SINGLE-FAMILY ACTIVITIES

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SINGLE-FAMILY ACTIVITIES

IHFA reserves the right to work with eligible applicants to design the program that is consistent with the housing strategies and resource investment as identified in Idaho’s Five-Year Strategic Plan for

Affordable Housing and Community Development programs.

IHFA reserves the right to publish interim NOFAs or RFPs to allocate HOME funds as appropriate, to best meet the housing needs in a specific region and/or to ensure the annual HOME Entitlement, in its entirety, is committed in a timely manner, to eligible activities. At its discretion, IHFA may follow an Open NOFA process for Single-family activities.

Project sponsors may request a waiver or deviation from current single-family activities through the application process. A waiver request must adequately explain the project’s advantages over the current activities as defined in the Administrative Plan.

 Down-payment/Closing Cost Assistance

 Homebuyer Properties Activity (sponsored by IHFA-qualified non-profits only). See Homebuyer Properties Activity in this section

HOME 2nd Lien - Down Payment/Closing Costs Assistance (DPCC) Program Income Targeting

One Hundred Percent (100%) of HOME funds must be used to assist families whose documented annual household income is at or below 80% of the Area Median Income (AMI).

As defined in 24 CFR 5.609, Idaho Housing and Finance Association uses the Part 5 Annual Income, formerly known as Section 8 definition of annual (gross) income as guide to determining income eligibility. Refer to Technical Guide for Determining Income and Allowances for the HOME Program.

 All HOME 2nd liens will accept the approval of the first lien using IHFA guidelines as required through the IdaMortgage.com.

 Borrower cannot currently own or be on title for any other land, property, or residence. Principal Residency Requirement

Owner(s) own and reside in the Property for the term of the loan, as the principal place of residence and make all payments due on loans secured by prior lien or liens on the Property

Eligible forms of Assistance

HOME 2nd lien - Down Payment and Closing Cost Assistance (standard and reasonable soft costs for closing not including reserves and certain prepays). See the Homebuyer Properties Activity section of this chapter for information regarding eligible forms of assistance.

Subsidy Limits

Standard down-payment/closing cost assistance of a minimum HOME investment of $1000.00 up to a maximum of 3.5% of the purchase price, not to exceed $8000.00 (based on need and income

eligibility).This product requires the Borrower to use a first lien from Ida Mortgage.com or USDA-RD

first lien.

Maximum amount of HOME funds on a per-unit basis in affordable housing may not exceed the per-unit dollar limitations established under section 221(d) (3) (ii) of the National Housing Act (12 U.S.C.

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17151(d) (3) (ii) for elevator-type projects that apply to the area in which the housing is located (Reform Act of 1989 and HOME 92.250).

Minimum HOME Investment: The minimum only relates to the HOME funds, and not to any other funds that might be used for the project.

Eligible Property Types  Single-family unit  A two-four family unit  Condominium unit

 Manufactured Housing-Idaho law allows manufactured home park community current residents to purchase an ownership share of real property to accumulate necessary equity for the acquisition from the current owner.

Property Standards

At occupancy, the unit must meet Local property code/standards. If no local standards/codes exist, than property standard defaults to IHFA (Section 8) Housing Quality Standards (HQS).

A full Independent 3rd party Home Inspection is required prior to closing. IHFA will review the inspection report in accordance with Section 8 Housing Quality Standards for compliance.

Manufactured Housing

Must comply with applicable state and local laws and codes as stated above with the following additional requirements:

 Must be connected to permanent utility hook-ups

 Attached to a permanent foundation as approved by HUD

 Located on land that is owned by the manufactured housing unit owner, or on land for which the manufactured housing unit owner has a lease for a period at least equal to the applicable Period of Affordability (Building HOME 2009; 5-11)

 Must comply with manufacturer’s written instructions for installation

 New Manufactured Housing must meet HOME Construction and Safety Standards of 24 CFR Part 3280

Subsidy Layering

Standard down-payment/closing cost assistance of a minimum HOME investment of $1000.00 up to a maximum of 3.5% of the purchase price, not to exceed $8000.00 (based on need and income

eligibility).This product requires the Borrower to use a first lien from Ida Mortgage.com or USDA-RD

first lien.

Based in a full Appraisal by a Idaho State Certified Appraiser Occupancy Monitoring

Ongoing monitoring will include an annual verification that the homebuyer(s) occupies the property as the primary dwelling, throughout the affordability period.

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Minimum Documentation Required at Submission

 All HOME 2nd liens will accept the approval of the first lien using IHFA guidelines as required through the IdaMortgage.com. or USDA-RD first lien program. Borrower cannot currently own or be on title for any other land, property, or residence.

 Loan Approval for the first lien, by IHFA or an eligible IHFA Lender/Broker/Sponsor  “Approve/Eligible” is required evidence by an Automated Underwriting Approval  HOME 2nd lien forms:

o #01-Document Conditions List o #02-Beneficiary/Property Information

o #03- Borrower’s Affidavit & Lender/Broker/Sponsor Certification o #04- Sources & Uses of Funds

o #05- URA/Voluntary Sale Disclosure. (Completed and signed by the Seller, on the same date they sign the Purchase Offer. 49 CFR 24.101(b)(2)(i))

o #05a-Sellers Acknowledgement – Receipt of Appraisal o #06- Wire Transfer Authorization

 Signed and accepted Purchase & Sales Agreement

 If a Pre-1978 Targeted Home, the following Lead Based Paint minimum requirements must be submitted (additional documentation may be required):

o Form 07-Pre-1978 Targeted Home-Lead Based Paint Disclosure form, completed and signed by both the Borrower(s) and Seller(s)

o Document Borrower(s) have received the pamphlet “Protect Your Family From Lead In

Your Home”. (Provide IHFA with a signed copy of the disclosure that shows the

Pamphlet was provided.)

o Visual Assessment by -HUD trained Visual Assessor (and provide a copy of their certificate).

 Reservation (lock in) of the first lien under Ida Mortgage.com.

 Certificate of Completion from the “Finally Home!®” homebuyer education course  Loan application

 Credit Report

 All Employment and income sources documented  Deposit accounts documented

Minimum Homebuyer Eligibility Requirements  Low-income qualified

 Borrower(s) must be eighteen (18) years or older

 Borrower(s) must be US Citizen, or a Permanent Resident Alien, and/or a Non-permanent Resident alien with proof of permanent residency status, eligibility, and evidence to work in the United States

 Valid Social Security Card

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Homebuyer Income Limits: (24 CFR 92.203 & 24 CFR 5.609)

 Part 5 Annual Income 24 CFR 5.609, Annual income is the gross amount of income of all adult

household members that is anticipated to be received during the coming twelve-month period.

 Total gross household income must not exceed 80% of the Area Median Income (AMI) based on HUD estimates of median income based on household size and property location. (Exhibit A HOME Admin Plan)

Homebuyer Education

 At least one of the borrowers to be listed on the note is required to complete the Homebuyer Education class “Finally Home”* prior to the submission of the loan application to the Lender/Broker/Sponsor. First lien lender’s requirements for homebuyer education by product will take precedence.

 Verification of Certificate of Completion by originating Lender/Broker/Sponsor, prior to approval for the primary loan is required.

*Note: HUD approved Pre and Post counseling programs are recommended for all first time

homebuyers.

Assets Limits

 “Liquid assets, excluding restricted retirement accounts including employer-controlled retirement accounts, IRA Accounts, SEP Accounts, 401K, 403B, and 457 deferred compensation plans, remaining after closing; the equivalency of three months’ PITI not to exceed $5,000.”

 For the Elderly (62 years old or older), non-retirement liquid cash assets cannot exceed $10,000. Buyer(s) Investment

 The borrower must make a minimum investment of at least $500.00. The contribution must be verifiable and may come from a fully documented gift

Primary Loans

 Loan approval under standard lending programs (FHA, VA, CONVENTIONAL, USDA-RD), by an IHFA approved Lender/Broker/Sponsor. Fixed-rate loan only.

 Loan must be sold to IHFA (exception: USDA-RD Loan products). If the first lien is not purchase by IHFA or USDA-RD for any reason, originating lender will be required to repay the amount of HOME funds from IHFA Grant Programs Department.

Programs Not Allowed

 Private land sales contracts,  Adjustable rate mortgages  Prepayment penalties Ineligible Loan Types

 No refinances, ARM’s, Interest-Only, or Hybrids

 No Combo or Second (2nd) Mortgages with variable interest rates Reservation of HOME Funds

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Eligible Activity

 Acquisition only

Ineligible Costs, not limited to:  Pre-paid fees  Reserves

 Repairs/Home Warranties  HOA dues or set-ups  Irrigation dues or set-ups  Collections, Judgments  Tax Liens

 Delinquent taxes, fees or charges on property  Homebuyer Education Fee(s)

Eligible Homebuyer Costs (24 CFR 92.206)  Hard Costs

o Acquisition of real property to include land and existing structure  Soft Costs

o Closing Costs-Standard and reasonable, as approved by IHFA HOME Program o Other costs incurred associated with the acquisition of the housing assisted with

HOME funds as approved by IHFA HOME Program HOME Loan terms

 Zero Percent (0%)

 Due on sale or in the event of regulatory non-compliance

HOME Investment subject to the Recapture provision as defined under the HOME Program (24 CFR 92.254(a) 5(ii). HOME funds will be recaptured at the time of sale, transfer of title, default, or refinance of the first mortgage.

Repayment Obligation

The HOME subsidy is due and payable, if not paid earlier, upon any sale or transfer of ownership or title of Borrower’s home located at (property address), or upon any event of default as defined herein. The payment shall be applied first to interest accrued on the then unpaid principal balance, at the rate of ZERO PERCENT (0%) per annum, and the balance thereof shall be applied to the principal balance. Both principal and interest shall be payable at the offices of IHFA, at the address set forth above, or such other place as IHFA may designate in writing. Borrower may prepay the principal outstanding hereunder, plus accrued interest thereon, if any, in whole or in part at any time without premium or penalty

All principle and interest payments are hereby deferred until sale of property, an event of default occurs, or transfer of property without IHFA prior consent. If default occurs hereunder, the entire principal sum and accrued interest shall immediately become due and payable without notice, at the option of the holder of the Note. Failure to exercise this option shall not constitute a waiver of the right to exercise the same in the event of any continuing or subsequent default. In the event of default in the payment of this Note, and if same is submitted for collection by IHFA, its successors and assigns, the undersigned agree(s) to pay all costs of collection, including reasonable attorney’s fees.

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 State of Idaho Eligible Property Types

 Single Family unit(1-4)

 Condominium unit (Approved HUD/FHA)

 Manufactured Home (Must comply with applicable state and local codes; have permanent utility hook-ups; be on attached to a permanent foundation, as approved by HUD. Must own the land or have a 99-year leasehold. Engineering Certification required on foundation. The

Manufactured Home must also meet the Construction and Safety Standards (24 CFR Part 3280). Construction and safety standards pre-empt State and local codes covering the same aspects of performance for such housing. 24 CFR 92.251(a) (4)

 Cooperative Housing (manufactured home community resident acquisition program): For current resident-owners seeking financing to help accumulate necessary equity to acquire the real property comprising of their manufactured home community, from the current owner. Resident-owners will form a non-profit Resident-ownership entity, and purchase an individual Resident-ownership share with individual space identity for their unit.

Ineligible Properties  Rental

 Investment Properties  Second Homes

Current Occupancy Status of Property

 Must be vacant or owner-occupied (by the Seller).  No rental units or tenant occupied properties.

 Has not been occupied by anyone other than the owner/seller in the past 90 days. HOME Property Value Limits

 See Exhibit E of this HOME Admin Plan Necessary Reviews/Reports for Properties At the time application is submitted:

 (URA) (24 CFR 92.355) (49 CFR24.101(b)(2)(i))

Completion of the Uniform Relocation Assistance and Real Property Acquisition – Voluntary Sales Disclosure Form (Exhibit C Form #3) must be completed and signed by all parties prior to or at the time the Purchase Offer is made. No Exceptions.

 Lead Based Paint Requirements - Pre-1978 homes subject to all Lead-Based Paint requirements, which include but are not limited to:

o Form #07-Pre-1978 Targeted Home-Lead Based Paint, completed and signed by both the Borrower(s) and Seller(s)

o Document Borrower(s) have received and signed the pamphlet “Protect Your Family from Lead In Your Home”. Pamphlet to IHFA

o Visual Assessment by -HUD trained Visual Assessor (and provide a copy of their certificate).

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 Environmental Review: HUD 24 CFR 58.35(b) Determination of Categorical Exclusion must be completed and approved by IHFA at the time of receipt of homebuyer’s application

Prior to final approval

 Idaho Certified Appraisers/Appraisals: Uniform Residential Appraisal Report (URAR). Appraisal Type: First lien requirement.

 Property complies to local property Codes/Standards (Refer to Inspections below). If no local property standards exist, then default to HUD’s Section 8 Housing Quality Standards (HQS). Lead Based Paint Requirement (24 CFR 92.355)

Pre-1978 Homes only – The EPA and HUD Lead Based Paint requirement must be met. Refer to Chapter six, (6) of the HOME Administration Plan.

 Renovation must be performed by EPA-Certified Renovation firm  Lead Based Paint Disclosure Pamphlet notice to buyers

 HUD Visual Assessment.

 Renovate Right Pamphlet notice signed by seller (if applicable)

 Renovate Right Requirements, by EPA Certified Company / Individual (if applicable)  EPA Lead Based Paint Risk Assessment (if applicable)

 EPA Lead Based Paint Clearance (if applicable)

Environmental Review (24 CFR 92.352) (24 CFR Part 58.35 b (5)

 The appropriate level of Environmental clearance will be completed and approved by IHFA prior to the release of HOME funds.

HOME Inspection

 Full Appraisal by a State Certified Appraiser

 A full Independent 3rd party Home Inspection. HQS certified IHFA staff will review the inspection report in accordance with HQS for compliance. Additional property conditions may be required after review

The following reports must also be completed prior to approval:

 Applicable Lead Based Paint (LBP) reports/inspections/assessment are required - see details listed out above (if applicable),

 Applicable Environmental Review(IHFA must complete)

 Section 8 Housing Quality Standards (HQS) – see property standards listed out above  Septic & Well (if applicable),

 Professional Wood Stove, Fireplace insert (if applicable)

 Any inspections required by the first mortgage loan or as outlined in the EMA/Sales Agreement,  Proof that the construction was completed according to all applicable building codes, and,  The lender/broker/sponsor has obtained a “Notice of Occupancy” from the city/county, -see

property standards listed out above

 Certificate of Occupancy – with evidence of all inspections made during construction  USDA–Rural Development will provide Inspection Form 1924A, if applicable.

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 Full Third Party Home Inspection by independent inspector. – see property standards listed in previous section.

 Other inspections as a result of deficiencies reported

 Engineering Certification on foundations with manufactured homes. Occupancy Requirements

 Borrower(s) must both own and occupy residence for the term of the Period of Affordability and make any payments due on loans secured by priority lies on the property. 92.254(a) (4).

 Borrower cannot currently own or be on title for any other land, property or residence.

Ownership

Purchaser must occupy the home within thirty (30) days of loan closing.

 The buyer(s) will take ownership in fee simple title or maintain a minimum 99-year leasehold interest on an eligible property.

 For property held on trust or restricted Indian Lands, homeownership includes a 50-lease ( see 24.CFR 92.2 homeownership)

Ownership Interest

 The property is subject only to the restrictions on resale as required at 24 CFR 92.254(a);

mortgages, deed of trust, or other liens or instruments securing debt on the property as approved by the Participating Jurisdiction, (PJ); or any other restrictions or encumbrances that do not impair the good and marketable nature of title to the ownership.

 The HOME due-on-sale loan must be listed on the Preliminary Title Report and on the Final Title Report as a recorded lien against the subject property.

Cash Back at Closing

 No Earnest Money refunded

 Any projected or proposed refund of eligible closing costs paid by the Borrower prior to closing, must be fully documented and must be reviewed and approved prior to closing by HOME Staff.  Any approved refund cannot exceed the minimum cash investment.

Subordination

If a Borrower with a HOME 2nd lien is planning to refinance their first lien, contact with IHFA, Grant Programs Department prior to loan approval is crucial.

 Allowed only if the refinance is to lower the borrower’s current interest rate or piti payment.  The HOME 2nd lien will only be subordinated if the purpose of the refinance is solely to reduce

the interest rate or payment on the first lien.

Period Of Affordability

HOME Funds provided on a per unit basis Minimum Affordability Period

<$15,000 5 years

$15,000-$40,000 10 years

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 If the purpose of the refinance is debt consolidation payments of non-mortgage debts, and/or cash out refinance, the HOME 2nd lien will not be subordinated.

Credit Score

 Borrower(s) must receive First Mortgage approval by IHFA, IHFA approved Lender/Broker/Sponsor, or USDA-RD.

 (Buy-back liability for the Lender / Broker / Sponsor, exists if 1st mortgage is not purchased by IHFA or USDA-RD)

Credit

 An acceptable copy of the current Tri-merge credit report is required.

 Pay off collections, judgments, liens and other derogatory credit per Automated Underwriting findings of the 1st lien approval.

 Bankruptcy and Foreclosure to follow 1st lien guidelines

Ratios

Per 1st lien guidelines

Seller’s Contribution

Per FHA / VA / Conventional / USDA-RD Guidelines. Seller-financed down payment products cannot be combined in a purchase transaction with DPCC. If any create a lien, see Primary Mortgage Amounts and CLTV.

Combined Loan To Value (CLTV) Match LTV / CLTV of 1st lien product Impounds

As required per 1st lien guidelines. First Mortgage

 Must be a fixed rate, non-sub prime mortgage purchased by IHFA or issued by USDA-RD  (Buy-back liability for the Lender / Broker / Sponsor, exists if 1st mortgage is not purchased by IHFA or USDA-RD) or other second mortgage loan programs unless approved by the IHFA prior to loan commitment.

Occupancy Reconciliation

 Ongoing monitoring of occupancy reconciliation will include annual verification that the homebuyer(s) occupies the property through the HOME Period of Affordability Assets Limits Assets Limits

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