Builders who sell homes to moderate-income buyers in West Virginia should note a change from the state's housing finance agency. It affects what some of their buyers will pay each month.
The West Virginia Housing Development Fund raised interest rates on its Movin' Up programs effective with new loan reservations received Wednesday, Oct. 7. According to the Fund's memo to lending partners, signed by Loan Closing and Pipeline Manager Tricia Poe, the new rates are:
- Movin' Up: 7.750%
- Movin' Up Special: 7.625%
The memo, titled "Movin' Up Programs Rate Increase," doesn't list the previous rates. It says rates on the Fund's Homeownership Program and its Low Down Home Loan stayed the same.
Down payment help is off the table for Movin' Up
The memo also reminded lenders of a second change that matters at the closing table. As of Sept. 30, the Low Down Home Loan, the Fund's down payment assistance product, is no longer eligible with the Movin' Up programs.
The Low Down Home Loan is still available with the Homeownership Program, but only on loans with first-lien loan-to-value ratios of 80 percent or higher. The maximum Low Down Home Loan amount is $12,000, and the combined loan-to-value maximum remains 105 percent.
For a buyer who was counting on stacking a Movin' Up first mortgage with up to $12,000 in down payment help, that combination is gone. Some of those buyers may now need more cash at closing, or may need to qualify under the Homeownership Program instead.
Who Movin' Up serves
According to the Fund's Movin' Up program page, the program is designed to help moderate-income first-time or repeat homebuyers buy a home. Unlike the Fund's better-known homebuyer programs, it has no first-time homebuyer requirement. First-time buyers who earn too much for the Homeownership Program may also qualify.
Movin' Up Special is for applicants whose qualifying income is at or below 80 percent of area median income for their census tract. It offers a reduced interest rate and lower-cost private mortgage insurance.
The program can be used to buy single-family homes, townhomes, units in approved planned unit developments or condominiums, and new or existing post-1976 doublewide manufactured homes. Homes must be in West Virginia, and there's no lot size or acreage limit. The Fund accepts FHA, VA, USDA and private mortgage insurance. Homebuyer education is required on conventionally insured or uninsured loans, while government-insured loans follow the insuring agency's rules.
For builders, one line on the program page matters most: permanent financing is available for newly constructed homes, but construction financing is not.
The October memo notes that Movin' Up allows a 45-day lock on existing homes, and it warns lenders to watch locks carefully because of possible extension fees or worst-case pricing. New construction is handled differently. In an April 15 memo, Senior Division Manager Jon M. Rogers said the Fund was working "to address affordability and inventory struggles" as it announced the return of a 180-day lock for Movin' Up and Movin' Up Special, available only for permanent financing on new construction. That lock requires a fee of 1 percent of the first mortgage amount, not to exceed $2,000, paid within five business days of the lock request.
Why it matters for Contractors
Mortgage terms decide whether a buyer can close on a new house, and builders feel every quarter-point. A higher Movin' Up rate raises monthly payments for moderate-income buyers. Losing the Low Down Home Loan pairing may push some buyers toward the Homeownership Program, or out of the market for now.
The 180-day new-construction lock is the bright spot. A buyer who signs on a house that's months from completion can lock in a rate for up to 180 days, not 45. That protects the deal from more rate moves while the house is built. Builders and their lender partners should make sure buyers know the option exists, what the fee is, and that the clock starts at the lock request, not at closing.
Keep an eye on future WVHDF memos to lenders, too. This one was posted on the Fund's website, and lock questions go to the Fund's lock desk at lockdesk@wvhdf.com. A builder who knows the current rate and the program rules can answer buyers' questions on the spot, before a sale stalls.