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vs Full Service Loans

vs Full Service Loans. The information in this presentation was compiled from sources believed to be reliable for informational purposes only. Which I s T he B est P rogram F or M y Borrower ?. Before you can decide you need to know the difference between

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vs Full Service Loans

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  1. vsFull Service Loans

  2. The information in this presentation was compiled from sources believed to be reliable for informational purposes only.

  3. Which Is The Best Program For My Borrower? Before you can decide you need to know the difference between Iowa Finance Authority Program Loans and Iowa Bankers Mortgage Corporation Full Service Loans.

  4. Iowa Finance Authority Program (IFA) IFA has more than one loan program to choose from. They are: • FirstHome • FirstHome Plus • Homes for Iowans • Homes for Iowans Plus More information about these Programs can be found on the IFA website at www.iowafinanceauthority.gov.

  5. IFA Through these programs you are able to use different loan products with them. The various loan products are: • FHA • Rural Development (RD) • VA • HFA Preferred • HFA Preferred Risk Sharing You will follow standard guidelines for the loan products. 97% LTV Conventional Loan Product

  6. IFA Grants and Tax Credit Plus Grant Military Homeownership Assistance Program Take Credit Mortgage Credit Certificate Program

  7. Plus Grant • Plus Grant- This grant offers home buyers $2,500 for down payment and closing costs assistance when used in conjunction with the FirstHome or Homes For Iowans mortgage programs. 

  8. Military Homeownership Assistance Program • The Military Homeownership Assistance Program provides eligible service members and veterans with a $5,000 grant for down payment and closing costs on a qualifying home purchase. • The Military Homeownership Assistance grant may also be combined with a Plus grant ($2,500) for a total of $7,500 of down payment and closing cost assistance for borrowers who qualify for both programs. Borrowers are limited to one-time use of a Plus grant and one-time use of a Military Homeownership Assistance grant.

  9. IFA Credit Mortgage Credit Certificate Program The Take Credit program allows eligible borrowers to receive a Mortgage Credit Certificate (MCC) from IFA, which awards a tax credit value of 50 percent of annual mortgage interest paid (up to a maximum of $2,000 per year) to be taken as a credit against federal income tax liability for the life of the loan, up to 30 years. More information for this program can be found on IFA’s website at www.iowafinanceauthority.gov. There is a bond fee for MCC of $250.

  10. FirstHome Parameters First Time homebuyers only, which is defined as: • Has not owned a primary residence in the last 3 years. • OR: Exempt veteran discharged other than dishonorably, no previous mortgage revenue bond program • OR: First time or repeat homebuyers purchasing their home in “Targeted Area” • Products- HFA Preferred, HFA Preferred Risk Sharing, FHA, RD and VA Loans • Income eligible- maximum is currently $68,400 per year • Credit worthy- minimum credit score 640 midpoint • Homebuyer education as required by loan type (in accordance with agency guidelines) • Single Family Principal Residence- Purchase Limit $255,000

  11. FirstHome Plus Parameters The parameters are the same as FirstHome with the addition of the Plus Grant of $2,500. The rates are higher with the Plus Grant than without the grant as shown in the May 27, 2016 sampling.

  12. Homes for Iowans Borrowers do not need to be First-time Homebuyers, but can only own one home at a time • Products- HFA Preferred, HFA Preferred Risk Sharing, FHA, RD and VA Loans • Income Limit- maximum is currently $120,960 • Single Family Principal Residence- Purchase Limit $312,000 • Credit worthy- minimum credit score 640 midpoint

  13. Homes for Iowans Plus The parameters are the same as Homes for Iowans with the addition of the Plus Grant of $2,500. The rates are higher with the Plus Grant than without the grant as shown in the May 27, 2016 sampling.

  14. IFA Facts • Rates are set by IFA per the program, loan product, and whether the borrower is getting the Plus Grant • 1% origination is charged on all loan types • Plus Grant can be used towards down payment and closing costs • Premium Pricing is not allowed

  15. IFA Facts • Minimum credit score of 640 • Maximum DTI 45 • Income restrictions per program • 25 or 30 Year Term • Single Family property- new purchase only- no refinances

  16. IFA Facts • Co-signers not permitted • Iowa Title Guaranty only • When Homebuyers Education is needed IFA requires that it be done through FinallyHome available on the IFA website. • IFA’s contract with Idaho Housing and Finance Association states that loans have to be serviced by Idaho as the Master Servicer.

  17. IFA Loan Process IFA requires the review of all loan documentation prior to loan approval. Product specific reviews may need to be done by another source such as an RD loan or possibly a VA loan. If the loan is a Conventional loan and needs MI it will need to go for MI approval Borrower makes loan application with banker Banker registers and uploads to IBMC IBMC puts loan on our system and pulls credit and runs DU or GUS Once processing is done IBMC UW will review loan file and appraisal for loan commitment Once registered with IFA the banker can give approval to lock the loan. Banker uploads verification documents After cursory review by UW , processor will send to banker the Processing Checklist

  18. IFA Loan Process (Continued) If more information is needed then the loan has to go back to processor to collect and resubmit for approval After the appropriate days have passed the Final CD and closing documents will be sent to bankers The various approvals have to be done prior to IBMC giving the final commitment Banker does closing with the borrowers If all parties approve & all items are satisfied the processor moves the loan to closing Banker sends closing documents back to IBMC for auditing & funding. Banker receives compensation CD will need to be sent out for borrower’s signatures Once figures are supplied the closer will prepare the CD Closer will ask banker for the figures to complete the Closing Disclosure (CD)

  19. Now Let’s look at IBMC These products that are offered through IBMC: • FHA • RD • VA • Conventional- 97% LTV for First-time homebuyers The various product guidelines are followed per loan type.

  20. IBMC Full Service Facts • Purpose of loans can be Purchase, Refinance (Limited Cash-Out or Cash-Out) • Credit Scores for Government Loans- 640 minimum • Credit Scores for Conventional Loans- 620 minimum • Maximum DTI 45 per DU/GUS • Rates are set by IBMC per the Loan Product, Purpose, and Property type for Conventional Financing • Rates for Government Loan products are set by IBMC with no LLPAs • 1% Origination Fee charged on all loans types

  21. IBMC Full Service Facts • Premium Pricing is allowed to cover closing costs and prepaids. (Rates and Pricing as posted on June 8, 2016) • Down Payment Assistance Grants such as the FHLB Grant or one that is being offered by the community or county can be used for financing. • Loans are Serviced by IBMC.

  22. IBMC Full Service Facts • Income restriction for RD loan per RD guides • HomeReady has income restrictions per property location and Area Median Income (AMI) • Conventional, FHA, and VA have No income restrictions • Government Loans amortization- 30 years • Conventional Loans amortization- 10, 15, 20, 25/30 years

  23. IBMC Full Service Facts Property Type- • Conventional-1-4 Unit Primary Residence, Condo, PUDs, Manufactured Home, Second Home, or Investment properties. • FHA-1-4 Unit Primary Residence • VA- Primary Residence • RD- Primary Residence

  24. IBMC Loan Process Borrower makes loan application with banker, banker registers and uploads to IBMC After final loan commitment from UW the loan moves to Closing for the production of the CD Once the CD is reviewed the closing documents will be sent to the banker for closing with the borrowers IBMC puts loan on our system and pulls credit and runs loan through DU or GUS After cursory review by UW, processor will send to banker the Processing Checklist After bankers closes with borrowers they will send documents to IBMC for auditing & funding. Banker receives compensation. If the loan is a RD it will need to go to RD for approval. If it is Conventional requiring MI it will need to go for MI approval Once processing is done IBMC UW will review loan file & appraisal for loan commitment Banker locks loan online with IBMC and uploads verification documents

  25. Let’s Look at a Comparison of Government Pricing

  26. Comparison of Conventional Pricing can be more involved. Loan Level Price Adjustments can impact the borrower based on their credit score and loan-to-value.

  27. Comparison of Conventional PricingThe calculations are based on a purchase price of $100,000 and loan amount of $97,000 which is a 97% LTV and credit score of 700. The Plus Grant does not apply to the IFA loan products. Loan Product Rate- June 8, ‘16 Pricing LLPAs Monthly

  28. Comparison of Conventional PricingThe calculations are based on a purchase price of $100,000 and loan amount of $97,000 which is a 97% LTV and credit score of 700. The Plus Grant does apply to the IFA loan products. Loan Product Rate- June 8, ‘16 Pricing LLPAs Monthly

  29. Servicing of the Loans IFA: Idaho Housing and Finance Authority PO Box 7899 Boise, ID 83707-7899 IBMC: Iowa Bankers Mortgage Corporation PO Box 6220 8800 NW 62nd Ave. Johnston, Iowa 50131 IBMC offers excellent customer service with the personal telephone support during business hours or using our 24/7 Customer Service website.

  30. So how do you decide which is better for your borrower? Find out what is important to them. • Do they have downpayment or the ability of using some sort of assistance for downpayment? IFA or IBMC • Are they looking for the lowest rate and some help for closing costs or prepaids? IBMC may be the best option with the premium pricing credit.

  31. So how do you decide which is better for your borrower? • Are they looking for the tax credit? IFA Take Credit (MCC) • Do they qualify for the Military Grant? IFA Military Grant • No income restrictions. IBMC • Ease of loan process. IBMC • Variety of property types. IBMC • Local Servicing. IBMC

  32. Resources • Iowa Finance Authority- www.iowafinanceauthority.gov • Iowa Bankers Mortgage Corporation- www.ibmc-iba.com • Fannie Mae- www.fanniemae.com

  33. THANK YOU! Pamela KuceraShana Light AVP Training & Marketing Rep. Relationship Manager Office PH: 515-286-4319 Office PH: 515-286-4341 Cell PH: 515-681-1018 Cell PH: 515-321-0034 Email: pkucera@iowabankers.com Email: slight@iowabankers.com

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