Habitat Information Session

Transcription

1 Habitat Information Session Partnership Program toward Homeownership July 5, 2017 We build strength, stability and self-reliance through shelter.

2 agenda Introductions About us Affordable Housing A Habitat Family Story Steps to Homeownership Program Requirements Habitat Homes Questions and Answers Next steps Open Application Dates

3 Habitat for Humanity International Habitat for Humanity Affiliates Central Oregon Redmond HFH Newberry HFH (LaPine) Sisters HFH Jefferson Co. HFH (Madras) Partner Families Volunteers Bend Area Habitat for Humanity Donors Restore Community Partners

4 Bend Area Habitat for Humanity Founded in 1989 ReStore opened in 1996 Dec. 2014: New location on 3 rd St. 117 homes built to date

5 ARE YOU BURDENED BY HOUSING COSTS? Generally, you should pay no more than 33% of gross income on housing 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.

6 Can you afford a home in Bend? Avg. home price in Bend = $396,000* However, Avg. income = $51,000* which affords a loan of approx. $247,000 3 bedroom Bend Habitat Income guidelines of 40-75% AMI = $21,520* - $40,350* Which affords a loan of $69,000 to $183,000 Avg. Rent per Month: $ 1,837.50* *Source Deschutes County

7 How do we build affordable homes in bend? Donations, reduced fees for services, fundraising, Restore and VOLUNTEERS!!!

8 Habitat Family Example Household of 3 could qualify earning $23,000 to $43,100 $250,000 appraised value = Sales Price Habitat Subsidy Equals a loan of $82,145 to $209,154 This is what you pay as your mortgage Everyone deserves a decent and affordable place to call home

9 Mortgages Side-by-Side Conventional vs Habitat Model Type of loan Habitat Model (3.25%) Home Price $250,000 Down Payments Closing Cost Contribution Total Closing Costs $1,000 (of $9,000 total) Taxes, Home Ins, and PMI $275/mo (no PMI) Monthly Mortgage Pmt $590/mo FHA Loan (4%) $250,000 $8,750 $4,000 $325/mo $1,152/mo Total Paid over 30 years $312,400 $544,470 Bank Loan (4%) $250,000 $25,000 $6, /mo $1,074/mo $535,140

10 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

11 Partner Family Insight

12 PARTNERSHIP PROGRAM QUALIFICATIONS Need, Ability to Pay, and Willingness to Partner

13 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

14 Housing NEED

15 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

16 Mortgage Payment ABILITY TO PAY

17 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 Maximum Household Income (75% AMI) $ 33,500 $ 38,300 $ 43,100 $ 48,000 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 5 $2,300 mo. $ 51,750 $ 29, $2,471 mo. $ 31,700 $2,642 mo. $ 33,750 $2,813 mo. $ 55,600 $ 59,400 $ 63,250 OTHER REQUIREMENTS: Landlord Reference Letter One year Utility payment history Credit Score above Letters of Recommendation *updated annually based on HUD guidelines for county

18 Determining 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

19 Determining 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: Credit Card Student Loans Medical Bills Vehicle payments Other loan payments Family support payments NOT included: Utilities Groceries Other misc. expenses Total Household Debt = $238/month

20 Determining Debt-to-Income (DTI) Ratio Example $238 $2, x 100% DTI Ratio (ideally under 13%) = 8.4%

21 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

22 Working together WILLINGNESS TO PARTNER

23 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 representative of Habitat it could be a 30 year relationship

24 Sweat Equity Your physical and emotional investment in the mission of Habitat 3 goals Partnership Pride in Ownership Development of Skills and Knowledge 500h 60h 50h Required before purchasing a Habitat home. 200 minimum per adult applicant; remainder may be donated Construction 25h Events Restore and scheduled classes 15h Mentor Meetings

25 Minimum Requirements 8 hrs 16 hrs Partner Families will be required to complete a minimum of 8 hours of sweat equity per month until their hours are completed. Partner Families will also be required to work a minimum of 16 sweat equity hours on their assigned home. Strike System: In order to ensure that Partner Families complete their obligations in a timely, fair, and efficient manner

26 Monthly Minimums PLAN IT OUT: 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?

27 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 Nona Armstrong

28 Individual Development Account Monthly Savings Program $1,000 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

29 Classes & Workshops Monthly Homeowner Education Classes Topics: home maintenance property taxes homeowner s insurance conflict resolution budgeting etc.

30 tentative Class Schedule Plan on: 1 evening per month with Habitat, 1 evening every 3 months for NeighborImpact class, and 1 day a week for 8 weeks for Dave Ramsey Financial Peace University course New Families Sept. '17 NI class 1: Money Habits Habitat class Oct. '17 Habitat class Nov. '17 NI class 2: Saving & Protecting Habitat class Habitat class Habitat class NI class 3: Credit & Goals Habitat class Habitat class Habitat class Dec.'17 Jan.'18 Feb.'18 Mar.'18 Apr.'18 May '18 NI class 4: Banking Habitat class June '18 Habitat class July '18 Habitat class Aug.'18 NI: 8 hour homebuyer course FPU & Habitat class Sept. '18 FPU & Habitat class Oct. '18 FPU Nov. '18 Tentative: Habitat classes; Thursday evenings from 5:30-7pm

31 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

32 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

33 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 and generosity How will you continue to maintain pride in your home? How will your children participate in this?

34 Willingness to Partner Accept Habitat assigned home and location 117 Habitat homes built since 1989 Boyd Acres Mountain View Orchard District Larkspur Southern Crossing River West

35 30 year loan 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.

36 Habitat Homes We build strength, stability and self-reliance through shelter.

37 Future Habitat Homes: High Density Models You own the land Shared wall - fire wall and higher density insulation sound barrier Currently building townhomes, duplexes In the near future - cottage communities

38 Habitat Home Features 900-1,200 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 Homes will also vary due to donations available

39 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.

40 Additional Habitat Benefits Group of supporters rooting for your success Resource Referrals Networking and a Hand Up Opportunities for personal and professional growth

41 5 Steps toward Habitat Homeownership 1 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)

42 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

43 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.

44 Q & A

45 Next? FORMS Take with you: Intake Form (return with in 2 weeks to main office): by Wednesday July 19 th Copy of slide presentation (last pages include resource handouts) Please DO NOT turn in original documents!

46 Deadlines Complete and return the Intake Form by Wednesday, July 19, 2017 Bend Habitat, 1860 NE 4 th Street Questions? Call us at: DeeDee Johnson, x 103 djohnson@bendhabitat.org Catalina Frank, ext. 108 (Spanish-speaking) cfrank@bendhabitat.org We build strength, stability and self-reliance through shelter.

47 appendix

48 Ability to Pay 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: -loan-forgiveness-programs-by-state/ Total and Permanent Disability Discharge:

49 FHA & Bank Loan Examples FHA Loan Conventional Bank Loan Notes Appraisal $243, year loan, 4% $243, year loan, 4.5% Down Payment $8, % required down Loan Amount $234,495 $218,700 1% FHA Fee $2,345 Mortgage Amount $236,840 $24,300 10% down, with 1 pt. added to closing costs Closing Costs (one-time Payment) $4,000 $6,345 $4, pt. ($2,345) = $6,345 Mortgage Payment $1,130.71/mo. $1,108.12/mo. Taxes, Homeowners Insurance, Private Mortgage Insurance Total Mortgage Payment $300 $300 $ $1, Total Mortgage Paid over 30 years Principle $236,840 Principle $218,700 Interest $170,216 Interest $180,233 TOTAL $407,056 TOTAL $398,923

50 Habitat Loan Examples Habitat (old Partner Lender model) Appraisal/Sales Price $243,000 $243,000 (less) City of Bend, CDBG $15,000 $15,000 (less) City of Bend, SDC $12,263 $12,263 Discount Sales Price $215,737 $215,737 Homeowner Affordability: $2,800 x.30 = $840/mo. less $250 (taxes and insurance) = $590/mo. x 30 years = $212,400 BAHFH Silent Second (Sales Price minus Homeowner Affordability) $3,337 Loan Total $212,400 $212,400 Principal Interest $139, $72, Term (in years) 30 Principle Payment $590 $ varies Interest 0 $ varies Taxes $200 $200 Homeowner s Insurance $50 $50 Payment $850 $850 Based on a household income of $2,800/mo. (Family of Four) $2,800 x.30 = $840 - $250 (taxes and Homeowners Insurance) = $590 mortgage payment