Habitat Information Session Partnership Program toward Homeownership

Transcription

1 Habitat Information Session Partnership Program toward Homeownership January 2018 We build strength, stability and self-reliance through shelter. agenda Introductions About us Habitat Housing A Habitat Family Story Program Requirements Steps to Homeownership Questions and Answers Open Application Dates Habitat for Humanity International Habitat for Humanity Affiliates Central Oregon Redmond HFH Sunriver HFH Sisters HFH Jefferson Co. HFH (Madras) Partner Families Volunteers Bend Area Habitat for Humanity Donors Restore Community Partners 1

2 Founded in 1989 ReStore opened in : New location on 3 rd St. 2017: Expansion and New Admin Office 118 homes built to date Here In Bend AFFORDABLE HOUSING Rule of thumb: You should pay no more than 33%* of gross income on housing Are you burdened by housing costs? Paying more than 33% means, housing is a cost burden and you may have difficulty affording necessities such as food, clothing, transportation, and medical care. 2

3 Can you afford a home in Bend? Median home price in Bend = $388,000* 3 BDR However, Avg. income = $52,471* which affords a loan of approx. $250,000 Bend Habitat Income guidelines of 40%-75% AMI = $21,520* - $40,350* 3 bedroom Which affords a loan of $69,000 to $183,000 Avg. Rent per Month on 3- bedroom house: $1,800 *Source: Habitat Model Example 3 BDR Sales Price $315,000 Last appraised value of Habitat home Household of 3 could qualify earning $21,520 to $40,350 gross per year This is what you pay as your mortgage Homeowner Affordability 30-33% of gross income at time of loan application Habitat Subsidy Equals a loan of $69,000 to $183,000 Everyone deserves a decent and affordable place to call home Habitat Homes We build strength, stability and self-reliance through shelter. 3

4 Future Habitat Homes High Density Models You own the land Shared wall - fire wall and higher density insulation sound barrier Townhomes, duplexes Cottage communities Non-Habitat Cottage Community example Habitat Home Features 1,100-1,200 sq. feet 2-4 bedroom 1 ½ - 2 bath May include garage Xeriscaping Energy efficiency In-floor radiant heat systems, tank-less water heaters, maximum insulation Homeowners choose from a preapproved list of finishes: laminate countertops, paint color, and lighting fixtures Home options will also vary due to donations available How do we build affordable homes in bend? Donations, reduced fees for services, fundraising, Restore and VOLUNTEERS!!! 4

5 Financing your Home through Habitat Same federal laws as lending institutions We CANNOT sell you a home if your debt to income (DTI) ratio is greater than 43%, by federal law In addition, Habitat requires: Your home to be owner-occupied Habitat to hold Right of First Offer should you want to sell your home Mortgages Side-by-Side FHA and Conventional Assumptions: 3.85% Interest rate, 30 year fixed Family of 3 with Annual Income: $35,000 ($2916 /mo.) Type of loan Habitat Model FHA Loan Bank Loan Home Price $315,000 $315,000 $315,000 Down Payment Closing Cost Contribution: $2, % = $11,025* 5% = $15,750 Closing Costs $8,000 Taxes, Home Ins, and PMI $6,000 (your $300/mo. contribution (no PMI) w/matched Savings plan)** Total Monthly Payment (including Principle and Interest) $ At 3.25% 33% of your monthly gross Income Approximate Total Paid over 30 years $346,320 $8,000 $553.31/mo. $ At 3.75% $707,065 $8,000 $549.38/mo. $ At 4.5% $743,621 MIP = Upfront Mortgage Insurance Payment is 1.75% on FHA loan * Required FHA 3.5% of home price. Higher if you have lower credit score **Habitat subsidizes rest of closing costs Partner Family Insight 5

6 PARTNERSHIP PROGRAM QUALIFICATIONS Bankruptcy: 2 + years old Foreclosure / or short sale: 3 +years old Credit score: Legal resident status for income qualifying applicant Short-term DTI ratio below 13% Meet Habitat selection criteria: Need, Ability to Pay and Willingness to Partner Basic QUALIFYING GUIDELINES Housing NEED 6

7 NEED for Housing Substandard housing (mold, poor heating) Overcrowded housing Overpriced housing Unsafe neighborhood (police activity) Qualified for conventional loan but could not find a home in Bend in your price range Mortgage Payment ABILITY TO PAY HUD Income Guidelines 2017* Household Size Minimum Household Income (40% AMI) $ 17,850 $1,488 mo. $ 20,400 $1,700 mo. $ 23,000 $1,917 mo. $ 25,600 $2,133 mo. $ 27,600 $2,300 mo. $ 29,650 $2,471 mo. $ 31,700 $2,642 mo. $ 33,750 $2,813 mo. Maximum Household Income (75% AMI) $ 33,500 $ 38,300 $ 43,100 $ 48,000 $ 51,750 $ 55,600 $ 59,400 $ 63,250 *HUD publishes annual guidelines for county To determine your ability to qualify for a Conventional loan we will: Review your monthly gross income (paystubs, tax returns, SSD) Review your monthly debt Determine your DTI Estimate amount of your affordable mortgage Review your credit status Are you within these income guidelines? Are you above? 7

8 Determining your monthly gross Income Example Household Size of 4 (Single mom + 3 children) QUALIFIED SOURCES OF INCOME Wages: 40 hours a week at $12.50 / hr Paid weekly = $500 / wk 52 pay periods = $26,000 / yr Monthly = $ 2,167 SSI: 10 year old daughter receives $650 every month. Household s gross (before taxes) monthly income? $2,167 / mo $650 / mo Total monthly income = $2,817 Gross Annual Income = $33,804 63% AMI Determining your Monthly Debt Example Min. credit card payments $50 / mo + Auto loan $150 / mo + Student loans ($2500 deferrred) Estimated* at $38 / mo * $2,500 X = $38 Included: NOT included: Credit Card Utilities Student Loans Groceries Medical Bills Other misc. expenses Vehicle payments Other loan payments Family support payments Total Household Debt = $238/month Determining your Debt-to-Income (DTI) Ratio Example $238 $2, x 100% DTI Ratio (ideally under 13%) = 8.4% 8

9 Determining Your Estimated Mortgage Payment 30-33% of your gross income at time of credit / loan application Example $2,817 x.33 $ per month (includes property taxes and homeowners insurance) Estimated Mortgage Payment Working together WILLINGNESS TO PARTNER Willingness to Partner Includes: Sweat Equity Monthly savings for closing costs Monthly Classes Financial Workshops Working with a Mentor Open communication Home upkeep and curb appeal Accept Habitat assigned home, size and location Habitat has the right of first offer Be a steward of Habitat! 9

10 Sweat Equity 3 goals 500h 1. Partnership 2. Pride in Ownership 3. Development of Skills and Knowledge Required before purchasing a Habitat home. 200 minimum per adult applicant remainder may be donated Where? Construction site, ReStore, Habitat events, Classes, Mentor Meetings Your physical and emotional investment in the mission of Habitat Minimum Requirements 8 hrs 16 hrs per family per month of construction on assigned home Strike System: In order to ensure that Partner Families complete their obligations in a timely, fair, and efficient manner Monthly Minimums THINK IT THROUGH: In order to complete your sweat equity in one year, you would need to volunteer 16+ hours per month. That is 4 hours per week. Do you also work full time? Will you be able to fit this into your schedule? 10

11 NeighborImpact Partnership Programs and Contacts Home Buyer Workshops Is buying a home right for you? Credit improvement How to care for your home Personal Finances Workshops Financial planning and money management Saving & investment Individual Development Account Monthly Savings Program $2,000 total savings goal When available, eligible families enroll in a Matched Savings Program (or IDA) Save toward closing costs What are Closing Costs? Closing costs are one-time fees that you, the homebuyer, will be required to pay at the closing of escrow. Total Cost are estimated at $9,000 Classes & Workshops Monthly Homeowner Education Classes Topics: home maintenance property taxes homeowner s insurance conflict resolution budgeting etc minutes per month 11

12 Matched with a Mentor Your mentor IS: A coach to encourage your progress and readiness Another set of eyes and ears A communication support An experienced homeowner (minimum 5 years) Your mentor IS NOT: Necessarily a Habitat expert Not your supervisor or relative Your mentor and you meet monthly to: Complete assignments and activities that will prepare you for home readiness Timely Communication Acceptance into the Partnership Program is not a guarantee that we will be able to sell you a home. CHANGES IN YOUR INCOME OR DEBT THAT NEGATIVELY IMPACT YOUR ABILITY TO PAY MAY MAKE YOU INELIGIBLE FOR A MORTGAGE, EVEN IF YOU HAVE COMPLETED ALL OTHER PROGRAM REQUIREMENTS AND/OR BEEN ASSIGNED TO A HABITAT HOME. Loss of employment Increase in family size Loan or cosigning Debt Being a representative of Habitat Pride in Homeownership Physical ability and willingness to maintain home exterior Involve children in the mission and model Able to manage the continuous process of vulnerability How will you continue to maintain pride in your home? How will your children participate in this? 12

13 30 year loan Willingness to Partner Accept Habitat assigned home and location 118 Habitat homes built since 1989 Old Bend Boyd Acres Mountain View Orchard District Larkspur Southern Crossing South West Bend River West Uniqueness of Habitat Loans THE RIGHT OF FIRST OFFER Our Right of First Offer is about having the option to purchase back your home should you want or need to sell it, in order to keep affordable housing options in the community. First 10 years Habitat Purchase price based on a shared equity appreciation value Your home can be purchased for the amount that you have paid on your principal Should we choose not to buy back your home, you will then be free to sell it on the open market (and pay off any other loans or grants on the home). A shared appreciation model between the homeowner and Habitat will apply. Additional Habitat Benefits Group of supporters rooting for your success Resource Referrals Networking and a Hand Up Opportunities for personal and professional growth 13

14 5 Steps toward Habitat Homeownership attend an information session Between now and 2 weeks: return intake form and waivers. If generally qualified, we will schedule one-on-one appointments to review materials, set goals, and prepare for application cycle. attend intake appointment(s) submit habitat program application application cycle opened up two times per year (based on construction and funding schedule). Dates will be posted on website, through media, and notifications sent to you/contacts get selected to partner with habitat 8-12 week process that includes formal program application, committee review, home visit, and board approval apply for affordable home loan and purchase your home after completing the program requirements (usually months) If you DO meet our qualification requirements: Before 1 st appointment, you will be mailed a confirmation letter including privacy statement, disclosures, and documents checklist Soft Credit Pull Staff to prepare worksheets (income/debt verification) 1 st Appointment: Review process Verify Information Review Debt and Credit 3 rd appointment: More work on Action Plan in preparation for open application period 2 nd appointment: Review personal summary forms Begin thinking about obstacles, strategies and goals Qualification Guidelines See: If you do not meet the basic eligibility guidelines we will mail out an Adverse Action Letter (required by law) that will address the ineligible guideline(s) and give follow up suggestions. In some cases, you might have time to address the issues before the open application round or you might want to wait and give yourself more time to make needed adjustments. 14

15 Q & A Thank you! Next.. Complete and return the Intake Form and/or the Program Application by Friday, February 16th, 2018 Bend Habitat, 224 NE Thurston Ave. Please DO NOT turn in original documents! Questions? homeownership@bendhabitat.org DeeDee Johnson Catalina Frank Spanish We build strength, stability and self-reliance through shelter. appendix 15

16 Student Loan Resources Federal Student Aid Repayment Estimator: n/mobile/repayment/repaymentestim ator.action National Student Loan Data System: Special Discharge Options: For Public Services Employment State-specific Loan forgiveness: Total and Permanent Disability Discharge: DOES A MATERIALS DONATION OR DISCOUNT ON A PROFESSIONAL SERVICE AFFECT MY HOME PRICE? Funding to offset homebuilding costs coming through the donation of money, materials, or labor will not reduce the sales price or your mortgage amount. In other words, if someone donates materials, labor, or cash toward your home it will not help buy down your mortgage. Q: My uncle owns a roofing company and is willing to donate the materials and labor. Will this bring my sales price down? Q: Wells Fargo donated $10,000 to construct my home. Does that brings my sales price down? A: No. All donations are considered donations to Bend Habitat, not to a specific family. This allows us to serve more families in our community rather than just one. 16