08 06 05 MAP Manual by shuifanglj


									                                          Mortgage Assistance Program (MAP)

                                              Victorville Redevelopment Agency
                                                      14343 Civic Drive
                                                    Victorville, CA 92392
                                                       (760) 955-3851

Rev. 06/08   N:\New Folder HOUSING\Mortgage Assistance Program (MAP)\MAP PROGRAM   Effective 3/31/08
                                         MORTGAGE ASSISTANCE PROGRAM (MAP)

                                                GENERAL DEFINITIONS

As used in this Mortgage Assistance Program (MAP) Manual and MAP documents, and unless the context requires
otherwise, the following words and terms have the meanings set forth below:

Means the cost of acquiring the residence as a completed residential unit, excluding the usual and reasonable
settlement of financing costs, and excluding the value of services performed by the mortgagor (as defined in the
Internal Revenue Code, Title 26, Section 143). The term is used interchangeably throughout this Manual with
Purchase Price.

Means an affidavit filed in connection with the MAP Program made under oath and subject to penalties of perjury.

The City of Victorville Redevelopment Agency.

Means any person(s) who applies for assistance under the MAP Program.

Means the City of Victorville Economic Development Department that administers the federal, state and local funds
for the Mortgage Assistance Program.

A single-family detached property located in the City of Victorville as defined in Section 3 (9) of this Manual.
Properties located in unincorporated areas of the City including, but not limited to, Mountain View Acres and Spring
Valley Lake are not eligible for MAP consideration.

The MAP will share a percentage of the equity gained on the Property at time of sale/transfer or at the end of the
term of the loan based on the amount of assistance. The original loan amount plus the equity share is to be repaid to
the City’s ED Department. Percentage of equity is determined by taking the amount of the original MAP Loan and
dividing it into the Purchase Price.

Front-End Ratio:
Principal, interest payments property insurance, property taxes, assessments, homeowner’s association fees, and
reasonable utility allowance. Monthly housing cost of a purchaser shall not exceed the maximum ratios required
based on household income

The gross annual household income of the Applicant(s) is adjusted annually and is further defined in this manual.

An extension of credit provided to an eligible Applicant(s) to assist in the financing of the purchase of an eligible
single-family detached dwelling, which also meets the MAP requirements set forth within this Manual.

The Mortgage Assistance Program (MAP) established by the City and administered by the Economic Development
Department pursuant to the rules and regulations included within this Manual.

A new mortgage originated in conjunction with the MAP program, or a mortgage that has not been transferred or

                                         MORTGAGE ASSISTANCE PROGRAM (MAP)

Means ownership by any means, whether outright or partial, including a fee simple ownership interest by joint
tenancy in common, a tenancy by the entirety, or a life estate interest.

A financial institution which is licensed to do business in the State of California, has met all of the requirements
established by the Economic Development Department to participate as a Lender in the MAP Program, and has
entered into a Lender Participation Agreement acceptable to the Economic Development Department and
renewable on an annual basis. The Lender must have attended the mandatory lender’s training in order to be
eligible to participate.

A single-family residence that must   be occupied by the homebuyer(s) throughout all of the year and thereafter to
the end of the MAP term.

Means the cost of acquiring the residence as a completed residential unit, excluding the usual and reasonable
settlement of financing costs, and excluding the value of services performed by the mortgagor (as defined in the
Internal Revenue Code, Title 26, Section 143). The term is used interchangeably throughout this Manual with
Acquisition Cost.

As defined under the Internal Revenue Code: brothers and sisters (whether by whole or half blood), spouse,
ancestors, and lineal descendants; or (for the purposes of the Program) any entity that is more than fifty percent
(50%) owned by a related person.

                                                 MORTGAGE ASSISTANCE PROGRAM (MAP)


The purpose of this Mortgage Assistance Program (MAP) Manual is to describe the program and set forth the roles of
the Economic Development Department, the Participating Lenders, and MAP Applicants. This document contains
Program Requirements and Program Procedures. Also there are various Exhibits, Attachments, and General
Definitions which further explain the MAP Program.

Participating Lenders are required to attend a mandatory training to be well-informed regarding applicable local,
state, and federal requirements in addition to the program regulations contained in this Manual. Both Applicants
and Participating Lenders alike must be aware of these requirements before any MAP Application is processed. A
Participating Lender shall disqualify those Applicants where the submitted information indicates that the Applicant
does not meet all MAP Program Requirements, and therefore, is ineligible to qualify for the program.

Section 2.       PROGRAM SUMMARY

The Mortgage Assistance Program (MAP) makes available deferred payment (principal and interest) second
mortgages in amounts up to $65,000.00 or up to 30% of the purchase price. However, in no instance will the amount
exceed the amount needed to complete the purchase. This program is specifically designed to provide qualified
families the assistance necessary to secure financing towards the purchase of a single-family detached home in the
City of Victorville. The MAP makes the dream of homeownership a reality for families to experience the pride of

Interested Applicants are encouraged to contact Participating Lenders to have loan eligibility determined. A
Participating Lender list is made available by contacting the City or visiting its website at www.ci.victorville.ca.us. All
MAP Applications are submitted to the Economic Development Department through a Participating Lender. If an
Applicant is interested in using a Lender not on the list, that Lender must contact the City to become a Participating
Lender for the program prior to submitting an application.

The MAP Requirements discussed in this Manual are incorporated in the MAP documents which will become a part of
this document as exhibits. All Applicants must complete and sign the appropriate MAP documents and attest to their
validity. The Participating Lender will be required to submit certifications which will state that to the best of the
Participating Lender’s knowledge, material misstatements do not appear in the application and program
documents. If the Participating Lender becomes aware of misstatements, whether negligently or willfully made, they
must notify the Economic Development Department immediately. The City will take all appropriate actions to
enforce program requirements.

The Participating Lender should also be aware and inform the Applicant(s) that penalties are provided by Federal
and California law if a person makes a false statement or misrepresentation so as to obtain assistance through the
MAP program.


    In order to qualify for a Mortgage Assistance Program home loan, the Applicant’s gross annual household
    income must not exceed the following limits: *

   CATEGORY                                                  HOUSEHOLD SIZE
                     1              2              3              4              5               6               7         8
   Very Low       $23,300        $26,650        $29,950        $33,300        $35,950         $38,650         $41,300   $43,950
   Low            $37,300        $42,650        $47,950        $53,300        $57,550         $61,850         $66,100   $70,350
   Moderate       $52,100        $59,500        $67,000        $74,400        $80,400         $86,300         $92,300   $98,200
          *Year 2008 Income Limits as published by the Housing and Urban Development (HUD) and updated annually.

                                            MORTGAGE ASSISTANCE PROGRAM (MAP)

The Applicant’s gross annual household income qualifying procedure will be pursuant to the state and federal
funding requirements. Under the California Code of Regulations, Housing and Community Development Law,
Section 6914, “gross income” shall mean the anticipated income of a person or family for the twelve-month period
following the date of determination of income. Gross income may include but not be limited to the gross amount,
before payroll deductions, of wages (including part-time), salaries, commissions, overtime pay, fees, tips and
bonuses; alimony; child support; public assistance; Veterans Administration compensation.

The income to be taken into account in determining gross income is all income of any adult (over 18) member in the
household for the residence to be financed, whether or not such person is a borrower. For example, if the person will
reside in the home, but is not an additional borrower, that person’s income must be considered. In the case of
married couples, income includes that of both spouses, even if only one spouse is applying for the loan.


For those cases involving self-employed Applicant(s,) income must be determined according to all applicable
Participating Lender guidelines for such income. For this purpose only income can be averaged over a three year
period. Explanation of the Lender’s determination of income must accompany the MAP Application. A minimum of
three (3) years Income tax returns are required and a current profit and loss statement.


In order to better determine whether or not an Applicant exceeds the established income guidelines, the
appropriate adjustment for household size will be verified by the City. Such verification will consist of a review of the
Applicant’s federal income tax returns in addition to any other documentation submitted to support the stated
household size. In those cases in which an Applicant’s household size is not readily demonstrated by supporting
documentation, a letter of explanation supporting the stated household size must be submitted with the application
for consideration.


To qualify, the buyer must not currently own a home or hold an interest in a residential real property. Priority will be
given to current residents of the City of Victorville and applicants employed within the City.

The Applicant cannot have held ownership interest in a Principal Residence at any time during the preceding three
(3) years ending on the date of the Application. This must be verified by the Participating Lender’s examination of
the Applicant’s federal tax returns for the preceding three (3) years to determine whether the Applicant has claimed
a deduction for mortgage interest or real estate taxes on a Principal Residence.

To demonstrate compliance with this requirement, Applicants must execute the MAP Applicant Certification form,
and provide complete copies of the last three (3) years signed federal tax returns and W-2s as well as any 1099. If
complete copies for the last three years are not available, alternative documents may be submitted as follows:

        a. If the Applicant(s) cannot produce a copy of a signed federal tax return, then the Applicant can request
           a copy from the IRS by using IRS Form 4506, Request for Copy of Transcript of Tax Form. The Applicant(s)
           should note that it may take up to 60 calendar days to get a copy of a tax form from the IRS.


        b. If the Applicant(s) cannot produce a copy of a signed federal tax return, the following will be

              The Applicant(s) can request a printout of tax account information, which is available free of charge, from
              the local IRS office. In addition, the Applicant must complete and sign the MAP Income Tax Affidavit.

                                         MORTGAGE ASSISTANCE PROGRAM (MAP)

        c. In the event an Applicant(s) was/were not obligated to file federal income tax returns for any of the
           preceding three (3) years, a completed and signed Income Tax Affidavit will be required. The Income
           Tax Affidavit must be accompanied by documented proof of the reason for not filing taxes. The Affidavit
           must also be accompanied by documented proof that the Applicant was a renter during the specified
           period (i.e., notarized letter from the landlord or manager, canceled checks, rent receipts, etc.).

        d. When a MAP Application is submitted during the period between January 1 and April 15, and the
           Applicant has not yet filed the federal income tax return for the previous year, a completed and signed
           MAP Income Tax Affidavit is required. The affidavit will certify that the Applicant is not entitled to claim
           deductions for real estate taxes or mortgage interest with respect to a Principal Residence for the
           previous calendar year.

If a tax return indicates that the Applicant took a deduction for mortgage interest or real estate taxes on property
claimed not to be the Principal Residence, documentation is required to show proof of non-ownership.

Exception: In cases involving a judgment determined a principal residence not to be an Applicant’s property; such
an Applicant may still be eligible for MAP assistance. (Court judgment will be required and the City will need to make
a determination)

Displaced Homemaker: Any spouse that has lost a primary residence due to divorce. The property was awarded to
the other party under the court judgment. However, current loan cannot be in the participant’s name. (Court order
and disposition of loan will be required)


All homebuyer(s) receiving MAP assistance are required to attend a Community Homebuyers Training/Seminar
before the loans are funded. Acceptable certificates must come from the Inland Fair Housing and Mediation Board
(IFHMB) agency which can be reached at 1(800) 321-0911 or by Neighborhood Housing Services of the Inland Empire
at (909) 884-3891. These are the two agencies approved by the MAP.


The lender should understand that the buyer’s income will be computed differently for the MAP loan than the
computation for the first mortgage. Although the income calculation can vary from the first mortgage, an
explanation will be required for the differences.

Income Sources: The MAP requires that every source of income, taxed or untaxed, be included in the MAP
computation, while the underwriter for the mortgage may choose not to honor sources of income which are
sporadic and lack a strong track record.


In order to qualify for a loan through the MAP, the applicant must not be able to purchase a home with his/her
current assets, yet still must have sufficient income and credit with which to qualify for a loan.

For purposes of the MAP program, the following will be considered assets in determining program eligibility:

        a.     Cash savings, certificates of deposit, marketable securities, stocks, bonds, and other forms of capital
               investments other than Individual Retirement Accounts, KEOGH plans, or other retirement vehicles.

        b.     Inheritances, cash lump sum insurance payments, settlements for personal property damage already
               received will be considered a household asset.

                                         MORTGAGE ASSISTANCE PROGRAM (MAP)


All MAP Applicants must meet “affordable housing cost” requirements as defined by Health and Safety Code Section
50025.5 The “affordable housing cost” is strictly determined as the percentage of gross monthly household income
which is utilized toward the total cost of owning a home. This calculation will be determined by the Participating
Lender and verified by the City. Affordable monthly payments (mortgage payments, property taxes, insurance, etc.)
shall not exceed the following percentages of the Gross Annual Household Income divided by twelve (12) months.
The ratios are strictly enforced:

For Very Low Income Households                 Not to exceed 30% (Front End Ratio Equivalent)
For Low Income Households                      Not less than 25% but not to exceed 30% (Front End Ratio Equivalent)
For Moderated Income Households                Not less than 28% but not to exceed 35% (front end ratio Equivalent)

Lenders should ensure that the MAP assistance it is only for the amount that is required to complete the transaction.
The affordability requirements are to keep MAP loans within the maximum ratios; however, at the same time attention
should be given to only providing the amount of assistance required, not the maximum available.


The Applicant(s) must comply with the following purchase price limits in order to qualify. For new or existing housing
units, the purchase price of the single-family residential unit must not exceed $362,790 (95% of U.S. Department of
Housing       and       Urban       Development          FHA      as       adjusted      annually)     found        at
https://entp.hud.gov/idapp/html/hicostlook.cfm (County/California/San Bernardino)) to qualify for the MAP Program.


Single-family detached properties, condominiums, and town homes located within the City of Victorville are eligible.
Most mobile homes (see exception below) are not eligible for assistance through the MAP Program. Manufactured
homes may be eligible for the MAP Program if certain construction, foundation and financing requirements are

The home must be a fee simple, single-family residence, condominium, or townhouse, be owner-occupied, vacant or
occupied by tenant buyer and be within the limits of the City of Victorville. Manufactured homes and mobile homes
on individually owned parcels may qualify for assistance providing they are on a permanent foundation. Priority shall
be given to foreclosure properties and others, which have been vacant over 90 days. Mobile homes on rented
spaces are not eligible. The home must be in sound condition and meet established City of Victorville Housing Quality
Standards prior to closing. Repairs are not eligible for assistance under the MAP program.

All purchases must obtain certification that the properties purchased with Mortgage Assistance Program funds meet
minimum health and safety standards upon occupancy (See Housing Quality Standards and the Inspection Form).
Properties purchased that were built prior to 1978, must meet compliance with lead-based paint regulations for
Notification, Evaluation, and Reduction of lead-based paint hazards in federally owned residential property and
housing receiving federal assistance; Final Regulation (September 15, 1999) [24 CFR Part 35].

All purchases funded under the HOME Program must comply with the regulations set forth in the National
Environmental Policy Act of 1969 (NEPA) and 24 CFR Part 58, and the “Compliance Documentation Checklist” must
be completed for each property prior to committing or expending funds (responsibility of the City of Victorville
Economic Development Department).

Manufactured homes may be eligible for the MAP Program if certain construction, foundation and financing
requirements are satisfied. Manufactured homes constructed in compliance with the “National Manufactured
Housing Construction and Safety Standards Act of 1974,” a building code administered and enforced by the U.S.
Department of Housing and Urban Development, may be considered eligible properties for the MAP Program. The
sale must be structured so that the land and home represent a single real estate transaction and financing must be
evidenced by a recorded mortgage or Deed of Trust. The borrower must acknowledge that the unit is attached to a

                                          MORTGAGE ASSISTANCE PROGRAM (MAP)

permanent foundation and is a part of the real property securing the mortgage. All applicable permanent
foundation requirements must be met to allow the manufactured home to be classified as real estate.

For the home inspection requirement, the City will accept the Section 8 Checklist attached to the appraisal or a
home inspection by a certified home inspector.


The Applicant(s) must intend to use the home purchased with MAP assistance as a Principal Residence. The MAP
Application Affidavit includes a statement of the Applicant’s intent to use the residence as his/her Principal
Residence. This affidavit further states that the Applicant(s) will notify the City if the residence ceases to be his/her
Principal Residence.

An Annual Certification Form will be mailed to the homeowner requiring execution to confirm the Principal Residence


MAP can be used with a new mortgage loan, including; conventional, FHA, CAL-HFA, FNMA, FHLMC, a Fixed Rate
loan that meets the front-end ratio criteria,

The following loans are not eligible to be used with the MAP Program:
         a. An adjustable rate loan.
         b. Any loan that has negative amortization and is tied to annual adjustments.
         c. Any loan that is contrary to either U.S. Treasury Bonds and/or exceeds the established index for 11 th District
            Cost of Funds or U.S. Treasury Bonds.
         d. Any loan in which interest on the mortgage (or certified indebtedness) amount will be paid to a person
            who is a “related person,” as that term is defined under the Internal Revenue Code and applicable
            regulations. The Participating Lender must obtain from the Applicant, using the program affidavits, a
            statement to the effect that no related person has or is expected to have, an interest as a creditor in the
            certified indebtedness amount.

203(k) loans are eligible for the MAP Program to finance the purchase and rehabilitation of an eligible property
provided the plans and specifications for the proposed rehabilitation are submitted to the City for review along with
the application.


The homebuyer(s) must contribute a minimum of 1% of the purchase price toward the acquisition of the home.
Additionally, they must have a one month payment of PITI at the end of the transaction. The contribution must be
fully documented in the transaction. It may be in the form of allowable buyer’s closing costs or in the form of down

The 1% contribution required must come from the borrowers own funds. However, the one month PITI can be in the
form of a gift from a family member. A non-acceptable form of gift funds is seller contribution.


The City of Victorville Mortgage Assistance Program (MAP) loan is made available to applicants with fair to good
credit. If a bankruptcy and/or a foreclosure exist, a minimum waiting period of three years is required prior to
participation in the MAP. In addition, the credit record(s) must not show a substantial disregard for former or existing
credit obligations or they may be disqualified for participation.

                                          MORTGAGE ASSISTANCE PROGRAM (MAP)


MAP funds should be applied primarily toward the required down payment, and applied secondarily toward the
allowable buyer’s closing costs. (Not to exceed 2.5% of the Purchase Price).

Allowable buyer’s closing costs are those defined by FHA guidelines.

The City will review the structure of the sale to determine the amount of assistance required to complete the
transaction. MAP funds will not be issued to cover those closing costs usually associated with the seller or for discount


The Mortgage Assistance Program can provide assistance up to 30% of the sales price or a maximum $65,000.00;
However, in no instance shall the amount of assistance exceed what is required to complete the purchase. The MAP
staff will ensure that every transaction maximizes the first mortgage, so that only the gap required to complete the
purchase is provided.

The amount of assistance will be determined by taking into account all factors to include the minimum down
payment required; the buyer paid closing costs, seller’s contribution and the 1% Homebuyer(s) contribution.


For an eligible Applicant purchasing a $160,000.00 home, the Applicant would have to contribute at least $1,600 (1%)
toward the purchase of the home. For this example, the purchase and loan is structured as such that 3% is the
required down payment, 4% is required to be paid by the buyer for closing costs, while the seller is paying for 2% of
the closing costs. In each case the Applicant is required to make a minimum 1% contribution. The amount of MAP
assistance made available would be determined by maximizing the first mortgage and then by the Applicant’s
household income category as follows:

The amount of assistance made available to qualifying Applicants will be determined on a case by case basis by the
City in its sole discretion taking into account various factors including, but not limited to: need, income level, cost of
home, affordability, assets, additional sources of assistance, etc.

Note: This program is to assist the buyer in purchasing a home. The funds cannot be applied to standard costs
associated with the seller.

This program has limited funds available for use.        Please check the website for current funds available at:
www.ci.victorville.ca.us .


MAP assistance is in the form of a deferred payment loan reflected in a Promissory Note in favor of the City/Agency
and secured by a second Deed of Trust. The Promissory Note shall have a term of thirty (30) years with a 0% interest
loan. Monthly payments (principal and interest) will not be required during the term of the loan. However, an equity
share based on the amount of the assistance and the principal amount is required to be repaid at the end of the

Upon the sale, transfer, refinancing, change of ownership or if the homeowner cease to occupy the home as the
primary residence, the principal balance and equity share based on the amount of assistance will become
immediately due and payable. After the expiration of the thirty (30) year term, the principal amount of the loan plus
the applicable percentage of appreciated equity based on the market value will become due and payable. The
market value of the Property will be determined by a licensed appraiser approved by the Economic Development
Department, at the Borrower’s expense.

                                         MORTGAGE ASSISTANCE PROGRAM (MAP)

The gross equity accumulated shall be computed by calculating the difference between the purchase price and the
sales price minus the cost of sale.


All Applicants are required to complete, sign, and submit the required MAP Application Affidavits which contain
acknowledgments and certifications specific to satisfying all program requirements. Strict penalties and/or fines may
be imposed on any Applicant(S) making a material misstatement, misrepresentation, or fraudulent act on documents
or affidavits submitted to obtain MAP assistance.

This form is the Mortgage Assistance Program (MAP) application.


Participating in this program will require a Declaration of Covenants, Conditions, and Restrictions to be recorded
against the property that the homebuyer is purchasing. The term of Covenants, Conditions, and Restrictions will be
for a period of 45 years. The 45 year affordability period runs with the land. It is the responsibility of the lender to
explain and ensure that homebuyers fully understand the purpose of this document.

To ensure that the homebuyer(s) is notified, a new notice referred to as “NOTICE OF AFFORDABILITY RESTRICTIONS ON
TRANSFER OF PROPERTY” will be executed with each MAP at loan closing.

                                              ADDITIONAL REQUIREMENTS

The City of Victorville Economic Development Department must be named as “additionally insured” on all
homeowner insurance policies for the property in which a MAP loan was issued. Proof of the policy with the Agency
named must be submitted to the ED Department by the Lender prior to the closing of escrow.

Each loan package must be submitted to the City of Victorville Economic Development Department a minimum of
thirty (30) days prior to the close of escrow to meet the necessary deadlines to obtain approval and to obtain the
required documents to fund the loan.

Additional requirements may be updated as necessary. MAP notices will be provided periodically to keep all
participating lenders informed about program updates. Participating Lenders will also receive all document updates
as they become available and are incorporated into the program. The City of Victorville Economic Development
Department is an Equal Opportunity Housing Provider.

                                        LENDER PARTICIPATION AND TRAINING

Any Lender who wishes to utilize the MAP Program must attend a mandatory lender’s training and submit a MAP
Lender application for approval. Upon verification of information and credit verification, a Lender Participation
Agreement will be issued and it must be fully executed before becoming an approved lender to participate in the
MAP. The approval process will be reviewed annually. It is the responsibility of the Lender, not the City, to maintain
current on any information required to continue participation. MAP Applications will be accepted from participating
lenders only. A participating Lender List will be made available to all interested MAP participants. This list of
approved, participating lenders will be available through the City’s Website and by request at the ED Department.

All Lenders will be required to attend MAP Lender’s training held by the City to participate. Additionally other
meetings may be required or deem necessary to facilitate the program’s proper use. Participation is granted to the
lender, not to each participant of the training; therefore, it is the responsibility of the attendee to share the
information with their office and to ensure that they update any required forms or program revisions. A specific
contact person must be identified by each lender to ensure that he/she receives all updated information and he/she
shares it with the office. Lenders interested in becoming a participating lender can contact the ED Department to be
placed on a waiting list for the next available lender’s training.

                                          MORTGAGE ASSISTANCE PROGRAM (MAP)


The City retains the express authority to perform random audits of Participating Lender’s records relevant to any MAP
                                                 CONFLICT OF INTEREST

MAP assistance shall not be issued to a person, or an immediate family member, who is in a decision-making position
relative to the MAP Program, or the issuance of a MAP loan. This includes, but is not limited to, staff of Participating
Lenders and their immediate family members.

1.   A revocation will occur upon discovery by the City or a Participating Lender of an Applicant’s material
     misstatement, whether negligent or fraudulent.

2. Automatic revocation occurs when the residence for which MAP funds were issued ceases to be the Borrower’s
   Principal Residence.


MAP loans are not transferable. In the event of sale of the residence, escrow shall require payoff of the MAP loan
which includes principal and an equity shared based on the amount of Assistance. A transfer is defined as any sale,
assignment, conveyance, lease or transfer, voluntary or involuntary, of any interest in the Property. Without limiting
the generality of the foregoing, Transfer shall include (i) a transfer by devise, inheritance or intestacy to a party who
does not meet the definition of a Moderate, Low or Very Low Income Household; (ii) a life estate; (iii) creation of a
joint tenancy interest; (iv) a gift of all or any portion of the Property; or (v) any voluntary conveyance of the Property.
Transfer shall not include transfer to a spouse in a dissolution proceeding.


Eligible homebuyer(s) must apply for MAP assistance in connection with the primary mortgage loan application
through a Participating Lender. The MAP processing procedures are designated to coincide with the standard
mortgage loan processing and underwriting procedures that are in place for most mortgage lending institutions.
Recognizing there are procedural variations among the Participating Lenders, the procedures outlined herein are
meant to serve as guidelines with respect to the sequence of events. Regardless of sequence, however, all elements
of the MAP Program Procedures outlined in this section must at some point be completed, either by the Lender, the
City, or the Applicant(s).

The ED Department may delegate part of its administrative functions to Participating Lenders through a Lender
Participation Agreement. A Participating Lender must notify the ED Department if it becomes aware of any
circumstances which would disqualify MAP Applicant(s) or borrower(s) of a MAP loan.

                                                   HANDLING PRIORITY

All MAP Applications will be processed by the City according to the date of receipt. Participating Lenders must
submit applications to the City allowing for sufficient processing time prior to loan closing. To allow for proper
processing time, Participating Lenders should take into account those days in which the City of Victorville is
scheduled to be closed. Last minute or “Rush” applications will be under a normal handling priority.

                                                   APPLICATION PHASE

During the Application Phase, the City, Applicant(s) and/or Lender perform the following procedures:

During the Application Phase, all homebuyer(s) receiving MAP assistance are required to attend a Community
Homebuyers Training/Seminar before the loans are funded. Acceptable certificates must come from the Inland Fair

                                               MORTGAGE ASSISTANCE PROGRAM (MAP)

Housing and Mediation Board (IFHMB) agency which can be reached at 1(800) 321-0911 or by Neighborhood
Housing Services of the Inland Empire at (909) 884-3891.

     1.   Applicant contacts the Economic Development Department for a MAP Program Summary, flyer and for a list
          of participating lenders.

     2.   Applicant Contacts a Participating Lender to obtain preliminary loan approval. If an Applicant selects a
          lender that is not on the Participating Lender List, the lender should contact the City if interested in becoming
          a Participating Lender. The approval process is not automatic so adequate time should be allowed for this

     3.   Participating Lender determines Applicant’s preliminary eligibility for primary mortgage loan approval based
          on its underwriting guidelines. If Applicant(s) is preliminarily approved for primary mortgage loan financing,
          Participating Lender determines if Applicant is eligible for MAP assistance taking into consideration MAP
          eligibility factors.

     4.   Applicant(s) contacts a Realtor to select a home and obtain a purchase agreement.

     5.   Applicant(s) completes application package for a primary mortgage loan and an application for the MAP
          through the Participating Lender.

     6.   If Applicant(s) appears to be eligible and has received Loan Approval, Participating Lender submits
          complete MAP Application Package to the City.

     7.   City determines preliminary eligibility and establishes case file on Applicant.

     8.   Once staff has reviewed the MAP Application Package for completeness, City notifies Lender of Application
          status by one of the processes below:

          a. Issuing an initial eligibility and a preliminary needs list.

          b. Issuing “MAP” Reservation Letter.” The MAP Application would then move to the Approval/Commitment
             Phase detailed below.

          c. Issuing a “MAP Request for Additional Information” Letter. As eligibility cannot be determined based on
             the information submitted and the additional requested information must be submitted to the City within
             the next 10 days or the MAP Application will be canceled.

          d. Issuing a “MAP Determination of Ineligibility” Letter including reasons for ineligibility.

If a MAP Application has been denied by the City, any re-submission, if appropriate, must include all information
necessary to determine those circumstances used in determining the denial have since been mitigated.

                                          APPROVAL/COMMITMENT (FUNDING) PHASE

During this Phase, the Participating Lender continues to perform standard verification for loan underwriting. In
conjunction with the regular verification process and under the Agreement with the Economic Development
Department, the Participating Lender performs a reasonable verification that all MAP Program Requirements have
been satisfied. The Participating Lender may verify these facts in any reasonable, efficient manner, according to
standard industry practices, for processing mortgage loan applications.

1.        During this phase, all documentation, as well as an estimated HUD 1 must have been received by the
          Economic Development Department, prior to commitment being issued. Commitment can only be issued if
          a complete determination has been made as to applicant(s) eligibility, property eligibility and the amount of
          assistance has been determined. Upon completion of this process, MAP loan documents can be requested

                                            MORTGAGE ASSISTANCE PROGRAM (MAP)

         to be forwarded to the designated Escrow Company/Title Company for execution by the Borrower(s). Those
         documents will include the following:

             Escrow Letter
             Escrow Instructions
             Deed of Trust
             Promissory Note
             Covenants, Conditions & Restrictions
             Notice of Affordability Restrictions on Transfer of Property
             HOME Disclosure
             Truth in Lending
             Request for Notice
             Tax Form
             Lead Based Paint Notification

2. The Lender forwards to the City a copy of the following:

             Complete MAP Loan Closing packet
             Proof of Hazard Insurance with the Economic Development Department named as additionally insured.
             Copies of the executed primary deed of trust and note
             Any final conditions prior to funding, if applicable

         During the Commitment Phase, the Participating Lender must immediately notify the City in writing
         cancellations of reservations or commitments. The reason for cancellation must be clearly stated.

         Once a “MAP Commitment” is issued, the Participating Lender has thirty (30) days to close escrow. Extensions
         may be considered if the Participating Lender forwards a written request to the City. Updated documents
         will be requested as a condition of the extension.

                                                        LOAN CLOSING

1.   After the Borrower(s) has formally executed the required loan documents, the Escrow/Title Company then
     forwards the MAP complete packet fully executed to the City. Upon acceptance of the documents, the City will
     execute and forward the appropriate documents to Escrow/Title Company for recording with first mortgage
     documents. The Escrow/Title Company forwards those documents which require recordation to the County
     Recorder’s Office.

2.   In addition, the City requires a copy of the Deed of Trust which secures the primary financing, a copy of the
     Promissory Note for the primary financing, and a copy of the Escrow Settlement Statement (HUD1), identifying the
     source and amount of funds due to Escrow for closing.

3.   MAP funds will be released to the Escrow/Title Company once the City is in receipt of the above referenced
     documents. Funds are disbursed in the form of a wire transfer upon confirmation that all MAP approval
     conditions have been met and verification that the first mortgage will be funding concurrently.

4.   The Escrow Company proceeds to effectuate the completion of the transaction and escrow closes.

5.   The City completes the final review of the file.

6.   The Title Insurance Company forwards to the City a copy of the Title Insurance Policy.

7.   The City receives recorded documents from the County Recorder’s Office.

8.   The City completes loan file.

                                           MORTGAGE ASSISTANCE PROGRAM (MAP)

                                                   MONITORING PHASE


1. The City maintains a record of all MAP funds issued (including case number and amount).

2. The City maintains a running, cumulative total for the MAP Program, including amounts reserved, to monitor the
    amount of expected aggregate certified indebtedness and aggregate amount of MAP funds to be issued. The
    aggregate amount of MAP funds issued and reserved shall not exceed the authorized amounts designated for
    the program.

3. The City shall maintain closed MAP case files for at least 5 years after the term of satisfaction of loan or the end of
   the affordability term.

4.   The City will require a signed Annual Affidavit of Owner-Occupancy for each MAP loan.

5.   The City will retain the original Promissory note, Deed of Trust, CC&R’s and Notice of Affordability Restrictions on
     Transfer of Title, as well as a certified copy of the first mortgage deed and note for the term of the loan. All other
     documents generated during the loan process will be scanned and retained electronically for a period of five (5)
     years after the term.


                                                  LENDER RESPONSIBILITY

1. For seven (7) years, the Lender must retain the following on its MAP cases:

         Borrower’s name
         Borrower’s mailing address
         Borrower’s social security number
         Date of Loan issuance and amount

                                                    LENDER ELIGIBILITY

A “Lender” is a company licensed to make first mortgage loans in the State of California. The MAP is available to
direct lenders.   Brokers may be eligible for designation as participating lenders; however, they may enter into
arrangements with a participating lender to process MAP applications. The participating lenders will remain
responsible for all submittals. All lenders who wish to participate in the MAP must be enrolled in the program,
maintain an active status, and meet the following requirements:

         1.      Require all lenders to attend a MAP lender training session;

         2.      Complete a MAP Lender Application;

         3.      Sign a Lender Participation Agreement;

         4.      Provide the MAP Guidelines and the Handbook to all MAP processors;

         5.      Complete a Quality Commitment Policy Form for every file submitted;

         6.      Certify that borrower meets all MAP loan criteria;

         7.      Cooperate with the City in providing the best possible service to the City’s homebuyers;

                                          MORTGAGE ASSISTANCE PROGRAM (MAP)

        8.      Designate contact person(s) for the program; and

        9.      Refer the Applicant to the homebuyer education and counseling as soon as the contact is made
                and prior to completing the application process.

                                                   LENDER REMOVAL

The Economic Development Department may suspend or remove participating lenders from the Mortgage
Assistance Program in accordance with the terms of the Lender Participation Agreement. A Lender may be
suspended or removed from the Program based on, but not limited to, the following violations:

        1.      Failure to follow the MAP Guidelines, as described in this manual and periodic Lender Bulletins.
        2.      Failure to submit all outstanding documentation within ten days of the scheduled loan closing.
        3.      Withholding information that would result in applicant or property disqualification from the program.
        4.      Negligent or fraudulent misstatements or actions in regard to the Program.
        5.      Failure to conduct reasonable verification of applicant qualifications for the Program.
        6.      Failure to maintain complete applicant records for a minimum of seven (7) years after the date of
                loan closings.
                                                ADDITIONAL PROCEDURES

The following changes during the Application or Reservation Phase will be handled in the manner outlined below:

                                CHANGES IN THE PROPERTY AND/OR PURCHASE PRICE
If there is a change in the property being financed at any time during the MAP Application or Reservation Process,
the Participating Lender must submit updated documents in which any information has changed. This includes any
documents reflecting the property address.

If there is a change in the Purchase Price of the property, additional underwriting will be necessary to determine if the
Applicant remains eligible for MAP assistance. If a “MAP Reservation Letter” has already been issued, and the
Applicant remains eligible, all loan documents must be updated to reflect the change. The original Commitment
expiration date of thirty (30) days will remain.

The MAP Program will issue the Reservation based on income verified. This income amount remains valid throughout
the thirty (30) day period in which the Reservation is valid; however, should the income change at any time, it must
be reported so that the file can be updated and eligibility determined on again.

If the loan does not close within thirty (30) days and an extension is requested, the income will have to be re-verified.
If there is an increase in income from that which was previously approved and such increased income exceeds the
MAP Program limits, the Applicant will no longer remain eligible.

If the Applicant experiences a change in marital status after issuance of the Reservation and prior to closing, the
Participating Lender must notify the City. The new spouse must satisfy the MAP Program Requirements and any
additional income from the new spouse must be considered. This will affect the validity of the Reservation.

                                       CHANGES IN HOMEOWNERSHIP STATUS
If the Applicant(s) acquire(s) a present ownership interest in a Principal Residence prior to loan closing, the MAP
Reservation shall be revoked.

If the total acquisition cost of the residence purchased in connection with the MAP Program increases so as to
exceed the Purchase Price limitations set forth herein, the MAP Commitment shall be revoked. If the mortgage loan
amount changes at closing, the MAP Commitment may be revoked.


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