November 3, 2019 at 6:52 pm #61911NelsontMember
1 point = 0.25% rate decrease = cost of 1% of the loan.
1% of 540k is $5400. 7 points = $37800
I don’t know where you are getting 27000 from. Even if you use the purchase price prior to rehab it’s still 30800 minus fees.
As of right now I do not think boa is matching. I think it’s only the half a percent rate decrease until they can work out a deal with naca for 2020.
Whether you take the rate decrease or the match if offered the rule is you can only take one and you must be 80% or below the MSA in order to have either.November 3, 2019 at 9:39 pm #61912
My mistake , I was looking at the wrong notes, 27k was for maximum of 5 points which is what I’ve also read on this forum.
Math mistake, notwithstanding, my understanding was correct?
Thanks for the response. I certainly hope the match program returns.
November 3, 2019 at 10:05 pm #61914NelsontMember
- This reply was modified 2 years, 9 months ago by frankysmom.
I’m not sure I fully understand the whole math you have laid out. If I’m not mistaken it looks like you are mixing 2 separate rules. I believe if you are below 80% income than you have no fees(?) and you can get the boa grant. Right now it’s just the rate increase. The lender match is not available at the moment I don’t think.
BUT if you are above 80% you pay fees and are limited to 5.5 effective points after the fees and you can’t get the grant.
So the biggest question would be is your income 80% or lower than your MSA?
The other thing you need to take a look at is whether your area is considered high income according to HOEPA rules. If not you are limited to a total loan including rehab to about 480k. The high income areas are all adjusted accordingly but each one has a different limit.November 3, 2019 at 10:19 pm #61915
My question was about the lender match not the .5 rate reduction.
My area is considered high income, we are below 100 percent but not below 80. IIRC, for the .5 reduction, one must be at or below 80 and for the lender match (which is now defunct) one must be at or below 100.
My math was indeed wonky because I was using the 5 percent limit.
I found this from @timtrubble
Points and fees limited to 7% for a NACA loan includes:
• Interest rate buy down paid by the Member. Included are third party contributions to the Member, i.e. grants and gifts paid to interest rate buy down on the Member’s behalf.
• The HAND fee – Files to Bank of America always 3% of the total funds held in escrow to complete repairs after closing.
• Broker fees the lender pays to NACA – Bank of America loans – $3,000November 3, 2019 at 11:36 pm #61916
Fixed the error:
On a loan of 540,000 with a rehab of 100,000 And contributing 43,200 to buydown…
7 points = $37,800
Max buyer buy down = 7 points – ($3,000) – (3% rehab escrow aka $3000)
Therefore 31,800 is the actual maximum buy down. (Which translates to 5 points??? OR is this figure just for “overage” calculation below and am I still permitted to buy down 37.8K worth of points)
43,2000 – 31,800 = 11,400 is the “overage” and that amount, lender will match? And NOT the full 7 points?
If Tim, can chime in with If this program is still in existence. Thanks!
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