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LENDER TRAINING

City of St. PetersburgHousing and Community

Development “Working to Improve our

Neighborhoods” (W.I.N.) DivisionJanuary 21, 2010

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

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HOME BUYER LOAN PROGRAM

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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%

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Area Median Income (MI) Table

F/Y 2009 – MEDIAN FAMILY INCOME ADJUSTED BY FAMILY SIZE

Family Size 50% MFI 80% MFI

1 $20,700 $33,150

2 $23,700 $37,900

3 $26,650 $42,600

4 $29,600 $47,350

5 $31,950 $51,150

6 $34,350 $54,950

7 $36,700 $58,700

8 $39,050 $62,500

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.

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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

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

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Household Income - Exclusions

Income from employment of children, including foster children, under the age of 18Payments received for the care of foster childrenLump-sum additions to family assets (inheritances or insurance payments)Income of live-in aidsReimbursement for the cost of medical expensesStudent financial assistance paid directly to the studentSpecial pay to a family member serving in the Armed Forces who is exposed to hostile fireGiftsIncome in excess of $480 for each full-time student 18 years or olderAdoption assistance payment in excess of $480 Refunds or rebates received in lump sum from SS or SSIRefunds or rebates for property taxesServices needed to keep a developmentally disabled family member at home

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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

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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%

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The Application Process

Begins with W.I.N Lending PartnersCRA AgreementCRA Agreement Bank 2010.docCRA 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 homeRealtorContractor/BuilderFor sale by owner

Loan Processing

Loan Underwriting and Approval

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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

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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

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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

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– Existing HomesPrior 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

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– 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 Requirementsvisitability.pdf

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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

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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

Underwriting CriteriaVerification 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

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Home Buyer Brochure

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2Final W.I.NHomeBuyer2010.pdfwww.flhousing.org/programs

www.stpete.orgwww.hud.gov