IHDA will supply $1.4 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 2010 mortgage loans will be provided at below market rate to families with income at or under 80% of the HUD Adams County Median.
Two Rivers Regional Council will provide program training for real estate agents, lenders, and potential home buyers.
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
$31,850 $36,400 $40,950 $45,500 $49,150 $52,800 $56,450 $60,100
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.
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.
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.
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.
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.
Construction loans-permanent financing applications can be taken by the following lenders:
First Bankers Trust
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.
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.
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.
Contact Elaine Davis at 217-222-1560 ext. 236 for more information.