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FHA PowerSaverFHA HOME ENERGY IMPROVEMENT LOAN PILOT PROGRAMU.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENTAPRIL 21, 2011
HOW THE PROGRAM WAS DEVELOPEDProposed rules, request for public commentand solicitation of lenders: November 9, 2010. Lenders were required to describe how theywere working with well established state andlocal home energy performance programs. Final rules released: March 31, 2011. Lenders announced: April 21, 2011. 2
PARTICIPATING LENDERS LenderAdmirals BankAFC First Financial Corp.Bank of COCity of BoiseEnergy Finance SolutionsEnterprise CascadiaHomeStreet BankNeighbors Financial CorpParamount EquityTarget MarketsDOE Better Buildings locationsPA, MECOBoise, IDNY stateOR, WAOR, WA ,HICA, MI, TXAZ, CA, OR, UT, WA, CO, TN3
PARTICIPATING LENDERS LenderQuicken LoansSOFCU Community Credit UnionStonegate Mortgage Corp.Sun West Mortgage Co.The Bank at BraodmoorUniversity of Virginia Credit UnionViewtech Financial Services, Inc.WinTrust MortgageWJ Bradley Mortgage Capital Co.Target MarketsDOE Better Buildings locationsSouthern OregonDOE Better Buildings locationsDOE Better Buildings locationsPikes Peak region (CO)Central VACAChicago regionDOE Better Buildings locations4
TITLE I - POWERSAVER INSURANCE BASICSCo-insurance Feature Federal insurance covers up to 90% of loanagainst default. Lender is accountable for the remaining 10%balance of each loan.Portfolio Cap (Reserve Account) Maximum federal insurance coverage of10% in aggregate of the total amount of alender’s Title I loan portfolio.5
TITLE I – POWERSAVER PROGRAM BASICSUse of Loan ProceedsProceeds generally must be spent on eligibleenergy improvements No cash out No partial insurance (i.e., 20,000 of 40,000 loan) No debt consolidation Up to 25% of the loan may be used forunrelated measures6
PROGRAM BASICS CONT’DSecurity Requirements Lien required if loan over 7,500.00 Mortgage or Deed of Trust Lien position must be 1st or 2nd (with a fewexceptions)Written Description of Work Must have a detailed description of the work tobe done by the contractor including abreakdown of materials and labor Lender must use judgment regarding thereasonableness of the description of the work7
PROGRAM BASICS CONT’DEligible Properties Single family (principal) residences only. Caninclude detached, semi-detached and attachedsingle family residences. Condominiums that meet the criteria foreligible single family properties are alsoeligible.8
PROGRAM BASICS CONT’DLoan Maturities Loan terms will generally be limited to 15 yearsto align them with the useful life of most energyimprovements. Loan terms of 20 years can be used but onlyfor certain improvements.9
PROGRAM BASICS CONT’D“Direct Loans” Only The borrower must make application directly toan approved lender. No retail sales installment contracts etc. Contractors can market PowerSaver loans.10
PROGRAM BASICS CONT’DProperty Valuation Combined Loan to Value (CLTV) cannot exceed100%. Lenders may use Fannie Mae or Freddie MacForm 2055 Exterior-Only Inspection Report toestablish property value. Other valuation methods – e.g. AVMs – asapproved by HUD.11
PROGRAM BASICS CONT’DConditions for Disbursement Loan proceeds shall be disbursed in twoincrements. Upto 50% of the proceeds disbursed at loanfunding/closing. The remaining proceeds disbursed after completionof improvements (and inspection if over 7,500.00).12
PROGRAM BASICS CONT’DUnderwriting Requirements 45% debt to income limit Borrower must be solvent and anacceptable credit risk 45% debt to income limit Credit report (decision credit score ofat least 660 for all borrowers) Employment and income verification(2 year history)13
RESOURCESOn the Title I Home Pagehttp://www.hud.gov/offices/hsg/sfh/title/ti home.cfm Industry Fact SheetFAQ for LendersFAQ for ConsumersFederal Register Notice containing all program detailsHUD Formshttp://portal.hud.gov/hudportal/HUD?src /program offices/administration/hudclips/forms14
FHA HOME ENERGY IMPROVEMENT LOAN PILOT PROGRAM . FHA PowerSaver . HOW THE PROGRAM WAS DEVELOPED . U.S. Department of housing and Urban development FHA Home Energy Improvement Loan Pilot Program April XX, 2011 Author: h45362 Created Date: 5/6/2011 10:18:41 AM .
