Homebuyer Dream Program Guidelines - FHLBNY

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Homebuyer Dream Program GuidelinesJanuary 2021January2021 HOME LOAN BANK OF NEW YORK 101 PARK AVENUE NEW YORK, NY 101781 FEDERAL

INTRODUCTION . 3PROGRAM OVERVIEW . 4PROGRAM OFFERING . 4MEMBER PARTICIPATION . 5SECURE FILE TRANSFER PORTAL . 5SUBMISSION OF A NEW HOUSEHOLD RESERVATION REQUEST . 6COMMITMENT OF FUNDS. 6SUBMISSION OF A FUNDING REQUEST . 7FUNDING OF THE HDP GRANT . 8SUBMISSION OF OTHER DOCUMENTATION . 8STATUS REPORTING . 9PROGRAM REQUIREMENTS . 9HOUSEHOLD INCOME . 11Eligible and Ineligible Income Sources . 12Household Income Calculation and Documentation Requirements . 14HOMEOWNERSHIP COUNSELING. 19HOUSEHOLD EQUITY CONTRIBUTION . 20USE OF THE HDP GRANT . 20Eligible Uses of the Grant . 20CLOSING REQUIREMENTS . 21Execution of HDP Retention Documentation . 21Execution of Closing Disclosure and/or HUD-1 Settlement Statement. 21RETENTION PERIOD. 22RETENTION MONITORING PRACTICES . 22EVENTS OF NON-COMPLIANCE AND RECAPTURE . 22EVENTS OF NON-COMPLIANCE. 23FORECLOSURE. 24INHERITANCE . 24PROCESSING OF A RECAPTURE. 24SUSPENSION AND DEBARMENT POLICY . 25CONFLICT OF INTEREST . 26RECORD RETENTION REQUIREMENTS. 26HOUSEHOLD TRANSFERS . 26TRANSFER BETWEEN MEMBERS IN THE HOMEBUYER DREAM PROGRAM . 26TRANSFERS FROM THE FIRST HOME CLUBSM (“FHC”) PROGRAM TO THE HOMEBUYER DREAM PROGRAM . 26January 20212

IntroductionThe mission of the Federal Home Loan Bank of New York (“FHLBNY”) is to advance housing opportunityand local community development by supporting FHLBNY member Financial Institutions (“member”) inserving their markets. The FHLBNY meets our mission by providing our members with access toeconomical wholesale credit and assistance through our credit products, mortgage finance program,housing and community lending programs, and correspondent services to increase the availability of homefinance to families of all incomes. Each year since 1990, the FHLBNY has contributed 10% of its netearnings to the Affordable Housing Programs (“AHP”). The FHLBNY accepts applications for twoaffordable housing programs, the Affordable Housing Program General Fund and a First-TimeHomebuyer Set-Aside Program.The Homebuyer Dream Program (“HDP”) is a federally regulated first-time Homeownership Set-AsideProgram that is managed within regulatory requirements established by the Federal Housing FinanceAgency (“FHFA”) 12 C.F.R. Part 1291, as may be amended from time to time (“AHP Regulation”). TheHomebuyer Dream Program provides funds in the form of a grant to be used towards down payment andclosing cost assistance to first-time homebuyers earning at or below 80% of the Area Median Income(“AMI”) and purchasing homes in New York, New Jersey, Puerto Rico or the U.S. Virgin Islands.The maximum grant that a household may receive is up to 9,500, as determined by the member, andsubmitted to the FHLBNY. Additionally, the Homebuyer Dream Program also offers up to 500 towardsthe defrayment of homeownership counseling costs, which will be provided for the use of the householdvia the member to the non-profit counseling agency. The amount of the defrayment will be added to thegrant resulting in the potential maximum assistance of 10,000.The Homebuyer Dream Program Guidelines (“Program Guidelines”) will assist you as you work alongwith the homebuyer, and counseling agency to ensure HDP grants are executed and funded in a timelymanner and in conjunction with the AHP Regulation, the FHLBNY AHP Implementation Plan(“Implementation Plan”) and these Program Guidelines. These Program Guidelines are intended to beillustrative, not exhaustive, as not all possible scenarios can be addressed herein.January 20213

The diagram below outlines the program life cycle beginning with member participation.MEMBER PARTICIPATIONIN THE PROGRAM Member executes and returns the following documents: HDP Member Participation Agreement HDP Secure File Transfer Portal Enrollment Form FHLBNY sets up the users identified within the Secure File Transfer PortalEnrolment Form within the Online PortalDETERMINATION OFHOUSEHOLD ELIGIBILITY Member qualifies household based on program parameters.SUBMISSION OF ARESERVATION TO THEFHLBNY Member submits a completed household reservation request to the FHLBNYvia the Online Portal.COMMITMENTOF FUNDS FHLBNY reviews the reservation request for eligibility and issues a commitmentto the member for a period of 120 days.SUBMISSION OF AFUNDING REQUEST Member must submit a funding request to the FHLBNY via the Online Portal nolater than 15 days prior to the commitment expiration.FUNDING OFTHE GRANT FHLBNY requires the reimbursement of funds to the member to occur bycommitment expiration. Funds are disbursed to the member on a post-closing basis pursuant toFHLBNY’s review of the submitted funding request.RETENTIONPERIOD Household is required to commit to a 5-year retention period.Program OverviewProgram OfferingThe HDP is administered through participating members in an annual round. Each year the FHLBNY willprovide a funding allocation to its participating members. Notification will be distributed within thirtydays of the start date of the round. Once the round opens members may begin submitting reservationrequests on behalf of eligible households. The maximum grant amount that a household may receive is upto 9,500, as determined by the participating member and submitted to the FHLBNY. Funds may be usedtoward the down-payment and/or closing cost for the purchase of a home by a qualified household.Additional grant funds up to 500 may be added to the total grant amount awarded to assist in defrayingthe cost of the non-profit housing agency counseling.January 20214

To ensure the full commitment of allocated funds the FHLBNY in its sole discretion may advise of a date atwhich funds that are not committed will be reallocated to those members that have exhausted their funds.Members may be eligible for an increase or decrease in their allocations in subsequent rounds dependingon funding availability, the number of participating members, and the funding utilization of othermembers.Member ParticipationMembers who are in good standing with the FHLBNY may apply to participate in the HomebuyerDream Program by completing the HDP Member Participation Agreement. By executing this agreement,the member agrees that it has received notification of and will comply with all the requirementsestablished by the AHP Regulation, the FHLBNY AHP Implementation Plan, and the FHLBNYHomebuyer Dream Program Guidelines, which govern the Homebuyer Dream Program, whether nowexisting or hereafter amended or implemented. The member also agrees that it will pass on the fullamount of the AHP grant to the household and the AHP grant will be used in accordance with theterms of the HDP Member Participation Agreement and the requirements of the AHP Regulations,Program Guidelines and the Implementation Plan.Participation in the Homebuyer Dream Program may be suspended or debarred at any time at the solediscretion of the FHLBNY.Secure File Transfer PortalPursuant to applicable Federal and State laws, to protect household information that may be utilized todevelop a credit profile if intercepted by an unauthorized third party, the FHLBNY requires that allHDP documentation be submitted through FHLBNY’s Secure File Transfer Portal (“Online Portal”).FHLBNY must receive a fully executed HDP Secure File Transfer Portal Enrollment Form identifyingmember representatives authorized to submit program documentation to the FHLBNY. Memberrepresentatives listed in the HDP Secure File Transfer Portal Enrollment Form must have both a User IDand password established for the Online Portal and must have completed a successful test file prior tosubmission of any HDP files to FHLBNY. It is the member’s responsibility to advise FHLBNY of anychanges in member representatives.All files submitted through the Online Portal must be done as one Zip file and must contain acompleted and accurate Homebuyer Dream Program Request Form (in MS Excel format, containing the.xlsx file extension) and all supporting documentation (in PDF format). Submissions received byFHLBNY via e-mail or methods other than the Online Portal will not be accepted. A successful uploadthrough the Online Portal does not constitute a reservation or commitment of funds.January 20215

HDP Program GuidelinesSubmission of a New Household Reservation RequestTo submit a new household reservation request, the member must complete the Homebuyer DreamProgram Request Form selecting the New Household Reservation Request option.The Homebuyer Dream Program Request Form along with the following required documentation (in PDFformat) must be submitted to the FHLBNY via the Online Portal as one Zip file per household:»Income documentation for all sources of income for each income earning adult in the household.»Fully executed Purchase and Sales Contract.»Fully executed HDP Homebuyer Certification.»Fully executed homeownership counseling certificate.»Fully executed HDP Zero Income Certification form(s) for each member of the household, 18 yearsand older, with zero income.»Fully executed legal separation agreement or court papers filed for divorce (if ap