Government Loan Seminar

1. Government Loan Seminar Sponsored by: Home Builders Association of Lincoln Realtors Association of Lincoln Nebraska Mortgage Association

2. Why FHA? • Not income sensitive • $271,050 max. loan amount • January 1, 2009 – simplified loan calculation • 3.5% down payment • Minimum total investment from borrower • Can be local DPA program or • Gift funds from immediate family member • Builder / Seller can pay closing cost/prepaids up to 6% maximum

3. FHA Loan • Government Insured First Mortgage for 15 or 30 year permanent financing • A. Purchase Price X 96.5% = Pre-MIP Loan • B. Pre-MIP Loan X 1.75% = UpFront MIP • A+B above = Total Loan • Monthly MI = Pre-MIP Loan X .55% ÷ premium due monthly • Guideline Ratios – 31% and 43% • Slightly higher with compensating factors

4. FHA New Construction • Plans & Specs not required if home over 90% complete. Need: • Builder Certification – HUD 92541 • Builder’s one year warranty – HUD 92544 • Termite statement – NPCA 99A & 99B (wood is acceptable for a pre-treatment) http://www.hud.gov/offices/hsg/sfh/ref/sfhp1-8d.cfm Go to “General Requirements”

6. What Are the New Construction Stages? • Proposed Construction: Property is approved for mortgage insurance prior to the beginning of construction (no construction has started/no footings poured). • Under Construction: Building has started, but is not complete at the time of appraisal. • Existing Property Less Than 1 Year Old: Building is complete, but the final completion date (date Cert of Occupancy issued) is less than 1 year old. Still need Builder’s certification 92451 and 1-yr builder warranty from original builder (one year from date of Cert of Occupancy).

7. Acceptable forms of documentation to obtain a high ratio loan with regards to Inspection Options. • Option 1 – available with High-Ratio Proposed Construction, Under Construction, or Existing Construction less than 1 Year Old: • A copy of the Building Permit, and • A Certificate of Occupancy showing clear, and • A Final inspection or Appraisal Report – either of these would need to show documentation that the property is 100% complete • Not available for Condominiums or Manufactured Housing

8. Acceptable forms of documentation to obtain a high ratio loan with regards to Inspection Options. • Option 2 – available with High Ratio Proposed Construction, Under Construction, or Existing Construction less that 1 Year Old: • HUD-Approved 10-Year Warranty • Final inspection signed by a Fee Inspector and DE Underwriter or Appraisal Report indicated 100% complete.

9. Acceptable forms of documentation to obtain a high ratio loan with regards to Inspection Options. • Option 3 – available with High Ratio Proposed Construction: • Early start letter or conditional commitment from DE Underwriter prior to footing being poured, and • Three inspections from a Fee Inspector documenting that the property is 100% complete, and • Final inspection signed by DE Underwriter

10. VA • What’s new ($417,000) with no down • Funding fees • Waived if receive VA disability • Disability Grant Program for N/C • New Construction Documents • Builder Certification – HUD 92541 • Builder’s one year warranty – HUD 92544 • Termite statement – NPCA 99A & 99B (wood is acceptable for a pre-treatment) • VA Builder ID# Assigned

11. VA Websitewww.va.govBenefits→Home Loans→Construction&Valuation→Builder Registration Three forms required: • Builder Information and certification: Click here to download required format • Form 26-421 (Equal Employment Opportunity Certification) • VA Form 8791 (VA Affirmative Marketing Certification) Builder ID# Already Assigned – 217 statewide now http://condopudbuilder.vba.va.gov/2.2/frames.html

12. USDA RD • Program Features • 100% financing • Non-metro only (cities < 20,000) excpt-Norfolk; Columbus • No monthly MIP (funding fee of 2%) • Low-to-moderate income qualifying • First-time homeownership NOT required • Closing cost/prepaids and funding fee can be financed if appraisal value supports 100% of total cost • Assumable—with credit qualifying • New Construciton - Similar guidelines as FHA

13. USDA RD Income Chart • http://www.rurdev.usda.gov/rhs/sfh/GSFH_Income_Limits/NE%20GRH.pdf Proposed Change for 2009 1-4 Person 5-8 Person 70,750 93,400

14. Down Payment Assistance Programs • Local • Nebraska Housing Resources • NIFA – HBA (when available) • SENCAC / Blue Valley – others • www.housingdevelopers.org • “Reach Affiliates” for listing

16. LMI Owner-Occupied Impact Exemption Refund City of Lincoln Public Works & Utilities

17. Requirements • Builder initially paid an Impact Fee on subject property • Purchase price of the home can not exceed the FHA mortgage limit for Lincoln MSA. Single-family $271,050

18. Requirements • Homebuyer verified income must be at 60% or 80% of median taxable income adjusted for household size. • Must have income verification • Provide previous years 1040 tax return form • Most recent 30 day pay stubs • Both signed & dated

20. Requirements • Homebuyer may only receive this reimbursement once in a five year period. • Application must be made no later than 10 days following the execution of the Purchase Agreement.

21. For more information…. Visit: www.Lincoln.ne.gov – search for keyword “Impact Fee”

22. For more information & questions: • Michaela DuganAssistant Public Works/Utilities Business ManagerPublic Works and Utilities Department555 South 10th Street, Suite 203Lincoln, NE 68508-3994(office) 402-441-7559(fax) 402-441-8609(cell) 402-429-2897mdugan@lincoln.ne.gov • Visit: www.Lincoln.ne.gov – search for keyword “Impact Fee