Remove this text
and place
your logo here
[Name of Presenter]
[Date Presented]
FOR CONSUMERS
Remove this text
on slide master and
place your logo here
Today’s Presentation
 It’s Still a Great Time to Buy
 Sources You Can Tap to Fill Your Down Payment Gap
 Down Payment and Closing Cost Resources in [Add Location Name
Here]
 Mortgage Options We Offer
 Information Resources
2
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
It’s Still a Great Time to Buy
3
© Freddie Mac 2015
Remove this text
on slide master and
place lender logo
here
Low Interest Rates + Low Home Prices = Affordability
4
© Freddie Mac 2015
Remove this text
on slide master and
place lender logo
here
U.S. Home Prices Are at 2005 Levels
5
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Many potential homebuyers today are anxious about buying a home,
and those concerns are legitimate.
Challenges





Lack of down payment
Anxiety over housing prices
Inability to find financing
Lack of information
Challenges of selling current
home
Universal
 Fear of making wrong
choices
 Not the right time to buy
 Down payment struggles
But today is a great time to buy, if you do your homework and understand your options….
Source: Freddie Mac
6
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
You’ve Decided to Go Ahead and Buy
 You’ve found your first home.
 Your loan officer tells you you’re approved for a mortgage.
 The numbers have been crunched -- and you find you’re just short of the cash you
need to close.
So what do you do?
 Drain your 401(k)? Not ideal.
 Bank of Mom? No.
 Any other options? Yes.
- There are homebuying assistance resources out there – ranging from a few
thousand dollars to larger amounts – waiting for well-qualified, mortgage-ready
borrowers like you.
7
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Overcoming Your Challenges and Fears: the Benefits of
Pursuing Homeownership:
 Owning a home still has its advantages, both personally and financially:
– housing costs are more stable if you obtain a fixed-rate mortgage (still available
at low rates);
– tax incentives such as the mortgage interest deduction not offered to
renters; and
– you obtain a sustainable mortgage at an affordable rate using available down
payment and closing cost assistance.
8
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Sources You Can Tap
to Fill Your Down Payment Gap
9
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Where Can I Find Down Payment and Closing Cost Assistance?
 States;
 Cities;
 Counties; and
 Other local government resources.
 The U.S. Department of Housing and Urban Development provides grant assistance
through either the HOME Investment Partnerships Program or the Community
Development Block Grant Program that are used to administer programs on the
state and/or local level. An example of a program is the Neighborhood Stabilization
Program.
10
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
What Are the Qualifications and Requirements? And If I Do
Qualify, How Much Can I Get?
 Assistance may be limited to first-time homebuyers and/or low- and moderateincome homebuyers, depending on the assistance program.
 Homebuyer education counseling is often required, but not always.
 Assistance can range from a few thousand dollars to larger amounts, depending on
your needs, your qualifications, and where you choose to purchase your home.
 There are many programs out there, with different requirements.
 Finding the right program to meet your circumstances takes some research, but the
solutions are out there.
11
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
What Kinds of Assistance Are There?
There are three main types of down payment help:
 Grants;
 Low-rate or deferred payment second mortgage loans; and
 Tax credits.
12
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Grants
 Grants are funds that you do not have to pay back as long as you own and occupy
your home for a certain period of time.
 Depending on the source, income limits may apply. For example, if you apply for a
grant your state or local government offers, you may be eligible only if you earn no
more than 80 percent of the income for your area.
 To apply for a grant offered by a state or local government agency (or designate*),
you must contact the agency or designate directly. Our loan officers and real estate
professionals in your area are also familiar with state and local sources and can
help.
“Designate” is an organization (typically, a nonprofit organization) that a state or local government agency has assigned to administer the program.
13
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Example of a Grant Program
 A state-chartered housing finance agency offers a $2,500 down payment and
closing cost assistance grant to eligible buyers, including first-time homebuyers,
current and past members of the military, and borrowers purchasing a home in one
of 16 communities affected by a recent Naval Air Base closure. In addition to the
$2,500 grant, new homebuyers will also receive a coupon for up to $500 to pay for
an “energy audit” that helps identify cost-effective home energy improvements.
 The grant does not have to be paid back, and will not be added to your loan amount.
 To qualify for the grant, you must apply for a below-market-rate first mortgage
offered by one of the agency’s participating lenders. In addition, you must pay a
certain portion of closing costs from your own funds, and attend a homebuyer
education class.
14
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
[Add a Specific Grant Program Example in Your Area Here:]
XX City, XX State – [Add Name of Program Here]
 Describe program here
[USE THIS SLIDE TO PROVIDE A SPECIFIC EXAMPLE OF A GRANT PROGRAM IN YOUR LOCAL AREA OR LENDING FOOTPRINT.]
Source – Add Here
15
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Low-rate or Deferred Payment Second Mortgage Loans
 The most common type of down payment source, many second mortgage loans
offered by state and local governments have low or no interest rates, and the
payments are deferred over a certain timeframe.
 Income and prior homeownership limits may apply.
 Like grants, you must also apply for second mortgage loans through the state or
local agency offering the program. Ask your loan officer or real estate professional
for more details.
16
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Example of a Low-rate or Deferred Payment Second Mortgage
Loan Program
 Through a city home purchase assistance program, low- and moderate-income,
first-time homebuyers can receive up to $40,000 in financial assistance to purchase
single-family homes, condos, or co-ops in the city, with closing cost assistance
provided separately up to $4,000. The assistance is in the form of a low-interest,
deferred loan for the first five years. Certain eligibility requirements apply.
 Interested residents can apply through one of six participating city-based nonprofit
organizations.
17
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
[Add a Specific Second Mortgage Loan Program Example in Your
Area Here:]
XX City, XX State – [Add Name of Program Here]
 Describe program here
[USE THIS SLIDE TO PROVIDE A SPECIFIC EXAMPLE OF A SECOND LOAN MORTGAGE PROGRAM IN YOUR LOCAL AREA OR
LENDING FOOTPRINT.]
Source – Add Here
18
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Tax Credits
 Certain states and local governments, including housing finance agencies, issue
mortgage credit certificates (MCCs), which reduce the amount of federal income tax
you pay, thus giving you more available income up-front to make your down
payment or pay closing costs.
 MCCs generally allow you to claim around 20 percent of the annual interest on your
mortgage as a federal tax credit every year for the life of the original first mortgage
(details vary by state).*
 The amount of the credit is capped by the Internal Revenue Service at $2,000 per
year.
 Although MCCs are not a down payment assistance source, mortgage lenders often
use the estimated amount of the credit on a monthly basis as additional income to
help you qualify for the loan.
*Borrowers should always check with their tax advisor to determine any potential tax benefits
19
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Mortgage Credit Certificates (cont’d)
 To obtain an MCC, you must meet certain minimum prior homeownership
guidelines (restrictions may be waived by issuing entity in certain circumstances):
-- Must not have owned a home in the previous three years;
– Must meet income and purchase price restrictions; and
– Must use the new home as a primary residence.
 To apply for a Mortgage Credit Certificate, you must apply through a housing finance
agency, or state or local government, administering the program.
Source – NCSHA and Wikipedia®
20
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
How Mortgage Credit Certificates Work
Borrower receives an MCC for:
30% credit on a
$200,000 mortgage at
30-year, fixed-rate, and a
Results:
6% interest rate
 Total tax credit in this example exceeds
IRS limit of $2,000
 Homebuyer reports a $2,000 credit on
tax return
Allowable Tax Credit:
Mortgage Interest Paid (First Year): $11,933
 Homebuyer may continue to receive a
tax credit for as long as they remain in home and
retain mortgage
X
0.30 (30% MCC Credit)
=
Total Credit: $3,579
For illustrative purposes only. Borrowers should always check with their tax advisor to determine any potential tax benefits.
Source – Wikipedia®
© Freddie Mac 2015
21
Remove this text
on slide master and
place your logo here
[Add a Specific Mortgage Credit Certificate Program Example in
Your Area Here:]
XX City, XX State – [Add Name of Program Here]
 Describe program here
[USE THIS SLIDE TO PROVIDE SPECIFIC INFORMATION ABOUT MORTGAGE CREDIT CERTIFICATE-ISSUING ENTITIES IN
YOUR LOCAL AREA OR LENDING FOOTPRINT.]
Source – Add Here
22
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
How Government Grants and Loans Can Help
Borrowers Buy Their First Home
YOUR BORROWER’S
NEW HOME
FIRST MORTGAGE
Obtain a 30-year fixed-rate
conventional mortgage and
combine it with a Mortgage Credit
Certificate to lower the borrower’s
monthly payment and maximize his
or her purchasing power.
Home Purchase Price
+
Closing Costs
__________________________
TOTAL REQUIRED TO CLOSE
First Mortgage
Borrower obtains a 30-year conventional
fixed-rate loan
+
Mortgage Credit Certificate (MCC),
when available
Money Out of Pocket
Borrower’s personal contribution towards
the purchase can be as low as 3% of the
MONEY OUT OF POCKET
Borrower’s personal contribution.
purchase price
“GAP” LOAN
These loans fill the gap between
what you can qualify for on your
own and the actual price of the
home. These loans don’t require
any monthly payments.
“Gap” Loan
Silent second loan from a local government agency
requires no monthly payment and, therefore, is not
counted as a borrower’s debt during underwriting
Other Assistance Programs
Remaining down payment or closing
cost assistance needed to close the loan
(can include seller concessions)
© Freddie Mac 2015
OTHER ASSISTANCE PROGRAMS
If the “gap” loan isn’t sufficient to close
the loan, these programs give extra
help with the borrower’s down payment
and closing costs. Seller concessions
can be applied here.
23
Remove this text
on slide master and
place your logo here
Down Payment and Closing Cost
Resources in
[Insert Location Here]
24
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Summary: Down Payment and Closing Cost Assistance Programs
in [Insert Location Here]
Statewide and Regional Programs:
 [Add here]
City/County Programs:
 [Add here]
Municipal Programs:
 [Add here]
[CUSTOMIZE THIS PAGE TO SUMMARIZE DOWN PAYMENT ASSISTANCE PROGRAMS OFFERED IN THE STATE, REGION,
CITY, COUNTY, AND MUNICIPALITY.]
25
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Housing Counseling Agencies
 Homebuyer education counseling is often required to be eligible for
down payment and closing assistance.
 Counseling Agencies Providing HUD-approved Homebuyer Education:
- [Add here]
- [Add here]
- [Add here]
[CUSTOMIZE THIS PAGE TO LIST COUNSELING AGENCIES PROVIDING HUD-APPROVED HOMEBUYER EDUCATION IN
YOUR AREA.]
26
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Mortgage Options We Offer
27
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
[List Your Mortgage Product Offerings Here]
[Name of lender] offers the following mortgages that, when combined
with down payment or closing cost assistance sources, can help you
buy your first home:

[Name of product] – Description…

[Name of product] -- Description…
[CUSTOMIZE THIS PAGE TO SHOW MORTGAGE PRODUCT OFFERINGS, REQUIREMENTS, AND SPECIAL PROGRAMS YOU OFFER.]
Source – Add Here
28
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Information Resources
29
© Freddie Mac 2015
Remove this text
on slide master and
place your logo here
Information Resources -- HUD and
NCSHA Websites
http://portal.hud.gov/hudportal/HUD?src=/states
 HUD provides information on local homebuying
programs in all 50 states, Puerto Rico, and the
U.S. Virgin Islands.
 Directory of housing counselors also available on
this site (homebuyer education required for some
assistance).
 In addition to the HUD site, the National Council of
State Housing Agencies (NCSHA) website has
links to all state housing finance agencies and the
Mortgage Credit Certificate and other programs
they offer.
Source -- HUD
© Freddie Mac 2015
www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm
www.ncsha.org/housing-help
30
Remove this text
on slide master and
place your logo here
Contact Information
[CUSTOMIZE THIS PAGE TO INCLUDE YOUR CONTACT INFORMATION, “800” NUMBER, NAME OF A SPECIFIC LOAN OFFICER, ETC.]
31
© Freddie Mac 2015