Let’s Make Home Happen!

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

To create affordable housing

opportunities for North Carolinians

whose needs are not met

by the market.

NCHFA Mission Statement

www.nchfa.com

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

More than

191,000 households

www.nchfa.com

The N.C. Housing Finance Agency has helped

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

$11.7 billion in affordable homes

and apartments

www.nchfa.com

The N.C. Housing Finance Agency has financed

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

79,600 families

buy their first home

www.nchfa.com

The N.C. Housing Finance Agency has helped

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

More than $150 million of supportive housing for North Carolinians:

www.nchfa.com

The N.C. Housing Finance Agency has financed

mental illness & developmental disabilities

survivors of domestic violence

homeless

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

$693 million in real estate activity

7,226 construction jobs

$66 million in state and local tax revenues

www.nchfa.com

The N.C. Housing Finance Agency’s

2008 investments created:

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

Today’s Session Topic

Tools for Turning Minority

Buyers Into Homeowners

in a Tight Credit Market

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

Our Speakers

Ms. April Young, VP of BB&T- Specialist in all facets of mortgage financing

Mr. Jose Serrano, Realtor RE/MAX United - 25 years of experience in real estate, specializing in all areas of real estate purchases

Mr. Lewis Dancy, Assistant Director of Mortgage Lending, Self-Help Credit Union

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

Credit is Tight

Fewer mortgage applications being approved

“Nearly seven of 10 mortgage applications were approved and

financed during the housing boom five years ago. At the end of 2008, the

number was down to five.”– Source: CNN, 9/17/2009

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

Credit Scores

Two Measures of Credit– Credit Report – like a school transcript– Credit score – like an SAT score

Access Your Credit Report for Free– www.annualcreditreport.com– Call 877-322-8228– Free / one every 12 months from each bureau– Opt out of credit inquiries = (888) 567-8688

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

True or False About Credit

Fallacy: A poor score will haunt me forever.

Fact: Just the opposite is true. A score is a “snapshot” of your risk at a particular point in time. It changes as new information is added to your bank and credit bureau files. Scores change gradually as you change the way you handle credit.

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

True or False About Credit

Fallacy: Credit scoring is unfair. Fact: Scoring considers only credit-

related information. Factors like gender, race, nationality and marital status are not included. In fact, the Equal Credit Opportunity Act (ECOA) prohibits lenders from considering this type of information when issuing credit.

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

What's Not in Your Credit Score

Any items reported as child/family support obligations or rental agreements.

Certain types of inquiries (requests for your credit report). The score does not count “consumer-initiated”

inquiries.

Whether or not you are participating in a credit counseling of any kind.

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

What's Not in Your Credit Score

Your race, color, religion, national origin, sex and marital status.

Your age. Your salary, occupation, title, employer,

date employed or employment history. Where you live. Any interest rate being charged on a

particular credit card or other account.

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

Credit Scores Credit scores range from 350 to 850

in most credit scoring models 3 main bureaus are depositories of your

credit histories– Equifax– Experian– TransUnion

Not all 3 bureaus will have identical information

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

Know What Makes UpYour Credit Score

35% is based on “payment history” 30% is “amount owed as a percentage of

total credit available” 15% is based on length of credit history 10% is based on types of credit utilized

– Revolving credit vs. installment debt

10% is new credit inquires or applications for credit

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

Credit Scores Vary by Type of Credit

Did you know….- Your credit score can change

daily

- Your credit score number is different when applying for a mortgage vs. a car

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

Improving Your Credit Score

Pay your bills on time. If you have missed payments, get

current and stay current. Be aware that paying off a

collection account will not remove it from your credit report. It will stay on your report for seven years.

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

Improving Your Credit Score Keep balances low on credit cards and other

types of “revolving credit”. Pay off debt rather than moving it around to

other credit cards. Don't close unused credit cards as a short-

term strategy to raise your score. Don't open new credit cards that you don't

need, just to increase your available credit.

.Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

Ways to Improve Credit

Pay your bills on time Don’t hide from credit problems Seek help from a established housing

counselor if you feel overwhelmed or are getting behind on payments– Housing counselors are trained to solve these

problems– Help is confidential and can change your life

for the betterTools for Turning Minority Buyers into Homeowners in a Tight Credit Market

Mortgage Market in Flux

According to federal HMDA data just released in September 2009, “the total number of originated loans of all types reported fell by 3.3 million, or 31 percent, from 2007”.

“FHA backed mortgages have increased dramatically. The number of such loans in 2008 rose by 169 percent over 2007 levels”.

Source: FFIEC.govTools for Turning Minority Buyers into Homeowners in a Tight Credit Market

Mortgage Market in Flux

“FHA’s market share expanded from 5.5 percent in 2007 to 19.6 percent in 2008”

“The number of VA-guaranteed loans in 2008 increased by 48 percent over the number in 2007.”

Source: FFIEC.gov

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

Lending DiscrepanciesStill Exist

According to FFIEC data released in September 2009…

“for conventional home purchase lending in 2008, the incidence of higher-priced lending (not adjusted for lender or

borrower-related factors) was 17.1 percent for blacks, 15.4 percent for Hispanic whites, 6.5 percent for non-Hispanic whites, and 3.3 percent for Asians.

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market

If You Need Help

Contact a HUD-approved credit counselor

Seek help from a non-profit agency Establish a budget and stick to it Seek advice from an established

financial institution or counselor

Tools for Turning Minority Buyers into Homeowners in a Tight Credit Market