Tuesday, July 23, 2019

New OHCS/VA Excel Home Loan Estimating Tool Answers Key Geographic and Household Specific Affordability and Eligibility Questions.

I previously posted HERE the good news for veterans that the Oregon Housing Bond program can be combined with the VA zero down loan program, even for non first time home buyers. I followed that up with a second post HERE comparing the benefits of a combo OHCS/VA loan with an ODVA home loan. 

To show the potential benefit for Oregon veterans and home ownership advocates I have created a first of its kind Excel workbook (Version 1) HERE that takes user variable inputs AND then answers 4 key geographic specific questions about 30 year combo OHCS/VA loans:
  1. Is the purchase price below OHCS purchase price limits?
  2. Is the borrowers income below OHCS income limits?
  3. Is the borrowers income sufficient to qualify for the loan amount being sought?
  4. Is the borrowers income sufficient to meet the VA loan requirements for residual income?
The first worksheet is only be used for a first time user of a VA loan and a user that has not previously had a bond financed loan or a mortgage credit certificate in Oregon or elsewhere.  

The second worksheet is for veterans who have successfully paid off a VA loan and wish to REUSE their VA benefit and have not previously had a bond financed loan or a mortgage credit certificate in Oregon or elsewhere (The VA financing fee increases for these veterans). Note, because of the higher reuse VA funding fee increase the default $89,000 income entered is NOT sufficient to qualify for $425,000 no down payment cash advantage OHCS loan--increasing borrower income by $1,000 however would qualify.  

In both worksheets the left side is for regular military veterans, and the right side is for Reserve or Guard veterans. (VA funding fees are different for the two categories).  

In a third worksheet I included a chart that shows how qualifying purchase prices change as income increases (with zero down payment required). 

Finally a fourth worksheet includes links to OHCS, VA, and ODVA reference materials and data.

The estimating tool allows variable inputs for
Family size (Default: 3 or more)
County location (Default: Clackamas, Multnomah, Washington)
Targeted area indicator (Default: Non Targeted)
Purchase price (Default: $425,000)
Down payment % (Default: ZERO). 
Loan rate ( Default: 4.25% [3.25% is lowest current OHCS rate].
Veteran's Disability status (Default: NON Disabled)
Income (Default: $89,000)
Reoccurring debt (Default: $500)
Debt to Income ratio used to determine affordability(Default: 43%)
Property taxes (Default: 1,2%)
Insurance (Default: .3%)
For residual income calculation (used for VA underwriting)
Square footage of home used to calculate utility cost (Default: 1,500 sq, ft.)
Fed Income Taxes (Default: 15% rate)
State Income Tax Rate Default: (5% rate)
Other pension contribution (Default: $0)

The estimating tool returns
Loan amount.
VA funding fee and loan amount with funding fee.
Income required.
Closing cost projection @3%. 
Projected Utility cost (used for residual income calculation).
Residual income vs required residual income (used for VA loan underwriting).
Answers to the 4 key questions referenced previously.

To illustrate I am posting a 2 page PDF HERE , and embedded below, using the default examples in the 1st worksheet. With these default entries:

3 person regular military veteran using a VA loan for the first time, and with an income of $89,000 could qualify to purchase a Portland metro home with an 4.25% OHCS Cash Advantage loan at $425,000, with ZERO down, AND receive $12,750 to be used for closing costs.  [ Note: Most recent RMLS Market Action report had the Portland metro median sales price in June at $420,000].

IMPORTANT NOTE: This workbook is for ILLUSTRATION ONLY; it should NOT be used to determine actual loan amounts or closing costs or to determine eligibility for OHCS and or VA loans. Lenders and these agencies make those determinations. 

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