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Home Ownership Pool - City of Wilmington
 

Home Ownership Pool - City of Wilmington

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  • Good Morning! Welcome to Homebuyer Education Class I’d like to take a moment to applaud all of you for taking time from your jobs or school to attend today. It’s a great step you’re taking towards homeownership. My name is Dana Blanks, I’m the housing financial counselor here at the City of Wilmington. I’ll be your primary presenter today. Also here to day is Mr. Fred Riesz. He’s senior housing financial counselor for the City of Wilmington. Feel free to ask either of us questions at any time during the class. Additionally, we will have a guest speaker from the insurance industry to speak with you a little bit later on concerning the process of obtaining insurance for your home. Now. Let’s get started!
  • Here are a few of the topics we’ll be discussing today:
  • The class lasts from 9-3 with breaks every hour. Check your parking meter, get snacks, or go to the restroom. The restrooms are located across the entryway just past the elevators on the left. Lunch will be provided and usually arrives around 11:30 or so. This will be somewhat of a working lunch where we’ll eat and immediately begin the class again.
  • Place of your own – decorate how you want Equity- Overtime you gradually accumulate “ownership interest” in the property that you can often borrow against or convert to cash by selling the house. Appreciation- Houses increase in value over time Tax Benefits -interest paid on the mortgage is usually deductable More Expensive-you can usually expect to pay more as a homeowner rather than a renter Possibility of Foreclosure-lose house, credit rating, possible judgment after foreclosure Decreased Mobility-can not pick up and move as easily as a renter. Make sure you thoroughly check house/neighborhood/schools. Typically a homeowner will not even break even on a sale within 2 years of the purchase. Upkeep-Repairs and maintence
  • Place of your own – decorate how you want Equity- Overtime you gradually accumulate “ownership interest” in the property that you can often borrow against or convert to cash by selling the house. Appreciation- Houses increase in value over time Tax Benefits -interest paid on the mortgage is usually deductable More Expensive-you can usually expect to pay more as a homeowner rather than a renter Possibility of Foreclosure-lose house, credit rating, possible judgment after foreclosure Decreased Mobility-can not pick up and move as easily as a renter. Make sure you thoroughly check house/neighborhood/schools. Typically a homeowner will not even break even on a sale within 2 years of the purchase. Upkeep-Repairs and maintence
  • Now that you’re equipped with the resources to prepare for homeownership, let’s talk about the reason that you all are here. The City of Wilmington’s Home Ownership Pool - HOP Program.
  • Place of your own – decorate how you want Equity- Overtime you gradually accumulate “ownership interest” in the property that you can often borrow against or convert to cash by selling the house. Appreciation- Houses increase in value over time Tax Benefits -interest paid on the mortgage is usually deductable More Expensive-you can usually expect to pay more as a homeowner rather than a renter Possibility of Foreclosure-lose house, credit rating, possible judgment after foreclosure Decreased Mobility-can not pick up and move as easily as a renter. Make sure you thoroughly check house/neighborhood/schools. Typically a homeowner will not even break even on a sale within 2 years of the purchase. Upkeep-Repairs and maintence
  • Place of your own – decorate how you want Equity- Overtime you gradually accumulate “ownership interest” in the property that you can often borrow against or convert to cash by selling the house. Appreciation- Houses increase in value over time Tax Benefits -interest paid on the mortgage is usually deductable More Expensive-you can usually expect to pay more as a homeowner rather than a renter Possibility of Foreclosure-lose house, credit rating, possible judgment after foreclosure Decreased Mobility-can not pick up and move as easily as a renter. Make sure you thoroughly check house/neighborhood/schools. Typically a homeowner will not even break even on a sale within 2 years of the purchase. Upkeep-Repairs and maintence
  • Place of your own – decorate how you want Equity- Overtime you gradually accumulate “ownership interest” in the property that you can often borrow against or convert to cash by selling the house. Appreciation- Houses increase in value over time Tax Benefits -interest paid on the mortgage is usually deductable More Expensive-you can usually expect to pay more as a homeowner rather than a renter Possibility of Foreclosure-lose house, credit rating, possible judgment after foreclosure Decreased Mobility-can not pick up and move as easily as a renter. Make sure you thoroughly check house/neighborhood/schools. Typically a homeowner will not even break even on a sale within 2 years of the purchase. Upkeep-Repairs and maintence
  • Place of your own – decorate how you want Equity- Overtime you gradually accumulate “ownership interest” in the property that you can often borrow against or convert to cash by selling the house. Appreciation- Houses increase in value over time Tax Benefits -interest paid on the mortgage is usually deductable More Expensive-you can usually expect to pay more as a homeowner rather than a renter Possibility of Foreclosure-lose house, credit rating, possible judgment after foreclosure Decreased Mobility-can not pick up and move as easily as a renter. Make sure you thoroughly check house/neighborhood/schools. Typically a homeowner will not even break even on a sale within 2 years of the purchase. Upkeep-Repairs and maintence

Home Ownership Pool - City of Wilmington Home Ownership Pool - City of Wilmington Presentation Transcript

  • Home Ownership Pool HOP presented by: Community Development Division
    • What Is HOP?
    • The HOP Advantage
    • Income Limits
    • HOP Financing
    • Homebuyer Education
    • The City Inspection
    • HOP vs. Conventional
    • Restrictions & Limitations
    • Participating Banks
    • 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
    • 100% Loan-To-Value
    • 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
    • House Hunting
    • Free Pre-Offer Inspection
      • Upon Request
    • Formal Application
    • Loan Processing
      • Please allow 45 – 60 days in the contract
    • Free City Inspection
    • Loan Review
      • File transferred to partner bank upon approval
    • Closing Package to Attorney
    HOP Financing
    • Steps to Homeownership
      • How much can they afford
      • Prequalification
      • House hunting/Working with real estate agents
      • Home inspection
      • Closing
    • What Counts/Becoming Mortgage Ready
      • Credit (History, Being Proactive, Value)
      • Income/Employment
      • Debt & Qualifying Ratios
      • Savings (Up-Front Costs, Down Payment, Closing Costs & Reserves)
    Homebuyer Education
    • Other Items
      • Budgeting
      • Property Value
      • PITI
      • Insurances
      • HOP
    • 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
    Property Inspections
      • 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)
    Points to Remember
  • Sample Inspection Report RIESZ PRELIMINARY COST ESTIMATE Name : _Bob Borrower Address: 22 Happy Homeowner Dr. Program: H.O.P. Phone Number: 555-2817 Date: 8-25-09 MINIMUM HOUSING CODE TECHNICIAN RECOMMENDATION Item Cost Item Cost L. Gene Langley Housing Rehabilitation Technician ____________________________
  • 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
    • Restrictions :
    • 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
    • Conventional Financing:
    • $150,000 at 5.00%*……....$ 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.)
    • Monthly Savings
    • $250.43
    • 30-year Savings
    • (over life of loan)
    • $90,154.80
    Savings with the HOP Program:
  • HOP Partner Banks
    • BB&T
    • First Citizens
    • First Federal
    • NewBridge
    • RBC
    • SunTrust
  • Home Ownership Pool Recent Home Purchases Offering Your Clients Curb Appeal and More …”
    • Purchase Price
    • $158,000
    • Amount Financed
    • $160,000
    • Construction Escrow
    • $2,000
    • PITI
    • $920.98
    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
    • Amount Financed
    • $102,000
    • PITI
    • $573.77
    • Date Closed
    • October - 2009
    • Bank’s Interest Rate: 5.125%
    1202 S. 6 th St. 60/40
    • Purchase Price
    • $124,000
    • Amount Financed
    • $124,000
    • PITI
    • $688.20
    • Date Closed
    • 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
    • Purchase Price
    • $174,000
    • Amount Financed
    • $174,000
    • PITI
    • $1,031.09
    • Date Closed
    • February - 2010
    • Bank’s Interest Rate: 5.00%
    920 Turgotine Lane 60/40
  • “ Questions & Answers”
    • City of Wilmington
    • Community Development Division
    305 Chestnut Street Wilmington, NC 28401 (910) 341-7836 [email_address] Thank You!