5/20/1997 - Laserfiche WebLink

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LOCK 1 UAE. • Habitat for Humanity Cutrently, the county is working with Habitat for Humanity to provide decent housing for very low income households. On occasions, Habitat for Humanity applicants have credit problems which, in turn, do not satisfy the above referenced credit requirements established by the county for SHIP applicants. In most cases, however, both county staff and Habitat for Humanity staff believe that less stringent requirements should apply to Habitat for Humanity assisted SHIP applicants. Thefollowing$re reasons to apply different, less stringent requirements to Habitat for Humanity applicants. Credit verification is a county requirement, not a state requirement. Therefore, the county has the ability to modify it as appropriate. Besides assisting very low income households with the purchase of housing, Habitat for Humanity assists those households with lifestyle changes. In many instances, these households have credit problems and cannot satisfy conventional lending/credit requirements. The major reason for requiring satisfactory credit is to ensure that mortgage payments are made on time, thereby reducing the chance of foreclosure and loss of loaned funds. With SHIP loans, this is of less concern smce.no monthly payments are required; SHIP loans are `due on sale'. In addition, Habitat for Humanity's loans are usually in the amount of $30,000 to $35,000, while the county's loans are in the amount of $15,000. Habitat for Humanity houses, however, are generally appraised between $50,000 to $60,000. Therefore, there is approximately $5,000 to $15,000 of equity built in the homes; so if there is a foreclosure, the county's loan is secure. Habitat for Humanity works with applicants prior to closing and at least two years after closing to ensure that credit problems are fixed, mortgage payments are paid on time, and the applicant is assisted in overcoming any unexpected problems that they may encounter. The applicant must have clean credit or establish a payment schedule to pay down any chargeoffs, judgments, and other debts. Habitat for Humanity's nationwide foreclosure rate is 0.8%. A Florida appellate court has held that lenders (Board of County Commissioners through SHIP) who loan purchase money in exchange for a, mortgage on property to be acquired have a priority in the proceeds of sale, superior even to pre-existing judgments of record. Given the reasons stated above, staff feels that the county could establish the following special credit requirements for Habitat for Humanity assisted SHIP applicants and still ensure that county loans are secure. Proposed Special Credit requirements for Habitat for Humanity Assisted SHIP applicants: MAY 20, 1997 Habitat for Humanity applicants will be deemed to have satisfactory credit and the county loan will be deemed to be secure if applicants meet the normal established SHIP program credit requirements or if the appraisal of the home indicates that at least $5,000 in equity, above Habitat for Humanity's first mortgage and the county's subordinate mortgage, exists and if: * The applicant has no chargeoffs; or if undisputed chargeoffs exist, a payment plan has been established for paying down any existing chargeoffs and at least 12 consecutive payments have been made by the time of closing. * There are no active judgments against the applicant; or if undisputed active judgments exist, a payment plan has been established for paying down the judgments and at least 12 consecutive payments have been made by the time of closing. * There are no motor vehicle repossessions with a remaining balance payable by the applicant; or if undisputed repossessions with a remaining balance exist a payment plan has been established to pay down the remaining balance of any existing repossessions and at least 12 consecutive payments have been made by the time of closing. * For any chargeoff, judgment, or repossession less than one year old or any judgment lien for medical expenses, a payment plan has been established for paying down the chargeof% judgment, repossession, or medical judgment and the applicant is current with the payment schedule. T M M