Homebuyer Program- For First Time Home Buyers

PURPOSE:

The mission of the Homebuyer Program is to work in concert with other City and community-wide efforts to achieve community prosperity by providing safe, decent, and affordable housing and by promoting pride of homeownership.

WHAT IS THE DEFINITION OF FIRST TIME HOME BUYER?

Eligible participants (both applicant and co-applicant) must meet one of the definitions of a first time homebuyer as described below:

1.       Applicant(s) shall not have owned a home except a mobile home not affixed to permanent foundations, during the three years prior to applying for assistance under the HP Program. or

2.       A displaced homemaker who, while a homemaker, owned a home with his/her spouse.  A displaced homemaker is an adult who has not, within the preceding 2 years, worked on a full time basis as a member of the labor force for  a consecutive twelve-month  period and who has been unemployed or under employed, experienced difficulty obtaining or upgrading employment and worked primarily without remuneration to care for his/her home and family; or

3.       A single parent who, while married owned a home with his/her spouse or residing in a home with spouse.  A single parent is an individual who is unmarried or legally separated from a spouse and has one or more minor children for whom the individual has custody, or joint custody, or is pregnant; or

4.       An individual or individuals who owns or owned as a principal residence during the 3 year period before the purchase of a home with assistance, a dwelling unit whose structure is:

a.       Not permanently affixed to a permanent foundation in accordance with local or state regulations; or

b.       Not in compliance with state or local building codes and cannot be brought into compliance for less than the cost of replacement.

 

 WHO IS ELIGIBLE FOR A FIRST-TIME HOMEBUYER LOAN?:

Households whose income does not exceed 80% of the Area Median Income, adjusted by household size. The income limits follow the State of California Housing and Community Development (HCD) Community Development guidelines, which are updated annually.  All eligible applications are subject to loan committee approval*.

                                2010 MAXIMUM QUALIFYING INCOME

Household Size	80% of AMI for Shasta County
1	$31,550
2	$36,050
3	$40,550
4	$45,050
5	$48,700
6	$52,300
7	$55,900
8	$59,500

 

*Program funds are subject to availability.

Single family dwellings, condominiums, and manufactured homes are eligible for purchase under HP.  Any dwelling purchased with assistance under HP must be on a permanent foundation and must be appropriate size and number of bedrooms for the number of persons in the purchaser’s household, and purchase price is not to exceed $172,500 (updated annually).

Yes, the home must be located within the city limits of the City of Shasta Lake.

The amount borrowed is the minimum needed to close the gap between lender requirements and the buyer's available cash for down payment/closing costs. The maximum loan amount is up to $80,000. The borrower must contribute 3% of the selling price toward purchase.

Loan repayment is deferred for 30 years at an annual interest rate of 0% (equity share conditions may apply).  Borrower must pay remaining balance if property is sold, transferred, or converted to rental property at any time during loan period. City of Shasta Lake First-Time Homebuyer Program loan is recorded as a second mortgage against the property.

Yes.

The City of Shasta Lake First-Time Homebuyer Program loan is recorded as a second mortgage against the property. The amount of principal borrowed will be due in full.

 

Application Process:

 

1.     HP applicants will complete a City of Shasta Lake Homebuyer Program Interest form.  This will enable the housing staff to quickly review preliminary information, and send the applicant a full application package which includes the following:

     a.  Application Instructions, Required Documentation Checklist, and Housing      Programs Application

 

2.       Only original applications and all supporting documentation will be accepted and must disclose realtor and lender information.  If application is incomplete or applicant is ineligible, a letter will be sent to that effect.

 

3.        The HP program requires all HP loan applications to complete an eligible First Time Homebuyer Seminar prior to preliminary eligibility approval.  Program Staff will provide a schedule to applicant of the scheduled seminar dates.

4.       If applicant is determined to be eligible, a meeting between the applicant and program staff will be scheduled and a Letter of Eligibility will be provided to the applicant.  At this meeting, staff will discuss the program requirements and answer applicant’s questions.  The letter will have an expiration date of 90 days from the date of issuance and will state further information necessary for you to obtain a HP loan approval.  This letter is for eligibility to program, not a loan commitment.

 

5.         In addition to the eligibility letter, the buyer will obtain three notices.  The Seller Affidavit states:  the home was either owner-occupied or vacant (90) days prior to execution of the purchase offer.  A property not meeting this condition is ineligible.  The Acquisition Notice to Seller states:  the purchaser has no power of eminent domain and, therefore, will not acquire the property if negotiations fail to result in an amicable agreement.  The Lead Paint Notice requires Buyer, Seller, and Agent to complete and sign.

 

6.        The purchased unit must pass a Code Compliance (CC) Inspection before the loan will be approved.  Please submit purchase contracts at the time of execution allowing two weeks for the CC inspection.

 

7.        When the eligibility letter is issued, applicant can then enter into a contract to purchase a home contingent upon receiving first mortgage and HP financing.  No purchase contract dated prior to the eligibility letter will be accepted.

 

8.        Any purchase agreements must state that the purchase is conditional upon final approval of the HP Loan.  Final approval of the loan comes from the HP Loan Committee.  No funds are obligated until the loan is approved.

 

9.          Before the loan can be presented to committee, the City of Shasta Lake must be provided with:

1} a copy of the completed purchase agreement (a 45-day escrow is recommended); 2} signed loan approval from first lender;

3} a copy of the appraisal with original photos;

4} a preliminary title report;

5} a standard flood hazard determination;

6} a good faith estimate with all fees from the lender and title;

7} a copy of inspections as applicable (pest, septic, well)

8} Any other documents that is required for loan approval.

 

10.        Loan Committee Meetings are scheduled on an as need basis, please allow 10 working days for meeting scheduling.

 

11.         Following HP loan approval by committee, HP loan documents and escrow instructions will be sent to the title company.  The executed documents must be received back to the HP Program Staff for review prior to release of funds.

 

12.          To Order Funds into escrow, the City of Shasta Lake will submit escrow instructions to the escrow officer, which will describe all required documentation to be, submitted prior funds release. This process, once the instructions are received, takes a minimum of one (1) week for the funds to be deposited into escrow.

 

Please Note:  This is a summary of the Program Guidelines for the HP Program. 

 

CONTACT:

 

Mailing:  City of Shasta Lake, PO BOX 777, Shasta Lake, CA 96019

 

Physical Address:  City of Shasta Lake, 1650 Stanton Drive, Shasta Lake, CA 96019

 

Fax#: (530) 275-7419

 

Program Managers:

 

Jessaca Lugo– (530) 275-7464, email: jessaca.lugo@ci.shasta-lake.ca.us

 

Loree Byzick – (530) 275-7463, email: loree.byzick@ci.shasta-lake.ca.us