Home Buyer Program

QUINCY HOUSING INITIATIVE

The Partnership for HomeOwnership Foundation in collaboration with the Illinois Housing Development Authority, the city of Quincy, area banks, and Two Rivers Regional Council of Public Officials have available the following loan program for the fourth year of the Quincy Initiative.  IHDA will supply$2 million in mortgage funds to serve Quincy first time home buyers or those who have not owned a home for 3 years.  (Families purchasing in the targeted areas are exempt from that rule.)  During 2006 mortgage loans will be provided at below market rate to families with income at or under 80% of the Adams County Median and are available anywhere within the city limits of Quincy.

PROGRAM CERTIFICATION

Two Rivers Regional Council will provide program training for real estate agents, lenders, and potential home buyers. 

HOMEBUYER EDUCATION/REGISTRATION

Pre-purchase counseling is a requirement prior to entering into a contract to purchase a home.  Potential home buyers must register with the Partnership For HomeOwnership Education Centers using the standard application forms.  These forms will certify that they have been pre-qualified and understand the requirements of the program.  A credit report will be provided to each potential home buyer registering for the education session.  Both hus­band and wife or any two individuals applying jointly must attend the pre-purchase seminar prior to entering into a contract to purchase a home.  Upon comple­tion of the Home Buyer Seminar, participants receive a certificate qualifying them for the program.  That certificate does not guarantee loan approval.

LOAN TYPE/ INCOME LIMITS

PFHO will offer qualified borrowers at or below 80% of county median a 97% LTV

COUNTY                                  MAXIMUM HOUSEHOLD INCOME LIMITS
                                                              (1)                    (2)                        (3+)
            Adams County                       $46,700          $53,300         $60,000

   
RATIOS

In general ratios should not exceed 29/36.  However, it is acceptable for ratios to exceed 29/36, when the following conditions exist:
            - Borrower has a history of maintaining a high debt load
- Borrower has demonstrated an ability to repay debt in a timely fashion
- Borrower has a history of income stability

Borrowers cannot have more than 20% of their monthly income in credit card/installment debt.

DOWN PAYMENT

Minimum down payment of 3% of the purchase price.  $1000 or 1% of the purchase price is required from the borrower, buyers must have the down payment at the time of loan application.  2% of the down payment can be a grant, gifted, paid by the seller, provided by an approved employer assisted loan program, or funded through IHDA’s Help Program at a slightly higher mortgage rate.

CLOSING COSTS/RESERVES

A minimum of 2 month’s PITI reserves is required.  Some closing costs, such as a homeowner policy, home inspection fee, etc. can be paid at closing from the grant funds, if the provider agrees. 

MORTGAGE INSURANCE

PMI (Private Mortgage Insurance) coverage of 97% LTV, with 35% mortgage insurance coverage.   PMI can be paid with 2.5% up-front and .43% monthly.  Up-front PMI can be financed (house must appraise for the higher loan amount plus the downpayment)  Loan amount cannot exceed 97% of appraised value.

ASSISTANCE MONIES

OR:

Applicants may be gifted 4.25% of the purchase price at closing to cover remaining downpayment and closing costs. The interest rate is slightly higher with this option.

 Both interest rates will be posted on the www.pfho.org web site.

BORROWER INCOME/CREDIT

The lender must verify income for two consecutive years (three consecutive years following bankruptcy) in order to determine adequacy and continuance.  Borrowers must have re-established acceptable credit for three years after a bankruptcy, or two years after other credit problems.  Any outstanding collections must show paid.  Medical collections must have a written repayment plan accepted by the medical facility and have a history of 6 months consecutive payments.

On a case-by-case basis, the lender can consider additional non-seasonal, part-time income with less than two years, but not less than one year, of history.  The employer must verify the continuation of part-time employment.  Verification of alimony or child support income for qualifying purposes is not restricted to divorce decrees or separation agreements, but must have a minimum of two years of such income remaining.  Other forms of verification are acceptable so long as they verify the amount received, can demonstrate two years of past history and the continuation of income.

ASSETS

Borrowers cannot have more than 5% of the purchase price remaining in cash assets after closing unless designated for specific pending expenses.  This does not include 401K, pension plans or other long term investment vehicles.
 
PARTICPATING LENDERS

Participating lenders must be IHDA approved lenders.

First Bankers Trust
Merchantile Bank
First Federal
First Bank

LOAN APPROVALS

Original Seminar Certificate must be attached to loan application. Certificate will indicate the Quincy option chosen.  Lenders must call IHDA at time of application to reserve both loan amount and grant monies, indicating the Quincy City Rates or the Help rate option.  Lenders should submit the loan files to IHDA and a copy to the designated mortgage insurer at the same time to speed approval.  IHDA will provide a standard letter of approval or rejection to the applicant and the lender

ELIGIBLE PROPERTIES

Existing housing and new construction single family dwellings, including new modular housing approved by the City of Quincy.  The City of Quincy has donated lots for families at or below 80% of Adams county median income.  This program is available within the city limits of Quincy, Illinois.

MODULAR housing

Must be purchased new from an Quincy approved dealer/contractor. Call PFHO for information. All eligible “modular” housing must have a minimum 5-12 pitched roof, an 8” fixed eave overhang, 2” x 6” exterior wall stud, and be built on a crawl space or basement.  Interior of home must be fully finished dry wall.  Lenders will require manufacturer’s building specifications at time of loan application to verify requirements.  We cannot grant exceptions.  Note: Manufactured housing is not an option with this program.

Home inspections for existing dwellings

Each loan will require a professional home inspection report, which can be paid out of grant funds at closing.  Inspections must be performed by licensed Home Inspector. Dwellings financed must be structurally sound, functionally adequate, and placed in good repair. Repairs recommended by the inspector must be completed by the seller or financed into the loan amount All homes must meet weatherization requirements (see chart), have a minimum 100 amp electrical service, and a minimum roof lifetime of 5 years.  Existing dwellings must have a remaining Economic Life for at least 30 years or life of the loan and.  A termite inspection and necessary treatment must be completed by a licensed Pest Control Agency.

REPAIRS

Buyer may negotiate with the seller or lender to build major repairs into the loan amount.  Repairs, such as a new roof or furnace will require three bids, and the highest bid will be  escrowed at closing.  This MUST be written into the contract!  This can be done either as “seller agreed” to repairs or as part of a financing contingency in which the amount financed includes the money necessary for repairs.  Property  appraisal should reflect proposed improvements and must support higher loan amount.  Repairs must be completed within 60 days of closing and  will be paid by lender or escrow agent.  This is not a rehab loan.  Repairs are limited to safety and soundness only, more than three major repairs may eliminate this house from the program.  .

MAXIMUM PURCHASE PRICE
          
EXISTING HOUSING: $237,030                         NEW CONSTRUCTION: $237,030            

QUINCY HOUSING INITIATIVE NEW CONSTRUCTION

IHDA will supply $2 million in mortgage funds to serve Quincy first time home buyers or those who have not owned a home for 3 years.  (Families purchasing in the targeted areas are exempt from that rule.)  During 2006 mortgage loans will be provided at below market rate to families with income at or under 80% of the HUD Adams County Median.

PROGRAM CERTIFICATION

Two Rivers Regional Council will provide program training for real estate agents, lenders, and potential home buyers. 

HOMEBUYER EDUCATION/REGISTRATION

Pre-purchase counseling is a requirement prior to entering into a contract to purchase a home.  Potential home buyers must register with the Partnership For HomeOwnership Education Centers using the standard application forms.  These forms will certify that they have been pre-qualified and understand the requirements of the program.  A credit report will be provided to each potential home buyer registering for the education session.  Both hus­band and wife or any two individuals applying jointly must attend the pre-purchase seminar prior to entering into a contract to purchase a home.  Upon comple­tion of the Home Buyer Seminar, participants receive a certificate qualifying them for the program.  That certificate does not guarantee loan approval.

LOAN TYPE/ INCOME LIMITS

PFHO will offer qualified borrowers at or below 80% of county median a 97% LTV fixed rate mortgage .
:
 1 person    2 person    3 person    4 person    5 person    6 person    7 person    8 person
$29,600      $33,850     $38,050    $42,300     $45,700     $49,050     $52,450     $55,850    
   

RATIOS

In general ratios should not exceed 29/36.  However, it is acceptable for ratios to exceed 29/36, when the following conditions exist:
            - Borrower has a history of maintaining a high debt load
- Borrower has demonstrated an ability to repay debt in a timely fashion
- Borrower has a history of income stability

Borrowers cannot have more than 20% of their monthly income in credit card/installment debt.

DOWN PAYMENT

Minimum down payment of 3% of the purchase price.  1% or $1000 (whichever is higher) is required from the borrower, buyers must have the down payment at the time of loan application.  2% of the down payment can be a grant, gifted, or paid by the builder.

CLOSING COSTS/RESERVES

A minimum of 2 month’s PITI reserves is required.  Some closing costs, such as a homeowner policy, home inspection fee, etc. can be paid at closing from the grant funds, if the provider agrees. 

MORTGAGE INSURANCE

PMI (Private Mortgage Insurance) coverage of 97% LTV, with 35% mortgage insurance coverage.   PMI can be paid with 2.5% up-front and .43% monthly.  Up-front PMI can be financed (house must appraise for the higher loan amount plus the downpayment)  Loan amount cannot exceed 97% of appraised value.

GRANT/ASSISTANCE MONIES

Limited funds for applicants at or below 80% of HUD county median may qualify for up to $9,250 in American Dream funds.  These “silent second” forgivable loans towards down payment and closing costs.   Are forgivable over a 5 year period at a rate of 1.67%/month.
 
Applicants may also qualify for up to $1,500 in IHDA closing cost assistance .
**“Down Payment Plus” funds can also be applied to these loans. 

1 person    2 person    3 person    4 person    5 person    6 person    7 person    8 person
$29,600      $33,850     $38,050    $42,300     $45,700     $49,050     $52,450     $55,850    

 
BORROWER INCOME/CREDIT

The lender must verify income for two consecutive years (three consecutive years following bankruptcy) in order to determine adequacy and continuance.  Borrowers must have re-established acceptable credit for three years after a bankruptcy, or two years after other credit problems.  Any outstanding collections must show paid.  Medical collections must have a written repayment plan accepted by the medical facility and have a history of 6 months consecutive payments.

On a case-by-case basis, the lender can consider additional non-seasonal, part-time income with less than two years, but not less than one year, of history.  The employer must verify the continuation of part-time employment.  Verification of alimony or child support income for qualifying purposes is not restricted to divorce decrees or separation agreements, but must have a minimum of two years of such income remaining.  Other forms of verification are acceptable so long as they verify the amount received, can demonstrate two years of past history and the continuation of income.

ASSETS

Borrowers cannot have more than 5% of the purchase price remaining in cash assets after closing unless designated for specific pending expenses.  This does not include 401K, pension plans or other long term investment vehicles.
 
PARTICPATING LENDERS

Construction loans-permanent financing applications can be taken by the following lenders:

First Bankers Trust
Merchantile Bank
First Federal
First Bank

LOAN APPROVALS

Original Seminar Certificate must be attached to loan application.  Lenders must call IHDA and PFHO at time of application to reserve both loan amount and grant monies.  Lenders should submit the loan files to IHDA and a copy to the designated mortgage insurer (if applicable) at the same time to speed approval.  IHDA will provide a standard letter of approval or rejection to the applicant and the lender.

ELIGIBLE PROPERTIES

New construction single family dwellings, including new modular housing approved by the City of Quincy.  All units must have garages, either attached or detached.  The City of Quincy has donated lots for families at or below 80% of Adams county median income.  This program is available within the city limits of Quincy, Illiniois.

MODULAR housing

Must be purchased new from an approved dealer/contractor.  All eligible “modular” housing must have a minimum 5-12 pitched roof, an 8” fixed eave overhang, 2” x 6” exterior wall stud, and be built on a crawl space or basement.  Interior of home must be fully finished dry wall.  Lenders will require manufacturer’s building specifications at time of loan application to verify requirements.  All units must be turn-key, with the dealer completing all work.  We cannot grant exceptions.

MAXIMUM PURCHASE PRICE
          
NEW CONSTRUCTION: $172,632