ILLINOIS HOUSING DEVELOPMENT AUTHORITY Tara Pavlik Managing Director

ILLINOIS HOUSING DEVELOPMENT AUTHORITY Tara Pavlik Managing Director Homeownership 3/5/2015

NEW PROCESS

RESERVATION/ COMMITMENT • • LOAN COMMITMENT IS PROCEDURALLY THE SAME AS THE CURRENT RESERVATION PROCESS. INSTEAD OF RECEIVING A RESERVATION CONFIRMATION YOU WILL RECEIVE A COMMITMENT. – ONCE THE LOAN IS COMMITTED, YOU WILL HAVE IMMEDIATE ACCESS TO THEFHA COMMITMENT LETTERS (IF APPLICABLE) – THE LENDER CLOSES THE LOAN (AFTER LENDER DETERMINES BORROWER IS TAX CODE COMPLIANT) – THE COMMITMENT IS VALID FOR 60 DAYS • WITHIN THOSE 60 DAYS THE LOAN MUST BE DELIVERED AND SOLD TOUS BANK MRBP. • 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.

HOMEOWNERSHIP NEW FORMS • REVISED, EASIER TO COMPLETE ONLINE DOCUMENT SETS – ALL ACCESSIBLE ON IHDA. ORG, – UNDER: PARTNER, INFORMATION, FREQUENTLY USED FORM AND DOCUMENTS – DOCUMENT SETS- FILLABLE PDF – ELECTRONIC SIGNATURES AVAILABLE TO ALL LENDER THAT WISH TO PARTICIPATE • TO PARTICIPATE LENDER MUST SEND IN TOIHDA ON COMPANY LETTER HEAD THAT THEY WILL BE USING ELECTRONIC SIGNATURES AND A SAMPLE OF A 1003 SIGNED ELECTRONICALLY – ALL DOCUMENTS CAN BE COMPLETED WITH INITIAL DISCLOSURES ( THE ONLY EXCEPTION WOULD BE THE INCOME CALCULATOR AND SELLER AFFIDAVIT) • AUTHORIZATION AND RELEASE – THIS IS MANDATORY- IHDA WILL NO LONGER PURCHASE A LOAN THAT HAS THIS MISSING – NO EXCEPTIONS! – LOCATED ON IHDA. ORG – EXPLANATION

REQUIRED DOCUMENT!!!

HOMEOWNERSHIP NEW PROCESS IN MARCH 2015, IHDA WILL INSTITUTE A NEW OPERATIONAL POLICY. • • • INVESTOR PACKAGE UPLOAD ( ALL ITEMS REQUIRED YOU WOULD NEED FOR INVESTOR DELIVERY) – DELIVERY CHECKLIST ( ALL ITEMS THAT ARE SEND FOR INVESTOR DELIVERY) IHDA PACKAGE UPLOAD ( ALL DOCUMENTS NEEDED FOR TAX CODE COMPLIANCE) – SUBMISSION COVER AND DATA SUMMARY ( APPRAISAL DATA IS REQUIRED, ALL FINAL NUMBER MUST BE ACCURATE- IF NOT COULD DELAY FUNDING!) DELIVERY - U. S BANK HFA DIVISION - IHDA

HOMEOWNERSHIP NEW POLICIES- EFFECTIVE MARCH 1, 2015 • ALL FILES SUBJECT TO THIRD PARTY QC AUDIT – WHAT DOES THAT MEAN? – HOW LONG IS THE PROCESS? • ELECTRONIC SIGNATURES ALLOWED STARTING 3/1/2015 – MUST SIGN UP TO DO SO – LENDER LETTERHEAD AND A SAMPLE OFELECTRONIC SIGNATURES COPIES – BORROWER/SELLER AFFIDAVIT, RECAPTURE, INCOME CALCULATOR, INCOME CERTIFICATION - IHDA WILL NOW ACCEPT UPLOADED COPIES OF ALL IHDA DOCS- NO APPROVAL REQUIRED - ORIGINAL MORTGAGE AND NOTES STILL REQUIRED

RECAP

NEW PROGRAMS EFFECTIVE 3/1/2015

First time ever down payment assistance program is available to non first time home-buyers Statewide

AVAILABLE FOR FIRST TIME AND NON-FIRST TIME HOMEBUYERS FEATURES: • 30 -YEAR FIXED RATE LOAN (VA, FHA, USDA, FNMA(DU) AT THIS TIME NO FREDDIE MAC (LP)) • A FLAT $5, 000. 00 DOWN PAYMENT AND/OR CLOSING COST ASSISTANCE AVAILABLE • PURCHASES ONLY! • THE SECOND WILL BE AMORTIZED OVER 10 YEARS WITH A ZERO PERCENT INTEREST RATE MONTHLY PAYMENT. – $41. 67 PER MONTH PAYABLE MONTHLY • QUALIFIED DWELLINGS- 1 -2 UNITS (MUST BE PRIMARY RESIDENCE)

CONVENTIONAL PROGRAM: ÜOPTIONAL LENDER PAID MORTGAGE INSURANCE ÜNO ADVERSE MARKET FEES ÜNO PRICING ADJUSTMENTS ÜREDUCED PMI COVERAGE: • • 18% FOR THE LTVS GREATER THAN 95% AND LESS THAN OR EQUAL TO 97% 16% FOR THE LTVS GREATER THAN 90% AND LESS THAN OR EQUAL TO 95% 12% FOR THE LTVS GREATER THAN 85% AND LESS THAN OR EQUAL TO 90% 6% FOR THE LTVS GREATER THAN 80% AND LESS THAN OR EQUAL TO 85% DELIVERY REQUIREMENTS • ALL IHDA CONVENTIONAL LOANS MUST BE RUN THROUGH DU AS “HFA PREFERRED“. YOU MUST SHOW THE SUBORDINATE FINANCING, WHICH IS CONSIDERED A COMMUNITY SECOND.

@HOMEILLINOIS LENDER PAID OPTION • • • 640 MINIMUM CREDIT SCORE LENDER CHOOSES MORTGAGE INSURANCE COMPANY OFF APPROVED LIST LENDER DELIVERS TO US BANK CERTIFICATE OF INSURANCE AND PROOF PAID SRP PAYMENT AS FOLLOWS -90. 01% - 97% LTV, 4. 0% SRP -80. 01% - 90% LTV, 3. 4% SRP *REGARDLESS OF COST OFLPMI SRP IS AS LISTED ABOVE MUST BE RUN THROUGH DU DU AS “HFA PREFERRED” NO LP (FREDDIE MAC) LOANSALLOWED

@HOMEILLINOIS LENDER PAID OPTION APPROVED MORTGAGE INSURANCE COMPANIES – ARCH – ESSENT – GENWORTH – MGIC – NATIONAL MI – RADIAN – UNITED GUARANTEE

@HOMEILLINOIS STANDARD SRP AND SRP WITH LENDER PAID OPTION • SRP PAYABLE TO PARTICIPATING LENDERS = 2. 00% OF THE PRINCIPAL LOAN AMOUNT PAID AT PURCHASE BYU. S BANK , PLUS INTEREST ON BOTH CONVENTIONAL AND GOVERNMENT • FOR LENDER PAID OPTION SRP PAID AS FOLLOWS -90. 01% - 97% LTV, 4. 0% SRP -80. 01% - 90% LTV, 3. 4% SRP

@HOMEILLINOIS LENDER PAID OPTION • For non-delegated lenders, US Bank HFA Division will order the appropriate MI coverage selected by the Lenders are responsible to provide proof that the MI is paid in full when the closed loan file is delivered to US Bank.

WHAT IS A MORTGAGE CREDIT CERTIFICATE (MCC)? AN MCC IS A CERTIFICATE AUTHORIZED BY THE FEDERAL GOVERNMENT AND ISSUED BY IHDA. IT ALLOWS THE BORROWER TO TAKE 20 PERCENT OF THE ANNUAL MORTGAGE INTEREST PAID, AS A DOLLAR-FOR-DOLLAR REDUCTION TO THE ANNUAL FEDERAL INCOME TAX LIABILITIES. THIS IS AVAILABLE TO ALL FIRST TIME HOW DOES AN MCC WORK? BASIC ASSUMPTIONS: ADJUSTED GROSS INCOME $55, 000 LOAN AMOUNT $135, 000 INTEREST RATE 4. 00% INTEREST PAID FIRST YEAR $ 5, 349

SMARTMOVE PROGRAM CALCULATION OF BENEFIT: Without MCC With MCC Income $55, 000 Mortgage Interest Deduction - $5349 - $4, 280 (80%) Taxable Income $49, 651 $50, 720 $7, 448 $7, 608 Taxes Paid @ 15% Tax Bracket MCC Tax Credit N/A Income Taxes Due $7, 448 Tax Savings Due to MCC $1, 070 (20%) $6, 532 N/A $916 THE EXAMPLE SHOWS THAT THE 20% CREDIT WILL LOWER THE TAX LIABILITY BY $916. 00 ST POTENTIALLY SAVING THE BORROWER $916 ÷ 12= $76. 00 PER MONTH THE YEAR 1

OPTIONAL WITH @HOMEILLINOIS • MORTGAGE CREDIT CERTIFICATE (MCC) A FEDERAL INCOME TAX CREDIT FOR THE LIFE OF THE LOAN(AVAILABLE TO FOR FIRST TIME HOME-BUYERS OR VETERANS ONLY) – $350 FEE TO IHDA – $150 FEE TO LENDER • LENDER PAID MORTGAGE INSURANCE (AVAILABLE ON CONVENTIONAL PROGRAMS ONLY) TO FIRST TIME AND NON-FIRST TIME HOMEBUYERS

IHDA’S PROGRAM QUALIFICATION • • • INCOME AND PROPERTY APPLICABLE LIMITS APPLY ON ALL LOANS MINIMUM CREDIT SCORE 640 (FHA -96. 5 LTV, USDA, VA-100% LTV, CONVENTIONAL – 95% LTV OR LESS), 660 ( MANUFACTURED NO CONVENTIONAL) 680 (FNMA CONVENTIONAL - DU ONLY) BETWEEN 95. 01% AND 97%LTV MUST BE UNDERWRITTEN WITH US BANK –MRBP DIVISION $300 FEE • MAXIMUM TOTAL DEBT (BACK END) RATIO OF 45 PERCENT • BORROWER MUST CONTRIBUTE 1 PERCENT OF PURCHASE PRICE OR $1, 000 FROM BUYER’S OWN FUNDS, WHICHEVER ISGREATER • AUTHORIZATION AND RELEASE REQUIRED • HOMEOWNERSHIP COUNSELING REQUIRED THIS IS REQUIRED FOR ALL BUYERS

@HOMEILLINOIS ELIGIBILITY REQUIREMENTS • AVAILABLE FOR FIRST TIME AND NON-FIRST TIMEHOMEBUYERS WITHIN IHDA’S APPLICABLE INCOME AND PURCHASE PRICE LIMITS • MUST PURCHASE A 1 -2 UNIT SINGLE FAMILY PROPERTY WITHIN THE STATE OFILLINOIS • BORROWER MUST OCCUPY PROPERTY AS PRIMARY RESIDENCE( NO NON-OCCUPANT COBORROWER ALLOWED!)

@HOMEILLINOIS RECAP • MORTGAGE CREDIT CERTIFICATE (MCC) A FEDERAL INCOME TAX CREDIT FOR THE LIFE OF THE LOAN (AVAILABLE TO FOR FIRST TIME HOME-BUYERS OR VETERANSONLY) • LENDER PAID MORTGAGE INSURANCE (AVAILABLE ON CONVENTIONAL PROGRAMS ONLY) • VERY COMPETITIVE RATES • 30 YEAR FIXED RATE TERMS • ON CONVENTIONAL LOAN DU ONLY NO LP (FREDDIE MAC LOANS NOT ALLOWED AT THIS TIME)

@HOMEILLINOIS NEW WEBSITE WWW. ATHOMEILLINOIS. GOV • LOAN OFFICERS LISTED WITH CONTACT INFORMATION AS PROVIDED BY LENDERS • ONLY LOAN OFFICERS THAT CLOSED A LOAN LAST YEAR ARE LISTED

QUESTIONS?

Resources IHDA Support Line: 877 -456 -2656 IHDA Website : www. athomeillinois. gov IHDA Compliance Officers: Linda Benson - Supervisor 312 -836 -5249 Allison Crane 312 -836 -8561 Lee Gattuso 312 -836 -5324 John Maskim 312 -836 -5237 Diana Esparza-Navarrete 312 -836 -5371 Aaron Turner 312 -836 -5347 IHDA Account Managers: Greg Faulkner 312 -914 -5023 gfaulkner@ihda. org Scott Bush 312 -898 -3317 scottbush@ihda. org

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