exceed $270,000 to $450,000 depending on the county Express Loan Program : Same Income and Acquisition limits as House Key Program but can only use an underlying Conventional first mortgage . It is priced at competitive market rates. Can only use House Key Plus Down Payment Assistance with Express Loan program. While ALL of the Commissions Down Payment programs can be used with the House Key Program. See www.wshfc.org for specific restrictions
  • The House Key program uses the proceeds of tax-exempt bonds to provide first-time homebuyers the benefit of a lower interest rate.  If the home financed using the House Key loan is sold or refinanced within nine years of purchase, a portion of the benefit received by the homeowner may be recaptured.  Our experience shows that very few borrowers will be affected by a potential recapture tax.  Your participating lender will provide you with a statement regarding recapture tax along with the federal income limits.  The payment of recapture tax occurs in the tax year the property is sold, only if all of the following conditions apply: In the event that a recapture tax is due, it is only a portion of the borrower's gain on the sale of the home.  The maximum recapture tax is either 50% of the gain on the sale or 6.25% of the original loan amount, whichever is less.  For more information regarding this provision, please contact the IRS or ask a tax professional.
  • Subsequent Slides cover programs in detail Please update these screens as necessary prior to presenting! Some programs are pilot programs or subject to funding availability Go to www.wshfc.org “ We Help Finance Homeownership” “ Downpayment Assistance programs”
  • This program can only be used with a House Key State Bond first mortgage.
  • This program can only be used with a House Key State Bond first mortgage but must also be used with an FHA or Fannie Mae Conventional underlying first mortgage. Can also use part or all of the funds for ADA accessibility improvements
  • This program can only be used with a House Key State Bond first mortgage and is available for people who are employed by a K-12 School District, public or private, 2 year Community College or Technical College
  • This program can only be used with a House Key State Bond first mortgage and is available for people who have been honorably discharged from any branch of service. Not open to active military. Only DPA Program that be can also be used with a House Key VA first mortgage (CLTV can not exceed 100%)
  • This program can only be used with a 30 year only - House Key State Bond first mortgage and is available only for properties within the city limits of Seattle. Shared Appreciation is applicable to this 2 nd mortgage which requires the homebuyer to pay back a portion of the appreciation in value to the program to help other first time homebuyers if they sell or refinance before the shared appreciation time has ended. The time period shared appreciation applies is based upon the original percentage of the 2 nd mortgage to the purchase price. Maximum Income Limits To be eligible for House Key Plus Seattle, your household income must not exceed these limits: 1 person $44,800 | 2 person $51,200 | 3 person $57,600 | 4 person $64,000 5 person $69,100 | 6 person $74,250 | 7 person $79,350 | 8 person $84,300
  • ARCH – A R egional C oalition for H ousing This program can only be used with a 30 yr only House Key State Bond first mortgage and is available for people buying a home or condominium within an ARCH member city or surrounding unincorporated east King County ARCH area ( Beaux Arts Village, Bellevue, Bothell, Clyde Hill, Hunts Point, Issaquah, Kenmore, Kirkland, Medina, Mercer Island, Newcastle, Redmond, Sammamish, Woodinville, Yarrow Point) Maximum Income Limits To be eligible for House Key Plus ARCH, your household income must not exceed these limits: 1 person $44,800 | 2 person $51,200 | 3 person $57,600 | 4 person $64,000 5 person $69,100 | 6 person $74,250 | 7 person $79,350 | 8 person $84,300
  • This program can only be used with a House Key State Bond first mortgage. Check the map at www.wshfc.org to see if your area is considered Maximum Income Limits To be eligible for House Key Federal Way, your household income must not exceed these limits: 1 person $44,800 | 2 person $51,200 | 3 person $57,600 | 4 person $64,000 5 person $69,100 | 6 person $74,250 | 7 person $79,350 | 8 person $84,300
  • This program can only be used with a House Key State Bond first mortgage. FHA/ Conventional underlying mortgage. Check the property address at http://kcwppub3.co.kitsap.wa.us/ParcelSearch/ Income limits: http://www.ci.bremerton.wa.us/display.php?id=479 Maximum Income Limits To be eligible for House Key Plus Bremerton your household income must not exceed these limits: 1 person $39,700 | 2 person $45,350 | 3 person $51,050 | 4 person $56,700 5 person $61,250 | 6 person $65,750 | 7 person $70,300 | 8 person $70,900
  • Contact the local office to see if the area you are interested falls within their service area. This loan is backed by USDA and the borrower will need to have decent credit. RHS 502 Direct Loan – (loan term: 33 years) under certain conditions term may be extended to 38 years. For purchase of new or existing home, or for purchase of site and construction of home. RHS 502 Guarantee (loan term: 30 years) www.rurdev.usda.gov/wa/
  • Congress established the Section 184 Indian Housing Loan Guarantee Program in 1994. The program is designed to offer home ownership, property rehabilitation, and new construction opportunities for eligible tribes, Indian Housing Authorities and Native American individuals and families wanting to own a home on trust land or land located in an approved Indian or Alaska Native area. HUD 184 - Debt to income ratio can be as high as 41%. Loan term up to 30 years fully amortized HUD 184 Program www.hud.gov/offices/pih/ih/homeownership/184/
  • Regional Down Payment Assistance programs are subject to funding issues. Please check to verify the program is still available
  • Aberdeen Neighborhood Housing Services www.aberdeen-nhs.com City of Bremerton Exclusive to Bremerton City limits only www.ci.bremerton.wa.us 360-473-5211 Kitsap County Consolidated Housing Authority www.kccha.org (360) 535-6100
  • City of Seattle Office of Housing http://www.cityofseattle.net/housing/ Mark Ellerbrook , (206) 684-3340. Seattle Teacher Homebuyer Program: For additional information call Evergreen Home Loans at 800-459-5331 or 206-938-8900. www.emoneysource.com/teacher.asp HomeSight www.homesightwa.org 206-723-4355 Parkview Services parkviewservices.org/homeownership 206.542.6644
  • Pierce County Community Services (253) 798-7038 http://www.co.pierce.wa.us/pc/abtus/ourorg/comsvcs/housing/html/1DownPay.htm City of Tacoma: www.cityoftacoma.org (253) 591-5219 or (253) 591-5200 City of Lakewood www.ci.lakewood.wa.us (253) 589-2489 Homeownership Center of Tacoma w ww.hcthomes.org (253) 627-6560
  • City of Yakima City of Yakima ONDS (509) 575-6101 City of Richland (509) 941-7580 www.ci.richland.wa.us City of Kennewick (509) 585-4431 www.ci.kennewick.wa.us City of Pasco (888) 664-6705
  • Community Action Center of Whitman County www.cacwhitman.com (800) 482-3991 Spokane Neighborhood Action Programs www.snapwa.org (509) 456-7106 The ARC of Spokane http://arc-spokane.org/Homeownership.php (509) 789-2247
  • Columbia Non-Profit www.columbianonprofithousing.org (360) 690-4496 Community Housing & Resource Center http://www.homecen.org/index.html (360) 690-4496
  • Homestead Community Land Trust (HCLT) homesteadclt.org/HCLTAdv.htm 206-323-1227 Opal Community Land Trust www.opalclt.org, (360) 376-3191 Lopez Island CLT http://www.lopezclt.org/ Kulshan Community Land Trust (360) 671-5600, x1, www.kclt.org Homeward Bound Community Land Trust http://www.homewardboundclt.org/index.html Housing Resource board of Bainbridge Island http://www.housingresourcesboard.org/ 1-206 842 1909
  • Self Help housing serves a higher income level than Habitat for Humanity. Vashon Household Self Help: www.vashonhousehold.org (206) 463-6454 Northwest Housing Development: www.northwesthousingdevelopment.org (253) 863-8188 Housing Hope: www.housinghope.org (425) 347-6556 (Snohomish County) Homes for Islanders: www.homesforislanders.org (360) 370-5944 (San Juan Islands) Whatcom Skagit Housing: www.whatcomskagithousing.com (360) 398-0223 Habitat for Humanity serves a low-income population. www.habitat.org
  • Self Help housing serves a higher income level than Habitat for Humanity. Vashon Household Self Help: www.vashonhousehold.org (206) 463-6454 Northwest Housing Development: www.northwesthousingdevelopment.org (253) 863-8188 Housing Hope: www.housinghope.org (425) 347-6556 (Snohomish County) Homes for Islanders: www.homesforislanders.org (360) 370-5944 (San Juan Islands) Whatcom Skagit Housing: www.whatcomskagithousing.com (360) 398-0223 Habitat for Humanity serves a low-income population. www.habitat.org
  • HomeStart / Federal Home Loan Bank www.fhlbsea.com List of participating lenders and non-profits that have IDA programs Some IDA programs offered by local housing authorities United Way of King County http://www.uwkc.org/ourcommunity/endinghomelessness/ida.asp 206.461.3700
  • Section 8 for homeownership – existing Section 8 individual may be able to use their rental voucher towards a mortgage payment. Not a dollar for dollar match – has to be approved by Housing Authority – will issue client a letter stating how much per month they are eligible to receive towards house payment. Usually requires clients to participate in classes (FSS) for a minimum of one year. Family Self Sufficiency – allows clients to save money in an account that can then be used towards a home purchase. Family self-sufficiency (FSS) is a HUD program that encourages communities to develop local strategies to help voucher families (Section 8) obtain employment that will lead to economic independence and self-sufficiency. http://www.hud.gov/offices/pih/programs/hcv/fss.cfm Housing Authorities that offer Section 8 to Homeownership Spokane , Pierce, Tacoma, Clallam, Thurston (in process), Richland, Longview, Kelso, Snohomish (HomeSight), Bremerton (in process), Island, Bellingham (Kulshan CLT)
  • Good place to play the M&M game Talk about realistic expectations – “this is a starter home, not a dream home.”
  • A Real Estate Agent knows the process and can guide a homebuyer through the purchase and helps avoid potential pitfalls and legal disasters. They are also a great resource for the homebuyer to rely on for advice and direction. Questions to ask of a prospective Real Estate Agent : How long have you been an agent? What is the best way to contact you? When are you available to look at homes? Are you familiar with the neighborhoods & area I am interested in? Are you familiar with first time buyer programs?
  • Qualities in a home that a homebuyer would prefer: schools close to supermarkets/shopping close to police & fire departments leisure activities (golf, arts, boating, parks, etc.) How many bedrooms & bathrooms Home options that a homebuyer would prefer: 1 car / 2 car / 3 car garage Big / small / low maintenance yard Upstairs / downstairs laundry room Close to work Particular community where you would like to live What can you afford now and what can you put off until later? What creates connection with family? What enhances your health? What enhances your life?
  • Your Real Estate agent will know the market and can give you good advice but you should also try to learn as much as you can too. If you are familiar with the market, you can also determine whether the price in line with other homes that are similar. If a home has been on the market for a while you may be able to negotiate more than a home that just was put up for sale. Budget. Be sure to stick to the budget you previously completed so you don’t buy a house that costs more than you want to pay. Keep your priorities in mind and don’t get carried away in the process. Talk to your Real Estate agent early on in the process to determine how much earnest money is customary for your area so you can plan to have that available.
  • The Purchase and Sales Agreement is the document where the details of the transaction are agreed upon between the buyer and the seller. If it isn’t on the purchase and sales agreement, whatever might be said between the parties is not necessarily legally binding. The Sellers Disclosure requires the seller to openly admit to any known deficiencies and potential problems regarding the property and home. It is common practice to add a Financial Contingency to a purchase and sales agreement that states should the buyer not be able to obtain financing by such date, the buyer has the option to cancel the contract to purchase the home and get the earnest money back. The Inspection Contingency states that should your home inspector determine the house has problems that the buyer doesn’t want to accept, the contract may be cancelled and the earnest money refunded.
  • It’s important to have a home inspection because most people aren’t in the construction industry and don’t know what to look for. Ultimately it’s for your protection so the home doesn’t require major repairs that you didn’t anticipate. A great way to find a good home inspector is by recommendation. Questions to ask: How long have you been in the industry? How long does an average inspection take? How detailed will the report be? Can I be present during the inspection? Home inspections generally range in cost from $150 to $500 and like everything else, you often get what you pay for. A less expensive inspection may not be as comprehensive and extensive as the more costly option. And the less expensive inspector will take less time to review the home as opposed to a 2-3 hour detailed inspection. You should receive a full report from the inspector (and sometimes photos) that you will be able to present to the seller. Often the seller will fix many of the problems outlined in the report or you can choose to complete them yourself and ask for a reduction in the purchase price.
  • When you arrive to sign your final purchase paperwork, any funds needed for closing will need to be in form of a cashiers check. Ask your Escrow Closing agent about the exact amount and how they would like the funds delivered. Plan on spending a minimum of 45 minutes to sign your final purchase paperwork at escrow but it may take longer! The Deed of Trust is the document that is recorded with the county showing you as the owner of the property. The Promissory Note is the agreement between you and the bank showing the amount you are borrowing, the interest rate, the term of the loan, and any specific details regarding your mortgage. The HUD-1 settlement statement is the document that brings together all of the costs associated with the purchase and shows the amount of money coming from the buyer to close and how much cash the seller is receiving after all the expenses are paid. Truth in Lending – Sometimes this can be confusing at closing if a buyer isn’t prepared for this document. Once again, the APR is not the interest rate of your loan. The interest rate of your loan will appear on the Promissory Note. *** Ask your Real Estate agent when you will be able to get the keys and take possession of the home. Often the seller may ask for a provision to be able to have an additional 3 days to clear their belongings from the home before you can move in. ***
  • Don’t be late – making your mortgage payment should be a priority. Contact your lender as soon as you know you are going to have a hard time making the payments on time – try to work out a payment plan with them. Contact a local housing counseling agency to assist with a budget and to help stay on track.
  • Set money aside every month for home maintenance fund. If you need reliable contractors to help with home repairs, ask your home inspector. Home inspectors are a great resource that you will be able to use for years to come.
  • The risks borrowers face from predatory loans such as high fees/payments, and the potential loss of the home is they can’t keep up with payments can be life changing events. Comparing Loans: A quick easy way to compare loans is with the interest rate and APR. The interest rate will determine your monthly payment and the APR will show the rate combined with the costs associated with the loan. So the larger the spread between the rate and APR shows how expensive a loan is. For instance: A 6.5% interest rate with a 6.8% APR is a cheaper loan than a similar loan at a 6.5% interest rate and 7.4% APR. If you think you have been a victim of predatory lending, contact the Washington Homeownership Center at (866) 600-6466 or the Washington State Department of Financial Institutions at (877) 746-4334.
  • A sub-prime mortgage is not necessarily a predatory loan! If your credit profile warrants higher risk, expect to pay a higher interest rate than someone with perfect credit. But if you have perfect credit, question why the interest rate or program appear higher than expected. This is another good reason to keep up on credit issues and not let small credit problems become bigger issues later.
  • Everyone is protected in fair housing. Race, ethnicity, gender, and sexual orientation cannot be a factor in determining credit worthiness and viability of a mortgage application or area to restrict a prospective homebuyer to look for a home. Home sellers cannot restrict potential homebuyers based upon: Race Ethnicity Gender Sexual Orientation Religion National Origin Familial Status, etc… Parties involved must treat everyone equally with equal merits and this applies to the seller, your lender, and the real estate agent. Another good resource is the Fair Housing Center of Washington www.fhcwashington.org
  • These are some of the agencies that can work one-on-one with prospective homeowners and clients to help overcome credit obstacles that have prevented them from obtaining a mortgage. Western Washington Clallam, Grays Harbor, Jefferson, Kitsap, Mason and Thurston Counties American Financial Solutions Kitsap & Olympic Peninsula 888-864-8699 (PP/DP) Neighborworks of Grays Harbor County 360-533-7828 (PP/DP) Homeward Bound Olympic Peninsula 360-565-2068 (PP/DP) Housing Authority of Thurston County Olympia 360-664-2485-109 (PP) Island, King, San Juan, Snohomish, Skagit and Whatcom Counties Solid Ground Seattle 866-297-4300 (DP) El Centro de la Raza Seattle 206-957-4610 (PP/DP) Urban League of Metropolitan Seattle 800-368-1455 (PP/DP) International District Housing Alliance Seattle 206-957-1316 (PP/DP) Parkview Services Seattle 206-542-6644 (PP/DP) Home Sight Seattle 206-723-4355 & Snohomish 888-749-4663 (PP/DP) HomeStead CLT Seattle 206-323-1227 (PP) Clear Point Financial Services Puget Sound 877-877-1995 (DP) Home for Good Lynnwood 425-672-9098 (PP/DP) Kulshan Community Land Trust Whatcom /Bellingham 360-671-5600 (PP/DP) OPAL Community Land Trust (Island County) 360-376-3191 (PP/DP) Housing Hope Everett 425-347-6556 (PP/DP) Pierce, Clark, Cowlitz, Klickitat, Lewis, Pacific, Skamania and Wahkiakum Counties South Sound Outreach Services Tacoma 253-593-2111 (PP/DP) Homeownership Center of Tacoma 253-627-6560 (PP/DP) PC2 Homeownership 253-564-0707 x105 (PP/DP) Columbia Non-Profit Housing Vancouver 360-993-9555 (PP) Community Housing Resource Center Vancouver 360-690-4496 (PP/DP) Family Finance Resource Center Longview 360-423-9197 (PP/DP) Lower Columbia Community Action Program Longview 800-383-2101 (PP)   Eastern Washington Benton, Chelan, Douglas, Franklin, Grant, Kittitas, Okanogan, Walla Walla and Yakima County Catholic Charities Housing Services Yakima 509-853-2800 (PP / DP) Consumer Credit Counseling Services of the Tri-Cities 509-737-1973 (PP / DP) CCCS of Yakima Valley/Apprisen Financial, Central Wa. & Wenatchee 800-355-2227 (PP/DP) OIC of Washington - Moses Lake 509-765-9206 (PP/DP) Okanogan County Community Council Okanogan 877-641-0101 (PP/DP) Chelan County / Wenatchee Housing Authority 509-663-7421 (PP/DP) Adams, Asotin, Columbia, Ferry, Garfield, Lincoln, Pend Orielle, Spokane and Whitman Counties Spokane Neighborhood Action Partners 509-456-7106 (PP / DP) The ARC of Spokane 509-328-6326-206 (PP/DP) Rural Resources Community Action Colville 509-685-6179 (PP/DP) Community Action Center of Whitman County Pullman 509-334-9147 (PP/DP) Community Action Partnership for SE WA (Idaho) 800-329-4843 (PP/DP) Consumer Credit Counseling Services of Inland NW Spokane 800-308-2227 x5732 (PP/DP)
  • Talk about how these agencies can help clients with questions, or services.
  • Research the available down payment & gap financing programs. Most of the incentivized programs are available for households that make 80% of the Annual Median County Income or less, However some programs allow income up to 100% of the county median income (House Key Programs) .
  • For more information about programs and agencies class participants can call or email the Washington Homeownership Center – a state-wide information and referral source for first-time homebuyers. Washington Homeownership Center www.homeownership-wa.org (866) 600-6466 Washington State Housing Finance Commission www.wshfc.org (800) 767-4663 There is a Homeownership Hotline sponsored by DFI & WSHFC: 1 – 877- 894- HOME (4663)

credit card washington county credit card washington county Presentation Transcript

  • Welcome to Homebuyer Education Sponsored by the Washington State Housing Finance Commission
  • Class Instructors
    • Add Your Names Here
    • Add Your Names Here
    12/22/2009
  • What we will cover
    • Steps to Homeownership
    • Owning vs renting
    • How Much Can You Afford?
    • Selecting a Loan Program
    • Down payment and Closing Costs
    • How to Shop for a Lender & Real Estate Professional –
    • Selecting a Home
    • The Importance of a Home Inspection
    • House Key Program
    • Loan Closing
    • Foreclosure Prevention and Early Delinquency Intervention
    • Home Maintenance
    • Consumer Protection Resources
    • Community Resources for Further Counseling or Other Assistance.
    • Fair Housing
    • Predatory Lending
    22 benchmarks set by WSHFC 05/04/10
  • Agenda
    • The Home Buying Process
    • Lender Curriculum
    • Assistance Programs
    • Real Estate Curriculum
    • Q & A’s and Resources
    05/04/10
  • The Home Buying Process
      • Steps to Homeownership
      • Owning vs renting
      • The Players in the Home buying Process
      • The Benefits of Getting Loan Pre-Qualified & Pre-Approved Before Searching for a Home
      • Shopping for a Lender
    05/04/10
  • The Steps to Homeownership Education Credit History Budget Research Loan Pre-Approval Your Priorities The Search You’re Home! The eight steps recommended by the Washington Homeownership Center 05/04/10
  • Owning vs. Renting
    • Benefits of Renting Your Home…
    • Low maintenance costs
    • Freedom to move
    • Lower monthly payments
    • No risk of losing investment
    • Benefits of Owning Your Home…
    • Pets
    • Yard
    • Décor
    • Tax savings
    • Building equity
    05/04/10
  • Owning vs. Renting
    • Things to keep in mind about owning….
    • Yard work
    • Home improvements/maintenance
    • Larger monthly payments
        • - Property Taxes
        • - Homeowners Insurance
    05/04/10
  • The Players in the Homebuying Process
    • Who are they?
    • What role do they play?
    05/04/10
  • Pre-Approval
    • What is the difference between pre-approval and pre-qualified?
    • Why is it important to get pre-approved before you shop for a home?
    • Good Faith Estimate
    • Truth In Lending (TIL)
    • APR
    05/04/10
  • Shopping for a Lender
    • Get referrals and interview different lenders
    • Questions to ask
    • Difference between broker and loan officer
    05/04/10
  • Lender Curriculum
      • How Much Can You Afford?
      • Credit
      • Budgeting
      • Selecting a Loan Program
      • Down payment & Closing Costs
    05/04/10
  • Credit History– Why it is Important
    • Your score and history will:
    • Affect the interest rate you will be offered.
    • Determine what loan program will be offered.
    05/04/10
  • Credit
    • Read your credit report
    • Correct errors on your report
    • How to build your credit
    • Maintain good credit history
    • Check credit at least annually
    • What is a credit score
    • How to increase your credit score
    05/04/10
  • Credit Repair & Counseling
    • The Homeownership Hotline sponsored by
    • WSHFC
    • 1 – 877- 894- HOME (4663)
    • Or for a list of counselors statewide:
    • http://www.wshfc.org/buyers/counseling.htm
    05/04/10
  • Budgeting Basics
    • Set Financial Goals
      • Eliminate debt
      • Six months of expenses saved
      • Set investment goals
    • Treat Your Savings Like An Expense
      • 10% of all income saved or invested
      • Automatic withdrawals
    05/04/10
  • Budgeting Basics
    • Eliminate credit card debt
    • Put your money to work
    • Educate yourself
    • Plan for future expenses
    • Pay yourself first
    05/04/10
  • Budgeting Basics
    • ABC Your Budget – track what you spend for 30 days…
      • A: Expenses you need and can do nothing about today (mortgage, car payment)
      • B: Expenses you need, but CAN do something about today (groceries, clothing)
      • C: Things you want (cable TV, lattes, movies, eating at restaurants)
    05/04/10
  • Budgeting Basics
    • How much do you CURRENTLY spend on housing?
    • How much CAN you spend and how much do you WANT to spend on housing?
    05/04/10
  • Documents You Will Need
    • 2-3 years tax returns
    • 2 years of W-2s
    • 2 most recent pay stub
    • Last 3 months of bank statements
    • Credit card information
    • Information on any other loans
    • Landlord information
    05/04/10
  • Types of Loans
    • Conventional (or Conforming)
    • FHA
    • VA
    • USDA
    • Sub Prime & Non-Conforming
    • Portfolio
    • Jumbo
    05/04/10
  • Types of Loan Terms
    • Fixed Rate
    • Adjustable Rate
    • Interest Only
    • 15 / 20 / 30 / 40 years
    • Balloon
    05/04/10
  • How Much Can You Afford
    • What the bank is looking at:
    • Debt-to income ratios
    • The 3 “C”s – Credit, Capacity & Collateral
    • Down payment
    • What the bank is looking at:
    • Debt-to income ratios
    • The 3 “C”s – Credit, Capacity & Collateral
    • Down payment
    How Much Can You Afford? 05/04/10
  • How Much Can You Afford
    • Calculating how much house payment you can afford depends on your income and current debt
    • Gross monthly income
    • $_3,000__ x .41 = $ 1,230
    • Minus total monthly minimum debt payments - $ 300
    • Total housing payment you can afford = $ 930
    • PITI (Principle, Interest, Tax, Insurance)
    Calculating how much house payment you can afford depends on your income and current debt Gross monthly income $ 3,000 x .41 = $1,230 Minus total monthly minimum debt payments - $ 300 Total housing payment you can afford = $ 930 PITI (Principle, Interest, Tax, Insurance) How Much Can You Afford? 05/04/10
  • How Much Can You Afford
        • Housing Expense-to-Income Ratio
        • Principle and Interest: $ 690
        • Hazard Insurance: $ 73*
        • Real Estate Taxes: $ 117*
        • Mortgage Insurance: $ 73
      • Homeowner’s Association: $ 0
        • Subordinate Financing: $ 0 _______
        • $ 930.00
        • Housing Expense-to-Income Ratio
        • Principle and Interest: $ 690.00
        • Hazard Insurance: $ 73.00*
        • Real Estate Taxes: $ 117.00*
        • Mortgage Insurance: $ 73.00
      • Homeowner’s Association: $ 0.00
        • Subordinate Financing: $ 0.00 ___________
        • $ 930.00
    How Much Can You Afford? 05/04/10
  • How Much Can You Afford
    • To calculate total payment/income
    • Take your monthly housing debt and divide by your monthly income
    • $930 divided by $3,000 = .31 which is the same as 31%
    To calculate “total payment to income” ratio: Take your monthly housing debt ($930) and divide by your monthly income ($3000) Example: $930 / $3,000 = .31 which is the same as 31% How Much Can You Afford? 05/04/10
  • How Much Can You Afford
    • Total Expense-to-Income Ratio:
    • total house payment
    • plus total monthly minimum debt payments
    • divided by gross monthly income
    • Example: $930 + $300 = $1200 divided by $3,000 = .41 or 41%
    • Total Expense-to-Income Ratio =
    • total house payment
    • plus total monthly minimum debt payments
    • divided by gross monthly income
    • Example: $930 + $300 = $1230
    • divided by $3,000 = .41 or 41%
    How Much Can You Afford? 05/04/10
  • How Much Cash Will You Need?
    • Down payment: Percentage of the value of the house
    • Private mortgage insurance (PMI)
    • Closing costs
    • Items to be paid before closing (pre-paids):
      • Appraisal (also considered Closing cost)
      • Inspection (also considered Closing cost)
      • Homeowners insurance
      • Taxes
    05/04/10
  • Assistance Programs
    • House Key Program
      • Recapture Tax
      • Occupancy and Property Restrictions
    • WSHFC Down Payment Assistance Programs
    • USDA, HUD
    • Community Land Trusts
    • Other DPA Programs statewide
    05/04/10
  • Washington State Housing Finance Commission
    • House Key Loan Programs
    • Lower interest rate
    • First-time homebuyers
    • Under income limits
    • Under acquisition limits
    05/04/10
  • Recapture Tax
    • Recapture only applies if all 3 of the following occur:
    • Your home is sold or disposed of within 9 years of being purchased, for reasons other than your death;
    • There is a capital gain on the sale of your home, AND
    • Your household income for the year in which you sell your home exceeds federal recapture tax limits. See your lender for current limits.
    05/04/10
  • Washington State Housing Finance Commission
    • Down Payment Assistance Programs
    • House Key Plus
    • HomeChoice
    • House Key Schools
    • House Key Veterans
    • House Key Plus Seattle (Subject to funding)
    • House Key Plus ARCH (Subject to funding)
    • House Key Federal Way
    • House Key Bremerton
    • Down payment assistance program must be used in conjunction with House Key State Bond 1 st mortgage.
    • These are All Second Mortgages – These are not grants
    • Only one WSHFC DPA program can be used.
    05/04/10
  • Washington State Housing Finance Commission
    • House Key Plus
    • Second Mortgage Loan
    • 5% interest with a 10 year term
    • Up to $10,000 Statewide
    • Income Limits:
    • Clark/Skamania/Thurston Counties $70,000
    • Island County $77,900
    • King/Snohomish Counties $84,300
    • Kitsap Counties $70,900
    • All Other Counties $66,300
    05/04/10
  • Washington State Housing Finance Commission
    • HomeChoice
    • Person with a disability or a family member with a disability (ADA)
    • Up to $15,000
    • 1% simple interest Deferred payment
    • One on One Counseling required
    • Income Limits:
    • Clark/Skamania/Thurston Counties $70,000
    • Island County $77,900
    • King/Snohomish Counties $84,300
    • Kitsap Counties $70,900
    • All Other Counties $66,300
    05/04/10
  • Washington State Housing Finance Commission
    • House Key Schools
    • Up to $10,000
    • 3% interest on a 10 year term
    • Any Employee of Private or Public School K -12, Community Colleges or Technical Colleges.
    • Income Limits:
    • Clark/Skamania/Thurston Counties $70,000
    • Island County $77,900
    • King/Snohomish Counties $84,300
    • Kitsap Counties $70,900
    • All Other Counties $66,300
    05/04/10
  • Washington State Housing Finance Commission
    • House Key Veterans
    • Second Mortgage
    • Up to $10,000
    • 3% interest on a 10 year term
    • Veterans honorably discharged
    • Income Limits:
    • Clark/Skamania/Thurston Counties $70,000
    • Island County $77,900
    • King/Snohomish Counties $84,300
    • Kitsap Counties $70,900
    • All Other Counties $66,300
    05/04/10
  • Washington State Housing Finance Commission
    • House Key Plus Seattle
      • Up to $60,000
      • 3% interest rate - Deferred payment
      • Borrower must contribute 1% or $2500 whichever is greater
      • City limits of Seattle
      • 80% Area Median Income & below
      • (lower than House Key first mortgage income limits)
      • Shared Appreciation
    05/04/10 Subject to Funding
  • Washington State Housing Finance Commission
    • House Key Plus ARCH
    • Up to $30,000
    • 4% simple interest - Deferred Payments,
    • Borrower must contribute 2% of own funds
    • One on One Counseling required
    • 80% Area Median Income & below
      • (lower than House Key first mortgage income limits)
      • Available in 15 Eastside Cities
    05/04/10 Subject to Funding
  • Washington State Housing Finance Commission
    • House Key Federal Way
    • Up to $30,000
    • Deferred payment
    • 0% simple interest
    • Buying in City of Federal Way
    • Must be Foreclosed or Bank-Owned
    • 80% Area Median Income & below
      • (Much lower than House Key first mortgage income limits
    05/04/10
  • Washington State Housing Finance Commission
    • House Key Bremerton
    • Up to $20,000
    • 3% interest on a 15 year Term
    • Buying in Bremerton city limits
    • One-on-one Counseling Required
    • 80% Area Median Income & below
      • (lower than House Key first mortgage income limits)
    05/04/10
  • Rural USDA Programs
    • 502 Direct Loan (work directly to USDA)
    • Income limits: up to 80% of area median income
    • Location: rural community with less than 10,000 population
    • Loan amount: may be up to 100% of appraised market value
    • Down Payment: not required
    • (Please Note: WSHFC DPA Programs CAN NOT be used with USDA direct)
    • No Mortgage Insurance
    • www.rurdev.usda.gov/wa/
    • 502 Guarantee (work with a lender that offers USDA)
    • Income limits: up the 115% of area median income
    • Location: rural community with less than 10,000 population
    • Down payment: not required
    • (ALL WSHFC DPA Programs CAN be used with USDA 502 Guaranteed)
    • No Mortgage Insurance
    05/04/10 Subject to Funding
  • HUD
    • HUD 184 Indian Home Loan Guarantee Program
    • Funds can be used to purchase and/or rehabilitate an existing home, or construct a home
    • Must be an Alaskan Native or Native American, to participate in program
    • Down payment as low as 1.25%
    • Long term fixed rate financing with loan to value ratios as high as 150%
    • Nontraditional methods may be used to demonstrate borrower’s credit and income
    • No income limits
    05/04/10
  • Community Lending Funding Note
    • Be aware that specialty financing options have limited funding so you will want to ensure your program is available when you are in the home buying process.
    • Organizations make every attempt to maintain continuous funding but they occasionally exhaust their assistance programs.
    • All Housing Assistance programs are subject to funding availability
    05/04/10
  • Down Payment Assistance Programs by Region 05/04/10
  • Region 1 Clallam, Grays Harbor, Jefferson, Kitsap, Mason, and Thurston Counties 05/04/10
    • Aberdeen Neighborhood Housing Services
      • Up to 20% of appraised value
      • Grays Harbor County
      • Housing Education (HUD Approved)
      • Housing Rehab loans
    • City of Bremerton
      • Up to $20,000 (See House Key Bremerton)
      • Housing Rehab Loans
    • Kitsap County Consolidated Housing Authority
      • Up to $20,000 (currently only available for Self help clients)
      • Must purchase in Kitsap County outside Bremerton City limits
    05/04/10 Region 1
  • Region 2 Island, King, San Juan, Skagit, Snohomish, and Whatcom Counties 05/04/10
    • City of Seattle Down Payment Assistance
      • Up to $45,000
      • HomeStead CLT, HomeStreet Bank,
      • HomeSight & Parkview (see below)
      • Home Repair Program
    • City of Seattle Teacher Homebuyer Program
      • Up to $45,000
    • HomeSight
      • City of Seattle
      • South King County
      • Snohomish County
      • Up to 35,000 - $75,000
      • Housing Education
    • Parkview Services
      • People / families with Developmental Disabilities
      • Down Payment Assistance
      • Housing Counseling & Hotline
    05/04/10 Region 2
  • Region 3 Pierce County 05/04/10
    • Pierce County Community Services
      • Up to 3.5% of the sales price
      • Purchasing in Pierce County outside of Tacoma and Lakewood city limits
    • City of Tacoma
      • Up to 3.5% of the sales price
      • Designated neighborhoods, Primarily south of 6 th Ave
    • City of Lakewood
      • Up to $7000
      • Lakewood City Limits
    • Homeownership Center of Tacoma
      • Up to 22% of purchase price
      • Below market price homes
      • Hilltop area
      • Housing Education
    05/04/10 Region 3
  • Region 4 Benton, Chelan, Douglas, Franklin, Grant, Kittitas, Walla Walla, and Yakima Counties 05/04/10
    • City of Yakima
      • Up to $4000
      • Purchasing in City of Yakima targeted area
      • City acquired property purchase program also, up to $30,000 in assistance
    • City of Richland
      • Up to $5000
    • City of Kennewick
      • Up to $5000
      • Purchasing in City of Kennewick targeted area
    • City of Pasco
      • Up to $5000
      • Priority given to property within the Museum and Longfellow districts
    05/04/10 Region 4
  • Region 5 Adams, Asotin, Columbia, Ferry, Garfield, Lincoln, Okanogan, Pend Orielle, Spokane, Stevens, and Whitman 05/04/10
    • Community Action Center of Whitman County
      • Up to 15,000 - $20,000 Available
      • Single Family homes
      • Manufactured homes ok with approval
      • Housing Education & Counseling
    • Spokane Neighborhood Action Program
      • Up to $15000
      • City of Spokane & Spokane County
      • Housing Education and Counseling (HUD Approved)
    • The ARC of Spokane
      • Up to $20,000
      • People with Disabilities
      • Housing Education and Counseling
    05/04/10 Region 5
  • Region 6 Clark, Cowlitz, Klickitat, Lewis, Pacific, Skamania, and Wahkiakum Counties 05/04/10
    • Columbia Non-Profit
    • (Vancouver Housing Authority)
      • Up to $35,000
      • Must have lived or worked in Clark or Cowlitz County for one year prior to closing
      • Housing Education & Counseling
      • Must be at or below 80% AMI
      • Loan term up to 30 years at 0% interest
    • Community Housing & Resource Center Vancouver
      • Housing Education & Counseling
    05/04/10 Region 6
  • Community Land Trusts
    • City of Seattle
      • Homestead Community Land Trust
    • San Juan Islands
      • Opal Community Land Trust
      • Lopez Island Community Land Trust
    • Whatcom
      • Kulshan Community Land Trust
    • Clallam
      • Homeward Bound Community Land Trust
    • Kitsap /Bainbridge Island
      • Housing Resource Board
    05/04/10
  • Self-Help Housing Opportunities
    • Self Help
    • Clients participate in the construction of their home
    • Low interest mortgage loan
    • Sweat Equity
    • Low Income (up to 80% AMI)
    • Habitat for Humanity
    • Clients participate in the construction of their home
    • Zero interest loans
    • Very Low- Low Income (30-60% AMI)
    05/04/10
  • Additional Self Help Housing Opportunities
    • Self-Help Programs Statewide
    • Vashon Household Self Help,
    • Northwest Housing Development,
    • Housing Hope,
    • Homes for Islanders,
    • Whatcom Skagit Housing,
    • Northwest Housing Development,
    • Port Gamble S'Klallam Housing Authority/ Southern Puget Sound Intertribal Housing Authority,
    • Kitsap County Consolidated Housing Authority, Clallam County Housing Authority,
    • Community Frameworks Spokane,
    • SHARE Longview
    05/04/10
  • Matching Programs
    • HomeStart
    • Clients are matched $3 for every $1 of their own up to $5,000
    • Must be first-time homebuyer
    • Individual Development Accounts (IDA’s)
    • Clients are matched $2 for every $1 of their own up to $8,000
    • Money can be used for: buying a home, education or starting a small business
    • United Way of King County (YMCA) offers IDA program
    05/04/10
  • Housing Authorities
    • Section 8 for Homeownership
    • Family Self Sufficiency
    • Classes and Counseling
    05/04/10
  • Real Estate Curriculum
      • How to Shop for a Real Estate Professional – Understanding Agency Representation
      • Selecting a Home and Negotiating a Purchase Price
      • The Importance of a Home Inspection
      • The Loan Closing – What to Expect, Review Sample Loan Documents
    05/04/10
  • Your Priorities
    • Size of home
    • Number of bedrooms
    • Number of bathrooms
    • Neighborhood
    • State of home (new vs fixer)
    • Garage
    05/04/10
  • How to Shop for a Real Estate Professional
    • Why use a Real Estate Agent?
    • Interview several people
    • Questions to ask
    • Buyers agent vs. sellers agent
    05/04/10
  • Selecting a Home
    • Dream Home vs. Starter home
    • Where do you want to live?
    • What is important to you?
    • Do research – explore neighborhoods
    05/04/10
  • Negotiating a Purchase Price
    • Know the market
    • What are you willing to pay
    • Be prepared for a counter offer
    • Keep your priorities in mind
    • Be prepared to put up earnest money
    05/04/10
  • Making the Offer
    • Purchase and sale agreement
    • Sellers disclosure
    • Neighborhood review
    • Financial contingency
    • Inspection contingency
    05/04/10
  • Home Inspection
    • Why you should have one
    • How to find an inspector
    • Questions to ask
    • How much will it cost
    • How long will it take
    • What should I receive from the inspector
    05/04/10
  • The Loan Closing – What to Expect
    • Signing papers
    • Deed-of-trust
    • Promissory note
    • HUD-1
    • Truth in Lending
    • When do you get the keys?
    05/04/10
  • Q & A’s and Resources
    • Foreclosure Prevention and Early Delinquency Intervention
    • Home Maintenance
    • Consumer Protection Resources
    • Community Resources for Further Counseling or Other Assistance.
    • Fair Housing
    • Predatory Lending
    05/04/10
  • Foreclosure Prevention
    • Don’t be late
    • Contact your lender as soon as possible
    • Contact a local housing counseling agency
    • Visit Washington Homeowners & Homebuyers Web Site:
    • http://www.wshfc.org/buyers/counseling.htm
    05/04/10
  • Home Maintenance
    • Protect your investment
    • Test smoke detectors
    • Clean out gutters
    • Have regular service on heating system
    • Change furnace filters
    • Yard upkeep
    • Budget for home repairs
    • Visit http://www.wshfc.org/buyers/guide.htm
    • Download:
    • Post Homeownership Guide & Seasonal Newsletter
    05/04/10
  • Predatory Lending
    • Predatory lending can be one or more abusive lending practice:
    • Excessive interest rates and/or high fees
    • Failing to disclose the true terms of the loan
    • Approving a loan with payments higher than the borrower can afford to pay
    • Pressuring a borrower to sign documents without understanding the terms of the loan
    • “ Flipping” or frequent refinancing of a loan
    05/04/10
  • Predatory Lending
    • Predatory lending vs. sub-prime lending
    • Sub-prime loans help borrowers with:
    • - less than perfect credit
    • - inconsistent employment history
    • - incomplete application documents
    • Sub-prime loan has a higher interest rate because the lender is taking a bigger risk in making the loan.
    05/04/10
  • Fair Housing
    • Who is protected
    • What is prohibited in the sale & loan
    • How to file a complaint
    05/04/10
  • Housing Counseling Agencies
    • The Homeownership Hotline sponsored by
    • The Department of Financial Institutions
    • & WSHFC:
    • 1 – 877- 894- HOME (4663)
    • Or for a list of counselors statewide:
    • http://www.wshfc.org/buyers/counseling.htm
    05/04/10
  • Housing Counseling Agencies
    • One on one counseling
    • Loan document review
    • Budgeting and financial literacy
    • Mortgage default counseling
    • Predatory lending counseling
    • Reverse mortgage counseling
    • Run /Check credit report
    05/04/10
  • Research & Resources
    • Housing counseling agencies
    • Down payment assistance programs
    • Low-interest loan programs
    • Affordable homeownership opportunities
    05/04/10
    • Washington State Housing Finance Commission
    • www.wshfc.org
    • US Housing & Urban Development
    • www.hud.gov
    • (look for HUD’s Settlement Cost Booklet)
      • Or Call the Homeownership Hotline:
      • 1 – 877- 894- HOME (4663)
  • Now What?
      • Are you pre-approved for a mortgage loan:
      • If not, meet with a lender
      • If you know how much you can afford, then you are ready to go house shopping:
      • Meet with a real estate professional
      • Want to know more about the home buying process?
      • Meet with a Housing Counselor
    05/04/10