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Update to the Homebuyer Down Payment Assistance Loan Program <br />March 6, 2018 <br />Page 2 <br />profit homeownership professionals in the area to identify potential opportunities for <br />improvements to our current programs. Based on this outreach and the recommendation from <br />the EDIBT Committee, staff is proposing the following revisions to the eligibility criteria for the <br />Homebuyer Down Payment Assistance Loan Program to ensure the program is successful and <br />homeownership more attainable for low to moderate income residents: <br />*Maximum sales price is subject to HUD revisions <br />The first proposed revision is to fund the Homebuyer Down Payment Assistance Loan Program <br />with Inclusionary Housing Funds. Pursuant to Section 41-1909 (1) of the Housing Opportunity <br />Ordinance, monies deposited into the Inclusionary Housing Fund must be used to increase and <br />improve the supply of housing affordable to moderate, low, very low, and extremely low income <br />households in the City. Pursuant to Section 41-1909 (3) of the Housing Opportunity Ordinance, a <br />permissible use of monies deposited into the Inclusionary Housing Fund includes pre -home <br />ownership co -investment. This proposed revision will allow the City to increase the eligible <br />household income limit to moderate income, meaning up to 120 percent of the area median <br />income. Second, this proposed revision will also remove the maximum sales price requirement. <br />The second proposed revision to the program is to increase the maximum loan amount for low <br />income buyers up to $80,000. The maximum loan amount for moderate income buyers would be <br />$40,000, but low income buyers could qualify for up to $80,000. Under the current program <br />guidelines, maximum loan amounts are $40,000. By increasing the loan amount for low income <br />buyers, more lower income families will be able to more effectively qualify to purchase a home. <br />25C-2 <br />Current Program <br />Proposed Revisions <br />Guidelines <br />CDBG & HOME <br />Inclusionary Housing <br />CDBG <br />Funding Source <br />Funds <br />Income Limit <br />Low -Income (80% AMI) <br />Moderate -Income <br />120% AMI <br />Low -Income <br />80% AMI <br />Maximum Sales <br />$499,999* <br />N/A <br />$499,999* <br />Price <br />$40,000 for Moderate <br />Maximum <br />$40,000 <br />Income Households; <br />$80,000 for Low <br />Assistance <br />$80,000 for Low <br />Income Households <br />Income Households <br />Local Preference <br />N/A <br />Must Live or Work in Santa Ana (except U.S. <br />military veterans <br />Gift Funds <br />No Limit <br />May not exceed 3% of purchase price <br />Inclusionary <br />Eligible <br />Ineligible <br />Homes <br />Returning Student Incentive <br />($10,000 forgiven every five years up to $40,000 <br />Loan Forgiveness <br />N/A <br />maximum loan forgiveness; Must have <br />graduated from a high school located in Santa <br />Ana and have a 4 -year college degree) <br />*Maximum sales price is subject to HUD revisions <br />The first proposed revision is to fund the Homebuyer Down Payment Assistance Loan Program <br />with Inclusionary Housing Funds. Pursuant to Section 41-1909 (1) of the Housing Opportunity <br />Ordinance, monies deposited into the Inclusionary Housing Fund must be used to increase and <br />improve the supply of housing affordable to moderate, low, very low, and extremely low income <br />households in the City. Pursuant to Section 41-1909 (3) of the Housing Opportunity Ordinance, a <br />permissible use of monies deposited into the Inclusionary Housing Fund includes pre -home <br />ownership co -investment. This proposed revision will allow the City to increase the eligible <br />household income limit to moderate income, meaning up to 120 percent of the area median <br />income. Second, this proposed revision will also remove the maximum sales price requirement. <br />The second proposed revision to the program is to increase the maximum loan amount for low <br />income buyers up to $80,000. The maximum loan amount for moderate income buyers would be <br />$40,000, but low income buyers could qualify for up to $80,000. Under the current program <br />guidelines, maximum loan amounts are $40,000. By increasing the loan amount for low income <br />buyers, more lower income families will be able to more effectively qualify to purchase a home. <br />25C-2 <br />