DC Open Doors July 2015

DC Open Doors Through its participating lenders, the District of Columbia Housing Finance Agency (“DCHFA”) offers mortgage financing referred to as “DC Open Doors”: With or without down payment assistance (up to 100% financing) to qualified borrowers purchasing their primary residence in Washington, D.C. Only participating lenders may administer any DCHFA Product

DC Open Doors Program Highlights Open to First Time and Repeat Homebuyers Open to all Neighborhoods and Wards Open to residents and nonresidents of the District More Inclusive Affordable Homeownership!

DC Open Doors Program Highlights DC Open Doors Program Requirements: Minimum Credit Score of 640 Maximum Income of $132,360 Unlike most programs, income is based upon Borrower’s income ONLY – NOT Household Income Maximum Debt-to-Income Ratio of 50% (Max of 45% DTI on an FHA loan) Rates Quoted with 0 Points $424,100 Maximum 1st Trust Loan No maximum Sales Price Limit

DC Open Doors FHA loans FHA Plus FHA 1st Mortgage at 96.5% LTV Down Payment Loan of 3.5% (for 100% Total Financing) FHA Plus

DC Open Doors Conventional Loans 1st Mortgage at 97% LTV Down Payment Loan of 3% (for 100% Total Financing) HFA Preferred with DPAL or HFA Advantage with DPAL Refinances Eligible HFA Preferred or HFA Advantage

DC Open Doors Down Payment Assistance Loans (“DPAL”) 3.0% or 3.5% DPAL Available 5 Year Forgivable Loan (20% Per Year) 0%, Non-Amortizing Repayable only upon sale, refinance or transfer

Freddie Mac Super Conforming Max loan amount of $636,150 No DPA 3% Down Charter Minimum MI Beginning 6/20/17

DC Open Doors Key Take-Aways : Program Open to First Time and Repeat Homeowners HFA Conventional Loan Products – 97% LTV with almost HALF the normal required mortgage insurance cost No Home Inspection Required/Review

DC Open Doors Key Take-Aways : DC Open Doors mortgages and down payment assistance can be “layered” other programs including: HPAP (Home Purchase Assistance Program) EAHP (Employer Assisted Housing Program) NEAHP (Negotiated Employee Assistance Home Purchase Program) Funds from DC Open Doors can also be used to pay closing costs instead of down payment.

MCC’s A Mortgage Credit Certificate (“MCC”) provides qualified borrowers the ability to claim a Federal Tax Credit of 20% of the mortgage interest paid during that calendar year A Tax Credit is a dollar for dollar reduction of the borrower’s annual Federal Tax Liability. The remaining mortgage interest can still be claimed as a Tax Deduction. A Tax Deduction is subtracted from the adjusted gross income before Federal Taxes are computed.

DC’s mccs what are the requirements? Guidelines differ from the DC Open Doors Loan Programs: Borrowers must be first time homebuyers Must not have had an ownership interest in a principle residence within the most recent 3 year period Exception for residences purchased in a Targeted Area (see chart) Exception for Veteran’s utilizing a one-time exception Maximum income is based upon HOUSEHOLD income Household income is the income of all members of the household, even if not taking an ownership interest in the home (excluding full-time student dependents) Household Income Limits are based upon the household size Acquisition costs (sales price) may not exceed Program Limits Single Family residences, only (no 2-4 unit properties) Can be provided in conjunction with a DC Open Doors loan program or without a DC Open Doors loan program

Dc’s mccs What are the income and sales price limits? Income Limit: Non-targeted Area Family of 2 or less Non-targeted Area Family of 3 or more Targeted Area Family of 2 or less Targeted Area Family of 3 or more $132,360 $154,420 Sales Price Limits Single-Family Unit Non-targeted $585,713 Targeted $715,872

DC’s MCCs What are the benefits? EXAMPLE 1 $280,000 Loan Amount 4.50% Interest Rate 1st Year’s Interest = $12,507 X 20% Tax Credit = $2,501 Benefit EFFECTIVE INTEREST RATE = 3.71% $208 Monthly Benefit Borrower is still able to take a deduction for the remaining 80% of interest paid for that year. Don’t wait for tax time to reap the benefits! Adjust dependents on your W-4 Form so that you increase your net take home pay! Example is for illustrative purposes only. Please consult a Tax Advisor.

DC’s MCCs What are the benefits? EXAMPLE 2 $400,000 Loan Amount 4.50% Interest Rate 1st Year’s Interest = $17,868 X 20% Tax Credit = $3,573 Benefit EFFECTIVE INTEREST RATE=3.71% $297 Monthly Benefit Borrower is still able to take a deduction for the remaining 80% of interest paid for that year. Don’t wait for tax time to reap the benefits! Adjust dependents on your W-4 Form so that you increase your net take home pay! Example is for illustrative purposes only. Please consult a Tax Advisor.

Total Credit over 30 years ($400,000 @ 4.5%) $65,982.60

DC’s MCCs What type of mortgage loan? DC’s MCC Loan Options Option #1- DC’s MCC may be used with a Conventional, VA, FHA 30 Year Fixed Rate Mortgage or an FHA Adjustable Rate 1st Trust Mortgage*** OR Option #2- DC’s MCC may be combined with a DC Open Doors 1st Trust Mortgage Product. If this option is utilized, the lender must follow the stricter of the program requirements *** Must apply for your 1st Trust loan through a DCHFA Lender Partner participating in the MCC Program

DC’s Mccs Costs DCHFA charges $450 as an MCC Issuance Fee when issued in conjunction with a DC Open Doors Loan Program or VA Loan DCHFA charges $1,500 as an MCC Issuance Fee when the MCC is issued without a DC Open Doors Loan Program or VA Loan The lender is permitted to charge an additional $450 MCC Processing Fee

DC’s Mccs what are the targeted areas? Target Areas in DC District of Columbia, Census Tract 34 District of Columbia, Census Tract 88.04 District of Columbia, Census Tract 47.01 District of Columbia, Census Tract 89.03 District of Columbia, Census Tract 47.02 District of Columbia, Census Tract 89.04 District of Columbia, Census Tract 64 District of Columbia, Census Tract 92.04 District of Columbia, Census Tract 74.01 District of Columbia, Census Tract 95.01 District of Columbia, Census Tract 74.03 District of Columbia, Census Tract 96.01 District of Columbia, Census Tract 74.04 District of Columbia, Census Tract 96.02 District of Columbia, Census Tract 74.06 District of Columbia, Census Tract 97 District of Columbia, Census Tract 74.07 District of Columbia, Census Tract 98.02 District of Columbia, Census Tract 74.08 District of Columbia, Census Tract 98.03 District of Columbia, Census Tract 75.02 District of Columbia, Census Tract 98.10 District of Columbia, Census Tract 75.03 District of Columbia, Census Tract 98.11 District of Columbia, Census Tract 75.04 District of Columbia, Census Tract 99.04 District of Columbia, Census Tract 76.05 District of Columbia, Census Tract 99.06 District of Columbia, Census Tract 77.08 District of Columbia, Census Tract 99.07 District of Columbia, Census Tract 78.08 District of Columbia, Census Tract 104 District of Columbia, Census Tract 78.09 District of Columbia, Census Tract 109

Dc’S mccS How do I get my benefit at tax time? What do I need to do to receive my benefit when I file my federal taxes with the IRS?? Each year the homeowner files IRS Form 8396 with their federal income tax return. This form is available on the IRS website, www.irs.gov. Buyers are reminded to direct any tax questions to a tax professional or to the IRS. DC’s M₵₵$

How Do I Access DCHFA’s Products? Reach out to a Participating Lender Participating Lender List available via www.dcopendoors.com or www.dchfa.org Lender Process: Prequalification Process/Underwrite Approval Closing Lender Drives the Transaction – No Borrower Interaction directly with DCHFA 30 Day Closings New Lenders are welcome to sign up to participate.

DCHFA Information (Dc open doors & dc’s mccs) For information about rates, programs, products and forms: www.dcopendoors.com www.facebook.com/DCOpenDoors www.dchfa.org @DCOpenDoors

Questions?