2018 Equity Builder Program

Transcription

1 2018 Equity Builder Program

2 Resources Housing and Economic Growth Tab Equity Builder Program Forms and Applications Download the following: Income Calculation Guidelines Homebuyer Information EBP Disclosure Next Steps Webinar: Enrolling Homebuyers 1

3 Next Steps: Enrolling Homebuyers/Households

4 Agenda Why FHLB Boston? Equity Builder Program Overview Eligible/Ineligible Uses Member Eligibility Requirements Household Eligibility Requirements Establishing an EBP Work Flow Identifying Eligible Households Documents Required At Time of Enrollment Income Calculation Reminders Online Income Calculation/Enrollment Process Disbursement Training Questions? 3

5 How FHLB Boston Can Help Members How participating in our programs can help you: Expand business development opportunities Meet the housing and credit needs in your communities Meet CRA objectives 4

6 The EBP offers homebuyers The opportunity to bridge the gap between mortgage and purchase price The potential for lower debt ratios A greater equity position in the subject property with lower loan-to-value ratios Marketing material: FHLB Boston has developed a marketing flyer for members to use when presenting the program to community partners A press release template is available and may be used to announce your participation in the program 5

7 Program Overview EBP is a regulated grant program Household grant of up to $11,000; provides down-payment, closing-cost, homebuyer counseling, and rehabilitation assistance to households with incomes 80% of AMI Can be combined with other subsidy programs (except AHP) You provide concessions and ensure homebuyers receive homeownership counseling Requires an executed 5-year retention document at closing EBP Standard Mortgage Deed Restriction (FHA only) EBP Note (covers standard and deed restriction) 6

8 Grant Funds 2018 Member Enrollment Cap: Each member will access up to $110,000 Funds are not guaranteed to any one member Funds are available on a first-come, first-served, homebuyer-by-homebuyer basis First one-third of the enrollments must be to first-time homebuyers * Refer to: (HUD 42 U.S.C (14)) * Individual Household Cap: Each household can receive up to $11,000 Approved enrollments are homebuyer specific 7

9 Subsidy Pool The allocation for the 2018 funding round will be divided between four funding periods: 35 percent released on March 28, percent released on April 25, percent released on May 23, percent released on June 20, 2018 Available funds will continue to roll into the next funding period until all funds have been committed within the annual funding period 8

10 Eligible/Ineligible Uses Eligible Uses: Downpayment assistance Customary closing costs Homebuyer-counseling costs not covered by another funding source to a maximum of $500 Rehabilitation costs associated with acquisition (funds are released only after 100 percent of the work has been completed and verified) Ineligible Uses: Reimbursement for previously paid earnest money downpayment(s) Bridge the gap between purchase price and appraised value Co-mingling of other AHP subsidy provided by any Federal Home Loan Bank (systemwide) Funding monthly housing payment reserve requirements or prepayment of life insurance premiums 9

11 Member Reminders Submit EBP application and be approved (annually) Complete enrollment and disbursement training - required Review and manage the EBP pipeline regularly Review and submit income-eligible households into the program through the Bank s online system Housing debt of 34 percent (exceptions allowed on case-by-case basis HH must be able to carry monthly debt) Request all increases/decreases to the EBP subsidy for enrolled homebuyers online Review homebuyer education/counseling requirements Provide a concession/special incentive at closing Ask questions! 10

12 Homebuyer Education/Counseling Homebuyer education/counseling must be completed within 24 months prior to enrollment submission and prior to closing on the subject property The counseling should follow accepted industry standards regarding the purchase and ownership, including maintenance of the home Although a minimum is not required, the Bank recommends a minimum of 8 hours of homebuyer education with a counseling component Online counseling will be permitted as an acceptable resource for meeting the homebuyer counseling requirements when approved in advance by FHLB Boston. An online counseling program will be recommended, at the time of approval, by FHLB Boston. 11

13 Communication is Key! NOTE: Members will be limited to six user names and passwords The two contact people identified at the time of application for the EBP will: Receive all s and correspondence Remain a point of contact for the homebuyer Coordinate a work flow and train appropriate staff personnel such as: Loan Originators Underwriters/Processors Closers/Post-closers 12

14 Household Reminders Purchase an owner-occupied primary residence One- to four-family units, condos, multifamily and manufactured homes (permanently affixed homeowner must take title) Provide the total HH count and all income received EBP Disclosure Cannot receive more than $250 cash back at closing Contribute a minimum of $500 in downpayment funds Execute an EBP retention document at closing Earnest money downpayment must stay in the transaction Complete homebuyer education/counseling requirement Ask questions! 13

15 Establishing an EBP Work Flow Homebuyer Selected Executed P&S Agreement Online Income Calculation/Enrollment FHLB reviews and approves Allow 15 business days Close on Purchase Request Disbursement/Reimbursement FHLB reviews, approves, disburses Allow 20 business days 14

16 Identifying Eligible Households Interview and identify potential homebuyers: Verify the total number of household occupants who will live in the property at the time of closing and going forward Validate the total household income: Cannot exceed 80 percent of the area median income based on the current HUD Income guidelines at 18 years or older, must include their income Year 2018 limits have not been released as of 03/14/2018 Review income sources and household members against the most recent filed tax return for each adult Remember: The EBP is an income-based eligibility program and the first one-third of homebuyers must be first-time homebuyers. 15

17 Documents Required at Time of Enrollment Homebuyer Information, Household Members and Income Worksheet and Authorization to Release/Certification of Information (EBP Disclosure) To be uploaded at the time of enrollment! 2018 version is on the website and must be used with all enrollments at (under Forms and Applications) 1. Document is to be completed by an adult household member 2. Loan originator should review and validate the information against the income documents requested and received NOTE: The form needs to be initialed by the homebuyer (pages 1-4) and signed by all parties (pages 6-7)! 16

18 Documents Required at Time of Enrollment Income Documents: Documents from all sources of income, as defined in the Income Calculation Guidelines provided by FHLB Boston located at Income documents must be provided and uploaded with the enrollment dated within 45 days of enrollment We cannot accept documents through s A Certification of Zero Income only from non-working adult household members who do not receive any income from any source updated 2018! An explanation from the member for any unusual income or household situation(s) 17

19 Documents Required at Time of Enrollment Purchase and Sale Agreement: Legible, executed, valid, and a complete copy of the agreement Include all addendums and exhibits NOTE: Member to identify and provide an explanation for related-party transactions NOTE: Income eligibility is approved by FHLB Boston at enrollment and is required to re-reviewed with any change to the property 18

20 Income Calculation Reminders: Prior to submission, a manual review of the income should be performed and should be in-line with the income calculator results The accuracy of the enrollment and income calculation is based on a comparison of the EBP disclosure, tax returns, and income documents Approval of the enrollment is determined by FHLB Boston upon review of the documents provided 19

21 Income Calculation Reminders EBP income is prospective (next 12 months), annualized Income Calculation Guidelines available at The total income of the household for all residing adult members cannot exceed 80 percent of the area median income (AMI) Income calculations under the EBP will most likely vary from secondary market income requirements Online automated system is designed to provide a standard way of determining income-eligibility and must be used 20

22 Online Income Calculation/Enrollment Process Starting the Income Calculation/Enrollment Process 1. Log into the system Users can request an account or reset their passwords. 21

23 Online Income Calculation/Enrollment Process 2. Select Create/Manage My Homebuyer Enrollments 22

24 Online Income Calculation/Enrollment Process 3. Click on Create/Manage Income Calculations/Enrollments 23

25 Online Income Calculation/Enrollment Process 4. Review member specific program details AND Add A New Household The subsidy pool balance and member specific details can be viewed here. Each household is assigned an EBP number and added to your pipeline 24

26 Online Income Calculation/Enrollment Process 5. Blackout personal identifying account numbers and review the EBP disclosure 25

27 Online Income Calculation/Enrollment Process 6. Enter information pertaining to the property being purchased 26

28 Step Four Online Income Calculation/Enrollment Process 7. Enter information about each household member and their income 27

29 Online Income Calculation/Enrollment Process 8. Don t forget to click Add Household Member : The household member must show up in the table that is being created 28

30 Online Income Calculation/Enrollment Process 9. Tax Return Review (top portion of screen) Continued: (middle portion of the screen)

31 Online Income Calculation/Enrollment Process 10. Upload the Homebuyer Information, Household Members and Income Worksheet, and the Authorization to Release: (bottom portion of the screen) Remember: Review to make sure that there are all three signatures on the document! 30

32 Online Income Calculation/Enrollment Process 11. Enter employment information and click Add household member s employer/type of documentation 31

33 Online Income Calculation/Enrollment Process 12. Use the document type selected to input income information (paystubs) Income Calculation pay periods, are calculated based on the check date except when the check date is before the period ending date. Always round up; i.e pay periods = 10 Enter YTD earnings before deductions (i.e. $3000) 32

34 Online Income Calculation/Enrollment Process 13. Click Add Paycheck Information to create Table of Employment 33

35 Online Income Calculation/Enrollment Process 14. Use the document type selected to input income information (VOE): 34

36 Online Income Calculation/Enrollment Process 15. Use the document type selected to input income information 35

37 Online Income Calculation/Enrollment Process 16. Review uploaded documents and attach any additional documents here: 36

38 Online Income Calculation/Enrollment Process 17. You will be able to review the system s calculation of income and data you have entered: 37

39 Online Income Calculation/Enrollment Process 18. If there is anything missing, it will show up on the right under the appropriate section 38

40 Online Income Calculation/Enrollment Process 19. You have the following two options: a) Save and Exit OR b) Enroll Household 39

41 Online Income Calculation/Enrollment Process Option One: Save and Exit will return you to the beginning of the process. Your income calculation/enrollment will remain in NEW status until you complete the enrollment submission process. You will click Edit to review and update. Option Two: Selecting the Enroll Household will take you straight into the enrollment process 40

42 Enrollment Submission Enter required data and upload the P & S agreement 41

43 Enrollment Submission Enter mortgage financing information Remember: Maximum 2/6 caps for all ARM products 42

44 Enrollment Submission Attach documents 43

45 Enrollment Submission Missing items will display on the right under the appropriate section: 44

46 Enrollment Submission Member certification for enrollment 45

47 Enrollment Submission Validate and submit 46

48 Enrollment Submission THANK YOU! EBP funds have been reserved for this household pending approval by FHLB Boston. 47

49 Enrollment Submission Enrollments must be submitted at least 15 business days prior to the closing transaction Upon submission of the enrollment, EBP funds will be reserved for that specific household If a homebuyer is denied a mortgage loan or requests to withdraw their loan application, the expectation is that the member will withdraw the enrollment as soon as notification is received Each enrollment approval is valid for 90 days Extensions may be requested and are granted at the sole discretion of FHLB Boston 48

50 Disbursement Training All approved members must attend EBP Disbursement training prior to requesting reimbursement of EBP funds Upcoming date: Final Steps: Requesting the Disbursement March 29 and April 3 Registration is now open and can be accessed at Members should determine who is best suited to attend: Underwriters Closers and Post-closing 49

51 Housing and Community Investment For more information, contact: Kaitlyn Mulhern, EBP Manager Michelle Chisholm, HCI Analyst Kathleen Amonte, HCI Compliance Analyst Paulette Vass, Community Development Advance Manager, Mary Ellen Jutras, Vice President/Deputy Director Kenneth Willis, First Vice President/Director

52 Thank You! We look forward to working with you!