Unit 3 - Additional Government Influence
Under consumer lending law, which of the following advertisements would require a lender to give full disclosure of all aspects of the financing being offered?
"6.5% VA assumable loan" The use of any of the "trigger" terms (e.g., rate of interest, number of payments, term of the loan, amount of monthly payment, down payment amount, and/or percentage) requires full disclosure of all the financing terms
Changes requiring a new three-day waiting period are:
(1) changes to the APR greater than 1⁄8 of a percent, (2) changes to the loan product, or (3) the addition of a prepayment penalty.
TILA Disclosures
-APR -Full disclosure of all elements of financing (Disclosure of any one of the "trigger" terms—rate of interest, number of payments, term of the loan, amount of monthly payment, down payment amount, or percentage—requires full disclosure of all of the terms.) -Adjustable-rate mortgages must include disclosure of all potential rate increases
Requirements for VLB (Veterans Land Program):
-At least 18 years old -TX resident on date of application. Must meet one of the following service criteria: -active duty service member -member of TX national guard -reserve component military member having completed 20 qualifying years for retirement -served at least 90 days of active duty unless discharged sooner due to service-connected injury -surviving spouse of a veteran listed as MIA or who died in service
USDA Rural and Community Development Program
-Created to forge partnerships with rural communities to reverse downward spiral of rural job losses, out-migrations and diminishing services.
HUD is responsible for:
-FHA -Ginnie Mae -Fair Housing -Housing Choice Vouchers -Community Dev. Block Grant -Indian Housing
RESPA Covers:
-real estate brokers and agents -mortgage brokers and mortgage bankers -title companies and title agents -home warranty companies -hazard insurance agents -appraisers -flood insurers and tax service suppliers -home and pest inspectors.
How many states recognize community property?
10
An urban homestead is defined as up to ________, regardless of marital status
10 acres
When was the Veterans Housing Assistance Program (VHAP) created?
1983
A rural homestead is defined as up to _________ for married couples and up to 100 acres for a single person, plus improvements
200 acres
For a veteran to qualify for an interest rate reduction, the veteran's disability must be of
30% or greater
Interstate Land Sales Full Disclosure Act
A federal law that regulates the sale of certain real estate in interstate commerce. Established the informational criteria for marketing residential land to potential buyers. Designed to reduce fraud in the sales of land by developers, the law requires that anyone selling or leasing 25 or more lots of unimproved land as part of a common plan in interstate commerce must comply with the act's provisions
Texas Department of Housing and Community Affairs (TDHCA)
Acts as a conduit for federal grants funds for housing and community services. Most funds are distributed to local residents in need.
According to the Texas Department of Savings and Mortgage Lending, which of these must have a license for mortgage loan origination?
An individual who secures a loan for a structure that is suitable for occupancy as a residence but used for a commercial purpose
Secure and Fair Enforcement Mortgage Licensing Act (SAFE Act)
Applies to all mortgage brokers and mortgage bankers.
What is the purpose of the Federal Farm Credit System Insurance Corporation (FCSIC)?
Assure timely payment of principal and interest to purchasers of debt securities issued by the member banks in the Farm Credit System (FCS)
Farmer Mac (Federal Agricultural Mortgage Corporation)
Created to provide a secondary market for agricultural and rural housing mortgage loans.
These Texas veterans' loan programs are not associated with the federal _______________, so veterans who have used VA benefits may still be eligible
Department of Veterans Affairs (VA)
RESPA (Real Estate Settlement Procedures Act)
Designed to protect the participants in a real estate transaction by providing closing cost information so they better understand the settlement procedures.
What is the primary purpose of the Housing Tax Credit (HTC) program?
Direct private capital toward creating affordable rental properties
Fannie Mae and Freddie Mac are overseen by
Federal Finance Housing Agency - NOT HUD
Homebuyer Assistance Program (HOME HBA)
Funds to eligible entities that offer down payment assistance for homebuyers earning up to 80% of the area's median family income and may help fund modifications to make homes more accessible
Multifamily Mortgage Revenue Bond Program
Issues mortgage revenue bonds to finance loans for qualified nonprofit organizations and for-profit developers. In an effort to target low-income populations, properties financed are subject to unit set-aside restrictions for low-income tenants, such as rent limitations and other requirements set by TDHCA and its governing board. For example, 75% of all units created with mortgage revenue bonds must be occupied by households earning 80% or less than the area median family income. In addition, 5% of the units are reserved for special needs tenants.
Functions of HUD
Mission: Responsible for national policy and programs that address America's housing needs, improve and develop U.S. communities, and enforce fair housing laws. HUD's mission is to help create a decent home and suitable living environment for all U.S. citizens -supervising the Federal Housing Administration (FHA) -directing Ginnie Mae -enforcing the Fair Housing Act -managing the Housing Choice Voucher Program (formerly Section 8 Housing) -managing the Indian Housing Act -supervising public housing projects.
Loan Estimate (LE)
Provides a summary of the loan terms, estimated loan costs, other closing costs, and additional application disclosures. This form can be used to compare different loan products. The Loan Estimate must be provided to the borrower within three business days from application.
Farm Credit System
Provides loans to farmers, ranchers, rural homeowners, agricultural cooperatives, rural utility systems, and agribusinesses
My First Texas Home (TDHCA)
Provides mortgage loans at a fixed interest rates and downpayment and/or closing cost assistance to qualifying veterans and first time homebuyers or households who have not owned a home in the past 3 years. May be combined with mortgage credit programs for maximum benefit.
Texas Mortgage Credit Certificate Program
Provides tax credits based on the annual interest paid on a mortgage loan to qualifying veterans and first time home buyers or households who have not owned a home in the previous 3 years.
Community Reinvestment Act
Requires banks to demonstrate their commitment to local communities through low-income lending programs and to provide annual reports to the public.
Servicemembers Civil Relief Act (SCRA)
Texas reservists and National Guard troops with a VLB home or home improvement loan can defer their interest payments when they get called up for active duty. Participants don't have to repay the interest after returning to civilian life. This program also lets many reservists and National Guard members defer their entire monthly payments on VLB land loans, as long as they're on active duty.
Texas Department of Housing and Community Affairs
Texas's lead agency responsible for affordable housing, community development and community assistance programs, and regulation of the state's manufactured housing industry a nine-member board appointed by the governor, with concurrence of the senate, for overlapping six-year terms. The board must be composed of four members with experience in housing and finance, one member from local government, one member representing low-income persons, and three members from the general public
Housing Choice Voucher Program (formerly section 8)
The federal government's major programfor assisting very low-income families, the elderly, and the disabled in obtaining safe and affordable housing.
Texas Bootstrap Loan Program (TDHCA)
This is a self-help construction program to provide very low-income families an opportunity to help themselves through the form of sweat equity. Participants under this program are required to provide at least 65% of the labor necessary to build or rehabilitate their home.
What are the three housing loan programs available to Texas veterans?
VLB, VHAP, and VHIP
Home Mortgage Disclosure Act (HMDA)
all mortgage originators are required to report information relating to income level, racial characteristics, and gender of mortgage applicants. This includes loans originated as well as applications rejected
Texas veterans can use _________ loan programs at the same time (land loan, housing loan, and home improvement loan).
all three
Contract for Deed Conversion Initiative
available to eligible residents who are currently purchasing residential property within 150 miles of the Texas-Mexico border and reside in a colonia identified by the Texas Water Development Board or meet the department's definition of a colonia.
Texas First-Time Homebuyer Program (FTHB)
channels below-market interest-rate mortgage money through participating Texas lending institutions to eligible families who are purchasing their first home or to those who have not owned a home in the past three years. Although income limits may vary with each bond issue, the program is designed to serve very low- to moderate-income (30-115% of the area median family income) Texas families.
Comprehensive Energy Assistance Program (CEAP)
combines case management, education, and financial assistance to help very low- and extremely low-income consumers reduce their utility bills to an affordable level. Services include utility payment assistance, energy education, and budget counseling.
D.Property acquired during the marriage is _________ property with equal, undivided ownership.
community
Unless there is a written agreement stating that one spouse releases all rights and interests to the other spouse's separate property, the income received from a seperate property is considered ___________ funds.
community
Veterans Housing Assistance Program (VHAP)
created to help veterans purchase a house provides financing up to $417,000 toward the purchase of a home to qualified Texas veterans. There is no maximum sales price with VHAP. not a refinancing program; it can only be used as a first lien on the primary residence requirements: being located in Texas and being used as the veteran's primary residence, The veteran is required to occupy the home within 60 days after the closing date of the loan. The home must remain the veteran's primary residence for at least three years
Texas Statewide Homebuyer Education Program (TSHEP)
designed to work with local nonprofit organizations to teach the principles and applications of comprehensive pre- and post-purchase homebuyer education, and to certify participants as homebuyer education providers.
VHAP and VHIP offer an interest rate reduction to qualifying veterans with _____________
disabilities
RESPA requires that all service costs be _________.
disclosed
The annual percentage rate (APR) can BEST be described as
disclosing the true yield achieved by the lender
Homeowner Rehabilitation Assistance (HRA) Program (HOME)
funds to eligible entities for the rehabilitation or reconstruction of substandard homes owned and occupied by homeowners earning up to 80% of the area's median family income
Homeless Housing and Services Program (HHSP)
funds to eligible entities within the eight largest Texas cities (Arlington, Austin, Corpus Christi, Dallas, El Paso, Fort Worth, Houston, San Antonio) for services and housing, including construction, to prevent and alleviate homelessness. The funding must benefit homeless persons or families who are at or below 50% of the area's median family income
VLB Veterans Land Loan Program
gives Texas veterans the opportunity to borrow money to purchase land at below-market interest rates The VLB will finance the lesser of the following options: -$100,000 -95% of the purchase price -95% of the appraised value of the land Any purchase price above $100,000 must be paid by the veteran at closing. Veteran must pay 5% down payment at closing. the land must meet certain requirements, including being located in Texas and containing at least one acre
Weatherization Assistance Program (WAP)
helps low-income Texans, particularly the elderly and persons with special needs, control energy costs to ensure a healthy and safe living environment. The program funds the installation of weatherization materials and provides energy conservation education.
A developer is planning a new retirement home community in Florida. To avoid being subject to Interstate Land Sales Full Disclosure Act (ILSFDA) regulations, the developer should
limit marketing of the property strictly within Florida.
Entitlement Communities
metropolitan cities with populations of at least 50,000 and urban counties with populations of at least 200,000
LE & CD (Loan Estimate and Closing Disclosure) must be used for:
most closed-end consumer mortgages. Home equity lines of credit, reverse mortgages, or mortgages secured by a mobile home must continue to use the preexisting disclosures under RESPA and TILA
Texas requires home equity loans be _________, so lenders may force the sale of the property for the nonpayment of the debt, but they are not allowed to pursue the borrower for any losses.
nonrecourse
Community Development Block Grant (CDBG) program
one of HUD's longest continuously running programs. program has helped communities with economic development, job opportunities, and housing rehabilitation. CDBG funds have been used to construct and improve public facilities such as water, sewer, streets, and neighborhood centers; to purchase real property; and to assist private businesses
Veterans Home Improvement Program (VHIP)
provide low-cost loans to veterans for improvements and repairs to their existing houses. the VLB will lend eligible Texas veterans up to $25,000 for up to 20 years on a fixed-rate note to make substantial repairs to their existing primary residence. No down payment is required. For loans of less than $10,000, the maximum term of a loan is 10 years. All loans are FHA insured The home being repaired must meet certain requirements, including being located in Texas and being used as the applicant's primary residence
Colonia Self-Help Centers (SHCs)
provide onsite technical assistance to low and very low-income individuals/families on housing, community development activities, infrastructure improvements, and outreach and education
Closing Disclosure (CD)
provides a summary of the actual loan terms, the loan costs, other settlement costs, and additional closing disclosures. The Closing Disclosure must be provided to the consumer at least three business days before closing. If there are significant changes,an updated Closing Disclosure must be prepared and there will be another three-day waiting period.
Community Services Block Grant Program (CSBG)
provides administrative support to a network of local community action agencies (CAAs) that provide services to very low-income persons in all areas of the state. The funding helps provide such essential services as child care; health and human services for children, families, and the elderly; housing; and other poverty-related programs.
Homebuyer Assistance (TDHCA)
provides down payment and closing cost assistance for homebuyers of single family housing units; may include rehabilitation for accessibility modifications.
Single Family Development Program for Community Housing Development Organizations (CHDOs)
provides funds to Community Housing Development Organizations (CHDOs) for the acquisition, rehabilitation, or reconstruction of single-family housing for households earning up to 60% of the area's median family income
Amy Young Barrier Removal (AYBR) Program
provides funds to eligible entities for accessibility modifications in rental and owner-occupied housing for persons with disabilities who earn up to 80% of the area median family income
Neighborhood Stabilization Program (NSP)
provides funds to eligible entities for the acquisition and redevelopment of foreclosed, abandoned, or vacant housing to create affordable housing; the demolition of severely substandard housing; the redevelopment of demolished or vacant properties; and the creation of land banks; and/or other related activities
Multifamily HOME Direct Loan Program
provides funds to eligible entities for the development or rehabilitation of affordable multifamily rental housing. Funding is provided in the form of low-interest-bearing repayable loans. Multifamily developments carry long-term rent and income restrictions
HTF Homebuyer Assistance Program (HTF HBA)
provides funds to eligible entities that offer down payment, closing cost, and/or gap financing for the purchase of a principal residence for homebuyers earning up to 80% of the area median family income
Project Access (Voucher) Program
provides funds to eligible entities that offer rental assistance to qualifying non-elderly persons with disabilities who are transitioning from institutions into the community.
Tenant-Based Rental Assistance (TBRA) Program
provides funds to eligible entities who offer rental assistance for up to 24 months; assistance includes security and utility deposits, which may be extended for up to 12 months, for tenants earning up to 80% of the area's median family income
Emergency Solutions Grants (ESG) Program
provides grants to eligible entities that provide shelter and related services for homeless persons, as well as intervention services to persons threatened with homelessness. Activities eligible for funding include renovation of buildings for use as homeless shelters, assistance in obtaining permanent housing, medical and psychological counseling and supervision, and the development and implementation of activities to prevent homelessness.
Statewide Housing Assistance Payments Program (Section 8)
provides rental assistance subsidy vouchers to families earning less than 50% of the area's median family income, the elderly, and persons with disabilities. The statewide program is designed specifically for needy families in small cities and rural communities who are served by similar local or regional programs.
Truth in Lending Act (TILA)—Regulation Z
requires that all costs of financing be disclosed to the consumer. The intent of this act is to ensure that consumers can compare the cost of making a purchase using credit to the cost of making the same purchase with cash
Property acquired by gift or inheritance is ________.
separate property
Housing Tax Credit (HTC) Program
the primary means of directing private capital toward the creation of affordable rental housing. Developers of low-income rental housing use the tax credit to offset a portion of their federal tax liability in exchange for the production of affordable rental housing. To qualify for the tax credit, either 20% or more of the project's units must be rent-restricted and occupied by individuals earning 50% or less than the median family income, or 40% or more of the units must be rent-restricted and occupied by individuals earning 60% or less than the median family income.
Texas Veterans Land Board (VLB)
to provide low-interest, long-term loans to Texas veterans
An ______ homestead is defined as a lot or contiguous lots of no more than 10 acres with improvements.
urban
Farm Credit System (FCS)
was created by Congress in 1916 to provide American agriculture with a source of sound, dependable credit at competitive rates of interest -services have been provided to farmers, ranchers, producers and harvesters of aquatic products, rural homeowners, timber harvesters, agricultural cooperatives, rural utility systems, and agribusinesses.
National Guard troops with a VLB home improvement loan can defer their interest payments
when they get called up for active duty.
