WHEDA Single Family Housing Bond Claim Program Your Dream, Our Mission

Agenda What is the Bond Claim Program? Program Qualifications Borrower Requirements Timeline The Funding Source

What is the Bond Claim Program? A WHEDA-funded loan to eligible homeowners to reinstate their delinquent home loan. 0% interest rate Due on payoff or non-owner occupancy Program Eligibility Primary Residence with a commitment to owner occupy First mortgage financing only Available statewide - Wisconsin

Program Qualifications MRB Loan - 90 days or more past due Maximum loan amount -$25,000 (average $10K) Maximum CLTV not to exceed 150% of current BPO Loans in Foreclosure / Bankruptcy are eligible 3 month trial period must be completed WHEDA DPA 2nd mortgages may be modified by a similar process What we are not solving: Lack of equity Borrower’s who have not overcome the reason for default Imminent default borrower (current) Property condition

Borrower Requirements Borrower has overcome the reason for default Provide the necessary documentation Explain and document the reason for default Current financial statement Document current income Provide any additional information as required

Borrower Requirements Continued… Monthly surplus income required - 10% of Net Monthly Income or $150 Ratios reviewed for reasonability Definition Percentage Range and Calculation Housing to Income (MTI) <45% PITI/Net Income = MTI Debt to Income (DTI) <55%* Total Debt/Net Income = DTI Expense to Income (ETI) <50%* Total Expenses/Net Income = ETI *If borrower has greater than 55% DTI or 50% ETI, borrower must complete debt counseling prior to obtaining Bond Claim Loan approval. Housing includes PITI plus any junior liens DTI equals PITI plus other monthly obligations Expense includes estimated food, transportation, child care, utilities, etc.

Contact / Analysis / Decision Timeline Jul 1, 2014 Contact / Analysis / Decision Solicitation letters to borrower with checklist of required information Calling campaigns to follow up and / or clarify received documentation Internal review of financial information Decision based on review Postcard mailer for incomplete documentation or non-responsive borrower Face-to-face meeting

The Funding Source The Single Family Team encumbered $500,000 from WHEDA’s Dividend - Homeownership Fund to finance the pilot Bond Claim Program. Wisconsin law requires that an annual plan be developed to use unencumbered general reserve funds specifically in the categories: *Homeownership *Multifamily Housing *Small Business / Economic Development *Grants and Services

The Results The first Bond Claim loan was successfully completed July 1, 2014 The program has shown positive impact in keeping WHEDA “hardship” borrowers in their homes To-date, 14 WHEDA borrowers have overcome their reason for default and have avoided subsequent default and foreclosure All 14 borrowers have remained current on their mortgage payments

Summary WHEDA’s Bond Claim Program was a local response to provide a path for “mortgage revenue bond loan borrowers to overcome default and remain in their home in the absence of Hardest Hit Fund remedies.