Every two years, the Winnebago Homebuyer Program solicits partnerships with mortgage lending institutions for participation in the Winnebago Lending Consortium. Lending institutions commit first-mortgage financing to support qualified homebuyers in the Winnebago Homebuyer Program. This page provides an overview of the qualification requirements for our homebuyers, as well as detailing the commitments required to become a member of the lending consortium and the process for joining the consortium.
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.
IV. Maximum home value after rehab is $129,999.99. As a result, maximum target home value at purchase time is $125,000.00.
V. Homebuyer must contribute minimum $1500.00 to home purchase process, with additional investment based upon sale price.
VI. Homebuyer must have savings equivalent to one-month’s living expenses at time of purchase offer.
VII. Homebuyer must have minimum credit score of 580. Target minimum is 680. 580-680 may be required to complete additional credit rehab work.
VIII. First mortgage financing shall be obtained through partner lender. Loan must be fixed, minimum 15 years, standard 30 years. No high-fee loans will be supported.
IX. Target home affordability amount is 29-31% of gross household income. Amount = PITI + $50-$100 monthly savings.
X. Maximum household monthly debt is 12%, with target maximum of 10%.
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.
XII. Homebuyer must acquire home insurance.
XIII. Lender has provided formal commitment letter to the Winnebago Homebuyer Program stating support for qualified LMI homebuyer activities.
VIV. Lender Standards (standards should be met or lender should provide detailed explanation explaining reasoning for change and providing rate / terms comparison):
a. Lender has provided letter of commitment to assisting qualified homebuyers.
b. Lender maintains loan “in house” or can formally quantify a comparable service to the borrower to ensure excellent ongoing customer service and a documented agreement to assist and service a minimal cost refinance/restructure if terms become unaffordable due to uncontrollable circumstances.
c. Lender waives PMI. Homebuyers will have a minimum 12% of purchase price as downpayment in combined homebuyer investment and Winnebago Homebuyer funds. Regularly, the Winnebago Homebuyer Program may work with buyer to meet a 20% downpayment in combined funds.
d. Lender offers 1/8 – 1/4 point reduction in interest rate or comparable benefit (does not need to be exclusive to WCHA homebuyer – for example, may include waiving of application fee when direct deposit checking out is established along with auto-mortgage withdrawal.)
XV. 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 of $11,000.00. Lender should use $10,000.00 as initial entry 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.
This information will be made available January 2017.