HSP 2016 MANUAL. of the Homeownership Set-aside Program

Transcription

1 HSP 2016 MANUAL of the Homeownership Set-aside Program FHLBank Topeka One Secrity Benefit Place, Site 100 Topeka, KS

2 Table of Contents HSP Program Description... 3 Member Eligibility... 4 Hosehold Eligibility... 5 Property Eligibility... 6 Eligible Use of Grant Fnds... 7 Process Overview... 8 TreShare... 9 Reservation of Fnds Homebyer Edcation Disbrsement (Reimbrsement) of Grant Fnds Retention Reqirements HSP MANUAL 2 FHLBANK TOPEKA

3 HSP Program Description FHLBank Topeka annally sets aside fnds within the Affordable Hosing Program (AHP) to assist very low-, low-, and moderate-income first-time homebyers. The Homeownership Set-aside Program (HSP) provides down payment, closing cost and repair assistance to first-time homebyers earning at or below 80% of the Area Median Income (AMI) for hoseholds prchasing or constrcting homes in Colorado, Kansas, Nebraska or Oklahoma. HSP sbsidy is provided to hoseholds as a forgivable grant with a five-year retention period. The program is offered in partnership with FHLBank members members work with qalified homebyers, sbmit reqired docments to FHLBank, advance the grant fnds at closing and reqest reimbrsement of the fnds after closing. Available fnding for the 2016 program is a minimm of $4.5 million. Grants of p to $5,000 per hosehold are available on a first-come, first-served basis HSP MANUAL 3 FHLBANK TOPEKA

4 Member Eligibility HSP Instittions mst be FHLBank members when sbmitting a 2016 Homeownership Set-aside Program Member Registration Agreement (Registration Agreement) to be eligible to participate in the program. MEMBER REGISTRATION: To participate in the program, members mst sbmit an HSP Member Registration Agreement each program year. Registration Agreements are accepted after they are made available on FHLBank s website throgh November 14, FUNDING PERIOD: Reservations are accepted March 7 throgh November 14, Reservations will not be accepted if grant fnds have been exhasted or the member has reached its monthly limit. Disbrsement reqests will be accepted throgh December 5, MEMBER LIMIT: HSP grant fnds are available on a first-come, first-served basis of $25,000 per month pls any nsed portion of previos months limits, if fnds are available, per FHLBank member as otlined in the AHP Implementation Plan. Members are not garanteed the availability of HSP fnds and are neither allocated nor garanteed $25,000 per month. Each member instittion may not reserve fnds in excess of the member limit, nless that limit is increased or eliminated by FHLBank. Hosing and Commnity Development management will evalate fnds remaining after Jly 1, 2016, to determine whether to contine, discontine or change the individal member fnding limit. FHLBank will annonce changes to member fnding limits HSP MANUAL 4 FHLBANK TOPEKA

5 HSP Hosehold Eligibility ELIGIBLE HOUSEHOLDS: To be eligible, the hosehold mst meet all of the following reqirements: The hosehold income mst be at or below 80% of applicable AMI at the time the reservation is received by FHLBank. Mst be a first-time homebyer as defined below and in the 2016 AHP Implementation Plan. All borrowers/co-borrowers mst be hosehold members of the property being prchased. FIRST-TIME HOMEBUYER: An individal who does not own and is not an investor in another residence and who wishes to prchase a home that will be his/her primary residence who meets any one of the following criteria: 1. An individal who has had no ownership in a residence dring the prior three-year period ending on the date of prchase of the property; 2. A divorced or legally separated individal who has only owned a residence with a former spose; 3. An individal who has only owned a residence not permanently affixed to a permanent fondation in accordance with applicable FHFA Reglations; or 4. An individal who has only owned a property that was not in compliance with state, local or model bilding codes and which cannot be broght into compliance for less than the cost of constrcting a permanent strctre. Member certifies, on the HSP Fnds Reservation Form, the homebyer is a first-time homebyer per the definition provided above and in the 2016 AHP Implementation Plan. FHLBank reserves the right to reqest spporting docmentation to verify the member certification. THE HOUSEHOLD MUST MEET ADDITIONAL REQUIREMENTS, DESCRIBED IN OTHER SECTIONS OF THIS MANUAL, INCLUDING: Contribte at least $500 towards down payment, closing costs, and costs paid before closing. (Participation in USDA direct loans, USDA Self-Help, Habitat for Hmanity, or other mtal self-help hosing programs spported by docmented sweat eqity may be sbstitted for the $500 down payment. REFER TO DISBURSEMENT (REIMBURSEMENT) OF GRANT FUNDS Complete a Homebyer Edcation corse by a provider approved by FHLBank s designated organization for the state in which the property is being prchased. REFER TO HOMEBUYER EDUCATION Agree to a five-year retention period. REFER TO RETENTION REQUIREMENTS Payment of other debt is not allowed as part of the home prchase. REFER TO DISBURSEMENT (REIMBURSEMENT) OF GRANT FUNDS RECEIVE NO CASH BACK AT CLOSING. REFER TO DISBURSEMENT (REIMBURSEMENT) OF GRANT FUNDS 2016 HSP MANUAL 5 FHLBANK TOPEKA

6 Property Eligibility HSP The property being prchased mst be located in FHLBank Topeka s for-state district (Colorado, Kansas, Nebraska, or Oklahoma). ELIGIBLE PROPERTY TYPES: Single-family dwelling, townhose, condominim, cooperative hosing nit or manfactred hosing to be sed as the homebyer s primary residence. New constrction of a single-family dwelling is allowed. If the prchase incldes repairs, review the eligible and ineligible repair expenses listed nder Eligible Use of Grant Fnds. REFER TO ELIGIBLE USE OF GRANT FUNDS 2016 HSP MANUAL 6 FHLBANK TOPEKA

7 HSP Eligible Use of Grant Fnds HSP fnds may be sed for: A. Down payment for eligible properties B. Closing/Settlement Costs Examples of eligible closing costs inclde: Loan origination fee; discont fee; appraisal fee; credit report; mortgage insrance (inclding pfront premim); application fee; closing fee; docment preparation; attorney fees; title insrance; abstracting fees; recording fees; tax stamps; srvey fees; prepaid interest ; initial flood insrance premim; escrow of property taxes, homeowners insrance, mortgage insrance and flood insrance; homeowner s insrance premim; property inspection fees. C. Homebyer Edcation costs REFER TO DISBURSEMENT (REIMBURSEMENT) OF GRANT FUNDS D. ELIGIBLE REPAIR COSTS inclde correction of deferred maintenance and/or replacement of principal fixtres and components of an existing bilding inclding, bt not limited to: accessibility improvements roof repair or replacement electrical repair plmbing repair mechanical repair or replacement INELIGIBLE REPAIR COSTS inclde bt are not limited to the following (FHLBank will determine eligibility of repairs. Contact FHLBank with qestions.): fondation or other strctral repair exterior siding replacement or paint window and/or door replacement floor coverings wall repair and/or paint payments directly to the hosehold for repair labor appliances lxry items (i.e. hot tbs) room addition(s) Refer to DISBURSEMENT (REIMBURSEMENT) OF GRANT FUNDS or the Closing Checklists located on or website for gidance docmenting repair expenses. decks fences constrction/repairs of a detached garage or otbildings 2016 HSP MANUAL 7 FHLBANK TOPEKA

8 Process Overview HSP 1. TRUESHARE: All registration agreements, reservation workbooks and disbrsement reqests for HSP sbsidy and reqired docmentation mst be sbmitted via TreShare online file server. 2. MEMBER REGISTRATION: The member mst sbmit a Registration Agreement in order to participate. Registration Agreements are accepted after they are made available on FHLBank s website throgh November 14, RESERVATION OF HSP SUBSIDY: To reserve fnds for a hosehold the member mst sbmit a Reservation Workbook (which incldes the HSP Fnds Reservation and Income Calclation Worksheet) and spporting income docmentation. REFER TO RESERVATION OF FUNDS FHLBank will notify the member when the HSP reservation has been approved/denied. Reservations are accepted March 7 throgh November 14, 2016, ntil the monthly member limit has been reached, or the grant fnds have been exhasted. 4. CLOSING: The transaction may close after FHLBank approves the reservation and income. The HSP sbsidy is advanced by the member at closing and reimbrsed to the member by FHLBank after approval of the member s disbrsement reqest. Closing docmentation is reqired by FHLBank. REFER TO DISBURSEMENT (REIMBURSEMENT) OF GRANT FUNDS 5. DISBURSEMENT/REIMBURSEMENT OF GRANT FUNDS: After closing, member will sbmit an HSP Disbrsement Reqest Form, final Closing Disclosre (CD), recorded Real Estate Retention Agreement and homebyer edcation certificate. Additional docmentation may be reqired. FHLBank will notify the member when the HSP Disbrsement Reqest has been approved/denied. Disbrsement reqests are accepted throgh December 5, 2016, and fnds mst be disbrsed to the member on or before December 31, The HSP sbsidy may not be sed for home prchases closed prior to reservation and income approval or prior to the HSP fnding period as otlined in MEMBER ELIGIBILITY HSP MANUAL 8 FHLBANK TOPEKA

9 TreShare HSP Registration, Reservation and Disbrsement docmentation is reqired to be sbmitted via TreShare. TreShare is a secre clod-based docment storage site that facilitates large file sharing. The se of TreShare allows HSP staff to compile the docmentation from members and process it in the order that it was received. Registration, Reservation and Disbrsement docmentation will not be accepted by any other means of transmission. All HSP participants mst to enroll to access TreShare. Instrctions and the enrollment form can be fond on or website HSP MANUAL 9 FHLBANK TOPEKA

10 HSP Reservation of Fnds Reservation of HSP fnds can be sbmitted starting March 7, 2016, by registered members. Reservations are on a firstcome, first-served basis. Reservations mst identify a specific homebyer and a specific property address. Reservations withot a property address are not accepted. To reserve fnds, the member mst sbmit a Reservation Workbook (which incldes the HSP Fnds Reservation Form and Income Calclation Worksheet) and spporting docmentation as reqired by FHLBank s Income Calclation Manal. The Reservation Workbook can be fond on or website. HSP FUNDS RESERVATION FORM All sections mst be completed Enter the address of the property the homebyer is prchasing Maximm sbsidy per hosehold is $5,000 If the HSP fnds will be sed for repair expenses, refer to ELIGIBLE USE OF GRANT FUNDS Mst be signed by an athorized representative of the member inclded on the FHLBank Credit Athorization or FHLBank Credit Resoltion Closing mst occr AFTER reservation and income are approved by FHLBank FHLBank will reserve fnds pon receipt of all reqired docments. The contact listed on the HSP Fnds Reservation Form is notified when the fnds are reserved. Complete reservation packets mst be received by FHLBank in order to reserve fnds. ADDITIONAL REQUIREMENTS A. PROPERTY ADDRESS CHANGES: The homebyer and the property address sbmitted for disbrsement mst match the homebyer and property address identified on the HSP Fnds Reservation Form. Reservations cannot be transferred to other homebyers or other properties. B. CANCELLATION: Members may cancel a reservation by notifying FHLBank in writing. C. TIMING: HSP sbsidy may not be sed for home prchases closed prior to: 2016 HSP fnding period FHLBank approval of reservation and income. D. HOMEBUYER EDUCATION: The homebyer mst participate in homebyer edcation offered by an approved provider for the state in which the home is being prchased. Completed homebyer edcation is not reqired at reservation. REFER TO HOMEBUYER EDUCATION 2016 HSP MANUAL 10 FHLBANK TOPEKA

11 HSP Homebyer Edcation The homebyer edcation mst be provided by an approved provider listed on the designated state organization websites shown below and on the HSP web page. Contact yor designated state organization for qestions abot approved providers and corse schedles. Below are the state organization websites: Colorado: Kansas: Nebraska: Oklahoma: For hoseholds with more than one homebyer, only one homebyer mst complete the homebyer edcation corse and be named on the certificate. The provider mst be on the list of the state in which the hose is being prchased. The certificate mst be signed or initialed by the provider nless the corse is taken online. If the corse is taken online, the certificate mst be signed by the homebyer. If the certificate does not provide a signatre line, the homebyer or provider may sign in any open space on the certificate HSP MANUAL 11 FHLBANK TOPEKA

12 HSP Disbrsement (Reimbrsement) of Grant Fnds A. Disbrsement reqests inclde: 1. DISBURSEMENT REQUEST FORM 2. FINAL CLOSING DISCLOSURE (CD) 3. RECORDED REAL ESTATE RETENTION AGREEMENT 4. HOMEBUYER EDUCATION CERTIFICATE 5. A complete copy of the property APPRAISAL (reqired if the member crrently has an ownership interest in or crrently holds the mortgage or lien on the property). B. Disbrsement reqests are accepted throgh December 5, C. Disbrsement reqests are sbmitted after FHLBank approval of reservation and income and after closing. D. With the exception of the appraisal, all docments listed above are reqired with every disbrsement reqest and mst be received before the disbrsement reqest will be reviewed. E. When all docments have been received, FHLBank will send a notification of receipt of disbrsement reqest. F. FHLBank will review the docments and notify the member of the approval/denial of the disbrsement reqest. G. Upon approval of the disbrsement reqest, FHLBank will transfer grant fnds listed on the closing disclosre to the member s DDA. FHLBank will notify the member of approval and transfer of fnds. DISBURSEMENT REQUEST FORM: All sections mst be completed. Mst be signed by an athorized representative of the Member inclded on the FHLBank Credit Athorization or FHLBank Credit Resoltion. CLOSING DISCLOSURE (CD): Ensre the Closing Disclosre demonstrates eligibility as follows: The closing did NOT occr prior to reservation of fnds and income approval. FHLBank s HSP grant is listed and appropriately labeled. The grant shold be labeled as HSP Grant, FHLBank Grant, FHLBank Fnds or similar. The first mortgage interest rate is at or below the FHLBank maximm interest rate in effect as of the date of closing. The interest rate is located at The second mortgage interest rate is at or below the FHLBank maximm interest rate in effect as of the date of closing. The interest rate is located at The mortgage term is no less than five (5) years and no greater than forty (40) years HSP MANUAL 12 FHLBANK TOPEKA

13 Disbrsement (Reimbrsement) contined CLOSING DISCLOSURE (CD) CONTINUED FROM PAGE 12 The homebyer contribtion towards down payment, closing costs, or costs paid before closing (PBC) is at least $ Items PBC can be applied towards this reqirement (e.g. homeowner s insrance premims, application fees, earnest money, appraisal fees, home inspections, etc.); however, they mst be listed as PBC by borrower on the Closing Disclosre. Participation in USDA direct loans, USDA Self-Help, Habitat for Hmanity, or other mtal self-help hosing programs spported by docmented sweat eqity may be sbstitted for the $500 down payment. The homebyer did not receive cash back at closing. Lender fees (origination fee, docment preparation fee, application fee, etc.) do not exceed 4% of the mortgage amont for all mortgages associated with the transaction. (USDA Garanty fees are not considered a lender fee.) Discont points do not exceed 2.5% of the mortgage amont. Homebyer Edcation fee (if applicable) is identified and does not exceed $ Nonprofit processing fee (if applicable) is identified and does not exceed $ No processing fee is charged by the member for providing the HSP sbsidy to the hosehold. The loan terms section (amont, interest rate, etc.) is filled ot completely. No debt is being paid throgh closing (e.g. credit cards, loans, collections, etc.). Repair expenses are inclded on the Closing Disclosre and are docmented by either option below: Repair expenses are held in escrow and disbrsed by the member or closing agent. Any nsed fnds mst be applied to the new first mortgage as a principal redction or held in escrow to be applied towards ftre payments. OR Repair expenses are listed on the Closing Disclosre with a detailed description of the repair(s) completed. Copies of paid invoices or receipts for repairs paid before closing by the borrower may need to be provided with the disbrsement reqest form. For details on eligible repair expenses, REFER TO THE ELIGIBLE USE OF GRANT FUNDS. RECORDED REAL ESTATE RETENTION AGREEMENT: The Real Estate Retention Agreement mst be signed by the homebyer and mst be recorded. FHLBank cannot process the disbrsement reqest withot the recorded retention agreement. REFER TO THE RETENTION REQUIREMENTS HOMEBUYER EDUCATION CERTIFICATE: The homebyer edcation mst be provided by an approved provider listed on designated state organization websites. See the state organization lists at the links provided on the HSP web page. The provider mst be on the list for the state in which the hose is being prchased. The certificate mst be signed or initialed by the provider nless the corse is taken online. If the corse is taken online, the certificate mst be signed by the homebyer. If the certificate does not provide a signatre line, the homebyer or provider may sign in any open space on the certificate HSP MANUAL 13 FHLBANK TOPEKA

14 Disbrsement (Reimbrsement) contined APPRAISAL: A complete copy of the property appraisal (reqired if the member crrently has an ownership interest in, or crrently holds the mortgage or lien on the property). The appraisal mst be completed within 6 months prior to the date of disbrsement and by an appraiser licensed in the state in which the property is located. The prchase price of the property mst not exceed the as is or as repaired appraised vale HSP MANUAL 14 FHLBANK TOPEKA

15 HSP Retention Reqirements A. Homebyer mst agree to a five-year retention period. The homebyer will maintain ownership of and reside in the property as the primary residence for a period of five years from the closing date or repay a prorated share of the HSP fnds as described below. B. Member mst sbmit to FHLBank the recorded Real Estate Retention Agreement with the disbrsement reqest. A copy of the recorded docment is acceptable. REPAYMENT OF SUBSIDY: Homeowners who received HSP sbsidy may be reqired to repay a portion of the remaining balance of the grant if they sell or refinance the property prior to the end of the five-year retention period. All sbsidies to be repaid mst be calclated sing FHLBank Topeka s Repayment/Reqest for Release Worksheet, which can be fond on FHLB Topeka s website along with instrctions. Use the worksheet to determine whether a repayment is reqired, the amont to be repaid (if any) and to reqest a release if the retention period has expired. The Repayment/ Reqest for Release Worksheet also identifies the docmentation FHLBank reqires to complete or analysis. If the property is sold before the end of the retention period, a pro rata share of the sbsidy calclated to the nearest whole month mst be repaid from any net gain nless the nit is sold to a very low-, low-, or moderateincome hosehold, or proxy for sch hosehold. The amont of sbsidy sbject to repayment declines 1/60th each month for 60 consective months and is then forgiven. In the case of refinancing before the end of the retention period, an amont eqal to a pro rata share of the direct sbsidy that financed the prchase, constrction or repair of the nit, redced 1/60th each month for every month the occpying hosehold has owned the nit shall be repaid to FHLBank from any net gain nless the nit contines to be sbject to a deed restriction or other legally enforceable retention agreement or mechanism described in this section. FHLBank will sbordinate to the new loan if necessary. The obligation to repay HSP sbsidy to FHLBank terminates after any foreclosre, deed-in-lie of foreclosre, assignment to the Secretary of the U.S. Department of Hosing and Urban Development, or the death of the homeowner HSP MANUAL 15 FHLBANK TOPEKA

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