Welcome to the New Construc1on/Build on Own Land/ Construc1on to Perm Webinar

Transcription

1 Welcome to the New Construc1on/Build on Own Land/ Construc1on to Perm Webinar Scheduled Start: 9:00AM Mountain Time - The webinar will be underway shortly- All audio for this webinar is through your computer there is no separate call- in number Please ensure that you are able to receive sound through your computer and that your speakers are un- muted If you have any technical or audio issues please review the Support for Technical Issues document by clicking on the Suppor3ng Material BuEon located just below this screen 1

2 Important Things to Know Suppor1ng Ques1on and Answer Format: For Audio/Technology ques1ons, u1lize Help bueon U1lize Ask a Ques3on bueon on your screen Ques1ons will be compiled and a FAQ document posted with the archived webinar Materials: A copy of this PowerPoint presenta1on A PDF version of the presenta1on Frequently Asked Ques1ons related to technical issues (PDF) If you have audio issues or the slides stop advancing simply refresh or reload the page displaying the webinar 2

3 Important Things to Know Web Site Pop- ups During Presenta1on Several helpful web sites will be provided to you for bookmarking during the presenta1on. You will need to disable your pop- up blocker to receive this informa1on. 3

4 Important Things to Know Archive Version of the Webinar and FAQ Document (POP- UP) hep:///offices/hsg/s[ /talk/parc/phiarch.cfm 4

5 Presenters Karina Batkalin Sam Kramer Tamara Pritchard John Slavinski 5

6 How To Receive FHA updates To subscribe to the FHAinfo announcements list: hep://bit.ly/fharcpage or send a request by to answers@hud.gov FHA Homeownership List Serv Archive Page: hep://portal.hud.gov/hudportal/hud?src=/ program_offices/housing/s[/fha_info_messages 6

7 Where to Get More Informa1on FHA Resource Center TELEPHONE CALLFHA ( ) Available Monday- Friday (excluding federal holidays) from 8:00am 8:00pm (Eastern Time) E- MAIL Available 24 hours a day 7 days a week! 7

8 Where to Get More Informa1on /[a The main web site for the latest news on FHA programs hep:///offices/adm/hudclips/index.cfm HUDCLIPS - the source for FHA policy documents - handbooks, mortgagee leeers and no1ces 8

9 Disclaimer Ø The purpose of this presenta1on is an overview of the subject maeer with summa1on and explana1on of recent changes in FHA policy. It introduces and explains, rather than supplants, official policy issued in Handbooks and Mortgagee LeEers. If you find a discrepancy between the presenta1on and Handbooks, Mortgagee LeEers, etc., the official policies prevail. Please note the informa1on provided in this training is subject to change. Ø Please consult HUD online Handbooks and Mortgagee LeEers through the link below for the most recent updates and current policy. hep://portal.hud.gov/hudportal/hud?src=/ program_offices/administra1on/hudclips

10 10

11 New Construc1on Documenta1on Requirements Proposed Construc1on Under Construc1on Exis1ng (New) Less than 1 year Manufactured Housing 11

12 Construc1on Procedures for Single Family The following guidelines are established from the Code of Federal Regula1ons (CFR) that governs the determina1on of high LTV loans and the documenta1on requirements depending on the stage of construc1on. CFR: CFR: CFR: (a) 3 12

13 Stage of Construc1on Appraisers must determine and specifically describe the stage of construc1on Check the appropriate box: Proposed Under Construc1on Exis1ng Concrete poured is the determining factor. Once the concrete is poured, it is considered under construc1on, instead of proposed Handbook, Sec1on 2-1 C 13

14 Percentage of Comple1on of Construc1on Comple1on of Construc1on Considered 90% or more complete when finished drywall is complete and only buyer preference items remain to be installed Considered 100% complete when the home is fully completed including all u1li1es being on and fully func1onal *FOR APPRAISAL PURPOSES ONLY* Handbook, Sec1on 2-1 C 14

15 Construc1on Exhibits for Appraiser Proposed or Under Construc1on less than 90% complete Builder s Cer1fica1on of Plans, Specifica1ons and Site Appraiser to comment on any discrepancies exis1ng between what they observe at the site and what was cer1fied to by the builder. Lenders must resolve any noted discrepancies Complete set of Plans and Specifica1ons Descrip1on of Materials Appraise Subject to comple1on per plans and specifica1ons Final Inspec1on is completed by an FHA fee inspector ML Appendix B, Sec C 15

16 Construc1on Exhibits for Appraiser Under Construc1on 90% or more complete Builder s Cer1fica1on of Plans, Specifica1ons and Site Appraiser notes any repairs and/or altera1ons required Appraisal is completed Subject to the following repairs or altera1ons Plans and Specs are not required Appendix B, Sec C 16

17 100% Complete Appraiser determines if the property is 100% complete Home is considered 100% complete when all u1li1es are on and fully func1onal Appraisal can then serve as final inspec1on Appraise As Is 17

18 What Stage of Construc1on is this? 18

19 What Stage of Construc1on is this? 19

20 What Stage of Construc1on is this? 20

21 New Construc1on Documents Tradi1onal Build Construc1on **Proposed Construc1on** Low Loan to Value (LTV) Loan: 90% LTV and lower 1. Subterranean Termite Treatment Report HUD- NPMA- 99A & HUD- NPMA- 99B, if applicable 2. Builder s Cer1fica1on (HUD ) 3. Final inspec1on by fee inspector (HUD ) OR Building Permit (or equivalent) and Cer1ficate of Occupancy (or equivalent) 4. Health Authority Approval on Well & Sep1c, if needed 5. Eleva1on Cer1ficate & Flood Insurance, if applicable Only 2 inspec1ons are required on modular homes. Approved prior to the beginning of construc1on by either a Condi1onal Commitment or Early Start LeEer for those transac1ons with LTV 90.01% and higher. ML 01-27; , Sec1on 3-18, App.5 ML 97-22; ML 96-18; ML 06-33; ML

22 New Construc1on Documents Tradi1onal Build Construc1on **Proposed Construc1on** High Loan to Value (LTV): 90.01% LTV and higher 1. Subterranean Termite Treatment Report HUD- NPMA- 99A & HUD- NPMA- 99B, if applicable 2. Builder s Cer1fica1on (HUD ) year warranty (HUD ) year warranty and Final Inspec1on by fee inspector (92051) OR 3 inspec1ons by fee inspector (HUD 92051) OR Early Start leeer and 3 inspec1ons by fee inspector (92051) OR Building Permit (or equivalent) and Cer1ficate of Occupancy (or equivalent) 5. Health Authority Approval on Well & Sep1c, if needed 6. Eleva1on Cer1ficate & Flood Insurance, if applicable Only 2 inspec1ons are required on modular homes. Approved prior to the beginning of construc1on by either a Condi1onal Commitment or Early Start LeEer for those transac1ons with LTV 90.01% and higher. ML 01-27; , Sec1on 3-18, App.5 ML 97-22; ML 96-18; ML 06-33; ML

23 New Construc1on Documents Tradi1onal Build Construc1on **Under Construc1on** Low Loan To Value (LTV) Loan: 90% LTV and lower 1. Subterranean Termite Treatment Report HUD- NPMA- 99A & HUD- NPMA- 99B, if applicable 2. Builder s Cer1fica1on (HUD ) 3. Final inspec1on by fee inspector (HUD ) OR Building Permit (or equivalent) and Cer1ficate of Occupancy (or equivalent) 4. Health Authority Approval on Well & Sep1c, if needed If Early Start LeEer is in file treat as Proposed Construc1on Appraisal completed Subject to Comple1on per Plans & Specs ML 01-27; , Sec1on 3-18, App.5 ML 97-22; ML 96-18; ML 06-33; ML

24 New Construc1on Documents Tradi1onal Build Construc1on **Under Construc1on** High Loan To Value (LTV): 90.01% LTV and higher 1. Subterranean Termite Treatment Report HUD- NPMA- 99A & HUD- NPMA- 99B, if applicable 2. Builder s Cer1fica1on (HUD ) year warranty (HUD ) year warranty and Final Inspec1on by fee inspector (92051) OR Building Permit (or equivalent) AND Cer1ficate of Occupancy (or equivalent) 5. Health Authority Approval on Well & Sep1c, if needed 6. Eleva1on Cer1ficate & Flood Insurance, if applicable If Early Start LeEer is in file treat as Proposed Construc1on Appraisal completed Subject to Comple1on per Plans & Specs ML 01-27; , Sec1on 3-18, App.5 ML 97-22; ML 96-18; ML 06-33; ML

25 New Construc1on Documents Tradi1onal Build Construc1on **Exis1ng (New) Construc1on Less Than 1 Year** Low Loan to Value (LTV) Loan: 90% LTV and lower 1. Subterranean Termite Treatment Report HUD- NPMA- 99A & HUD- NPMA- 99B, if applicable 2. Builder s Cer1fica1on (HUD ) 3. Health Authority Approval on Well & Sep1c, if needed 4. Eleva1on Cer1ficate & Flood Insurance, if applicable If Early Start LeEer is in file treat as Proposed Construc1on Appraisal completed As Is ML 01-27; , Sec1on 3-18, App.5 ML 97-22; ML 96-18; ML 06-33; ML

26 New Construc1on Documents Tradi1onal Build Construc1on **Exis1ng (New) Construc1on Less Than 1 Year** High Loan to Value Ra1o (LTV) Loan: 90.01% LTV and higher 1. Subterranean Termite Treatment Report HUD- NPMA- 99A & HUD- NPMA- 99B, if applicable 2. Builder s Cer1fica1on (HUD ) year warranty (HUD ) year warranty OR Building Permit (or equivalent) AND Cer1ficate of Occupancy (or equivalent) 5. Health Authority Approval on Well & Sep1c, if needed 6. Flood insurance (Eleva1on Cer1ficate evidencing outside of Special Flood Hazard Area) If Early Start LeEer is in file treat as Proposed Construc1on Appraisal completed As Is ML 01-27; , Sec1on 3-18, App.5 ML 97-22; ML 96-18; ML 06-33; ML

27 New Construc1on Documents Manufactured Housing **Proposed Construc1on** Low Loan to Value (LTV) Ra1o Loan: 90% LTV and lower 1. Structural Engineer s Cer1fica1on 2. Subterranean Termite Treatment Report HUD- NPMA- 99A & HUD- NPMA- 99B, if applicable 3. Builder s Cer1fica1on (HUD ) 4. Final inspec1on by fee inspector (HUD ) 5. Health Authority Approval for Well & Sep1c, if needed 6. Eleva1on Cer1ficate & Flood Insurance, if applicable ML 09-16; REV- 2; ML

28 New Construc1on Documents Manufactured Housing **Proposed Construc1on** High Loan to Value Ra1o (LTV) Loan: 90.01% LTV and higher 1. Structural Engineer s Cer1fica1on 2. Subterranean Termite Treatment Report HUD- NPMA- 99A & HUD- NPMA- 99B, if applicable 3. Builder s Cer1fica1on (HUD ) 4. 1 year Warranty (HUD ) 5. 1 st & Final Inspec1on by fee inspector (Engineer may complete 1 st inspec1on) OR 10- year warranty & Final Inspec1on by fee inspector OR Early Start LeEer, First AND Final Inspec1on by fee inspector 6. Health Authority Approval for Well & Sep1c, if needed 7. Eleva1on Cer1ficate & Flood Insurance, if applicable ML 09-16; REV- 2; ML

29 New Construc1on Documents Manufactured Housing **Under Construc1on** Low Loan to Value (LTV) Ra1o Loan: 90% LTV and lower 1. Structural Engineer s Cer1fica1on 2. Subterranean Termite Treatment Report HUD- NPMA- 99A & HUD- NPMA- 99B, if applicable 3. Builder s Cer1fica1on (HUD ) 4. Final Inspec1on by fee inspector (HUD ) 5. Health Authority Approval on Well & Sep1c, if needed 6. Eleva1on Cer1ficate & Flood Insurance, if applicable If Early Start LeEer in file treat as Proposed Construc1on ML 09-16; REV- 2; ML

30 New Construc1on Documents Manufactured Housing **Under Construc1on** High Loan to Value Ra1o (LTV) Loan: 90.01% LTV and higher 1. Structural Engineer s Cer1fica1on 2. Subterranean Termite Treatment Report HUD- NPMA- 99A & HUD- NPMA- 99B, if applicable 3. Builder s Cer1fica1on (HUD ) year warranty (HUD ) year warranty 6. Final inspec1on by fee inspector (HUD 92051). 7. Health Authority Approval on Well & Sep1c, if needed 8. Eleva1on Cer1ficate & Flood Insurance, if applicable If Early Start LeEer in file treat as Proposed Construc1on ML 09-16; REV- 2; ML

31 New Construc1on Documents Manufactured Housing **Exis1ng (New) Construc1on Less Than 1 Year** Low Loan to Value (LTV) Ra1o Loan: 90% LTV and lower 1. Structural Engineer s Cer1fica1on 2. Subterranean Termite Treatment Report HUD- NPMA- 99A & HUD- NPMA- 99B, if applicable 3. Builder s Cer1fica1on (HUD ) 4. Health Authority Approval on Well & Sep1c, if needed 5. Eleva1on Cer1ficate & Flood Insurance, if applicable If Early Start LeEer is in file - treat as Proposed Construc1on ML 09-16; REV- 2; ML

32 New Construc1on Documents Manufactured Housing **Exis1ng (New) Construc1on Less Than 1 Year** High Loan to Value Ra1o (LTV) Loan: 90.01% LTV and higher 1. Structural Engineer s Cer1fica1on 2. Subterranean Termite Treatment Report HUD- NPMA- 99A & HUD- NPMA- 99B, if applicable 3. Builder s Cer1fica1on (HUD ) year warranty (HUD ) year warranty 6. Health Authority Approval on Well & Sep1c, if needed 7. Eleva1on Cer1ficate & Flood Insurance, if applicable If Early Start LeEer is in file - treat as Proposed Construc1on ML 09-16; REV- 2; ML

33 Builder s Cer1fica1on (form HUD ) ML 06-33, ML 95-11; ML 93-27; CFR (b)2 33

34 New Construc1on Documenta1on Requirements Cer1ficate of Occupancy (C.O.) Equivalent Requirements (Acceptable to the Denver Homeownership Center) Inspec1on Card reflec1ng all inspec1ons. Cer1fica1on from DE Underwriter cer1fying that inspec1on card is equivalent to a (C.O.) and that the city/county or local jurisdic1on does not issue a Cer1ficate of Occupancy. DE Underwriter must properly complete A, page 3. A Building Permit is also required. *Please note that each Homeownership Center makes its own determina1on as to what are acceptable (C.O.) equivalency documenta1on requirements.* ML Developed by Denver HOC 34

35 Flood Zone Requirements Mortgagee LeEer Life- of- Loan Flood Zone Determina3on Property Located Within Coastal Barrier Resource System (Protected Areas) Property Located Within Special Flood Hazard Area (SFHA) New & Proposed Construc1on Exis1ng Construc1on Manufactured Homes Required Required Required Property Not Eligible for FHA Insurance Property Not Eligible for FHA Insurance Property Not Eligible for FHA Insurance Adequate Flood Insurance for Term of Loan (if insurance under NFIP not available, property not eligible) Property Not Eligible for FHA Insurance Property Not Eligible for FHA Insurance Unless Unless Unless Unless LeNer of Map Amendment (LOMA) or LeNer of Map Revision (LOMR) Property Eligible for FHA Insurance No Flood Insurance Required Property Eligible for FHA Insurance Or Or Or Or FEMA Na3onal Flood Insurance Program (NFIP) Eleva3on Cer3ficate (FEMA Form 81-31) Property Eligible for FHA Insurance. Flood Insurance Required (if property remains in SFHA) Flood Insurance Required (if property remains in SFHA) Property Eligible for FHA Insurance. Flood Insurance Required (if property remains in SFHA)

36 Build on Own Land

37 Build On Own Land FHA financing is available for Build on Own Land Build on Own Land (BOOL) not to be confused with Construc1on- to- Permanent Program BOOL is the formula used to calculate the maximum loan amount using the lesser of: the appraised value or acquisi1on cost (cost to build the property) 1. For example: builders price, subcontractors bids and materials, cost of land (owned more than 6 months or rec d as giy use value, owned less than 6 months use the lesser of the appraised value or purchase price), interest and other costs associated with the construc1on loan. These costs must be verified and documented B.5.a- d ML B.6.a- c B.7.a- b 37

38 Build On Own Land Maximum financing is available as long as the borrower receives no cash back at closing. Replenishing the borrower s own cash expended during construc1on is not considered cash back, provided that the borrower can substan1ate with cancelled checks and paid receipts for all out- of- pocket funds used for construc1on. You will use build on own land calcula1ons when the borrower already owns the land or acquires separately to build a home (we will go into more detail later) B.5.a- d ML B.6.a- c B.7.a- b 38

39 Build On Own Land Build On Own Land Calcula1ons is used for S1ck Built and Manufactured homes Use the Build On Own Land formula incorporated in Mortgagee LeEer We have provided a more detailed BOOL Worksheet Using Land Equity Equity in the land may be used for the borrower s en1re cash investment as long as the borrower does not receive more than $500 cash at closing B.5.a- d ML B.6.a- c B.7.a- b 39

40 FHA Connec1on heps://entp.hud.gov/idapp/html/mrtg- pkg.cfm 40

41 FHA Connec1on heps://entp.hud.gov/idapp/html/ mrtg- pkg.cfm 41

42 Build on Own Land with Manufactured Homes An Engineer s Cer1fica1on on Founda1on assuring Compliance is required Must be in compliance with the Permanent Founda1ons Guide for Manufactured Housing (HUD- 7584) Completed by a licensed professional engineer Contain engineer s signature, seal & license or cer1fica1on number Must be in loan file and insuring binder HUD REV - 2 Sect 3-4 ML

43 Build On Own Land with Manufactured Homes Property must be considered real property as evidenced by the 1tle policy Flood Zones A and V are not eligible for endorsement without: 1. FEMA issued LeEer of Map Amendment 2. FEMA issued LeEer of Map Revision 3. Acceptable Eleva1on Cer1ficate this must be based on finished construc1on and prepared by a state licensed/registered engineer or land surveyor and indicates that the finished grade beneath the manufactured home shall be at or above the 100 year flood eleva1on. MFH s with basements, the grade beneath the basement must be at or above the 100 yr. flood eleva1on. ML

44 Build On Own Land with Manufactured Homes Borrowers may not receive cash back for trade ins on Manufactured Homes. Any realized value from the trade must go towards the down payment. No cash back allowed for Manufactured homes that have been permanently erected on site for less than one year Manufactured dealer is ac1ng as contractor When a Manufactured Dealer is ac1ng as a general contractor for the founda1on and installa1on of the unit, the cost of the unit and addi1onal charges must be itemized on the invoice. Aggregate amounts for total cost are not acceptable B.6.i 44

45 ML

46 ML

47 Construc1on - Permanent Mortgage Program 47

48 Construc1on - Permanent Considered a purchase in FHA Connec1on Construc1on perm AKA One- 1me close Closing done prior to construc1on At closing, funds disbursed for land payoff and remaining funds in placed in escrow account Loan is insured ayer property is 100% complete B.8.a- i 48

49 Construc1on - Permanent Program ID code 36 in FHA Connec1on Maximum mortgage is determined by applying LTV limits to the lesser of appraised value or Total/Itemized Value (acquisi1on cost) Maximum Interest rate set at closing UFMIP is remieed within 10 days of closing B.8.a- i 49

50 Construc1on Permanent Obtain wrieen approval by borrower for each draw Must provide Construc1on Rider to the Note and Construc1on Loan Agreement Modifica1on Agreement to establish Permanent terms Amor1za1on of loan within 60 days Borrower Cer1fica1on that property free & clear of liens B.8.a- i 50

51 Please Review the Following Case Studies v Case Study #1 Land Value $20,000 Land Balance Payoff $ 0 Cost of construc1on $170,000 Closing costs + Pre- paids $3,000 Construc1on interest $4,000 Appraised value $200,000 Case Study #2 Land Value $20,000 Land Balance Payoff $20,000 Cost of construc1on $170,000 Closing costs + Pre- paids $3,000 Construc1on interest $4,000 Appraised value $200,

52 Case Study #1 With Equity In Land

53 Case Study #1 With Equity In Land

54 Case Study #1 With Equity In Land

55 Case Study #1 With Equity In Land

56 Case Study #2 Without Equity In Land

57 Case Study #2 Without Equity In Land

58 Case Study #2 Without Equity In land Without Equity In Land

59 Case Study #2 Without Equity In Land

60 References Handbook, Sec1on 2-1 C Appendix B REV 2 Handbook Handbook, Sec1on 4.3.c (Flood Requirements) Handbook, Sec1on 6.A.3.a Mortgagee LeEer Mortgagee LeEer Mortgagee LeEer Mortgagee LeEer Mortgagee LeEer Mortgagee LeEer HUD Accepted Insured Ten- Year Protec1on hep://portal.hud.gov/hudportal/documents/huddoc?id=hoctenyr.pdf Search Answers: hep://portal.hud.gov/hudportal/hud?src=/fhafaq BOOL Worksheet 8/19/11 60

61 New Construc1on Presenta1on FOR FURTHER QUESTIONS PLEASE CONTACT: CALL- FHA OR 61

62 Thank You!

63 Disclaimer Ø The purpose of this presenta1on is an overview of the subject maeer with summa1on and explana1on of recent changes in FHA policy. It introduces and explains, rather than supplants, official policy issued in Handbooks and Mortgagee LeEers. If you find a discrepancy between the presenta1on and Handbooks, Mortgagee LeEers, etc., the official policies prevail. Please note the informa1on provided in this training is subject to change. Ø Please consult HUD online Handbooks and Mortgagee LeEers through the link below for the most recent updates and current policy. hep:// portal.hud.gov/hudportal/hud?src=/program_offices/administra1on/ hudclips 63