WHEDA Home News - September 2008

WHEDA® AWARDED $120,000 FROM THE FHLB-CHICAGO

WHEDA is pleased to announce that it is partnering with AnchorBank to provide 30 $4,000 forgivable loans to first-time home buyers in WHEDA's Partnership Neighborhoods.

WHEDA received a $120,00 grant from the Federal Home Loan Bank of Chicago to fund down payment assistance in WHEDA's Partnership Neighborhood zip codes in four urban cities.

The program is effective for loans rate locked on or after October 1, 2008.

The Down Payment Grant for Partnership Neighborhoods can be combined with WHEDA's Easy Close Down Payment loan and is available for individuals earning 60% or less of County Median Income (CMI).

Eligible borrowers must be first-time home buyers, contribute $500 at the time of closing and be buying a home if one of the following urban zip codes:

Beloit	53511
Madison	53711
Milwaukee	53204, 53209, 53212, 53215, 53218, 53223, 53224
Racine	53402, 53403, 53404, 53405

Federal Home Loan Bank of Chicago expects that with the use of these down payment assistance funds there will be at least 6-8 hours of face-to-face home buyer education.

The counseling agency is expected to invoice the consumer at closing for up to $600 for the fee for this education on the HUD-1. The lender needs to be diligent in informing the consumer for this allowable fee and show it on the Good Faith Estimate at the time of application.

Remember, rate lock requests for borrowers using the Down Payment Assistance for Partnership Neighborhoods or the Rural Initiative Down Payment Assistance can not be rate locked on-line. Lenders must submit a Rate Lock Request via the fax machine.

Learn more about the process.

Also please note, effective immediately, the special discounted rate in the Partnership Neighborhood zip codes will no longer be available.

INTEREST RATES

The WHEDA interest rate for its Home program has increased substantially this week due to unfavorable conditions in the capital markets.

As you know, WHEDA funds its loans with the proceeds of tax-exempt mortgage revenue bonds and passes the benefit of tax exemption along to borrowers in the form of below-market interest rates.

WHEDA hopes that the disruption in the capital markets is short-lived so that we may again get back to our business of providing affordable home loans to Wisconsin families.

We will provide regular updates on this website.

DEBT-TO-INCOME (DTI) RATIO

Genworth, our pool and primary mortgage insurer, recently announced changes to their underwriting guidelines pertaining to DTI that effect our underwriting standards.

The following changes are effective for loan packages received on or after October 6, 2008:

Manually underwritten loans: 33 / 38 (higher ratios may be acceptable based on compensating factors) Maximum allowable ratio is 41%
AU Approve/Eligible decisions from DU® or LP®: Maximum 50%

If you have any questions regarding the information in this e-mail, contact Gene Weittenhiller at 1-800-334-6873 or via e-mail at gene.weittenhiller@wheda.com.