Application Packet

Transcription

1 C i t y o f G i l r o y P l a n n i n g D i v i s i o n H o u s i n g & C o m m u n i t y D e v e l o p m e n t R o s a n n a S t r e e t G i l r o y, C A ( ) P h o n e ( ) Fax City of Gilroy Homebuyer Assistance Program Application Packet How the Process Works Contents Program Guidelines CalHFA-Approved Lenders Contact Information Application Page 1 of 1

2 Homebuyer Assistance Program How the Process Works 1. Notice of Funding Availability Upon approval of the program year budget, HCD staff announces availability of Program funds 2. Loan Approval a. Applicant gets pre-approved through a mortgage lender or broker; pre-approval letter from lender must show the maximum loan amount and interest rate for which the applicant is eligible. b. Applicant obtains and completes Homebuyer Assistance Program application c. Applicant, mortgage lender, or broker then submits to the City a packet of information that shall include the following items: i) Completed City of Gilroy Homebuyer Assistance Program Application; ii) Payment of application fee by check, cash or money order; iii) Copies of the first mortgage lender loan application (called a 1003) and pre-approval letter stating income and credit have been verified; iv) Proof of one-year City residency within Gilroy (may be provided from prior years tax filings) or, if a City of Gilroy or Gilroy Unified School District employee, (and not otherwise an eligible Gilroy resident), a letter from your employer stating that you have successfully passed probation; v) Copy of First-Time Homebuyer Training Certificate (if applicant is a first-time homebuyer), only one household member/applicant is required to complete training; vi) Income verification documents for all employed applicants Documents evidencing a minimum of three months of all verifiable income (income statements or pay stubs), including social security and/or retirement income, (e.g. annuity or pension), if applicable; Two years of federal tax filings and associated W-2s; and Three months of bank statements. d. When a completed application packet is submitted, City staff date and time stamps it. Page 1 of 3

3 e. City staff reviews the application packet, in the order it was received. Subject to availability of City funds, if the application is complete and the applicant meets all income and other eligibility requirements, the City issues a Loan Commitment Letter to the applicant. The City s loan approval is valid for a period of one hundred twenty (120) days. The applicant may request a maximum 30-day extension if they are in escrow for a home purchase and require additional time to close escrow. 3. Disbursement Loan Documents and Loan Funds a. Applicant, mortgage lender, real estate broker, or escrow holder then forwards to the City the following documents and information: i) Executed purchase contract (signed by both seller and applicant); the loan commitment amount may be revised based upon the purchase price of the home; loan cannot exceed 20% of the purchase price. ii) iii) iv) Appraisal for the house being purchased; Final loan approval, (recommend underwriter s approval, showing final loan amount, interest rate, type of loan (30 year fixed)) etc. Copy of sample first Lender s Note and Deed of Trust v) Copies of any new or updated applications or approvals provided by other assistance sources, such as the Mortgage Credit Certificate Program or California Housing and Finance Agency programs. vi) vii) Wiring instructions from escrow company. Initialed or signed Truth in Lending Statement and other disclosure documents legally required; viii) Preliminary title report, escrow company, and escrow account number; b. City reviews additional information submitted in Step 3.a. If the intended purchase and loan documents comply with program requirements, the City will its loan documents and escrow instructions to escrow company. Page 2 of 3

4 c. When City receives the following documents, the City will wire its loan funds to the borrower s escrow account (i) Estimated buyer s and or seller;s settlement statement from escrow company; and (ii) Signed Homebuyer Assistance Program Promissory Note; (iii)signed Homebuyer Assistance Program Deed of Trust; d. The escrow holder records deed of trust and sends to the City copies of the following: i) The recorded Deed of Trust; ii) The signed promissory note iii) Final closing statement for buyer and seller; iv) Notice of Default, and; v) Receipt of Copy of Title Insurance Policy with City named as beneficiary. Page 3 of 3

5 Purpose of the Program Program Guidelines July June 2010 The Homebuyer Assistance Program is administered by the City of Gilroy and funded by the City s Housing Trust Fund. The Program facilitates homeownership for low and moderate income eligible households by offering down payment assistance in the form of deferred loans. Eligibility Requirements for Participants General Requirements Gilroy residents who have not owned property in the past three years and employees of the City of Gilroy and Gilroy Unified School District are eligible to apply. - Gilroy residents who are not City of Gilroy or Unified School District Employees must have resided within the City at least one year prior to submitting an application. - City and Gilroy Unified School District Employees must have successfully passed employment probationary periods. All program applicants must submit evidence that they have completed an approved first-time homebuyer training course before their applications will be considered. Approved training courses are those certified by CalHFA, Fannie Mae, HUD or City staff. Applicants will pay a $ application fee at time of submittal of application, and a $ loan processing fee at close of escrow. Application fee for a low income applicant is $ Application fee paid by check, cash or money order; to be made out to City of Gilroy. Program applicants must submit a pre-approval letter from their lenders, prior to the City s consideration or approval of their applications. The letter must state the maximum loan amount and interest rate for which the applicant is eligible; and that the lender has verified applicant s credit and income as part of the approval process. Applicants or their lender must submit a completed mortgage loan application, commonly referred to as a 1003 form. Income Requirements The combined household income of program participants shall not exceed limits established for moderate or low-income households, based on the number of persons in the household. If applicants use or require co-signers for the first mortgage, the co-signers total household income shall be included as part of the applicant s total income when determining the borrower s income eligibility level. Page 1 of 2

6 2009 Income Santa Clara County Limits No. of Persons Low income ,400 67,900 76,400 84,900 91,650 98, , ,050 Moderate 88, , , , , , , ,100 Other Requirements Borrower shall use the home purchased under this program as their primary residence. The owner occupant shall not lease or rent out the subject property and shall occupy the property for no fewer than ten months per year. Applicant must demonstrate that they have a need for the downpayment assistance loan; there must be a funding gap between the purchase price of the home and the maximum amount of a first mortgage that they have been approved for by a mortgage lender Continued Eligibility Throughout Application and Funding Processes Applicants shall maintain eligibility throughout application and funding processes. Changes to income, number of persons in household, and inability to secure a primary mortgage that complies with Program Guidelines may affect household eligibility for funding. Applicants shall report any changes that may affect their program eligibility to the City when changes occur. The City may request updated paystubs or tax returns from applicant prior to disbursement of the loan funds. Type of Residence and Maximum Loan Amount Loan funds may be used to purchase the following types of residences for ownership purposes: Type of Residence Loan Amount Single-Family Detached, Condominiums, and Townhomes Constructed Prior to Year 2007 Constructed After Year 2007 Low Income up to $50,000 Moderate Income up to $30,000 Low Income up to $30,000 Moderate Income up to $20,000 Manufactured housing if structure is permanently attached up to $20,000 Mobile homes fabricated after 2007 and located in approved mobile home parks up to $10,000 Page 2 of 2

7 Requirements for Residence The property must be located within Gilroy City limits. The maximum home sales price shall not exceed 120% of the monthly median home sales price for home in Gilroy, published by the Santa Clara County association of realtors. Website link: The total amount of the loan shall not exceed 20% of the purchase price of the residence. Loan Provisions City Council may annually review, and if necessary, amend loan provisions. Interest Rate The interest rate varies over the 20-year loan period as follows: 0% for the first 3 years 3% for years 4 through 20 Deferment Period The maximum deferment period is three years. Within the three-year deferment period, borrowers may repay the principal amount without incurring an interest charge. After the three-year deferment period, borrowers shall pay a minimum monthly amortized amount that includes principal and interest, sufficient to pay off the loan balance within the remaining seventeen-year repayment period. Any and all principal and interest owed are due upon sale of the property, a refinance, or maturity of the first mortgage loan, which ever occurs first. Loan Period The loan period is 20 years. All principal and applicable interest must be paid within the 20-year loan period. Borrowers may pay off the entire loan balance (principal and any applicable interest) at any time during the 20-year loan period without prepayment penalty. Method of Allocation The City shall consider completed loan applications on a first-come, first-served basis as funds are available. City shall only accept and process applications when funds are available and when accompanied by ALL documents required for the loan approval stage. Loan Approval Process Approval of loan applications for the Gilroy Homebuyer Assistance Program shall be subject to approval by the City Administrator s or his or her designee and shall remain in effect for one hundred twenty (120) days from the City s approval date. Completed Loan Application Contents and Process The City shall date and time stamp all completed loan applications received, prior to their consideration. If the application is NOT complete at the time of submission, it will not be Page 3 of 2

8 processed and will not be considered for review and processing until all missing documents are submitted. Each applicant shall submit to the City the following information and documents: City s Homebuyer Assistance Application Packet signed and dated where indicated; Application fee of $100 or $50 paid with check, cash or money order made out to City of Gilroy. Copies of First Mortgage Lender s pre-approval letter that states applicants credit and income was verified, loan amount and interest rate, and loan application completed by applicants (called a 1003); Copy of First-Time Homebuyer Training Certificate (if applicant is a first-time homebuyer); Proof of one-year residency within Gilroy (may be provided from prior years tax filings) or, if applying as a City of Gilroy or Gilroy Unified School District employee, a letter from your employer stating that you have successfully passed probation; Income verification documents for each applicant, if employed or receives income - Three months of all verifiable income (income statements or pay stubs) - Two years of federal tax filings and associated W-2s or 1009s; - Social Security Income (if applicable); - Retirement Income, e.g. annuity or pension (if applicable); - Three months of bank statements for each applicant. If the application is approved, the City will issue a Homebuyer Assistance Loan Commitment Letter to the applicant. Note: Applications submitted without one or more of the documents required under the Completed Loan Application Contents and Process section will NOT be processed if accepted by City staff. Loan Commitment Letter If the loan is approved, the City will issue a Commitment letter stating that the City will fund the homebuyer assistance loan. The loan commitment letter shall remain in effect for a period of one hundred twenty (120) days from the date of loan approval. Extension of Loan Commitment The applicant may request, in writing, that the City extend its Loan Commitment. The letter must set forth the reasons for the request. If approved, the maximum time extension shall NOT exceed thirty (30) additional days. Only one extension shall be granted. Page 4 of 2

9 Promissory Note and Deed of Trust In order to receive the Loan, Borrower will be required to execute a promissory note evidencing the loan and its terms. Borrower shall also sign a deed of trust securing the loan. Failure by borrower to make timely loan payments to the City may result in the default of the City s loan and City foreclosure on the property. Title Insurance with City named as Beneficiary Borrower shall obtain a title insurance policy listing the City of Gilroy as a beneficiary. Lending Restrictions The City homebuyer assistance loan shall be subject only to the first lender to secure its first mortgage on the property, the California Housing Finance Agency to secure any financial assistance it may provide Buyer and the Santa Clara County Housing Trust Fund and/or the Santa Clara County Mortgage Credit Certificate Program to secure any assistance it may provide to Buyers. The City homebuyer assistance loan may also be subject to a resale restriction recorded on the property in favor of the City of Gilroy or a non-profit agency, who have recorded and are administering the Resale Restriction Agreement. The City shall NOT fund homebuyer assistance loans accompanied by the following first mortgage loans unless the first mortgage loans are offered and approved by California Housing Finance Agency through that agency s approved lenders: Interest only mortgage loans where the interest only payment option period exceeds two consecutive years or the interest only payment cap exceeds 100% of the first mortgage loan. First mortgage applications allowing undocumented income. Adjustable rate mortgage loans with caps larger than 8% and/or adjustment periods less than three years (36 months). First mortgage applications allowing debt to gross income ratios that exceed 45%. Use of Funds Loan funds shall be used for down payment assistance only. Use of loan funds for closing costs associated with purchasing the home, repairs, room additions, remodeling, refinancing, or purchase of any non-real property is prohibited. Disbursement of Loan Documents and Loan Funds Upon receipt of the following documents, City staff may send loan documents to escrow company Final loan approval, (recommend underwriter s approval, showing final loan amount, interest rate, type of loan (30 year fixed)) etc. Executed purchase contract (signed by both seller and applicant); Initialed Truth in Lending Statement and other disclosure documents legally required; Sample of first Lender s Note and Deed of Trust; Appraisal from lender for property being purchased Page 5 of 2

10 Copies of any new or updated applications or approvals provided by other assistance sources, such as the Mortgage Credit Certificate Program or California Housing and Finance Agency programs; Updated paystubs, tax returns that were not available at time of application Preliminary title report, escrow company, and escrow account number; and Wiring instructions from the escrow company. Upon receipt of the following documents City will disburse approved loan funds into an escrow account as may be designated by the borrower (and approved by City): Signed Homebuyer Assistance Program Deed of Trust; Signed Homebuyer Assistance Program Promissory Note; Buyer s and or Seller s estimated statement from escrow company Page 6 of 2

11 Approved CalHFA Lenders Locally Lender Name Address City Phone State WELLS FARGO HOME MRG BANK OF AMERICA, Home Loans, BANK OF AMERICA, Home Loans JPMORGAN CHASE BANK Zip Code 7960B Soquel Drive #118 Aptos CA Hawthorne Avenue Los Altos CA Jacklin Road Milpitas CA E. Hamilton Avenue, #100 Campbell CA BANK OF AMERICA 101 Vineyard Town Center Way Morgan Hill CA BANK OF AMERICA, Home Loans BANK OF AMERICA, Home Loans BANK OF AMERICA Home Loans WELLS FARGO HOME MTG BANK OF AMERICA, Home Loans BANK OF AMERICA, Home Loans FIRST MORTGAGE CORP WELLS FARGO HOME MRG MERIWEST MORTGAGE CO 868 Blossom Hill road, Ste 8 San Jose CA Stevens Creek Blvd #100 San Jose CA S. Market Street, Ste 101 San Jose CA Monterey Road, Ste. 101 Morgan Hill CA Page Mill Road, Bld. 3 Palo Alto CA S. Market Street, Suite 101 San Jose CA Tassajara Circle Morgan Hill CA Blossom Hill Road San Jose CA Chesbro Ave, Ste 110 San Jose CA NHS SILICON VALLEY North North Fourth Fourth Street Street San San Jose Jose CA CA UNITED COMMERCIAL 1715 Lundy Avenue, Suite 138 San Jose CA UNITED COMMERCIAL 1001 Story Road, Suite 130 San Jose CA UNITED COMMERCIAL 1648-A Tully Road San Jose WELLS FARGO HOME MTG WELLS FARGO HOME MTG WELLS FARGO HOME MTG WELLS FARGO HOME MTG BANK OF AMERICA, CA Blossom Hill Road San Jose CA N. First Street, #C San Jose CA S. Mathilda Avenue Sunnyvale CA Washington Street Santa Clara CA Tennant Avenue, Suite #100 Morgan Hill CA USE CREDIT UNION 1570 West San Carlos Street San Jose CA MASON MCDUFFIE 950 Monroe Street Santa Clara CA PROSPECT MORTGAGE 1122 Willow Street San Jose CA Page 1 of 2

12 ACORN-Approved Lenders in Santa Clara County Lender Name Address City Phone State Zip Code CITIBANK, GREGORY MEYER 702 Marshall Street, Suite #110 Redwood City CA DISCLOSURE The City does not endorse or recommend any of the lenders listed. The referral list represents those lenders approved by the California Housing and Finance Agency and Association of Community Organizations for Reform Now (ACORN). You, the applicant(s), are completely free to exercise independent judgment in choosing to use or not use any provider in any industry related to home purchase or financing. Page 2 of 2

13 C i t y o f G i l r o y P l a n n i n g D i v i s i o n H o u s i n g & C o m m u n i t y D e v e l o p m e n t R o s a n n a S t r e e t G i l r o y, C A ( ) P h o n e ( ) Fax City of Gilroy Homebuyer Assistance Program Application DISCLOSURE NOTICE It is your responsibility to complete the application process. Your application will be reviewed for completeness and eligibility based on the information you submit with it. Only completed applications will be considered for review in the order they are received. Being allowed to submit an application and/or qualifying for a second mortgage with the City of Gilroy is not a guarantee that you will be able to buy a home. You must still qualify for a loan and make an accepted offer to purchase a home in the City of Gilroy. Your ability to do so will depend on the amount of money you have for a down payment, the income you have available for mortgage payments, your outstanding debt, and your credit history You must submit a complete application to the City at least three weeks prior to your scheduled close of escrow. Upon approval of the application by the City s Planning - Housing and Community Development Division, you will receive a Commitment Letter stating your eligibility for and the maximum amount of program assistance. This letter only verifies your program eligibility and is not a guarantee that funds will be available to the borrower when requested. In addition, the Homebuyer Assistance Program is allocated a limited amount of funds each year. The City cannot guarantee that it will have funds available for each application submitted. Provided that funds are available, program assistance will be distributed on a first come first serve basis upon completion of the following: an executed sales contract signed by both the applicant/purchaser and property owner, evidence of approval of the first mortgage, and, if the applicant is a first-time homebuyer, certificate indicating completion of an approved homebuyers training program. By signing this Disclosure Statement, I/we acknowledge that I/we have read and understand this statement, and that I/we have had any questions about the application process answered to our satisfaction. Name Name Signature Date Homebuyer Assistance Program Application Page 1 of 4 Signature Date

14 C i t y o f G i l r o y P l a n n i n g D i v i s i o n H o u s i n g & C o m m u n i t y D e v e l o p m e n t R o s a n n a S t r e e t G i l r o y, C A ( ) P h o n e ( ) Fax APPLICANT CERTIFICATION 1. I (We) the undersigned hereby certify that I (we) am (are) applying to receive secondary mortgage financing to purchase a home through the City of Gilroy Homebuyer Assistance Program, as my/our principal residence. 2. I (We) acknowledge and understand that my (our) application will be relied upon for purposes of determining my (our) eligibility for this loan. I (We) acknowledge that a material misstatement fraudulently or negligently made in my (our) Application or in any other statement made by me (us) in connection with the Application may result in the denial of my (our) Application, or, if the sale has been closed prior to discovery of the false statement, all principal and interest of the second mortgage held by the City will become immediately due and payable. 3. I (We) have applied for a Homebuyer Assistance loan with the City of Gilroy and authorize the City of Gilroy, its employees, and/or its agents to release any information regarding my/our eligibility for the program and/or required to complete processing of this loan request. A photocopy of this consent is considered as valid as the original. Name Signature Name Signature Date Date Signature of Acknowledgement I/we acknowledge that I/we have read, understood, and agreed to comply with these City of Gilroy Homebuyer Assistance Program Guidelines and that I/we have had any questions about the Homebuyer Assistance Program Guidelines answered to our satisfaction. Name Signature Date Name Signature Date Loan Applicant is responsible for meeting Homebuyer Assistance Program Guidelines and must continue to meet these guidelines throughout the escrow process. Homebuyer Assistance Program Application Page 2 of 4

15 City of Gilroy Homebuyer Assistance Program APPLICANT INFORMATION Applicant Name(s): Amount Requested $ Home Address: Work Address: Phone: Street City Zip Street City Zip Work Home Cell Gross Annual Household Income: $ Number of Persons in Household: Have you ever owned a home before? Yes No If yes, date of sale or pending sale Check the Appropriate Box: Gilroy Resident City of Gilroy Employee Gilroy Unified School District Employee Documents Required For Acceptance of Application City s Homebuyer Assistance Application signed and dated Application fee payment by check, cash or money order Copy of First Mortgage Lender s pre-approval letter & application completed by applicant(s) Proof of one-year residency within Gilroy (may be provided from prior years tax filings) or, if a City of Gilroy or Gilroy Unified School District employee, letter from your employer stating that you have successfully passed probation Income verification documents Copy of First-time Homebuyer Training Certificate (For first-time homebuyers only) Documents Required for Funding Sales Contract Signed by the Owner and Purchaser/Loan Applicant Appraisal from lender for property being purchased Updates to Information Submitted for Pre-Approval (if applicable) First Lender s Promissory Note and Deed of Trust Copy of applications to and approval letters from other funding assistance sources, e.g. California Housing Finance Agency or Mortgage Credit Certificate and their requirements (if applicable) Other Assistance Sources Promissory Note(s) and Deed(s) of Trust (if applicable) Preliminary Title Report Escrow Company Information, account number, and wiring instructions Estimated Settlement Closing Statement for Buyer (include Seller when paying closing costs) Signed Homebuyer Assistance Program Promissory Note and Deed of Trust Please mail or bring applications to: Planning Division Housing and Community Development City of Gilroy 7351 Rosanna Street Gilroy, CA Homebuyer Assistance Program Application Page 3 of 4

16 City of Gilroy Homebuyer Assistance Program FAIR LENDING NOTICE TO: All applicants for financial assistance for the purchase, construction, rehabilitation, improvement or refinancing of one to four family residences. Under the Federal Fair Housing Act, it is illegal, on the basis of race, color, religion, national origin, ancestry, age, marital status, physical or mental disability, pregnancy, sexual orientation, sex, or actual or perceived gender identity or familial status (having children under the age of 18) to: - Deny a loan for the purpose of purchasing, construction, improving, repairing, or maintaining a dwelling; or - Discriminate in fixing the amount, interest rate, duration, application procedures, or other terms or conditions of such a loan, or in appraising property. Under the Equal Credit Opportunity Act, it is illegal to discriminate in any credit transaction: - On the basis of race, color, religion, national origin. ancestry, age, marital status, physical or mental disability, pregnancy, sexual orientation, sex, or actual or perceived gender identity, or familial status (having children under the age of 18); - Because Income is from public assistance; or - Because a right was exercised under the Consumer Credit Protection Act. If you wish to file a complaint, or if you have any questions about your rights, contact: Write - U.S. Department of Housing and Urban Development (HUD) 600 Harrison Street, 3rd Floor San Francisco, CA Phone I HEREBY ACKNOWLEDGE RECEIPT OF A COPY OF THIS NOTICE: Signature: Date: Signature: Date: Homebuyer Assistance Program Application Page 4 of 4