19D - FIRST TIME HOMEBUYER - Laserfiche WebLink

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FIRST TIME HOMEBUYER DOWNPAYMENT AND REHABILITATION LOAN PROGRAM The City of Santa Ana seeks to ensure that its neighborhoods are attractive and well maintained. To achieve this goal, the City has designed the First Time Homebuyer Downpayment and Rehabilitation Loan Program ("Homebuyer/Rehab Program") to encourage long-term homeownership. This is a deferred loan program. The Program is designed and implemented in accordance with the American Dream Downpayment Initiative (ADDI) and HOME program and will be modified whenever necessary to ensure compliance with federal regulations and continued program feasibility. The Program will give priority to residents and those employed in the City of Santa Ana. To ensure successful homeownership, borrowers will be required to complete a pre-purchase and post-purchase housing counseling program with a U.S. Department of Housing and Urban Development (HUD)-approved or an affiliate of one of the HUD-funded National Intermediaries, and be required 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 downpayment and/or closing costs. The maximum amount of the homebuyer loan is six percent of the purchase price or $10,000, whichever is greater. In addition to assisting with the acquisition, the Program provides funding for property rehabilitation. Elie:ibilitv Requirements Borrowers must be first time homebuyers. A first time homebuyer is an individual and his or her spouse who have not owned a home during the three-year period prior to purchase of a home under this program. The term includes displaced or divorced homemakers and single parents as defined in 24 CPR Part 92. Total annual income of the household, meaning all persons residing in the home as their principal place of residence, cannot exceed 80 percent of the area median income as determined by HUD. The following table identifies the Orange County HUD limits effective March 15,2004. Household Size Maximum Income Household Size Maximum Income 1 person $ 41,600 5 persons $ 64,100 2 persons $ 47,500 6 persons $ 68,900 3 persons $ 53,400 7 persons $ 73,600 4 persons $ 59,400 8 persons $ 78,400 In addition to meeting the housing counseling and downpayment requirements, borrowers must have a positive credit history and must obtain a fixed-rate loan. Co-signers and variable rate loans are not allowed. Gross household income of all adults who will make the home their principal residence will be used for underwriting purposes. Borrowers must agree to maintain EXHIBIT 1 Page 1 19D-4