HRSR INFORMATION 01-28-2002 - Laserfiche WebLink

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• Attachment 2 KEY ADVANTAGES OF THE MINNESOTA CITY PARTICIPATION PROGRAM Bond Advantages of MCPP Participation • MHFA has historically obtained the lowest available bond interest rate in Minnesota, which allows cities to pass the lowest interest rate on to their borrowers. • MHFA absorbs all program underwriting costs and risks of bond issuance. Costs to participating cities are limited to a Department of Finance processing fee (charged to both MCPP participants and self issuers)of$20 for each$100,000 in allotment. • MHFA often reacts to a falling interest rate market by lowering program rates further during the program term due to the volume of its mortgage revenue bond activity and/or remarketing provisions in its bond resolution. Loan Advantages of MCPP Participation • Commitment of city staff time is primarily limited to completing the application, administration of any city added targeting or enhancements, and monitoring fund usage. • • MHFA's Homeownership Assistance Fund (HAF) is available with MCPP mortgage funds. HAF provides downpayment/closing cost assistance of up to$3,500 and monthly payment assistance of up to$60. HAF cannot be used with self-issued city bond programs. • Historically, house price and household income limits under the MCPP are higher than other MHFA programs. • MHFA provides marketing support for each city, including brochures, posters, ad layouts, and local and statewide press releases. • MHFA absorbs all lender compensation costs. • Participating lenders net 2-1/2 points for each loan closed and sold to MHFA under the MCPP (1/2 point higher than MHFA's Minnesota Mortgage Program). • The program requires 1-1/2 discount points charged to the home seller or buyer, for both existing housing and new construction under the MCPP (compared to 2 and 2-1/2 points under the Minnesota Mortgage Program). • 11/01