PROGRAM DESCRIPTION

The first time Home Buyer program helps home buyers purchase homes by providing financial assistance towards down payment and closing costs.

PROGRAM GOALS:

The goal of the FTHB program is to help first time, low income home buyers purchase homes which they can afford with a minimal amount of Agency assistance in order to promote home ownership.

FORM OF ASSISTANCE:

A forgivable promissory note in favor of the Agency.

CALCULATION OF ASSISTANCE:

MAXIMUM ASSISTANCE AMOUNT:

$5,000.00

TERM:

Ten years (10) or due upon sale or refinancing of the property. (Sale prior to year 10 may be subject to recapture provisions.

LOAN TO VALUE

The total of all loan secured by the property shall not exceed 102% of value. "Value" shall mean the lesser of the appraised value of the property or the unsubsidized sales price. Waivers may be granted for non-Agency subordinate financing.

However, on FHA financing, the second mortgage when combined with the first may not exceed the estimated value of the property including all closing costs.

USE OF FUNDS:

Funds may be used to pay for a portion of the buyers down payment and closing costs.

BORROWER CONTRIBUTION:

The applicant/borrower must contribute a minimum cash amount towards the purchase price to be determined by the firs mortgage lender. The minimum applicant cash contribution required by the FTHB Program is $500.00. These funds must come from the borrowers own funds.

OTHER TERMS:

Loans may be secured by a subordinated deed of trust on the property.

The principal amount of the promissory note and proportionate share of accrued interest shall be forgiven for properties located:

• 1) in the City of Sacramento at the rate of 12.5% beginning in the third year of the loan;
• 2) in the County of Sacramento at the rate of 10% per year, beginning in the first year of the loan.

Borrowers must maximize their use of funds provided by the first mortgage lender. This may be evidenced by either

• 1) a housing ratio of greater than or equal to 30% or
• 2) a loan to value ratio of the first loan of greater than or equal to 95%.

Agency loans are assumable by qualified purchasers, subject to Agency approval.

Funding is contingent upon the applicant/borrower obtaining a first mortgage loan.

All applicants must attend Home Buyer Education Classes and receive community home buyer certification. Such classes will include training stressing proper property maintenance and "good neighbor" practices.

Loan funds may be used in conjunction with Mortgage Credit Certificates only in Agency designated target areas.

ELIGIBILITY:

The applicant must be a first-time home buyer or must not have owned a home as his/her principal place of residence within the preceding three (3) years.

The qualifying income of a borrower/applicant must not exceed 80% of the area median income, adjusted for family size as determined by HUD.

PROPERTY:

• The property must meet minimum housing quality standards.
• A HOME INSPECTION will be required.
• The property must be occupied by the applicant/borrower as his/her principal residence for the term of the agency Agency loan.
• The home may not be rented without the prior approval of the Agency.
• The appraised value may not exceed the HUD 203(B) mortgage limit for the area.