March 2014

New Mortgage Initiative to Cover PMI for Homebuyers

For a limited time, homebuyers can benefit from a new mortgage enhancement--the Alabama Home Buyer Initiative--that will provide private mortgage insurance (PMI) at no cost to the borrower.

The initiative will pay the up-front single PMI premium--saving the average homebuyer approximately $100 each month.

This unique option is designed to complement AHFA's Step Up mortgage program by providing 30-year, fixed-rate financing and down payment assistance with no PMI costs for the homebuyer.  Eligible borrowers may earn up to $97,300 in total household income and must also complete a homeownership education course to qualify.

For proposed construction cases, $100 million has been reserved for the first six-month period of the initiative. Each loan will receive a four-month commitment of funds during the home's construction period.

The Alabama Home Buyer Initiative could help approximately 2,000 Alabama families and generate $275 million in home sales.

 

Contact your local lender to apply. 

 

Learn More
MULTIFAMILY NEWS
 
Multifamily Division Accepts Funding Applications
 
AHFA's multifamily staff received 42 requests for HOME Investment Partnerships and Housing Credit program funding during the March 18-20 application cycle. 
 
This year, AHFA will be allocating approximately $8.3 million in HOME funds and $7.5 million in Housing Credits.

AHFA will announce funding decisions in June.

Are your tenants prepared for tornado season?

In April 2011, tornadoes and heavy storms carved 1,100 miles of destruction across Alabama. When the weather cleared, nearly 250 people were dead and 23,000 structures were damaged or destroyed. 

 

Damage reports from AHFA's multifamily housing developments were serious as well, including 44 developments, three of which were considered total losses with two fatalities. 

 

The state of Alabama faces the threat of severe weather from thunderstorms, tornadoes, hurricanes and snow/ice.

 
Help your tenants be prepared. Provide residents with educational information and guidelines in newsletters, signage or possibly have a weather professional speak at the clubhouse. 

Download NOAA's Severe Weather Preparedness Guide or visit http://www.ready.gov/tornadoes for detailed information.
HOUSING HEADLINES

Flood Insurance Reform

On March 21, 2014, President Obama signed the Homeowner Flood Insurance Affordability Act of 2014 into law.

 

This law repeals and modifies certain provisions of the Biggert-Waters Flood Insurance Reform Act, which was enacted in 2012 to reform the National Flood Insurance Program (NFIP), relating to private flood insurance, the escrow of flood insurance payments, and the forced-placement of flood insurance. Key provisions of the 2012 legislation required the NFIP to raise rates to reflect true flood risk, make the program more financially stable, and change how Flood Insurance Rate Map (FIRM) updates impact policyholders. 

 

Because of the 2012 law, homeowners were suddenly required to carry flood insurance, many for the first time. In other cases, FEMA revised its estimates for how high storm waters could rise, which also triggered steeper flood insurance costs.

  

The bill mostly reverts the law to pre-2012 terms. Homes that were built to code prior to the new flood estimates would continue paying the older, lower rates. The bill would undo a provision in the 2012 law that triggered higher flood insurance rates when houses are sold. It would require a refund for those homeowners who've had to pay the higher rates. 

 

New Rules Bring New Challenges. We Can Help.

For lenders in Alabama and surrounding states, ServiSolutions®--a department of the Alabama Housing Finance Authority--can manage your bank's mortgage servicing needs including escrowing of taxes and insurance. For more information, visit www.ServSol.com.