2018 Equity Builder Program - Federal Home Loan Banks · Equity Builder Program ... Meet CRA objectives ... Log into the system Online Income Calculation/Enrollment Process Users

2018 Equity Builder Program

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www.FHLBBoston.com

Housing and Economic Growth Tab

Equity Builder Program

Forms and Applications

Download the following:

Income Calculation Guidelines

Homebuyer Information……

EBP Disclosure

Next Steps Webinar:

Enrolling Homebuyers

Resources

Next Steps: Enrolling Homebuyers/Households

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Why FHLB Boston?

Equity Builder Program – Overview

Eligible/Ineligible Uses

Member Eligibility Requirements

Household Eligibility Requirements

Establishing an EBP Work Flow

Identifying Eligible Households

Documents Required At Time of Enrollment

Income Calculation Reminders

Online Income Calculation/Enrollment Process

Disbursement Training

Questions?

Agenda

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How participating in our programs can help you:

Expand business development opportunities

Meet the housing and credit needsin your communities

Meet CRA objectives

How FHLB Boston Can Help Members

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The opportunity to bridge the gap between mortgage and purchase price

The potential for lower debt ratios

A greater equity position in the subject property with lower loan-to-value ratios

Marketing material:

FHLB Boston has developed a marketing flyer for members to use when presenting the program to community partners

A press release template is available and may be used to announce your participation in the program

The EBP offers homebuyers

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EBP is a regulated grant program

Household grant of up to $11,000; provides down-payment, closing-cost, homebuyer counseling, and rehabilitation assistance to households with incomes ≤ 80% of AMI

Can be combined with other subsidy programs (except AHP)

You provide concessions and ensure homebuyers receive homeownership counseling

Requires an executed 5-year retention document at closing

EBP Standard Mortgage

Deed Restriction (FHA only)

EBP Note (covers standard and deed restriction)

Program Overview

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Member Enrollment Cap:

Each member will access up to $110,000

Funds are not guaranteed to any one member

Funds are available on a first-come, first-served, homebuyer-by-homebuyer basis

First one-third of the enrollments must be to first-time homebuyers * Refer to: (HUD 42 U.S.C. §12704(14)) *

Individual Household Cap:

Each household can receive up to $11,000

Approved enrollments are homebuyer specific

Grant Funds – 2018

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The allocation for the 2018 funding round will be divided between four funding periods:

35 percent released on March 28, 2018

25 percent released on April 25, 2018

20 percent released on May 23, 2018

20 percent released on June 20, 2018

Available funds will continue to roll into the next funding period until all funds have been committed within the annual funding period

Subsidy Pool

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Eligible Uses:

Downpayment assistance

Customary closing costs

Homebuyer-counseling costs not covered by another funding source to a maximum of $500

Rehabilitation costs associated with acquisition (funds are released only after 100 percent of the work has been completed and verified)

Ineligible Uses:

Reimbursement for previously paid earnest money downpayment(s)

Bridge the gap between purchase price and appraised value

Co-mingling of other AHP subsidy provided by any Federal Home Loan Bank (systemwide)

Funding monthly housing payment reserve requirements or prepayment of life insurance premiums

Eligible/Ineligible Uses

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Submit EBP application and be approved (annually)

Complete enrollment and disbursement training - required

Review and manage the EBP pipeline regularly

Review and submit income-eligible households into the program through the Bank’s online system

Housing debt of 34 percent (exceptions allowed on case-by-case basis – HH must be able to carry monthly debt)

Request all increases/decreases to the EBP subsidy for enrolled homebuyers online

Review homebuyer education/counseling requirements

Provide a concession/special incentive at closing

Ask questions!

Member Reminders

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Homebuyer education/counseling must be completed within 24 months prior to enrollment submission and prior to closing on the subject property

The counseling should follow accepted industry standards regarding the purchase and ownership, including maintenance of the home

Although a minimum is not required, the Bank recommends a minimum of 8 hours of homebuyer education with a counseling component

Online counseling will be permitted as an acceptable resource for meeting the homebuyer counseling requirements when approved in advance by FHLB Boston. An online counseling program will be recommended, at the time of approval, by FHLB Boston.

Homebuyer Education/Counseling

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NOTE: Members will be limited to six user names and passwords

The two contact people identified at the time of application for the EBP will:

Receive all emails and correspondence

Remain a point of contact for the homebuyer

Coordinate a work flow and train appropriate staff personnel such as:

Loan Originators

Underwriters/Processors

Closers/Post-closers

Communication is Key!

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Purchase an owner-occupied primary residence

One- to four-family units, condos, multifamily and manufactured homes (permanently affixed –homeowner must take title)

Provide the total HH count and all income received

EBP Disclosure

Cannot receive more than $250 cash back at closing

Contribute a minimum of $500 in downpayment funds

Execute an EBP retention document at closing

Earnest money downpayment must stay in the transaction

Complete homebuyer education/counseling requirement

Ask questions!

Household Reminders

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Homebuyer Selected

Executed P&S Agreement

Online Income Calculation/Enrollment

FHLB reviews and approves | Allow 15 business days

Close on Purchase

Request Disbursement/ReimbursementFHLB reviews, approves, disburses | Allow 20 business days

Establishing an EBP Work Flow

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Interview and identify potential homebuyers:

Verify the total number of household occupants who will live in the property at the time of closing and going forward

Validate the total household income:

Cannot exceed 80 percent of the area median income based on the current HUD Income guidelines at http://www.huduser.org/datasets/il.html

18 years or older, must include their income

Year 2018 limits have not been released as of 03/14/2018

Review income sources and household members against the most recent filed tax return for each adult

Remember: The EBP is an income-based eligibility program and the first one-third of homebuyers must be first-time homebuyers.

Identifying Eligible Households

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Homebuyer Information, Household Members and Income Worksheet and Authorization to Release/Certification of Information – (EBP Disclosure)

To be uploaded at the time of enrollment!

2018 version is on the website and must be used with all enrollments at www.fhlbboston.com (under Forms and Applications)

1. Document is to be completed by an adult household member

2. Loan originator should review and validate the information against the income documents requested and received

NOTE: The form needs to be initialed by the homebuyer (pages 1-4) and signed by all parties (pages 6-7)!

Documents Required at Time of Enrollment

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Income Documents:

Documents from all sources of income, as defined in the Income Calculation Guidelines provided by FHLB Boston located at www.fhlbboston.com

Income documents must be provided and uploaded with the enrollment – dated within 45 days of enrollment

We cannot accept documents through emails

A Certification of Zero Income only from non-working adult household members who do not receive any income from any source – updated 2018!

An explanation from the member for any unusual income or household situation(s)


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Purchase and Sale Agreement:

Legible, executed, valid, and a complete copy of the agreement

Include all addendums and exhibits

NOTE: Member to identify and provide an explanation for related-party transactions

NOTE: Income eligibility is approved by FHLB Boston at enrollment and is required to re-reviewed with any change to the property


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Reminders:

Prior to submission, a manual review of the income should be performed and should be in-line with the income calculator results

The accuracy of the enrollment and income calculation is based on a comparison of the EBP disclosure, tax returns, and income documents

Approval of the enrollment is determined by FHLB Boston upon review of the documents provided

Income Calculation

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EBP income is prospective (next 12 months), annualized

Income Calculation Guidelines available at www.fhlbboston.com

The total income of the household for all residing adult members cannot exceed 80 percent of the area median income (AMI)

Income calculations under the EBP will most likely vary from secondary market income requirements

Online automated system is designed to provide a standard way of determining income-eligibility and must be used

Income Calculation Reminders

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Starting the Income Calculation/Enrollment Process

1. Log into the system


Users can request an account or reset their passwords.

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2. Select Create/Manage My Homebuyer Enrollments


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3. Click on Create/Manage Income Calculations/Enrollments


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4. Review member specific program details AND

“Add A New Household”


The subsidy pool balance and member specific details can be viewed here.

Each household is assigned an EBPnumber and added to your pipeline

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5. Blackout personal identifying account numbers and review the EBP disclosure


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6. Enter information pertaining to the property being purchased


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7. Enter information about each household member and their income

Step FourOnline Income Calculation/Enrollment Process

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8. Don’t forget to click “Add Household Member”:


The household member must show up in the table that is being created

9. Tax Return Review (top portion of screen)

Continued: (middle portion of the screen)


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10. Upload the Homebuyer Information, Household Members and Income Worksheet, and the Authorization to Release: (bottom portion of the screen)


Remember: Review to make sure that there are all three signatures on the document!

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11. Enter employment information and click “Add household member’s employer/type of documentation”


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12. Use the document type selected to input income information (paystubs)


Income Calculation pay periods, are calculated based on the check date except when the check date is before the period ending date.

Always round up; i.e. 9.01 pay periods = 10

Enter YTD earnings before deductions (i.e. $3000)

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13. Click “Add Paycheck Information” to create Table of Employment


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14. Use the document type selected to input income information (VOE):


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15. Use the document type selected to input income information


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16. Review uploaded documents and attach any additional documents here:


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17. You will be able to review the system’s calculation of income and data you have entered:


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18. If there is anything missing, it will show up on the right under the appropriate section


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19. You have the following two options:

a) Save and Exit OR

b) Enroll Household


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Option One: “Save and Exit” will return you to the beginning of the process. Your income calculation/enrollment will remain in “NEW” status until you complete the enrollment submission process. You will click “Edit” to review and update.

Option Two: Selecting the “Enroll Household” will take you straight into the enrollment process


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Enter required data and upload the P & S agreement

Enrollment Submission

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Enter mortgage financing information


Remember:Maximum 2/6 caps for all ARM products

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Attach documents


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Missing items will display on the right under the appropriate section:


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Member certification for enrollment


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Validate and submit


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THANK YOU! EBP funds have been reserved for this household pending approval by FHLB Boston.


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Enrollments must be submitted at least 15 business days prior to the closing transaction

Upon submission of the enrollment, EBP funds will be reserved for that specific household

If a homebuyer is denied a mortgage loan or requests to withdraw their loan application, the expectation is that the member will withdraw the enrollment as soon as notification is received

Each enrollment approval is valid for 90 days

Extensions may be requested and are granted at the sole discretion of FHLB Boston


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All approved members must attend EBP Disbursement training prior to requesting reimbursement of EBP funds

Upcoming date: Final Steps: Requesting the Disbursement

March 29 and April 3

Registration is now open and can be accessed at www.FHLBBoston.com

Members should determine who is best suited to attend:

Underwriters

Closers and Post-closing

Disbursement Training

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For more information, contact:

Kaitlyn Mulhern, EBP Manager

617-292-9606 | [email protected]

Michelle Chisholm, HCI Analyst


Kathleen Amonte, HCI Compliance Analyst


Paulette Vass, Community Development Advance Manager,


Mary Ellen Jutras, Vice President/Deputy Director

617-292-9607

Kenneth Willis, First Vice President/Director

617-292-9631

Housing and Community Investment

Thank You!

We look forward to working with you!