SB975,4,20 18(3) Certifications. (a) A qualified organization may certify that an applicant
19is eligible to receive a workforce home loan in an amount determined by the qualified
20organization, subject to the approval of the authority.
SB975,4,2221 (b) An applicant for a workforce home loan is eligible if the applicant satisfies
22all of the following:
SB975,4,2523 1. The applicant has not had any ownership interest in residential real
24property for the 3 consecutive years immediately preceding the date of the
25application.
SB975,5,2
12. The applicant's annual household compliance income equals 100 percent or
2less of the area median income.
SB975,5,73 3. The applicant's debt-to-income ratio, based on qualifying income, satisfies
4the underwriting guidelines, except that if the payments on a workforce home loan
5are deferred for at least 60 months, no future workforce home loan payment may be
6included in the debt-to-income ratio calculation and the maximum debt-to-income
7ratio for manual underwriting shall be 40 percent of the qualifying income.
SB975,5,128 4. The applicant's credit score, rating, or other classification, as determined by
9the authority, satisfies the underwriting guidelines, except that if the payments on
10a workforce home loan are deferred for at least 60 months, the minimum qualifying
11credit score, rating, or other classification shall be the lowest eligible score, rating,
12or other classification published in the underwriting guidelines.
SB975,5,1713 5. The applicant's minimum financial reserves, as determined by the authority,
14after down payment and closing costs for the applicant's conventional mortgage for
15the purchase of the residence subject to the workforce home loan satisfy the
16underwriting guidelines. This subdivision does not apply if the payments on a
17workforce home loan are deferred for at least 60 months.
SB975,5,2118 6. The applicant's conventional first mortgage for the purchase of the residence
19subject to the workforce home loan is a fully amortizing, fixed-rate qualified
20mortgage loan with a term of 30 or fewer years consistent with Regulation Z under
21the federal Truth in Lending Act, 12 CFR 226.
SB975,5,2522 7. The applicant satisfies all eligibility requirements with respect to citizenship
23or resident alien status, social security number validity, home buyer education and
24counseling, and payment of child support or maintenance if owed, as provided in the
25underwriting guidelines.
SB975,6,6
1(c) The authority shall adopt policies and procedures to facilitate the
2preapproval of applicants for workforce home loans and the encumbrance of
3workforce home loan funds for preapproved applicants for a period of up to 90 days
4for preapproved applicants seeking to purchase existing single-family residences
5and up to 180 days for applicants seeking to purchase new construction
6single-family residences.
SB975,6,9 7(4) Loan issuance; repayment. (a) 1. Subject to pars. (b) to (g), the authority
8may issue a loan to an eligible applicant certified by a qualified organization under
9sub. (3).
SB975,6,1310 2. The authority may not charge interest for any workforce home loan, and the
11loan term shall be 30 years, except that in the case of applicants who qualify for
12payment deferral under par. (f), the loan term shall be 40 years, and except that a
13workforce home loan may be prepaid in whole or in part at any time without penalty.
SB975,6,1414 3. No workforce home loan shall be forgivable in whole or in part.
SB975,6,1615 4. Each workforce home loan shall be secured as a 2nd lien real estate
16mortgage.
SB975,6,1817 5. The authority shall use all repayments of workforce home loans to fund
18additional workforce home loans under this section.
SB975,6,2319 (b) The authority may issue a workforce home loan only for the purpose of
20providing gap financing to supplement a conventional mortgage for the purchase of
21a single-family residence in this state, whether new construction or an existing
22residence and whether detached or attached, that will be the eligible applicant's
23primary residence.
SB975,6,2524 (c) The authority may not issue a workforce home loan that exceeds the lesser
25of the following:
SB975,7,2
11. $60,000, adjusted for inflation annually beginning on the effective date of
2this subdivision .... [LRB inserts date].
SB975,7,43 2. Twenty-five percent of the purchase price or fair market value of the home,
4whichever is less.
SB975,7,95 (d) If the authority issues a workforce home loan to an eligible applicant whose
6household compliance income is 100 percent or less, but more than 80 percent, of the
7area median income, the repayment of principal on a monthly basis shall commence
8on the first day of the 2nd month following the issuance date of the loan, amortized
9over 30 years.
SB975,7,1410 (e) If the authority issues a workforce home loan to an eligible applicant whose
11household compliance income is 80 percent or less, but more than 60 percent, of the
12area median income, the repayment of principal on the loan shall be deferred for 60
13months following the issuance date of the workforce home loan after which time the
14repayment of principal on a monthly basis shall commence, amortized over 25 years.
SB975,7,2115 (f) If the authority issues a workforce home loan to an eligible applicant whose
16household compliance income is 60 percent or less of the area median income, the
17repayment of principal on the loan shall be deferred until the first-lien real estate
18mortgage loan on the home is paid in full after which time the repayment of principal
19on a monthly basis shall commence, amortized over 10 years. No more than
20$25,000,000 in loans subject to this paragraph may be outstanding at any time and
21the authority shall allocate at least $20,000,000 for loans subject to this paragraph.
SB975,7,2322 (g) The total amount of unpaid principal on a workforce home loan shall become
23due and payable upon the occurrence of any of the following:
SB975,7,2424 1. The recipient of the workforce home loan sells the home.
SB975,8,2
12. No recipient of the workforce home loan resides in the home as a primary
2residence.
SB975,8,7 3(5) Subordination to new first mortgage. The authority shall subordinate an
4outstanding workforce home loan to a new first mortgage loan obtained by the
5recipient of the workforce home loan, using the same documentation requirements
6and charging the same subordination review fee as for the authority's other 2nd
7mortgage loan programs, if the authority determines that all of the following apply:
SB975,8,98 (a) The home continues to be the primary residence of any recipient of the
9outstanding workforce home loan.
SB975,8,1810 (b) The combined loan-to-value ratio, calculated using the sum of the amount
11of the proposed new first mortgage loan and the outstanding balance of the workforce
12home loan, divided by the fair market value of the subject property at the time of the
13subordination request, as determined by the authority, is equal to or less than the
14combined loan-to-value ratio at the time the workforce home loan was first issued,
15calculated using the sum of the conventional first mortgage loan used to purchase
16the residence and the amount of the original workforce home loan, divided by the
17original fair market value of the subject property at the time the workforce home loan
18was first issued.
SB975,8,2119 (c) The proposed new first mortgage loan is a fully amortizing, fixed-rate
20qualified mortgage loan with a term of 30 or fewer years, consistent with Regulation
21Z under the federal Truth in Lending Act, 12 CFR 226.
SB975,8,2322 (d) The workforce home loan recipient continues to satisfy sub. (3) (b) 3., 4., 5.,
23and 7.
SB975,8,2424 (End)
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