Eric Boucher - Your No Money Down Expert

New Connecticut Area Codes take effect 11/14/2009

Last spring the Dept. of Public Utility Control established two new area codes for the State of Connecticut. In the 203 area, the second area code will be 475. In the 860 area, the new area code will be 959.

It was also determined that in implementing the new area codes ALL phone numbers will require the use of the full ten-digit phone number, even if the number is in the same area code. Meaning, if you are calling from the 860 area code to another 860 number, you must dial a "1" plus the full ten-digit number.

This also includes wireless cell phones, which do not currently require the use of the full ten-digit number when dialing in the same area code.

This will most definitely affect the users of automated dialers or others who have pre-programmed numbers such as an electronic address book in their phone or on their fax machines or computers.

This will take effect on Saturday, November 14, 2009.

When it comes to No Money Down Financing, we are the Experts!

Eric Boucher
Right Trac Financial Group
860-647-7701 x13 Office
860-324-3324 Cell
eric@righttracfg.com

The CHFA Loan Process

CHFA loans are offered through the Connecticut Housing Finance Authority in the State of Connecticut for first-time home buyers, properties for sale in "targeted" census tracts and for other groups of qualified borrowers such as police, teachers and Section 8 recipients. Its loan origination is unique and the following is a step-by-step process of CHFA loans. It includes the new steps as required by the MDIA (Mortgage Disclosure Information Act of 2009.) The steps are written from the standpoint of a correspondent lender (broker) and if you are dealing with a direct lender, the steps may vary slightly.

1. Application. This step is not unique as all loans require that buyers fully complete an application and sign and date all paperwork. There is also a CHFA-specific application and CHFA disclosures to review and sign. At this time, the Loan Originator usually collects all necessary paperwork from the buyer including income and asset statements and may run a credit report to check for credit-worthiness. It is also customary for the loan officer to run the loan information through an online Automated Underwriting System to verify that the buyers qualify for the loan for which they are applying. (1-3 hours)

2. Generate the Lender's TIL (Truth-in-Lending form). The application, GFE (Good Faith Estimate) and a Mortgage Broker Fee Agreement is sent to the lender with a registration form. The lender generates a Truth-in-Lending form based upon the figures in the application and GFE. The buyer then has to sign this Truth-in-Lending form. At this point there is a 3-day waiting period before the appraisal fee can be charged to the buyer. (24-48 hours, then 3 days)

3. Reserve Funds with CHFA. During this time, an online registration form is completed that CHFA calls the "Reservation of Funds". It generates a loan number for CHFA and locks the interest rate for 120 days. It is important that the reservation of funds is completed PRIOR to the appraisal being done or it causes a problem later down the road which results in delays in processing. (5 minutes)

4. FHA Connection. Brokers and lenders use a website called FHA Connection for FHA-related activities. On FHA Connection, the broker generates an FHA Case Number through an online application. The case number appears on a number of forms, including the appraisal, and it is how FHA tracks the loan. The case number should be generated prior to the appraisal being ordered or it can cause delays later in the process. Also, the broker checks that the buyers, real estate agents, mortgage broker and loan officer are not on lists that preclude any of the above from using the FHA program. If the property is a condo, the broker verifies whether or not it is part of an approved complex. (15-60 minutes)

5. Order the appraisal. Once the 3-day period has concluded, the appraisal is ordered and the appraisal fee is collected from the buyers. The appraiser inspects the home and generates a report and statement of estimated value to be sent to the broker. (2-5 days)

6. The loan package is sent to the lender. Once the appraisal is received, the file is checked for completeness and submitted electronically, by overnight or via fax to the lender. (1 day)

7. Lender Underwriting. Once received by the lender, it is time-stamped, reviewed for completeness and placed in a queue where it waits to be underwritten. Underwriting is a process by where a person called an underwriter reviews the documentation in the file and checks it against the information that was uploaded into the Automated Underwriting System. In some cases, the underwriter reviews the credit worthiness of the buyers and other facets of the loan including gift documentation. This is the step that usually takes the longest during the process. (3-15 business days depending on how busy the lender is.)

8. Submission to CHFA. Once the loan has been underwritten by the lender, a Conditional Approval is issued by the lender. This approval, along with other paperwork, comprises a second file that is sent to CHFA for underwriting. This file is different from the one sent to the lender as CHFA is not only looking for information that was sent to the lender, but also other documentation from the buyers to verify that they qualify for the CHFA program and/or the DAP (Downpayment Assistance Program.) (2-7 business days depending on volume)

9. Clearing CHFA conditions. If the file submitted to CHFA is incomplete or is in need of further documentation as required by the CHFA underwriter, a "Missing Exhibits" letter is sent to the broker requesting this documentation. The broker submits the requested paperwork and CHFA issues its commitment to lend. (24-48 hours)

10. Clearing lender conditions. Upon receipt of the CHFA commitment, it and other documentation necessary to satisfy the lender's conditions, if applicable, are sent to the lender for review to clear conditions. (24-48 hours)

11. Clear to Close. If the documentation sent to the lender is sufficient to clear all of the lender's conditions, the file is "cleared to close" and the closing can be scheduled through the attorney's office. The closing would take place at least 48 hours AFTER the file is cleared to close. (48-72 hours.)

12. Closing. This is the fun part. At the closing, the buyers sign the loan closing paperwork and receive the deed to the property and THE KEYS! (1-2 hours)

Now, you may have noticed that there are a few extra steps involved when using a CHFA loan. These should be anticipated when specifying a time frame for mortgage commitment when completing a purchase and sale agreement. These steps should NOT be looked at as a deterrent from using the CHFA loan program because the rewards are worth the wait, especially if you don't have sufficient funds to purchase a home but have the ability to afford the monthly payment.

If you are a Real Estate Professional working in Connecticut, you need to be aware of these time frames as well. CHFA and the lenders can vary several days or even a week in underwriting time depending upon the volume of loans that they have been receiving.

When dealing with CHFA, you want to make sure that you are working with someone who understands the program and the time element involved. I have made it a point to be well-versed in this loan program as it is essential if I am to be an expert in no-money down and low-money down financing programs.

Please contact me with any questions regarding CHFA or other no-money down and low-money down mortgage loan programs at eric@righttracfg.com or 860-647-7701 x13. I will be happy to answer any of your questions.

When it comes to No Money Down Financing, we are the Experts!

Eric Boucher
Right Trac Financial Group
860-647-7701 x13 Office
860-324-3324 Cell
eric@righttracfg.com

Connecticut Housing Finance Authority

It has been said that the one constant in life is that things are always changing.  In order to provide the highest quality of service, it is imperative that I read and learn and go to trainings as much as possible.

Recently, I attended a training put on by The Connecticut Housing Finance Authority (CHFA).  Although CHFA's program is not new, there have been changes to the program that affect all who do business with CHFA.

CHFA offers a loan program run by the State of Connecticut that offers down payment and closing cost assistance for first-time home buyers and provides an interest rate that is at or below standard FHA and conventional financing rates.  It is available in all towns and cities in Connecticut.

Important Information about CHFA Loans:

• Down payment and closing costs assistance comes by way of a small second mortgage offered through CHFA and is called a DAP (Downpayment Assistance Program).  Unlike other financing programs, CHFA will allow a home buyer to keep up to $5000 of their liquid assets and provide a loan to the buyer to finance closing costs and the downpayment of the loan.  The interest rate of the DAP loan is that of the first mortgage however it will never be higher than 6% regardless of the interest rate of the first mortgage.  The repayment term is 30 years.
• Currently, the interest rate for CHFA's standard homebuyer and downpayment assistance programs is 4.75% (APR range 4.85-5.25%) and comes with a 1% origination fee payable to the lender/broker, which can be financed with the DAP.  Other fees may apply, such as a $200 DAP Application fee, but CHFA is strict on how much a homebuyer can be charged by the lender/broker.  Such restrictions are not common to other types of financing programs.
• There are income and purchase price limits as dictated by CHFA and vary by town/city.  Income limits also vary by family size.  Unborn children to expectant mothers are included in the family size calculation!  Income limits can be found here and purchase price limits can be found here.
• There is a potential for "recapture".  Because the CHFA loan is funded by the sale of a tax-exempt bond, information regarding the sale of a property financed with a CHFA loan is reported to the IRS.  If the sale of the home resulted in a profit, part of that profit may be required to be paid to the IRS as a recapture.  This happens infrequently and is dependent upon the income of the seller and how many years he/she has lived in the home.  For more information regarding the potential for recapture, please contact me at eric@righttracfg.com .
• For any DAP loan, financial information is collected on ALL persons who are to be living in the home that are over 18 years of age whether or not they are part of the loan application (tenants in multi-family homes excluded.)  This means that if a boyfriend/girlfriend, husband/wife, brother, sister, mother, father, friend, etc, is to be living in the home financed with a CHFA loan, he or she must provide income and asset statements as part of the DAP approval process even if he or she is not being implicated in the financing of the home.
• Teachers, Police Officers and Military/Veterans may qualify for a special CHFA homebuyer program that has a reduced interest rate and, in the case of teachers and police officers, allows the buyer to keep all of their assets, not just $5000.  There are geographical restrictions for teachers and police officers.  Please contact me for details at eric@righttracfg.com .
• Use of the CHFA or DAP loans does NOT automatically disqualify you from the tax credit program offered by the Federal Government.  Please consult a tax professional as to whether or not you will qualify for this tax credit.

Stay tuned for more information regarding CHFA loans.  If you have any questions regarding CHFA loans or whether or not you are able to qualify for a CHFA loan and/or downpayment assistance, please contact me at eric@righttracfg.com or 860-647-7701 ext 13.

When it comes to No Money Down Financing, we are the Experts!

Eric Boucher
Right Trac Financial Group
860-647-7701 x13 Office
860-324-3324 Cell
eric@righttracfg.com

There are many loans available to home buyers in Tolland Connecticut. Because it is deemed a "rural" town by the US Department of Agriculture, buyers can qualify for specialty financing.

Rural Financing:

There are two main types of Rural financing and buyers qualify depending on the household income of the person, people or family.

"Low Income" is a classification where the household income must be less than around $45,000 per year in Tolland County. I say "around" because there are other factors that come into play such as allowable deductions for dependents, disabled and elderly members of the family and annual childcare expenses. If buyers qualify for this program, they can be awarded a government subsidy that can lower their effective interest rate all the way down to 1%. In addition, this program offers no money down, no monthly mortgage insurance, the seller can pay the closing costs and it has lenient credit-qualifying criteria.

Recently, I worked with a couple who purchased a $195,000 home with no money down, $2500 out-of-pocket expenses (such as inspections) and their monthly payment was below $1200. They were thrilled to say the least!

"Moderate Income" is the second classification where the household income must be between the "low" level and the county's median income. For Tolland County, this is between around $45,000 and $70,000. Again, I say "around" because of the possible deductions allowing a household to make more than $70,000 and still qualify. While these buyers don't qualify for the subsidy, they can still qualify for no money down, no monthly mortgage insurance, the seller can pay the closing costs and it has lenient credit-qualifying criteria. This results in one of the lowest payment options possible today.

Veteran's Financing - VA Loans:

Along with the Rural loans mentioned above, these are my favorite. Veterans have sacrificed to keep our country great and strong. It is with humility and pride that I can help them in return to accomplish their goals of home ownership.

Veterans Loans are no money down loans that also don't require the buyer to pay monthly mortgage insurance. In some cases, the seller can not only pay closing costs but also some of the debt the buyer may be carrying to help the buyer qualify. VA loans offer lenient credit qualifying and low monthly payments. For more information about VA loans, click here.

Federal Housing Administration - FHA Loans:

FHA loans allow buyers to make a low down payment of 3%. There are also state-run "hybrids" of the FHA program that allow for no money down. One such program is CHFA (the Connecticut Housing Finance Authority.) This loan is available in Connecticut only, but other states have similar programs. Like the Rural programs, there is a maximum amount of household income that is allowed, and it varies by county.

FHA loans have no such income restrictions, only maximum loan amount restrictions. These also vary by county.

Conventional Financing:

This refers to the type of loans that are bought by Fannie Mae and Freddie Mac. If you were to walk into a bank with great credit and money for a down payment, this is probably what they would offer you. With conventional financing, buyers are required to make at least a 5% down payment.

Jumbo Financing:

The term "jumbo" refers to loans greater than loan limits allowed by Fannie Mae and Freddie Mac. To help with the housing crisis, the Federal government forced Fannie's and Freddie's hand to temporarily allow for an increase in their loan limits. This is set to sunset at the end of the year and many lenders have already eliminated the higher loan limits. So, for single-family homes in Tolland county, a jumbo loan refers to a loan amount of greater than $417,000. Jumbo rates are typically higher than conventional rates however there is a way around it that could provide for a lower payment. For most Jumbo loans, the borrower will be required to make a 5% down payment although more favorable terms are available for a down payment of 10% or more.

As you can see, despite the doom and gloom portrayed by the media, there are still many options for home buyers. If you would like to learn more about financing options, please visit us at www.righttracfg.com or you can call our FREE information hotline at 888-833-2369 ext 1119.

When it comes to No Money Down Financing, we are the Experts!

Eric Boucher
Right Trac Financial Group
860-282-6182x100
eric@righttracfg.com

There are many loans available to home buyers in Ellington Connecticut. Because it is deemed a "rural" town by the US Department of Agriculture, buyers can qualify for specialty financing.

Rural Financing:

There are two main types of Rural financing and buyers qualify depending on the household income of the person, people or family.

"Low Income" is a classification where the household income must be less than around $45,000 per year in Tolland County. I say "around" because there are other factors that come into play such as allowable deductions for dependents, disabled and elderly members of the family and annual childcare expenses. If buyers qualify for this program, they can be awarded a government subsidy that can lower their effective interest rate all the way down to 1%. In addition, this program offers no money down, no monthly mortgage insurance, the seller can pay the closing costs and it has lenient credit-qualifying criteria.

Recently, I worked with a couple who purchased a $195,000 home with no money down, $2500 out-of-pocket expenses (such as inspections) and their monthly payment was below $1200. They were thrilled to say the least!

"Moderate Income" is the second classification where the household income must be between the "low" level and the county's median income. For Tolland County, this is between around $45,000 and $70,000. Again, I say "around" because of the possible deductions allowing a household to make more than $70,000 and still qualify. While these buyers don't qualify for the subsidy, they can still qualify for no money down, no monthly mortgage insurance, the seller can pay the closing costs and it has lenient credit-qualifying criteria. This results in one of the lowest payment options possible today.

Veteran's Financing - VA Loans:

Along with the Rural loans mentioned above, these are my favorite. Veterans have sacrificed to keep our country great and strong. It is with humility and pride that I can help them in return to accomplish their goals of home ownership.

Veterans Loans are no money down loans that also don't require the buyer to pay monthly mortgage insurance. In some cases, the seller can not only pay closing costs but also some of the debt the buyer may be carrying to help the buyer qualify. VA loans offer lenient credit qualifying and low monthly payments. For more information about VA loans, click here.

Federal Housing Administration - FHA Loans:

FHA loans allow buyers to make a low down payment of 3%. There are also state-run "hybrids" of the FHA program that allow for no money down. One such program is CHFA (the Connecticut Housing Finance Authority.) This loan is available in Connecticut only, but other states have similar programs. Like the Rural programs, there is a maximum amount of household income that is allowed, and it varies by county.

FHA loans have no such income restrictions, only maximum loan amount restrictions. These also vary by county.

Conventional Financing:

This refers to the type of loans that are bought by Fannie Mae and Freddie Mac. If you were to walk into a bank with great credit and money for a down payment, this is probably what they would offer you. With conventional financing, buyers are required to make at least a 5% down payment.

Jumbo Financing:

The term "jumbo" refers to loans greater than loan limits allowed by Fannie Mae and Freddie Mac. To help with the housing crisis, the Federal government forced Fannie's and Freddie's hand to temporarily allow for an increase in their loan limits. This is set to sunset at the end of the year and many lenders have already eliminated the higher loan limits. So, for single-family homes in Tolland county, a jumbo loan refers to a loan amount of greater than $417,000. Jumbo rates are typically higher than conventional rates however there is a way around it that could provide for a lower payment. For most Jumbo loans, the borrower will be required to make a 5% down payment although more favorable terms are available for a down payment of 10% or more.

As you can see, despite the doom and gloom portrayed by the media, there are still many options for home buyers. If you would like to learn more about financing options, please visit us at www.righttracfg.com or you can call our FREE information hotline at 888-833-2369 ext 1119.

When it comes to No Money Down Financing, we are the Experts!

Eric Boucher
Right Trac Financial Group
860-282-6182x100
eric@righttracfg.com