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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