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The Nehemiah Program^® Description and Guidelines

What Is The Nehemiah Program?

The Nehemiah Program is the nation's largest privately funded downpayment assistance program, helping thousands of people achieve their dream of homeownership. Nehemiah Corporation of America (Nehemiah), one of the nation's largest and most respected community development corporations, administers The Nehemiah Program. The Nehemiah Program provides gift funds to qualified homebuyers who purchase participating homes using an eligible loan program, such as a Federal Housing Administration (FHA) loan. The Nehemiah Program is approved to provide gift funds by the FHA, which allows charitable organizations to provide gift funds toward downpayment and closing costs (HUD Handbook 4155.1 Rev. 4, Chg. 1).

Mortgage originators may request gift funds for qualified homebuyers through the two methods discussed below: (1) the Standard Process, and (2) the Online Processing System (OPS^®) with a paperless feature option.

What Are Gift Funds?

The Nehemiah Program gift funds are monies offered by Nehemiah to qualified homebuyers, requiring no repayment, no silent second mortgage, and no re-capture penalties. The gift funds are offered toward the purchase of a participating home anywhere in the United States-with no income limitations and no geographical restrictions. The money given to the homebuyer is a true gift. Nehemiah charges a nominal processing fee that may be paid by the seller, lender, or homebuyer.

Who May Request Gift Funds?

Gift funds are requested by mortgage originators on behalf of qualified homebuyers through a registered closing agent, e.g., a settlement agent, closing attorney, escrow officer, or title company representative. Mortgage originators who choose the paperless feature option request gift funds directly from Nehemiah.

How Are Gift Funds Requested?

The Nehemiah Program provides two methods for mortgage originators to request gift funds for qualified homebuyers: (1) the Standard Process, and (2) the Online Processing System (OPS) with a paperless feature option.

(1) Under The Standard Processing method, mortgage originators complete the required documents and submit them to Nehemiah via fax through their registered closing office. The homebuyer can receive a gift amount between one percent (1%) and six percent (6%) of the final contract sales price as a percentage of the sales price or a flat gift amount. Further, the seller or homebuilder contributes to Nehemiah an amount equal to the gift and pays a processing fee.

(2) Under The Online Processing Paperless method, which provides for the fastest receipt of gift funds, mortgage originators request gift funds using our online processing system (OPS) and submit their transaction to Nehemiah through our website. The homebuyer can receive a gift amount between one percent (1%) and six percent (6%) of the final contract sales price as a percentage of the sales price or a flat gift amount. The seller or homebuilder contributes to Nehemiah an amount equal to the gift. Also, the lender, seller, homebuilder, or homebuyer may pay the processing fee.

OPS is available online at http://www.getdownpayment.com/lenders/ops.asp.

Who Is Eligible?

The Nehemiah Program offers gift funds to any qualified homebuyer, not just to first-time homebuyers. A qualified homebuyer is anyone who:

• Purchases a Nehemiah participating home to be owner-occupied (non-occupant co-borrower(s) may assist owner- occupant to qualify for mortgage).
• Uses an eligible loan program, such as an FHA loan or a conventional loan product that allows gifts from charitable organizations.

What Is a Nehemiah Participating Home?

A Nehemiah participating home is a home owned by a seller who has entered into a Participating Home Agreement with Nehemiah, acknowledging that the seller has made his or her home available for purchase by a homebuyer receiving gift funds. Any home on the market can be purchased using our program, provided the seller agrees to the Nehemiah participation requirements. A participating home may be an existing (resale) home or a new home offered by a homebuilder.

What Is Recommended for the Homebuyer?

Nehemiah recommends that homebuyers seriously consider (1) homeownership education courses and (2) home inspections.

1. Homeownership Education Courses: Nehemiah strongly encourages, but does not require, all homebuyers to complete a homeownership education course. In addition, HUD-approved counseling agencies provide homeownership education courses to homebuyers.
2. Home Inspection: Nehemiah strongly encourages, but does not require home inspections. Home inspections provide the homebuyers with an impartial evaluation and important information about the property's overall condition. An inspection may provide homebuyers with a list of items that need to be repaired or replaced.

What Is an Eligible Loan Program?

The Nehemiah Program may be used in conjunction with any eligible loan program. Nehemiah reserves the right to approve the loan program. An eligible loan program has these characteristics:

1) The Homebuyer must qualify under a single-family, 1-4 unit loan.

2) The loan must permit charitable organizations to provide gift funds to be used in conjunction with the purchase of a home.

What Are the Closing Agent's Responsibilities?

To qualify as a closing agent, you must be associated with a closing office that is registered with Nehemiah.

Closing agents receive Nehemiah gift funds by wire-funds transfer through a registered closing office only. Nehemiah will not pay for any costs associated with wiring funds to Nehemiah. Such wiring costs, as well as other costs associated with the use of a closing office, must be negotiated between the homebuyer, seller, or lender.

Further, each of the two gift funds request methods available to mortgage originators-the Standard Process and the Online Processing System (OPS) with a paperless feature option, has specific closing requirements, required documentation, and wiring instructions. The closing agent must receive the Nehemiah gift funds before the loan closes. Nehemiah will not honor gift funds requests after the loan has closed and funds have been disbursed.

Getting Started: It takes a Team

The Nehemiah Program works best when the real estate professionals working with the homebuyer to utilize the program are all informed about how the program works. Nehemiah offers training on using The Nehemiah Program through its Outreach sales and marketing division.

Nehemiah recommends that the mortgage originator take the lead in becoming familiar with the program and then work with homebuilders, real estate agents, and homebuyers to assist them in understanding how to use the program.