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GSFA Homebuyer Assistance - Win Win for Realtor and Homebuyer

What would your clients do with $20,000 in down payment assistance? First-time OR repeat homebuyers can qualify, as long as they are purchasing a primary residence in California. Find out more about the GSFA homebuyer assistance programs and how they can help you boost your business and help California homebuyers achieve the dream.

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GSFA Homebuyer Assistance - Win Win for Realtor and Homebuyer

  1. 1. GSFA Homebuyer Assistance Programs Copyright 2019© | 3005RE2 - Realtor Presentation What Could Your Buyer Do With $20,000? Golden State Finance Authority (GSFA) Homebuyer Assistance Programs Be Your Client’s Link to Down Payment Assistance 08/03/2020
  2. 2. Golden State Finance Authority (GSFA)  Supporting affordable homeownership for 27 Years:  Public entity and agency in California organized in 1993  Mission to provide a source of financing for California homebuyers  Enhance standard mortgages:  Down payment, closing cost assistance (DPA)  Mortgage Credit Certificates (MCC)  Standard underwriting:  FHA, VA, USDA and Conventional First Mortgages  Ensure homebuyer has ability to afford mortgage  Any overlays are more restrictive, not less Over 78,400 homebuyers helped $569.7 million in down payment assistance provided 08/03/2020 2
  3. 3. Common Down Payment Assistance MYTHS  Only in certain areas  Only for first-time homebuyers  Only for low income homebuyers  Only for those with zero savings  Only for exceptional credit  Accrues interest  Only works with FHA  Harder to qualify  Takes longer to close  Limited funding * According to findings from the second annual America at Home survey commissioned by NeighborWorks America." 08/03/2020 3
  4. 4. GSFA Homebuyer Assistance Programs Highlights only; Full program guidelines provided by GSFA and Participating Lenders First Mortgage Loan Assistance from GSFA Purchase with little-to- no money out of pocket 08/03/2020 4
  5. 5. Win-Win for Homebuyer and You  Financial Assistance:  DPA up to 7.0% available  Flexibility:  Doesn’t have to be a first-time homebuyer  FICO scores as low as 620  Flexible DTI limits  Variety of Mortgage Loan Types  Flexible income limits  Available throughout California  More qualified buyers = More home sales  Does not slow down escrow  No additional compliance review from GSFA or Servicer  Assistance funds from GSFA don’t run out  Once Lender locks in Mortgage Loan and Assistance options, they close the loan on their normal timeline HOMEBUYERS LENDER / REALTOR 08/03/2020 5
  6. 6. General First Mortgage Guidelines  Purchase of Primary Residences in California  Eligible Mortgages (30-Year Fixed Rate)  FHA, VA, and USDA  Conventional Freddie Mac HFA Advantage  Loan Limit = $510,400  Min FICO = 620  Max DTI = based on AUS approval  Flexible Income Limits  Pricing better for borrowers ≤ 80% AMI 08/03/2020 6
  7. 7. Forms of the DPA (Varies by Program) Total DPA available = 7%  Primary DPA is in the form of a 0% Second Mortgage  Up to 3.5% DPA available  No interest accrual; no payments  DPA Second is due and payable upon sale or refinance  Additional DPA as a Gift  Up to 4% additional DPA available  This portion is forgiven when escrow closes  Total DPA available = 5%  DPA as a Gift for:  FHA Energy Efficient Mortgage  USDA Guaranteed Home Loan  Public Safety Occupations: • Law enforcement • Fire Fighters and fire support staff • Paramedics and Emergency Medical Technicians • Teachers, school administration and staff  DPA as 0% Second Mortgage for:  All other First Mortgage Loans and borrowers  DPA Second is forgiven after 3 Years GSFA OpenDoors™ Program GSFA Platinum® Program 08/03/2020 7
  8. 8. Let’s Look at a Borrower’s End Result EXAMPLES GSFA OpenDoors Program 30-year fixed-rate mortgage. Purchase Price $300,000. 1 For example purposes only; Rates are subject to change. Interest Rates published 08/03/20. 2 Includes Up Front Mortgage Insurance of 1.75% (required by FHA) 3 MI based on FICO of 720 with Charter level coverage on two borrowers through MGIC. Category GSFA OpenDoors FHA 96.5% LTV (3.5% DPA)1 GSFA OpenDoors Freddie Mac HFA Advantage 97% LTV (7.0% DPA)1 GSFA OpenDoors Freddie Mac HFA Advantage 97% LTV (7.0% DPA)1 Borrower Income Range ≤ 80 AMI ≤ 80 AMI > 80 AMI First Loan Interest Rate 2.75% 3.375% 4.00% Purchase Price $300,000 $300,000 $300,000 Down Payment Required 3.50% ($10,500) 3.00% ($9,000) 3.00% ($9,000) Total First Loan $294,5672 $291,000 $291,000 Gift DPA $5,892 (2.0%) $5,820 (2.0%) $5,820 (2.0%) Second Mortgage DPA $5,892 (2.0%) $10,185 (3.5%) $10,185 (3.5%) Total OpenDoors DPA $11,784 (4.0%) $16,005 (5.5%) $16,005 (5.5%) Monthly P & I (First Loan) $1,203 $1,411 $1,390 Monthly MI $209 (0.85%) $116 (0.48%)3 $116 (0.48%)3 Monthly P & I (DPA) $0 $0 $0 Total Monthly Payment $1,412 $1,403 $1,506 Borrower Out-of-Pocket for Down Payment $0 $0 $0 Remaining DPA for Closing Costs $1,284 $7,005 $7,005 08/03/2020 8
  9. 9. Additional Financial Assistance  GSFA Platinum – Paid MI Options  GSFA pays MI on behalf of Borrower  Coupled with DPA up to 2.5%  GSFA MCC Program –  20% Tax Credit for First-time Homebuyers  Borrowers < 120% AMI 08/03/2020 9
  10. 10. Expectations AND timeline Buyer Gets Pre-Qualified First Mortgage and DPA Reserved (60-day rate lock) Escrow Closes + Loan Purchased by Servicer (within 60-days of Lock)  No additional compliance review by GSFA.  Lender closes escrow on Lender’s timeline.  FICO  DTI  Income Range  Note Occupation of Homebuyer  GSFA Participating Lenders lock/reserve funds  150+ Lenders (See GSFA Website) 08/03/2020 10
  11. 11. Remember these Common MYTHS regarding DPA? Do these apply to GSFA OpenDoors™? NO Only in certain areas NO Only for first-time homebuyers NO Only for low-income buyers NO Only for those with zero savings NO Only for exceptional credit NO Accrues interest NO Only works with FHA NO Harder to qualify NO Takes longer to close NO Limited funding GSFA OpenDoors™ 08/03/2020 11
  12. 12. Realtor Best Practices  Link with a GSFA Approved Lender  Lender helps determine best DPA options for homebuyer  Listed on back of handout  List on www.gsfahome.org Note: If client is not currently working with a GSFA Participating Lender?  Approval and Training of Lender could delay process  Best to refer to a current GSFA Approved Lender 08/03/2020 12
  13. 13. Marketing Literature Templates  Flyers and brochures  Adobe PDF format (download from our website)  Program-specific  English & Spanish  Embedded “Text” fields  Add info such as name, company info, phone, website, etc. 08/03/2020 13
  14. 14. GSFA Client Relations Department M-F 8:00 AM – 5:00 PM This concludes today’s training event. Thank you all for attending. TOGETHER WE CAN MAKE A DIFFERENCE Copyright© 2020 Golden State Finance Authority (GSFA). All rights reserved. Presentation contains program highlights only. All guidelines are subject to change without notice. Visit www.gsfahome.org for complete program guidelines. The GSFA Platinum®, GSFA OpenDoors™ and GSFA MCC® Programs are sponsored by GSFA, a duly constituted public entity and agency, and managed by National Homebuyers Fund, Inc., a non-profit public benefit corporation and Instrumentality of Government under Internal Revenue Service code section 115. 3005RE2 08/03/2020 14

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