​2021 Equity Builder Program & Housing Our Workforce Next Steps: Enrolling Homebuyers

2021 Equity Builder Program & Housing Our Workforce Next Steps: Enrolling Homebuyers

1:17
We have an exciting year for homeownership for our Equity Builder Program, which is our eldest standing program. This will be our third year running the Housing Our Workforce Program.
1:28
These programs are fantastic because these are just additional tools to allow your organization to reach more home buyers and offer them successful homeownership.
1:42
As I mentioned, we will be recording this presentation, and we're going to have a packed agenda today.
1:49
We're going to talk about how these programs operate. We are going to talk about the differences.
1:54
We are going to give you more assistance to be able to administer the programs and properly train your staff.
2:05
So a little bit about both our programs for those who are new, and those who are returning the way that they operate. The Equity Builder Program is our oldest standing program. It started in 2003. It is a regulated program by the FHFA.
2:23
So it is slightly different than HOW and in that sense that EBP is offered for income eligible homebuyers, and they can be used for down payment, closing cost assistance, and rehab assistance.
2:38
We have disbursed a little over 45.9 million dollars so far.
2:45
And we have served a little over 4,000 homebuyers, which is great and counting every day.
2:52
HOW is a voluntary program that started as a three-year commitment.
2:57
It started in 2019 and since we started this program, we have administered a little over 4.3 million dollars.
3:05
And we've assisted around 292 homebuyers how is for income eligible homebuyers for down payment assistance only.
3:19
So, when we're talking about these programs, you know, there are huge benefits for the homebuyers as well as your organization.
3:27
When you're talking to homebuyers, this is a great opportunity for them to bridge the gap between mortgage and purchase price.
3:34
We know that some people do not have necessarily have any issues qualifying but coming up with the money at the closing sometimes can be a challenge which sometimes further delays people into successful homeownership. So our programs can help with that. It's also great because this also has potential to lower any debt to income ratios.
3:56
It also puts them in a better position with loan-to-value. Maybe these homebuyers are on the cusp of MI and maybe this gets them out of it. Things of that nature that can only just help them further sustain this.
4:09
As I mentioned, both programs are for down payment and the Equity Builder also for closing cost assistance.
4:15
Other things to think about is that maybe these homebuyer's do have some savings. And maybe they don't want to put it all down.
4:23
They are able to reserve that for other things that come with being a homeowner in the future, whether it's repairs and things of that nature.
4:33
So, huge benefits. And this also benefits your organization, because this allows you opportunity to expand your business opportunities. It's just another tool in the toolbox for your organization to promote what you do as an organization.
4:50
These homebuyers could lack those funds.
4:54
So another thing is we're not asking you to invent mortgage products.
4:59
We want you to be able to use what you currently use and sometimes people do market that equity builder can qualify for the CRA.
5:09
And that allows some flexible and innovative financing, which is a huge selling point and the other thing is, you can layer our grant program with as many grants are down payment assistance. That's what's really important, too, is that if your state has any state housing, finance agency down payment assistance programs, or any city in towns, things like that, layer us. We're not lien sensitive, we will sit in any positions and even sit in third or fourth.
5:36
And that's also another thing that's really great for your organization to market to these home buyers.
5:42
We will take qualify and non-qualified mortgages, and that's something that's also great to try and be as flexible with what you're currently utilizing.
5:53
So, when where, comparing both our programs this grid is located on our website. It was also included in the 2021 notice and change.
6:03
We're going to cover some key items in the grid, but we're also going to get into further detail on the presentation.
6:09
The biggest things right off the bat is that EBP and HOW have different income limits.
6:16
For EBP, it is at or below 80% of the area median income, and for our HOW program it's slightly over that 80%, and up to 120%.
.6:27
This year the grant amount for EBP is 15,000 and for HOW it is $10,000 with a 1 to 1 match, and we'll talk about that later in the presentation.
6:40
When it comes to your organization, you have gone through the application process. The award notifications are going out, by end of this day, tomorrow.
6:49
Your organization has access to $150,000 this year for Equity Builder Program.
6:57
Housing Our Workforce is $100,000. Also know that these funds are never guaranteed there on a first come, first serve basis.
7:03
But that is the maximum threshold that your organization can reserve up to in total for the year.
7:10
The biggest difference is that HOW specifically for down payment only. For EBP, it can be for a downpayment closing cost assistance, which does include the education and counseling fees, and any rehab assistance.
7:28
And both our programs, do have to be for purchases of primary resident, owner occupied properties.
7:38
We'll talk a little more about that later, and then when it comes to the first one-third of the enrollments that's only an Equity Builder Program requirement that's within our regulation with the FHFA that your organization has to reserve your first one-third for first-time home buyers only.
7:56
And anything after that once you have met  that cap
8:01
you can register non-first-time home buyers. HOW does not have this requirement.
8:07
Any first-time homebuyer does have to do the homebuyer education and counseling.
8:11
We'll talk about that, as well, later in the presentation, when we're looking at the documents themselves, they will have a disclosure, which is our, basically, our field in the tunnel free.
8:24
And there is a lien on the property for both of them.
8:28
So, we do have notes and mortgages and we do service in the six New England states, however, sometimes some of our
8:37
homeownership programs, if members lend slightly outside of that footprint, it's a separate approval process where they will submit to us. That's outside there.
8:47
It's a separate process that would already have to have been provided
8:51
you know, what time of application but that is why we list that there for how it's only to the six New England states and we'll talk about for how having that homebuyer match requirement in today's presentation.
9:07
This is just a great tool to show what the roadmap is in the overall process. This is on our website as well, and I think it's a strong depiction of the entire program process itself. I recommend sharing it with your staff, and even your home buyers, because we don't directly interact with your customers.
9:25
Technically, you are our customers, and therefore, they are yours.
9:29
So, it's something just to kind of show them how the process is.
9:33
They have to work with an approved bank or credit union. They have to start the application process and get the first mortgage financing.
9:41
There has to be a live property and a fully executed purchase and sales.
9:46
When we're talking about submitting for the enrollment, which is reserving the funds, that's when we're going to the income qualification process.
9:55
That's a 15-day business turnaround time.
9:58
And then once your organization's approved, the biggest thing is, is that you're going to be table funding the grant.
10:05
So once you have closed on your first mortgage financing, then you know you're closer or you're post-closer
10:12
is going to be submitting the appropriate documentation for the disbursements, which is the reimbursement, of you table funding the grant. So I think it's, it's definitely a great feature to be able to show with staff and homebuyers.
10:28
For the funding periods, so we are having four funding periods this year for both programs. They're going to both be administered at the same time. They are two separate pools of money.
10:38
They're not co-mingled in that sense.
10:41
We run them together because the great thing is, is if you have applied for both, then, you know, maybe you have somebody who’s really close to that threshold, and, you know, you can be able to shift into one or the other permitting, you know you qualify, et cetera.
10:58
​They're separate pools of money because for the Equity Builder Program, it's a regulated program that's based on 10% of the bank's earnings, and then within that, it goes toward our Affordable Housing Program, that 10%.
11:16
And then from that 10%, is where the Equity Builder Program grant funds are, and that's at 15% for HOW it is an annual board approval.
11:27
So, you know, that is where that number is generated. Like I said, there are two separate pools of monies.
11:33
We don't have the final allocation amount because our organization is still in the process of releasing our 10K financials.
11:41
Once we have that, you will have access to what the total amount is and how the funding structure is, but in the meantime, the first release is on March 15th.
11:49
And, then, we're going to be doing April 1st, April 15th, and May 3rd this year, and something to note as well is these funds are on a first come, first serve basis.
12:02
They are subject to change.
12:03
And, for some reason, you know, we do as much analysis in advance, you know, to look at what the market trends are, as well as, you know, what our dollar amount is and making sure we can process files in a timely manner to provide your organization great customer service. So, that's why we always say it's subject to change, because just depending on how things play out for that current year.
12:28
So it's really important that when you are selecting contacts to submit and communicate with us on EBP or HOW that who you have selected, an application, is going to be receiving all the correspondence, an e-mail, any of the notifications, when we release money, and what's available.
12:51
If we have any questions or concerns that we release file back to you, so, it's important to make sure that those two contacts identified are suited for that.
13:02
Then also, you know that those two staff members are going to train, and make sure you co-ordinate that workflow with the other staff in your organization.
13:12
Something to note whatever you had put an application, if for some reason, that contact, maybe you don't think is a good fit, or maybe you want to change or maybe they're no longer what the organization, you know, just reach out to me directly, I'm happy to work with you and update that.
13:29
Communication with your organization is key for these e-mails.
13:34
That way, you know, we can partner together and be able to work successfully in, you know, approving and enrolling and reimbursing these grant moneys.
13:50
So, when you're submitting the applications in general, that has already been completed for your member organization to participate, and that is what has currently already taken place.
14:03
I mentioned the award notices are going to be going out tomorrow by end of business day on March 5th.
14:09
Your organization is going to complete these trainings, whether they are live, or if you offer the pre-recorded, once it is made available on our website, we just want to make sure that at least one staff member has completed the appropriate training.
14:26
And you're certifying when you are applying for these programs, that, you know, you're doing this. And it is on an honor system.
14:35
And something just to call out specifically, is that, you know, the front-end ratio, max is 37% for both our programs.
14:47
And, you know, that's not to say if you do not If you don't have this, you can provide compensating factors. That has not changed. We haven't on changes in, I believe, two years, but some examples of compensating factors that we provide in our procedures.
15:05
You know, what is what is the current monthly rent if they have any additional backend debt, if any, at all. And, you know, do they have at least 2 to 6 months reserves?
15:15
It's just important for us to make sure they can sustain homeownership.
15:19
We know that Fannie and Freddie will go up to 50 plus for debt to income ratios and you know, that's great for that.
15:27
But for us, you know, we are specifically for low to moderate and slightly higher for HOW income thresholds.
15:34
So, you know, we're trying to make sure that, you know, where we're vetting that these home buyers can sustain these mortgage payments.
15:43
And when you're applying for these individual homebuyer's, it's important for you to kind of treat this as
15:51
a second underwriting process, you know, looking at your pipeline regularly, coinciding with your first mortgage.
15:58
When you have to request increases or decreases in the grant amounts, you can do all this within the online system everything's under our online portal.
16:08
You know, making sure that the homebuyer has that first-time homebuyer education, counseling, if applicable, and number EBP.
16:15
We have a specific requirement that you provide a member concession, which is something that you put on your application. You're not married to it. But if, you know, if you deviate, that's fine. It's just something that's special to that Equity Builder Program grant recipient. that's different from your first-time homebuyers.
16:39
So when we're looking at just some household reminders, as I mentioned, this, these programs are for purchases, owner-occupied primary residences.
16:49
That includes 1 to 4 families, condo's, multi families, manufactured homes. And with manufactured homes, we just need evidence that it's permanently affixed or wheels up axels down.
17:01
And the homeowner must always take title. If you have manufactured homes, and you think you have a different unique scenario, just reach out to us, we're happy to work with you, and give you guidance in advance to see if there's something that might be complicated, know, that you are unaware of.
17:18
It's important that you are looking at that total household headcount and all the people that are in there. And it's not just who's in your first mortgage financing. We will talk a little more about that as well when we get down to the income part.
17:35
The requirement to execute our disclosure is for both programs. And the reason is if you think you qualify this homebuyer for one or the other.
17:46
You have the flexibility and you don't have to go back and re-execute.
17:51
The requirement. This is a threshold. That's a regulatory requirement for EBP.
17:55
And we mirror this for how your homebuyer cannot receive more than 250 dollars, cash back at closing.
18:03
And, for EBP, specifically, the minimum contribution for down payment is $500 just to show that they have some skin in the game.
18:12
But for HOW because it is a match program, you're going to want to put more than $500 down, because it's a 1 to 1 match-based program.
18:21
And that's how the grant amount, is generated, we'll talk more specifically about HOW throughout this.
18:27
Then as I mentioned, we have notes and mortgages. They are separate for each program because each program, although they're procedurally the same, they are slightly different.
18:37
So just making sure that you're using the appropriate templates, as I mentioned, that for first-time home buyers, they have to complete the education counseling.
18:47
So when your organization is identifying these potential homebuyers, as I mentioned, the household occupants who reside in the property in that foreseeable future is really important to have that conversation and it's very different.
19:02
Then, who is on your first mortgage. We're all in for income.
19:05
We're all in for who lives in the house, know, some examples that you have to include that you might not even necessarily consider is if there's any college students.
19:14
Maybe there is some custody where, you know, former spouses that
19:20
they have joint custody, you know, those little children, or even those adult household members have to be included in the household because they're going to be residing in the property in the foreseeable future.
19:30
So it's just important when you're working with your home buyers to get all that on paper, which is important for them to review our EBP/HOW disclosure, because it does explain all that information.
19:44
Your organization is going to work with validating the total household income.
19:49
And as I mentioned, this is with income threshold for both programs.
19:55
We are using the HUD income limits, and we do have the link here.
19:59
Like I said, for EBP is less than or equal to 80% of the area median income, and how is slightly over that 80%, and either less or equal to 120%.
20:13
So, for this year, the way we time, our program, the 2021 income limits are not available at this time.
20:22
Typically, they come out later after we release our first pool of funds. So, we will be operating with the 2020 HUD limits until the 2021's are released.
20:33
But we will determine when we're going to change over after the release, we'll give you ample time. We're going to provide notification in advance through e-mail, and also, we put notifications when your organization logs into the community lending site.
20:47
So, you know, we try to just least give you that heads up and that transparency, just because the timing of everything and sometimes HUD is a little delayed, especially last year they were a lot more delayed than usual because of the pandemic this year. You know, it could be a wildcard, there could be some trickledown this year as well.
21:07
And, you know, just remembering that you have to review all the income sources, compare it to the household members and just make sure that everything ticks and ties. These programs are income-eligible based.
21:24
So these are reserved specifically for those individual homebuyers.
21:30
You can't swap out homebuyers, you can swap out property addresses.
21:34
If for some reason that property does fall through for the homebuyer, but you can't switch different homebuyera in that situation.
21:45
So this year, I'm proud to say that we have translated our disclosure from English to Spanish, thanks to two of our employees at the Bank,
21:55
one of them being one of our analysts, Ivette Morillo.
21:58
We are also allowing e-signatures this year in our 2021 version and moving forward to be able to assist, making this process better, especially if folks are still working from home.
22:1
I know sometimes, wet-signatures has become a challenge if you have that e- signature software, and your LOS system, and you can map our disclosure.
22:20
We highly recommend it, and we did make some enhancements just to try to work better and try to make everything a little more streamlined
22:29
when you're submitting things through the portal to do after you use the 2021 version, we won't accept priors just because we do update this annually. It does get audited from the FHFA.
22:42
So, any enhancements that we make, especially with a new regulation, we make sure that everything ticks and ties that were not requiring the first four pages to be initialed this year. So, this is something that's new.
22:54
We are recommending when you're going over this with your homebuyer, it's important to tell them that the first four pages are informational.
23:03
It's for them, recommend them, keeping it on hand, because it talks about the importance of what you have to do to receive the grant.
23:12
It also talks about, after closing the loan, and if they go to refinance or sell the property.
23:18
So there's a lot of information on those first four pages, and it's really important that they understand that there was a lien on their property and any other educational components that they need to be aware of.
23:32
Income Documentation, we're all in for income, and we do have income guidelines.
23:37
That will be on the website. That is the last document that has not gone live.
23:42
There are not really any significant changes this year. I will call them out in this presentation though
23:49
And if your homebuyers or household members do not have any income, we do have a current 2021 zero certification of income certificate that also can be e-signed as well.
24:01
What enhancement for our income guidelines is that, typically, we require tax returns or IRS transcripts.
24:09
We're not requiring for W2, wage earnings only. If they're self-employed or there's interest income, capital gains, rental income, things of that nature.
24:20
We are requiring the tax returns and transcripts, but to make this more simplified for the W2 wage earnings. It's not a requirement.
24:29
We know that your organization is getting that stuff, anyway, just for Fannie Mae and Freddie Mac. So if you do see something that is significantly different, we're looking for you guys to be our eyes and ears when you're reviewing these homebuyers. You see the full scope of work. We do not. We only see what we're requiring.
24:48
So, if you do see that there are some things changing, you know, ask the appropriate questions to, your household members.
24:56
If there is a discrepancy, maybe they changed their line of work or, you know, especially with COVID that was, you know, a lot of impact last year is that some people's income did vary compared to what it historically is or what they were anticipating. So, you know, just make sure you're doing your due diligence still, just because we've removed this for W2 wage earners.
25:20
We can also not accept documents through regular or encrypted e-mail. Everything does have to be uploaded to our system.
25:30
And if, for some reason there are some complicated or different parts of your file, you know, if you need letters of explanation, for unusual income that you're unable to document or maybe it's not as cookie cutter, we see that a lot. Feel free to also include letters of explanation.
25:48
If there's a change in the household count, things of that nature. Sometimes we do come back for extra information.
25:56
If we do think that things don't tick and tie together. You're required to upload the purchase and sale agreement, it needs to be fully executed, and it does need to be legible.
26:07
Unfortunately, we cannot accept offers, and the reason why is because these funds are high demand. And we're basing everything off that property address because this, these are income eligible programs.
26:21
So, if that property address changes, you know, depending on if there going, you know, say they have a property in one city and then they go into a town far away that income could be very different.
26:33
And we want to make sure that these are fully baked files is as fast as they can. So that's why it has to be a fully executed P and S.
26:44
The income calculation, as I mentioned, our website, does have our income guidelines.
26:49
You know, they will be available before the enrollment opening date of March 15th.
26:57
So we always have a standard practice, that prior to submission, you are doing a manual review. It's important to remember that we're perspective.
27:06
So our qualifying income for your first mortgage financing compared to what we do at the bank, is different because we're compliant, we're projecting out.
27:16
So that's why it's really important to do manual reviews and making sure you have the accuracy when you're looking at the documents and you're imputing it in the system.
27:26
And although the system does calculate, it can't foresee every scenario, especially if there has been a temporary, unpaid leave of absence or they didn't start on January 1st.
27:38
Maybe this is new employment, things of that nature.
27:40
So it's really important to make sure you're doing manual review, in addition to the system.
27:47
And, obviously, if you have questions, feel free to reach out to myself, or any other staff, who do the first reviews.
27:53
You know, we're happy to help, especially if there's any scenarios that are complex, that you want to make sure you're fully depicting.
28:01
So like I said, accuracy is very important and making sure that you are being as truthful as you can.
28:10
And making sure you're covering everything.
28:13
So the approval of the enrollment is determined by us. Like I said, we do a two-tier review
.28:19
It's 15 business days, and that's permitting that we have all satisfactory documentation.
28:27
We're projecting out for the next 12 months, and it's annualized.
28:31
You can refer to the income guidelines on our website. And just really making sure you're communicating, especially. If you have two persons who are maybe in putting all of the enrollments in the system, just making sure they really do understand how we're calculating income, and this should be treated separately because it does vary from secondary market income.
28:54
So just an example of how we're looking on the HUD income website.
28:59
As I mentioned, 2020 is only available at this time. So this is the example that we're providing here.
29:04
You're going to select the current year, and then you're going to make sure you select the state followed by the city in town, or county.
29:14
Then when you're going in here, you're going to click for the income summary.
29:18
You're going to just cross-check that everything ticks and tie the one that you selected.
29:23
You're going to do a headcount in advance.
29:27
So this example is for Boston, and this is a household of three. So when you're looking at that, 80% for 2020, is $86,650. We do not use the median family income.
29:43
It is identified by the Persons in the Family, so that's important.
29:48
When you're looking at here, some State housing finance agencies might, might differ from what we do, but just so everybody knows, I do have a question, just want to see what it is.
30:05
This is something that I will, I will reach out off offline, on this specific scenario here.
30:13
So when we go to the HOW you're going to want to look at that 80%, and make sure that the income is slightly over that 80% to be able to qualify for the HOW program.
30:28
And when we get to the 120, because the HUD income limits on this part of the website go up to 80.
30:37
​The way you're going to do what You're going to go to the same selection process. Go through the state, going to go to the county.
30:43
Identify who's residing in the property, so this example three person, you're going to go with the 50%.
30:50
You're going to times that by two to get the 100%. And then you're going and times it by 1.2 to project out to the 120.
​30:56
The system is going to automatically do this, but if you have a loan officers who are on the road, and they're trying to pre-qualify before providing the information regarding the system.
31:07
This is how we operate this.
31:12
So, for HOW specifically-So, as I mentioned in the beginning that it is a down payment assistance only with a match component. It's a 1 to 1 match.
31:22
That has to be documented. So, for example, if a homebuyer contributes $10,000, then they're eligible for the full max and $10,000, is it because it is a higher income bracket? So, you know, these homebuyers it's to promote workforce housing. So, they do have to have some skin in the game.
31:40
They are slightly over that 8% and up to 120.
31:44
You cannot request a grant amount that exceeds the difference between the purchase price and the first mortgage loan amount. The reason is, it is because it is a down payment assistance only program, and it cannot be used for closing costs.
31:59
So for example, to follow with this $10,000 is that if a purchase price is $275,000 with the first mortgage, loan amount of $265,000.
32:10
The total downpayment and grant reservation is $10,000.
32:17
So, we do say that this does have to be documented.
32:21
The homebuyer downpayment must be evidenced on the Purchase and Sale agreement.
32:27
I need to show that contribution as an earnest money deposit, or prior to closing.
32:33
We do understand, depending on when you're getting these P&Ss, if they have already been executed before you're doing the first mortgage financing, we will accept fully executed addendum to the P and S.
32:46
We cannot match the cash to close, and this is because these figures are always a moving target.
32:52
They always shift, especially if programs change and things of that nature. You know, you're table funding these grants.
33:00
So it's important that when you are looking at this that you're doing the due diligence in advance.
33:09
If you ever have any questions or you do have some changing and how things are structured from time of enrollment and disbursement, feel free to reach out to me.
33:19
And the contribution from that homebuyer's own funds, it cannot be a gift or a gift of equity.
33:27
If they do receive any additional gift funds, that's fine, but when you're looking at how the 1 to 1 match is completed, this is how we're looking at that.
33:40
And, yes, I do see a question regarding the 2 to one match being last year opposed to this year. So, yes, unfortunately, we did change this for this year.
3:52
It is ... a 1 to 1 match for 2021.
33:58
I do see some other questions around this, so I just want to go through here.
34:05
So, one question, I believe I answered was regarding a gift of equity.
34:11
So you cannot include the gift of equity in or any gift money into the HOW? This is for HOW, specifically, this does not apply for EBP.
34:23
When we are doing the 1 to 1 match, and if there's gift money and someone else also had a question. Can give money be used for EBP? Yes. You just have to make sure for EBP that they have to contribute in minimum of $500 of their own funds. When we're looking at this 1 to 1 match. This is for how specifically.
34:48
HOW also has Home Purchase Price Limits. Which are based on the 2020 Mortgage Revenue Bonds.
34:55
This is a link to the IRS website for the specific sheet that we will be using this year. The system will also automatically calculate it. When you have input the property address.
35:08
This information is also on our website when you go to the How landing page.
35:15
So, we're talking about Member Action Required.
35:18
This means when you have submitted your enrollment to us, if we feel that there is incomplete information or something is not completed correctly or, things do not meet the income guidelines and are stale documents we will put the file and member action required.
35:38
And these will go directly to the main contacts and e-mail, that means that we're going to release the file back to you as the member organization.
35:48
And it's important that all documentation is submitted within 10 business days from when we get that.
35:55
We also have an email reminder that is generated on the fifth business day, to remind you of this.
36:02
And some examples are missing fully executed P and S, either incomplete it or outdated EBP/HOW disclosure, or, if there's income documentation, that's not in accordance with our guidelines.
36:14
It's actually really interesting.
36:16
We started recently, back in 2019, tracking the error rates, and kind of just looking at if we need to provide more guidance, and training and technical assistance for all of our members.
36:30
And actually, when we looked at last year's, we did actually see a significant increase in 2020 compared to 20 21, which was great.
36:39
So, you know, I think, in 2019, I think we had an 80% or higher error rate, and now we're down into the sixties for both of these programs.
36:48
And I think that that is, is great, and I hope that that continues this year.
36:54
I think it's important, when we're looking at all of our documents, making sure, if you guys have any questions, that we're as transparent as possible and we're trying to work one-on-one.
37:04
We have these complicated files.
37:06
We know that these are always not cookie cutter scenarios, especially with last year, and I have a feeling that this might be trickle-down, especially because of the pandemic. So a great job.
37:16
And you know, we do have the sole discretion to deny enrollment.
37:20
If you do not resubmit within that 10 business days, if for some reason it can't be resolved or you need more time, just reach out to us. You know, we'll work with you on this.
37:30
We get that sometimes timing is not ideal with certain situations.
37:34
Just making sure you're letting us know. And of course, before we'd ever deny something, we would give you a courtesy call and an email notification. And if we weren't denied due to that, we do release the funds back into the general pool.
37:54
So for first-time homebuyers, as I mentioned, we do require education and counseling.
38:01
Your organization at time of application selected some approved agencies that we grabbed from HUD, CHAPA and National Industry Standards of Education and Counseling. You're not married to them.
38:14
It's just to get a flavor of what your organization typically sees and just making sure you're doing your due diligence on who is approved. And making sure you're not deviating from that list.
38:27
If you were to use an agency that is not on our approved list, you were supposed to provide that curriculum in advance.
38:36
If you feel you're still interested in this, and you don't know if somebody is submitted, feel free to reach out to me.
38:44
But the education counseling should always follow the acceptable industry standards that focus on purchase and ownership, including the maintenance of the home.
38:56
Alright.
38:56
So, when we're getting into the online education, it's important that the education typically is offered online.
39:06
What the real focus on, to make sure we're being transparent is the counseling component.
39:11
So a lot of our approved agencies through CHAPA, HUD, and National Industry Standards of Homeownership Education Counseling, they will work with a parent company and provide the online education, because we do understand that some people don't have eight hours out of their day to sit in a workshop.
39:33
The only acceptable sources that we have been offering the last two years or so. are Framework, or eHome America.
39:41
We will not accept Freddie Mac.
39:44
We won't accept MGIC, or Fannie Mae either. Framework and eHome, America are the only ones, but we do encourage that you go through the approved agency, who then gives that online code directly to the home buyer.
40:00
It's important because then they're required to do the counseling component, whether they do what post-closing. I know, because of COVID they're not really doing in person. Some restrictions are being relaxed, but they are even doing it on the phone. I knew with COVID that that happened a lot initially. But that's important, because if they just go to Framework or eHome America, they can opt out of that. And we do understand sometimes is, home buyers might have already taken the course you have to certify and ensure that they're going to get that counseling component, so we put that back on your institution. So, that's why we give that guidance on there. And this is an example of what a certificate looks like that.
40:42
It's done through a Framework, but they paired with an approved agency.
40:46
Which this one for example, MAHA.
40:48I
Do have a couple of questions regarding homeowner education.
40:57
One question in general. Does one have to be clear to close to apply?
41:04
Especially if there's new construction that will be completed later in the year. So, the answer is No. It does not have to be clear to close.
41:10
You have to have that first mortgage financing initiated with your organization and just making sure that you follow what we require to submit at time of enrollment because it's income-based eligibility.
41:27
Is there a difference between the application form for EBP and HOW? So, with that, we call the application. The what we're currently going through right now, where your organization applies to offer the program.
41:41
Once that award notice goes out, we call those enrollments.
41:44
So, the enrollments that you are reserving for individual homebuyers for either EBP or HOW are required to complete our disclosure and that disclosure is for both.
41:56
Just because you might not know if you're doing pre-qual or pre-approval programs if you're having them fill out these forms in advance, you might not necessarily know which program they qualify for.
42:12
One question actually about in comments, do you have COVID overlays?
42:16
That's a great question.
42:18
So when it comes to the COVID situation, know, if you feel that whatever income you're providing is not fully depicted.
42:28
Whether you think that it's not projecting out accurately and there are some circumstances that a paycheck will not be able to factor in. That's where that Fannie Mae VOE comes in. We accept one or the other, but especially with coven it's tough because it can't be a one size fits all because every industry was impacted differently.
42:49
Now, I'll give an example, the restaurant industry- that had unfortunately the highest hit when it came to income, you know, some people have been working remotely this entire time and you know, you might have all their pay stubs that that accurately project that out.
43:06
So, I would just say if you do have those complicated situations, you know, reach out to us, we're happy to talk to you, and we can have conversations of, Well, how did you qualify them?
43:17
If you think the system is not projecting accurately, you know, what numbers are you using and why.
43:22
And if there's something on those documents that we can't figure out, maybe we do need a little more documentation, so I feel it that might be on a case-by- case basis with that.
43:40
And when we're talking about these certificates, so, these certificates have to be good for 24 months.
43:46
We say 24 months from either at time of enrollment, or when you close, just because, depending on if they've taken it in advance, and depending on when the closing is just making sure that that 24-month rule is into play.
44:05
I got some more questions about this.
44:14
So, this certificate, just to clarify, is an acceptable way to see the online education. Part of it is by framework. And we see in the bottom right, then it's paired with an approved agency. MAHA. And that is because the approved agency is working with the homebuyer to take it through Framework or eHome America, and they're providing counseling component.
44:47
All right.
44:52
So, the next component of our presentation is just going over that we do have another training that's coming up. It's for the disbursement part.
45:01
So, as I mentioned, we also have live or pre-recorded for this offering as while we require at least one staff member to complete that you can go onto the Bank's website under the Events and register for the live event or stand-by for the pre-recorded. We're going to be covering the five-year retention period and we typically feel this is suited for either underwriters, closers or post closers.
45:31
We're going to go over how your organization has to monitor the grant for five years, especially for refinances, foreclosure, or any sales.
45:42
Because something to note with these programs and when you apply to participate, which your organization already has, you need to monitor that. So it's really important.
45:54
If you're selling the loan on the secondary market, that's great, but you're still yourself committed to be able to hold the grant. You can't sell off the grant for EBP or HOW. So that's something I just want to say for any new people to the program that that is communicated.
46:10
​Like I said, those are on our website for our March 23rd and April 1st.
46:17
We do have a couple more questions.
46:19
Does the class have to be completed prior to the application? So no, it does not.
46:24
If you're new to the program, I definitely recommend having somebody who is going to be importing the enrollments complete this course before March 15th. We do have another offering for this if people were unable to make the live on March 9th.
46:40
So if you feel that you want to have multiple staff members, tell them to go on the website as well under the Events tab and also register for that.
46:49
We have some specific situations.
46:52
One question is if a person purchasing a multifamily property, is rental income considered? So that's a great question.
47:00
So, yes, rental income is considered in the qualification.
47:06
We do 75% of the rental income and that is reflected in our income guidelines.
47:12
You need to either provide a copy of the appraisal or a copy of a current lease.
47:18
The only way that we do not include rental income is if the property is vacant and you can demonstrate that. If you're going to use it for a compensating factor and you're using it to qualify, though, we're all in, you have to include that in there.
47:35
And I would recommend looking at that section of the income guidelines and sharing that with your staff members.
47:41
How are self-employed borrowers handled? Are we to follow temporary guidelines that Fannie and Freddie have provided P and L bank statements?
47:50
That's a great question.
47:50
So for us, what we do with self-employment is that we do need most recent tax returns.
47:57
So we typically require a three-year history if that is valid.
48:02
When we are getting into 2020, the complexity of that is, it can't be a one size fits all, but we do get very specific on if they are operating at a loss, and how we do that.
48:16
And that calculation, because we don't include losses in there, I would just really recommend looking at that section of the income guidelines on the website.
48:26
And if you have something specific, with self-employed borrowers that you want to share, that maybe something is not reflective of their returns, you know, provide an explanation. That's what's always helpful.
48:38
When we're talking about profit and loss, we only require the P and L after July 1st.
48:45
So, something to note for that, and if somebody has filed an extension, just provide us a copy of the extension and then just provide previous tax returns for that.
48:59
Some more questions.
49:11
I have a question regarding if.
49:14
If the eHome America course needs to be completed before the application. So, the homebuyer is taking the first-time homebuyer education and counseling. It does not have to be completed before submitting the enrollment.
49:28
The important thing is the timing of what that certificate has to be done, 24 months in advance. So, it's either at time of enrollment, or the closing. Because depending on how these dates pan out, you're going to go with either or in that situation. If you ever have questions about certificates specifically, feel free to e-mail either myself or any of our staff on that, because we're happy to tell you that.
49:52
There was a reference to lien Positions.
49:54
​Can you elaborate on program requirements regarding lien? Does the grant require a secondary lien over the five-year retention?
50:02
So, both are programs do have a lien. What I was saying is that we will sit in any lien position.
50:10
A lot of people will know, pair us with other liens on whether they're receiving additional down payment assistance. And I'll give an example that if the LIFT program was around in New England, you know any municipalities liens with that.
50:26
And down payment assistance, you know, sometimes they may be more restricted, and they might require to be in a certain lien position, Will sit in any lien position, is what I was saying. We're not lien sensitive.
50:40
But yes, technically there is a lien on the property and the lien is for five years and we'll talk more about that in the disbursement.
50:51
Is the homebuyer enrolling homebuyer the same as submitting the application for the member?50:56
No, it is not. What your organization has already done, is you've applied to offer the program once your organization is approved and awarded to use the program. You then have to, when we had the first release, on March 15th and other, the other three funding periods that we're releasing this year. You have to then register those individual homebuyers and all of the documentation that's required to reserve the funds. You're not just guaranteed that amount.
51:26
It's a, it's a first-come, first-serve basis when we release. If you have questions about that, you know, feel free to reach out.
51:40
Can a person who currently has [an] HLB,loan rent out his home to be eligible to purchase another home through the program?
51:52
And I might not be understanding this question, so they have to be a first-time homebuyer for the first one-third for equity, build their program.
52:04
So once your organization has met that first one third, anyone who's not a first-time homebuyer can be registered. For the HOW,
52:15
we don't require it to be for first-time homebuyers. However, if they are, you know, upgrading a property, they have to close on that former primary residence either simultaneously or before.
52:31
Feel free to reach out to me if you have any other questions. But I hope that you hope that answers your question.
52:38
So here's the Department's contact information. Like I said, I'm Kaitlyn Mulhern. I am the Homeownership Set-Aside Programs Manager for both our programs. We have two analysts this year. We have Ivette Morillo and we have Kevin Ryan.
52:52
Some other staff members, we have Livia Bourque, she's our HCI Operations Manager and she also is working with myself and the analyst this year on both our programs.
53:05
Paulette Vass, she's our CDA Manager. Sometimes you'll see things from her through password resets and go-to webinar platform notifications. And then Ken Willis is our Senior Vice President and Director.
53:20
If you have any other questions that maybe you haven't thought of, just reach out to us.
53:25
​And thank you for attending our program. We're really excited for this year. And working with your organizations, and it's going to be a fun year.
53:33
Thank you very much everybody. Have a great rest your day.