Carol Marx

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Bring Workers Home Regional Workforce Housing Forum--Honolulu, HI--October 12, 2010

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Carol Marx

  1. 1. WORKFORCE HOUSING Financing for Employees
  2. 2. Bank Opportunities <ul><li>Chance to partner with key employers and their employees </li></ul><ul><li>Way to introduce new customers to the bank </li></ul><ul><li>Support to the community – CRA (Community Reinvestment Act) Initiative </li></ul>
  3. 3. Forms of Employer Assistance <ul><li>Down payment or closing cost credit </li></ul><ul><li>A direct, fully repayable second mortgage or unsecured loan </li></ul><ul><li>A forgivable second mortgage or unsecured loan or, </li></ul><ul><li>A deferred payment second mortgage or unsecured loan </li></ul><ul><li>Mortgage payment differential </li></ul>
  4. 4. Program Financing Currently Offered <ul><li>Mortgage Guaranty </li></ul><ul><li>Up to 97% financing </li></ul><ul><ul><li>2 nd mortgage is guaranteed by the employer </li></ul></ul><ul><li>Closing Cost Assistance </li></ul><ul><ul><li>Certain loan closing costs paid for by the employer </li></ul></ul><ul><li>Down Payment Assistance </li></ul><ul><ul><li>In additional to the minimum required down payment by the borrower themselves </li></ul></ul><ul><ul><li>Funds provided by employer </li></ul></ul>
  5. 5. Example of Financing <ul><li>Purchase Price: $500,000 </li></ul><ul><li>First Mortgage @ 80% Loan-to-Value </li></ul><ul><ul><li>$400,000 </li></ul></ul><ul><li>2 nd Mortgage @ 17% (97% Cumulative Loan-to-Value) </li></ul><ul><ul><li>$85,000 </li></ul></ul><ul><li>Down payment Required </li></ul><ul><ul><li>$15,000 </li></ul></ul>
  6. 6. Comparison $15,000 $100,000 Down Payment $85,000 2nd Mortgage (Guaranteed) $400,000 $400,000 First Mortgage $500,000 $500,000 Purchase Price With Assistance Without Assistance
  7. 7. Bank Participation <ul><li>Program development </li></ul><ul><ul><li>Reviews employer’s offer in comparison to allowable guidelines </li></ul></ul><ul><ul><li>Prepares documentation, including a tri-party agreement that is executed by the employee, bank and employer at loan closing </li></ul></ul><ul><li>Mortgage Consultation </li></ul><ul><ul><li>Estimate of Payments </li></ul></ul><ul><ul><li>Estimate of Closing Costs </li></ul></ul><ul><ul><li>Pre-qualification Letter </li></ul></ul><ul><li>Application to Closing </li></ul><ul><li>Loan Servicing </li></ul><ul><li>Loan Reporting </li></ul>
  8. 8. Employer Benefits <ul><li>Bank expertise help create, deliver and maintain the program </li></ul><ul><li>Specialized loan helps attract good employees </li></ul><ul><li>Discounts from bank provides added value </li></ul><ul><li>Program helps to mitigate the high cost of living in Hawaii vs. other states </li></ul>
  9. 9. Conclusion <ul><li>Partnerships make winning solutions </li></ul><ul><li>More employers should consider </li></ul><ul><li>Rates and home prices are attractive </li></ul><ul><li>Total investment can be minimal </li></ul>
  10. 10. Questions? <ul><li>Carol Marx – Sr. Vice President, </li></ul><ul><li>Residential Lending Sales Manager </li></ul><ul><li>Phone: 282-6658; 694-8855 </li></ul><ul><li>[email_address] </li></ul>
  11. 11. Mahalo!

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