Welcome To
Mississippi’s Annual
Affordable Housing
Conference 2013
Mississippi Home Corporation
2013 MHC Programs
Melissa West, Vice President
Single Family Program Operations
MHC Single Family Programs
Mortgage Revenue Bond (“MRB”)/ TBA
Mortgage Credit Certificate (“MCC”)
Down Payment Assistance (“DPA”)
Home Loan Plus (“HLP”)
Home Buyer Advantage (“HBA”)
Housing Assistance for Teachers (“HAT”)
Home of Your Own (“HOYO”)
Mortgage Revenue Bond
“MRB”/TBA
4.00% Statewide
3% 2nd Mortgage for Down Payment and/or
Closing costs (no pre-paid items)
Can be used in conjunction with
HAT/HOYO/HLP programs
Homebuyer must have homebuyer education
counseling
Mortgage Revenue Bond/ TBA
Qualifications
Borrower (s) must qualify for a 30-year
FHA, VA, RD Guaranteed loan program,
Fannie Mae or Freddie Mac Conventional
Conforming Loans
Homebuyer Status – Non-Target/1st time
buyer or have not had an ownership
interest in the past 3-years – Target areas
have no 1st time buyer requirement
Mortgage Revenue Bond/ TBA
Qualifications
Income Limits determined by County
designation & # of persons in the household
gross income (See Brochure)
Sales price/Acquisition limits –
Target = $289,705 & Non-Target = $237,031
Mortgage Revenue Bond/TBA
Potential Recapture Tax Penalty
Potential Recapture comes into play when
the property is sold in the first 10-years.
There must be a gain on the sale & the
household adjusted gross income
exceeds the modified adjusted income for
the year in which the sale takes place.
If recapture applies, it’s handled through
the homeowners federal tax return.
MRB Sample Recapture
Hinds County Modified Adjusted Gross Income for
year 5 for a household of 1 to 2 = $72,365
IRS Regulations state that the recapture amount is
to be rounded up to the next years amount (in this
case is Year 5)
Maximum Recapture = $6,250 (based on a loan
amount of $100,000)
$100,000 (Adjusted Gross Income)
- 72,365 (Modified Adjusted Income)
27,635 divided by $5k = 5.53%
$6,250 x 5.53% = $345.62
MHC Approval Process
5 to 7 day Turnaround
If any conditions exist and have been
satisfied, MHC faxes the Conditional
Commitment to the lender & over nights the
MHC Closing Instructions, 2nd Mortgage
funds & loan documents to the settlement
agent.
Homebuyer must authorize auto draft for the
monthly payment to MHC (not optional).
Mortgage Credit Certificate
“MCC”
MCC Tax Credits come from converting bond
authority to tax credits, i.e. 5,000,000 in
bond converts to 1,250,000 in tax credits
Federal income tax credit equal to 25%
(site built home) 40% (manufactured home)
of annual interest on the mortgage loan.
Tax credit can be used with
DPA/HLP/HBA programs
Mortgage Credit Certificate
“MCC”
Income and Sales price limits by county &
Number of persons in the household
(See MHC Program Income Brochure)
Sample MCC Tax Credit
Worksheet
Loan Amount Financed
$150,000.00
Interest Rate:
X 4.50%
Annual Mortgage Interest
6,750.00
MCC Percentage
(25%, SF or 40%, MH)
X
25%
= $1,687.50
2 Ways to take credit: Yearly or Monthly
Monthly Savings = $140.63
The borrower continues to write off the remaining 75% or 60% of
the Mortgage Interest and reduce your tax liability by
$1,687.50
IRS Regulation limits the MCC Tax Credit to $2,000 each year.
Total Tax Credit = $37,500 over life of the loan
Down Payment Assistance “DPA”
DPA is a second mortgage for down payment
&/or closing costs
Maximum DPA: 3% of full loan amount
(not sales price)
Maximum Liquid Assets: $4,500
Maximum Statewide Sales Prices: $198,000
Maximum Household Income: per county limit
(see MHC Program Income Brochure)
Down Payment Assistance
Program
Loan Types:
FHA
VA
Rural Development
MHC Approved In-House Products
No Prepayment Penalty
Property Types:
Single-Family Residence
Condominiums and Town Homes
Permanently affixed Manufactured Homes
Planned Unit Developments
Home Loan Plus “HLP”
The HLP program is a $14,999 federal HOME
grant to assist qualified home buyers with
Down Payment & Closing Cost assistance.
MHC is a sub-recipient for this program on
behalf of the MS Development Authority.
Home Loan Plus “HLP”
HLP grant period of affordability is 5-years
& is enforced by Deed Restriction that is
executed at closing & recorded with the
Warranty Deed. Grant will be forgiven as long
as the homeowner stays in the residence
during the 5 year period. If the homeowner
sells, does a cash-out refinance or if the
property is foreclosed on during the 5-year
period, there is a recapture penalty on the
grant payable to MDA.
Home Loan Plus
Buyer Eligibility Requirements
1st time home buyer or previous homeowners
(must document sale, real estate contract to
sale or lease of previously owned home)
MUST qualify for a FHA, VA, Rural
Development, Fannie Mae or Freddie Mac
conforming mortgage
Household gross income cannot exceed 80%
of area median income (See Program Flyer)
Homebuyer Education Counseling Certificate
awarded by a HUD-approved counselor
Home Loan Plus
Buyer Eligibility Requirements
Must occupy home as primary residence
Home Buyer (s) must execute the HLP Grant
Recipient/Homebuyer Agreement
Must be a US Citizen
Can be used in conjunction with the
MRB/MCC/HAT Programs
Home Loan Plus
Property Requirements
Must be located in an eligible area
Must serve as the primary residence for at
least 5-years
Only site-built, single family homes, qualified
condominium or town home
Property Inspection required & home must
meet all applicable state & local housing
quality standards and code requirements.
In the absence of such standards and codes,
the home must meet Section 8 Housing
Quality Standards (HQS).
Home Loan Plus
Property Requirements
If Property is built prior to 1978, property
must undergo lead-based paint inspection, if
found, must be mitigated
Properties identified for purchase must be
submitted for review by the MS Dept. of
Archives and History (Requested by MHC)
Housing Assistance for Teachers
“HAT”
Up a $6,000 grant for 2% of down payment,
closing costs, pre- paid items & MI
Agrees to Teach in a Critical Shortage
School District (See brochure) for a minimum
of 3 Years
Minimum Down Payment from Applicant:
1% of Sales Price & 1-months reserves
25 or 30-year fixed loan rate
Housing Assistance for Teachers
“HAT”
Fannie Mae Conventional loan products
12% - 30% Mortgage Insurance required
(depending on LTV)
Units must be located in the county that the critical
shortage school district is located
Applicant must obtain a Homebuyer Education
Certificate unless they aren’t a first time buyer
No Income Limits unless using “My Community
Products”
Home of Your Own “HOYO”
$10,000 or $15,000 grant depending upon
median household income.
Household income cannot exceed 80% of the
county area median income
FHA, VA, Rural Development, Fannie Mae
conventional loan or Lender In-House loan
products
Home of Your Own “HOYO”
Individuals with disabilities or household
member with a disability as defined by the
Americans with Disabilities Act are eligible
Household income after expenses that is
adequate to make monthly mortgage
payments
Thank You!
www.mshomecorp.com
601.718.4626
We Look Forward to Working with you Soon!