Single-Family Rehabilitation Loan Application Checklist

Transcription

1 City of Lompoc Housing Repair Loan Program 100 Civic Center Plaza, Lompoc, CA Single-Family Rehabilitation Loan Application Checklist Before submitting your loan application, make sure you include all the documents indicated below. Rehab Technicians are available in City offices to assist you with information or provide assistance in completing this package. Loan Application - Complete the entire application to the best of your ability. Please print or type. Remember to list all assets and all liabilities, including all co-signed loans. Be sure to include all addresses and account numbers. Notice to Applicant - Signed Purpose of Funds - Signed Information Disclosure Authorization - Signed Notice of Lead-Based Paint Requirements - Signed Equal Credit Opportunity Act/Fair Lending Notice - Signed Fair Credit Reporting Act - Signed Hazard Insurance Requirements - Signed and Dated In addition, please submit: Copy of Deed of Trust and Note for first mortgage Copy of your Social Security card and your Drivers License Copy of your most recent mortgage statement(s) Copy of homeowner s insurance statement Income verification is required for all household members and/or occupants of the eligible property. W-2's/Paystub - Last year s W-2's and current paycheck stub for each borrower and resident over 18 years old. Tax Returns - Submit one complete copy of your latest federal tax return unless you are selfemployed, contract labor, salesperson, etc., in which case, please send complete sets of the past 2 years income tax returns. These returns must have original signatures. If you are involved in a partnership or corporation, you must also include the past 2 years. Complete returns for those businesses. We will also require a current Profit and Loss Statement prepared by an accountant for corporations and partnerships. Divorce/Child Support/Alimony - Please include a complete set of documentation providing amounts that are paid. If you receive child support, alimony or separate maintenance payments and wish to use this income as a basis for repaying your loan, include documentation to verify receipt of this income (interlocutory and final decree of divorce, copies of six months statements showing deposits of those funds, etc.). The information may be used to reduce your income for eligibility purposes, if you are under a court order to pay these costs. Retirement, Disability, Social Security Income - Include most recent copies of the award letters showing the amount of income that is received each month.

2 PURPOSE OF FUNDS Borrower Date Co-Borrower Date

3 Information Disclosure Authorization To Whom It May Concern: I/We hereby authorize you to release to The City of Lompoc for verification purposes, information concerning: Banking and savings accounts of record Mortgage loan rating (opening date, high credit, payment amount, loan balance, and payment record) Any information deemed necessary in connection with a consumer credit report for a real estate transaction This information is for confidential use in compiling a loan credit report profile for the undersigned borrower(s). A photographic or carbon copy of this authorization (being a photographic or carbon copy of the signature(s) of the undersigned) may be deemed to be the equivalent of the original and may be used as a duplicate original. Your prompt reply will help my real estate transaction. Thank you. Signature Date Social Security Number Signature Date Social Security Number

4 Notification of Lead-Based Paint Requirements As a recipient of federal CDBG funds, the City of Lompoc has a responsibility to provide decent, safe, and sanitary housing to its residents. Part of this responsibility is to protect residents from the health risks of lead hazards. New Federal and State Lead-Based Paint (LBP) Regulations were put into effect on September 15, All loans made under the Lompoc Housing Rehabilitation Loan Program will be subject to the new LBP Regulations. What this means for homeowners is that if you property was built prior to 1978, LBP testing will be required and a risk assessment made prior to the funding of a Rehabilitation Loan. LBP assessments and containment activities must be performed by a State Certified Lead Based Paint Contractor. When LBP hazards are found lead hazards must be reduced using interim controls, standard treatments or abatement. Proper notification will be given to the homeowner and/or occupants on affected areas and types of lead found along with a risk assessment. It is recommended that families with children under the age of six (6) consider testing their children for elevated blood lead levels. Property owners must provide purchasers and lessees with available information or knowledge regarding the presences of lead-based paint or lead hazards prior to the selling or leasing of a residence. When NO LPB hazards are found notification will be given to the homeowner and/or occupants to that effect and no other actions toward the testing or mitigation of LBP will be required. I have read and understand the requirements and procedures listed above. I also acknowledge receipt of the Environmental Protection Agency s pamphlet Protect Your Family From Lead in Your Home (available in Spanish also). Signature of Applicant: Date: Signature of Applicant: Date:

5 Equal Credit Opportunity Act The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on a basis of race, color, religion, national origin, sex, marital status, age (provided that the applicant has the capacity to enter into a binding contract); because all or part of the applicant s income derives from any public assistance program, or because the applicant has in good faith exercised any right under the Consumer Protection Act. The Federal Agency that administers compliance with this law concerning this creditor is the Federal Trade Commission, Equal Credit Opportunity, Washington, D.C Fair Lending Notice - State of California TO: All Applicants For a Loan Concerning Purchase, Construction, Rehabilitation, Improvement or Refinance of a One-to-Four Family Residence Under the Housing Financial Discrimination Act of 1977, it is unlawful for financial institutions to refuse to make a loan or to offer less favorable terms than normal (such as higher interest rates, larger down payment or shorter maturities) based on any of the following considerations: 1. Neighborhood characteristics (such as the average age of the homes or the income level in the neighborhood) except to a limited extent necessary to avoid an unsafe and unsound business practice. 2. Race, sex, color, religion, marital status, national origin or ancestry. In appraising a residence, it is also unlawful to consider the racial, ethnic, or religious composition of a particular neighborhood, whether or not such a composition is undergoing change or is expected to undergo change. If you wish to file a complaint or if you have questions concerning your rights, contact: STATE DEPARTMENT OF FAIR EMPLOYMENT AND HOUSING 1055 WEST SEVENTH STREET, SUITE 1420 LOS ANGELES, CALIFORNIA TOLL FREE: OR (213) ON THE WEB: If you file a complaint, the law requires that you receive a decision within thirty (30) days. I (We) received a copy of this notice. Signature of Applicant Date Signature of Applicant Date

6 Fair Credit Reporting Act As part of processing your application for a real estate loan, we may request a consumer report bearing on your creditworthiness, credit standing, and credit capacity. This notice is given pursuant to the Fair Credit Reporting Act of 1970, Section 601 to Section 622, inclusive. You are entitled to such information within 60 days of written demand therefore made to the Credit Reporting Agency pursuant to Section 607(b) of the Fair Credit Reporting Act. Signature of Applicant Date Signature of Applicant Date

7 Hazard Insurance Requirements 1. Proof of insurance must be provided on or before the day the loan is to fund. NOTE: BINDERS ARE NOT ACCEPTABLE. The insurance policy is required to have the City of Lompoc listed as Loss Payee. Sign the attached instructions to your insurance company to list the City of Lompoc as Loss Payable. 2. The insurance company must be California licensed with an A rating in the current Bests Insurance Guide. 3. We, the Lender, require the very minimum amount of insurance coverage to be at least replacement cost coverage or loan amount, whichever is less. Please consult with your insurance agent to determine adequate insurance limits. 4. We will contact you if Flood Insurance will be required. 5. Renewal procedures: Original renewal policies or continuation certificates are to be furnished at least fifteen (15) days in advance of renewal date, accompanied by premium billings for those loans which include impounds for insurance. Hazard Insurance Authorization I have read and understand these hazard insurance requirements. I agree to abide by these requirements. I acknowledge responsibility to: A) Provide, at my expense, fire insurance and other types of hazard insurance as may be required by Lender. This acknowledgment does not limit the terms and conditions of the Deed of Trust that secures or will secure the loan applied for. B) To continue to maintain such insurance without lapse of coverage throughout the life of the loan. C) To deliver such prepaid insurance policies to The City of Lompoc on or before the day when the loan is ready to fund, providing my insurance agent has not yet done so. Borrower Date Borrower Date

8 NOTICE TO APPLICANT City of Lompoc Single-Family Rehabilitation Loan Program G: CDBG\Single Family Rehab\Application Packet\Notice to Applicant SF.doc APPLICANTS FOR REHABILITATION LOANS - PLEASE READ CAREFULLY Enclosed is an application for a mortgage loan under the Lompoc Housing Rehabilitation Program for Single-Family Housing of 1 to 3 units. Your property must be located in the City of Lompoc. This loan is intended to provide the necessary financial assistance to eligible Lompoc citizens whose property is in need of rehabilitation and necessary repairs. The purpose of the City s program is to help homeowners make needed repairs on their home so that it will meet all local code, health and safety requirements. This notice is intended to provide basic information about the rehabilitation loan program. It is not a commitment for a loan. 1. Eligibility Criteria. To be eligible for a Single-Family Rehabilitation Loan you must meet the following requirements: 1.1 Location: You must own a property within the city limits of Lompoc. 1.2 Property: Your property can be defined as a one to three unit dwelling. Mobile homes are not eligible. For a triplex to qualify under the Single-Family Loan Program an owner must occupy one of the units. Three (3) or more non-owner occupied units on the property must qualify under the Multi-Family Loan Program. 1.3 Income: The total income of all occupants residing in the housing unit does not exceed 80% of the area median income, adjusted by household size, as established by the U.S. Department of Housing and Urban Development for Santa Barbara County as follows: Number of persons In household Maximum Household Income Levels as of April 11, 2018 $56,250 $64,250 $72,300 $80,300 $86,750 $93,150 $99,600 $106,000 Single Family - Notice to Applicant April 13, 2018 Page 1 of 5

9 1.4 Loan to Value Ratio: The total amount of loans secured by liens against the property (senior to and including the proposed rehabilitation loan) shall not exceed ninety percent (90%) of the after-rehabilitation value of your property. 2. Loan Terms: 2.1 Rate: Loans offered by the City of Lompoc are at a fixed rate of interest. The interest will be calculated at three percent (3%) on amortized loans and four percent (4%) on deferred loans. Both loans will be calculated using a 365-day basis on the unpaid principal balance. 2.2 Loan Amount: The City will loan up to $50,000 for rehabilitation work (hard cost) and loan fees (soft cost). If a lead hazard is found in your home, federal regulations will require full abatement for any rehabilitation loan exceeding $25,000 in hard costs. In some cases, interim controls may be used for those rehabilitation projects under $25,000 which will not involve a full lead based paint removal or abatement. If your housing situation qualifies as over-crowded" and the rehabilitation involves room additions, the maximum loan amount can be increased up to $60,000 in total cost. As with any project it is difficult to plan for unforeseen work that may not be included in the contractor bid. For this reason, contingency funds are included in your loan amount to pay for changes that may arise during the rehabilitation of your property. The contingency funds will vary depending upon the loan amount and scope of work for the rehabilitation of the property. 2.3 Payment Terms: 2.3a Amortized loans are available for terms of seven- (7), fifteen- (15) and twenty- (20) years. Borrowers must make monthly payments in accordance with the amortized schedule set forth in your Promissory Note. The entire principal balance of the loan, accrued interest, and any late fees accrued must be repaid to the City in the event of the following conditions: (a) end of loan term; (b) at the time of sale or transfer of ownership of the property; (c) in the event of default under the loan documents; or (d) termination of residency by owner/borrower without previous approval from the City. 2.3b Deferred Loans are available to both elderly borrowers 60 years of age or older and severely disabled adults on owner occupied units only. Elderly borrowers and severely disabled adults do not have to repay the principal and accrued interest until one of the following occurs: (a) property is sold; (b) transfer of ownership; or (c) in the event of default under the loan documents. If you wish, however, you may enter into a voluntary payment plan at the time of loan closing or any time thereafter. Such a payment plan must be arranged in advance with the City. The Census definition of severely disabled is as follows: Persons are classified as having a severe disability if they: (a) used a wheel-chair or had used another special aid for six months or longer; (b) are unable to perform one or more functional activities or need assistance with an ADL or IADL (c) are prevented from working at a job or doing housework; or (d) have a selected conditions including autism, cerebral palsy, Alzheimer s disease, senility or dementia, or mental retardation. Also, persons Single Family - Notice to Applicant April 13, 2018 Page 2 of 5

10 who are under 65 years of age and who are covered by Medicare or who receive SSI are considered to have a severe disability. For purposes of this definition, the term functional activities include seeing, hearing, having one s speech understood, lifting and carrying, walking up a flight of stairs, and walking. An ADL is an activity of daily living which includes getting around inside the home, getting in or out of bed or a chair, bathing, dressing, eating, and toileting. An IADL is an instrumental activity of daily living and includes going outside the home, keeping track of money or bills, preparing meals, doing light housework and using the telephone. 2.4 No Prepayment Penalty: You may repay City loans, without penalty, at any time during the term of the loan. 2.5 Loan Costs: Loan costs include: Title Insurance $150; Credit Report $25; Environmental Processing $65; Certified Home Inspector $495; Certified Termite & Pest Inspector $100; Certified Lead-Based Paint Assessment/Testing $1,600; Loan Processing Fee $250 for a Total Estimated Loan Cost of $ $1,000 of the total loan amount is paid by this program (no cost to the borrower) and remaining fees paid through the loan. 3. Collateral for Loan. The loan advanced to you will be secured by a lien recorded against your home. In most cases, the City will only assume a first or second trust deed position against the property. The lien against your home will be in the form of a Deed of Trust and will remain, until such time, as all sums due are paid in full. 4. Lead-Based Paint (LBP). A State Certified Inspector/Contractor, prior to loan funding, must test all properties built prior to 1978, for lead-based paint. This will help determine the scope of work to be performed on your property. Both Federal and State Regulations mandate this testing. The cost of this testing/assessment may be paid through your loan proceeds, along with any required abatement, standard treatments, or interim controls necessary to remove lead hazards from your home. If you choose to cancel your application after an assessment has been performed, you may be responsible for the cost incurred by the City on your behalf for this testing. For additional information, please refer to the Lead-Based Paint Notice included in this package. 5. You and Your Contractor. 5.1 Contractor Selection: You must agree not to discriminate against any Contractor or potential Contractor because of race, color, religion, ancestry, sex, age, national origin, physical handicap or other arbitrary basis. You are encouraged to contact and use minority or women contractors for your rehabilitation. You will be required to submit copies of bids, application forms, and other pertinent data and records to the City of Lompoc. You must submit proof that your contractor has an active contractor s license, City business license, and liability/workmen compensation insurance by submitting the contractor information sheet. The contractor you select must complete the contractor information sheet included in this package. Single Family - Notice to Applicant April 13, 2018 Page 3 of 5

11 5.2 Contractor Proposals/Bids: You must attempt to obtain at least three bids for the agreed scope of work on your rehab project. If you are unable to obtain written bids, you must provide a City Contact Sheet showing at least three attempts to contact the selected licensed contractors of your choice. The contact may be made by phone, in person, or in writing and must be logged on the contact form provided in this package. Contracts must state the time frame that work will be completed and must be completed within 3 months from the start date, unless pre-authorized by the City. All bids must be itemized according to the agreed scope of work, for example: roofing, paint, cabinets, flooring, electrical, plumbing, etc. Please read the bid /proposal thoroughly, verifying it is complete. It should include permit fees and a one-year warranty for workmanship. All materials should be clearly stated and the contractor should provide details to include such things as model numbers, paint colors and carpet/flooring quality. 5.3 Contractor Payments: Any progress payments, as required in the contractor s contract or accepted proposal, shall be disbursed through the Community Development Block Grant Program at City Hall as described in your Loan Agreement. Request For Payment (RFP) forms will be signed by the contractor and co-signed by you, the homeowner. When you sign the Request for Payment, you are stating that the contractor, to your satisfaction, has completed the work described on the RFP form and you are authorizing the City to pay the contractor s invoice, which must be attached. City checks will be made payable to the contractor. The borrower may be reimbursed for materials purchased, provided the materials, fixtures and/or supplies purchased are in accordance with the scope of work and contractor agreement (purchase of tools is not permitted). Material and labor lien-releases from the contractor shall be submitted to the City prior to the contractor receiving final payment for the project. For all items that carry a manufacturer s warranty, insist that the contractor provide these documents to you (i.e., for heating units, smoke detectors, etc.). Your contractor is responsible for any defects in workmanship for one year after the work is completed. 6. Changes in the Scope of Work. You, the Contractor, and the City must approve any changes to the scope of work prior to work being done. A change order request can be made on a change order form provided by the City or Contractor. 7. Inspections and 10% Retention. A representative of the City s Housing Rehabilitation Loan Program will do at least three inspections. In addition to the City inspections, a certified contractor will perform a lead-based paint inspection on your home. The initial inspection will be made with a Rehab Technician, the Borrower and a Certified Home Inspector to help determine the scope of work along with any environmental, code and safety issues that may be apparent. A copy of both reports will be given to the homeowner for review. The second inspection will be performed during the rehabilitation work to assure funds are utilized in accordance with all loan documents, permits and the agreed scope of work. The Rehab Technician may choose to perform an additional inspection prior to 50% of the loan funds being drawn or disbursed, to review the progress of the project. Ten percent (10%) of the contract amount will be held until all work items listed in the contract requiring a permit have been completed and signed off in a final inspection by the Lompoc Building Division. After all rehabilitation work and permits are completed, the Single Family - Notice to Applicant April 13, 2018 Page 4 of 5

12 Rehabilitation Specialist will do a final inspection to ensure all work is completed to the City and the borrower s satisfaction. If you have any questions, call City Staff at (This Notice is intended for informational purposes only. It is not a commitment or loan approval. Important information relating specifically to your loan will be contained in the loan documents.) I acknowledge that I have read and understand, the above information concerning the rehabilitation loan offered by the City of Lompoc. Applicant Co-Applicant Single Family - Notice to Applicant April 13, 2018 Page 5 of 5

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