19D - FIRST TIME HOMEBUYER - Laserfiche WebLink

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First Time Homebuyer DownpaYffient and Rehabilitation Loan Program August 2, 2004 Page 2 used to pay for downpaYffient and closing costs for first time homebuyers. Eligible participants must be first time homebuyers whose household income is at or below 80 percent of the area median income adjusted by household size. The purchase price of the home cannot exceed current limits as established or approved by the U.S. Department of Housing and Urban Development (HUD). Effective June 8, 2004, at the request of the City, HUD approved an increase in the maximum purchase price to $380,000. The program regulations limit the maximum loan amount to six percent of the purchase price or $10,000, whichever is greater. Loan funds will be offered as a deferred loan with a zero percent interest rate for a term of 45 years and will be secured by a recorded affordability agreement. To ensure successful homeownership, borrowers will be required to complete a pre-purchase and post-purchase housing counseling program and to open an impound account for insurance and property taxes. Borrowers will be required to provide up to three percent of the purchase price toward downpaYffient and/or closing costs. Preference will be given to Santa Ana residents and those employed in the City of Santa Ana. If the property requires rehabilitation in order to meet the program's property standards, HOME program funds can be used for property rehabilitation. The rehabilitation loan may be provided in an amount such that all loans combined will not exceed 110 percent of appraised after rehabilitation value. If the rehabilitation work includes remediation of hazardous substances, all but $2,500 will be forgiven at the time all rehabilitation is complete and the property is in compliance with all applicable building codes. RepaYffient of the City loan will be required when any of the following events take place: at the end of the term of affordabili ty, when the property is sold, or when the property is no longer the borrower's principal residence. In the event the borrower does not complete the post-purchase counseling program or bring the property into compliance with property standards within one year of the purchase, an interest rate equal to the 11th District Cost of Funds at the time the loan was made will be added to the outstanding balance, including costs associated with the remediation of hazardous substances. ENVIRONMENTAL IMPACT In accordance with the California Environmental Quality Act, the proposed program is not considered a project. No further action is required. 19D-2