Welcome To Mississippi’s Annual Affordable Housing Conference 2013

1. Welcome ToMississippi’s AnnualAffordable HousingConference 2013

2. 2013 MHC Programs Melissa West, Vice President Single Family Program Operations Mississippi Home Corporation

3. Mortgage Revenue Bond (“MRB”)/ TBA Mortgage Credit Certificate (“MCC”) Down Payment Assistance (“DPA”) Home Loan Plus (“HLP”) Home Buyer Advantage (“HBA”) Housing Assistance for Teachers (“HAT”) Home of Your Own (“HOYO”) MHC Single Family Programs

4. 4.00% Statewide 3% 2nd Mortgage for Down Payment and/or Closing costs (no pre-paid items) Can be used in conjunction with HAT/HOYO/HLP programs Homebuyer must have homebuyer education counseling MortgageRevenue Bond “MRB”/TBA

5. Mortgage Revenue Bond/ TBA Qualifications • Borrower (s) must qualify for a 30-year FHA, VA, RD Guaranteed loan program, Fannie Mae or Freddie Mac Conventional Conforming Loans • Homebuyer Status – Non-Target/1st time buyer or have not had an ownership interest in the past 3-years – Target areas have no 1st time buyer requirement

6. Mortgage Revenue Bond/ TBA Qualifications • Income Limits determined by County designation & # of persons in the household gross income (See Brochure) • Sales price/Acquisition limits – Target = $289,705 & Non-Target = $237,031

7. Potential Recapture comes into play when the property is sold in the first 10-years. There must be a gain on the sale & the household adjusted gross income exceeds the modified adjusted income for the year in which the sale takes place. If recapture applies, it’s handled through the homeowners federal tax return. Mortgage Revenue Bond/TBA Potential Recapture Tax Penalty

8. MRB Sample Recapture Hinds County Modified Adjusted Gross Income for year 5 for a household of 1 to 2 = $72,365 IRS Regulations state that the recapture amount is to be rounded up to the next years amount (in this case is Year 5) Maximum Recapture = $6,250 (based on a loan amount of $100,000) $100,000 (Adjusted Gross Income) - 72,365 (Modified Adjusted Income) 27,635 divided by $5k = 5.53% $6,250 x 5.53% = $345.62

9. MHC Approval Process 5 to 7 day Turnaround If any conditions exist and have been satisfied, MHC faxes the Conditional Commitment to the lender & over nights the MHC Closing Instructions, 2nd Mortgage funds & loan documents to the settlement agent. Homebuyer must authorize auto draft for the monthly payment to MHC (not optional).

10. Mortgage Credit Certificate “MCC” MCC Tax Credits come from converting bond authority to tax credits, i.e. 5,000,000 in bond converts to 1,250,000 in tax credits Federal income tax credit equal to 25% (site built home) 40% (manufactured home) of annual interest on the mortgage loan. Tax credit can be used with DPA/HLP/HBA programs

11. Mortgage Credit Certificate “MCC” Income and Sales price limits by county & Number of persons in the household (See MHC Program Income Brochure)

12. Sample MCC Tax Credit Worksheet Loan Amount Financed $150,000.00 Interest Rate: X 4.50% Annual Mortgage Interest 6,750.00 MCC Percentage (25%, SF or 40%, MH) X 25% = $1,687.50 2 Ways to take credit: Yearly or Monthly Monthly Savings = $140.63 The borrower continues to write off the remaining 75% or 60% of the Mortgage Interest and reduce your tax liability by $1,687.50 IRS Regulation limits the MCC Tax Credit to $2,000 each year. Total Tax Credit = $37,500 over life of the loan

13. Down Payment Assistance “DPA” DPA is a second mortgage for down payment &/or closing costs Maximum DPA: 3% of full loan amount (not sales price) Maximum Liquid Assets: $4,500 Maximum Statewide Sales Prices: $198,000 Maximum Household Income: per county limit (see MHC Program Income Brochure)

14. Loan Types: FHA VA Rural Development MHC Approved In-House Products No Prepayment Penalty Property Types: Single-Family Residence Condominiums and Town Homes Permanently affixed Manufactured Homes Planned Unit Developments Down Payment Assistance Program

15. Home Loan Plus “HLP” • The HLP program is a $14,999 federal HOME grant to assist qualified home buyers with Down Payment & Closing Cost assistance. MHC is a sub-recipient for this program on behalf of the MS Development Authority.

16. Home Loan Plus “HLP” • HLP grant period of affordability is 5-years & is enforced by Deed Restriction that is executed at closing & recorded with the Warranty Deed. Grant will be forgiven as long as the homeowner stays in the residence during the 5 year period. If the homeowner sells, does a cash-out refinance or if the property is foreclosed on during the 5-year period, there is a recapture penalty on the grant payable to MDA.

17. Home Loan PlusBuyer Eligibility Requirements • 1st time home buyer or previous homeowners (must document sale, real estate contract to sale or lease of previously owned home) • MUST qualify for a FHA, VA, Rural Development, Fannie Mae or Freddie Mac conforming mortgage • Household gross income cannot exceed 80% of area median income (See Program Flyer) • Homebuyer Education Counseling Certificate awarded by a HUD-approved counselor

18. Home Loan PlusBuyer Eligibility Requirements • Must occupy home as primary residence • Home Buyer (s) must execute the HLP Grant Recipient/Homebuyer Agreement • Must be a US Citizen • Can be used in conjunction with the MRB/MCC/HAT Programs

19. HomeLoan PlusProperty Requirements • Must be located in an eligible area • Must serve as the primary residence for at least 5-years • Only site-built, single family homes, qualified condominium or town home • Property Inspection required & home must meet all applicable state & local housing quality standards and code requirements. In the absence of such standards and codes, the home must meet Section 8 Housing Quality Standards (HQS).

20. HomeLoan PlusProperty Requirements If Property is built prior to 1978, property must undergo lead-based paint inspection, if found, must be mitigated Properties identified for purchase must be submitted for review by the MS Dept. of Archives and History (Requested by MHC)

21. Housing Assistance for Teachers “HAT” Up a $6,000 grant for 2% of down payment, closing costs, pre- paid items & MI Agrees to Teach in a Critical Shortage School District (See brochure) for a minimum of 3 Years Minimum Down Payment from Applicant: 1% of Sales Price & 1-months reserves 25 or 30-year fixed loan rate

22. Housing Assistance for Teachers “HAT” Fannie Mae Conventional loan products 12% - 30% Mortgage Insurance required (depending on LTV) Units must be located in the county that the critical shortage school district is located Applicant must obtain a Homebuyer Education Certificate unless they aren’t a first time buyer No Income Limits unless using “My Community Products”

23. Home of Your Own “HOYO” $10,000 or $15,000 grant depending upon median household income. Household income cannot exceed 80% of the county area median income FHA, VA, Rural Development, Fannie Mae conventional loan or Lender In-House loan products

24. Home of Your Own “HOYO” Individuals with disabilities or household member with a disability as defined by the Americans with Disabilities Act are eligible Household income after expenses that is adequate to make monthly mortgage payments

25. Thank You! www.mshomecorp.com 601.718.4626 We Look Forward to Working with you Soon!