1. Delaware State Housing Authority Closing Disclosure Requirements for HDF and SNHF Recipients June 1, 2016

2. Agenda Background of TILA, RESPA, and TRID DSHA Grant Restrictions New notice requirements Understanding of how DSHA grants work with your homebuyers Closing Disclosure Statement Questions

3. Background of TILA and RESPA and TRID Truth in Lending Act (TILA) Real Estate Settlement Procedures Act (RESPA) TILA-RESPA Integrated Disclosure (TRID)

4. TILA and RESPA TILA- Mandates that lenders or creditors, disclose all interest cost and fees associated with borrowing. RESPA- Requires lenders to provide borrowers with pertinent and timely disclosures regarding the cost of their loan settlement process.

5. RESPA and TILA When the homebuyer has a first mortgage from a commercial lender, the commercial lender is required to follow all RESPA and TILA notice requirements. If the homebuyer has other down payment/settlement loans in second or third position with regular terms and interest, (i.e. DSHA SMAL loan), the lender must also follow RESPA and TILA. Homebuyers with 0% interest mortgages will have some TILA notice requirements, check with your title attorney.

6. RESPA and TILA For more detailed information on TILA-RESPA for non-profits, please go to the following link: http://www.consumerfinance.gov/pol icy- compliance/guidance/implementatio n-guidance/tila-respa-disclosure- rule// http://www.consumerfinance.gov/pol icy- compliance/guidance/implementatio n-guidance/tila-respa-disclosure- rule//

7. TILA Notice for DSHA Grants DSHA’s homeownership grants do not fall under Regulation Z, Section 1026.3(h) (the partial TRID exemption), the HDF/SHNF Grants will be exempt from the TRID requirements of Regulation Z (set forth in under Section 1026.19(e), (f) and (g)); However, DSHA must still provide a notice to the Borrower; – This TIL notice can be completed at closing, however, DSHA will provide more notice.

8. Notice Requirement HDF Completed Prior to Closing

9. Notice Requirement SNHF Completed Prior to Closing

10. What is required by the Grantee for DSHA Homeownership Grants? Notify DSHA of closing date, at a minimum, 10 days prior. Send DSHA all closing documents from DSHA homeownership checklist. DSHA will send out the TIL Notice to the Borrower. DSHA will prepare the grant restriction agreement, upon all closing documents being received.

11. DSHA Grant Restriction Agreements DSHA’s Grant Restriction Agreements will now include an Understanding Your Grant Agreement document signed by the Homebuyer/Borrower at closing or before. This document describes what DSHA’s Grant Restriction Agreement means and recapture requirements by providing questions and answers should the homebuyer sell, transfer, or re-finances their home prior to the expiration date of the restriction.

12. Closing Disclosure Statement (CD) HDF HDF grants are typically a reduction of the Borrower’s first mortgage (Mortgage Affordability Reduction (MAR) and must appear as a credit on the Borrower’s CD. If the Grantee is eligible for no MAR, the HDF grant still must appear on the Borrower’s CD.

13. Closing Disclosure Statement (CD) HDF Example of an HDF Grant Restriction – 1 st Mortgage with Commercial Lender 4% Interest Rate; 30 year term – $19,500 MAR 0% interest; 10 year term

14. Closing Disclosure Statement (CD) HDF Example of an HDF Grant Restriction – 0% Mortgage – Soft Second – HDF Grant $19,500 – No MAR

15. Closing Disclosure Statement (CD) SNHF Example of an SNHF Grant Restriction – 1 st Mortgage with Commercial Lender 4% Interest Rate; 30 year term – $50,000 SNHF Grant 0% interest; 10 year term

16. Questions? This webinar and all sample documents will be available and posted to DSHA’s website: www.destatehousing.com

17. Contact us: Delaware State Housing Authority 18 The Green Dover, DE 19901 302-739-4263 or 888-363-8808 http://www.destatehousing.com Penny@destatehousing.com Dawn@destatehousing.com Cindy@destatehousing.com Brian@destatehousing.com