June 1 2016 Agenda Background of TILA RESPA and TRID DSHA Grant Restrictions New notice requirements Understanding of how DSHA grants work with your homebuyers Closing Disclosure Statement Questions ID: 808786
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Slide1
Closing Disclosure Requirements for HDF and SNHF Recipients
June 1, 2016
Slide2AgendaBackground of TILA, RESPA, and TRIDDSHA Grant RestrictionsNew notice requirementsUnderstanding of how DSHA grants work with your homebuyers
Closing Disclosure StatementQuestions
Slide3Background of TILA and RESPA and TRIDTruth in Lending Act (TILA)Real Estate Settlement Procedures Act (RESPA)TILA-RESPA Integrated Disclosure (TRID)
Slide4TILA and RESPATILA- Mandates that lenders or creditors, disclose all interest cost and fees associated with borrowing.RESPA- Requires lenders to provide borrowers with pertinent and timely disclosures regarding the cost of their loan settlement process.
Slide5RESPA and TILAWhen the homebuyer has a first mortgage from a commercial lender, the commercial lender is required to follow all RESPA and TILA notice requirements
.If the homebuyer has other down payment/settlement loans in second or third position with regular terms and interest, (i.e. DSHA SMAL loan), the lender must also follow RESPA and TILA.Homebuyers with 0% interest mortgages will have some TILA notice requirements, check with your title attorney.
Slide6RESPA and TILAFor more detailed information on TILA-RESPA for non-profits, please go to the following link:http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/tila-respa-disclosure-rule//
Slide7TILA Notice for DSHA GrantsDSHA’s homeownership grants do not fall under
Regulation Z, Section 1026.3(h) (the partial TRID exemption), the HDF/SHNF Grants will be exempt from the TRID requirements of Regulation Z (set forth in under Section 1026.19(e), (f) and (g)); However, DSHA must still provide a notice to the Borrower;
This TIL notice can be completed at closing, however,
DSHA will provide more notice
.
Slide8Notice RequirementHDF
Completed Prior to Closing
Slide9Notice RequirementSNHFCompleted Prior
to Closing
Slide10What is required by the Grantee for DSHA Homeownership Grants?Notify DSHA of closing date, at a minimum,
10 days prior.Send DSHA all closing documents from DSHA homeownership checklist.DSHA will send out the TIL Notice to the Borrower.DSHA will prepare the grant restriction agreement, upon
all closing documents being received.
Slide11DSHAGrant Restriction Agreements
DSHA’s Grant Restriction Agreements will now include an Understanding Your Grant Agreement document signed by the Homebuyer/Borrower at closing or before.This document describes what DSHA’s Grant Restriction Agreement means and recapture requirements by providing questions and answers should the homebuyer sell, transfer, or re-finances their home prior to the expiration date of the restriction.
Slide12Closing Disclosure Statement (CD) HDFHDF grants are typically a reduction of the Borrower’s first mortgage (Mortgage Affordability Reduction (MAR) and must appear as a credit on the Borrower’s CD.
If the Grantee is eligible for no MAR, the HDF grant still must appear on the Borrower’s CD.
Slide13Closing Disclosure Statement (CD) HDF
Example of an HDF Grant Restriction1st Mortgage with Commercial Lender4% Interest Rate; 30 year term$19,500
MAR
0% interest; 10 year term
Slide14Closing Disclosure Statement (CD)HDF
Example of an HDF Grant Restriction0% MortgageSoft SecondHDF Grant $19,500 No MAR
Slide15Closing Disclosure Statement (CD)SNHFExample of an
SNHF Grant Restriction1st Mortgage with Commercial Lender4% Interest Rate; 30 year term$50,000 SNHF Grant
0% interest; 10 year term
Slide16Questions?This webinar and all sample documents will be available and posted to DSHA’s website:www.destatehousing.com
Slide17Contact us:Delaware State Housing Authority18 The Green
Dover, DE 19901302-739-4263 or 888-363-8808http://www.destatehousing.com
Penny@destatehousing.com
Dawn@destatehousing.com
Cindy@destatehousing.com
Brian@destatehousing.com