1 Minnesota Housing Program Changes: for loans committed on or after 5/1/15 May 1, 2015

2 Agenda 1.Income Limit Changes – Manual and Form Changes 2.Downpayment Loan Changes 3.Deferred Payment Loan Plus (DPL Plus) Program Access – Qualifying borrowers for DPL Plus – Locking DPL Plus Loans

3 Income Limit Changes

4 Start Up, MCC and Monthly Payment Loan Effective May 1 for new commitments Also affects Step Up with MPL Household Size 11-County Twin Cities Metro Area Rochester MSA Balance of State 1-2$86,600$81,700$77,400 3+$99,500$93,900$89,000

5 Start Up and MCC Subsidy Recapture Forms Effective May 1 for new commitments Reflects new income limits Found on the website or Forms Generator

6 Downpayment Loan Changes

7 Monthly Payment Loan Effective May 1 for new commitments Available with Start Up, MCC and Step Up Loan amounts start at 5% of the purchase price or $5,000 Max loan amount capped at $7,500

8 Deferred Payment Loan Effective May 1 for new commitments Available with Start Up Loan amounts start at 5% of the purchase price or $5,000 Max loan amount capped at $6,000

9 Deferred Payment Loan Plus (DPL Plus) Effective May 1 for new commitments Available with Start Up Borrowers are eligible for a man loan of $7,500 NO lender application Must meet 2 of the following targeting criteria:  Household size of four or more household members  Single head of household with minor dependent(s)  Front end housing ratio of 28% or more (calculated without DPA)  Household member with a disability

10 DPL Plus Program Access

11 Repeat Homebuyer or Current Homeowner Downpayment and Closing Cost Loans Monthly Payment Loan Tax Credit Step Up Repeat homebuyer loans Purchase Loan Refinance Loan Downpayment and Closing Cost Loans Monthly Payment Loan First-Time Homebuyer Start Up First-time homebuyer loans Purchase Loan Mortgage Credit Certificate First-time homebuyer tax credit Purchase Loan Monthly Payment Loan Deferred Payment Loans Deferred Payment Loan (DPL) option Deferred Payment Loan Plus (DPL+) option Downpayment and Closing Cost Loans

12 DPL and DPL Plus Income Limits Household Size 11-County Twin Cities Metro Area & Rochester MSA Balance of State 1-3$60,000$55,000 4$66,500$59,500 5$72,000$64,000 See income limits webpage for full listing of income limits.income limits webpage

13 DPL and DPL Plus Benefits Zero-interest, deferred loans Repaid at sale, transfer of title, refinance, or maturity date

14 Options Comparison DPL OptionDPL Plus Option Loan Amount: Up to the greater of $5,000 or 5% of the purchase price ($6,000 max) Loan Amount: Up to $7,500 Downpayment Closing costs Downpayment Closing costs Principal reduction

15 DPL Plus Program Goals Targeted Populations Ensures adequate downpayment loan funds for borrowers who need it most

16 DPL Plus Program Requirements Borrower investment Post closing liquid asset reserves Homebuyer education: Must meet two of four targeting criteria: – Single head of household with dependent(s) – Household of four or more people – Disabled household member – Front-end ratio of 28% or higher

17 DPL Plus Targeting Criteria Single Head of Household – Minors must live in the household 50% of the time – Only one borrower (non-resident co-signer allowed) – Only one parent/guardian (with no step-parents living in the household)

18 DPL Plus Targeting Criteria Households of four or more people

19 DPL Plus Targeting Criteria Disabled household member – A borrower or household member who has a permanent physical or mental condition, which substantially reduces the person’s ability to function in a residential setting.

20 DPL Plus Targeting Criteria Front-end ratio 28% or higher – Calculated before the DPL Plus loan is applied – DPL Plus Eligibility Worksheet DPL Plus Eligibility Worksheet

21 DPL Plus Documents Same documents required at closing for DPL and DPL Plus: Deferred Payment Mortgage Deferred Payment Note

22 FHA Loan Required Documents FHA DPA Commitment Form Completed at time of commitment Update if loan amount changes Available in Forms Generator FHA Award Letter – “Gift Letter” Completed prior to closing Requires Borrower/Co-Borrower signatures Available in Forms Generator

23 Assignment  Use Minnesota Housing documents – Close in lender’s name – Assign the mortgage and endorse the Note to Minnesota Housing Finance Agency Assign  The wording in bold must be printed verbatim on the assignment  If the assignment asks for an address, the address should be: 400 Sibley St., Suite 300, St. Paul, MN 55101

24 Disclosure Requirement Follow mortgage industry disclosure requirements for second mortgages Consult your compliance/legal team regarding disclosure requirements

25 Locking a DPL Plus Loan

26 Locking Start Up Loan with DPL Plus Select the appropriate allotment and allocation for Start Up with Deferred Payment loan.

27 Locking Start Up Loan with DPL Plus Identify the loan as DPL Plus by entering in three new fields. “Loan Info” Tab “Other” Tab Housing Ratio fields required even if not using as one of your targeting criteria.

28 Locking Start Up Loan with DPL Plus Do not list co-signers; no co-borrowers if claiming single head of household Minor dependents Household size Disability “Borrower” Tab

29 Locking Start Up Loan with DPL Plus “Additional Loan” Tab

30 Resources for all loans committed 5/1/15 or after Summary of Changes Start Up Manual – Start Up Subsidy Recapture Start Up Subsidy Recapture MCC Manual – MCC Subsidy Recapture MCC Subsidy Recapture DPL Plus Eligibility Worksheet DPA Comparison Chart DPL Plus FAQs

31 Contact Us! 400 Sibley Street, Suite 300 St. Paul, MN | | TTY | mnhousing.gov Minnesota Housing Partner Solutions Team