Workshop Presentation, November 20 and 26, 2013 - Housing

Report
First Time Homebuyer
Assistance
Presentation
Who We Are:
City of Oxnard Affordable
Housing and
Rehabilitation Division
Note: We are not the
Oxnard Housing Authority
Affordable Housing and
Rehabilitation Division
Mary Chappell
Connie Hernandez
Hermila Hernandez
Ruth Johnson Hopkins
Karl Lawson
Eva Magaña
Presentation:
Part 1:
The Basics of Homeownership
Part 2:
City of Oxnard Assistance for
First-Time Homebuyers
PART 1:
THE BASICS OF
HOMEOWNERSHIP
Should I buy
a house?
Some Advantages of Renting
 Cheaper
(at the beginning)
 Flexibility
– easier to move
 Maintenance
and upkeep of the
property are the responsibility
of the landlord
 You
don’t pay property taxes
Advantages of Homeownership
 Cheaper
(over the long term)
 Financial
stability for your
family: you build up equity
 You
 It
do pay property taxes
is your home
About Homeownership
 Homeownership
is not for everyone
 It
is not always the right time to buy a
home
 Only
buy a house because you want it
– not simply because you can
 Buying
a home is the biggest purchase
you will ever make; don’t set yourself
up to fail
What does a house cost?
Median Home price in
Oxnard as of
September 30, 2013:
$345,600
Change in Home Prices
Median price in Oxnard:
Sept. 2012:
$312,000
Sept. 2013:
$345,600
(10.5% increase in one year)
Two Ways to
Buy a House
How to Pay for a House:
Pay cash
or
Borrow money
Mortgages
Most homes in the United
States are purchased
when the homebuyer
borrows from a bank or
credit union by taking out
a mortgage loan
What is a mortgage?
A
long-term loan (usually 30
years) secured by the property
 The
lender “holds” the
mortgage (similar to a car
dealer holding a “pink slip”)
Qualifying for a mortgage loan:
1. Meet lender’s
requirements
2. Make a down-payment
Example: $315,000 house
How Much will my Monthly
Mortgage Payment be?
Your monthly house payment will be
determined by the following factors:
1.
Cost of the house (purchase price
plus closing costs)
2.
Amount of your down payment
3.
Interest Rate of the loan
What determines the
interest rate?
 Your
income
 Your
assets
 Your
debts and credit history
 Your
credit score
Interest Rate Trends
November 2012:
3.25%
May 2013: 3.25%
September 2013: 4.16%
(Average, 1980-2011: 6.3%)
Comparison: $300,000 loan
For a 30-year Loan, Fixed Interest Rate, the
monthly payment would be:
4.0%: $1760
4.5%: $1848
5.0%: $1939
5.5%: $2032
Questions to Ask Yourself:
Do I have a bank account?
 Do I have money in savings?
 Can I document all my income?
 Have I done my taxes regularly?
 Do I know my credit history?
 How much debt do I have?
 Should I take on new debt?
 Do I already have a mortgage loan
application in process?

Preparing to Buy a Home:
Get
your finances in
order
Attend
a Homebuyer
Education class
End of Part 1
Note: This has been a brief
overview of the
Basics of Homeownership.
PART 2
CITY OF OXNARD
ASSISTANCE FOR
FIRST-TIME
HOMEBUYERS
CITYWIDE HOMEBUYER
LOAN PROGRAM
The City of Oxnard’s Affordable Housing and
Rehabilitation Division has a Citywide
Homebuyer Loan available to income-qualified
families to purchase their first home in the City
of Oxnard.
WHAT IS GAP?
A loan to close the “gap” between the purchase
price, primary lender’s loan amount, closing
costs, and the homebuyer’s down payment of at
least $5,000. Each borrower shall receive only
the subsidy needed to allow them to become
homeowners while keeping their housing costs
affordable.
HOW MUCH CAN I
GET?
The maximum assistance is up to
$30,000 and it’s used towards the
down payment and/or closing costs
for the purchase of a mobilehome,
condominium, or single family
dwelling.
HOW MUCH “GAP” CAN I
RECEIVE?
Purchase Price of Property
Plus estimated Closing costs
Total Cost
Mortgage Loan
$224,000
Downpayment
5,000
$229,000
City “GAP”
$250,000
+7,000
$257,000
-229,000
$28,000
Example: $257,000 house
Terms of City
Assistance Loans

Forgiven after 5 years if the loan amount
is up to $15,000

Forgiven after 10 years if the loan
amount is from $15,001 to $30,000

The loan has 0% annual interest

Loans must be paid back if there are any
defaults within the term of the loan
Terms of City
Assistance Loans
 5-30
year loans
 May
require monthly payments
 Details
to follow
Homebuyer Obligations



Owner-occupancy is required until the
term expires (annual certification &
reporting)
All refinances need written authorization
from the City.
All loan amounts shall be due and
payable to the City if the homeowner
defaults on any loan terms.
What is a default?

Renting out the property

Not paying your first mortgage

Taking “cash out” from a refinance

Refinancing without City’s authorization
WHO QUALIFIES?
Income: Combined annual gross income may not
exceed eighty percent (80%) of the Area Median
Incomes (AMI)
Household
Size
Low-Income
(80%)
1 Person
$48,950
2 Persons
$55,950
3 Persons
$62,950
4 Persons
$69,900
5 Persons
$75,500
6 Persons
$81,100
7 Persons
$86,700
BORROWER REQUIREMENTS
• Must be an Oxnard resident
• Must be a first-time homebuyer
(must have not owned a home for the
past 3 years)
•
Must obtain a mortgage loan that is fully
amortized and has a fixed interest rate
for the life of the loan
WHO DOESN’T QUALIFY?

Anyone who currently owns a home

Any with an income over the 80% AMI

(owning a mobilehome is an exception)
Someone who has obtained a loan from
the City’s Affordable Housing Division
BORROWER REQUIREMENTS
•
Buyer must attend a homebuyer course,
in person, and have a certificate of
completion from either of the following
HUD-approved agencies located in
Ventura County:
• Cabrillo Economic Development
Corporation – 805.659-6868 ext. 138
• Surepath Financial Solutions –
805.383-7700
DATES AND COST OF
HOMEBUYER COURSES
Cabrillo Economic Development
Corporation
- December 7, 2013 (Free class)
Surepath Financial Solutions
- November 23, 2013 (Free class)
PROPERTY REQUIREMENTS
•
Property being purchased must be located
within the Oxnard City limits.
•
Property must pass inspection conducted by
the City’s Inspectors.
•
Property must be free from any defects that
pose a danger to the health or safety of
occupants prior to the close of escrow. Any
building code violations must be corrected
prior to sale or occupancy.
Where are the
houses that the City
is building for us to
buy?
The City is not building any
houses. The City assistance
provided can be used to
purchase houses or
condominiums located
anywhere you choose to
buy, provided it is in the City
of Oxnard.
CITYWIDE HOMEBUYER LOAN
APPLICATION
WHAT DOCUMENTS DO I
NEED?
Identification Documents:
•
Copy of Government Photo I.D. for all adults
(persons 18 years and older)
•
Copy of Birth Certificate, Passport or Alien
Registration Card for all household members
WHAT DOCUMENTS DO I
NEED?
Income Documents
• Copy of most recent pay check stubs
that cover 3 full months
• Copy of Federal Income Tax Return –
most current year
WHAT DOCUMENTS DO I NEED?
Assets Documents
• Copy of Bank statements that cover 6
full months for all accounts
• Copy of most recent documentation on
asset income; 401K
WHAT DOCUMENTS DO I NEED?
Lender’s Documents
• Copy of Uniform Residential Loan Application
(Fannie Mae Form 1003) on all borrowers
• Letter of Lender’s Loan Pre-Approval
• Copy of Good Faith Estimate (GFE)
• Copy of Credit Report on all borrowers
WHAT DOCUMENTS DO I NEED?
Homebuyer Course Document
• Copy of HUD-approved homebuyer
education certificate for all buyers
ACQUISITION & REHABILITATION
LOAN PROGRAM
The City of Oxnard’s Affordable Housing and
Rehabilitation Division has an Acquisition &
Rehabilitation Loan Program available to incomequalified families to purchase and rehabilitate their
first home in the City of Oxnard.
This program is designed to assist in purchasing
dilapidated homes (fixer-uppers) that do not meet City
code and do not qualify for the Citywide Homebuyer
Loan Program.
TERMS OF LOAN

Income cannot exceed 80% AMI

Due and payable after 30 years

The loan has a 3% annual interest

No monthly payments
HOW MUCH CAN I GET?
The maximum assistance is up to $60,000 (minus activity
delivery fees) and it’s used towards the down payment and
the rehabilitation of a condominium, or single family
dwelling. Mobilehomes are not eligible for this program.
The down payment portion of the loan is “Gap” financing.
The buyer is required to provide a 3% contribution towards
the purchase price.
The rehabilitation portion of the loan is based on actual
costs from a contractor’s City-approved cost estimate.
Up to $5,000 of recurring closing costs, will be provided as
a loan from the HOME Program.
The loan must be used for both down payment and
rehabilitation assistance.
HOW MUCH “GAP” CAN I RECEIVE?
Purchase Price of Property
Plus estimated Closing Costs (3%)
Total Cost
$150,000
+4,500
$154,500
Max Mortgage Loan
Buyer Contribution (3%)
$124,000
4,500
$128,500
“GAP” Down Payment Assistance
-128,500
$26,000
Total Acq/Rehab Loan (minus Act Del)
“Gap” Down Payment Assistance
Available for Rehabilitation Work
$55,000
-26,000
$29,000
CITY LOAN APPLICATIONS

Applications can be obtained at
 Affordable Housing & Rehabilitation Division,
435 South D Street, Oxnard, CA 93030
 Division’s Website:
http://housing.cityofoxnard.org/page/10/935
- Click on Homebuyer Program Application
LOAN APPLICATIONS MAY BE
SUBMITTED BEGINNING ON
TUESDAY, JANUARY 21, 2014 AT
10:00 AM AT
435 SOUTH “D” STREET

Completed Applications:
 All information on application is completed
 All required documents indicated on page 3 of application
must be submitted with the application
 Must Bring in written pre-approval letter from a lender
(pre-approved NOT pre-qualified)
Only completed applications will be accepted.
Applications will not be accepted prior to January 21, 2014
10:00am.
City of Oxnard
Affordable Housing &
Rehabilitation Division
435 South D Street
Oxnard, CA 93030
805.385-7400
805.385-7416 FAX
http://housing.cityofoxnard.org/page/10/935

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