Martin O'Malley GOVERNOR Anthony G. Brown LT. GOVERNOR Raymond A. Skinner SECRETARY Clarence J. Snuggs DEPUTY SECRETARY Maryland Mortgage Program Realtor Workshop May 8, 2013 1
Maryland Mortgage Program (MMP) Martin O'Malley GOVERNOR Anthony G. Brown LT. GOVERNOR Raymond A. Skinner SECRETARY Clarence J. Snuggs DEPUTY SECRETARY 2
Program Overview 30-year mortgage Fixed interest rate - entire term of loan FHA, VA, Conventional, or RHS loan types 3
Eligible Borrowers May be single or married. If married, both spouses are not required to apply. If separated, a Separation Affidavit must be completed. Co-signers are NOT permitted. Must intend to occupy the property as a principal residence within 60 days of closing. Cannot own any other real property at the time of closing. 4
Eligible Borrowers Must have a valid social security number and be eligible to work in the United States. Citizenship of the United States is not required to obtain a CDA loan. 5
Eligible Borrowers Must be First Time Homebuyers Federal Definition: Borrowers who have not had a present ownership interest in their principal residence in the last three years UNLESS Borrower is a veteran using this exemption for the first time. (A copy of the DD-214 must be presented to Lender.) OR Borrower is purchasing in a TARGETED AREA 6
Targeted Areas Targeted Areas Targeted areas are designated by the Federal Government based on the U.S. Census. Targeted areas are those in which 70% or more of the families have an income which is 80% or less of the statewide median family income. 7
Targeted Areas Areas shaded green represent Targeted Areas. The following jurisdictions are designated targeted areas: Allegany Co. Baltimore City Caroline Co. Garrett Co. Dorchester Co. Kent Co. Somerset Co. 8 other counties have pockets that are Targeted Areas Targeted Area list: www.mmprogram.org/documents/target_areas.htm Census Tract #: http://www.ffiec.gov/geocode/default.aspx Targeted & PFA Verification: http://www.dhcd.maryland.gov/website/dhcdmapper.aspx 8
Priority Funding Areas Priority Funding Areas (PFA) If new construction, the property MUST be located in a Priority Funding Area. This is an older community or locallydesignated growth area where State and local governments already have a significant financial investment in the existing infrastructure. 9
Targeted Areas & Priority Funding Areas Mapper Process Go to: http://www.dhcd.maryland.gov/website/dhcdmapper.aspx Accept the conditions. On the far right, to the right of the blue circle with the house, there is a small double right arrow. Click this to change from Multifamily (there is no heading for Single Family). In the Find Address box, enter: Street Address, City, Zip Code (separated by commas). Press GO. Results will show on the left. If it is a PFA or Targeted Area, that information will be shown. Print page for submission in the package. For a new construction property that is too new to show on the mapper, email abutler@mdp.state.md.us (can take two weeks). 10
PFAs & Targeted Areas 11
Income & Purchase Price Limits Income Limits Total projected Annual Household Income may not exceed applicable income limit Projected income for ALL household members (including overtime, part-time, commissions, etc.) is utilized to determine income 12
Income & Purchase Price Limits Purchase price limits vary from county to county See chart on website for income and purchase price limits by location. http://www.mmprogram.org/incomes.aspx 13
Income & Purchase Price Limits Eligibility Calculator on website under Tools www.mmprogram.org/tools.aspx You can also use this to get an estimate of the monthly loan payment 14
Maximum Loan Amount Loan amount may not exceed the lesser of $417,000 or the insurer/guarantor s maximum mortgage amount Maximum loan amount may only be exceeded by the FHA UFMIP. VA and RHS loans must be at or below $417,000 including the financed guarantee or funding fee 15
Assets Asset Restrictions Attachment F- Asset Test Worksheet An asset test is required for borrowers whose assets equal or exceed 20% of the purchase price A gift of equity (difference between the appraised value and the purchase price) in a non-arms length transaction is considered an asset 16
Credit Parameters Government Loans = 640 Middle Credit Score Conventional Loans = 680 Middle Credit Score 45% DTI - no exceptions 17
Eligible Property Types Detached Attached Semi-detached Townhouses Modular Condominium Per Directive 2012-14, manufactured housing is currently not an eligible property type 18
Eligible Property Types (continued) Maximum Lot Size Urban/Suburban: The lot size may not exceed the greater of one acre or the jurisdictional minimum Rural: The lot size may not exceed the greater of 3 acres or the jurisdictional minimum 19
Eligible Property Types (continued) Housing Standards A home inspection must be completed (not required for new construction or substantial rehabilitation) NOTE! CDA does not review the inspection. Borrowers must sign a Home Inspection Certification showing that they have reviewed the home inspection. 20
Flip Policy Flip Policy Properties acquired within six months of prior sale will be subject to additional valuation and appraisal requirements. CDA will allow the HUD 90-day waiver for all property sellers, including private sale transactions, but prohibit FHA financing for properties owned less than 90 days IF the sales price is increased by more than 20% over the seller s acquisition cost. The 90 days is calculated from the seller s acquisition date to the purchase contract date of the new transaction. 21
Recapture Tax Reimbursement This 9-page form is signed at closing by the borrower(s) Borrower(s) sign & date last page Form version changes yearly 22
Homebuyer Education Requirement Required for all borrowers Homebuyer Education A counseling certificate is required from the homebuyer education class provider. Certificate must be less than 12 months old at closing. There are specific requirements for Baltimore City, Anne Arundel, Baltimore and Harford Counties. NOTE! Baltimore City and Baltimore County require that the full homebuyer education be completed and a certificate issued PRIOR TO the contract being signed! Refer to http://www.mmprogram.org/counseling.aspx for additional information on counseling requirements. 23
Contract Ratification Contracts must be fully ratified prior to reservation. CDA reserves the right to cancel any reservation or deny the purchase of a loan that does not have a fully ratified contract, signed by all parties, prior to reservation date. This includes third party (lender) approval for short sale transactions. 24
Down Payment & Settlement Expense Loan Program (DSELP) Martin O'Malley GOVERNOR Anthony G. Brown LT. GOVERNOR Raymond A. Skinner SECRETARY Clarence J. Snuggs DEPUTY SECRETARY 25
DSELP Downpayment & Settlement Expense Loan Program (DSELP) Available only with a CDA loan $5,000 toward downpayment or closing costs in the form of a 0% deferred loan Repayable in full upon sale or transfer of the property, or when the first mortgage is paid off or refinanced 26
Partner Match Programs Martin O'Malley GOVERNOR Anthony G. Brown LT. GOVERNOR Raymond A. Skinner SECRETARY Clarence J. Snuggs DEPUTY SECRETARY 27
Partner Match Programs (continued) Who are the Partners? Partners can be employers, builder/developers, and community agencies. A list of participating partners is posted on the MMP website. Local governments, such as Baltimore City, are also partners. 28
Partner Match Programs (continued) How does it work? Borrower must qualify for an MMP loan and be approved by the partner. Borrower provides the partner s signed verification form to their CDA lender. Participating partners provide downpayment and/or closing cost assistance to borrowers at settlement. CDA will match funds up to $2,500 in the form of a 0% deferred loan. 29
Partner Match Programs (continued) Terms The partner match from CDA is repayable when the home is sold or transferred, or when the first mortgage is paid off or refinanced. The terms of the partner contribution vary from partner to partner. It can be a grant or a loan. 30
Partner Match Programs (continued) House Keys 4 Employees (HK4E) with Smart Keys 4 Employees (SK4E) component Builder/Developer Incentive Program (BDIP) Community Partners Incentive Program (CPIP) www.mmprogram.org/downpayment.aspx Employees relocating to Maryland as a result of BRAC may receive additional match funds in the amount of $2500. Refer to Directive 2010-22 for details. 31
Partner Match Programs (continued) SMART KEYS 4 EMPLOYEES (SK4E) A Smart Growth enhancement to the House Keys 4 Employees (HK4E) Program that allows borrowers to receive an additional $1,000 of match funds if: Property is located in a Priority Funding Area AND Property is within 10 miles of borrower s place of employment or within the boundaries of the local jurisdiction 32
Combining Assistance Funds Partner Match Program funds can be combined with DSELP funds for additional assistance, as well as with funds from jurisdictions such as Baltimore City or Hagerstown. 33
Combining Assistance Funds Example 1: Partner Contribution $3,000 DSELP $5,000 Partner contribution $3,000 HK4E, BDIP or CPIP maximum match $2,500 TOTAL ASSISTANCE $10,500 34
Combining Assistance Funds (continued) Combined total match funds from CDA MMP (HK4E, BDIP, CPIP) may not exceed $2,500 Unless qualifying for Smart Keys 4 Employees and thereby receiving another $1,000 Partner contribution must be present at settlement this is the borrower s responsibility. 35
Combining Assistance Funds (continued) HK4E State of Maryland Employees A State of Maryland employee can receive $1,250 from the State of MD (employer) and a $1,250 HK4E Program Match for a total contribution of $2,500. State of MD employees provide a copy of the borrower s paystub in lieu of a signed Verification of Partnership Contribution form Employees of the University of MD system are not considered State of MD employees for the purposes of this program 36
Combining Assistance Funds (continued) Partner Resources Additional resources are offered by partners in Baltimore City, which is a fully targeted area. Baltimore City Housing Authority has Live Near Your Work and Vacants-to-Value initiatives, which can offer significant downpayment assistance. Baltimore City now offers State employees a partner match of $2,500! http://www.baltimorehousing.org Healthy Neighborhoods, Inc. (HNI) offers low interest loans, rehabilitation loans, and downpayment assistance. www.healthyneighborhoods.org 37
Combining Assistance Funds Example 2: State of Maryland Employee DSELP $ 5,000 HK4E: State of MD Employer contribution $ 1,250 HK4E: State of MD Match contribution $ 1,250 SK4E: CDA match for employee who lives and works in a PFA and within a jurisdiction Baltimore City Live Near Your Work contribution (grant) $ 1,000 $ 2,500 TOTAL ASSISTANCE $11,000 38
CDA MMP Products Martin O'Malley GOVERNOR Anthony G. Brown LT. GOVERNOR Raymond A. Skinner SECRETARY Clarence J. Snuggs DEPUTY SECRETARY 39
CDA MMP Products Homefront: The Veterans and Military Family Mortgage Program Save-A-Home Conventional Mortgages Refinance Loans Now Available! 40
CDA MMP Products Directive 2012-20 MD Homefront: The Veterans and Military Family Mortgage Program One-half of a percent discount (.50%) lower than the prevailing MMP rate $10,000 assistance from the Downpayment and Settlement Expense Loan Program (DSELP) Don t Forget: Qualified veterans can receive a waiver for the first-time homebuyer requirement. 41
CDA MMP Products SAVE-A-HOME PROGRAM Short sale properties and non-dhcd-owned foreclosures Interest rate is the same as the prevailing MMP interest rate, but DSELP is increased to $6,500 Documentation of property status must be provided to CDA lender to qualify 42
CDA MMP Products Conventional Mortgage Loans With Private Mortgage Insurance: Loans must be underwritten to current Fannie Mae HFA Preferred underwriting guidelines Insurer must be on CDA s Participating Private Mortgage Insurance Companies List Uninsured: For purchases where the loan-to-value (LTV) ratio is 80% or less. Maximum combined LTV is 105%. 43
CDA MMP Products Reduced Mortgage Insurance Premiums! Coverage required by HFA Preferred 18% for LTVs > 95% and <=97% 16% for LTVs > 90% and <=95% 12% for LTVs > 85% and <=90% 6% for LTVs > 80% and <=85% 44
CDA MMP Products Conventional MIP Borrower can get a more affordable monthly payment by paying the mortgage insurance up front OR the monthly payment can be terminated when a lower LTV is reached. LTV cannot exceed 97% under Fannie Mae s HFA Preferred Program, even if the PMI has a higher guideline. 45
Conventional vs. FHA
CDA MMP Products Participating Mortgage Insurers* Essent Guaranty, Inc. Genworth Financial, Inc. (GE) Mortgage Guaranty Insurance Corporation (MGIC) Radian United Guaranty Residential Insurance Company (UGRIC) *In addition to Federal Housing Administration (FHA) insurance and Veterans Administration (VA) or Rural Housing Services (RHS) guaranty 47
CDA MMP Products Refinance Loans! 97% LTV Conventional Refinance Loan Program 30-year, fixed rate, fully amortizing, limited cash out Higher LTV limit ~ Lower MI premiums (No DSELP available) 48
Resources Martin O'Malley GOVERNOR Anthony G. Brown LT. GOVERNOR Raymond A. Skinner SECRETARY Clarence J. Snuggs DEPUTY SECRETARY 49
Resources Lenders MMP loans can only be obtained from approved CDA lenders Currently there are 48 CDA lenders Not all CDA lenders offer the full range of products we are working on posting that to our website soon! http://www.mmprogram.org/lenders.aspx 50
Interest Rates Interest rates are calculated daily In a fluctuating market, rates may change more than once daily Interest rates are posted online and a notice is emailed when it changes (You can request to be on this email list email SingleFamilyHousing@mdhousing.org) 51
Interest Rates Check current interest rates: www.mmprogram.org/rates.aspx 52
Interest Rate Sheet updated every weekday or more often PROGRAM MARYLAND HOMEFRONT: The Veterans and Military Family Mortgage Program SUB-PROGRAM Maryland Mortgage Program Save-A-Home Loan Program DHCD-owned Foreclosure Program POINTS 0 POINTS 0 POINTS 0 POINTS GOVERNMENT INTEREST RATE 3.250% 3.250% 1.000%* APR (VA) 3.419% 3.419% 1.149% APR (FHA) 4.082% 4.082% 1.638% CONVENTIONAL** INTEREST RATE 4.125% 4.125% 4.125% APR*** 4.621% 4.621% 4.621% Maximum DSELP Loan Amount $10,000 (plus any applicable Partner Match Program funds) PROGRAM Maryland Mortgage Program (regular MMP) Save-A-Home Loan Program DHCD-owned Foreclosure Program POINTS 0 POINTS 0 POINTS 0 POINTS GOVERNMENT INTEREST RATE 3.750% 3.750% 1.000%* APR (FHA) 4.628% 4.628% 1.638% CONVENTIONAL** INTEREST RATE 4.125% 4.125% 4.125% APR*** 4.621% 4.621% 4.621% Maximum DSELP Loan Amount $5,000 $6,500 $5,000 (plus any applicable Partner Match Program funds) PROGRAM MBS 97% LTV Conventional Refinance Program INTEREST RATE 4.125% APR*** 4.621% Maximum DSELP Loan Amount NOT AVAILABLE 53
Points of Contact If you have questions, you can call or email: Vicki Jones 410-514-7519 Ed Anthony 410-514-7528 SingleFamilyHousing@mdhousing.org They will take your question and make sure that you receive a timely response. 54
HOPE Hotline 1-877-462-7555 The HOPE Hotline is available 24 hours daily for consumers who have questions regarding mortgage delinquency, foreclosure and assistance available from the State of Maryland. 55
Website www.mmprogram.org Website contains information on programs, rates, initiatives, counseling, downpayment assistance, approved lenders, directives, and more. Please consider attending future training classes to stay informed of CDA s latest changes and updates! 56
Resources website: www.mmprogram.org 57
MMP Kits Seven Quick Steps to Getting Started 58
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Questions? Martin O'Malley GOVERNOR Anthony G. Brown LT. GOVERNOR Raymond A. Skinner SECRETARY Clarence J. Snuggs DEPUTY SECRETARY 60