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thanks everyone for joining us today and for your patience as we get our technology all sorted out my name is kaya peterson i am the executive director of neighborworks montana i've been with the organization for about eight years and in this role since january and i am based in missoula so today we want to give you a good overview of our loan products and a little bit of an overview of our organization and i'm joined by lori yerko who will introduce herself in a little bit um katie biggs and michelle rogers from our team are also on the call so names you may know or find familiar as you start working with us more all right next slide katie so neighbor works montana if you're not familiar with us we are a statewide nonprofit organization we um that in orange is our mission statement together we strengthen our communities by providing education and financing that gives every montanan the opportunity to live in a safe and stable home where they can thrive so i think we're most known for working with low and moderate income people across the state and that is our core focus we are what is called a community development financial institution a cdfi so our focus is really on combining good financial products that um are outside of what the traditional banking and lending sector is able to provide with education and counseling and really giving our clients the tools and the information they need to make good choices and have sustainable housing options so you see here are three program areas housing counseling and education lending and resident owned communities and just to give you a really high level description of each of those housing counseling and education is a really critical part of our work we have 15 partner organizations across the state who provide a variety of housing counseling and education we're most well known for our homeownership services but we do have a lot of partners who are providing rental education and counseling financial skills building and a whole range of counseling and education options in our lending world you'll hear a lot about our single-family lending today we also do multi-family lending primarily working with affordable housing developers we are often the first money in and provide really critical gap early money to help complicated affordable housing projects get done across the state in march of this year we hit 30 million dollars in assets in our loan fund it's a pretty um exciting benchmark and milestone for us and we're just really pleased to be able to provide those resources in the state and then lastly our resident owned community program this is work to preserve existing affordable housing by working with residents of manufactured home parks trailer parks to form cooperatives and buy their land and we can talk much more about that if folks are interested but at least that gives you a little sense of some of the the ways that we try to advance housing affordability across the state so with that i think we're going to dive right into the loan products and i think is this my slide katie yes so i i already touched on this a little bit um within our lending we have two primary areas home ownership lending and development lending and again we're going to talk a lot about these home ownership loan products today primarily we do deferred down payment lending and amortizing down payment lending through three different programs and those are targeted at folks from up to 120 125 of area median income and really are designed to just help those folks who are a little bit outside of being able to become homeowners on their own by saving up their own down payment and working with traditional products so lori is going to talk a lot more about those and then if we go back to the development lending again as i said you know we really work with affordable housing developers across the state short-term financing is our main focus we do have some long-term financing options and if any of you are in that sector or work with affordable housing developers for-profit or non-profit we always are available to talk with them about project financing and how our program might support them so there you go that's our that's the bulk of what we do in our lending world so now i think we're ready to dive in in more detail to the home ownership side of our work laurie okay i'm up yourself and then dive right in hi everybody lori yerko and i'm the loan specialist here at neighborworks montana i along with kay uh in case our loan processor kind of handle the loan um stuff uh prior to close and then we have a loan servicer linda grossman who handles everything post closed so the three of us sort of uh make up the the lending department i think before i dig into this first product i want to just go over some basic guidelines for all of our products so borrowers must occupy the property as their principal residents for the life of the loan property must be single-family dwelling town homes condos manufactured homes on permanent foundation are all acceptable properties and of course i think this goes without saying that all properties must be located in the state of montana um for program qualification neighborworks will use household income so we'll look for program qualification at the entire household's income each of our programs has minimum and maximum loan amounts we like to team up with a first mortgage fixed rate 30 year we will look at 15 year but we prefer the 30 year borrowers will always be required to have some skin in the game we're always going to ask them to have a minimum borrower contribution and that ranges anywhere from a thousand dollars up to one percent of the purchase price to use any of our programs the borrowers must take home buyer education by an approved neighbor works educator and i know a lot of people always call this the first time home buyers class but really i like to just call it home buyer education because it's good even if you have owned a home before and it will be required to to use any of our programs so for neighborworks first time home buyer is defined as not owning a home in the last three years a disabled member in the family so if there's a disabled family member we neighborworks term that as a first-time homebuyer and also if it's a single parent with this with dependents neighborworks will also turn that as a first-time home buyer all of our programs have liquid asset limitations and total asset limitations our amortized loan products require an automatic withdrawal an ach payment from a checking or savings account we will accept third lean position um so you know we will always look for that and on occasion we might take fourth so uh please don't feel like you can't call and ask if we might look at a lower position than second what else can i tell you um we don't accept any non-occupant co-borrowers and for the home program so those will be the programs that are zero percent deferred you have to be a true first-time homebuyer that is a requirement of those federal funds and i think that's it for maybe just the basic guidelines i know things will always pop up so please ask questions or you can call us anytime so let's dig into this first product we have two amortized loan products and we have one zero percent deferred program so we're going to start with one of our amortized programs this is a statewide low to moderate income product you can see that our loan amount minimum is 1500 and the max is 10 000. the term and the interest rate of the neighborworks loan will be dependent on where the income for the household lies so the term if the adjusted median income for the household is below 80 percent of ami adjusted median income the term will be 30 years if the adjusted median income is over 80 percent then we're going to have a 15-year term and the interest is excuse me the interest rate is figured the same way we have sort of a layer of um different percentages of ami and those will give you the rates so for instance you know we've got 51 to 65 it's going to be this rate 66 to 80 it's going to be this rate so you can certainly find those on the [Music] program guidelines that i think you have in front of you if not they can always be found on our website so these rates range anywhere from one and a half percent up to 7.25 percent there is a little bit different in rates we have one rate that can be used for borrowers who are using a participant lender and that would be a neighbor works participant lender that's a lender who participates in our bond pool and they get a little bit favorable rate for their borrower and then there's another set of interest rates that can be used for lenders who aren't uh contributing to our bond pool so this is open to anyone we always say you can use neighborworks funds if you're approved by montana housing montana board of housing and or if you're approved by rural development so either one of those and you also have to have a brick and mortar office in the state of montana so any of those you're more than welcome to use our programs again we're going to look at a fixed rate and those rates again will be itemized on the guideline for this program again the payments are going to be ach so um that is a requirement that all the neighborworks monthly payments be made automatically via a checking or savings account and of course we have home buyer education we just think this is so important and um it comes along with our programs if you want to use the neighborworks programs your borrowers will have to take the homebuyer education class let's see i'm looking here at my handy-dandy sheet i guess i want to say that we have ratios assigned to all of these programs for instance this one i think our guidelines say 40 29 41. so i want you to know that the black and white ratios in our guidelines are really just a guideline please know if we have some good compensating factors we can certainly go above these ratios um actually the housing ratio we can go up to 32 and even higher um if need be but that back-end ratio if we've got some good compensating factors we can certainly exceed that guideline of 41. just reach out to us and uh you know tell us what what you think you've got and we'll say hey i think we can look at that or that's maybe a little too high for us but just know when you read these guidelines on each of the programs you know we do have some flexibility so just keep that in mind and this particular loan product can be teamed with any first mortgage it can be teamed with an fha a va rd or conventional just know on the neighborworks montana side of things if this is an fha first mortgage this particular loan product cannot be used for the three and a half percent fha down payment but we can do closing costs on an fha or i've seen with an fha first maybe the borrower has a second mortgage a home zero percent deferred like with the missoula hrdc and then we can come in with a third position and everything's fine because they're getting that three and a half down from government funds so everything is good i think that's it katie on that one i think i'm sure we'll have some questions our second amortized product is the 20 plus community second to participate in this program you must be a participating lender and that's a participating lender in the neighborworks montana loan pool and we will show you that slide when we get done with this who um who those participating lenders are this is a fabulous product it was it's our newest developed product and it was developed to work in conjunction with a conventional first mortgage this uh this way neighborworks is coming in with 20 percent on a conventional product and we don't have any mi so that's fabulous for the borrower we are noticing you know since we've had this that sometimes this isn't always the best route to go but um it is a wonderful program there's no maximum loan amount um we can come in at 20 percent and really in all actuality we can come in at 25 because the cltv on the neighbor works side of things can go to 105 percent so if your secondary market will accept 105 cltv combined loan to value we can come in with actually 25 percent so it's going to be a 30-year fixed rate the neighbor works interest rate is going to be two percent above the first mortgage interest rate again we're going to have uh automatic payments for the neighborworks monthly payment again we're going to have homebuyer ad requirement the liquid asset limitation on this particular product is 7 500. so post close we hope that the borrower won't have any more than 7 500 in liquid assets if they do it doesn't mean that they don't qualify for the loan program we're just going to ask for anything over that 7 500 liquid asset balance to be put in the deal and let's see this particular loan product can go to 120 of adjusted median income ami so again that's going to be household income up to 120 and i want to tell you that this teams up with any conventional first mortgage well i should say any conventional first mortgage that you know will accept our community second and then also montana housing montana board of housing i'll never get used to calling them montana housing so they'll always be montana board of housing to me they have a special loan product a special conventional loan product that can team up with this 20 plus community second so it's the i believe the only conventional product they have and it teams up with this neighborworks 20 plus so that's a um a nice addition also i think that's it katie on that one and here are the participant lenders so these would be the participant lenders in both of our amortized programs so for the 20-plus community second and then also for that first program we talked about the low-to-moderate income program these would be the lenders that get a little bit better interest rate for their borrower would be these um lending institutions here if you want to know how to become a participant lender you'll want to talk to kaya our executive director and she will just give you the business okay so we're going to stop with the amortized programs and move on to our third and last loan program which is a zero percent deferred loan program and these are federal funds please know the other two programs we talked about use neighborworks funds we have a lot more flexibility because we're using our own funds with those two programs this program we're using federal funds we don't have as much flexibility and with federal funds comes a few more little nuances and re requirements i call them hoops but it's such a great program i mean where else can a borrower get a zero percent deferred second mortgage please know it is a second mortgage it's not a grant so it's never forgivable but it won't be due and payable until you know all those good things they sell maybe they refi their first you know all of those things so this program has a minimum neighbor works loan amount of 2500 and a maximum of 25 thousand we can go up to 40 000 if there's a disabled member in the household if it's in a high cost area or if it's a mobile home on a permanent foundation the term is 15 years and then it's automatically extended for another 15 years if the borrower is still occupying the property the interest rate is zero there aren't any payments and of course we need to take that uh homebuyer education class and it's really important important with all of our programs remember this is a zero percent deferred so this needs to be a true first-time home buyer so very important you know that we're coupling this with a home buyer education class the little extras on this program one of the biggies is and this is odd but the housing ratio has to be at least 29 percent so we're not going to accept anything that is a lower housing ratio than 29 percent and the reason is um the feds say we're over subsidizing the borrower if we're looking at a housing ratio below 29 so at least 29 percent and again we can certainly go over that we have some flexibility with the housing ratio on this program but we do not have flexibility on the back end ratio the back end ratio cannot exceed 42 percent so and that's just it it cannot exceed 42. also for this program um the government's going to require a housing quality standard inspection that's an hqs inspection ne ghborworks will order that we have to have a passing hqs inspection before we can close we're also required to order an environmental inspection and neighborworks will place that order for that review we also have to have a passing environmental review prior to closing and final approval for this program won't come until a bit later neighbor works will issue a conditional approval letter but one of the conditions will be final approval from the funder and the funder is montana department of commerce so we won't have true final approval until we get that approval from the funder and that does come you know a little bit later in the game neighbor works will have already issued their conditional approval letter and then once we receive everything we need to have a passing hqs inspection a passing environmental review and some other documents once we have all those things then we can send to the funder montana department of commerce for approval once we have that approval from uh mdoc we can set a closing so just know this particular loan program takes a little more time uh we're using federal funds um so you just want to be really upfront i guess with seller and say you know we're gonna use try to use this zero percent deferred program and it does take a little bit more processing time but it's so worth it to the borrower it's a great program again this program can team up really with any first mortgage product fha va rd conventional this program requires a match and the best way i can explain that to you is if your first mortgage is mboh so if it's montana housing the match is automatically taken care of so we don't need to worry about it if your first mortgage is not going to be mboh montana housing then we have to have some seller paids of five percent of the neighbor works loan amount so we can have five percent seller paids or we can have like a five percent gift given directly to the title company the gift cannot come to the borrower it has to go to the title company so i mean we can certainly talk about those instances but if you don't go mboh that's fine but we just have to find a five percent match somewhere and let's see i think that's it the oh the liquid asset limitation for this program is five thousand dollars total ass set limitation 75 000 um we're always going to want for all of our programs if you can remember this but if you don't we will reach out to you but with the assets we're always going to want to know their autos and their household good estimated value because we're going to put that into our total asset calculation okay here's our adjusted median income sheet i just think it's kind of important to go over this because sometimes it's like you're looking at it going how in the heck do i read this so this can be found on our website or you know you can certainly print it off it does change every year around july this was effective july 1. um but sometime around that time every year we will get we will change the figures so let's look here let's say we're looking at a property in custer county so we're going to go down here to custer and it's going to be a family of three so we're going to move over this first column is for a family of one then we've got a family of two and a family of three so the adjusted median income figure in custer county for a family of three is sixty eight thousand eight hundred seventy five so to find out the adjusted median income you can take the household income and divided by this top figure this is the adjusted median income figure the other figures in that column i like to call just as bullet points the one below that is the 55 100 that's what 80 percent of that adjusted median figure is the next one down is what 115 of that adjusted median income figure is etcetera so those are kind of just like eyeball points so you can see oh i'm going to be under 80 and i'm good to go um so anyway we've got a bunch on the very top of this we've got a bunch of counties lumped together they're all the same adjusted median income figures so whether you're doing park county phillips county you know any of those on the top they're all going to be the same figures that are right below them okay and our reservation checklist this is going to be the list of items that we would like you to include in your loan request package to neighborworks this can be found on our website um and you might be looking at it right now i'm not sure it might be in front of you we can accept reservation packages of course through the mail or overnighted and actually we can receive them via email if you have a secure email way to get it to us we will certainly accept that and we also have the ability using share file to have you load up your loan request into our share file and we can get it that way i know a lot of lenders these days you know are all secure when they're emailing so they usually just email directly to us using a secure email but we can do it a variety of ways so we want this particular sheet to come on top of your loan request package and it's pretty self-explanatory pretty much we need everything on this list there are a couple of exceptions if you do not have the appraisal yet you can note that that's going to be coming and if the home buyer education hasn't been taken yet you can say forthcoming but we hope that it has but that if it hasn't that can come later also but really everything else we do need right up front so we can start reviewing the package the more complete the package the smoother the initial review process is going to go reminder that we do want autumn autos a year make model year model all that and estimated value and we do want an estimated total value of household personal property we also at the time of application want a voe so we're going to actually need a written voe and we're also going to need two months current consecutive pay stubs so if that's something you can get us right up front it's great because then we don't have to reach out to you and say hey i need a couple more pay stubs we really only need tax returns if either of the borrowers are self-employed so that's really the only time we need tax returns we don't necessarily need them on wage employees but hey if you want to send it to us great but you don't have to i think that's about it right up front we do like to have a copy of that title commitment even if neighbor works is not added as a proposed insured yet we still would like to see a copy of the title commitment up front because that way we can just see how things look and we don't have to wait till later in the game to look at that title commitment and i think that's it please know you're never going to know everything about the programs you know um even we struggle and have to look at the guidelines every now and then so just know that we're out here please communicate with us ask us questions um you know we want to be here for you and we want to help you close loans so looking forward to working with a lot of you i see a lot of familiar names on board but i see some new ones too so it's very exciting thanks for tuning in and we'll answer questions later thanks laurie great so as you're hearing we there are a lot of different components to these programs but really we try to make it accessible to you and your client lori is a wealth of knowledge as you've seen and like she said we just really encourage you to give her a call give our team a call and chat with us about what what your clients needs are and how we might be able to help you know as i said at the beginning we're really here to help people achieve that homeownership dream that otherwise might be out of reach so it can take a little bit more time particularly on those deferred loans but it really like laurie said is really powerful for those borrowers who need it we just want to highlight again our partner network so lori mentioned a couple of times homebuyer education we see that as a really critical part of the home buying process particularly for the borrowers who we work with and what we've seen is that having good home buyer education upfront helps clients be successful long term we see lower rates of delinquency and default in clients who have taken these programs so these are partners across the state you may recognize some of these organizations for places where we don't have an in-person class available we do have online classes available and we pair that with one-on-one counseling so you can find all that information on our website and clearly during covid we're working primarily remotely and making sure that these services are still available to people during this time so we are happy to answer questions love to hear what's on your minds and how we might be able to help you and your clients you know this is a particularly difficult and wild time for a lot of people in a lot of markets in our state and i think probably many of you like us are trying to think about ways that we can really meet the needs of of clients and buyers right now so the products that lori went through with you are our core products and we're always looking at ways to improve those and find other opportunities to help clients as well so always helpful to hear from you what you're seeing in your corner of the state and what the needs and opportunities might be in addition to questions so we can open it up i think katie can people just use themselves yep you should just be able to unmute yourself and just make sure you let us know who you are and where you're at um we didn't have any questions that needed to be addressed from the chat but feel free to go ahead and ask we've got some time excellent i think i'd say also i know some familiar faces here on the call if you've used any of our products before and um want to want to chime in with what your experience was or feedback be great to hear some of your voices as well today so people are thinking lori i was gonna ask you know we you work with all these different products all these different clients maybe give a little bit of a feel for um you know who's your typical 20-plus client um who's your typical low mod client i know typical is like a word that basically doesn't get used in our organization or even in our sector but maybe give people a little bit of a a sense of who are these borrowers who we're working with sure yeah you know typical is you know sort of in quotes um because from our programs you know we can go anywhere from you know actually zero percent ami adjusted median income all the way up to 125 percent ami that low to moderate amortized program can go up to 125 percent typically the client that uses the 20 plus community second program typically has higher credit credit mid credit scores or just credits higher credit scores i don't know i i don't like to say this but there may be a little bit more astute it just seems like they they're very astute in terms of the home buying process and um that's just what i kind of see with 20 pluses but not always you know with the state home deferred zero percent of course we're going to see first-time home buyers that don't have a lot of money for down payment you know maybe we're seeing some lower credit scores and let me interject because i think that's something i forgot neighborworks uses the guideline of a mid-credit score of 640. so anything below 640 we have to look at a little closer we'll maybe ask for a couple more things but i can honestly tell you in all my years at neighborworks which is 203 years i have never seen neighborworks deny a loan because of a credit score so just know that that's probably not going to happen but we're going to ask for a couple more things like we might ask for a verification of rent we're probably going to ask for a credit explanation letter from the borrower and we're probably going to ask for a credit letter or some sort of letter from the loan officer as to why neighbor works management should consider a credit waiver so anyway where am i going with that yes the state home borrowers or applicants usually not always but usually have a lower credit score than someone we might look at for the 20 plus program and the low to moderate program you know really that runs the gamut uh we see all sorts of um borrowers in that so it's hard for me to say a typical borrower but yeah it is hard right because we really do serve a wide range of clients i was thinking about with the 20 plus program you know it was like you said it was designed really to serve people in more urban markets to help them get conventional financing and not have to pay for mortgage insurance and i think with that program we saw a lot of um young couples and young families and also single professionals seem to be a pretty common group of folks who you know they need a little bit more buying power in order to to get into the market as a as a single person on a single income but they they have good income and they have good credit um and just need a like lori said a way to have a savvy first mortgage loan that they're they're building more equity than they otherwise would be able to um and then i think like you said with the low mod it's really any client who just has a small gap in being able to get to the closing table so that can be a lot of a lot of people depending on their situation particularly where we see rental rates being so high and difficult for people to save up even small dollar amounts to cover closing and down payment so it just gives people a little bit of a sense of who who we're serving and when you see a client walk in your door and they're really trying to figure out how to how to piece this all together who might be a good candidate for neighborworks montana loan any questions that we can answer for folks at this point i want to know if carol holman is listening i see her name up here i see her name i'm going to cut i'm going to i'm going to point her out she's done a lot of neighborhoods i'm going to get and she's like the layering queen i mean she she's layering that with a first mortgage and maybe a second zero percent deferred in her area which is missoula and then neighbor works is coming in with a third and sometimes even a fourth if she's got some other funds in there so carol holman at stockman bank in hamilton she she really knows how to do the cocktail alone the layering effect yeah sometimes that's what it takes for these borrowers isn't it sometimes yeah yeah okay katie anything else you want to raise no so um we have the contact info for these um lovely loan um lending team for our lending team and so please feel free to do take a look at that snapshot it we are sending out this presentation with our lender e news which if you signed up for this you receive our lender e-news but please feel free to forward that to your team so other people can know as well um and this will be recorded or it is recorded so it can live on our website awesome thank you so we can't do this work without you our lending partners our realtor partners our private sector partners across the state and we so appreciate that all the work you're doing every day to help people get into home ownership so hope to do more work with you give us a call and have a great rest of your day bye