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Homebuyer Assistance Program Presentation

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Homebuyer Assistance Program Presentation Powered By Docstoc
					City of Houston

Housing & Community Development Department
Bill White, Mayor Richard Celli, Director

Introduction
The City of Houston (City) Housing and Community Development Department (HCDD) has designed the Homebuyer Assistance Program (HAP) to provide financial assistance to low-tomoderate income homebuyers in the incorporated area of the City.

Introduction
 HAP will provide:
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Direct financial assistance to offset portions of the down payment, closing costs, pre-paids and principal reduction required for home purchase Identification of prospective program participants Development and monitoring of "case management plans" to overcome individual barriers Access to mortgage resources

Homebuyer Requirements

Homebuyer Requirements
 The Homebuyer:
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Must be low-to-moderate income, (a gross annual projected income that does not exceed 80% of the City median income adjusted for family size) Demonstrate the ability to obtain a mortgage loan Sustain ownership during the period of affordability The level of assistance provided to each homebuyer may not exceed $19,500 for HAP and $40,000 for GNND

Homebuyer Requirements
(Homebuyer Assistance Program)
Area Median Income Affordability Percentage (%) Level of Assistance Period
50% or below* 51% to 65% 66% to 80% $14,500.00 $14,500.00 $10,000.00 5 years 5 years 5 years

* Homebuyers at 50% of the area median income or below may be eligible for an additional amount of $5,000 when available.

Homebuyer Requirements
(Good Neighbor Next Door Program)
Families that purchase a home in the Houston Hope area can receive:
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$30,000 for all families whose income is at 80% or below the area median income $40,000 for teachers, police officers, firemen, and EMS personnel whose income is at or below 80% of the area median income Must live in the home for at least 10 years for the full amount of the assistance to be forgiven

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Homebuyer Requirements
 Income Determination:
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Total Family Income used for program eligibility may be different from that used by the ALP. The definition of annual income is the gross amount of income of all household members anticipated to be received during the coming 12-month period. Income for all persons over eighteen years of age living in the property.

Homebuyer Requirements
 Completion of Homebuyer Education:
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Homebuyer must complete at least eight (8) hours of homebuyer education from any Participating HUD Approved Housing Agency. It is the responsibility of the homebuyer to pay all costs incurred with signing up for a homebuyer education course.

Homebuyer Requirements
 Borrowers Cash Investment Requirement :
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At least $500 invested into the transaction At least $1,000, but not more than $50,000, in reserves The cost of the appraisal, credit report, inspection, earnest money and/or cash brought to closing qualifies under this requirement

Homebuyer Requirements
 ALP Loan Approval:
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Downpayment, credit history and credit report are the responsibility of the ALP to assess risk. The back ratio for all ALP loans cannot exceed 50%. The borrower, co-borrower, and/or non-purchasing spouse can not be delinquent on a student loan, a student loan repayment plan, IRS taxes or City taxes. Also, the above applicant(s) cannot be late or delinquent on any utility payments applicable to the current or former address(es). The house payment must include Principal, Interest, Taxes and Insurance (PITI).

Property Eligibility

Property Eligibility Criteria
 Type of Property:
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Single-family property (detached and attached 1-4 units) Condominium unit/Townhouse Modular home/Manufactured home Cooperative unit

Property Eligibility Criteria
 Sales Price Limitation:
The sales price cannot exceed $135,000.

 Property Location:
Property must be located within the incorporated area of the City. The property must pay taxes to the City of Houston.

Property Eligibility Criteria
 Property Condition:
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If the property to be acquired is a newly constructed or existing property, it must be certified as decent, safe and sanitary by a clear HCDD Inspection Report HCDD encourages the potential homebuyer(s) to have an inspection performed on the property to be acquired. Prior to the commitment of any funds, HCDD Inspection Services Section will conduct an independent inspection on the property.

Property Eligibility Criteria
 Lead-Base Paint Visual Assessment:
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Any property built before 1978 will have a lead-based paint visual assessment performed prior to approval of HAP financial assistance.

Property Eligibility Criteria
 Environmental Review for Federal Funds:
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Homebuyers may be approved for downpayment assistance only to purchase existing homes or new homes already under construction at time of application for assistance. HAP will perform an assessment on the property with a focus on the wet lands, flood zones and costal ways. If the property is in a flood area, the ALP must submit the Flood Insurance Determination form with the file.

Property Eligibility Criteria
 Relocation Obligations:
The Uniform Relocation Act (URA) applies to federally assisted homebuyer programs. Under the HOME Program guidelines, the Seller (s) must not displace tenants of the property being purchased. If Seller currently occupies the property, the Seller will waive rights to relocation benefits.

Loan Financing and Closing Requirements

Loan Financing and Closing Requirements
 General Information:
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Should a change in ownership (including foreclosure) or occupancy occur during the Affordability Period, any balance would immediately become due and payable to the City. If the property is sold or the homebuyer vacates during the affordability period, the City must recapture the prorated amount from the Net Sales Proceeds, which shall be the sales price minus superior loan repayment (other than HOME funds) and any closing costs.

Loan Financing and Closing Requirements
 Program Loan :
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0% interest Deferred payment loan Not assumable No owner financing No cash out home equity loan Rate and term subordination 20% loan reduction per year for HAP 10% loan reduction per year for GNND except for special occupations

Loan Financing and Closing Requirements
 Closing Cost :
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Closing cost will be actual cost. ALP may charge no more than one percent (1%) origination fee or $500 whichever is greater. ALP fees not paid to a third party are limited to $650. In addition to the ALP fees described, Mortgage wholesale or broker transaction fees paid by the applicant are limited to $650. Participating Realtor fees are not eligible closing costs.

Loan Financing and Closing Requirements
 Lien Subordination:
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The only liens to be placed on the property purchased through HAP will be the ALP’s First Lien Deed of Trust and the City’s Second Lien Deed of Trust. There will be no third lien recorded related to the purchase of property without prior written approval of the HCDD Director. Violations can result in ALP debarment from participation in HAP.

Loan Financing and Closing Requirements
 Homebuyers must meet the credit and underwriting criteria established by the participating Affordable Lending Partner (ALP) providing the 1st loan.  All programs available to the ALP including conventional, portfolio, FHA, VA or other types are allowable.

Loan Financing and Closing Requirements
 Homebuyer Assistance Program Closing Procedures:
If the ALP submits a complete file, it will take approximately 15 business days to process a file and have a check ready for closing.

Loan Financing and Closing Requirements
 Homebuyer Assistance Program Closing Procedures for Approved Files:
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HCDD will fax a copy of the client approval letter to the ALP and title company to schedule closing. The preliminary HUD I, first page of First Lien Deed of Trust and Schedule A & B of the title commitment from the ALP will be requested in the approval letter.

Loan Financing and Closing Requirements
 Homebuyer Assistance Program Closing Procedures for Approved Files:
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Once the HUD I is approved, HCDD will prepare the Second Lien Deed of Trust, Loan Note, and Closing Instructions. HCDD will contact the appropriate title company to pick up a check and all prepared and executed documents.

Loan Financing and Closing Requirements
It should be noted that the required pre-closing documents must be received at HCDD by 10:00 a.m. if the file is scheduled to close the next business day. No exceptions will be made.

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E-mail Addresses
 Kennisha.Freeman@cityofhouston.net  Elizabeth.Gayatn@cityofhouston.net  Ellie.Delacruz@cityofhouston.net  Gerri.Randle@cityofhouston.net  Alicia.Garza@cityofhouston.net  Cesar.Verde@cityofhouston.net

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Questions & Answers


				
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