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PRINCE GEORGE’S COUNTY

PRINCE GEORGE’S COUNTY. NEIGHBORHOOD STABILIZATIONDOWNPAYMENTAND CLOSING COSTS ASSISTANCE LOAN PROGRAM REALTORS BRIEFING. FUNDING AVAILABLE. $7,000,000 Federal $2,000,000 State 800-900 anticipated loans (number may be less depending on average loan amount) 18 month time frame.

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PRINCE GEORGE’S COUNTY

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  1. PRINCE GEORGE’S COUNTY NEIGHBORHOOD STABILIZATIONDOWNPAYMENTAND CLOSING COSTS ASSISTANCE LOAN PROGRAM REALTORS BRIEFING

  2. FUNDING AVAILABLE • $7,000,000 Federal • $2,000,000 State • 800-900 anticipated loans (number may be less depending on average loan amount) • 18 month time frame

  3. NEIGHBORHOOD STABILIZATION PROGRAM DPCCA GUIDELINES

  4. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES The Prince George’s County Neighborhood Stabilization Program (NSP) Down payment and Closing Costs Assistance Loan Program (DPCCA) is funded by the NSP grant program. NSP was established under Title III of Division B of the Housing and Economic Recovery Act of 2008 (HERA) to provide emergency assistance to States and units of local governments for the purchase and redevelopment of abandoned and foreclosed homes. The DPCCA program will provide down payment and closing cost assistance to eligible homebuyers to purchase a vacant residential property in Prince George’s County that has been foreclosed upon.

  5. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES Definitions of Foreclosed Properties A property has been foreclosed upon when, under state or local law, the mortgage or tax foreclosure is complete and title for the property has been transferred from the former homeowner under some type of foreclosure proceeding or transferred in lieu of foreclosure, in accordance with state or local law. A short sale property would not meet the definition of a foreclosed upon property because they are typically used to prevent a foreclosure. As such, the title to the property remains in the hands of the homeowner until the sale is executed.

  6. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES Applicant Eligibility Applications will be accepted with no discrimination as to race, color, religion, creed, national origin, sex, marital status, physical or mental disability or sexual orientation. Applicants must be 18 years of age or older. Applicants must be first time homebuyers, or who have not owned a home at anytime during the three years immediately preceding the date of their mortgage application. (Investors or current owners of residential property are excluded). Applicants must agree to live in the home being purchased as their principal residence.

  7. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES Applicants must have an annual household income that does not exceed DPCCA Program limits (see Applicant Income below). Applicants must contribute a minimum amount of cash towards the purchase of the home (see Purchaser’s Own Cash Requirement below)

  8. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES Applicants must have attended an 8-hour, minimum, home buyer education/ counseling class provided by a HUD Certified housing counseling agency and received a Certificate of Completion. Applicant must have an eligible ratified Contract of Sale. Income Applicants for DPCCA must have gross annual household incomes at or below 120% of the area median, adjusted for family size. An income chart is provided Attachment A. Annual household income is defined in 24 CFR 5.609, and is referred to as "Part 5 annual income." The Part 5 definition of annual income is the gross amount of income of all adult household members that is anticipated to be received during the coming 12-month period. Complete information can be found at

  9. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES www.hud.gov/offices/cpd/affordablehousing/training/web/calculator/definitions/part5.cfm, including whose income to count, the types of income to count, and the treatment of assets (in general, an asset is cash or a no cash item that can be converted to cash. It is the income earned from the asset - not the value of the asset - that is counted). To assist in determining if an applicant is eligible, HUD has provided an income calculator, which can be found at https://webapps1.hud.gov/hfc/calculator. The Step by Step method must be used to determine eligibility.

  10. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES Debt-To-Income Ratio A maximum total debt -to-income ratio of 45% for borrowers at or below 60% of AMI. If total debt-to-income ratio exceeds 36 percent on a manually underwritten loan, strong compensation factors must be listed on the underwriting worksheet. Property Eligibility location The prospective property must be a vacant foreclosed upon property located within one of the following (33) zip codes: 20607, 20608, 20705, 20710, 20715, 20716, 20720,20721, 20613, 20722, 20743, 20623, 20735, 20740, 20747, 20744, 20769, 20770, 20781, 20782, 20783, 20784, 20785, 20706, 20707, 20708, 20712, 20745, 20737, 20746, 20748, 20772, 20774.

  11. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES Of the 33 zip codes above the following are considered Target Zip Codes: 20716, 20742, 20747, 20744, 20783, 20785, 20706, 20708, 20746, 20748, 20772, 20774  Property Type The prospective property must be a vacant foreclosed upon residential structure including single family dwelling units, townhouses and condominiums.

  12. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES Purchase Price The purchase price of the prospective property must reflect a 1% discount from the appraised value of property, determined by an appraisal completed within 60 days of the contract’s final offer. Physical Standards The home to be purchased must meet minimum FHA Housing Standards as determined by the FHA Appraisal. In addition the buyer must have a home inspection performed by a home inspector licensed by the State of Maryland. Deficiencies identified in the FHA Appraisal Valuation Conditions must be corrected prior to closing, or the costs of repairs escrowed by the lender, through mechanisms such as a 203k loan.

  13. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES Lead Based Paint The NSP Program is subject to the Lead Based Paint Poisoning Prevention Act (42 u.s.c. 4831 et seq.,) and the Lead Based Paint Regulations (24 CFR Part 35 and 24 CFR Section 570.608). All NSP assisted purchases for residential properties constructed prior to 1978 must have Lead Disclosure Form signed by seller and included in the Participating Lenders Transmittal of the NSP Application Package to HA.

  14. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES DPCCA Loan Amounts Under the DPCCA program, the County will provide loans for closing costs and to meet the minimum down payment required to comply with the underwriting regulations governing the type of first trust loan approved to purchase the property. DPCCA will the lesser of 3.5% of the purchase price or $15,000 to purchase a foreclosed property in one of the 33 eligible zip codes.

  15. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES DPCCA to purchase a foreclosed upon property in one of the 12 Target Area zip codes (highlighted above) will be the lesser of 7% of the purchase price or $20,000. DPCCA to purchase a foreclosed upon property in one of the 33 eligible zip codes as work force housing will be the lesser of 7% of the purchase price or $20,000. Workforce housing is defined as foreclosed upon properties located in one of 33 zip codes, purchased by teachers, police officers, nurses, firefighters, and employees working within a 3 mile radius of place of employment.

  16. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES Seller Requirements Closing and Repair Costs The NSP DPCCA Loan Program encourages the Seller to make a contribution towards Buyer’s closing costs and/or repairs to the Property: For 3.5 % Down payment and Closing Costs purchases: Seller encouraged to pay 6% of the NSP Adjusted Sale Price towards Buyer’s closing costs and/or repairs to the Property. For 7% Down payment and Closing costs purchases: Seller encouraged to pay 2.5% of the NSP Adjusted Sale Price towards Buyer’s closing costs and/or repairs to the Property.

  17. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES Certification of Property’s Occupancy Status Seller must certify that property is not lawfully occupied at the time of initial contract offer and that seller has not unlawfully evicted a tenant-occupant or refused to renew a lease in anticipation of an initial contract offer where the purchase is to be funded in part by NSP funds. These certifications must be stated in an Affidavit signed by the Seller and witnessed by a Notary of the Public and attached as addendum to the Contract of Sale. The form for the Affidavit will be provided by DHCD.

  18. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES Purchaser’s Own Cash Requirement Purchaser’s minimum contribution of own cash towards down payment, pre-paid and closing costs is as follows: Purchaser’s Income Level Minimum Purchaser’s (as % of Area Median Income)Required Cash Contribution* 50% of below $1,000 60%-80% $1,500 80-120% $2,000 *Payments of any upfront costs by the purchaser will be credited to this amount.

  19. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES Loan Term The DPCCA loan term is 10 years. Interest Rate The interest rate will be 0%.

  20. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES Primary Residency Restrictions The prospective property must be the applicant’s primary residence. Buyer must maintain the house as primary residence for a 10 year period. At closing of the DPCCA loan, the borrower will be required to sign a regulatory agreement or declaration or covenants that will be recorded in the land records of Prince George’s County.

  21. NEIGHBORHOOD STABILIZATION PROGRAM DOWN PAYMENT CLOSING COST ASSISTANCE PROGRAM GUIDELINES Repayment Requirements The DPCCA loan will be a deferred payment loan, secured on the property as a second trust, with a balance due upon sale or transfer of the property, or if the property ceases to be the primary residence of the borrower. The amount due will be determined by length of time the purchaser complies with the 10 year residency restriction. The amount of the DPCCA due or forgiven is based on the following: Purchaser Remains in Home Balance Due (As % of Total DPCCA Received) 0-4 years 100% 4-6 years 50% 6-9 years 30% 10+years 0%

  22. LENDER PARTICIPATION ELIGIBILITY Lenders who are eligible to participate in the DPCCA Program must be: A. Maryland DHCD-CDA approved Participating Lender with approval to originate CDA loans, or B. Non CDA lender approved to originate FHA insured loans, able to fund the first mortgage loan at closing and not a broker. And have: A. Sign a NSP Participating Lenders Application/Agreement B. Attended a NSP DPCCA Training Session

  23. GUIDANCE FOR REALTORS • Learn Program Guidelines • Learn NSP Requirements for Sale Contract • Develop data base of income qualified buyers • Make sure that buyers attend housing counseling • Write 45-60 day contracts • Establish relationship with participating lender

  24. WHO ARE PARTICIPATING LENDERS? • Updated list as of April 29, 2009 • Lenders can be added at any time

  25. ESTABLISH A PARTNERSHIP WITH PARTICIPATING LENDER AND CLIENT TO ENSURE COMPLETION OF NSP APPLICATION PACKAGE

  26. PARTICIPATING LENDER KEY ROLE • INTAKE AND PREQUALIFICATION OF NSP DPCCA APPLICATION • APPROVAL OF FIRST MORTGAGE • SUBMIT ENTIRE PACKAGE TO COUNTY FOR APPROVAL OF NSP DPCCA LOAN • NO APPLICATIONS RECEIVED FROM BUYERS OR REALTORS!!!!!!!

  27. NEIGHBORHOOD STABILIZATION PROGRAM (NSP)Down Payment Closing Cost Assistance (DPCCA) LoanApplication Checklist 1_ Completed original NSP DPCCA Loan Application 2_ Copy of Ratified Contract of Sale with all addendums including: ____ NSP Contract Addendum and Notice to Seller ____ NSP Buyer’s Affidavit ____ NSP Seller’s Affidavit 3_ Copy of Property Appraisal (completed within 60 days of final contract offer)

  28. NEIGHBORHOOD STABILIZATION PROGRAM (NSP)Down Payment Closing Cost Assistance (DPCCA) LoanApplication Checklist 4_ Copy of first mortgage lender’s approved credit package to include: _____Copy 1st Mortgage Uniform Residential Loan Application – FNMA Form 1003 ____Copy Underwriting Analysis Worksheet (MACW’s/1008 etc.) _____Copy of GFE provided to borrower _____Letter from lender confirming type of mortgage, amount and terms  5_ Income Verification for all members of borrower household 18 years and older to include: ______ Copy of last two months pay stubs ______ Copy of last two months payments for any other income source ______ Copy of previous two years federal tax returns ______ Copy of current bank statement 6_ Income Eligibility Worksheet & HUD Income Calculation Worksheet

  29. NEIGHBORHOOD STABILIZATION PROGRAM (NSP)Down Payment Closing Cost Assistance (DPCCA) LoanApplication Checklist 7_ Proof of minimum required borrower cash contributions (see Program Guide). Examples include application fees, home inspection fees, earnest money deposit, pre-paid hazard insurance, appraisal, etc. 8_ Copy of Certification of Completion of NSP required 8-hour homebuyer education course 9_ Home Inspection (State of MD certified Home Inspection) 10_ Lead Based Paint Disclosure if home built prior to 1978 11_ Copy of Termite Inspection report 12_ Draft HUD-1 Settlement Sheet from title company/attorney on approved list

  30. HUD CERTIFIED HOUSING COUNSELING AGENCIES • HOPE • UCAP • KAIROS • SEED • HIP • UNITY EDC • Omega Gold Most of Agencies charge for the Class

  31. NSP DPCCA LOAN PROGRAMBORROWER’S AFFIDAVIT The Borrower (s) ___________________________, ______________________, hereby certify that they are first time home buyers or have not owned a home during the last three years and hereby apply to the Housing Authority of Prince George’s County for a NSP DPCCA Loan in the amount of $_________. The NSP DPCCA Loan will be a zero percent (0%) interest, deferred payment loan, secured on the property as a second trust, with the balance due upon sale or transfer of the property.

  32. NSP DPCCA LOAN PROGRAMBORROWER’S AFFIDAVIT Borrowers (s) hereby agree to reside in the property as their primary residence for 10 years from the date of closing on the NSP DPCCA Loan. The amount of the NSP DPCCA Loan due will be determined by length of time the purchaser complies with the 10 year primary residency requirement: Purchaser Remains in HomeBalance Due (As % of Total DPCCA Received) 0-4 years 100% 4-6 years 50% 6-9 years 30% 10+years 0%

  33. NSP DPCCA LOAN PROGRAMBORROWER’S AFFIDAVIT The Borrower (s) hereby acknowledges that the property to be purchased with the NSP DPCCA Loan is a vacant foreclosed upon property, subject to the requirements of the Neighborhood Stabilization Program described in sections 2301-2304 of the Housing and Economic Recovery Act of 2008 (HERA) and regulations issued pursuant thereto, at 73 FR 58330, October 6, 2008 as amended. These requirements will be outlined in the NSP DPCCA Regulatory Agreement, Declarations of Covenants and Deed of Trust which borrower (s) will execute at closing. The NSP DPCCA Regulatory Agreement, Declarations of Covenants and Deed of Trust cannot be assumed by a subsequent purchaser unless the Housing Authority of Prince George’s County (HA) has made a written determination in an assumption agreement

  34. NSP DPCCA LOAN PROGRAMBORROWER’S AFFIDAVIT The Borrower (s) hereby certify and represent to the HA that he information provided in the NSP DPCCA Loan Application and the application of the Borrower(s) to _____________________________ (name of first mortgage lender) for a first mortgage loan, a copy of which is hereby submitted to the HA, is true and complete and the loan terms have not changed. Each Borrower declares under penalty of perjury that the contents of the NSP DPCCA Loan Application, the contents of the first mortgage loan application, and NSP DPCCA Borrower’s Affidavit are true. Date: _______________________________ Borrower: _________________ Date: _______________________________ Borrower: _________________

  35. NSP DPCCA LOAN PROGRAMSELLER’S/PROPERTY OWNER’S AFFIDAVIT The Seller (s)/Property Owner ___________________________, ______________________, hereby certify that the property located at: (Address)______________________ (City)__________________________ (State)_________________________ (Zip Code)_______________________ Is a foreclosed upon property, having been lawfully foreclosed upon in accordance with the laws of the State of Maryland and Prince George’s County, Maryland;

  36. NSP DPCCA LOAN PROGRAMSELLER’S/PROPERTY OWNER’S AFFIDAVIT The property is not lawfully occupied at the time of the initial contract offer to purchase the property using NSP funds; and That a former tenant-occupant of the property has not been unlawfully evicted or Seller has not refused to renew a lease in anticipation of an initial contract offer to purchase the property using NSP funds.  Date: ____________________Seller/Property Owner: ___________ Date: ___________________Seller/Property Owner: ___________ WITNESS: _______________________

  37. NEIGHBORHOOD STABILIZATION PROGRAM (NSP) CONTRACT ADDENDUM AND NOTICE TO SELLER SEE HANDOUT

  38. TOTAL LOAN PROCESSING TIME • 21 DAYS FROM RECEIPT OF COMPLETED APPLICATION PACKAGE FROM PARTICIPATING LENDER

  39. BRANDING FOR PROGRAM Down Payment on Your Dream

  40. NSP KICK OFF MAY 15, 2008 www.princegeorgescountymd.gov Link to Down Payment On Your Dream page

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