WELCOME HOME ILLINOIS Keith Pryor Assistant Director Home Ownership Programs April 2 nd 2014
WELCOME HOME ILLINOIS OVERVIEW
Welcome Home Illinois Program First Mortgage: 30-year Fixed rate Highlights: FHA / VA / USDA and conventional insured products available Maximum LTV: 96.5 (FHA); 97(Conventional) 100 (USDA & VA) First-time homebuyer or exempt Minimum credit score of 640 (Conventional loans may require higher score) Maximum total debt (back end) ratio of 45 percent Must contribute 1 percent of purchase price or $1,000 from buyer s own funds, whichever is greater Homeownership counseling required Same qualifications as IHDA s Smart Move Program
Welcome Home Illinois Program First Mortgage plus Down Payment Assistance (DPA): Characteristics of Down Payment Assistance: Provides $7,500.00, 0 percent, 5 year forgivable loan, recorded as a second mortgage The borrower receives the $7,500 regardless of being above or below 80% Area Median Income (AMI) Mortgage balance is repaid if home is sold or 1 st mortgage refinanced within 1 st 5 years Current Rates* 3.99% FHA, USDA, VA 4.625% Conventional *Subject to change
IHDA PROCESS UPDATE Keith Pryor Assistant Director Home Ownership Programs
IHDA New Process and Procedure In April 2014, IHDA will institute a new operational policy. This policy change is a direct response to questions and feed back from our lender networks. This new policy is beneficial because: You will no longer need IHDA approval to close You the lender can close when you desire Revised, easier to complete IHDA documents
COMPARISON BETWEEN CURRENT AND NEW PROCEDURES
Current Procedures Lender reserves loan in MITAS Lender submits loan to IHDA for tax code compliance review Lender waits for IHDA approval to close Lender closes loan Lender submits closed file to both US Bank and IHDA for review. New Procedures Lender commits loan in MITAS Lender closes loan at its own discretion Lender enters final closing data in MITAS /uploads entire file to MITAS The Authority will require & review the following IHDA original documents prior to purchase: Borrower Affidavit Seller Affidavit Income Certification (completed income calculator) and supporting income documentation Recapture Notice MCC documentation (if applicable US Bank will continue to perform its standard review
PROCESS IMPLEMENTATION
Process Implementation Process implementation will begin April 1 st 2014, but is not mandatory until May 1 st 2014 All loans reserved on or after May 1 st are subject to the new policy Loans reserved prior to May 1st that are not approved for closing have two options: Submit loans to IHDA for compliance review Submit loans under the new policy
New Process Stage 1 LOAN COMMITMENT
Stage 1: Loan Commitment Loan commitment is procedurally the same as the current reservation process. Instead of receiving a reservation confirmation you will now receive a commitment. The commitment gives a lender the ability to close the loan Once the loan is committed, you will have immediate access to the FHA commitment letters (if applicable) The commitment does not mean that the loan is tax code compliant The commitment is valid for 60 days Within those 60 days you must close the loan and sell to US Bank If not purchased by the 60 th day, lender receives.25 bps reduction to the SRP If not purchased by the 90 th day the loan is purchased at IHDA s discretion. However, we re under no obligation to purchase the loan Once a loan is reserved, a lender cannot cancel and re-reserve another loan for the same borrower with respect to the same property for 60 days after the initial cancellation
New Process Stage 2 LOAN CLOSING
Loan Closing Once the lender has reserved/committed the loan and printed the commitment the lender can close the loan: HOWEVER, the lender cannot close until they have completed a review of the buyer s IHDA compliance eligibility: 1. First time home buyer or exempt 2. Qualified property that s under our purchase price limits 3. Total household income under our income limits It is the lenders responsibility to ensure IHDA program compliance, the commitment itself does not constitute a compliance review.
Loan Closing Once the loan is closed you will do three things: 1. Complete required data entry and verification in MITAS. This may mean that more people on the closing and post closing end will have to become acclimated to MITAS. 2. Upload required file documentation to MITAS 3. Submit ORIGINAL IHDA documents to the Authority
Loan Closing Part One: Entering MITAS Data* * For a complete listing of required data entry and verification fields refer to the IHDA MITAS manual Lender will enter MITAS and verify and/or enter the data in the following screens: Loan Info Buyer name (must be consistent with mortgage documentation) Social Security # Appraised value Loan Amount Purchase Price Property Property information Must be consistent with the mortgage documentation Details of Transaction All applicable fields should be completed, however these are mandatory a) Purchase Price g) PMI, MIP, Funding Fee i) Total Costs m) Loan amount (exclude financed PMI, MIP, Funding Fee)
Loan Closing Part Two : Uploading Closing Packages The Authority will provide a list of documents to be uploaded through MITAS for its records. The required documentation will largely mirror what you currently send to US BANK MRBP
Loan Closing Part Three: Original Documentation To IHDA The Authority will require the following original documents PRIOR to purchase: Data Summary Sheet/Submission Voucher with Submission Checklist Borrower Affidavit Seller Affidavit Income Certification / Calculator and supporting documentation Recapture Notice (if applicable) Original MCC documentation (if applicable) US Bank will continue to perform its review of loan files prior to purchase Once US Bank & IHDA completes its review, the loan will be purchased
LOAN CLOSING: THE TOOLS TO SUCCEED
Loan Closing: The Tools To Succeed IHDA will provide tools to assist you including: Revised Buyer & Seller Affidavits Revamped Checklist IHDA income calculator Program support line
Loan Closing: The Tools To Succeed IHDA s Borrower & Seller Affidavits have been revised to better assist you by: No longer requiring the buyer or seller to sign the affidavit twice Removing section seven of the buyer affidavit (listing where the buyer lived for the last three years) Requiring only basic information, signature and notary certification
Loan Closing: The Tools To Succeed IHDA s is also revising the compliance checklist: New checklist will mimic the review that is traditionally done in house at IHDA It will address the key issues that determine program compliance Will be simpler to use than the current version Will be mandatory and will require signoff by the lender
Loan Closing: The Tools To Succeed Of the three IHDA compliance guidelines, determining household income is the most difficult. To assist lenders, IHDA has created an income calculator The income calculator is based on the way that we calculate income at IHDA IHDA will conduct brief webinars on how we calculate income
Loan Closing: The Tools To Succeed IHDA s new Program Support Line is designed to be an all-purpose call center: To answer questions from the general public Serve as resource to our lenders by: Helping with reservation issues General questions New process questions Providing IHDA marketing materials Program Support Line: Will be announced shortly.
LENDER TO DO LIST Decide how you will handle your pre-may 1st pipeline Will you use the current method of review? Will you complete the compliance review yourself? Prepare your staff for the new changes Make sure they read the IHDA procedural guide manual Make sure they know how to and use the checklist Make sure they know how to and use the income calculator Decide who will be responsible for uploading post closing loan file and delivering original documentation to IHDA
IHDA QUALITY CONTROL (QC)POLICY
The Authority s QC policy will consist three reviews Prior to purchase by US Bank MRBP: This review will be on 10% of the pipeline Consists of FNMA check Will also consist of an IHDA compliance check IHDA must complete this review before the purchase of the loan Post Purchase by US Bank MRBP: This review will be on an additional10% of the pipeline Consists of a FNMA Check No IHDA compliance check at this point Discretionary Review This review will be on 5% of the pipeline
QUESTIONS?