Assistance Program: City of Los Angeles Low Income Purchase Assistance Program (LIPA) Zero Interest Code: DCALIPADP

Transcription

1 HOMEOWNERSHIP ASSISTANCE PROGRAM SUMMARY Product Description Allowable Origination Channel Program Name Second mortgage loan program to be used in conjunction with: FHA Fixed Rate Fannie Mae Fixed 30-year Conforming Product (DU) Fannie Mae Housing Authority Product Fannie Mae HomeReady with Community Second Retail and Wholesale (Loan Officer and Broker must contact Authority for required Lender Training) Low Income Purchase Assistance Program (LIPA) Program Approval Expiration Housing Authority Subject to Availability approval expires: 11/17/2018 City of Los Angeles Housing and Community Investment Department 1200 West 7 th Street, 1 st Floor Los Angeles, CA Contact: Esther Barajas or Gloria Torres Telephone: (213) or (213) esther.lira-barajas@lacity.org or gloria.torres@lacity.org Website: Housing Authority EIN DPA Provider Classification Government Entity Secondary Financing Programs First Mortgage Maximum LTV First Mortgage Maximum CLTV Fannie Mae Conforming Product: Refer to Product Profile Fannie Mae HomeReady with Community Second: Refer to Product Profile o Purchase only: o 1 unit: LTV >95-97% (NO first-time home-buyer (FTHB) requirement). o Purchase and Limited Cash Out (Rate/Term): o 1 unit: 95% FRM; 90% ARM Fannie Mae Conforming Product: Refer to Product Profile for CLTV requirements, may not exceed limits in product profile Fannie Mae HomeReady: Refer to Product Profile Maximum Second Mortgage Loan Amount Second Mortgage Loan Interest Rate Minimum Borrower Down Payment The CLTV may not exceed 105% on HomeReady loans, unless further restricted by product profile. The sum of all financing may not exceed 105% of the cost to acquire the property plus any normal prepaid expenses. Up to $60,000 0% Minimum of 1% of the purchase price (These funds may not be gift funds) Page 1

2 Fannie Mae Conforming Product: Refer to Product Profile Fannie Mae HomeReady with Community Second: Refer to Product Profile NOTE: If first mortgage guidelines are higher than the Agency s for borrower s minimum investment, the first mortgage guidelines prevail. Second Mortgage Purpose Down payment Closing costs (including prepaids) Second Mortgage Loan This second mortgage loan is a zero interest no monthly payment deferred 30-year loan with Repayment Terms shared appreciation due at the end of the loan term. There is a clause in the loan documents referring to Paint Stabilization the City of Los Angeles has advised the Paint Stabilization section will indicate N/A. Repayment is due in full upon sale, transfer, lease, refinancing, change of ownership or home no longer is occupied as primary residence. Loan proceeds may not be used to pay off other loans, advances or consumer debts. However, if any of the following repayment triggering events occur, the principal balance and any accrued interest shall be due and payable in full: Evidence of the act of fraud committed to falsely obtain assistance funds The property is sold Transferred title Refinancing with cash out A default on the first mortgage The borrower(s) ceases to occupy the property as their principal place of residence Upon the death of the last surviving applicant The filing of any bankruptcy by the applicants Upon divorce, unless one of the applicants continues residing in the property by the decree of divorce Loan may be pre-paid in full at anytime Loan is NOT assumable Note: The City of Los Angeles has different funding sources under the Low Income Purchase Assistance Program, the executed documents (Note, Loan Agreement and Deed of Trust) will indicate CalHome First Time Homebuyer Program or Purchase Assistance with the terms as outlined above. Types of Financing Purchase Money Mortgage o 30 year fixed rate (No ARM, balloon payment or prepayment penalty) Occupancy Owner occupied primary residence only All co-borrowers must occupy Borrower(s) may not have an ownership interest in any other residential dwelling at the time of loan closing Geographic Location Properties must be located within the City of Los Angeles, California Eligible Properties Acquisition Limit: Existing and New Construction Single Family Residence: $498,750 Condominiums and Townhomes $404,700 Page 2 Properties shall be sited on a permanent foundation, with a permanent utility hook-up, and may include: Single family - detached, attached (Fixed Rate) Condominiums or Townhomes or Planned Urban Development -detached, attached Must be currently occupied by the owner, vacant or occupied by the homebuyer

3 All properties are inspected by the City of Los Angeles to ensure the property meets all applicable and local housing standards and code requirements. If the house was built prior to January 1, 1978, a lead based paint inspection will be required. ALL repairs called for by inspections MUST be completed prior to closing. NOTE: The City of Los Angeles has advised they no longer provide funds for Paint Stabilization. If the property requires it, the work must be completed prior to the close of escrow by the seller or buyer or the City of Los Angeles will not provide the funds for down payment and closing costs. The section in the loan documents that reference Paint Stabilization will indicate N/A. Underwriting Refer to product profile for additional property eligibility requirements, not all property types are allowed on all products. Lender to pre-approve all borrowers for the first mortgage product. Standard FHA, Fannie Mae Conforming Product, and Fannie Mae HomeReady, except as described herein: The Loan Officer will assist the borrower in completing and submitting all of the required documents directly to the Authority. Upon qualification of the underwriting, the homebuyer will be issued a preapproval letter indicating the amount of assistance. Upon approval, a copy of DPA Approval Letter MUST be in each file. Eligible Borrowers Borrower(s) must qualify for the first mortgage selected. First Time Home Buyers (FTHB) only Borrowers may not currently own a house and may not have owned a house during the last three years prior to making application. Must be a U.S. Citizen, lawful permanent resident alien or other qualified alien. Back end ratio not to exceed 42%. Minimum middle FICO score for each borrower 620. Assets Borrower must have required amount of their own funds in the transaction for type of first mortgage financing selected. All assets will be considered when calculating annual income (i.e.: checking/savings accounts, IRA s, 401(k) s, CD s, cash value life insurance, etc.) Income Limits 80% AMI Los Angeles County Effective March 1, Person 2 Persons 3 Persons 4 Persons 5 Persons 6 Persons 7 Persons 8 Persons $50,500 $57,700 $64,900 $72,100 $77,900 $83,650 $89,450 $95,200 NOTE: If first mortgage guidelines are more restrictive than the Agency s for borrower s income limit, the first mortgage guidelines prevail. MI Coverage FHA: Standard UFMIP and monthly if applicable Fannie Mae Housing Authority Product Refer to Product Profile Fannie Mae Conforming Product Refer to Product Profile Fannie Mae HomeReady and Conforming (DU) Products: Standard mortgage insurance requirements must be met, if applicable, as described in Product Profile Special Provisions Homeownership Counseling: Refer to product profile for specific product requirements Page 3

4 Borrowers must successfully complete an 8-hour homebuyer education class provided by a HUD approved counseling agency refer to City of Los Angeles approved list of providers Borrower s Certification of Completion of Homeownership Counseling is required Fannie Mae HomeReady Only: See Product Profile for Homeownership Counseling requirements. Freddie Mac Home Possible Only: See Product Profile for Homeownership Counseling requirements. All: May be funded by a municipality, state, county or local housing finance agency, non-profit organization, a regional Federal Home Loan Bank or an employer May be used to fund all or part of the down payment or closing costs The more restrictive down payment requirement between the product and the second mortgage will apply No reporting requirements permitted DPA Processing Fee Costs incurred for down payment assistance secondary financing program may only be included in the amount of the second lien. The fee cannot be included in the first mortgage transaction or appear on the HUD-1. Special Feature Code N/A Underwriting Requirements Receipt of borrowers approval from DPA provider Receipt of DPA Funds (at closing) No cash back at closing (at closing) Copy of DPA s Executed Promissory Note, Loan Agreement and Deed of Trust (at closing) Note: The City of Los Angeles has different funding sources under the Low Income Purchase Assistance Program, the executed documents (Note, Loan Agreement) will indicate CalHome First Time Homebuyer Program or Purchase Assistance with the terms as outlined above. First Mortgage Loan Documents Second Mortgage Loan Documents DPA Program Restrictions That Are Not Permitted Loan documents and security instruments must conform to Agency requirements (FHA, Fannie Mae, Freddie Mac loan type) Loan documents and security instruments must conform to Agency requirements (FHA, Fannie Mae, Freddie Mac loan type) PRMG The Low Income Purchase Assistance Program may not Restrict the transfer of servicing rights of the first Mortgage Require prior notification or approval from the sponsoring authority in the event of the transfer of the first mortgage servicing rights. If there is any evidence of this verbiage in the subordinate documents, the program will no longer be eligible. The First Mortgage may not be subject to a bond program loan documents and security instruments must conform to Agency requirements (FHA, Fannie Mae loan type) Special Requirements: NOTE: City of Los Angeles requires a Lender Agreement. City of Los Angeles has advised they no longer provide funds for Paint Stabilization. If the property requires it, the work must be completed prior to the close of escrow by the seller or buyer or the City Page 4

5 of Los Angeles will not provide the funds for down payment and closing costs. The section in the loan documents that reference Paint Stabilization will indicate N/A. The City of Los Angeles has different funding sources under the Low Income Purchase Assistance Program, the executed documents (Note, Loan Agreement and Deed of Trust) will indicate CalHome First Time Homebuyer Program or Purchase Assistance with the terms as outlined above. This Fact Sheet form and any attachments MUST be placed in each loan file at the time of submission. Additional Comments: Approved with Closing Instructions for Closing the DPA Mortgage needs to be recorded in 2nd lien position. STATUS APPROVAL ELIGIBLE The DPA IS eligible for use with the programs below INELIGIBLE The DPA IS NOT eligible for use with the programs below CONV FHA VA USDA CONV FHA VA USDA X X X X PRMG Approved By: PRMG DPA Review Department 11/17/2017 Name / Title Date Page 5