Marketing Programs to First Time Homebuyers

1. Marketing Programs to First Time Homebuyers Kenneth J. Lobene Office Director, Las Vegas HUD Office Lorraine Griscavage-Frisbee Single Family Housing Specialist

2. Class Overview • Introduction – Marketing Conditions and the First Time Homebuyer • HUD programs for First Time Homebuyers • Strategies for a Successful Marketing Campaign FHA - Serving American Homebuyers Since 1934

3. Market Conditions • Housing Market in Las Vegas • History • Trends • Impact on First Time Homebuyers FHA - Serving American Homebuyers Since 1934

4. HUD Programs for the FTHB • FHA financing programs • Downpayment Assistance • Housing Counseling FHA - Serving American Homebuyers Since 1934

5. Benefits of FHA • No prepayment penalty • Fully assumable mortgage -Credit qualifying required; $500 cost • No credit qualifying streamline refinance • FHA loan to FHA loan FHA - Serving American Homebuyers Since 1934

6. Benefits of FHA • 3.5% minimum cash investment • Gifts/secondary financing from acceptable sources can be used for buyer’s 3.5% minimum cash investment • Sellers can contribute up to 6% to closing costs • Competitive interest rates Usually priced better than blended or Interest Only mortgage products One loan instead of two FHA - Serving American Homebuyers Since 1934

7. Programs to Help FTHB Fix Up Loan - Streamline (k) • Allows for finance of repairs after close of escrow • No minimum repair amount • Maximum repairs (up to $35,000) – items identified on appraisal must be repaired first • Can be used for purchase (including HUD REO properties) or refinancing with rehabilitation FHA - Serving American Homebuyers Since 1934

8. Rehab Loan - 203(k) • For more complicated, structural repairs/upgrades • Minimum of $5,000 in improvements • Health and safety issues first • Structural alterations • Modernize property • Handicap accessibility FHA - Serving American Homebuyers Since 1934

9. Rehab Loan - 203(k) • Up to 6 months mortgage payments can be financed as part of the mortgage • Lender escrows funds and pays to homeowner/contractor in up to 5 draws • Requires 203(k) consultant • As repaired appraisal must support loan amount for repaired property • Higher upfront MIP and other costs for borrower FHA - Serving American Homebuyers Since 1934

10. Section 8 Housing Vouchers • Use voucher to help qualify for mortgage or use for downpayment Assists in distributing participants into mixed income areas • Public Housing Authorities administer program • Usually require graduation from Family Self Sufficiency Program

11. Downpayment Assistance • HUD provides funding directly to municipalities • HOME and Neighborhood Stabilization Program are two primary sources of downpayment assistance • Municipalities usually work with lenders to reduce loan costs FHA - Serving American Homebuyers Since 1934

12. HUD Approved Housing Counseling Agencies • Offer a variety of first time homebuyer programs including homebuyer education, pre-purchase, post-purchase, and credit counseling • Services are offered for free or minimal costs (based on client’s ability to pay) • Agencies compete for HUD housing counseling grants on a yearly basis • May also administer downpayment assistance programs for local and state municipalities FHA - Serving American Homebuyers Since 1934

13. Marketing Strategies • Partnerships • Outreach • Education • Marketing Materials • Marketing Plan FHA - Serving American Homebuyers Since 1934

14. Partnerships Key to any successful marketing strategy is identifying your community partners: • Local and state trade groups – lender and realtor groups, chambers of commerce • Housing Counseling agencies • Local Government contacts • Real Estate companies (networking opportunities) FHA - Serving American Homebuyers Since 1934

15. Outreach Opportunities • Industry Groups – local charters of National Association of Realtors, Hispanic Real Estate Professionals, National Association of Real Estate Brokers, Mortgage Brokers Association, Mortgage Bankers Association • Offer to speak at monthly meetings about your programs FHA - Serving American Homebuyers Since 1934

16. Outreach Opportunities • Purchase booth space at industry events such as a realtor rally or annual event • Purchase booth space at public events and celebrations • Volunteer to be guest speaker on local radio or TV (review your agency media outreach policy first) • Write articles for industry publications FHA - Serving American Homebuyers Since 1934

17. Education Outreach • Design a continuing education class for real estate licensees • Seek approval for CE credits from state real estate division • Offer class for free to real estate agents (market to industry partners and individual companies) FHA - Serving American Homebuyers Since 1934

18. Developing Marketing Materials • Benefit analysis – why should a real estate professional recommend your program? • Develop program specific materials • Written material should be short and colorful • Powerpoint presentations concise –use bullets FHA - Serving American Homebuyers Since 1934

19. Marketing Plan • List your program parameters: clientele and eligibility requirements • Identify all the Players (clients, government, nonprofit, and industry partners) • Identify Resources to implement plan Marketing budget – maximum impact Freebies – PSAs, guest speaker FHA - Serving American Homebuyers Since 1934

20. Marketing Plan • Outline specific marketing strategies based on your budget and outreach goals • Set goals for the marketing plan – how many outreach events and speaking engagements do you plan to attend? How many people do you want to reach? • Evaluate and revise the plan over time FHA - Serving American Homebuyers Since 1934

21. Local Successes • Exceeded yearly management goals • Well established relationships with industry groups • Helped create a housing counseling coalition • Educated over 1000 real estate sales persons over the last 5 years with CE class FHA - Serving American Homebuyers Since 1934