My New Blog

· Ok, here is the scoop as we know it today.

Plan #1- Again, there is NO investor at this time that will accept this option- we are still awaiting word

· Proceeds may be used for down-payment, closing cost or prepaids.

· Amount of Assistance Available- 5% of the total mortgage (including UFMIP) up to the maximum of $7,000.

· Borrowers must complete a pre-purchase homebuyer education course.

· Borrower pays $250 Administrative Fee.

· First 90 days, 0% interest to encourage borrowers to payoff 2^nd lien with tax credit refund.

· Thereafter, 2 year term at 10% interest rate. NOTE that this possible monthly payment will be required to be counted in the income vs expenses ratios regardless if the buyer thinks that they will be paying off the 2^nd lien (for example, $7000 at 10% interest for 24 months would be $323.01 per month). The buyers must qualify for the additional payment in their ratios.

· Available only with FHA loans.

· Tax credit advance loans may NOT result in any cash back to borrower at closing (i.e. cannot receive back earnest money, option fee, appraisal fee paid up front).

· Lender MUST submit a complete loan package to TDHCA a minimum of 20 business days prior to closing. This means that a minimum of total time to close will be approximately 60 days from contract to closing. Reminder that this could also require a lender to lock for 60 days (which is more expensive than a 30 day lock)

· Participating lenders must be approved by TDHCA to participate in the program.

Plan #2- One investor currently

· Proceeds may be used for down-payment, closing cost or prepaids.

· Amount of Assistance Available- 5% of the total mortgage (including UFMIP) up to the maximum of $6,000.

· Borrowers must complete a pre-purchase homebuyer education course.

· Borrower pays $275 Administrative Fee plus 1% Participation Fee (i.e., if the sales price is $150,000- the participation fee will be $1500 plus the $275 Admin Fee)

· Rate is set at 5.75% fixed (so with the cost of the 1% Participation Fee, it would be 5.75 1+1 plus the $275 Admin Fee)

· First 120 days, 0% interest to encourage borrowers to payoff 2^nd lien with tax credit refund.

· Thereafter, 5 year term at 7% interest rate. NOTE that this possible monthly payment will be required to be counted in the income vs expenses ratios regardless if the buyer thinks that they will be paying off the 2^nd lien (for example, $6000 at 7% interest for 24 months would be $118.81 per month). The buyers must qualify for the additional payment in their ratios.

· Available with FHA, VA, USDA, Fannie and Freddie 30 year loans

· TDHCA creates a 2^nd lien that advances the down payment, closing costs and prepaids

· Income limited

· Tax credit advance loans may NOT result in any cash back to borrower at closing (i.e. cannot receive back earnest money, option fee, appraisal fee paid up front).

· Lender MUST submit a complete loan package to TDHCA a minimum of 20 business days prior to closing. This means that a minimum of total time to close will be approximately 60 days from contract to closing.

· Participating lenders must be approved by TDHCA to participate in the program and pay $1000 to participate.