U.S. Department of Housing and Urban Development FHA Mortgage Insurance Issues Moderators Douglass Lynott, HUD Douglass.B.Lynott@hud.gov Lisa Ellis, HUD Lisa.C.Ellis@hud.gov John Laswick, HUD John.A.Laswick@hud.gov David Noguera, HUD David.A.Noguera@hud.gov Richard Pine, Enterprise Community Partners rpine@enterprisecommunity.org Community Planning and Development
Purpose of Presentation t To explore how FHA Insurance Programs can be used to support the successful implementation of the NSP Discuss issues surrounding use of FHA Insurance Programs with the NSP
FHA Mortgage Insurance Programs can be used with NSP for: Acquisition Rehabilitation Resale
Acquisiti i ion Non-Profit Organizations can use FHA financing to purchase homes for use with NSP Reduces the required down payment Increases leveraging of available funds
Non-Profit Approval To use FHA financing for acquisition, non-profit organizations must be approved by HUD to participate in the HUD Homes Program Application details»mortgage Letter 00-08 08»Mortgage Letter 02-01
Rehabilitati tion 203(k) 203(k) Program combines acquisition and rehabilitation funds in one mortgage Can be used for either the acquisition of a property by a non-profit organization or the resale of a property to a homebuyer
Resale Benefits to homebuyer/program Lower down payment Allows payment of closing costs by NSP grantees Allows combination with other approved homebuyer assistance/subsidy programs
Lower Down Payment FHA requires minimum 3.5% down payment Up to ½ (50%) of down payment can be subsidized with NSP funds Down payment assistance must come from a public entity Seller can not directly provide down payment assistance to subsidize the required FHA minimum down payment
Payment of Closing Costs NSP grantees can pay reasonable closing costs without limitation or up to the maximum 6% of sales prices when using FHA financing
Combining i Assistance Programs When using NSP or other government funds FHA allows more than two liens against the property
Higher Combi bined LTV Ratio If a government entity is engaged in development or revitalization efforts, the combined loan-to-value ratio for the 203(k) Program may exceed 110 %
FHA Income Limit itation ti NSP programs can serve clients with Area Median Incomes (AMI) exceeding 115% AMI after securing permission from the jurisdictional homeownership centers -as long as the AMI does not exceed 120% FHA Homeownership Centers & the FHA Resource Center http://www.hud.gov/offices/hsg/sfh/hoc/hsghocs.cfm
Lottery t Program Exclusively for non-profits, units of local government and Good Neighbors Properties held for 5 (calendar) days for localities to indicate their interest After 5 days, property is awarded to a random winner (Good Neighbors have priority) Buyer pays list price less 10% or 30% 13
Competitive Sales Program Exclusive look for non-profits, units of local government and owner-occupants for first 10 days Localities must enter a bid before midnight on the 10th day If awarded the property, the locality pays their offer price less 10% or 30% After the first 10 days, the property is open to the th general public 14
Bulk Sales Program Program is exclusive to NSP recipients Must bid on a minimum of 10 properties, no minimum purchase amount 15
Bulk Sales Program Discounts will be applied as follows: Appraised value greater than $100,000 = 10% discount Appraised value less than $100,000 = 50% discount Appraised value less than $20,000 and considered a demolition = $100 Properties remain in the competitive sales program during this period 16
$1 Home Program Available to city governments after property has been listed for 6 months 17
NCST Interaction t on HUD Properties Buyer Setup All buyers must be approved by HUD and be provided with a NAID number before they can purchase HUD properties under the discount programs the Trust assists with expediting this process as necessary
NCST Interaction t on HUD Properties Weekly Property Lists Trust provides lists of lottery and exclusive competitive sales to buyers based on prescribed HUD contractor reporting timelines All bids must come through the buyers directly as the Trust will not have a NAID number
NSP Help/Resources HUD NSP Help (http://www.hud.gov/nspta OR http://hudnsphelp.info) Find a Resource Frequently Asked Questions and Ask a Question Request Assistance Join list serve! Learning Center (http://hudnsphelp.info/index.cfm?do=viewlearningcenter) FHA Homeownership Centers & the FHA Resource Center http://www.hud.gov/offices/hsg/sfh/hoc/hsghocs.cfm 20
Questions?
Upcoming Webinars Program Income, Activity Deliver y and General Administration July 1, 2pm DRGR Show Your Progress July 6, 2pm Continued Affordability and Addressing Technical Issues with Recapture e and Resale e July 8, 2pm Fair Housing & Equal Opportunity, Section 3 and Section 504 July 13, 2pm
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