Homeownership Programs from Iowa Finance Authority
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Homeownership Programs from Iowa Finance Authority

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Homeownership Programs from Iowa Finance Authority Presentation Transcript

  • 1. Home Ownership Programs Presented by Irene Hardisty Single Family Production Director
  • 2.
    • FirstHome Program
      • first mortgage
      • grant (Plus)
    • Military Home Ownership Assistance
      • grant
    • Title Guaranty Certificate
      • Home Owner’s Certificate
    • On-site Wastewater Assistance Program (OSWAP) – “septic system funding”
    • Iowa Mortgage Help hotline
    IFA Home Ownership Programs Be a partner with IFA in providing affordable homeownership opportunities!
  • 3.
      • Lenders must be prior approved and maintain set criteria to participate in the program ( www.IowaFinanceAuthority.gov )
      • SRP: IFA pays participating lenders > 1.75% or $1,000 for mortgage purchased
        • Lender income is restricted to the SRP and up to $250 closing/settlement fee if the lender is the closing agent.
      • P. Lenders have delegated authority for underwriting and pre-closing MRB compliance review.
    • Lender options for participation:
        • Participating Lender*
        • Participating Correspondent Lender *
        • Third-party Participating Lender *
        • Third-party sourcing lender
    Lender participation in IFA Homeownership Programs
  • 4. FirstHome Program
    • Not Only for first-time homebuyers (FTHB):
      • 86 targeted counties - FTBH not required
      • Veteran exemption from FTBH requirement
      • 13 counties must be FTBB:
        • no real estate ownership interest in primary residence for last 3 years.
    • Purchase price limits:
      • Targeted areas: $289,000 (86 counties)
      • Non-Targeted: $237,000 (13 counties)
        • Must establish FTHB – no real estate ownership interest in primary residence for last 3 years.
    • Household income limit: 115% AMI
      • by family size 1-2 person & 3+ and per county (see brochure)
    • Property:
      • 1 unit purchase for primary residence
      • Generally limited to 5 acres and > 15% sq.ft. for business use
      • Personal property purchase may not be financed with mortgage
    • Eligible for $8,000 Federal Tax Credit
  • 5. FirstHome Program Mortgages
    • FHA:
      • 203b, 203c, 203ks (purchase + streamline rehab up to $35,000)
    • RD 502 Guaranteed
    • VA Guaranteed
    • Conventional:
      • MyCommunity Mortgage, HomePossible or standard conventional
      • Secondary market fee for Fannie Mae loan level price adjustment and adverse market fee
    • Fixed, fully amortizing, 30 year term
    • Restricted to reasonable and customary third party fees but not fee for lender outsourced services (e.g. note & mortgage doc prep. fee)
    • If settlement agent, lender may collect $250.00 closing fee
    • NO origination fee or discount points
    • Title Guaranty is the required title insurance
  • 6. FirstHome Recapture
    • May be subject to a “recapture tax” IF
      • Sold home within first 9 years;
      • Incomes >5%/year above the MRB household limit in effect when the FirstHome mortgage closed; AND
      • Have gain on the sale of the house.
    • Yes No
    • Yes No
    • Yes No
    • FirstHome - federally subsidized by tax exempt bond financing
    Need 3 “Yes’s” for Recapture to apply!!!!!!!
  • 7. FirstHome Recapture
    • “ maximum recapture” is lesser of
      • (A) adjusted 6.25% schedule
      • or (B) 50% gain on Sale
    • Mortgage X 0.0625 X year adjustment X income % (adj. personal income/ adj. income cap) = _(A)_
    • Sale price – original purchase price – improvements + sale costs= gain on sale X 0.50 = _(B)_
    • 6.25 adjustment schedule:
    • 1 st year: 20%
    • 2 nd year: 40%
    • 3 rd year: 60%
    • 4 th year: 80%
    • 5 th year: 100%
    • 6 th year: 80%
    • 7 th year: 60%
    • 8 th year: 40%
    • 9 th year: 20%
    • 10 th year: - -0-
    • Work with their tax preparer (IRS form 8828)
  • 8. FirstHome Recapture - Example
    • Sale in 4 th year at $96,000
    • FirstHome mortgage $90,000 (& had purchased at $90,000)
    • (A) 90,000 X .0625 X .80 = $4,500
    • (B) 96,000 – 90,000 – 6,310 = no gains
    • “ B” = no recapture
    • IF “gains” – remember lesser of 50% gains (B) or income calculation (A)
    • If income below 1.05% appreciation table – no recapture
  • 9. FirstHome Plus
    • $2,500 grant with FirstHome mortgage for household income at $49,600 (80% AMI) or less
    • Mortgage interest rate is slightly higher
    • No matching funds needed
    • For down payment, closing costs or prior approved minor repairs.
  • 10. Military Home Ownership Assistance
    • $5,000 grant
      • for prior approved down payment or closing costs
    • Military persons who have served 90 active duty days 9/11/01, surviving spouse or discharged due to medical injury.
    • MUST be purchasing primary residency in Iowa.
    • Home buyers eligible for FirstHome or FirstHome Plus must use FirstHome/FirstHome Plus.
    • IFA participating lender must handle the request to IFA and close the loan.
  • 11. Title Guaranty Certificate
    • Title Guaranty is title insurance issued in Iowa
    • Lender’s coverage protects the Lender
    • Owner’s coverage protect the homebuyer
    • Low cost - $110 includes lender and owner certificate (“insurance”)
    • Free Owner’s Title Guaranty fee with issuance of Lender’s Title Guaranty.
    • Rapid TG Certificate – final policy within 3 weeks
  • 12. Title Guaranty vs. Title Insurance
    • Title Guaranty:
    • Benefits Iowa economics
    • Excess revenue goes to support to affordable home ownership for Iowans (Plus grant)
    • Final title policy in weeks – saves the lender time & overhead costs of “chasing down” final abstracting, attorney opinion and final policy!
    • Affordable:
      • Lender $110 basic
      • Homeowner - free
    • Title Insurance
    • Benefit economies in other states
    • No donation of funds to Iowa homebuyers
    • Final policy after satisfaction of seller’s mortgage, abstractor updates title and attorney provides final opinion.
    • Affordable to lender
    • No option for homebuyer except large fee
  • 13. Septic System – low cost funds
    • On-site Wastewater Assistance Program (OSWAP)
    • Loan for the replacement of inadequate or failing septic systems (existing property)
    • Property located in unincorporated area
    • Existing homeowner or coordinated in conjunction with purchase of home
    • Minimum loan amount of $2,000, maximum 3% interest rate, up to 10 years repayment
    • Loan is accessed through OSWAP participating lender
    • www.IowaFinanceAuthority.gov ; Water Quality Programs
    • [email_address] or 800-432-7230
  • 14. Iowa Mortgage Help
    • Homeowners call:
    • 877-622-4866
    • or
    • Complete an on-line application at
    • www.IowaMortgageHelp.com
    • A counselor will contact the client within two business days, but usually sooner.
  • 15. Contact Information
    • Stephanie Preusch
    • Iowa Home Ownership Education Project
    • www.ihoep.com
    • 515-229-7737
    • [email_address]
    • Julie Noland
    • Iowa Finance Authority
    • 515-725-4916
    • [email_address]
  • 16. Questions????? Thank you! www.IowaFinanceAuthority.gov [email_address] 515-725-4900