REAL ESTATE FINANCE AYPO
QUESTIONS AND COMPLETE
ANSWERS
Making Home Affordable® Program ANSW✅✅The Making Home Affordable® Program (MHA),
which is a subset of the larger Troubled Asset Relief Program (TARP), was a federal program run by
the U.S. Department of the Treasury which was intended to help homeowners avoid foreclosure.
This was accomplished by providing a variety of modification and refinancing solutions, temporary
forbearances for unemployed homeowners, or options for transitioning out of homeownership
through short sales or deeds in lieu of foreclosure.
Principal Reduction Alternative ANSW✅✅The Principal Reduction Alternative (PRA) is designed to
help homeowners with homes that have significantly less value than the homeowner owes on the
home (loan-to-value ratio exceeding 115%). This program attempts to convince lenders to reduce
the amount owed by a homeowner in this situation.
Second Lien Modification Program ANSW✅✅The Second Lien Modification Program (2MP) is
intended for homeowners who have had a first mortgage permanently modified under HAMP but
also have a second mortgage on the same property. Lenders and servicers who participate in this
program are given the tools to modify second mortgages on properties with HAMP modified first
mortgages.
Home Affordable Unemployment Program ANSW✅✅The Home Affordable Unemployment
Program (HAUP) gives an unemployed homeowner who is eligible a way to either reduce mortgage
payments or suspend them for 12 months or more.
Home Affordable Foreclosure Alternatives Program ANSW✅✅The Home Affordable Foreclosure
Alternatives Program (HAFA) is designed for homeowners who cannot afford their mortgage
payments and need to transition out of their mortgage and into more affordable housing. HAFA has
two primary options for this transition: short sale or deed in lieu of foreclosure (DIL).
A short sale is a situation where the mortgage lender allows the borrower to sell the property rapidly
and for an amount that does not pay back what is still owed. If a borrower chooses to do a deed in
lieu of foreclosure, the mortgage company allows the borrower to hand back the title, thereby
transferring the ownership back to the lender.
Home and Property Disaster Loans ANSW✅✅This is a timely subject following the devastation to
the state by Hurricane Harvey. Home and property disaster loans are low-interest, long-term loans
,offered by the U.S. Small Business Administration (SBA) to homeowners and renters who live in
declared disaster areas.
Texas Department of Housing and Community Affairs (TDHCA) ANSW✅✅The TDHCA mission is to
execute its assigned programs and to invest its resources strategically, to develop effective and
efficient affordable housing strategies that empower Texas communities, enabling the communities
to flourish.
TDHCA also serves as a financial and administrative resource assisting in the provision of essential
services and affordable housing opportunities to qualified Texas residents, based on their income
level.
Additionally, the Department acts as a resource for educational materials and technical assistance
for housing, housing-related, and community services matters.
Texas Department of Housing and Community Affairs (TDHCA)
Advisory Committee ANSW✅✅The Texas Interagency Council for the Homeless (TICH) was
established in 1989 to coordinate the State's homeless resources and services. The TICH involves
representatives from all state agencies that serve the homeless, including serving as an advisory
committee to TDHCA. The council receives no funding and has no full-time staff. Clerical and
advisory support, as well as hosting of TICH Web pages, is provided by TDHCA.
My First Texas Home ANSW✅✅My First Texas Home's "Taxable Mortgage Program" (TMP-79) is a
state-sponsored program through the TDHCA that offers more competitive fixed interest and annual
percentage rates to qualified first-time homebuyers while providing down payment and closing cost
assistance of up to 5 percent of the mortgage loan.
TSAHC Programs ANSW✅✅focus on the housing needs of low-income families and other
underserved populations lacking adequate housing access through conventional financial channels.
Their purpose is to address these housing access needs with initiatives such as first time home buyer
grants and other down payment assistance programs.
To fulfill this mission, TSAHC provides affordable housing programs to assist:
affordable housing developers to build better housing for working families,
homebuyers to achieve the American dream of homeownership, and
homeowners to sustain homeownership and improve their financial situation.
Homes for Texas Heroes and Home Sweet Texas Home Loan Programs ANSW✅✅The Homes for
Texas Heroes and Home Sweet Texas Home Loan Programs are available to a targeted group of
,qualified Texans, including teachers, fire fighters, police and correctional officers, veterans, and low
and moderate-income homebuyers.
Mortgage Credit Certificate ANSW✅✅TSAHC's Mortgage Credit Certificate (MCC) Program, too, is
available to teachers, fire fighters, peace officers, veterans, and low and moderate-income
homebuyers through a network of lenders across Texas. The MCC offers the following:
Dollar-for-dollar savings up to $2,000 per year as a special tax credit
Homebuyer savings of thousands of dollars over the life of the loan
Exclusive opportunity for first-time homebuyers or individuals who have not owned a home in the
last three years
Ability to use in conjunction with TSAHC's Down Payment Assistance program
Texas Veterans Land Board ANSW✅✅The Texas Veterans Land Board (VLB) was created by the
Texas Legislature in 1946. Today, it serves Texas veterans through loan, land sales, long-term care,
and cemetery services, among others.
The Texas Veterans Home Improvement Program (VHIP) ANSW✅✅was created in 1986 making
loans available for certain home repairs or improvements through the Housing and Urban
Development (HUD) Title I Program with a top end threshold of $17,500. Currently, the threshold is
up to $50,000.00 for a 20-year home improvement loan or up to $10,000.00 for a 10-year loan.
Agricultural Loans ANSW✅✅available to farmers to assist in the financing of farming activities.
The farm loans make up only about 1% of all bank loans. However, not surprisingly, the agricultural
loans are an important function for small rural banks, who use about 6% of their assets for this
purpose.
Agricultural Lending
Banks' Traditional Role ANSW✅✅The traditional role of bank credit in the agriculture industry
revolved around funding seasonalproduction and longer-term investments in land, buildings,
equipment, and breeding stock. Under this traditional model, repayment of the loan depends largely
on the successful production and marketing of the agricultural products, and secondarily on any
collateral.
Texas Farm Credit ANSW✅✅Texas Farm Credit, a customer-owned cooperative, provides flexible
financing for agricultural production, agribusiness, plus rural real estate and homes. Their purpose is
to support rural communities and agriculture with reliable, consistent credit and financial services,
as well as insurance to assist customers in managing their risks.
, Texas Farm Credit is part of the nationwide Farm Credit System, a network of cooperatives first
established in 1916
Farm Credit System (FCS) ANSW✅✅Farm Credit supports rural communities and agriculture with
reliable, consistent credit and financial services, providing loans, leases and financial services to
farmers, ranchers and rural businesses throughout the U.S. and Puerto Rico. While the FCS has a
nationwide presence, FCS lenders are local, such as those through the Texas Farm Credit System.
The Loan Estimate ANSW✅✅The Loan Estimate form (also called the good faith estimate),
created by the TILA-RESPA merger of disclosures and estimates employed pre-October 3, 2015, uses
clear language and design to help understand the key features, costs, and risks of a loan. The new
form is a part of the Consumer Finance Protection Bureau (CFPB) Know Before You Owe mortgage
disclosure rule that is making the mortgage process work better for you.
Requesting a Loan Estimate from lenders calls for only these six items from the applicant/borrower:
ANSW✅✅Name
Income
Social security number (to pull a credit report)
Property address
Property value estimate
Amount to borrow
The Closing Disclosure ANSW✅✅The Closing Disclosure is a five-page form providing final details
about a borrower's mortgage loan, including the loan terms, projected monthly payments, and how
much will be paid in fees and other (closing) costs. The Closing Disclosure is the second of the two
forms created by the TILA-RESPA Rule to replace the previous three-form process (discussed earlier).
The Closing Disclosure is required to be provided by the lender at least three business days before
close of the mortgage loan to allow time to compare final terms and costs to those given in the Loan
Estimate (see above). The three-day period also provides an opportunity to ask the lender for any
clarifications necessary prior to the actual closing.
The Closing Disclosure replaces the HUD-1 which was used prior to October 2015, however, the
HUD-1 may still be used in applications for reverse mortgages only. ANSW✅✅
QUESTIONS AND COMPLETE
ANSWERS
Making Home Affordable® Program ANSW✅✅The Making Home Affordable® Program (MHA),
which is a subset of the larger Troubled Asset Relief Program (TARP), was a federal program run by
the U.S. Department of the Treasury which was intended to help homeowners avoid foreclosure.
This was accomplished by providing a variety of modification and refinancing solutions, temporary
forbearances for unemployed homeowners, or options for transitioning out of homeownership
through short sales or deeds in lieu of foreclosure.
Principal Reduction Alternative ANSW✅✅The Principal Reduction Alternative (PRA) is designed to
help homeowners with homes that have significantly less value than the homeowner owes on the
home (loan-to-value ratio exceeding 115%). This program attempts to convince lenders to reduce
the amount owed by a homeowner in this situation.
Second Lien Modification Program ANSW✅✅The Second Lien Modification Program (2MP) is
intended for homeowners who have had a first mortgage permanently modified under HAMP but
also have a second mortgage on the same property. Lenders and servicers who participate in this
program are given the tools to modify second mortgages on properties with HAMP modified first
mortgages.
Home Affordable Unemployment Program ANSW✅✅The Home Affordable Unemployment
Program (HAUP) gives an unemployed homeowner who is eligible a way to either reduce mortgage
payments or suspend them for 12 months or more.
Home Affordable Foreclosure Alternatives Program ANSW✅✅The Home Affordable Foreclosure
Alternatives Program (HAFA) is designed for homeowners who cannot afford their mortgage
payments and need to transition out of their mortgage and into more affordable housing. HAFA has
two primary options for this transition: short sale or deed in lieu of foreclosure (DIL).
A short sale is a situation where the mortgage lender allows the borrower to sell the property rapidly
and for an amount that does not pay back what is still owed. If a borrower chooses to do a deed in
lieu of foreclosure, the mortgage company allows the borrower to hand back the title, thereby
transferring the ownership back to the lender.
Home and Property Disaster Loans ANSW✅✅This is a timely subject following the devastation to
the state by Hurricane Harvey. Home and property disaster loans are low-interest, long-term loans
,offered by the U.S. Small Business Administration (SBA) to homeowners and renters who live in
declared disaster areas.
Texas Department of Housing and Community Affairs (TDHCA) ANSW✅✅The TDHCA mission is to
execute its assigned programs and to invest its resources strategically, to develop effective and
efficient affordable housing strategies that empower Texas communities, enabling the communities
to flourish.
TDHCA also serves as a financial and administrative resource assisting in the provision of essential
services and affordable housing opportunities to qualified Texas residents, based on their income
level.
Additionally, the Department acts as a resource for educational materials and technical assistance
for housing, housing-related, and community services matters.
Texas Department of Housing and Community Affairs (TDHCA)
Advisory Committee ANSW✅✅The Texas Interagency Council for the Homeless (TICH) was
established in 1989 to coordinate the State's homeless resources and services. The TICH involves
representatives from all state agencies that serve the homeless, including serving as an advisory
committee to TDHCA. The council receives no funding and has no full-time staff. Clerical and
advisory support, as well as hosting of TICH Web pages, is provided by TDHCA.
My First Texas Home ANSW✅✅My First Texas Home's "Taxable Mortgage Program" (TMP-79) is a
state-sponsored program through the TDHCA that offers more competitive fixed interest and annual
percentage rates to qualified first-time homebuyers while providing down payment and closing cost
assistance of up to 5 percent of the mortgage loan.
TSAHC Programs ANSW✅✅focus on the housing needs of low-income families and other
underserved populations lacking adequate housing access through conventional financial channels.
Their purpose is to address these housing access needs with initiatives such as first time home buyer
grants and other down payment assistance programs.
To fulfill this mission, TSAHC provides affordable housing programs to assist:
affordable housing developers to build better housing for working families,
homebuyers to achieve the American dream of homeownership, and
homeowners to sustain homeownership and improve their financial situation.
Homes for Texas Heroes and Home Sweet Texas Home Loan Programs ANSW✅✅The Homes for
Texas Heroes and Home Sweet Texas Home Loan Programs are available to a targeted group of
,qualified Texans, including teachers, fire fighters, police and correctional officers, veterans, and low
and moderate-income homebuyers.
Mortgage Credit Certificate ANSW✅✅TSAHC's Mortgage Credit Certificate (MCC) Program, too, is
available to teachers, fire fighters, peace officers, veterans, and low and moderate-income
homebuyers through a network of lenders across Texas. The MCC offers the following:
Dollar-for-dollar savings up to $2,000 per year as a special tax credit
Homebuyer savings of thousands of dollars over the life of the loan
Exclusive opportunity for first-time homebuyers or individuals who have not owned a home in the
last three years
Ability to use in conjunction with TSAHC's Down Payment Assistance program
Texas Veterans Land Board ANSW✅✅The Texas Veterans Land Board (VLB) was created by the
Texas Legislature in 1946. Today, it serves Texas veterans through loan, land sales, long-term care,
and cemetery services, among others.
The Texas Veterans Home Improvement Program (VHIP) ANSW✅✅was created in 1986 making
loans available for certain home repairs or improvements through the Housing and Urban
Development (HUD) Title I Program with a top end threshold of $17,500. Currently, the threshold is
up to $50,000.00 for a 20-year home improvement loan or up to $10,000.00 for a 10-year loan.
Agricultural Loans ANSW✅✅available to farmers to assist in the financing of farming activities.
The farm loans make up only about 1% of all bank loans. However, not surprisingly, the agricultural
loans are an important function for small rural banks, who use about 6% of their assets for this
purpose.
Agricultural Lending
Banks' Traditional Role ANSW✅✅The traditional role of bank credit in the agriculture industry
revolved around funding seasonalproduction and longer-term investments in land, buildings,
equipment, and breeding stock. Under this traditional model, repayment of the loan depends largely
on the successful production and marketing of the agricultural products, and secondarily on any
collateral.
Texas Farm Credit ANSW✅✅Texas Farm Credit, a customer-owned cooperative, provides flexible
financing for agricultural production, agribusiness, plus rural real estate and homes. Their purpose is
to support rural communities and agriculture with reliable, consistent credit and financial services,
as well as insurance to assist customers in managing their risks.
, Texas Farm Credit is part of the nationwide Farm Credit System, a network of cooperatives first
established in 1916
Farm Credit System (FCS) ANSW✅✅Farm Credit supports rural communities and agriculture with
reliable, consistent credit and financial services, providing loans, leases and financial services to
farmers, ranchers and rural businesses throughout the U.S. and Puerto Rico. While the FCS has a
nationwide presence, FCS lenders are local, such as those through the Texas Farm Credit System.
The Loan Estimate ANSW✅✅The Loan Estimate form (also called the good faith estimate),
created by the TILA-RESPA merger of disclosures and estimates employed pre-October 3, 2015, uses
clear language and design to help understand the key features, costs, and risks of a loan. The new
form is a part of the Consumer Finance Protection Bureau (CFPB) Know Before You Owe mortgage
disclosure rule that is making the mortgage process work better for you.
Requesting a Loan Estimate from lenders calls for only these six items from the applicant/borrower:
ANSW✅✅Name
Income
Social security number (to pull a credit report)
Property address
Property value estimate
Amount to borrow
The Closing Disclosure ANSW✅✅The Closing Disclosure is a five-page form providing final details
about a borrower's mortgage loan, including the loan terms, projected monthly payments, and how
much will be paid in fees and other (closing) costs. The Closing Disclosure is the second of the two
forms created by the TILA-RESPA Rule to replace the previous three-form process (discussed earlier).
The Closing Disclosure is required to be provided by the lender at least three business days before
close of the mortgage loan to allow time to compare final terms and costs to those given in the Loan
Estimate (see above). The three-day period also provides an opportunity to ask the lender for any
clarifications necessary prior to the actual closing.
The Closing Disclosure replaces the HUD-1 which was used prior to October 2015, however, the
HUD-1 may still be used in applications for reverse mortgages only. ANSW✅✅
