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American Income Life Complaint document sample
American Income Life Complaint document sample
USDA Rural Development Nebraska Tribal USDA Listening Session Working Effectively With American Indians Housing Session May 11, 2010 WHAT DOES USDA RURAL DEVELOPMENT DO??? Mission Statement: “To increase economic opportunities and improve the quality of life for all rural Americans.” FUNDING Funds are available through direct and guaranteed loan programs and grants Requirements: – Repayment Ability – Loan/Grant Eligibility (Economic Need) – Security Sustainability – Long term community investment USDA Rural Development Types of Program Delivery – Guaranteed Loans – Direct Loans – Grants Program Areas – Rural Business and Cooperative Business, Energy & Cooperatives – Rural Housing and Community Facilities Single Family, Community Facilities & Multi Family – Rural Utilities Water and Environmental, Telecomm & Electric Business Loans & Guarantees Ho-Chunk Industries – Walthill, NE before… after… COMMUNITY FACILITY LOANS & GRANTS Water Tower in Kelly Property Library - Winnebago, NE Addition – Winnebago, NE Little Priest Tribal College Classroom Winnebago Fire Truck USDA Rural Development’s Single & Multi-Family Housing Programs Single Family Programs Single Family Housing Direct & Guaranteed Loans Single Family Housing Repair Loans & Grants Mutual Self Help Technical Assistance Grants Multi Family Programs Housing Preservation Grants Multi Family Housing Direct Loans Multi Family Housing Guaranteed Loans USDA RURAL DEVELOPMENT Single Family Housing Loan Programs Many Would Like to Own Their Own Home, but… They don’t have the money for a down payment. Afraid the mortgage payments will be too high to afford. Believe past credit problems will be a barrier. KEYS TO HOME OWNERSHIP Affordable Housing is typically considered affordable when it costs no more than 30% of a household’s income Partners Homebuyer Education SUCCESSFUL HOMEOWNERS Our goal is not just to get families in homes, but to allow them to be successful to stay in the home Partners For Affordable Housing Private & non-profit sectors NIFA / Lenders Realtors Non-Profit Organizations DED – (CDBG , HOME , TRUST) Federal Home Loan Bank Nebraska Assistive Technology USDA RURAL DEVELOPMENT AFFORDABLE HOUSING PRODUCTS LENDER OF FIRST OPPORTUNITY IN RURAL NEBRASKA Guarantee Rural Housing (GRH) Program Direct Housing Program Self-Help Housing USDA RURAL DEVELOPMENT Housing loan programs designed for very- low to moderate income households to purchase homes, who would otherwise not qualify for bank financing. Provides 100%-102% financing to purchase, repair, and pay loan closing costs. No private mortgage insurance (PMI) is required. USDA RURAL DEVELOPMENT Provides fixed interest rates and terms that are affordable. Loan programs leverage very well with local down payment assistance programs. Credit counseling and servicing options available for customers. LOAN PURPOSES The purchase of a new or existing dwelling; refinance construction loan to build house; any needed repairs for an existing dwelling; finance closing costs (if equity) 2 “Rurals” Eligible area Eligible adjusted income Eligibility Website: LOG ON: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do Click here for property eligibility Click here for income limits Eligibility for Rural Development Single Family Housing Loan Programs Eligibility for a Loan Combined household income within the current published limits. Have a dependable source of income that indicates repayment ability. Repayment is determined by debt to income ratios. Credit History that demonstrates an ability and willingness to pay debt obligations in a timely manner. Other Eligibility for a Loan Do not currently own a home adequate to meet the family’s needs. Lack the resources to afford conventional financing. Citizen or Permanent Resident Alien. Have the legal capacity to apply for a loan or legal guardian who may apply for the loan. HOMEBUYER EDUCATION Direct Program – required for 1st time homebuyers through qualified providers (ie REACH) GRH – typically recommended. Lender will determine type of homebuyer education to be completed. Credit Scores No Minimum credit score to qualify Baselines for reduced documentation GRH Program – 620 or above Direct Program – 640 or above PROPERTY REQUIREMENTS EXISTING DWELLINGS DIRECT RH-502 Instead of meeting GUARANTEED HUD/FHA minimum Existing dwellings property standards, must meet HUD/FHA homes must be minimum property inspected by RD staff, electrician, plumber, heating/A/C professionals. PROPERTY REQUIREMENTS Property may not be a part of an income producing operation and may not have farm service buildings Properties must be located in rural areas/communities of under 20,000 and communities of Norfolk and Columbus PROPERTY REQUIREMENTS The appraised value of the property must be sufficient to cover the purchase price plus any closing fees and repairs being financed. GUARANTEED HOUSING LOANS GUARANTEED HOUSING LOAN HIGHLIGHTS 100% Financing Moderate income households Generous income limits: ADJUSTMENTS Loans originated by approved lenders 30-year loans at fixed interest rates. Rate is negotiable between Buyer and Lender. NIFA rates available for qualified Buyers. 100% Guaranteed financing True 100% program No maximum purchase price No monthly mortgage insurance – one time 2% GRH fee can be financed Expanded qualifying ratios 29/41 and above No asset limit / No reserve minimum Not FICO driven: Does the loan make sense? Emerging Markets/Non Traditional histories, etc. NOT just for first time homebuyers Maximize buying power Clients Choose An Approved Lender GRH LOAN PROCESSING Loans processed and underwritten by approved lenders USDA GRH Moderate Income Limits County 1 - 4 person 5-8 person Omaha MSA (Cass, Douglas, Wash, Sarpy) $80,350 $106,050 Lincoln MSA (Lancaster) $78,550 $103,700 Seward $76,900 $ 101,500 Saunders $75,200 $ 99,250 All Other Counties $73,600 $ 97,150 DEDUCTIONS TO INCOME: Dependents: $480 each Children 18 yrs. or younger Disabled household members 18 yrs. or older Full time students 18 yrs. or older Care expenses (DAYCARE) of minor children 12 yrs. or younger Elderly family: $400 (single deduction) 100% GUARANTEED FINANCING OFFERS: *Lowest payment *Least out of pocket cost *Competitive fixed rate *Affordable loan terms *Opportunity to serve more clients NO PMI LOAN 5% down $8,750 9% Rate NO MI $1338 FLEX 97 3% down $5250 680-699 FICO 35% MI $1259 FLEX 97 3% down $5250 700 + FICO 18% MI $1245 FHA 3.5% down $6125 2.25% UFMIP + 55 bp MI $1229 April 5th, 2010 95% LTV CONVENTIONAL 5% down $8750 30% MI $1214 MCM®/HOME POSSIBLE 3% down $5250 680 – 699 FICO 18% MI $1213 80/20 80% 1st 7% 30 YR TERM 20% 2nd 8.5% 30 YR TERM $1201 MCM®/HP 3% down $5250 700 + FICO 18% MI $1196 VA 2.15% GUARANTY FEE NO MI $1189 $175,000 Loan 7% rate 102% LTV RURAL DEVELOPMENT NO MI $1188 No r.e. taxes & insurance included 100% LTV RURAL DEVELOPMENT NO MI $1164 DIRECT RH-502 LOANS Single Family Housing Direct Loans Primary goal is to provide affordable quality housing to low and very low income households. 100% financing available. Mortgages are fixed rate for 30-38 years Current interest rate 4.875% Interest Rates subsidized down to as low as 1% Partial “Recapture” of interest subsidy DIRECT RH-502 LOAN HIGHLIGHTS Loans are originated in the local USDA Rural Development offices. Mortgage limit: $170,000 (Cass, Douglas, Sarpy, Saunders, Washington) $165,000 in (Lancaster, Saline, Seward, Otoe and Gage) $155,000 in (Cheyenne, Madison, Platte, Stanton) $145,000 all other counties DIRECT RH-502 LOAN HIGHLIGHTS Debt to income ratios are 29%-33% PITI and 41% total debt ratio. Compensating factors to allow higher ratios: -Energy efficient systems being installed to reduce utility costs -Comparable or higher rental costs -Savings -Proposed pay increase Payment Subsidies are available to reduce mortgage payments for most qualified buyers. RH-502 Loan Eligibility Wages or other sources of income must be dependable and sufficient for repayment of the loan. Credit history must demonstrate a willingness to pay credit obligations on time. Combined adjusted household income must be within the published Low Income limits. USDA Direct Low Income Limits County 1 person 2 person 3 person 4 person 5 person (general*) $30,050 $34,350 $38,650 $42,950 $46,400 *Income limits vary by County DEDUCTIONS TO INCOME: Dependents: $480 each Children 18 yrs. or younger Disabled household members 18 yrs. or older Full time students 18 yrs. or older Care expenses (DAYCARE) of minor children 12 yrs. or younger Elderly family: $400 (single deduction) PAYMENT SUSBIDY Subsidies are available to reduce monthly payment to as low at 1% for eligible low and very-low income households. This gives the buyer more purchasing power! HOW SUBSIDY WORKS: Subsidies help reduce the monthly mortgage payment for low and very-low income households to make the payment affordable. The subsidy is paid with Federal funds, on the Home Owner’s behalf each month. It is money you would pay out of pocket for interest at full note interest rate on a mortgage loan. AFFORDABILITY THROUGH SUBSIDIZED PAYMENTS DIRECT LOAN PROGRAM GRH loan - terms: 30 yrs, $100,000 @ 5.75% = $584 monthly principal & interest (P&I) payment Rural Development Direct loan - terms: 33 yrs, $100,000 @ 4.875% (The Rural Development “full note rate” is typically lower than conventional rates) = $509 P&I payment, HOWEVER, Payment assistance is granted to eligible applicants. FOR EXAMPLE PURPOSES ONLY: RE taxes $2,400 yr and insurance $600/yr = $3,000 / 12 mo = $250 month PAYMENT ASSISTANCE CALCULATION Household Income 4 person household: (calc #1) calculated at 24% of AAI annual income $30,000 RD mo. full note pymt ($509) + mo taxes & ins Less:Dependent deductions - 960 ($250) = $759 PITI - $580.80 (24% of mo AAI) Adjusted Annual Income $29,040 Monthly AAI $ 2,420 Difference $178.20 (Calc #2) calculated at 1% note rate Full Note Pymt $509.00 - $296.58 (mo pymt @ 1%) Difference $212.42 House Payment with Payment Assistance $330.80 monthly P&I payment by borrower Applicant receives monthly Payment Assistance of $178.20. Monthly full note rate $509 - $178.20 mo Payment Assistance Do We Pay Back The Subsidy? All, or a portion of the subsidies that are paid on the Buyer’s behalf to reduce your monthly payment is subject to repayment when you move out of the home, sell the home, or refinance your Rural Development loan with another lender. Subsidy Payback Example Buyer’s received $90,000 loan @ 5.75% for 33 years = $508.50 per month Principal + Interest (P&I) Eligible for subsidy at 1% rate P&I = $267.30 $241.20/mo paid on their behalf by the Government Had loan for 5 years at 1% subsidy rate: $241.20/mo x 60 mos. = $14,472 subsidized Home is now selling for $100,000 Unpaid P&I on RD loan is $85,000 Selling costs total approximately $6,000 Subsidy Payback Example Selling Price $100,000 Unpaid P&I -$ 85,000 Selling costs -$ 6,000 Remaining Equity = $ 9,000 RD only recaptures a maximum of 50% of “remaining equity” to pay back some or all of the subsidy paid on buyer’s loan 50% x $9,000 = $4,500 additional owed to RD to payback on subsidy. Subsidy Payback Example Conclusion: Buyer received $14,472 in subsidies, but is only paying back $4,500 = $9,972 granted to them REMEMBER: This was a 5.75% loan. The above subsidies were money the buyer would have paid out of pocket for interest payments on a non-RD loan at that rate. Let Rural Development Help You Qualify For a Housing Loan! If you have credit issues at the present time, or too much other debt to afford a loan right now, we will try to advise you on what steps to take and will continue to work with you until you are ready to buy a new home. DON’T GIVE UP! ANYTHING IS POSSIBLE!! Let Rural Development Help You Qualify For a Housing Loan! Contact USDA RD Office and request a pre- qualification review RD staff will do a prequalification and call you regarding what amount you might qualify for and which program would benefit you the most - Direct or Guarantee Rural Home Repair Loan and Grant Program Applicants must own their own home and are very-low income households. Grant funds can only be used to remove health & safety hazard. Grants are only available to homeowners 62 years of age or older who cannot afford a loan Loan funds can be used to improve or modernize dwelling as well as removal of health & safety hazards Rural Home Repair Loan and Grant Program Fund Uses: Installation or repair of waste disposal systems, connection fees for utilities, energy conservation, electrical, plumbing, heating systems, repair or replace roof, replace deteriorated siding, handicap accessibility Loans-1% interest rate Up to 20 year term Maximum amount-$20,000 Maximum lifetime grant-$7,500 Leverage with partners to provide maximum utilization of funds Single Family Housing Home Improvement Loan & Grant Program “Note Only” feature facilitates Lease/Mortgaging problems (loans less than $7,500) If no experience with Rural Development - this is a great 504 Customer Joyce Jefferson Lummi Reservation, WA place to start Grant has 3 year recapture clause RURAL HOME REPAIR LOAN RURAL HOME REPAIR GRANT *BEFORE REPAIRS* *AFTER REPAIRS* Self-Help Housing Program Assist low and very low income families to build their own home Construction method where a group of 6-10 families work together to utilize their own labor to build their homes and reduce total construction costs of the homes (families must contribute 65% of total labor on each house) A public or private non-profit organization obtains a USDA grant to provide technical assistance to the participating families. Organizations can use grant funds to: Hire personnel to carry out program Pay necessary and reasonable office and administrative expenses & salaries To make essential equipment, such as power tools available to households participating in self-help construction Training expenses Grantee responsibilities Recruit applicants & assist with loan applications Locate and or develop sites & obtain site options Obtain house plans & specifications & develop building cost estimates Provide construction training to applicants Coordinate family work groups & provide construction supervision Maintain accounting of construction materials and use of loan funds Self-Help – Scottsbluff Housing Preservation Grant Program Used to renovate deteriorating homes and rental properties of low and very low income categories Eligible entities consist of nonprofits, local governments, and Indian Tribes • Used in conjunction with other leveraged funds HELPFUL WEB SITES www.rurdev.usda.gov/ne (Nebraska Rural DevelopmentPrograms) http://eligibility.sc.egov.usda.gov/eligibility/mainservlet (Determine potential eligibility for USDA home ownership programs. View eligible and non eligible areas.) http://www.resales.usda.gov/sfhdirect/propertyco.cfm?StateAbbreviation=NE (Housing properties in Nebraska for sale by USDA Rural Development and guaranteed lenders, and upcoming foreclosures.) http://www.nifa.org/customers/project_listings.html (Assists renters to find affordable rental housing complexes. Research type of affordable rental housing located in county, community, zip code area, etc. in Nebraska. Contact information available.) http://www.nenedd.org/HousingLoanPrograms.asp (Down Payment Assistance and Housing Rehab programs) http://www.housingdevelopers.org/REACHweb/index.htm (Home buyer education programs) http://www.annualcreditreport.com (Free annual credit reports.) RD OFFICES State Office (402) 437-5551 Fax (402) 437-5408 Rm 152 Federal Bldg, 100 Centennial Mall North, Lincoln, NE 68508 Kearney Area Office (308) 237-3118 Fax (308) 236-6290 4009 6th Avenue, Kearney, NE 68845-2386 Ainsworth Sub-Area Office (402) 387-2242 Fax (402) 387-0968 731 E. 4th, Ainsworth, NE 69210 Lincoln Area Office (402) 423-9683 Fax (402) 423-7614 8000 South 15t h Street, Suite E, Lincoln, NE 68512 Norfolk Area Office (402) 371-5350 Fax (402) 371-8930 1909 Vicki Lane, Suite 103, Norfolk, NE 68701 Scottsbluff Area Office (308) 632-2195 Fax (308) 635-2787 818 Ferdinand Plaza, Suite B, Scottsbluff, NE 69361-4401 North Platte Sub-Area Office (308) 534-2360 Fax (308) 534-8645 1202 S. Cottonwood, North Platte, NE 69101 Mike Buethe, Rural Housing Program Director Phone 402-437-5574 ; e-mail email@example.com “USDA Rural Development is an Equal Opportunity provider, employer and lender.” To file a complaint of discrimination write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington D.C. 20250-9410 or call (800) 795-3272 (voice), or (202) 720-6382 (TDD).
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