First Home Clubsm News and Updates

 

Enrollment Period Deadline: July 21, 2008

Members may enroll households for the Second Enrollment Period in 2008. In this enrollment period members may submit an unlimited number of qualified households. The Enrollment Period Report (xls) and original Member Certification (pdf) must be received no later than Monday, July 21, 2008, by 5pm. The Enrollment Period Report may be submitted via email to Daniel Randall or CD. The 2008 Third Enrollment Period will close on November 17, 2008.

 

 

First Home Clubsm Grant is Increased to Maximum of $7,500

It is my pleasure to inform you that the Federal Home Loan Bank of New York ("HLB") has initiated the following three significant enhancements to the First Home Clubsm ("FHC"):

  1. The maximum FHC grant shall increase from $5,000 to $7,500;
  2. The savings match ratio will increase from 3:1 to 4:1; and
  3. Approved not-for-profit housing agencies will have an opportunity to receive up to $500 in reimbursement to help defray costs related to providing homebuyer education and credit counseling to each household who purchases a home and qualifies for FHC assistance.

 

Effective immediately, all households who are currently enrolled in the FHC and continue to meet the requirements of this program are entitled to take advantage of the foregoing enhancements.

 

If you have any questions, do not hesitate to contact Daniel Randall at (212) 441-6876 or Affordable Housing Officer Peter D. King at (212) 441-6858.

 

 

Revision to First Home Clubsm Procedures

 

January 14, 2008: First Home Clubsm Enhancement Specifications

The Federal Home Loan Bank of New York ("HLB") has enhanced its First Home Club ("FHC") and initiated a new homeownership set-aside program under the Affordable Housing Program ("AHP") as follows:

  1. The HLB has increased the maximum FHC award per household from $5,000 to $7,500; (see 4c below).
  2. The HLB will increase the match on funds that enrolled households have systematically saved in a dedicated account from a 3:1 to a 4:1 ratio. In other words, for every $1 saved and deposited into the dedicated account with the FHC participating stockholder institution ("Member") under a systematic schedule of savings, the HLB will match up to $4 in set-aside funds, not to exceed $7,500 in matching funds per household.
  3. Therefore, qualified households who were enrolled in the FHC prior to 2008 will have an opportunity to retroactively qualify for a 4:1 savings match up to $7,500, subject to their ability to satisfy all revised programmatic guidelines and the formal consent of the HLB and the participating Member.
  4. The HLB has also approved an AHP homeownership set-aside subsidy in order to reimburse approved not-for-profit housing advocacy agencies for the cost of providing formal home ownership counseling, including credit counseling, to qualified households who are enrolled in the FHC, only in cases where:
    • a) Such costs were incurred in connection with a qualified household who has attended and successfully completed, within 24 months of the applicable enrollment period report, a formal counseling program that the HLB has approved and ultimately purchases an AHP-assisted unit;
    • b) The cost of such counseling has not been covered by another funding source, including the Member; and
    • c) The comprehensive amount of the AHP subsidy funded to each household, including any homebuyer counseling costs (i.e., $7,500 + $500 = $8,000), must be reflected in the FHC retention agreements and enumerated on the HUD-1 settlement statement.
  5. The HLB will provide said subsidy to the participating Member who, in turn, shall directly reimburse the approved not-for-profit agency up to $500 in order to defray costs related to providing home ownership counseling and credit counseling to each qualified household at time of closing, subject to receipt of the following:
    • a) A copy of a syllabus that verifies the timeframe and the curriculum that the course and/or counseling sessions covered;
    • b) Appropriate supporting documentation that confirms the cost of counseling the household; and
    • c) A copy of a certificate or other appropriate evidence that the household has satisfactorily completed an approved home ownership counseling and/or credit counseling.

 

January 14, 2008: Accessing First Home Clubsm Enhancements

 

A. Procedures for Accessing Counseling Cost Defrayment Subsidy

The HLB will permit a Member who is authorized to participate in the FHC to access counseling cost defrayment subsidies, subject to our receipt of the following:

  1. A letter from an authorized representative of the not-for-profit housing counseling agency that formally requests approval to participate in this program;
  2. A letter from an authorized representative of the Member that formally endorses the not-for-profit housing counseling agency’s request to participate in this program;
  3. A copy of a syllabus that fulfills the HLB’s Homeownership Counseling Guidelines. (This is a one-time requirement).
  4. Appropriate supporting documentation that confirms the cost of counseling the household. Several methodologies for calculating such are available on the web, including: www.joe.org and www.nw.org
  5. In accordance with the HLB’s customary practices governing FHC funding requisitions, a Funding Certification must include a copy of a certificate or other appropriate evidence that the household has satisfactorily completed an approved home ownership counseling and/or credit counseling.

 

At time of closing, the HUD-1 Settlement Statement must include the following:

  • "200 Section, Amounts Paid By or In Behalf of Borrower" must memorialize the actual FHC grant credited to the household (i.e., $7,500.00) and the total counseling defrayment subsidy (i.e., $500) as one sum.
  • "1300 Section, Additional Settlement Charges" must memorialize the total counseling defrayment charges paid to the not-for-profit counseling agency under the FHC (i.e., $500).

 

B. Advisement to Not-For-Profit Housing Counseling Agencies

Compensation provided to private, not-for-profit corporations who provide credit counseling, home ownership counseling, or other financial services to participant households in the FHC may potentially risk their non-profit designation. Members are advised against providing such agencies with any legal counsel and should direct them to check with their own legal advisors in order to ensure that the products they are offering do not separately require exemption from the registration requirements subject to compliance with the applicable provisions of Article 12-D of the New York State Banking law and Part 39 of the General Regulations of the Banking Board.

 

Non-Profit Housing Agencies doing business in other areas of the HLB's District (i.e., New York, New Jersey, Puerto Rico, and the Virgin Islands) should also seek the advice of their own legal counselors as a prudent business practice.

 

November 2007: Revisions to the submittal of Funding Certification
Agreement, FHC-105

  • Members no longer need to delay the submission of Funding Certifications until the FHC household executes the member's first mortgage commitment. Indeed, members are strongly encouraged to submit complete Funding Certifications to us as soon as is possible. We will review the Funding Certification for completeness and for content. Upon the receipt of any information requested of the member, the Funding Certification will be reviewed and, if approved, closing documents will be forwarded to the member by e-mail. Members will be free to schedule closing and enter the appropriate closing dates in the FHC subordinate note and mortgage. FHLBNY should be notified of the closing date as soon as it is scheduled and no less than 3 days before closing and funds will be credited to the member's DDA account. If the member's first mortgage commitment is amended, a copy of the amended commitment must be provided to us with the post-closing documents.
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September 2007: Elimination of FHC Commitment Agreement, FHC-108

  • FHLBNY members using the current version of the Funding Certification Agreement, FHC-105 (dated 4/2007), are no longer required to execute Commitment Agreement, FHC-108, for closings dated after September 4, 2007. FHLBNY will no longer include Commitment Agreement in closing document packages sent in anticipation of an FHC household closing. This initiative is undertaken to reduce administrative processes and effort while maintaining prudent administrative controls.
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January 2007 Revisions

  • Please be advised that the Federal Housing Finance Board (“Finance Board”) recently adopted an amendment to the regulation that governs the Federal Home Loan Bank of New York’s (“FHLBNY”) administration of the AHP found at 12 CFR part 951 (the “AHP Regulation”). The Finance Board approved the proposed amendment to the AHP Regulation and published the final rule (“Final Rule”) in the Federal Register on October 6, 2006. The Final Rule became effective on January 1, 2007.
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  • The FHLBNY operates the First Home Club as a non-competitive, homeownership set-aside program under the AHP. As such, our administration of the First Home Club is subject to the regulatory revisions that the Finance Board set forth in its Final Rule. Consequently, please be advised that the FHLBNY has implemented the following changes to the First Home Club:
    • In accordance with § 951.6(c)(9) of the AHP Regulation, a First Home Club participating member bank may provide cash back to a household at closing on the mortgage loan in an amount not exceeding $250, in order to partially reimburse the household for any pre-closing expenses directly related to the acquisition of their dwelling, such as mortgage application fees, credit report fees, appraisal fees, or property inspection fees. Conversely, the member must use any First Home Club subsidy that exceeds $250 and is beyond what is needed at time of closing to cover closing costs and the approved mortgage amount as a credit in order to reduce the outstanding principal of the first mortgage or as a credit toward the household’s monthly payments on the mortgage loan. The FHLBNY shall evaluate closing records in order to effectively monitor this new requirement.
    • Starting in 2007, the FHLBNY has reduced the initial enrollment period for FHC households from 30 months to 24 months. The FHLBNY, in its sole discretion, may approve extensions up to one-year for those households who demonstrate reasonable progress in attaining homeownership. Prior to 2007, member banks could enroll eligible households in the First Home Club for a period of time not to exceed 30 months, with the opportunity to request multiple extensions for qualified households. The FHLBNY will continue to enforce the time periods of existing enrollments and subsequent extensions that were previously approved for all households who were enrolled in the First Home Club prior to 2007. However, as these existing time periods expire on a household-by-household basis, the FHLBNY will restrict all households to a three-year maximum enrollment period in the First Home Club. Please advise your clients accordingly.
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  • In addition to the codified regulatory requirements, the Finance Board is also requiring the FHLBNY to begin collecting certain household data. The physical address of the household will now include street, city, state, ZIP, county, MSA and census tract. The Enrollment Period Report has been revised to reflect these changes.
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  • Substantial changes have been made to the following FHC forms and guidelines:

  • FHC-101 Enrollment Period Report & FHC-102 Enrollment Period Report Instructions
  • FHC-103 Member Certification
  • FHC-104 Enrollment Terms and Conditions
  • FHC-110 Program Guidelines
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  • If you have any questions or concerns, please contact Peter King, Affordable Housing Officer at (212) 441-6858.
 
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