Now that you are an SDHDA Customer we want to take this opportunity to thank you for using our SDHDA Homebuyer programs. We hope your experience was rewarding and enjoyable. As you make your payments, there may be some terms or situations that you are unfamiliar with. SDHDA has created a list of most Frequently Asked Questions (FAQ) that will help you answer some of the questions that you may encounter. Again, we hope you are enjoying your new home!
Who is My Loan Servicer?
After SDHDA purchases your loan, the Participating Lender (Bank) who originated your loan may or may not accept and manage your payments. Any questions regarding your loan should be directed to your Loan Servicer. If you do not know who your Loan Servicer is, you may contact SDHDA to find out. SDHDA's current Loan Servicers are:
|Home Federal Bank||800.244.2149|
|Wells Fargo Home Mortgage||800.678.7986|
|First Bank and Trust||605.696.2205|
|CU Mortgage Direct||877.229.2198 ext. 1790|
|U.S. Bank Home Mortgage||800.240.7890|
When/if the servicing of your loan was transfered to the Loan Servicer, you should have received notification. Your Loan Servicer (the lender who receives your payment) was assigned to your loan when SDHDA purchased it. Your Loan Servicer has the responsibility to collect, monitor and report loan payments, handles your property taxes, your insurance escrows, payoffs and late payments.
Can I Remove My Mortgage Insurance (MI)?
The short answer is maybe. When your loan has reached the appropriate loan-to-value ratio specific to your loan because of appreciation or pay down of your loan balance, with no late pays (beyond 30 days in the last 12 months), then there is a chance you may be able to remove your MI.
The requirements to remove your mortgage insurance (MI) vary based on the type of mortgage insurance you have on your loan, but most have similar standards.
The first step is call or write your Loan Servicer (not the MI Company) and ask about the possibility of removing MI insurance from your loan.
What is My Recapture?
Recapture Tax regulations require some borrowers to repay the government a portion of their gain on the sale of their home, depending on
- Whether there is a gain on the sale,
- The household income has increased at the time of sale, and
- If the sale occurs within nine years of buying the home. Recapture Tax is paid directly to the IRS when filing taxes for the year in which the home is sold.
Nothing in the Recapture Tax provisions should prevent the use of SDHDA's First-time Homebuyer Program. Using the Program may enable you to afford the home of your dreams.
For SDHDA First-time Homebuyer Loans closed on or after August 15, 2006 and if you are required to pay a Recapture Tax to the Internal Revenue Service (IRS), SDHDA will reimburse you for the actual amount of the Recapture Tax paid to the IRS.
Contact your Loan Servicer if you are subject to Recapture Tax and your loan closed on or after August 15, 2006.
How do I Receive Recapture Tax Reimbursement?
In order to be reimbursed for Recapture Tax you have paid, you must send your written request for reimbursement to SDHDA no later than July 15 of the calendar year immediately following the calendar year in which you sold or otherwise disposed of your home.
For example, if you sell your home on August 15, 2011, SDHDA must receive your written request for reimbursement no later than July 15, 2012.
To request reimbursement of Recapture Tax you have paid, you must send the following original documents, signed by each Mortgagor (SDHDA will not accept copies or facsimiles) to SDHDA:
- Request for Recapture Tax Reimbursement;
- IRS Form 4506 (or its equivalent) permitting SDHDA to obtain a copy of each Mortgagor’s federal tax return, including IRS Form 8828 (or its equivalent). SDHDA will pay any fees associated with obtaining a copy of your tax return; and
- Any other documentation SDHDA may need to approve your request.
SDHDA’s approval of Recapture Tax reimbursement is subject to all terms and conditions contained in the Request for Recapture Tax Reimbursement form.
You may submit only one request for reimbursement. SDHDA will not reimburse you for any additional Recapture Tax you may owe under an amended tax return.
How do I get a loan payoff for my SDHDA First-time Homebuyer Loan?
Contact your Loan Servicer to acquire a loan payoff.
Can I Rent Out My Home?
Many SDHDA borrowers ask if they can rent their home or turn their home into an income producing property, regulations prohibit this kind of activity with the home that you purchased.
However, SDHDA will consider requests from Mortgagors to rent properties in cases where extenuating circumstances warrant the temporary renting of the property and when the property is being actively marketed. SDHDA will accept written requests for permission to rent from your Loan Servicer on your behalf. The request must adequately explain the circumstances surrounding your situation; specifically, the request shall address the anticipated duration of the rental, proof that the property is listed with a Realtor while rented, the Mortgagor's reason for vacating the property and necessity of renting, and any intent to reoccupy by a specific date.
You need to contact your Loan Servicer if this situation arises.
What if I can't make my payments?
Your mortgage or house payment is a major responsibility; however, SDHDA understands that life can bring unexpected events that cause financial strain.
Sometimes the financial pressure of managing your money is overwhelming. Through the HERO network of HUD approved counseling agencies, homeowners can get advice that may help you get through life's unexpected financial hurdles.
Private one-on-one counseling sessions, conducted by certified credit counselors may be able to assist you in a wide range of housing issues. Counselors are trained to discuss homeownership options such as refinancing your existing loan, repairing your credit, reverse mortgage options, and default and foreclosure mitigation.
If something arises and you know you are not going to be able to make your monthly mortgage payment. Here are four (4) proactive steps that you can take towards keeping your home and maintaining your credit:
- CALL YOUR LOAN SERVICER...See what types of assistance they may be able to offer you with your mortgage payments. The sooner you call the better.
- SEEK CREDIT COUNSELING...If you are behind in your mortgage payments, credit counseling can help you establish a budget, set priorities, and determine the appropriate strategies to stop foreclosure and help you keep your home. Find a HUD approved certified counselor nearest to you.
- BUDGET, BUDGET, BUDGET, BUDGET...Maintaining a monthly budget is the best way to keep your finances in order. If there has been a change in your financial situation, reconstruct your budget to adapt to your new financial limitations.
- BE PRACTICAL...If it is unlikely that you can continue to remain in your home, consider listing your home for sale.
Taking the first step in saving your home and protecting your credit is the best decision you can make.
What if my loan goes into foreclosure?
Reply immediately to your Loan Servicer's letter informing you of your loan status. It is much less expensive to save your house if foreclosure has not been initiated by SDHDA.
Do not give up hope and do not ignore the foreclosure, if SDHDA starts the foreclosure process. You still have the opportunity to bring your loan current. Time is of the essence. You should contact your Loan Servicer immediately to determine your options. Keep in mind that once the foreclosure has been initiated, you only have a certain amount of time in which you can reinstate (bring current) your loan. Please see "Who is My Loan Servicer?" at the begining of this section, to determine who to contact.