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, company. NMLS number is 42056, and as always, I'm here with my fantastic co host, Heidi Griffith, good morning. Heidi, well, good morning. Happy Sunday. Happy Sunday. How are you I am doing awesome. That is so good to

Heidi Griffith 1:13
hear. I'm Heidi Griffith. I'm also a mortgage advisor, and I'm your Director of Client Services. My NMLS number is 2247754, I just a quick thank you to our fantastic engineer. Wes he sure is always make sure that we sound good. Keeps us on point. He does. So we've got a really packed show today with some super exciting news that you're not going to want to miss. In studio with us this morning is Kevin Hickey from Nevada Rural Housing, and he's joining us to talk about some really exciting news. So if you ever thought about buying a home, this might be one of those shows that could literally change your path forward.

Roland Daniels 1:50
And if you're wondering how to take that first step, we've got you covered. We offer first time buyer solutions, VA loans, investor financing programs for the self employed buyers, and even some perks. If you're a Nevada K through 12 educator, there's something for just about everyone. And we love helping people get qualified. And even just figuring it out is a good time to finance, refinance or consolidate your debt with a heat lock.

Heidi Griffith 2:27
That's right. That's right. And talking about taking first steps, mark your calendars. We've got some incredible education opportunities coming up on Friday, April 18. We'll actually be hosting an in person class right here in the Las Vegas Valley. It's called home as possible, and that is with the Nevada housing division. This class runs from 11 to 1230 and attending gets you certified for all of the Nevada housing down payment programs and secret sauce. If you take this class and you get your certificate, and you're eligible to use it for Nevada Rural Housing, that will actually work. The certificate will actually work for that as well. It sure

Roland Daniels 3:04
will Yeah. Then on Saturday, April 19, we have a special online class understanding and maximizing your VA Home Loan benefits designed just for our veterans and active duty service members. This one is from 11am to 12 noon. Yep, just online, right? And then on Saturday, then the following week, April the 26th we're back with another online session all about down payment assistance, where we dig deep into all of our different 16 or 17 different down payment assistance programs, and we'll be able to bust some myths and help you understand what you actually qualify. Because

Heidi Griffith 3:51
a lot of people don't understand down payment programs. A lot of bad information out there that surrounds down payment programs. We hate it every week, every day, and even more so nowadays, um, you know, a lot of people think that all of those programs have gone away. They have not. That is true. Have not. And we offer, like Roland said, I think we're up to 17 right now. I think so we're up to 17 programs. They're not specifically for first time homebuyers. We have programs that, pretty much, you know, most people could utilize. We have them that go up to income limits of 165,000 we have programs where, if you own a home, you're still eligible. And then we have programs that income doesn't matter. There are no income limitations. Yeah. So, so there's some information in that class, and if you want to register for any of the classes or events, or if you have any questions about today's show, you want to find, find out how to qualify, how to buy. You want to explore options like refinancing or tapping into your equity, you're welcome to reach out. You can call or text us. We're at 702210, 02057, again, that number is 702-210-2057, and before we jump in with the exciting news that the that Nevada Rural Housing has, let's just take a quick moment to acknowledge something that's really important. We're in April. April is Fair Housing Month, and it's a time to recognize that access to housing is not just a dream, it is actually a right. The Fair Housing Act was signed into law in 1968 protecting people from discrimination based on race, color, national origin, religion, sex, disability and family status. That

Roland Daniels 5:35
means it's illegal to refuse to rent, sell or lend based on any of those factors, but it also means that we, as professionals in the housing space and as a community, we have a responsibility to make sure that fairness is more than just the law. It's a standard that we uphold every single day, so whether you're renting, buying or refinancing, you deserve to be treated with respect and transparency, and that's something we take very seriously in our work. So if you've ever felt unsure or unseen in the home buying process, we are here to change that Fair Housing Month is a great reminder that you don't have to walk this path alone. That is 100%

Heidi Griffith 6:29
correct, and just because it's Fair Housing Month doesn't mean that we only practice this this month. This is something that we take seriously every single day, daily, daily. Yeah, and speaking of people who are doing the work to expand access to home ownership, we are always excited to sit down. We are today's guest. He's a regular on our show, and he's a proud UNLV alum. Kevin Hickey, our home ownerships program manager from Nevada, rural housing. Hey, Kevin, good morning. Good morning. How are you? I'm doing great things. Welcome to the show. Good. You've got some exciting news, don't you? I do. You

Kevin Hickey 7:06
mentioned those programs that have income limits up to 165 and no restriction on home ownership, and whether you own a home currently or not. That might be this program, or one of them, at the very least. So our what we call our Og, the original Homeownership Program at Nevada Rural Housing has some very, very exciting changes, launching tomorrow. Yeah, so Home At Last. Just a little background on it started back in 2006 it was Nevada Rural housing's first home ownership program, and in that time, almost 20 years we have financed about $2.4 billion in mortgages. Can you say that again? 2.4 billion with a B and over $60 million in down payment assistance? That isn't and that's a lot of homeowners, 11,000 Nevada families, yep, and counting. So it is the real deal. You know, we talk about these things sometimes, and sometimes it sounds too good to be real. And this is one of those few things that is as good as it sounds. The Home at last program, as you know, provides down payment assistance on a percentage of the loan amount up to 4% and currently that it's a market driven program, so the rates fluctuate every day based on what the market's doing. Okay? And as we all know, interest rates have been higher lately, and it's been a bit of a roller coaster with those rates hourly, hourly Exactly. So we have been looking for ways with our partners to harness what's typical or common in a real estate transaction right now, and that's seller concessions, yes, so we know what's happening in 50% or more of those transactions, and we want borrowers to be able to use that seller concession to buy their rate down. And we call it a permanent rate reduction. Okay, that means that you can use that seller concession to permanently reduce your interest rate for the entire 30 year life of the loan. So it doesn't fluctuate, it doesn't change that by that that rate reduction is is permanent. So and it's not money that's coming out of your pocket to make it happen, and it comes with down payment assistance. We are the first HFA Housing Finance Agency we know of to launch this program. There are other hfas around the country that are looking into this, but we were the first, and we're pretty darn excited about that. We are too. Yeah, so there's the to start out. There will be a 2% discount option, which that means that if your seller provides a 2% concession based on the purchase price or sale price of the home that can be used to permanently reduce the rate. We're going to introduce a 1% discount option sometime in May, so if that you know if you have the concession is available that's a little bit lower, you can still take advantage of that rate reduction. So it's not just limited to seller concessions. You can use your own funds or wherever they may come. So we can use gift funds for that to use gift funds to pay that rate reduction Exactly. And then the other really cool thing, I think, is that the home at last program will now have a five year forgivable term. So that means, as long as you live in your home for five years and you don't sell or refinance in that time, you will have that down payment assistance forgiven on the 61st month of being in that home.

Heidi Griffith 10:34
And so for the listeners who might not understand what that really looks like, so we work with a lot of down payment assistance programs. I know that in the past, with Nevada Rural, they've got great programs that you get down payment assistance. It is a zero interest rate, right? So there's no cost. It is what we call a silent second. It just kind of sits in the background, and nothing happens to it, no interest, no interest, unless you sell your home, unless you refinance your home, right? And that's great, and it's a great way that these programs work so that when you do sell or you do refinance your property, you pay that back in in you know, a great instance would be you have the equity in the property, so you're able to just go ahead and and pay that back. And the reason why we do that is so that we can recirculate those funds. We can continue to offer families this assistance to get into a home. What Kevin's telling us right now is that we are able to after five years, as long as you live in your home for five years, that goes away. The second goes away. It goes away. You do not have to repay anything. You do not

Kevin Hickey 11:48
pay it back, and to be able to do that and use the potential of seller concessions or other funds to permanently reduce your rate. Yeah, and remember that rate reduction is for the entire life of the loan. It's, yeah, it's not a temporary reduction. So those are the big changes with home. At last, all the other benefits about the program are staying the same. And I know that you and Roland know this inside and out, which we certainly appreciate. But the minimum credit score for our programs is 640 we allow debt to income ratios up to 50% so that's where we call access to affordable credit. You can have a lower score, a higher DTI, and still qualify for these programs, and then you're not charged for that based on loan level pricing adjustments, which we've talked about in the past too. Sometimes you'll get a great rate, and there's a cost to it, and depending on the property type, manufactured versus stick build, or your credit score, other factors to the rates, the rate, it's what it that's what it is. And then if you can take advantage of that and get the seller concessions to reduce it even more

Heidi Griffith 12:54
and and understand if you're you know if, if, whatever means you use to look up your credit scores, be it experian.com or Credit Karma or and you don't feel that you're at a 640 we've helped many people who were, you know, on that cusp, and we have tools and resources available that can help you get your credit where it needs to be if it's not at a 640 Today, right?

Roland Daniels 13:19
Kevin, I do have one question, sure, can this still be paired with the MCC?

Kevin Hickey 13:24
Yes, it can be paired with the MCC. And to top it off, we just reduced the MCC program fee by $200 so now it costs less to take advantage of the MCC, but you still get that 20% credit on the mortgage interest you pay every year. So the example we like to give on a $350,000 loan at a six and a half percent interest rate can save you about $4,500 the first year in federal taxes. And so not only do you save that money again over the life of the loan. So if you had that loan all 30 years, or let's just say, you refinance somewhere down the line, you can have that MCC reissued to continue to get that credit for the original 30 years, close to $90,000 using that example,

Heidi Griffith 14:09
let's, let's take a second for those that haven't tuned in before, maybe don't, don't, you know, didn't catch a show with you. Kevin. Explain what the MCC is. So

Kevin Hickey 14:18
the MCC stands for mortgage credit certificate. And what it does is it allows you to claim 20% of the mortgage interest you pay every year as $1 for dollar tax credit. So you may have heard about how you can write off your mortgage interest. It's a write off, but it's not dollar for dollar. It's just a very small portion. It's a great thing benefit to have. But this MCC allows $1 for dollar tax credit, and you still get the write off of the credit that's not paid, if you want to call it that, with the MCC so you still get the write off of what's left of that 80% because the credit. It will give you 20% and then you get that 20% dollar for dollar tax credit. It's money that keeps the homeownership affordable in the long run, because it's money that you get every year with your taxes, year after year after year, year after year after year. And as we know, you pay more interest upfront with your mortgage, so your credit is higher in the beginning, and as you go through the years, you start paying more principal versus interest. So the credit will always remain 20% it's just the dollar amount will change over time as you pay less interest and more principal. And not only does that money come to you every year as a tax credit, it also can be used up front to help the borrower qualify. That's right. So you take that roughly $4,500 divided by 12, and that's additional qualifying income to help a borrower qualify for the loan, lower their debt to income ratio.

Heidi Griffith 15:54
So let's talk about locations. Where can we use this? We can

Kevin Hickey 15:58
use it right here in the Vegas valley, believe it or not, despite being Nevada, rural housing, we are a Rural Housing Authority. Our programs are based on populations. Our areas with population below 150,000 and it's based on tax districts. So how we keep track of that? I don't know, but we have a website to help folks determine what is eligible, and that's H A L, M, a p.org, hell map.org, and H A L stands for home at last, right? So. But in the Vegas valley, Summerland, South Winchester and Whitney are eligible. And then all the outlying areas, like Boulder City, Laughlin, mesquite even out in I County and Pahrump, that's all 100% eligible. And then everything up north, everything up north, but the city limits of Reno, we are pretty darned excited about it. You are going to help a lot of families. We sure hope so. And we know right now that because of the market, home prices are staying steady, staying high, and mortgage rates. Interest rates are fluctuating a lot. Seller concessions are going to be here to stay for a while. It seems inventory is creeping up there. It makes it more of a buyer's market, and borrowers will be able to take advantage and reduce the rate.

Roland Daniels 17:16
Can I just circle back with the MCC let's say after that, five year forgivable? Well, I still have the opportunity to take advantage of the MCC even though I've been in the property for five years and is forgiven.

Kevin Hickey 17:31
Yep. So the MCC is completely separate from the loan itself, and that's why, if it's reissued, if you I'm sorry, if you refinance the home, the MCC needs to be reissued so that we can attach it again to the loan, just so the IRS knows what they're looking at in terms of interest and and how much that mortgage was up front, so that just because the down payment assistance part is forgiven, that MCC is for 30 years, or until you sell the home, and It is a first time home buyer program, it's important. To mention that, right? So you have to have not owned a home in the previous three years, if you are a qualified veteran, or if you're purchasing in a targeted area, of which there are some in Whitney, then that first time buyer requirement is waived and and then there are other targeted areas in the county too. Like some out in Laughlin, we get real rule like Gene and Cal Navarre, those are targeted areas as well. So there is opportunity, especially in those areas. If you're not a first time home buyer, if you are a first time home buyer, there's opportunities right here to help you take advantage of all these benefits.

Heidi Griffith 18:40
Yeah, and let's qualify first time homebuyer. That doesn't mean that you never owned a home. Dope,

Kevin Hickey 18:46
just means you haven't owned in the last three years. We certainly try. We know it's a challenging market, and we do all that we can to bring whatever tools we can to the market to help overcome as many hurdles as possible, because

Heidi Griffith 18:59
down payment is, is one of the biggest obstacles. I think the number is close to 68% of people, and

Roland Daniels 19:08
it is the number one barrier to home ownership, is having that

Kevin Hickey 19:11
down payment, down payment. And what's the big myth there 20% through 20% that's a big myth. That is a massive myth. As you know, I'm glad

Heidi Griffith 19:19
you brought that up because you said that this program will go up to 4% correct 4% so just to kind of give listeners an idea, if you're using an FHA loan, three and a half percent is your minimum down payment. So if you were to utilize this and get 4% we could do one of two different ones. There's actually a few scenarios that we could do, but we could use three and a half percent of that 4% towards your down payment, then we would have a half a percent left that we could actually apply towards your closing costs. That's right, you're allowed up to 6% in seller credits and concessions, same thing right on an FHA loan. So. So you could, if you could get up to 6% from the seller, that could cover the remainder of your closing cost, and the buy down for the rate. That's right,

Kevin Hickey 20:09
we're pretty excited, and we and we hope that that, we hope that it resonates and that it helps folks truly, you know, jump those hurdles and make it in.

Heidi Griffith 20:19
Well, yeah, because if we're sitting there, we're like, well, I want to buy a house, but how do I come up with this money? That's, I mean, realistically, even three and a half percent, that could be a big chunk of change for someone. Yeah, this makes it possible. Yep.

Kevin Hickey 20:31
And then, as you know, to conventional is only 3% that is correct. So then you'll have 1% to go toward closing costs. And then VA and USDA. No down. So we can do so we can do VA with this one. Yes, you can. So the 4% can go entirely to closing costs. Can we use that towards the buy down? Sure can. But funds can come from anywhere.

Heidi Griffith 20:56
If you are an active duty service member and or a veteran, this is a conversation. We'll definitely be talking about it in our VA class,

Roland Daniels 21:03
and even if you chose not to use any of the down payment assistance programs, the MCC is still

Kevin Hickey 21:09
available. The MCC is still available exactly as long as it's one of the areas, yep, so as long as it's in an eligible area and the borrower meets the income and purchase price limits, because those are set by HUD as a first time home buyer program. You can take advantage of the MCC with any loan, provided the loan is not a first time home buyer program, also right, because they're funded with the same funding mechanism through tax exempt bonds. The IRS says you can only take advantage of one at a time, so But otherwise, the MCC can be paired with any any other loan doesn't have to be through Nevada Rural Housing. So

Heidi Griffith 21:45
really, so if you're listening today, you're thinking about purchasing. Maybe you haven't thought about utilizing down payment assistance. You've got your money, you know you're going to put 20% whatever that looks like to you. And you're either purchasing in one of the areas that Kevin mentioned, that's right here in the Las Vegas Valley and or you're thinking to you know, you're looking at more of a rural area, whether it be down here in Southern Nevada or up north, to not only save money, but be able to pay down some of that tax liability that we all just are overjoyed with coming From

Kevin Hickey 22:17
every next Tuesday, two days from now, right? It's coming. So yeah. So

Heidi Griffith 22:25
before we wrap up, a huge thank you again to Kevin Hickey from Nevada Rural Housing for joining us today, and we are so grateful for the work Kevin and his team continue to do to expand access to home ownership across our state. And

Roland Daniels 22:40
if you're listening and you've been wondering, could this be the right time for you, whether it's buying your first home, refinancing, consolidating your debt, or just an understanding of what options are out there for you?

Heidi Griffith 22:56
And remember, education is power. We've got three upcoming education opportunities this month to help you feel confident and ready,

Roland Daniels 23:05
feel free to give us a call or text us to register for or even just if you have a thought or a question, we're here to help you. Our number is 702-210-2057 that's 702-210-2057. So we believe that knowledge should feel empowering, not overwhelming, and we are proud to walk alongside you every step of the way. Thanks again for tuning in to mortgage matters. We'll be back next Sunday at 730 right here on KU and B 91.5 with more tools, tips and resources to help you buy smart and repay smart until then, remember, stay true to yourself and your money, bye, bye.