| Wednesday, October 03, 2007 More borrowers eligible for OHFA program since loan application change by The Jackson Team By MELANIE MCINTYRE Daily Reporter Staff Writer Reproduced with permission from The Daily Reporter The Ohio Housing Finance Agency recently announced that its Opportunity Loan Refinance Program guidelines have been expanded so borrowers with certain credit issues may take advantage of the program. "The new, more flexible guidelines will allow us to help families who are facing the prospect of losing their homes as their payments begin to rise and become unaffordable," said OHFA Executive Director Doug Garver. "With these expanded underwriting guidelines, we hope to help hundreds of Ohio families keep the home they have worked so hard to obtain," he added. Under the new guidelines, borrowers are permitted to have up to one 60-day late payment and two 30-day late payments in the last 12 month on their existing mortgage payment history. The maximum combined loan-to-value ratio permitted is 105 percent. Prior to the changes, loan application approval was automated, said Joel Ghitman, director of homeownership for OHFA. Applications were evaluated with a scoring model that assessed several factors, including credit, income, loan-to-value ratios and debt ratios, and approval was dependent on their strengths and weaknesses. Now, "every last one of those loans has to be manually underwritten," Ghitman said, explaining that a person reviews each application. Ghitman echoed Garver's remarks, saying "I'm really pleased we were able to incorporate those changes into the program. I think it will allow a lot more borrowers to participate in the program and remain in their houses." During the final week of August, the program's 185 participating lenders were notified of the guideline changes. On April 2, OHFA unveiled the Opportunity Loan Refinance Program, which offers a 30-year, fixed-rate refinancing alternative to borrowers in all 88 counties in Ohio. The program is designed to assist homeowners who have a mortgage that is no longer suitable for their financial situation, such as an adjustable rate mortgage, Option ARM, interest-only mortgage or high-rate loan. In addition, the Opportunity Loan may assist borrowers who have experienced an unforeseen circumstance that has hindered their ability to keep up with payments, such as divorce, a medical emergency or loss of employment. To date, OHFA has taken about $14 million in reservations and closed 25 loans for about $3 million. The Opportunity Loan also offers additional financial assistance in the form of a 20-year, fixed-rate second mortgage option funded with OHFA reserves. That second mortgage is available at an amount up to five percent of the appraised value of the home and can cover expenses such as closing costs, escrow payments, pre-payment penalties or other financing charges associated with the existing mortgage. To help borrowers make informed decision regarding their mortgages in the future, OHFA requires a total of four hours of homebuyer education (two hours during the initial interview and two hours of one-on-one counseling) with an agency approved by the U.S. Department of Housing and Urban Development. Proof of education must be provided prior to closing. Further, OHFA requires post-purchase counseling in the event that mortgage payment is 30 or more days late. Opportunity Loan participants must have a household income that does not exceed 125 percent of the area median income - a condition that ensures the program serves low and moderate-income Ohioans. Income limits vary by county, ranging from about $73,000 to $84,000, and no minimum credit score is required. Also, unlike OHFA's First Time Homebuyer Program, the Opportunity Loan program does not impose limits on loan amounts. In addition to meeting income requirements, qualified borrowers also must live in the residences they are refinancing. Eligible owner-occupied properties include single-family detached housing, condominiums or townhouses. Currently, two- to four-unit properties and manufactured homes are ineligible. Initially, the Opportunity Loan program is being made possible through the issuance of taxable bonds. It has been estimated that OHFA's first taxable bond issue will enable the agency to serve about 1,000 families, presuming that the aver loan amount is $100,000 per home. If demand is decent, the agency will likely issue additional bonds or other forms of financing. | 
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