Wednesday, December 5, 2012

New MHFA Programs Start December 18, 2012!

MHFA rolled out their new programs which will be effective with loan locked on or after December 18th. The new MHFA programs are the Start Up and the Step Up programs. The Start Up replaces the prior first time homebuyer loan programs and the Step up is a new program geared towards non-first time home buyers.

Buyers currently qualified and entered into the system before December 18th will be using current Minnesota Housing guidelines

Here is an outline of a few of the major changes:

~ Minimum credit score is 640 with ratio of 45% of less
~ Minimum credit score is 660 with ratio from 45-50% - Maximum housing ratio of 50%

Also, from what we are hearing with upcoming regulation changes we foresee underwriting requiring to show more of a borrower’s ability to repay the mortgage loan. This may include showing reserves for their payment, proof of rent payments, and alternative credit sources for buyers with limited credit and clean/re-established credit history for borrowers with prior major derogatory accounts.

There will be new income limits for the programs – Conventional, RD, and VA will have higher income limits. The FHA income limits have not been posted yet.

Down Payment Assistance changes:

~ The Deferred Payment Loan (formerly the $4,500 assistance) has now changed to 3% of the sales price OR $3,000 whichever is higher
~ Max income limits have been changed to 1 person: $35,250 2 people $40,300 3 people $45,300 and 4 people $50,350
~ Limited to the greater of 8 months PITI or $8,000 reserves after closing

Monthly Payment Loan (new program)

~ This is the only assistance that is available for non-first time home buyers
~ Can be used by first time home buyers who do not qualify for the Home Help or the Deferred Payment Loan
~ Max FHA income limit to follow – Conventional, RD and VA $83,900 for family of 1-2 and $96,485 for 3+
~ Payments are fully amortizing over 10 years at the same interest rate as the first mortgage
~ Maximum loan amount is 5% of the sales price or $5,000 whichever is higher
~ Unlimited cash reserves allowed after closing

Home Help changes:

Maximum loan amount $10,000 – limited to the following:
5% or $5,000 of purchase price plus
$1,000 bank owned/short sale
$1,000 HH income less than 60% AGI
$1,000 HH income less than 50% AGI
$1,000 if housing ratio is under 25%

Limited to the greater of 8 months PITI or $8,000 reserves after closing
Does require a minimum of $500 in reserves
50% forgiven after 6 years (change from 70%)

For more information contact:

Brian K. Lindstrom
Senior Mortgage Banker
NMLS ID #695808
Lake Area Mortgage, A Division of Lake Area Bank
Phone: (651) 209-2922
Fax: (651) 209-2929
E-mail: blindstrom@lakeareamtg.com

No comments:

Post a Comment