LENDER TRAINING

1. LENDER TRAINING City of St. Petersburg Housing and Community Development “Working to Improve our Neighborhoods” (W.I.N.) Division January 21, 2010

2. WELCOME LENDERS • Introductions • Tom de Yampert, Manager • Linda Byars, Housing Finance Coordinator • Diane Legg, Loan Processor • Tony Fernandez, Loan Processor • Scott Clarke, Office Systems Specialist

3. HOME BUYER LOAN PROGRAM • Maximum Sales Price: $215,555 • St. Petersburg city limits only • Applicant must be a first-time homebuyer as defined by HUD • No ownership during the 3 year period ending on the date of purchase. • A single parent who has lost homestead property as a result of divorce • Borrower Contribution (Down Payment) • An amount equal to 2% of the sales price • May not be borrowed or a gift • Verification of cash to close • Closing Costs • W.I.N. Assistance can not exceed an amount equal to 4% of the sales price • Down Payment, Closing Costs and Interest Rate Buy-Down

4. Loan Repayment • Loan repayment is determined by the applicant’s Median Family Income as defined by the U.S. Department of Housing and Urban Development (HUD); adjusted annually according to the number of occupants, related or not, living in the household • $ 8,000 available to households between 50% and 80% • Amortized 10 years @ 0% • $10,000 available to households under 50% AMI • Amortized 15 years @ 0%

5. Area Median Income (MI) Table

6. MEDIAN FAMILY INCOME Median Family Income (MFI) is annually defined by the U.S. Department of Housing & Urban Development (HUD). HUD establishes the MFI specific to the geographic area it applies to and adjusts the MFI for the number of occupants, related or not, who occupy the home. The chart attached lists the maximum annual gross household income for the City of St. Petersburg for the 50%, and 80% MFI groups, adjusted for household size.

7. Household Income - Inclusions • All adults living in the home over the age of 18 • Wages • Salaries • Overtime pay • Commissions • Tips • Bonuses • Net income from business or profession • Interest or dividends • Social Security • Retirement Benefits • Disability Income • Worker’s compensation • Severance pay • Unemployment compensation • Income producing assets

8. Income from Assets • Applicants who enjoy assets in excess of $100,000 are not eligible for down payment and closing cost assistance • Potential income from assets is considered when calculating annual projected or anticipated income • Calculate cash value to determine actual or tangible income from an asset • Net sale of assets sold in the past two years with value over $1,000 is considered income • Calculate “Imputed income” from the sum of asset values using a “passbook rate” established by HUD • .02% of value that exceeds $5,000

9. Household Income - Exclusions • Income from employment of children, including foster children, under the age of 18 • Payments received for the care of foster children • Lump-sum additions to family assets (inheritances or insurance payments) • Income of live-in aids • Reimbursement for the cost of medical expenses • Student financial assistance paid directly to the student • Special pay to a family member serving in the Armed Forces who is exposed to hostile fire • Gifts • Income in excess of $480 for each full-time student 18 years or older • Adoption assistance payment in excess of $480 • Refunds or rebates received in lump sum from SS or SSI • Refunds or rebates for property taxes • Services needed to keep a developmentally disabled family member at home

10. First Mortgage Lender • First Mortgage Lender must be: • State or Federally chartered lending institution • APR may not exceed most affordable loan facility offered by the lender for similar style, term and loan amount • Correspondent lending broker of a State or Federally chartered lending institution • The maximum yield to the originating lender may not exceed 4% of the loan amount including yield spread premiums, origination fees, discount fees, document preparation fees, broker fees, etc. • Owner financing is not acceptable

11. Acquisition with Rehabilitation • Additional funding may be available to home buyers purchasing an existing structure in need of repair • The lesser of a maximum of $30,000 or an amount not to exceed a CLTV of 125% of after rehabilitation appraisal • A first mortgage construction permanent loan may not adjust or require requalification prior to conversion to permanent • Repairs must be completed and the home occupied within 90 days of loan closing • Work must be provided by a licensed contractor • A 20 year amortizing loan @ 0%

12. The Application Process • Begins with W.I.N Lending Partners • CRA Agreement • CRA Agreement Bank 2010.doc • CRA Agreement Broker 2010.doc • Homebuyer education • Tampa Bay Community Development Corp. www.tampabaycdd.org (727) 442-7075 • Community Services Foundation www.csfhome.org (727) 461-0618 • Consumer Credit Counseling Services (800) 741-7040 • Catholic Charities www.housngccdosp.org (727) 893-1313 • St. Petersburg Neighborhood Housing Services www.stpetenhs.org (727) 821-6897 • Home Maintenance Classes – Pinellas County Technical Education • Selecting a home • Realtor • Contractor/Builder • For sale by owner • Loan Processing • Loan Underwriting and Approval

13. Selecting the Lender • Homebuyer is free to select a lender from any of those within the W.I.N Coalition of Lenders • The process of buying a home begins with the first mortgage lending partner who pre-qualifies the applicant to determine the first mortgage amount for which the home buyer may qualify • The W.I.N application is completed by the lender and submitted to the city on behalf of the borrower • The first mortgage lender acts as the liaison between the borrower and the city

14. Selecting the Home • The homebuyer whose income does not exceed 80% MFI may select any existing or newly constructed single family home, condominium, or cooperative living unit within the city limits • The home must be inspected in ensure compliance with the city’s minimum housing standards • All repairs must be completed prior to closing the loan • The applicant may not move into the home until all repairs are completed and inspected

15. Loan Processing • All applications and supporting documentation are submitted to the W.I.N. Programs Division of Housing and Community Development, One 4th Street North, Municipal Services Bldg., 9th Floor, St. Petersburg, Florida 33701 • The lender will provide the city with a fully documented loan application package and related information as requested on the HOMEBUYER APPLICATION CHECKLIST AND TRACKING sheet: Homebuyer Application Checklist-Tracking.tif Home Buyer Application Packet 1-21-10.doc Social Security Form 3288.pdf

16. – Existing Homes • Prior to approval a city rehabilitation officer will review the home inspection report for code compliant issues including chipping and pealing paint and housing quality standards. • If the report indicates evidence of deteriorated painted surfaces and if the home was built prior to 1978 then a lead inspection may be required • City policy demands the elimination of any lead hazard from homes funded by the W.I.N Homebuyer Loan Program • Also, any substandard housing quality issues must be addressed prior to closing the loan

17. – New Construction • Whether or not the first mortgage lender provides for construction draw inspection, the W.I.N. rehabilitation officer is required to perform a property inspection at each draw request. • The rehabilitation officer will review the floor plan, home elevation drawings and scope of work with the borrower prior to loan closing. • The city’s Construction Services Department will issue permits, complete required permit inspection and issue the Certificate of Occupancy (CO). • The construction must meet the city’s Visitability Requirements • visitability.pdf

18. Visitability Ordinance • “Visitable” shall be defined by the inclusion of architectural and landscaping design features, which allow basic access to and within a residential dwelling by people who use mobility devices such as wheelchairs and scooters and which minimize the cost of future modifications to achieve accessibility

19. Loan Approval • W.I.N Home Buyer loan applications are underwritten by the city’s Housing Finance Coordinator who submits recommendation for approval to the W.I.N Programs manager for approval. • The Housing Finance Coordinator or the Loan Processor will be the lender’s point of contact

20. Underwriting Criteria • Verification of two years employment • Established credit history and acceptable credit score • Debt-to-Income Ratio not to exceed 41% • Includes debt with 10 or more payments remaining or payments exceeding $100 • Implied payment of $10.00 for zero balance revolving debt and open accounts • 12 months current rent payments • Liens and collections must be paid-in-full at or prior to closing or removed from the Credit Bureau Report • Schedule repayment of collection or delinquent accounts must have been established with a minimum of six consecutive payments made • Borrower must be out of bankruptcy a minimum of 2 years with all debt paid as agreed • No income will be “grossed up” • None resident aliens must provide documentation

21. Home Buyer Brochure 2Final W.I.NHomeBuyer2010.pdf www.flhousing.org/programs www.stpete.org www.hud.gov