29A - HOMEBUYER DOWN PAYMENT ASSISTANCE LOAN PROGRAM

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Substantial Amendment — Homebuyer Down Payment Assistance Loan Program November 18, 2013 Page 2 The proposed Substantial Amendment (Exhibit 1) amends the Plan to include a new activity, Homebuyer Down Payment Assistance Loan Program and allocates $280,000 of HOME funds and $120,000 of CDBG funds. Public notice for this substantial amendment was published in the Orange County Register, La Opinion and Nguoi Viet News on October 18, 2013. Consistent with the City's goal of promoting neighborhood stability and homeownership for low - income households, the Homebuyer Down Payment Assistance Loan Program (Exhibit 2) encourages long -term homeownership within the city. This program will allow households with incomes up to 80 percent of the area median to participate. Maximum loan amounts will be $40,000. Loan amounts will be based on underwriting front -end ratios of not less than 28 percent. The loans will have a zero percent interest rate and payment will be deferred for 45 years or until property is sold. Participants must be first time homebuyers in that they have not had ownership interest in, or have not held title to a principal residence during the three years preceding the purchase of the property. The homebuyer must attend a home - ownership training from a HUD - approved counseling agency. FISCAL IMPACT Upon approval of the amendment and adoption of the new program activity, funds will be reallocated from the Single Family Rehab activities ($280,000 from HOME and $120,000 from CDBG) to the HOME and CDBG Housing Loans and Grants accounts (nos. 13018780 -69152 and 13518782 - 69152). Interim Exe Community NF /SLB /kg Exhibit: Agency APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez Executive Director Finance & Management Services Agency 1. 2013 -2014 Annual Action Plan Substantial Amendment 2. Homebuyer Down Payment Assistance Loan Program Description 29A -2