Home Ownership Pool - City of WilmingtonPresentation Transcript
Home Ownership Pool HOP presented by: Community Development Division
What Is HOP?
The HOP Advantage
The City Inspection
HOP vs. Conventional
Restrictions & Limitations
Recent Home Sales
Summary / Q&A
Topics of Discussion
What is HOP? The Home Ownership Pool (HOP) has helped hundreds of families purchase homes in the City of Wilmington over the past 18 years. It all started with local banks and the City forging a partnership to bring the dream of owning a home to more of our citizens .
HOP is not a sub-prime product that sets buyers up for failure.
Applicants without stable incomes and acceptable credit will not meet the HOP underwriting standards.
Our goal is to provide long-term home ownership to people of modest means. With the HOP foreclosure rate less than 1%, we have met that goal!
Bank Partnership Assures Success HOP has succeeded because partner banks contribute more to the funding “pool” than the City.
HOP financing is structured with a first mortgage provided by a partner bank and a second mortgage provided by the City of Wilmington.
The banks agree to provide fixed interest rate loans at market rates.
The City’s loan is also fixed, but no interest is collected as long as the borrowers meet minimum residency requirements.
The HOP Advantage
Borrower’s total contribution toward closing costs may be as low as $500
Gift funds and seller contributions acceptable
Higher Ratios: 30/43
Effective Interest Rate is Well Below Market Rate
No Mortgage Insurance
Repairs & Improvements May Be Included in Loan
Free Home Inspection
Free Homebuyer Education Seminar
Every first and third Friday of the Month 9a.m. – 3p.m. Lunch is served.
Prequalification and/or Credit Counseling
Free Pre-Offer Inspection
Please allow 45 – 60 days in the contract
Free City Inspection
File transferred to partner bank upon approval
Closing Package to Attorney
Steps to Homeownership
How much can they afford
House hunting/Working with real estate agents
What Counts/Becoming Mortgage Ready
Credit (History, Being Proactive, Value)
Debt & Qualifying Ratios
Savings (Up-Front Costs, Down Payment, Closing Costs & Reserves)
Professional Home Inspection
Checking systems and components to make certain everything is operating as it was intended .
City Home Inspection
Checking for Minimum Housing Code compliance, lead-based paint issues and environmental concerns
All utilities should be on prior to the inspection so that an accurate assessment may be made of the property.
Lead-based paint is a concern for homes built prior to 1978.
- The interior and exterior (including soils around drip line) should be thoroughly cleaned of any paint chips and paint dust.
- Once the inspector sees paint chips or dust, it is too late! The time and expense necessary to test and clear the house may doom the deal.
- Deteriorated surfaces should be coated to reduce chipping and flaking
- Provide sufficient time in the sales contract for the inspections and further negotiation if repairs are required.
Minimum Housing Code issues must be repaired or funds escrowed prior to closing. (Escrowed funds are subject to buyer approval, property appraised value and the City’s bidding process)
HOP Income Limits *1 st Mtg. @ market interest rate/2 nd Mtg. @ 0% interest (Minimum Residency Requirements Apply)** ** Funding for this income tier has been depleted** $69,120 $62,160 $55,320 $48,360 **70%/30% $46,100 $41,500 $36,900 $32,250 60%/40% 4 3 2 1 *1 st Mtg/2 nd Mtg Gross Annual Income Household Size
HOP Restrictions & Limitations
Home must be vacant or owner/buyer occupied (Please do not show your client homes that have a “tenant in place” even if the tenant is moving )
10 or 15 year residency requirements apply to ensure 0% interest
10 yr. – City’s portion of the loan is under $40,000
15 yr. – City’s portion of the loan is $40,000 or above
Purchase within City limits
Maximum Loan Limits $210,000 $220,000 Existing New
Buy now for less than most people pay in rent!! Check out what the HOP Program can do for your clients!
HOP Financing: ($150,000 purchase price)
$90,000 at 5.00%*………$483.13 (1 st mortgage)
$60,000 at 0.00% ……….. 166.67 (2 nd mortgage)
Monthly taxes……………. 100.00 (Estimated)
Monthly insurance……….. 100.00 (Estimated)
TOTAL PAYMENT …….$849.80 (monthly)
* Current available rate (as of 3/31/10). Since our loans are financed at fixed interest rates, your loan payment will not increase over the 30 year term. However, the amounts necessary to cover taxes and homeowners insurance are subject to change.
HOP vs. Conventional The Comparison
$150,000 at 5.00%*……....$ 805.23
Monthly taxes……………. 100.00 (Est.)
Monthly insurance……….. 100.00 (Est.)
Mortgage Ins. (PMI)……... 95.00 (Est.)
TOTAL PAYMENT ……...$ 1,100.23 (mo.)
HOP Financing TOTAL PAYMENT: $849.80 (mo.)
(over life of loan)
Savings with the HOP Program:
HOP Partner Banks
Home Ownership Pool Recent Home Purchases Offering Your Clients Curb Appeal and More …”
2219 Brandon Rd. Date Closed July 24, 2009 Bank’s Interest Rate: 6.50% 70/30
Purchase Price $137,900 Amount Financed $137,900 PITI $837.96 Date Closed August - 2009 Bank’s Interest Rate: 5.25% 609 S. 7 th St. 70/30
Purchase Price $102,000
October - 2009
Bank’s Interest Rate: 5.125%
1202 S. 6 th St. 60/40
November 4, 2009
Bank’s Interest Rate: 4.875%
1115 Davis Sound Lane 60/40
Purchase Price $165,000 Amount Financed $165,000 PITI $903.55 Date Closed December 22, 2009 Bank’s Interest Rate: 4.875% 1413 Parmele Dr. 60/40
Purchase Price $102,400 Amount Financed $102,400 PITI $796.67 Date Closed January – 2010 2308 Wrightsville Ave. Bank’s Interest Rate: 5.125% 60/40