The Homeownership Opportunity Program (HOP) loan is the perfect blend of Federal Government money granted to those in the State Government who know how it needs to be used and driven by the private marketplace so the money goes where it is needed. The money is intended to assist borrowers to buy their own home.
The Homeownership Opportunity Program Loan is priced weekly above first mortgage rates and it must be taken out in 120 days to avoid penalty. A ½ percent fee will be charged to extend the loan from 120 to 180 days but there will be no extension beyond 180 days. HOP Fees are ½ percent origination fee to the HOP lender, inspection and Rehab Advisor fees passed through to the borrower, appraisal fee, title Insurance and other fees required by lender.
The following are the list of process for the Homeownership Opportunity Program Loan:
1. Borrower. The borrowers should find and sign a purchase agreement, contingent on the HOP loan funding. They should apply to participating first mortgage lender for a maximum mortgage pre-qualification.
2. Rehab Advisor. The reb advisor will visit the property and writes a scope of work.
3. Borrower and Advisor. They will facilitate the bids and if the project is within the buyer's capacity to pay, an after rehab appraisal is ordered by the first mortgage lender.
4. First mortgage lender. They will qualify buyers for the actual mortgage amount and if the interest rate is not locked, the commitment must be based on 100bps above current market
5. HOP Lender. With the first mortgage commitment, they close the loan pass and the seller is paid and construction funds are escrowed at the title company assigns the mortgage to the lender. They will ship the documents according to the HOP Transmittal Form.
7. Contractor. They will requests payout from the HOP lender.
8. Rehab Advisor. They will verify the work has been completed and signed of and approves payout.
9. HOP lender. They will notify the first mortgage lender and servicer of completion and provides a payoff figure.
10. First mortgage lender. They will close the permanent loan and pays off the HOP loan.