Family Selection Impact on Affiliates

Policy for Income and Credit Qualifications Verifying Income Is the income verifiable? Is the income sustainable? Does the documentation match what is on the application? Are there employment gaps?

Documentation collected 2 years tax returns Recent pay stubs Benefit letters SSI/SSD Food assistance letter 2 year history of child support Employer references Re-verify income every 2-3 months

Verifying Credit Do they have a good pay history? Do they have collections? Do they have open judgments? What is the debt-to-income ratio Discuss importance of maintaining credit Recheck credit

Homebuyer Readiness Homebuyer orientation Sweat equity Down payment contribution Ability to manage and save their funds IDA CD

Ability to Repay Dodd –Frank Act requires creditor to make a reasonable, good-faith determination, based on verified and documented information, that the consumer will have reasonable ability to repay any consumer credit transactions secured by a dwelling, including any mortgage-related obligation (such as property tax). Ability to Repay Rule Non profit entities are exempt from the statute and the legal consequences of non-compliance, but non profits still have to ensure the borrower is able to repay the mortgage

Non profit creditor will need to maintain documentation of their procedures regarding the determination of consumer’s ability to repay Verify the documentation used in qualify the consumer

Eight factors to the Ability to Repay Rule Verify current or reasonably expected income or assets Current employment status Monthly mortgage payment Monthly payment on any simultaneous loans Monthly payment for mortgage-related obligations.

Current debt obligations, alimony, child support Total monthly debt-to-income ratio or residual income Credit history

Goals Comprehensive Plan Qualification Income Credit Other Training Budgets Credit Counseling Setting Expectations

Accountability Credit Checks Verification of Employment

Consequences Smooth mortgage process Avoid De-selection Accelerate cash flow Defaults Negative Escrows Cash Flow Foreclosure Costs Legal Costs Time Impact on the Homeowner