Getting the Word Out to First-time Homebuyers

As part of our public outreach, VHDA's Business Development and Training Manager Dan Kern made a number of media appearances to talk about VHDA and how our programs, including our unique Loan Combo, can help make homeownership a reality.

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VHDA Grant Programs and Initiatives

VHDA's Annual Grantee Training Event

VHDA's Grant Programs & Initiatives support Virginia's Affordable Housing Network. The Community Outreach Division recently hosted its second annual Grantee Training in August. Over the course of two days, 95 individuals from 70 grantee agencies learned about VHDA grant programs, resources and statewide housing initiatives. The meeting featured 17 workshops, 24 speakers and an evening networking session. Thanks to all who attended and presented.

Learn About VHDA Grants >>

VHDA/USDA Loan Program Helps Rural Home Buyers Purchase Existing Manufactured Homes

Previously, Only New Manufactured Homes Were Eligible

The Virginia Housing Development Authority recently partnered with a federal agency to pilot a new home loan program in Virginia that helps low to moderate-income individuals and families buy manufactured homes in rural areas.

By agreeing to join the Existing Manufactured Housing Unit Financing Pilot Program offered by the United States Department of Agriculture’s Office of Rural Development, VHDA has been able to expand its existing VHDA/USDA loan program from financing only new manufactured housing – defined as one year old and newer – to financing existing manufactured housing that can be between one and approximately 10 years old. As a result, many more manufactured housing units are now available to be financed with the multiple benefits offered by VHDA and USDA.

“The beauty of this loan program is that it offers zero down payment, minimal cash out of pocket, a less expensive guarantee fee, and VHDA’s low interest rate – these benefits combined give rural home buyers a great deal,” said Allen Andrs, VHDA Mobile Mortgage Field Originator. “Because VHDA typically offers a below market interest rate and USDA offers the lowest loan guarantee fee available, I believe this is the best home loan program in the state, if not the country.”

Allen Andrs, VHDA Mobile Mortgage Field Originator and Tenesha Bullock, Virginia’s first borrower to use the VHDA/USDA loan program, stand beside VHDA’s Mobile Mortgage Office.

The pilot loan program became available in Virginia this year when Michael Urban, USDA Single Family Housing Program Director, transferred from Vermont and was able to have Virginia included with the eight other states in the pilot.

“This program’s out of pocket expenses are definitely less for home buyers,” said Urban. “Our financing is 100% of the appraised value, and then we allow closing costs to be rolled in if the property appraises high enough, so some of our candidates could truly get into their home with no money out of pocket, while other loan programs have down payment requirements. The bottom line is that this program is helping more people get into homeownership.

Michael Urban, Virginia’s Single Family Housing Program Director for USDA – Rural Development and Tenesha Bullock, Virginia’s first borrower to use the VHDA/USDA loan program, stand in front of her new manufactured home.

“We discussed this pilot program with VHDA, and it just so happened that at the time VHDA’s Mobile Mortgage Office was working with first-time home buyer Tenesha Bullock on the purchase of her manufactured home with another loan product,” he added.

Andrs noted that Bullock’s loan application fit the guidelines of the new program, because the house she was buying was a 14-month-old manufactured home that was a model on a dealer’s lot. “Under the current USDA Guarantee program, we can’t finance manufactured homes that are greater than 12 months old. As a result, many older units on dealers’ lots wouldn’t have qualified, so Tenesha wouldn’t have been eligible. Fortunately, she qualified under the pilot program, and we were able to help her buy that home. As a result, she became VHDA’s first borrower using the VHDA/USDA loan program,” he said.

Allen Andrs, VHDA Mobile Mortgage Field Originator, meets with Tenesha Bullock, Virginia’s first borrower to use the VHDA/USDA loan program, inside VHDA’s Mobile Mortgage Office.

“It’s the best thing that has ever happened to me,” said Bullock. “I would absolutely recommend this program to other home buyers, because it gives people who may have lower incomes a chance to obtain homeownership.”

Bullock added that the no down payment feature was key to her purchase of the house. “Instead of taking a couple of years to save the thousands of dollars needed for a down payment, I was able to pursue homeownership immediately through this program,” she said.

Andrs said that over the life of Bullock’s 30-year fixed rate loan, he estimates she will save over $18,000 as a result of Rural Development’s loan guarantee fee, which is the lowest on the market.
“I am very fortunate to be the first one in this program, and I’m glad that VHDA was able to switch me over to the VHDA/USDA loan before I closed on the other loan. They saved me a lot of money on my monthly payment – I couldn’t be happier,” Bullock concluded.

Tenesha Bullock, Virginia’s first borrower to use the VHDA/USDA loan program, stands on the front deck of her new manufactured home.  

In addition to new construction, the pilot program allows for financing to purchase an existing manufactured home, on a permanent foundation, that was manufactured after January 1, 2006.
Manufactured homes are defined as homes that are factory-built in the U.S. to federal construction standards. These homes are built on permanent chassis so they can be transported; however, they typically are not moved after they are installed. Most manufactured homes in Virginia are identified as vinyl-sided ranchers on masonry foundations.

To learn more about the VHDA/USDA loan program or find out about eligibility requirements, contact Allen Andrs, VHDA Mobile Mortgage Field Originator, at Allen.Andrs@VHDA.com or (804) 837-1879.

Homebuyers can also use VHDA’s “Find a Lender” search on VHDA’s website (vhda.com) to locate local lenders who can assist with VHDA loans and interest rates.

Upcoming Housing Credit Events

Housing Credit Training

VHDA's Housing Credit department is offering several different training courses for developers, owners, architects and others involved in Virginia's LIHTC (Housing Credit) program. Topics include How to Complete a LIHTC (Housing Credit) Submission, Architect Certification and Universal Design Plans Submission Requirements, and Universal Design.

Info & Registration >>

Housing Credit Conference, Sept. 26 - 27, 2017

VHDA is the Platinum sponsor of this year's conference, to be held at the Omni Richmond Hotel. The keynote speaker will be Bobby Rozen, who has worked for many years in support of the Low-Income Housing Tax Credit (also known as Housing Credits), and was one of the five original members of Affordable Housing Finance Magazine's Affordable Housing Hall of Fame. Susan Dewey will also be speaking at the event. We hope to see you there!

Info & Registration >>

Loan Combo Proves Popular with New Homebuyers

In April, VHDA began advertising our Loan Combo package, which consists of a VHDA mortgage, our Down Payment Assistance grant, a Mortgage Credit Certificate and our free first-time homebuyer's class. Ads directed users to our Loan Combo landing page, which had more than 56,000 visits, resulting in hundreds of inquiries to our lending partners, and borrowers are continuing to ask about VHDA's Loan Combo.

Learn More >>

In Case You Missed It: A Look at Recent National Housing Policy News

Congress Passes Stopgap Funding, Debt Ceiling Extension, and Disaster Aid 

On September 8, President Donald Trump signed a legislative package including provisions to provide more than $15 billion in disaster recovery aid, raise the debt ceiling, and enact a continuing resolution to fund federal programs after the September 30 end of this fiscal year until December 8, 2017. The president's signature came after House lawmakers cleared the bill (HR 601) by a 316-90 vote earlier in the day. The Senate approved the package the day before by a 80-17 vote. The legislative package clears Congress' September calendar of several battles that were expected to occur over appropriations, the debt limit, and the future of the National Flood Insurance Program (NFIP). Trump, who endorsed the package earlier in the week, urged members of Congress to now use September to work on tax reform.

Trump Nominates Brian Montgomery to Lead FHA 

President Trump nominated Brian Montgomery to serve as commissioner of the Federal Housing Administration (FHA) and HUD assistant secretary for housing. Montgomery previously served as FHA commissioner/assistant secretary for housing from 2005 to mid-2009 after working on President George W. Bush's White House staff. He is currently vice-chairman of the Collingwood Group, a housing finance consulting firm he co-founded.

Senate Confirms Pam Patenaude for Deputy HUD Secretary 

The U.S. Senate confirmed Pamela Patenaude's nomination to serve as Deputy Secretary for Housing and Urban Development (HUD). The final vote approving Patenaude's nomination was 80-17, with all Republicans and most Democrats voting in favor. Three Senators did not vote. As NCSHA has previously reported, Patenaude has held a variety of housing policy positions in both the public and private sectors. She served as HUD Assistant Secretary for Community Planning and Development under President George W. Bush and as HUD's White House liaison under President Reagan. She also previously administered the Section 8 program for the New Hampshire Housing Finance Authority. She is currently president of the J. Ronald Terwilliger Foundation for America's Families, an organization that seeks to elevate housing's place on the political agenda.

Report: Housing Bond Issuance Soared in 2016 

Private activity Housing Bond issuance increased nearly 60 percent from 2015 to 2016, according to the Council of Development Finance Agencies' (CDFA) latest Annual Volume Cap Report for 2017. The report, which CDFA released, presents data on how states allocate and utilize their private activity bond (PAB) cap each year. All but two states submitted data for 2016, a higher participation rate than achieved for previous reports. The report finds that state and local governments issued $18.47 billion in Housing Bonds, including single-family Mortgage Revenue Bonds (MRBs) and Multifamily Bonds, in 2016, compared to $10.91 billion in 2015. Housing Bonds accounted for 91 percent of total PAB issuance in 2016. This is the third consecutive year that Housing Bonds have made up at least 80% of all PABs issued. Total PAB issuance was $20.38 billion in 2016, a substantial increase from $12.98 billion in 2015.

Is Housing Affordable If It Means Spending More on Commuting?

Many Virginians struggle to find a home in their budget that's also close to their job. The Housing and Commuting Affordability Index on SOURCEBOOK identifies the percentage of income needed to afford the average home in their community, plus the average cost of commuting to and from work. A household is considered housing and transportation cost burdened if it spends over 34% of household income on rental or mortgage and commuting costs combined. The Index is available statewide, for metro regions, and all localities - and shows the difference between income levels. In Virginia, the average low-income household making 60% of AMI spends nearly half (47%) of their income just for their home and for getting to work. These stats again demonstrate the need for greater harmony between economic development and housing strategies.

HUD Publishes 2018 Difficult Development Areas and Qualified Census Tracts 

On September 11, HUD published a Notice in the Federal Register designating Difficult Development Areas (DDA) and Qualified Census Tracts (QCT) for 2018 for purposes of the basis boost allowed under Low Income Housing Tax Credit (Housing Credit) program. DDAs are areas with high construction, land, and utility costs relative to area median income, and QCTs are areas in which at least 50 percent of the households have an income which is less than 60 percent of area median income or which have a poverty rate of at least 25 percent. As it has for the last two years, HUD DDA designations are set at the zip code level, rather than designations covering full metropolitan statistical areas, as was HUD's previous practice.

Recent Ribbon Cuttings

Summer Haven, Virginia Beach 

Summer Haven is a new affordable apartment community for working families in Virginia Beach, financed by VHDA.

Watch the Video on YouTube >>

On hand to cut the ribbon were VHDA Executive Director Susan Dewey, Virginia Beach Mayor Will Sessoms, Steve Lawson of The Lawson Companies and Sarah B. Stedfast of NewTowne Mortgage (also VHDA's Board of Commissioners).

Highland Park Senior Apartments, Richmond 

Highland Park was originally a school, built in 1909. It's now 77 apartments for low-income seniors, and part of the Six Points neighborhood revitalization. VHDA awarded Housing Credits to help ensure its affordability. Learn More >>

CPDC, Grimm + Parker Architects, KBS, Inc., Richmond Redevelopment and Housing Authority, Capital One, Local Initiatives Support Corporation (LISC), City of Richmond Economic & Community Development, VCU School of Nursing and VHDA partnered to renovate this historic property.

Board of Commissioners Update

VHDA is pleased to welcome Sarah Stedfast of Virginia Beach as our new chair and Clarissa McAdoo Cannion of Suffolk as vice chair. Tim Chapman has completed his two-year term as chair, and we thank him for his service as he continues to serve on the executive committee.

In Case You Missed It: A Look at Recent National Housing Policy News

Black Knight: Hurricane Harvey Could Cause up to 300,000 Mortgage Delinquencies

Hurricane Harvey swept through South Texas and Louisiana, bringing an unprecedented amount of rain and flooding with it. Now, Black Knight Financial Services predicts the mortgage industry could see up to 300,000 new delinquencies as a result of the storm, with 160,000 borrowers becoming seriously past due. Before the storm hit, Fannie Mae and Freddie Mac announced they were suspending foreclosures and evictions in wake of the hurricane. “Thankfully, Fannie Mae, Freddie Mac and the Federal Housing Administration have all announced temporary moratoria on evictions and foreclosure sales in Harvey-related disaster areas,” said Ben Graboske, Black Knight Data and Analytics executive vice president. “With these three organizations accounting for nearly 900,000 of mortgaged properties, the moratoria should help temper the negative effects.”

For Homeowners Affected by Hurricanes Harvey or Irma 

Federally regulated Fannie Mae and Freddie Mac have come together to get the word out about mortgage relief options for those affected by natural disasters, including Hurricanes Harvey and Irma. If you are affected by the recent hurricanes, you are eligible to temporarily stop making your monthly mortgage payment for up to 12 months. At the end of this temporary payment break:

• You won’t have late fees.
• You won’t have delinquencies reported to the credit rating agencies.
• You won’t have to catch up on all of your payments at once.
• You can work with your servicer to resume making a mortgage payment that is similar to what you paid before the disaster. Or if you need additional assistance, you can work with your servicer on options to keep your home.

1. Contact your mortgage servicer (the company where you send your monthly payments) as soon as possible to let them know about your current circumstances. The telephone number and mailing address of your mortgage servicer should be listed on your monthly mortgage statement. You also can look it up on the Mortgage Bankers Association website at www.mba.org/news-research-and-resources/hurricane-relief.
2. If you are having difficulty contacting your mortgage servicer, contact the Homeowner’s HOPE Hotline at 1-888-995-HOPE (4673) for assistance and FREE confidential support from a HUD-approved housing counselor.

National Flood Insurance Program Granted 3-month Extension

Previously set to expire Sept. 30

President Donald Trump signed a three-month extension to the National Flood Insurance Program on Friday, giving Congress more time to come up with a long-term financial solution for the program. Trump signed the extension, which was included in H.R. 601, after the House passed the extension in a legislative package that also provides funding for hurricane relief and other priorities. With this new extension, the program will now expire on Dec. 8, 2017.

Trump’s Immigration Crackdown Is Making New Homes More Expensive

Since taking office, Trump has rousted illegal immigrants, overseeing a 145 percent jump in the arrest of noncriminal undocumented workers, and backed plans to squeeze legal ones by letting only English speakers in. He threatened Mexican President Enrique Pena Nieto with a 35 percent tax on the country’s exports to the U.S., raised duties on imported Canadian lumber and continues to rattle China, South Korea and other parts of Asia with tough trade talk. All carry costs for the new U.S. home, a global melting pot of labor and parts. Trump’s policies could add tens of thousands of dollars to the cost of a house.

Freddie Mac: Unaffordability Everywhere

Freddie Mac announced a new enhanced relief refinancing offering intended to aid borrowers who are making their mortgage payments on time, but are unable to participate in the GSE’s “no cast-out” refinance program due to having a loan-to-value (LTV) ratio above maximum requirements. The new program will be effective for mortgages with applications on or after November 1, 2018.

How Could Tax Reform Hurt the Housing Market?

Tax reform is one of the major ticket items on the current administration’s agenda, a measure that Congress hopes to tackle now that they are back from summer recess. When President Donald Trump first announced his modified tax plan—the first comprehensive change in 30 years—one of the main amendments was the elimination of itemized tax deductions, which would be replaced by doubling the standard deduction.  However, two subgroups in the housing industry that could stand to lose on this change rather than benefit: real estate agents, and residential builders.

In Case You Missed It: A Look at Recent National Housing Policy News

HUD Extends Disaster Relief to Hurricane Harvey Victims

Estimates 200,000 FHA-insured homeowners live in disaster area
The Houston area continues to see heavy rainfall due to Hurricane Harvey and the heaving flooding plaguing the city is only expected to worsen as rain continues to fall. Some areas could eventually see up to 50 inches of rainfall, and five people have died due to the Category 4 hurricane with another 12 reported injured. Now, the U.S. Department of Housing and Urban Development announced it is offering mortgage and foreclosure relief as well as other assistance to some families, including to the 200,000 FHA-insured homeowners, living in the impacted areas.

Harvey Flooding Focuses Attention on Troubled Flood Insurance Program

Hurricane Harvey's ghastly flooding in the Houston area is sure to focus political attention on the National Flood Insurance Program, a controversial government benefit that makes home ownership affordable to many in south Louisiana. It's $24 billion in debt, and unless Congress acts in the next 34 days, it will expire. Whether Congress reforms the troubled program -- forcing more expensive premiums, for example, or discouraging rebuilding in high-risk areas -- or merely extends it despite its structural problems, is the big question.

New Research Dispels Common NIMBY Myth

One of the most common arguments put forth by opponents of affordable housing is that it will reduce property values and increase crime. The Center for Urban and Regional Analysis at VCU just released a study that answers this concern. The verdict? Homes built for modest-income households have no impact on surrounding property values or crime rate. Researchers looked at six affordable communities, both apartments and for sale townhomes, in the City of Richmond and three surrounding counties. Property values, sales prices, and crime rates were studied for at least the previous three years and up to ten years after construction. VCU concluded that there is "no evidence" that these affordable communities had "any significant impact on property values, sales prices, or crime rates in the immediately surrounding neighborhoods."

Changes to Popular Deduction Wouldn't Have Big Effect on Housing Market

There may be rumblings about lowering the cap on mortgage interest rate deductions, but it would have a "rather small effect" on the housing market, Nobel Prize-winning economist Robert Shiller told CNBC. He thinks what's driving the real estate market is our sense of where we're going and the uncertainty with the new administration in Washington. He believes lowering the cap would have more of a psychological effect on home prices than a calculated one.

Diversity: Influencing the Mortgage Industry

Making homebuyers’ dreams a reality is the goal of every great lender, and in the past few years, how that goal is achieved has changed—influenced by laws, technology and an emerging homebuyer demographic. This is where many articles go down the path of discussing “millennials”, but in the spirit of DS News' upcoming September Diversity issue, will highlight another trend: female homebuyers. According to the 2017 National Association of Realtors Home Buyer and Seller Generational Trends report, single women are buying more houses than single men today. While the majority of total homebuyers are married couples (66 percent), 17 percent were single females (compared to single men, who comprise seven percent of the total).

Fannie Mae: Mortgage Lenders Shift Focus to Enhancing Consumer Experience

The company's Economic & Strategic Research Team surveyed lenders about their 2017 business priorities and risk concerns, based on results from its second quarter Mortgage Lender Sentiment Survey, in which lenders reported subdued mortgage demand growth, a pessimistic profit margin outlook and strong concerns about increased competition.The survey found mortgage lenders are refocusing their efforts to address challenges of the post-crisis era--in particular, providing a better experience for consumers.