For Lenders

[Last Update 8/19/2020] This page provides program information to assist lenders.

Homebuyer Requirements Summary

I. Homebuyer receives 8 hours of HUD-approved homebuyer education and financial/budgeting education.

II. Homebuyer must purchase in Winnebago County.

III. Homebuyer household must be at or below 80% of County Median Income.
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IV. Maximum home value after rehab is $150,000.00. As a result, maximum home purchase price is $135,000.00 (effective May 2019).

V. Homebuyer must contribute minimum $1500.00 to home purchase process, with additional investment based upon sale price See Minimum Contribution Guide.

VI. Homebuyer must have savings equivalent to 50% of one-month’s living expenses at time of purchase offer. Amount based upon homebuyer education budget.

VII. Homebuyer must have minimum credit score of 580. Target minimum is 680. 580-680 may be required to complete additional credit rehab work. Lender may require higher score.

VIII. First mortgage financing shall be obtained through lender. Loan must be fixed, minimum 15 years, standard 30 years. No high-fee loans will be supported.

IX. Target home affordability amount is 30% of gross household income. PITI + $50 maintenance savings can reach 34%. Credit scores for any one from the borrowing party between 650 and 679 reduces allowable PITI + Maintenance Savings by $25. Credit score below 650 reduces allowable PITI + Maintenance Savings by $50.

X. Maximum household monthly debt is 14%, with target 10%. Monthly debt exceeding 10% may reduce total allowable PITI. Combined monthly debt + PITI + $50 maintenance savings may not exceed 42% of gross monthly income.

XI. Home must be inspected by WCHA and certified building inspector. Home may be inspected by local code official.

      a. Home must meet HUD Housing Quality Standards at time of closing; or

      b. Have a citation resolution plan that will typically entail 2nd/3rd mortgage financing either through the local municipality or the WCHA.

      b(2). If rehab work is to be completed with an additional mortgage, the program will ask lender about recording date that works with loan package.

XII. Homebuyer must acquire home insurance, with the Winnebago County Housing Authority listed as an additional covered party.

Lender Requirements

XIII. Lender has provided letter affirming they will work with our program, including the name, mailing address, telephone number and email of local contact. Members of the lending consortium have already met this requirement.

VIV. Lender Standards

      a. Must have physical branch office in Winnebago County or adjoining county.

      b. Lender will not consider Winnebago Homebuyer Program assistance as a debt in regards to calculating homebuyer monthly debt obligations. WCHA assistance will be in the form of a 0%, deferred loan, with no payments due until time of sale, transfer of possession, or use of property for means other than primary residency. Assistance can include downpayment, closing costs, and rehab. WCHA mortgages will be signed at closing. Assistance is determined by need on a case by case basis, with an average amount between $8,000.00 and $12,000.00. Lender should use $10,000.00 as initial entry estimate for applicant processing.

XVI. Lender agrees to collaborate with the Winnebago Homebuyer Program to maximize available funding resources to assist and benefit homebuyer. Additional funding options may include: WCHA will partner with municipality, when available, for downpayment and rehab support. FHLB assistance is also often a resource for our homebuyers. Local business-sponsored forgivable workforce housing grants may be available, and the WCHA runs a family self-sufficiency program that helps families save funds, with average homebuyer savings of $7000.00.

Subordination and Payoff

I. Subordination Policy and Request. Select "HOME Subordination Policy".

II. Subordination Agreement Template.

III. Requesting Payoff: See the following guide for requesting balance owed or to request a payoff notice. Payoff Request Guide.