Mortgage Matters

Wesley Knight 0:00
This is a Kun V studios original program. The content of this program does not reflect the views or opinions of 91.5 jazz and more the University of Nevada, Las Vegas, or the Board of Regents of the Nevada System of Higher Education.

Roland Daniels 0:43
Good morning, Las Vegas. Welcome to mortgage matters. I'm your host, Roland Daniels, a certified mortgage advisor with Geneva financial. My NMLS number is 355859, our company, NMLS number is 42056, and I'm here this morning, as always, with my fantastic co host, Heidi Griffith, good morning.

Heidi Griffith 1:06
Heidi. Well, good morning. Roland, how are you? Sunday? I am absolutely fantastic. Well, I am glad to hear that I'm Heidi Griffith. I'm also a mortgage advisor and your Director of Client Services. My NMLS number is 2247754, tell you we have a really good show lined up today. We do. We have a special guest, a very special guest in the studio this morning with us, and we have some exciting news about how you can get closer to making your dreams of home ownership a reality. Huh? We do. Yeah.

Roland Daniels 1:39
So before we jump in, let's cover our question of the week. Let's do it right. So today's question comes from Brandon, who's self employed, and he's a truck driver. Brandon asked, I'm a self employed truck driver, and I wrote off a lot of deductions on my tax returns. My wife and I want to buy a home before prices start to go up even higher. Smart. So how do I qualify? Do you look at my 1099, or do you use my tax returns for income?

Heidi Griffith 2:14
You know, that's a great question. We actually get that question a lot from self employed buyers. So when you're self employed, lenders are primarily going to look at your taxes, not just your 1099, right? That is correct. So specifically, we're going to calculate income based on your adjusted grossed income after any deductions you take. So depending on how much you've written off, it can actually sometimes be challenging to show enough qualifying income that said we've got solutions. One option could certainly be a bank statement loan, right, where we look at your deposits over a certain period instead of tax returns, and that could be a great way to make your income work if your traditional method doesn't fit Roland, what about you? What do you have?

Roland Daniels 2:52
Another strategy is that we often explore working with your CPA or tax preparer, right? We want to do it early in the process, because right now we're what first week in January, and tax returns are coming up, right? So we will sit down review your financials and help you plan ahead for this year's taxes and ensuring that you're in the best position to qualify, and it might be even beneficial to amend your tax returns depending on the income that you'll need,

Heidi Griffith 3:29
right, right? Because if you make enough to qualify with those deductions, that's one thing we can certainly use those right. And obviously we take the deductions that we can when we own our own business, when we're self employed, it makes sense. But when you're purchasing a home, sometimes it's a little bit more challenging. Yeah, most of us will try to write everything off, right, right? And it makes it just a little bit more challenging for qualifying income at that point, because if you written it off, we can't use it as income. That is correct, yeah, yeah. So I'm super excited I have an amazing person in the studio this morning that I'd love to introduce, Kevin Hickey. He's with Nevada Rural Housing, and because Nevada Rural website has your bio, just whoever I feel like you probably wrote it because it's so creative. But I want to read this really quickly. We've read it before, but if you haven't caught and I really want everybody to hear this. It says it's a bird, it's a plane. It's Kevin plucked from the sky after he retired from the airline industry after 25 years in the biz, and pulled into Nevada Rural Housing Kevin joined the home ownership program's crew to provide lender real estate and home buyer support. Kevin's a people person first, who thrives on connection and relationships, which made him a perfect fit for the role. He has since expanded his responsibilities and now manages Nevada Rural Housing home ownership programs, helping the team dream up the next big thing that will help rural Nevadans realize their dreams of becoming homeowners. Kevin earned his. Master's degree from the United the unit the University of Nevada right here UNLV, Las Vegas, in crisis and emergency management. That's interesting. And is a fifth generation Nevadan, born and raised in Gardnerville with his feet on the ground. Home is one of his favorite places to take his shoes off, kick back and truly relax with the people he cherises the most. Morning. Kevin, good morning. Thank you so much for being here today. Yeah, thanks for having me. I appreciate it. Excited. We're excited. So before we talk about all the great work that you in Nevada roll are doing, let's, let's quickly remind everybody about tomorrow's class. We actually have a class tomorrow. That's right, that is Monday, January 13, that is going to be at the Whitney library. That's like Boulder in Tropicana, right? We visited the library a few weeks ago, and we're actually hosting this special section at the library from 11 till 12, and we'll be diving deep into all of the programs that you're going to actually talk about today, right? Great. Lunch is provided because everybody knows that I like lunch and snacks. Say, are we having snacks? I'll bring snacks. All right. Snacks are gonna be there, not just lunch. We're gonna have good lunch. We're gonna have great sandwiches and chips, but probably some cookies and snacks. Sounds like a plane. Are you good with that?

Kevin Hickey 6:09
Kevin, I am good with that.

Heidi Griffith 6:12
So you're gonna get lunch, and when you attend the class, you'll actually get your home buyer education certificate, right? That's right. So that's great, and that's going to make you eligible for all of the programs that Nevada Rural Housing offers. And we're going to talk about all the down payment assistance programs. I really you know if you're thinking about becoming a homeowner, if you're thinking that down payment assistance could help you make that step a little bit sooner, I think this is going to be a great class. I'm excited that we're able to stand next to you while you present all this information, because I promise you guys, I'm sure this class is going to be first rate. I really am. Thank you. So if you'd like to register, Phil, I he'll fill him, he'll feel they might, you know, he definitely will doing big clown shoes motions right here, but Kevin will be there. And if, if we did come with a clown outfit. You would probably even, I would, you would, you

Kevin Hickey 7:03
know it, I'm excited. So if you've ever looked at Nevada Rural Housing, Instagram feed or Facebook, so good, they've done crazy things to me before. So

Heidi Griffith 7:12
you guys really do have the best social media out there. So yeah, Nevada Rural Housing on Facebook and Instagram. We follow them. They do some fun stuff that will definitely make you smile. I really like the in and out post that always makes me happy. Yeah, in and out one. So if you want to register for this class, you still have an opportunity. You can call or text us, or you can actually visit our brand new Facebook page to save your seat, feel free to reach out. We're at 70220204, 022102057, that number, again, is 702-210-2057. Or you can find us on Facebook at mortgage matters radio.

Roland Daniels 7:54
Wow. We have a new Facebook. We do. We

Heidi Griffith 7:57
do. And I think that, well, there's definitely going to be a link to all of the Spotify replays of the show, and there'll be so we have some good outtakes. So I think I'm gonna post so you can let guys, you can laugh with us. You're right, not at us. So let's jump into Nevada rule. Tell me about Nevada Rural Housing.

Kevin Hickey 8:18
So Nevada Rural Housing is a what's considered a local housing finance agency. What does that mean? Right? It basically gives us the authority to work in home ownership and other aspects of being housed, like rental assistance, using various government programs, and then we also have the flexibility to create our own programs, like home at last, which is a self funded down payment assistance program that we'll talk more about. But we've been around since 1973 our home ownership program is coming up on its 20th birthday next year, so we're getting close. About 11,000 Nevada families have been helped through our homeownership programs with over $2 billion in mortgages. Well, that's amazing. And 60 million in down payment assistance, yeah. 60 million in down payment assistance, million. Yeah. So I tell folks, you know, when they when they see the information we present, like at the class tomorrow, sometimes it sounds too good to be true, and this is one of those few things that's actually that good and and the proof is in the pudding, right? Those numbers, 11,000 families, 60 million in DPA. I love that. 2 billion in mortgages. And we get real numbers. We

Heidi Griffith 9:35
get it. We a lot on last week's show, we actually talked about why. We talk about the benefits of down payment assistance and how it does help families. You know, there's a couple programs here locally that, and you're one of them who just does great work for the city. And you know, there's just a lot of bad information surrounding down payment assistance programs, and we really do stress that there is always money. Available, and there's always a means, sometimes you've got to put in a little bit of work to make that happen, but we're here to help you make that happen, which

Kevin Hickey 10:09
is great. And we rely on partners like you, especially you and Roland. We definitely appreciate that partnership that we have with you and bringing our programs to home buyers and also helping us educate home buyers with the class tomorrow. So awesome. We appreciate you.

Heidi Griffith 10:23
So tell me a little bit about the programs that are currently in place and what they offer.

Kevin Hickey 10:28
Okay, so home at last, as you heard me mention a moment ago, is our legacy down payment assistance program, and it provides assistance up to 3% currently, we try to go up to 4% but because it's a market driven program, we're capped at 3% right now, temporary, we hope and but that's money that you can use towards your down payment and or closing costs. And so a home buyer might be well 3% what does that mean? So we're looking at a $350,000 loan, 3% of that you'll get towards your down payment. And then they might ask, well, is that enough? Well for conventional loans, you only need 3% down payment so that can help cover that DPA requirement and and as you two know, it's not just the DPA component, but it's also the access to affordable credit. So our listeners may not have heard about something called loan level pricing adjustments, but they have heard if their credit score might be lower, or if they're purchasing maybe a manufactured home they might have a higher interest rate. Well, with these HFA programs, again, Nevada Rural Housing is a Housing Finance Agency, we're able to access programs that don't have loan level pricing adjustments. So it really helps folks who may be on the lower end of the credit score spectrum and or buying a more a property like manufactured home, where their rate could be impacted,

Heidi Griffith 11:57
right and right now a lot of people are looking at manufactured homes, right? Just because of affordable affordability, yeah. And in areas like Pahrump and Northern Nevada and those types of areas, a lot of people are also looking at the land that's associated, right, though. So, and we actually talk about loan level pricing a lot. When we talk about it, we're just talking about cost of rate, right? So in in the current market that we're in, a lot of of interest rates are going to have cost associated with them just because of the environment, like you said. And that is another factor, and it's actually something that I really think that we should stress more often, is that these types of programs don't have a cost associated with this interest rate, nor does it have a credit requirement. You're not getting a better rate. If your credit is 740 there's a credit minimum, right? That's 640 right? And if you're not at 640 right? Now, you know we can help you. We actually have tools. We have resources. We work with nonprofits that actually will do credit counseling and go over all that stuff. So we, we can help you get there, but 640 is a great place to start. But there's no benefit. I shouldn't say there's no benefit there. There's no ding to you if you've got a 640 not a 780 Right, right? So it really, I mean, that really is a great point. Thank you for mentioning, Yeah,

Kevin Hickey 13:18
you're welcome. And the other, the other little hidden benefit kind of is that those who are using a conventional loan at or below 80% AMI, which is a mouthful, but that basically means your income is lower than 80% of the entire area average income, right, right? So that is that you can get what's called charter, charter level mortgage insurance, and that's a cost that adds up. It adds to the total cost of the mortgage. And with a program like this, you can get mi that might be roughly half of what it would be otherwise, which

Heidi Griffith 13:54
is huge mortgage insurance. And remember, we've talked about mortgage insurance before. It's required on conventional unless you've got 20% down payment, right? So And once you're at that 20% you can have that mortgage insurance removed. But if it's an FHA loan, then that that mortgage insurance is with you for the life of the loan, until you sell or refinance the property or you pay it off. But yeah, more than likely you're going to sell or refinance before you do that. So that is another great point, yeah, filled with information

Kevin Hickey 14:23
like it. And then, and also, what if you don't need down payment assistance, we do have an unassisted option that still comes with all those benefits of lower mortgage insurance and the access to affordable credit. So so that option is there as well. And then we have our launch pad program, which is just about wrapped up. So we could talk about that a little bit here, because there's a little caveat here. We have targeted area funds available still, so it's not completely gone, but just talking about the success of the programs and whatnot, we have allocated about. About 25 million in mortgage volume in the last six months for that program, wow, half of which happened right here in Southern Nevada. So we know that, or I should say, about 40% happened in Southern Nevada. And you know, we'll talk about this tour. We can talk about it now that Nevada Rural Housing. What does that mean for the Las Vegas area? Right? That is we talk about lots, yeah, we'd like to hear from you. Rule can actually mean the middle of the Vegas valley. Winchester is considered rural. Whitney is rural, and Summerland South is rural.

Heidi Griffith 15:30
Summerland South 135 right? Yeah. Imagine that. Imagine

Kevin Hickey 15:34
that. And that's because our area of eligibility is determined by the state legislature, and it is for areas below 150,000 population determined by tax districts, not census tracts, not zip codes, tax districts. So it gets confusing, but fortunately, we have our lender partners here who know how to determine that, and we help out as well. But there are areas right here in the Vegas valley that are considered rural and are eligible for our programs. And then, of course, everything outside the valley is eligible as well. Boulder City, Laughlin, Pahrump, you name it, Mesquite, Yep, those are all eligible areas.

Heidi Griffith 16:13
Yeah. And we're seeing a lot of people who are in the real estate market looking at values, because they continue to go up, right? Yeah, who are actually then thinking, well, maybe it might be advantageous to, you know, take a drive over the hill, yeah, and take a look and see what's available, because of values, right? So we are seeing a lot of people that you know may be commuting back and forth from the city into Pahrump So, yeah, always food for thought. There are programs available, and we are excited about Nevada Rural and that's why we talk about it so often, because with these little pockets, you're able to utilize rural housing right here, right the city,

Kevin Hickey 16:53
absolutely and so that. So with that, the launch pad program was was quite successful here in Southern Nevada, you know? So again, you think about, well, I'm just not going to find anything that fits that eligibility. Quite a few borrowers did. So yeah, so it there is opportunity out there, for sure. Even though Launch Pad is just about wrapped up, we still have funds for properties and targeted areas. There are some targeted areas here in the Valley. So can we talk about what a targeted area is? Yeah, so it's an area where it's it's kind of a determination between the Department of Housing and Urban Development and as well as with state input, areas that might have low loan origination numbers or might be areas that are they're looking at for revitalization, and so they target those. And what that allows is programs like Launchpad, which have a first time homebuyer requirement. That requirement gets waived in targeted areas. It also allows for a higher income and a higher purchase price limit, so it makes it easier to access the program for borrowers who are willing to purchase in those targeted areas. And so while funds for non targeted areas are have been fully allocated for launch pad, there are still funds for targeted areas, which is a great opportunity again, there, it's a little bit like a needle in the haystack, but we've had more targeted loans through the launch pad program than we anticipated, which is a great sign.

Heidi Griffith 18:27
And how do we find out what areas would be considered? I mean, is there an address? Look up

Kevin Hickey 18:32
there is, and it's a little bit convoluted. So I tell home buyers and real and agents and realtor or realtors and lenders all the time. Don't hesitate to ask me, because it is a bit of a process. It's all outlined on our website, but it's a process of first making sure the property is eligible for Nevada real housing, and then checking the address on a government lookup tool that tells you the census tract, and then comparing that census tract with the list of targeted census tracts in Nevada, okay, so or in that are in our program, makes sense? Yeah. So it a little bit of a process, but we've, we've made it as easy as we can online, but it's still it kind it can be hard to find the information, so we're always happy to

Heidi Griffith 19:19
let you know. But there's still those funds available. There's still targeted areas, right? And that doesn't mean it's a bad area, it just means that there's not a lot of homeownership, and we're trying to build the homeownership in those areas,

Kevin Hickey 19:29
yep. So areas like there's targeted areas in Searchlight, in kelna, very Laughlin, even in Whitney, there are some targeted areas. So it there's definitely opportunity there, and Andover and prompt. There's a few targeted areas and

Heidi Griffith 19:42
with with launch pad, and we've talked about launch pad, especially in when it was in its infancy. And I know that I mentioned to you, but I want to say this again, this program was, I mean, it was everything. We actually had the director of another housing division, um. Reach out to us when it first came online and mentioned that it was possibly the best program in the country. That's great the time. Yeah. And so if we're looking and if it is something that you know maybe it fits your criteria, tell us about Launchpad really quickly, and what that would entail

Kevin Hickey 20:17
from I missed the for the targeted fund. Oh, yeah. So it works exactly the same way. It just opens up that funding, that there's funding set aside that's required as part of a tax exempt bond program, which Launchpad is, that's, that's what allows us to offer the lower interest rate. 6.17 by the way, that's what I wanted. Didn't mention that. That's what I wanted to say. So, yeah, 6.17 interest and the 4% down payment assistance, okay, that comes with launch pad. And is it forgivable? It's forgivable after five years.

Heidi Griffith 20:50
I mean, yeah. So, So traditionally, right? And let's talk about this really quickly, rolling traditionally with down payment assistance programs. These types of programs are our favorite, because there's a silent second. So I'm just gonna use really even numbers right now. You qualify for down payment assistance. You purchase home, you get $15,000 towards down payment assistance. And this is just a basic number. You have $15,000 towards down payment assistance. It's a silent second. So when you sign all of your documentation, you're going to sign your first mortgage, and that's going to be the mortgage that you pay every month. And then you're going to sign for your second and that's going to be the down payment assistance that just sits quietly in the background. You're not making any payments. There's no interest on it. But when you sell or refinance your home, that money then becomes due, because this is how these this town, Nevada, rural, then put some money back in the coffers, and we're able to continue to offer homeowners the same the same gift that you were given to become a homeowner, right? So, I mean, it really makes sense. I pay it forward, it 100% and there are programs out there that we don't necessarily work with a lot, because there is a payment on the second right, and a lot of times that payment is a higher interest rate than your first interest rate. In some instances, 2% things more expensive, and it makes things more expensive. And then, then, when we sit down and we do the Ben Franklin where we're, you know, pros and cons of what's going on here, sometimes it doesn't make sense, whereas these programs really do, number one, help you get into a home, we know sometimes that money is the biggest hurdle, and so with that that paying it back is paying it forward, that was a great analogy with programs like launch pad. Like Roland said they're forgivable after five years. So that means if you live in your home five years, it's forgiven, it goes away. Yeah, wow. So you never have to pay it back as long as you live. Then that's probably the key word, right? Because you can't rent it out, right?

Roland Daniels 22:50
Yeah. Can you refinance?

Kevin Hickey 22:52
You? You would pay it back then, yeah. So less than five years. So as long as you keep the loan as is and live in the home for that five years, then, then it's forgiven, and you won't, you won't pay it

Heidi Griffith 23:02
back, but you've got that 6.17%

Kevin Hickey 23:06
one seven Yes, which is huge in today's real estate, 100% so yeah, the our unassisted rate right now, meaning, you know, no down payment assistance, is hovering between six and three quarters and seven and an eighth. But that doesn't come with any assistance. So you look at something at 6.17 you know, a full point lower in some cases, and and it comes with 4% down payment, and it's forgiven after and it's forgiven after five years. Is pretty awesome. So that is why those funds went so quick. For the first iteration, we are working to have a another version down the road. Don't have anything to share about that yet at the moment, but we do hope to have more soon, so So not to lose or be discouraged for for folks listening, we're always looking at new programs and coming up with ways to meet the needs of rural Nevadans. We're

Heidi Griffith 24:00
excited. I hope that you keep us posted. Of course, please do the first be bugging you.

Kevin Hickey 24:07
I'll be back here to talk about it. Yes, you

Heidi Griffith 24:09
will. Yes, you're always invited. That mic is always yours. We're gonna put your name on it. That's right.

Roland Daniels 24:14
And Kevin, what about mortgage credit certificates? Oh,

Kevin Hickey 24:19
yes. So that is kind of the real hidden gem of it all, and and I'm glad you bring it up, because it's once you understand it and know it, it's kind of hard to ignore it. And that is a mortgage credit certificate allows borrowers to write off or not write off, get a tax credit for a percentage of the mortgage interest they pay every year. So, you know, folks may know that when you pay your mortgage payment, a good chunk of that is interest on the loan. Heck, yeah, a little bit of it's the actual mortgage and, you know, and as time goes on, that kind of flips. It's more more principal than interest. But I. You can claim up to 20% of that and get it's $1 for dollar tax credit. So we're not talking write off, we're talking actual tax credit. And so for a $350,000 loan, this is just an example, and the interest rate of seven and a half percent, 7.5 the first year's estimated savings is just over $5,100 Wow, yes, and that's just one year, one year. So if the borrower had that, had that loan for the full 30 years, they could save about $100,000 on their taxes. So

Heidi Griffith 25:35
how do we access it? Tell us about how it works. So,

Kevin Hickey 25:38
so your mortgage lender, Heidi and Roland reserve the MCC when the loan is originated, okay? And it doesn't have to be an inaudible housing loan. It can be a Geneva financial loan. It can be a loan from another agency, whatever it might be. The only, the only restriction is it can't be a tax exempt bond program like Launchpad, right? Because the MCC is a tax exempt bond program as well, so you can only benefit from one at a time, right? But that's it. That's the only that's the only restriction. And there's no credit qualifying for the MCC because it's not a loan product. So the requirements are pretty simple. You are a first time homebuyer or purchasing in a targeted area, or a qualified veteran, those two categories will exempt you from that first time homebuyer requirement. Okay? And then you have to fit the income and purchase price limits for the county in which you're purchasing, and that's it, the MCC. So the MCC has a has a dual impact, as your as the borrower's lender, you can use that estimated qualifying income or estimated tax savings as additional qualifying income to help them qualify for the loan or make or help them qualify for more, you know, maybe a little more home, and then the borrower gets to take those savings when they file their taxes every year and use it for whatever they'd like. So it's a, it's a win, win program that's

Heidi Griffith 27:09
going to be available in any of the areas that Nevada Rural house, right?

Kevin Hickey 27:13
It still has to be Nevada Rural Housing eligible area to qualify for the MCC listeners.

Heidi Griffith 27:19
I this really is, this is one of those things, and you're absolutely right. That's like one of those little hidden gems that, aside from the qualifying, just that end of year savings,

Kevin Hickey 27:29
and let's just say, using that example, about $5,100 in tax savings that first year. What if your tax burden isn't $5,100 that year? Well, you'll get, you'll get the credit for what you owed. But you'll also have the next three years to use any remaining credit in k what maybe your income goes up and your circumstances change and you have higher taxes going forward, you can use the credit from that year plus whatever you had from the year before. You can stack it for up to three years any unused credit. And

Roland Daniels 27:59
can you use your program over and over again, or is it just the one time over and over, no restriction, so

Heidi Griffith 28:04
there's no restriction. So I used it in the past. I sold that property. I could utilize it,

Kevin Hickey 28:08
right? Provided it's not a first time buyer program, right? Because if you've used a program before, that means you've owned a home, but first time home buyer means you haven't owned in the past three years. That's right. Doesn't mean you've never owned. So if it's been and we've had folks that have used the program in the past 10 years ago and came back because they're ready to buy a home again and use the program,

Heidi Griffith 28:27
wow, we are so close on time today, but we definitely have to get you back, because there's actually, there's more I want to talk about, refine. There's so many things I want to talk about we can talk all day about. And if you want to catch us, you can catch us tomorrow at the Whitney library, if I'm 11 to 12, right? You can catch us if you want to register for that class, but we're at 702-210-2057, or you can find us on our new Facebook page, page that is mortgage matters, radio, um,

Roland Daniels 28:57
all you have to do is search on Facebook,

Heidi Griffith 29:00
right? That is correct.

Roland Daniels 29:03
So be sure to join us next Sunday at 730 right here, and K, U, n, b, 91.5, until then, we wish you a wonderful week. And as always, we're here to make your dream of homeownership a reality. In closing, remember, stay true to yourself and your mind.

Heidi Griffith 29:25
Thanks for coming out today, Kevin, thank

Kevin Hickey 29:27
you. It's great to be here. Bye. You.

Music 29:29
I.