Housing-News-Report-August-2017

HOUSINGNEWS REPORT

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TOP 10 CO-BORROWER CITIES Q1 2017 PCT NON-MARRIED CO-BORROWER PURCHASES

Traditional Financing Options for Shared Equity Purchases

Financing for shared equity transactions is widely available and from a number of sources, however requirements can differ. FHA: Shared equity buyers can use FHA funding with as little as 3.5 percent down but standards differ for family and non-family investor owners. First, HUD requires “all purchasers to be borrowers, unless the non-borrowing purchaser is a family member.” Second, financing with 3.5 down is only available when the occupying and non-occupying buyers are related. For a shared equity transaction with an arms-length investor the maximum loan-to-value ratio is 75 percent. Fannie Mae: Fannie Mae will buy shared equity financing from local lenders that meets certain standards. Non-occupant borrowers may or may not have an ownership interest, says Fannie Mae, but they must sign the mortgage or deed of trust note. Sellers, builders, and real estate brokers with an interest in the transaction may not be non-occupant co-borrowers. Freddie Mac: On July 6 Freddie Mac came out with new shared equity rules. The basic standards include requirements that both the owner- occupant and owner-investor must submit a mortgage application, financial statements and credit report; at least 5 percent of the purchase price must come from the owner-occupant. Another 5 percent must come from the owner-investor; all parties must be individuals and not corporations, partnerships or trust; and there can be no buy-out requirement for less than seven years.

Miami, FL

40.2%

Seattle, WA

37.4%

San Diego, CA

28.9%

Los Angeles, CA

28.2%

Portland, OR

27.7%

Austin, TX

26.7%

Orlando, FL

25.5%

Houston, TX

25.3%

Tampa, FL

23.9%

Denver, CO

23.9%

mortgage insurance and significantly lowers the monthly mortgage payment (typically by 15-20 percent),” he said. “This monthly payment savings can make it far easier to income-qualify for a mortgage loan.” Unison HomeBuyer can increase purchasing power by up to 100 percent and enable the buyer to comfortably afford the home they really want, according to Riccitelli. “Millennials and first-time buyers who are burdened with high rent and student debt now have a way to become homeowners, and have greater choice over important considerations like commute, school district and home features,” he added. “For buyers who already have the required down payment in hand, a Unison HomeBuyer enables them to retain a significant portion of their cash.”

In addition to buyer financing, Unison can also work with existing owners.

“We also have a program called Unison HomeOwner which allows existing homeowners to unlock some of the equity in their homes without borrowing,” Riccitelli said. “Clients use the cash we provide in various ways, including paying off debt, remodeling their home, starting a business, paying for a child’s education or investing for retirement.” Bailey, OWN home finance, p.b.c.’s Co-Founder and COO, explained that his company is a PBC – a public benefit company. “A public benefit corporation is a relatively new type of legal structure that allows for the company to focus on social impact (and not just

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JULY 2017 | ATTOM DATA SOLUTIONS

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