1. Delaware State Housing Authority Governor’s Conference on Housing DSHA Homeownership Programs October 11, 2012

2. DSHA is committed to following all aspects of the Fair Housing Act in our efforts to promote responsible homeownership and obtaining competitive and safe financing for homebuyers.

3. Agenda Overview of Program DSHA Mortgage Products Eligibility Guidelines Eligible Loan Products and Eligibility Guidelines Second Mortgage Assistance Loan (SMAL) Rebuilding Our Communities (ROC) Live Near Your Work (LNYW) 3

4. Overview of DSHA Mortgage Programs DSHA Mortgage loans are designed for income-qualified families. Advantages to borrowers include: –Below-market interest rates –Downpayment Assistance Second Mortgages DSHA requires borrowers to meet certain eligibility criteria including: –Purchase price limits –Income limits –Owner-occupancy requirements –Restricted to properties located in Delaware 4

5. Mortgage Products Welcome Home Loans - Mortgages For First-Time Homebuyers Home Again Loans - Mortgages For Repeat Homebuyers Loans for Heroes - Mortgages For Qualified Veterans FHA-VA-USDA 30 year fixed-rate loans Conventional 30 year fixed-rate loans Loans for Heroes program provides qualified veterans (as defined in 38 USC Section 101) with a 50 bps rate reduction on DSHA first mortgage programs. 5 FHA Welcome Home 30 Year Fixed Rate 3.00%* FHA Home Again 30 Year Fixed Rate 3.25%* *Rates as of 10/1/12 and are subject to change. (Above rates are for loans without downpayment assistance.)

6. Homebuyer Income Limits 6

7. Eligible Properties Single-Family Units Agency-Approved Condominiums Planned Unit Developments (PUD’s) 1-4 Unit Properties –Must meet DSHA purchase price limits and Agency guidelines. Manufactured Housing –Must meet Agency guidelines / requirements. Properties Not Eligible for DSHA Financing: Rental homes Co-ops Investment properties Recreational, vacation, or second homes 7

8. Home Purchase Price Limits 8

9. Downpayment Assistance Programs are available for all borrowers. Second Mortgage Assistance Loan (SMAL): 0%* interest rate *Rates are subject to change Loan is repaid upon maturity of 1 st Mortgage, refinance, sale of the property or when title is transferred. Rebuilding Our Communities (ROC): 0% interest rate Loan is forgivable over 10 years (1/120 th forgiven each month) Live Near Your Work (LNYW): Grant provided through participating employers; varies from $1,000 to $5,000 (LNYW grantees are not subject to the increased assisted loan rate adjustment.) 9

10. DSHA Second Mortgage Assistance Loan (SMAL) Loan amounts up to $10,000 as required for loan closing. Funds must be used toward downpayment and settlement costs. Interest free for the life of the loan. Repayment is deferred for 30 years, or until the first mortgage is refinanced, or the property is sold or transferred - whichever comes first. The SMAL is secured by a mortgage on the property. The SMAL can only be used with a DSHA Mortgage. –Borrowers must participate in a U.S. Department of Housing and Urban Development (HUD)-approved housing counseling program/ homeownership education. –Borrowers must have the property inspection completed by an ASHI, NACHI Delaware Chapter, or NAHI-CRI Certified Home Inspector. 10

11. Rebuilding Our Communities (ROC) Delaware State Housing Authority (DSHA) created the Rebuilding Our Communities (ROC) to promote the purchase of homes within areas of the state that have experienced high foreclosure rates. ROC is a forgivable second mortgage to be used for the purchase of foreclosed or abandoned single family housing in qualified census tracts. ROC loans provide homebuyers with $25,000 towards downpayment, closing costs and initial loan balance reduction for ROC-eligible properties. 11

12. A DSHA first mortgage must be used to access ROC funds. First mortgage rates will be the same rates offered for SMAL assisted loans. All borrowers will receive the full $25,000. Amounts available in excess of downpayment and customary closing costs and fees must be used to reduce the initial loan amount of the first mortgage loan. ROC (cont’d) 12

13. Must be in a ROC-qualified census tract. Homes must be sold at a minimum of 1% below appraised value. ROC is forgiven over a 10 year period prorated monthly (1/120 th ) as long as subject property remains the borrower’s primary residence. Must meet the ROC definition of foreclosed or has been vacant for 90 days. All homes must be inspected by an ASHI, NAHI-CRI, or NACHI Delaware chapter certified home inspector. Must have a lead based paint visual assessment if built prior to 1978. Additional Eligibility Requirements 13

14. A residential property located in an ROC census tract may be eligible if any one of the following conditions apply: Property has been vacant for 90 days or more at the time the sales contract was signed; or The property’s owners current mortgage is delinquent at least 60 days delinquent and the owner has been notified; or The property owner is 90 days or more delinquent on tax payments; or Foreclosure proceedings have been initiated or completed. Definition of Foreclosed or Abandoned Property 14

15. New CastleKentSussexWilmington 1034085023 139.01414518.025 1414306.01 147.036.02 148.087 149.038 149.059 15015 15216 15417 15521 15622 15823 15926 16027 163.02 ROC Qualified Census Tracts 15 An interactive map of eligible tracts can be found on DSHA’s website.

16. ROC Household Income Limits 16

17. DSHA Maximum Allowable Fees Origination Fee – 0.00% –1% Conventional Loan Delivery Fee required for all Conventional loans Discount Points – 0.00% Other Closing Costs – Normal and customary fees are allowed including appraisal fee; credit report fee; survey fee; title insurance fee, etc. –Must be charged in accordance with agency policies 17

18. DSHA Contacts Gary Hecker Housing Finance Manager Lender Support Bill Salamone Mortgage Loan Officer II Compliance Review/ Lender Support 18 Karen Flowers Office Manager Initial Package Review/ Pending Conditions Telephone: 302-577-5001 Fax: 302-577-5021