Development Homeownership Set aside Program. AVP, HCD Operations and HSP Manager

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1 Housing & Community Development 2014 Homeownership Set aside Program Stephanie Mickelsen AVP, HCD Operations and HSP Manager 1

2 Homeownership Set aside Program (HSP) HSP provides down payment, closing cost and rehabilitation assistance to first time homebuyers earning at or below 80% of the AMI for households purchasing or constructing homes in Colorado, Kansas, Nebraska and Oklahoma. 2

3 Basics for 2014 HSP $4.5 million available for HSP Up to $7,500 available for each homebuyer Member limit of $250,000 until May 1 Homebuyer must have income at or below 80% AMI Home purchased must be located in Colorado, Kansas, Nebraska and Oklahoma NEW! Home may be in an urban or rural location NEW! Funds are provided on a reimbursement basis, after closing 3

4 Getting Started Critical dates February 3 Agreements (how members register to participate in HSP) can be submitted March 3 Reservations and Income Calculation Worksheet and income docs can be submitted Critical documents 2014 AHP Implementation Plan HSP Funds Reservation Form Income Cl Calculation l Worksheet Income Calculation Guidelines HSP Disbursement Request Form 4

5 HSP Funds Reservation Form 5

6 HSP Disbursement Request Form 6

7 Homebuyer Eligibility Requirements First time Homebuyer (new definition) An individual who wishes to purchase a home that will be his/her primary residence who meets any one of the following criteria: i 1. An individual or co applicants who have had no ownership in a principal residence during the prior three year period ending on the date of purchase of the property. 2. A divorced or legally separated individual who has only owned a principal residence with a former spouse; 3. An individual who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable Regulations. 4. An individual who has only owned a property that was not in compliance with State, local or model building codes and which cannot be brought into compliance for less than the cost of constructing a permanent structure; or 5. An individual who did not purchase a home but holds legal title to a home as a result of special ilcircumstances, including health or disability of a previous homeowner or for estate planning purposes, subject to documentation acceptable to FHLBank. 7

8 Homebuyer Eligibility Requirements continued Incomeat or below80% AMI Provide $500 down payment NEW! Home may be in rural or urban location in Colorado, Kansas, Nebraska or Oklahoma Homebuyer Educationcertificate certificate At closing: homebuyer may receive no more than $250 cash back NEW! No front ratio calculation 8

9 New Process Highlights g Reservation Submit HSP Funds Reservation Form AND Income Calculation Worksheet and income docs Close the loan Disbursement Request Submit final docs FHLBank will fund as a reimbursement 9

10 Reservation Details Reservation of Funds Submit HSP FundsReservation Form Know homebuyer name and address Submit Income Calculation Worksheet and income docs Know homebuyer s income eligibility FHLBank will acknowledge receipt of the reservation and income docs Upon review and approval, FHLBank will notify the member or sponsor that the reservation and income are approved Closing can occur only after the reservation and income are approved. 10

11 Disbursement Request Details After closing, submit: HSP Disbursement Request tform Final signed settlement statement Final signed Truth in Lending document (TIL) Final signed and recorded FHLBank Topeka Note and Mortgage (NEW! Note and Subordinate Mortgage are combined into one document) Homebuyer Education certificate 11

12 Settlement Statement requirements Date of closing AFTER reservation and income are approved and PRIOR TO submission date of Disbursement Request Form HSP grant is shown on the settlement statement Homebuyer provides $500 down payment (unless participating in a housing program with documented sweat equity) Cash back to borrower limited to $250 Lender fees 3% of loan amount Loan discount fees paid by buyer and seller cannot exceed 2% of loan amount Mortgage rate nomore than ourmaximum (NEW! Mortgage rate now provided on our website) 12

13 FHLB Topeka Note and Mortgage gg Requirements Submittherecorded the documentwiththe the disbursement request Submit via fax or mail (NEW! Electronic copies via fax are permitted we no longer require a paper original) Date must match the settlement date 13

14 Homebuyer Education requirements NEW! FHLBank no longer approves homebuyer education providers nor lists approved providers on our website. Certain state organizations are now designated dto approve providers. Colorado Housing and Finance Authority Kansas Consumer Credit Counseling Service, Inc. buyer education.html Nebraska Housing Developers Association Oklahoma Homebuyer Education Association Provide a homebuyer education certificate for the homebuyer with Disbursement Request Form. 14

15 Common causes of disbursement delay or failure Disbursement Request Form not completed or signed Incompleteor or incorrect documentssubmittedwith submitted the Disbursement Request Form HSP grant amount was not included on the settlement statement Homebuyer received more than $250 cash back at closing 15

16 Resources 2014 AHP Implementation Plan Income Calculation Guidelines Mortgage Revenue Bond Income Limits HSP Workbook Instructions HCD Staff Questions or Suggestions: Call Stephanie or Or call HCD s toll free number: