Housing Trust Silicon Valley ( HTSV ) Mortgage Assistance Program (MAP) Program Description: Housing Trust Silicon Valley s Mortgage Assistance Program (MAP) is an amortizing second loan that is now available to assist in the purchase of your first home. The maximum loan amount is 17% of the purchase price up to $85,000. The loan is a fixed rate loan amortized over 30 years. Monthly payment of principal and interest is required. The fixed interest rate on the MAP loan is: o (see chart below): Equal to the rate on the first loan. o (see chart below): 1% above the rate on the first loan. Minimum borrower contribution of 3% for this financing. At least 50% of the required borrower contribution must come from the borrower s own funds. The total combined loan to value cannot exceed 100%. The MAP loan requires the borrower(s) to occupy the home as their principal residence. There is a $300 loan application fee, due to Housing Trust Silicon Valley at submission. There is a loan origination fee of 2% of the MAP loan amount, due at close of escrow. Available throughout the counties of Santa Clara, Alameda, San Benito, Santa Cruz, and Monterey. Eligibility Requirements: 1. The borrower(s) must be a first-time homebuyer. First-time homebuyer is defined as having NOT owned a home as a principal residence in the past three years. 2. The gross annual household income of the household does not exceed 120% of the Area Median in the corresponding county (see the chart below). Gross annual household income includes income of all persons 18 and older who will be living in the house. is the anticipated gross household income for the next twelve months. The HUD Part 5 Definition of will be used. includes salary, overtime, bonuses, tips, interest, dividend income, alimony, child support, net business income, IRA distributions, pensions and annuities, net rental income, royalties, partnership income, trust income, farm income, unemployment compensation, and Social Security Benefits. 1
County Alameda Monterey San Benito Santa Clara Santa Cruz Area Median (AMI) by Household Size 2015 as determined by the Department of Housing and Community Development, State of California Category MAXIMUM INCOME BY HOUSEHOLD SIZE BY COUNTY =80% AMI =120% AMI Number of Persons in Household 1 2 3 4 5 6 7 8 $50,150 $57,300 $64,450 $71,600 $77,350 $83,100 $88,800 $94,550 $78,550 $89,750 $101,000 $112,200 $121,200 $130,150 $139,150 $148,100 $40,600 $46,400 $52,200 $58,000 $62,650 $67,300 $71,950 $76,600 $57,700 $65,950 $74,200 $82,450 $89,050 $95,650 $102,250 $108,850 $ 45,100 $ 51,550 $ 58,000 $ 64,400 $69,600 $74,750 $79,900 $85,050 $ 68,100 $ 77,850 $ 87,550 $97,300 $105,100 $112,850 $120,650 $128,450 $59,400 $67,900 $76,400 $84,900 $91,650 $98,450 $105,250 $112,050 $89,300 $102,050 $114,800 $127,550 $137,750 $147,950 $158,150 $168,350 $56,500 $64,550 $72,600 $80,650 $87,150 $93,600 $100,050 $106,500 $73,100 $83,500 $93,950 $104,400 $112,750 $121,100 $129,450 $137,800 3. The borrower s total Front-End Housing Cost to Ratio cannot exceed 38%. Housing Cost includes all principal and interest payments, property taxes, monthly HOA fees, property hazard insurance and Private Mortgage Insurance (PMI) premiums, if any. Total monthly Housing Cost must not be greater than 38% of the borrower s total monthly household income. For moderate-income households, the monthly housing cost must be at least 28% of total monthly household income. 4. The borrower s Back-End debt to income ratio cannot exceed 45%. This means that when all of a homebuyer s debts are added up, including the Front End Debts (including first and second mortgage principal and interest payments, property taxes, monthly HOA fees, property hazard insurance and Private Mortgage Insurance (PMI) premiums, if any), plus any car payments, credit card payments and any and all other debts, loans, charge accounts, and business expenses, if applicable, etc., those total monthly payments added together must not be greater than 45% of the homebuyer s Total Monthly Household Gross. Except for those obligations specifically excluded by state law, the debts of the nonpurchasing spouse must be included in the borrower's qualifying ratios. 5. The borrower(s) must have a FICO credit score of 680. 6. The borrower(s) must complete an 8 hour homebuyer education class from a HUD-approved counseling agency. Online classes are not acceptable. 2
7. The property must be located in the counties in which the MAP program is available. 8. The property will be the primary residence of the borrower(s). 9. The first mortgage loan must be a 30-year, fixed-rate amortizing mortgage. 10. The borrower must make a minimum contribution of 3% of the purchase price. 11. The borrower s post-closing liquid assets cannot exceed $60,000. 12. The borrower(s) must have a signed purchase agreement (for the loan property). 13. The close of escrow date is no more than 120 days and no less than 21 days from date of application. 14. No financing subordinate to the MAP loan may have a balloon, deferred or negative amortization payment prior to 30 years. Fees and/or charges for subordinate financing shall be consistent with industry standards. Any additional subordinate financing will require HTSV approval. Loan Repayment Terms: The MAP loan is a 30-year amortizing second loan with monthly principal and interest payments. The loan is payable in full upon any sale, expiration of the loan term, transfer, assignment, default or refinance of the first loan or change to non-owner occupancy status, whichever occurs first. There is no prepayment penalty. Owner occupancy is required. Application Process: Borrower(s) who meet the eligibility requirements listed above can apply for a MAP Loan, as follows: 1. Meet with a Certified Loan Officer/Mortgage Loan Originator (LO/MLO) to review the different loan programs and their requirements. The LO/MLO completes a preapproval for first loan. The LO/MLO completes the Loan Information for Eligibility Determination pages of the Eligibility Application 2. To determine eligibility, the borrower completes and signs the Eligibility Application and submits with all required documentation to Housing Trust by appointment. 3. The borrower(s) must submit the most recent three years of signed Federal Tax returns with W-2s, the four most recent and consecutive paystubs for all household members over the age of 18, three most recent and consecutive statements for all asset and retirement accounts and an explanation of the source of funds being used for the borrowers contribution. 4. The borrower(s) must submit written Verification of Employment forms for all household members 18 and over who are earning income. 5. The borrower(s) must submit a copy of the credit report. For married couples, each spouse is required to submit a credit report regardless of who is on the first loan. 6. Upon determination of program eligibility, borrower may enter into a purchase agreement. 3
7. The LO/MLO will review the MAP loan program requirements and the loan application process with borrowers. The LO/MLO will assist the borrower in completing the HTSV loan application and select the MAP program. 8. Complete a Uniform Residential Loan Application (Fannie Mae Form 1003, available through your LO/MLO), and have the LO/MLO sign it. Submit Uniform Underwriting and Transmittal Summary (Fannie Mae 1008). 9. Submit a copy of the Automated Underwriting System (AUS) approval. 10. Submit a copy of the Preliminary Title Report for the loan property, and wiring instructions regarding the wire transfer of funds (from the Title Company). 11. Submit a copy of the signed Purchase Agreement for the loan property. 12. Submit a copy of the appraisal on the property. 13. Submit a copy of Deed Restrictions on the property, if any. 14. Submit a processing fee (check made payable to Housing Trust Silicon Valley) in the sum of $300.00 (this is a non-refundable fee). NO REFUNDS WILL BE ISSUED AFTER HTSV HAS MAILED DISCLOSURES. 15. The LO/MLO packages the documents referenced in 7-13 above and submits with a check (from borrower) for the processing fee to HTSV via mail or courier. NOTE: The Loan Application Package must be submitted to HTSV by the lender. 16. The loan application package must be received at HTSV no more than 120 days and no less than 21 days from close of escrow date. Application Review Process: The Loan Application Package is reviewed within 3 business days of receipt by HTSV staff. At the time of the Initial Review of the application package, the lender is notified by email that either a) the borrower(s) application package is complete, the borrower(s) meet all eligibility requirements, and a loan will be awarded (the dates for which the loan funding and the transfer of monies are scheduled is also provided); or b) the borrower(s) loan application is incomplete and application processing will recommence upon receipt of the missing documents/information; or c) the borrower(s) are ineligible and the application package is being returned. If loan application package is considered complete, HTSV will issue required loan disclosures to the borrower. Loan Underwriting: Once the application has been determined to be complete, the underwriting process will commence. The Housing Trust will approve or deny the application within 3-4 business days of the date of application completion. When an application is complete, the borrower and property have been determined to be eligible, and the borrower(s) have completed the one-on-one counseling session with HTSV staff, the Housing Trust will issue a Loan Commitment Letter. 4
The Housing Trust reserves the right to deny an application because of bankruptcy, foreclosure, or short sale. If the loan application is denied and applicant disagrees with the decision of the Housing Trust, they have the right to appeal by requesting an appeal form from Homeownership Program staff. The Mortgage Assistance Program is currently available throughout the counties of Santa Clara, Alameda, San Benito, Santa Cruz, and Monterey. The Housing Trust will limit the amount of Mortgage Assistance Program loans available in each jurisdiction in order to ensure geographic distribution of loans throughout the geographic county. Loan Documents: A loan document request will be sent to the LO/MLO. The LO/MLO must fill in and return the loan document request to HTSV. The Housing Trust requires at least 48 hours notice. Upon confirmation from the title company that the first lender s loan documents are in title, the Housing Trust will send its loan documents out. Funding: The Housing Trust will not fund a MAP loan without receiving a HUD-1 Estimated Buyer s and Seller s Statement or Closing Disclosure (Buyer and Seller) from the Title Company prior to funding. The Housing Trust reserves the right to reduce the amount of the Mortgage Assistance Program loan based on the Estimated Settlement Statement. The borrower(s) are not permitted to receive more than $500 cash back at closing. Any funds received by the borrower(s) must be due to excess deposit as a result of over-estimation of title and escrow charges. Borrower(s) must meet Housing Trust minimum borrower contribution requirement. Failure to meet this requirement may result in the loan officer being disqualified from submitting any future application for Housing Trust programs. The Housing Trust s Mortgage Assistance Program Loan will be subordinate to the First Mortgage. The Mortgage Assistance Program loan shall be no lower than second position in lien and recording priority. Upon receipt of a complete funding package from the Title Company and verification that all required funding conditions have been met, the Housing Trust will need at least 24 hours to fund. 5