Homebuyer Assistance Program

Transcription

1 Town of Easton Homebuyer Assistance Program Application & Information Town of Easton Department of Planning & Community Development 136 Elm St., Easton, MA

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3 Table of Contents Page: PROGRAM INFORMATION & RESOURCES 5 Overview 6 Guidelines 15 Program Process 18 Disclosures 19 Mortgage Options 20 Homebuyer Courses APPLICATION & FORMS 23 Applicant Checklist 26 Application 29 Applicant Certification 30 Local Initiative Program Homebuyer Disclosure Statement 3

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5 Overview Thank you for your interest in the Easton Homebuyer Assistance Program. This program is offered by Easton s Town government to assist first-time homebuyers at moderate income levels. Funds for this program originate from the Town s Community Preservation Act Fund. KEY FACTS: This program awards cash assistance in the form of grants to eligible buyers to assist them in purchasing homes. Homes purchased through this program are not limited to a specific development, but must be located in Easton and must meet other requirements. Homes purchased through this program will become permanently affordable. In other words, when they are sold in the future, they must be sold to a moderateincome purchaser at a restricted price. In the current round, the program will assist at least three households with home purchases. Participants in this program are selected on a first-come, first-served basis. DETAILS: Complete program details are contained in this package. Please read carefully, especially concerning your eligibility and the requirements of program participants. CONTACT: This program is administered by Easton s Department of Planning & Community Development. For further information or with questions, please contact: Tim Harrigan, Community Planner (508) or tharrigan@easton.ma.us 5

6 Program Guidelines Participant Eligibility Combined annual income for applicant household members is required to be at or below the 80% Area Median Income limits for the Easton-Raynham Statistical Area as published by US Department of Housing and Urban Development (HUD). Income is determined using the method in the HUD Section 8 program (defined at 24 CFR 5.609). Household income limits in effect as of the time of printing are as follows (note that these are subject to change): Household Size Income Limit $45,500 $52,000 $58,500 $65,000 $70,200 $75,400 $80,600 $85,800 Household assets may not exceed $75,000 in net cash value. The value of Assets is determined using the method established by the Massachusetts Department of Housing and Community Development (DHCD) [see the DHCD LIP Guidelines, Appendix II A.2 as may be revised by DHCD]. Only first-time homebuyers are eligible for this program. A first-time homebuyer is an individual or household of which no household member has owned a home within three years preceding the application, with the following exceptions: o displaced homemakers, where the displaced homemaker (an adult who has not worked full-time, full-year in the labor force for a number of years but has, during such years, worked primarily without remuneration to care for the home and family), while a homemaker, owned a home with his or her partner or resided in a home owned by the partner; o single parents, where the individual owned a home with his or her partner or resided in a home owned by the partner and is a single parent (is unmarried or legally separated from a spouse and either has 1 or more children of whom the individual has custody or joint custody, or is pregnant); o households where at least one household member is 55 or over; o households that owned a principal residence characterized as manufactured housing or otherwise not permanently affixed to a permanent foundation in accordance with applicable regulations; and o households that owned a property that was not in compliance with State, local or model building codes and that cannot be brought into compliance for less than the cost of constructing a permanent structure. (continued on following page) 6

7 Program Guidelines (continued) Individuals who have a relationship to the Easton Affordable Housing Trust Board and their families are not eligible to participate in the program. General Program participants find a property in the private housing market that complies with program requirements for household size and home condition (see the Property section for additional detail). Each property purchased through the program must become bound by a permanent affordable housing deed restriction that is provided by the state Department of Housing and Community Development and approved by the Town. A summary of the restriction is provided in this packet (see the Local Initiative Program (LIP) Homebuyer Disclosure Statement ). The complete deed restriction is available at: The resale process under the LIP Deed Rider involves the following: The Monitoring Agents have up to 90 days after you give notice of your intention to sell the home to close on a sale to an Eligible Purchaser, or to close on a sale to a Monitoring Agent, or to a buyer that one of them may designate. This time period can be extended, as provided in the LIP Deed Rider, to arrange for details of closing, to locate a subsequent purchaser if the first selected purchaser is unable to obtain financing, or for lack of cooperation on your part. If you attempt to sell or transfer the home without complying with the LIP Deed Rider requirements, the Monitoring Agents may, among their other rights, void any contract for such sale or the sale itself. Refer to the LIP Homebuyer Disclosure Statement for a clear description of deed rider requirements. Each property purchased through this program must be eligible for inclusion on the state s Subsidized Housing Inventory. Grant monies will not be disbursed if any aspect of the property, the financing, or the transaction would preclude the unit from inclusion on the Subsidized Housing Inventory. Fair housing law at state and federal levels prohibits discrimination in housing on a number of characteristics, including race, religion, color, sex, sexual orientation, familial status, age, handicap, marital status, national origin, genetic information and ancestry. An applicant who believes that they have been discriminated against in the buyer selection, financing or sales process may contact: the Massachusetts Commission Against Discrimination (617) ; and/or the United States Department of Housing and Urban Development (617)

8 Participant Obligations EASTON HOMEBUYER ASSISTANCE PROGRAM Program Guidelines (continued) Applicants must have obtained a mortgage pre-approval from a bank, credit union or government entity operating in Massachusetts. Pre-approvals from on-line services do NOT satisfy this requirement. Pre-qualifications do NOT satisfy this requirement. The pre-approval must be for a loan amount sufficient for a buyer to purchase a property under this program (i.e., at least 95% of the affordable sale price as defined in the Grants section below). Grant awardees will be informed of the maximum sale price of the home they may purchase by Easton s Department of Planning and Community Development. Awardees must be in receipt of this information before selecting a home. Participants must have completed a homebuyer course or homebuyer counseling before making an offer on a home to be purchased with the assistance of this program. The course/counseling must be offered by an organization certified under the Massachusetts Homeownership Collaborative (see the Homebuyer Courses section). Buyers must comply with specific closing and financing requirements of all applicable state programs and bank products. This includes obtaining the approval of the terms of the mortgage financing from the state Department of Housing and Community Development. No offer to purchase real estate may include a first right of refusal. Buyers are encouraged to obtain legal representation for the transaction starting with negotiation of purchase and sale agreements. Buyers must conduct their transaction so that the home purchased is eligible for inclusion on Easton s Subsidized Housing Inventory. Buyers must commit to executing any and all documents and agreements that are necessary for such purpose. Buyers are encouraged to review their transaction as it progresses with Easton s Department of Planning and Community Development to ensure that this condition is met. Property inspections by qualified Massachusetts-licensed inspectors are required for units purchased through this program. Offers to purchase must be conditional upon satisfactory inspections. 8

9 Grants Program Guidelines (continued) The program s subsidy takes the form of payments to sellers toward the purchase of the home at closing. Home purchase grants are intended to reduce the cost of the home purchase, allowing the purchaser to take out a smaller mortgage. In return for this financial assistance, an affordability deed rider is attached to the property. Additionally, reimbursement to buyers is available for required home inspections. Maximum sale prices are based upon the number of bedrooms needed by the recipient household. The number of bedrooms needed is based upon the household size and state regulations. Easton s Department of Housing & Community Development will verify this number for program participants. Participant buyers may select a home with up to one additional bedroom than is stipulated for their household. No additional grant monies will be disbursed and the home must otherwise meet all program requirements. Grants are primarily intended to close the gap between the affordable price and actual sale price of a home. Grant amounts are determined as follows: o Maximum sale prices for single family homes shall in no case exceed those listed in the table on the following page. Maximum sale prices for condominiums shall in no case exceed those listed in the table on the following page, and may be set lower, depending on actual condominium fees. Subject to this limit, the grant will be greater of: 10% of the home sale price, or; the difference between the actual sale price and the affordable sale price determined by the state Department of Housing and Community Development. (continued on the following page) 9

10 Maximum Prices (based on 2012 HUD income limits): Single-Family Approved # Beds Affordable Price Max. Sale Price* 1 $158,600 $253,600 2 $178,400 $273,400 3 $198,200 $293,200 4 $219,400 $314,400 5 $229,800 $324,800 Condo (Estimated maximum prices based on estimated condo fees) Approved # Beds Affordable Price Maximum Price* 1 $144,600 $239,600 2 $164,800 $259,800 3 $185,000 $280,000 4 $201,300 $296,300 *Based on availability of funds, smaller grants may be made available to applicants after three households have received assistance (see Program Process). The maximum home purchase grant awarded to each selected household to be used toward their home purchase shall in no case exceed $95,000. In cases where the relevant home purchase grant amount equals 10% of the home purchase price, the participant household is NOT entitled to any cash amount difference between the actual grant amount and the Maximum Home Purchase Grant listed in the table above. A participant purchaser may select a home at any sale price up to the maximum sale price as determined by the state Department of Housing and Community Development and the Easton Department of Planning & Community Development. The Department will inform participants of the actual maximum home sale price they may consider. The Program will reimburse buyers up to $1,000 per participant household toward initial home inspections and any additional inspections required under this program. Participants must pay for any additional amounts for any repairs required to be made to the property as a result of any inspection performed. 10

11 Program Guidelines (continued) Property Only properties that meet the following criteria are eligible for purchase: An existing home on a parcel located entirely in the Town of Easton, MA. The property must neither already be listed, nor under consideration for inclusion, on the Subsidized Housing Inventory as maintained by the state Department of Housing and Community Development. Homes purchased through this program must be the domicile and principal residence of the applicant. A satisfactory septic system or other adequate means of sewage disposal must be in place. If a property does not have a current, passing Title V Certificate or other evidence of adequate sewage disposal, either the seller must remedy or replace the system so that a passing Title V Certificate or other repair/upgrade is obtained or Program-approved assistance must be in place to remedy or replace the system. The property must be in compliance with the Massachusetts lead paint law, whether or not children of any age are expected to live in the property. (continued on following page) 11

12 Program Guidelines (continued) The property must be determined to be in good, safe and habitable condition by Easton s Department of Planning and Community Development in its sole discretion. The following inspections shall be required for units being considered for purchase through this program and all inspection reports and test result documentation must be provided to the Department. All inspections shall be completed within three weeks after the acceptance by the seller of an Offer to Purchase Real Estate, which must be conditional upon satisfactory inspections. 1. Water quality testing by a qualified professional from an interior faucet, which meets HUD/FHA loan requirements by testing for Coliform, E. coli, lead, nitrate and nitrite* 2. Property inspections by qualified Massachusetts-licensed inspectors. The property inspection must address all the items normally covered in a standard home inspection report as defined in 266 CMR 6:00 Standards of Practice and must additionally include: Confirmation of presence of smoke/co2 detection systems in accordance with M.G.L. 148 sect. 26E and 527 CMR 31 Inspection for pests and wood boring insects * Air quality testing for radon* A check for the presence of any potentially hazardous material, (asbestos, etc.)* A check for any indication of moisture damage and discoloration (mold, etc.)* A check for the presence of lead based paint if the property was constructed prior to 1978* 3. Hazard testing Easton s Department of Planning and Community Development will require additional testing by qualified professionals if the presence or potential presence of any of the above hazards or hazardous chemicals (marked with * ) is detected. (continued on following page) 12

13 Program Guidelines (continued) A major repair issue will be defined as any condition or hazard identified in the home inspection and/or testing report(s)that requires remediation beyond Ordinary Repairs as defined in the current Massachusetts State Building Code (780 CMR) to maintain the safety or habitability of the property within five years of purchase. At a minimum, the property must meet one of the following conditions: report(s) indicate that the property has no major repair issues; or, all major repair issues identified in the report(s) will be addressed by the seller, either in repairs before closing or through escrow payments to the buyer (Program must approve all escrow accounts); or, all major repair issues identified in the report(s) will be addressed through assistance offered through a Purchase and Rehabilitation mortgage from MassHousing or another similar program, if approved in advance by the Easton Department of Planning and Community Development. Buyers should be aware that the state Department of Housing and Community Development and the buyer s lender may make additional stipulations regarding the property s condition. For condominiums, the Easton Department of Planning & Community Development will review the condominium association and condominium documents. These documents include: condominium association s declaration, by-laws and regulations; condominium association s reserve fund plan; disclosure of any judgments against the condominium association or any pending lawsuits or legal proceedings against the condominium association; current condominium fee; current special assessment, if any; balance sheet; statement of income and expense; condominium association s annual budget; disclosure of any anticipated increase in contributions beyond inflation. At its discretion, Easton s Department of Planning & Community Development may deny approval of a grant. Reasons may include, but are not limited to: substantial issues with condominium documents; instability in the condominium association; pending or proposed lawsuits against the association that might result in it becoming financially unstable; and current or potential special assessments that might make the condominium unaffordable to the buyer. 13

14 Program Guidelines (continued) Mortgage Participants are strongly encouraged to review the following list with their lender. Program staff are available to speak with your lender to provide information and answer questions. Please see the Mortgage Options section of this packet for a list of lenders who issue mortgages compatible with the program. Mortgages for homes purchased through the program must be obtained from a bank, credit union or government entity operating in Massachusetts. Mortgages obtained through on-line services do NOT satisfy this requirement. Lenders must be able to work with property deed rider restrictions. Non-household members are not permitted as co-signers of the mortgage. The state Department of Housing and Community Development (DHCD) or its designee must review and approve the terms of the buyer s mortgage financing. The mortgage must comply with DHCD requirements, including, but not limited to, the following: The loan must have a fixed interest rate through the full term of the mortgage. The loan must have a current fair market interest rate. (No more than 2 percentage points above the current Masshousing Rate: (617) or The interest rate must be locked in not floating. The buyer must provide a down payment of at least 3%, 1.5% of which must come from the buyer s own funds. The loan can have no more than 2 points. The buyer may not pay more than 38% of their monthly income for monthly housing costs. Loans from non-institutional lenders will not be accepted. FHA will no longer accept the deed rider that survives foreclosure. DHCD will prepare a LIP Deed Rider, Maximum Resale Price Multiplier Certificate and LIP Mortgage to be recorded at the closing. (Note that these requirements are set by the state Department of Housing & Community Development (DHCD) and are subject to change. See DHCD s latest version of the LIP Guidelines for updated information.) 14

15 Applications Program Process 1. Please complete all application materials. Applicants are encouraged to complete the checklist as an aide to the process. 2. Applications received are dated and checked for completion of all required components. An application will be considered complete when all required items on the checklist have been provided. 3. Applicants will be notified for incomplete application packages by or phone call first and then by letter if no response has been received after 5 days. 4. Applications will be reviewed to determine that applicant households appear to be eligible to participate. (Final eligibility will be confirmed before closing for applicants selected to participate in the program). 5. Applicants deemed ineligible will be notified in writing of the decision and may contact the program in writing to comment on or protest the determination. Failure to contact the program in writing at least two weeks after notification will result in the applicant waiving their right for review. Selection 1. Participants are selected on a first-come, first-served basis by date of completed application. 2. In the event that any of the participants are unable to purchase a home within the allotted time frame, are unable to obtain financing, do not comply with guidelines, or withdraw for any other reason, the next qualified applicant will be offered the grant opportunity. If the returned grant is for a larger unit than the next applicant qualifies for, the grant will be reduced accordingly. If the returned grant is smaller than the next highest ranking applicant qualifies for and no additional program funds are available, only this smaller grant amount will be available to the applicant. 15

16 Post-Selection Process EASTON HOMEBUYER ASSISTANCE PROGRAM 1. Participants must have completed a homebuyer s course or homebuyer s counseling from an eligible provider prior to making an offer (see the Participant Obligations topic in the program guidelines for additional detail). 2. Participants will be notified by Easton s Department of Planning and Community Development of the maximum purchase price for the home that they select (see the Grants topic of the program guidelines for further information). 3. Participants are given 120 days from this notification to complete their transaction. This allows time for the participant to: Select property: Buyer must notify Easton s Department of Planning and Community Development of their choice and the Department must confirm that the property is eligible for purchase under the program before the buyer proceeds. Make offer: Sign offer to purchase, negotiate price. Include contingency on inspections. Include contingency on financing. No offer to purchase may include a first right of refusal. Complete inspections: Complete home/hazard inspections within 10 days of offer acceptance (see the Property topic in the program guidelines). Execute purchase and sale agreement Obtain financing: (see the Mortgage topic in the program guidelines). Close: Within roughly 40 days of signing of purchase & sale. At the discretion of the Easton Affordable Housing Trust Fund Board or its designee, extensions totaling up to 120 days may be granted. Extensions will be granted only when circumstances outside of a participant s control have prevented them from closing before their deadline. The participant may be required to provide additional documentation to demonstrate that good-faith efforts toward completing a transaction are underway. 4. The buyer may engage a real estate agent to show potential properties. At the buyer s request, the Easton s Affordable Housing Trust Fund Board may recommend agents familiar with the Program. The Board offers these merely as candidates to the buyer, who is responsible for selecting their agent and home. 5. Only properties that meet the criteria listed in the Program Guidelines are eligible for purchase. Eligibility must be verified by the Easton Department of Planning & Community Development. 6. Buyers are encouraged to obtain legal representation for the transaction starting with Offer to Purchase. 16

17 Post-Selection Process (continued) 7. Buyers must comply with specific closing and financing requirements of all applicable state programs and bank products. State Department of Housing and Community Development approval of the terms of the mortgage financing must be obtained. 8. Final buyer eligibility, as determined by the state Department of Housing and Community Development and the Easton Department of Planning and Community Development, will be verified before the execution of Purchase and Sale. 9. Eligibility for unit inclusion on the Subsidized Housing Inventory as determined by the state Department of Housing and Community Development and the Easton Department of Planning and Community Development will be verified before the execution of Purchase and Sale and again before closing. Grant monies will not be disbursed if any aspect of the property, the financing, or the transaction would preclude the unit from inclusion on the Subsidized Housing Inventory. 10. All property transaction documents must be provided to the Easton Department of Planning & Community Development and approved in advance of the closing in order for the participant to access the home purchase grant. These may include the offer, the purchase and sales agreement, inspection report(s), appraisal, financing commitment, municipal lien certificate, plot plan, title examination, affordable housing restriction, HUD-1 settlement statement and deed. 17

18 Disclosures After closing, buyers of condominiums will be assessed and will be responsible for payment of a monthly condominium fee. After closing, buyers will be responsible for all property taxes. Taxes may be set for the assessed market rate of the home until the assessment cycle reduces the assessed value of the dwelling to reflect the affordability resale restriction. All properties purchased under this program will be required to include the Massachusetts Local Initiative Program Deed Rider as part of the recorded title conditions. The Massachusetts Local Initiative Program Deed Rider limits the resale price of the property and requires that it be sold to a program eligible buyer. The deed restriction insures that the property remains affordable in perpetuity and requires pre-approval from the Massachusetts Local Initiative Program and the Town of Easton for refinancing and capital improvements. It is strongly recommended that applicants review the provisions of the Deed Rider with their own attorney to ensure that they understand its requirements. 18

19 Mortgage Options Program participants may work with any lender of their choosing to obtain a mortgage. This list is provided for informational purposes only. Participants are reminded that they are not required to obtain a mortgage from the same lender that issued their preapproval, and may speak with more than one lender when preparing to close on a home to find the best deal. Participants are encouraged to speak with their lender about the following mortgage products: Massachusetts Housing Partnership Soft Second Program MassHousing Mortgages and No MI Loans mmunitypage&parentid=3&mode=2&in_hi_userid=2&cached=true The following lenders are aware of the Easton Homebuyer Assistance Program and issue mortgages that are compatible with program requirements: North Easton Savings Bank Steven Holcomb (508) or (508) sholcomb@northeastonsavingsbank.com Harbor One Credit Union (Brockton) Barbara Graveline (508) Boston Private Bank Diana Carvajal-Hirsch (617) Dcarvajal-hirsch@bostonprivatebank.com Middlesex Savings Marlene Thomas (978) Randolph Savings Andrew Parsons aparsons@randolphsavings.com Sovereign Bank (Foxborough Office) Kevin Connolly (508) kconnol1@sovereignbank.com Bank of Canton Helen Lambropoulos (781) Bristol County Savings Jennifer Oldfield (508) Jen.Oldfield@bcsbmail.com USDA Direct Loan Program Ticia Weare (508) ext. 3 Bank of Easton

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21 Homebuyer Courses Participants in the Homebuyer Assistance Program are required to attend a homebuyer course at an organization certified under the Massachusetts Homeownership Collaborative. By participating in a pre-purchase homebuyer course, prospective buyers learn about the entire home buying process, including how to deal with credit issues, working with a real estate agent, applying for a mortgage, and more. Participants may also be able to access special mortgage products and other homebuyer services. Below is a list of nearby organizations offering approved homebuyer courses. Some may charge a small fee for participation. A statewide list of organizations is available from the Citizen s Housing & Planning Association website at: South Shore Homebuyer Courses Pro-Home (Taunton) (508) Neighborhood Housing Services of the South Shore (Brockton & Quincy) (617) South Shore Housing Development Corporation (Kingston) (781) City of New Bedford, Housing & Neighborhood Development (New Bedford) (508) Fall River Affordable Housing Corporation (Fall River) (508) Plymouth Redevelopment Authority (Plymouth) (508) x147 (Continued on following page) 21

22 Boston Area Homebuyer Courses Allston Brighton Community Development Corporation (Allston and Brighton) (617) (classes available in Spanish) Asian American Civic Association (Boston) (617) Asian Community Development Corporation (Boston) (617) x208 (classes available in Cantonese and Mandarin only) Boston Home Center / City of Boston, Dept. of Neighborhood Development (617) Massachusetts Affordable Housing Alliance (Dorchester) (617) x313 (classes available in Spanish) Neighborhood of Affordable Housing (East Boston) (617) (classes available in Spanish) Nuestra Comunidad Development Corporation (Roxbury) (617) Urban Edge Housing Corporation (Roxbury) (617) (classes available in Spanish) Viet-AID (Dorchester) (617) x10 (classes available in Vietnamese) Chelsea Restoration Corporation (617) (classes available in Spanish) Quincy Community Action Programs (617) Somerville Community Corporation (617) (classes available in Spanish and Portuguese) WATCH CDC (Waltham) (781)

23 Homebuyer Assistance Program Application & Forms 23

24 Applicant Checklist Use this to confirm that you have provided all application materials before submitting. Required Forms: Application (signed by applicant & any co-applicant(s)) Applicant(s) Certification Acknowledgements (last page, Local Initiative Program (LIP) Homebuyer Disclosure Statement) Required Documentation (one copy of each): Federal tax returns as filed for 2008, 2009, 2010 and 2011 (if available), for all members of the household over the age of 18 [do not send Mass. state taxes]. W2 and/or 1099-R forms as filed for 2008, 2009, 2010 and 2011 (if available) for all members of the household over the age of 18. Asset Statement(s): Current statements including most recent 5 months for: checking accounts (full statement showing activity/every page front and back); saving accounts (full statement); investment accounts including retirement; certificate of deposit; money markets; stocks/bonds; property; down payment gift amount etc. Five (5) consecutive pay stubs ending within one month of unit application for all jobs (check/direct deposit stubs). Must include five stubs whether paid weekly, bi-weekly etc. Provide for all salaried employed household members over 18. For unemployment, copies of unemployment checks or DOR verification stating benefits received. Mortgage pre-approval (continued) 24

25 Applicant Checklist (continued) If applicable (one copy of each): If you owned a home within the past 3 years but it was sold due to a divorce provide copy of divorce or separation papers and proof of the home sale showing equity received. If you intend to utilize a gift from a family member to assist with the down payment, please advise us of the gift amount with the name and telephone number of the person providing the gift. Proof of student status for dependent household members over age of 18 and full-time students. Social Security: official statement of monthly amount received for year in review and statement of total amount received for latest tax year. Pension: statements indicating amount received for year in review and statement of total amount received for latest tax year. Last consecutive three months statements and documents that indicate the payment amounts from all other sources of income of all members listed on the application, such as alimony and/or child support, Workman's Compensation, alimony, disability or death benefits and any other form of income on organization letterhead Documentation regarding current interest in real estate, or settlement statement(s) for any real estate/property sold within last 3 years No Income Statement, signed and notarized, for any household member over 18 with no source of income (continued) 25

26 Applicant Checklist (continued) Please bring a copy of the following Mortgage Guidelines to your lender: Mortgages must be obtained from a bank, credit union or government entity operating in Massachusetts. Mortgages obtained through on-line services do NOT satisfy this requirement. Lenders must be able to work with property deed rider restrictions. Non-household members are not permitted as co-signers of the mortgage. The state Department of Housing and Community Development (DHCD) or its designee must review and approve the terms of the buyer s mortgage financing. The mortgage must comply with DHCD requirements, including, but not limited to, the following: Mortgages for homes purchased through the program must be obtained from a bank, credit union or government entity operating in Massachusetts. Mortgages obtained through on-line services do NOT satisfy this requirement. Lenders must be able to work with property deed rider restrictions. Non-household members are not permitted as co-signers of the mortgage. The state Department of Housing and Community Development (DHCD) or its designee must review and approve the terms of the buyer s mortgage financing. The mortgage must comply with DHCD requirements, including, but not limited to, the following: The loan must have a fixed interest rate through the full term of the mortgage. The loan must have a current fair market interest rate. (No more than 2 percentage points above the current Masshousing Rate: (617) or The interest rate must be locked in not floating. The buyer must provide a down payment of at least 3%, 1.5% of which must come from the buyer s own funds. The loan can have no more than 2 points. The buyer may not pay more than 38% of their monthly income for monthly housing costs. Loans from non-institutional lenders will not be accepted. FHA will no longer accept the deed rider that survives foreclosure. DHCD will prepare a LIP Deed Rider, Maximum Resale Price Multiplier Certificate and LIP Mortgage to be recorded at the closing. (Note that these requirements are set by the state Department of Housing & Community Development (DHCD) and are subject to change. See DHCD s latest version of the LIP Guidelines for updated information.) Additional documentation may be requested as a condition of qualifying for this program. Applicants selected to participate must submit additional documentation, including confirmation of completing an approved homebuyer training program and purchase closing documents. Your application and all materials you provide will be reviewed by Easton s Department of Planning & Community Development, the program s consultant and the state Department of Housing & Community Development. 26

27 Application Applicant Legal Name Phone Number Address Address City State/Zip Co-Applicant Legal Name Phone Number Address Address City State/Zip I learned of this program from (check all that apply): Website: Advertisement: Other: Please specify (for any source): Signature: (Applicant) (Date) (Print Name) (Co-Applicant or Applicant s spouse) (Date) (Print Name) 27

28 Number of Bedrooms Needed: List all members of your household including yourself: Names of all Persons to Reside in Dwelling Relation (First Name, Middle Initial, Last Name) to Head HEAD Age Date of Birth Property - Do you own or have an interest in any real estate, land and/or mobile home? Yes ( ) No ( ) If yes: Address: Current Value: $ Have you sold real estate or other property in the past three years? Yes ( ) No ( ) If yes, attach settlement statement When: Address: Sale Price: $ 28

29 Income - List all income of all members over the age of 18 listed on application to reside in the unit, such as wages, child support, Social Security benefits, all types of pensions, employment, Unemployment Compensation, Workman's Compensation, alimony, disability or death benefits and any other form of income; including rental income from property. Adults with no income are required to submit a notarized statement. If you need additional space, please attach another sheet. # Source of Income Address/Phone# of Source Amount per Year 1 $ 2 $ 3 $ 4 $ 5 $ TOTAL $ Assets - List all checking, savings accounts, CD s, stocks, bonds, retirement accounts, savings bonds and any other investments below. If additional space is needed, please attach another sheet. Household assets do not include necessary personal property. # Type of Asset Account No Value, Balance 1 Checking account $ 2 Savings account $ 3 Retirement account $ 4 Other: $ 5 Other: $ 6 Other: $ TOTAL $ If you have questions, call or Tim Harrigan: (508) or tharrigan@easton.ma.us. Return completed application and all required documentation to: Tim Harrigan Department of Planning & Community Development Easton Town Offices 136 Elm St. Easton, MA

30 Applicant(s) Certification I/We certify that our household size is persons, as documented herein. I/We certify that our total household income equals $, as documented herein. I/We certify that our household has assets totaling $, as documented herein. I/We certify that no member of our household has owned real estate in the last 3 years, or if so, that each individual(s) having owned real estate in the last 3 years meets at least one of the exceptions noted in the Participant Eligibility published for this program. I/We certify that the information in this application and in support of this application is true and correct to the best of my/our knowledge and belief under full penalty of perjury. I/We understand that false or incomplete information may result in disqualification from further consideration. I/We certify that I am/we are not related to members of the Easton Affordable Housing Trust Board, or any party of this program. I/We understand that it is my/our obligation to secure the necessary mortgage for the purchase of a home and that all expenses, including closing costs and down payments, are my/our responsibility. [Lenders must be able to work with property deed rider restrictions.] I/We understand that if I/we do not complete the home purchase transaction within 120 days after the notification of qualification, the grant will be offered to the next eligible applicant on the waiting list. I/We understand the provisions regarding resale restrictions and agree to the restriction. The unit cannot be refinanced without prior approval of the Massachusetts Department of Housing and Community Development (DHCD), no capital improvements can be made without DHCD pre-approval; the unit must be owner's primary residence; the resale price is calculated according to the deed rider; and an increase in equity is very minimal to ensure affordability over time; the deed rider remains in effect in perpetuity. [All prospective buyers are advised to review the deed rider with their own attorney to fully understand its provisions.] I/We have been advised that a copy of the LIP Universal Deed Rider is available at Easton Town Offices and on the DHCD website ( I/We understand that if I/we are selected to purchase a home, I/we must continue to meet all eligibility requirements of DHCD and any participating lender(s) until the completion of such purchase. I/We understand that I/we must be qualified and eligible under any and all applicable laws, regulations, guidelines, and any other rules and requirements. Your signature(s) below gives consent to Easton s Department of Planning & Community Development or its designee to verify information provided in this application. The applicant agrees to provide additional information on request to verify the accuracy of all statements in this application. No application will be considered complete unless signed and dated by the Applicant/Co-Applicant. Applicant Signature Date Co-Applicant or Applicant s Spouse Signature Date 30

31 KEEP THIS DOCUMENT ACCESSIBLE IT CONTAINS VALUABLE CONTACT INFORMATION LOCAL INITIATIVE PROGRAM (LIP) HOMEBUYER DISCLOSURE STATEMENT This Homebuyer Disclosure Statement summarizes your rights and obligations in purchasing this home. You are about to purchase a home located at, in, Massachusetts (the Municipality ) at less than the home s fair market value, under the Local Initiative Program (LIP). When you sell the home, that same opportunity will be given to the new buyer. In exchange for the opportunity to purchase the home at less than its fair market value, you must agree to certain use and transfer restrictions. These restrictions are described in detail in a LIP Deed Rider that will be attached to the deed to your home and recorded at the Registry of Deeds.. PLEASE REMEMBER: You must occupy this home as your primary residence; You must obtain consent from the Department of Housing and Community Development (DHCD) and the Municipality [and (if another monitoring agent is listed)] (together they are referred to as the Monitoring Agents in this Homebuyer Disclosure Statement) before renting, refinancing or granting any other mortgage, or making any capital improvements to your LIP home; You must give written notice to the Monitoring Agents when you decide to sell your property. The contact information for the Monitoring Agents is listed in the LIP Deed Rider. Please read the LIP Deed Rider restriction in its entirety because it describes and imposes certain important legal requirements. It is strongly recommended that you consult an attorney to explain your legal obligations and responsibilities. 31

32 2 Primary Residence You must occupy your LIP property as your primary residence. Renting, Refinancing and Capital Improvements You must obtain the prior written consent of the Monitoring Agents before you do any of the following: Rent your LIP home; Refinance an existing mortgage or add any other mortgage including a home equity loan; or Make any Capital Improvements (for example, a new roof or a new septic system see attached Capital Improvements Policy) if you wish to get credit for those costs (at a discounted rate) when you sell your home. Before taking any action, please contact DHCD for instructions on renting, mortgaging, or making capital improvements to your home. If you do not obtain the required consent from the Monitoring Agents, you can be required to pay all of the rents or proceeds from the transaction to the Municipality. Resale Requirements When you sell your home, you are required to give written notice to the Monitoring Agents of your desire to sell so that they may proceed to locate an Eligible Purchaser for your LIP home. Your sale price will be computed by DHCD based on the formula set forth in the LIP Deed Rider to reflect your original purchase price plus certain limited adjustments. The allowed sale price is defined as the Maximum Resale Price in the LIP Deed Rider. It is calculated by adjusting the purchase price you paid for the home to reflect any change in the area median income from the time you purchased the LIP home to the time of the resale plus: (a) The Resale Fee as stated in the LIP Deed Rider; (b) Approved marketing fees, if any; and (c) Approved Capital Improvements, if any. The Maximum Resale Price can never be more than the amount which is affordable to an Eligible Purchaser earning 70% of the area median income, as determined by a formula set forth in the LIP Deed Rider. The sales price will also never be less than the purchase price you paid, unless you agree to accept a lower price. 32

33 3 The Monitoring Agents have up to 90 days after you give notice of your intention to sell the home to close on a sale to an Eligible Purchaser, or to close on a sale to a Monitoring Agent, or to a buyer that one of them may designate. This time period can be extended, as provided in the LIP Deed Rider, to arrange for details of closing, to locate a subsequent purchaser if the first selected purchaser is unable to obtain financing or for lack of cooperation on your part. It is your obligation to cooperate fully with the Monitoring Agents during this resale period. If an Eligible Purchaser fails to purchase the home, and none of the Monitoring Agents (or their designee) purchases the home, you may sell the home to a purchaser who does not qualify as an Eligible Purchaser (in this event, this purchaser is referred to as an ineligible purchaser), subject to the following: (i) the sale must be for no more than the Maximum Resale Price; (ii) the closing must be at least 30 days after the closing deadline described above; (iii) (iv) the home must be sold subject to a LIP Deed Rider; and if there are more than one interested ineligible purchasers, preference will be given to any purchaser identified by DHCD as an appropriately-sized household whose income is more than 80% but less than 120% of the area median income. Any sale by you to an Eligible Purchaser, or to an ineligible purchaser (as described in the LIP Deed Rider), is subject to the normal and customary terms for the sale of property, which are set forth in the LIP Deed Rider and which will be included in your Purchase and Sale Agreement.. There is no commitment or guarantee that an Eligible Purchaser will purchase the LIP home, or that you will receive the Maximum Resale Price (or any other price) for your sale of the LIP home. A sale or transfer of the home will not be valid unless (1) the total value of all consideration and payments of every kind given or paid by the selected purchaser do not exceed the Maximum Resale Price, and (2) the LIP Compliance Certificate that confirms that the sale or transfer was made in compliance with the requirements of the LIP Deed Rider is executed by the Monitoring Agents and recorded at the Registry of Deeds by the closing attorney. If you attempt to sell or transfer the home without complying with the LIP Deed Rider requirements, the Monitoring Agents may, among their other rights, void any contract for such sale or the sale itself. 33

34 4 Foreclosure In the event that the holder of a mortgage delivers notice that it intends to commence foreclosure proceedings, the LIP Deed Rider gives the Municipality an option to purchase the home (or to designate another party to purchase the home) for a period of 120 days after notice of the Lender s intent to foreclose. If this foreclosure purchase option is exercised, the purchase price will be the greater of (i) the amount of the outstanding balance of the loan secured by the mortgage, plus the outstanding balance of the loans secured by any mortgages senior in priority, up to the Maximum Resale Price as of the date the mortgage was granted, plus any future advances, accrued interest and/or reasonable costs and expenses that the mortgage holder is entitled to recover, or (ii) the Maximum Resale Price at the time of the foreclosure purchase option, except that in this case the Maximum Resale Price may be less than the purchase price you paid. By signing the LIP Deed Rider, you are agreeing that you will cooperate in executing the deed to the Municipality (or its designee) and any other required closing documents. If the foreclosure purchase option has not been exercised within 120 days of delivery of the foreclosure notice to the Monitoring Agents, the mortgage holder may conduct a foreclosure sale. The mortgage holder or an ineligible purchaser may purchase the home at the foreclosure sale, subject to the LIP Deed Rider. If the sale price at the foreclosure sale is greater than the purchase price that would have applied for the Municipality s foreclosure purchase option as described above, the excess will be paid to the Municipality. By signing the LIP Deed Rider, you are agreeing to assign any rights and interest you may otherwise have in the balance of any foreclosure proceeds available after satisfaction of all obligations to the holder of the foreclosing mortgagee, for delivery to the Municipality. There is no commitment or guarantee that the Municipality will exercise the foreclosure purchase option, or that your Lender will receive the Maximum Resale Price (or any other price) in any foreclosure sale of the LIP home. In addition, the foreclosing lender retains the right to pursue a deficiency against you. Violation of Restriction Requirements If you violate any of the Restriction terms, you will be in default and the Monitoring Agents may exercise the remedies set forth in the LIP Deed Rider. If one or more of the Monitoring Agents brings an enforcement action against you and prevails, you will be responsible for all fees and expenses (including legal fees) for the Monitoring Agent(s). The Monitoring Agent(s) can assert a lien against the home to secure your obligation to pay those fees and expenses. 34

35 5 Acknowledgements By signing below, I certify that I have read this Homebuyer Disclosure Statement and understand the benefits and restrictions described. I further certify that I have read the LIP Deed Rider and understand the legal obligations that I undertake by signing that document. I also certify that I have been advised to have an attorney review this document and the LIP Deed Rider with me. Dated, 2011 Homebuyer Witness Homebuyer Witness Local Initiative Program (LIP) Department of Housing and Community Development 100 Cambridge Street, Suite 300 Boston, MA