iowa finance authority overview

Iowa Finance Authority

Overview

April 18, 2013

Introduction

Mission: To finance, administer, advance

and preserve affordable housing and to

promote community and economic

development for Iowans.

History

Excellence in Financial and Program

Management

Major Continuous Improvement Initiatives:

• HOME Program

• Housing Tax Credits

• Section 8 – Rent Assistance

• Single-Family Mortgage Programs

• State Revolving Fund – Water Quality

• Title Guaranty

More than $1 billion in annual

investments benefitting Iowa.

Community Investment

Q: How does IFA do it????

A: The key to our success is our partnerships

with over 400 lending institutions throughout the

state who support our programs including:

• The State Revolving Fund

• Title Guaranty

• Single Family Home Mortgage Programs

State Revolving Fund Provides low-cost funds for nonpoint source water quality projects. Currently approximately $80 million outstanding.

Examples:

• Brownfields clean-up

• Replacing private septic systems

• Storm water management (rain gardens, permeable paving)

• Buffer strips and terraces on agricultural land

• Manure management projects for livestock producers

• Closing leading landfills

• Wetland restoration

State Revolving Fund Lender Partnership

IFA’s purpose is to subsidize the loan,

providing a lower interest rate for the

borrower thus, freeing up funds for the

lender.

SRF has over 400 partner lenders including

many Ag lenders.

IFA has over $62 million of State Revolving

Funds in community banks throughout the

state.

State Revolving Fund

• Total federal capitalization grants received: $700 million

• Total loans closed since programs began: $1.9 billion

– SRF Program has leveraged federal funds almost 300%

• Total SRF assets: $1.7 billion

• The SRF has more than $1.2 billion outstanding in

low-interest loans for municipal infrastructure projects

• Approximately 500 different borrowers (cities,

counties, sanitary districts, municipal utilities) have

benefited from the SRF

State Revolving Fund Loans

Title Guaranty

• Created by the Iowa Legislature in 1986

• Provide guarantees of Iowa Real Property

titles

• Facilitate mortgage sales to secondary

market

• Help assure integrity of Land Title System

Products

• Title Guaranty Certificate

– Lender Coverage

– Owner Coverage

• Title Guaranty Commercial Services

• Closing Protection Letter

• GAP Coverage

• Mortgage Release

Title Guaranty Notables

• Title Guaranty issues more than 60,000

Coverage Certifications Annually

• If a lender chooses to use TG for a

homebuyer property that is $500,000 or

less, the buyer is eligible for free coverage

• Keeps Iowa revenue in Iowa

Affordable Homeownership

The Iowa Finance Authority has helped nearly 60,000 homeowners realize their dream of homeownership since the FirstHome program’s inception in 1977.

First Mortgage programs:

• FirstHome – First time homebuyers only

• Homes for Iowans – Anyone buying a new home

Grants:

• Entry Cost Assistance - “Plus” Grant

• Military Homeownership Assistance

Federal Tax Credit

• Take Credit! 2013 Mortgage Credit Certificates

Single Family Programs -Affordable Homeownership

Benefits of IFA Loans

• Lower cost loans

– No origination fees

– No discount points

• Predictable mortgage payment for 25/30 years.

• No prepayment penalty

• Entry cost assistance

$2,500 “Plus” Grant for Closing Costs or Down Payment

$5,000 Military Homeownership Assistance Grant

• Mortgage Credit Certificate – federal tax credit

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Permitted First Mortgage Financing Products*

FirstHome

• Conventional – HFA Preferred Only

• FHA 203(b), 234(c), 203(h)& 203(ks)

• Rural Development 502 Guaranteed

• Veterans Administration (VA)

Homes for Iowans

• Conventional – HFA Preferred Only

• FHA 203(b), 234(c), 203(h)& 203(ks)

• Rural Development 502 Guaranteed

• Veterans Administration (VA)

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*Lender follows agency underwriting guidelines for loan type.

$2,500 GRANT • Apply to Down Payment and/or Closing Costs

• Not a loan, no lien – minimal increase in interest rate

• Can be used with FirstHome or Homes for Iowans, eligibility based upon each program

• Can be coupled with Military Grant

• Can be combined with the Take Credit! MCC

‘Plus’ Subsidy Reimbursement

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‘Plus’ Subsidy Reimbursement

Military Home Ownership Assistance – up to $5000 grant

Property Eligibility

– Primary residence in Iowa

– Immediate occupancy

– 1-4 family residential property

– Habitable – safety & soundness

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Borrower Eligibility

– 90 days Active Duty since 09/11/01 and

– Discharged other than dishonorably or

– Injured service person, or

– Surviving spouse of eligible service person

– One time use

TAKE CREDIT! IFA’s Mortgage Credit Certificate’s

CREDIT ANNUALLY FOR THE LIFE OF THE LOAN!!!!

– Credit buyers Federal Income Tax Return – Credit of up to 50% of annual interest paid on

mortgage loan – capped at $2,000 a year – Dollar for dollar reduction of the borrowers’

federal tax liability – Balance of mortgage interest can used as an

itemized deduction

– Estimated to benefit over 1,000 Iowa homebuyers

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Helping to Create 200,000 Jobs

Total jobs created in FY11: 8,011

Housing Tax Credit program

• 3,784 jobs for Iowans in one year/1,006 annually recurring (National Association of Home Builders)

State Revolving Fund

• 3,714 jobs for Iowans

(Federal government estimates of job creation for ARRA)

Homeownership Programs

• 513 jobs for Iowans

(National Association of Realtors)

Iowa Finance Authority

Annual Report

Thank you to our banking partners!

• You

complete

our

successful

mission!

IowaFinanceAuthority.gov

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