City of Brockton. Brockton Redevelopment Authority In partnership with NeighborWorks Southern Mass

Transcription

1 City f Brcktn Brcktn Redevelpment Authrity In partnership with NeighbrWrks Suthern Mass First Time Hmebuyers Prgram (FTHP) Dwnpayment and Clsing Csts Assistance Michelle Chishlm Brcktn Redevelpment Authrity 50 Schl Street Brcktn, MA Phne: (508) mchishlm@brcktnredevelpmentauthrity.cm Cindy Pendergast NeighbrWrks Suthern Mass 68 Legin Parkway Brcktn, MA Phne: (617) x46 c.pendergast@nwsma.rg FY2016

2 PROGRAM GUIDELINES FIRST TIME HOMEBUYER S PROGRAM (FTHP) Dwnpayment and Clsing Csts Assistance Our gal is t wrk with eligible first time buyers with the purchase f a 1-2 family residential prperty t increase hmewnership in the City f Brcktn. The City f Brcktn thrugh the Brcktn Redevelpment Authrity (BRA) and NeighbrWrks Suthern Mass (NWSOMA) is ffering financial assistance t lw-t-mderate incme, first-time eligible hmebuyers thrugh the First Time Hmebuyers Dwn Payment and Clsing Cst Assistance Lan Prgram (FTHP Lan). Under this prgram, eligible dwn payment and clsing csts are paid with funding available under the U.S. Department f Husing & Urban Develpment s (HUD) HOME Investment Partnerships Prgram (HOME). The apprval f funding is based n the amunt f assistance needed at the clsing. Incme eligible first time hmebuyers will be cnsidered fr a zer interest deferred lan f up t $7,500 thrugh the BRA secured by a Mrtgage and Prmissry nte. In additin, NWSOMA may prvide an additinal $2,500 in clsing csts t match the HOME funds fr a ttal f $10,000 (subject t available funds and NWSOMA directin). Lan payments n bth lans will be deferred until there is a change in wnership r the prperty ceases t be the hmebuyer s primary residence. Eligibility Criteria: 1. Husehld incme (all surces) must nt exceed the fllwing grss annual limits: Husehld Size (Number f Persns) $46,000 $52,600 $59,150 $65,700 $71,000 $76,250 $81,500 $86,750 80% f Area Median Incme Limits Adjusted fr Husehld Size. Surce: HUD, March 28, Purchase price cannt exceed $257,000 fr a single family residence r $328,000 fr a tw-family residence; Prgram des nt allw fr the purchase f cnds. 3. Prperty must be lcated in the City f Brcktn, althugh applicant des nt have t be a current resident f Brcktn. Lcal residents are given pririty. 4. Applicant and his/her spuse must be a first time hmebuyer; 5. Neither applicant nr his/her spuse can have a deeded interest in any prperty in the past three years; 6. All husehld members must be legal residents f the United States in rder t receive Federal husing assistance; 7. Neither applicant nr his/her spuse can have mre than $75,000 in cash assets (excluding 401K s and ther retirement accunts); 8. Applicants must qualify fr a cnventinal r gvernment spnsred fixed interest rate mrtgage with a lender f their chice*; 9. Applicants must cntribute at least 1.5% f the purchase price t the dwn payment requirement fr single family purchases and 2.5% fr multi-family purchases; 10. Applicants must be the wner f the prperty after purchase; Rev 4/1/16 Page 2 f 10

3 11. Applicants must ccupy the prperty as their principal residence; 12. Each applicant must cmplete an apprved first time hmebuyer training wrkshp and submit a First Time Hmebuyer Prgram Certificate (visit and/r if yu need t sign up fr a hmebuyer class); 13. Each applicant must als cmplete an apprved pst purchase wrkshp and submit a Prgram Certificate t the BRA within ne year after the clsing. A cmplete list f Hmebuyer Cunseling Agencies can be fund at Applicants must agree t maintain prperty hazard insurance, make timely prperty tax payments, and perfrm general prperty maintenance and upkeep f the hme; 15. Husehld husing expenses (principal, interest, taxes and insurance) must be between 20% - 35% f ttal husehld incme fr single family purchases and 20% - 33% fr multi-family purchases; 16. Husehld ttal mnthly debt bligatins (husing expenses plus ther husehld debt such as credit cards, car lans, etc.) cannt exceed 41% f ttal husehld incme; 17. Prperty must meet federal, state and lcal husing quality standards and cde requirements; *Fr a list f lcal participating lenders please visit Applicatin Prcess : PLEASE READ THE FOLLOWING CAREFULLY INCOMPLETE APPLICATIONS WILL RESULT IN A DELAY IN PROCESSING WHICH MAY MAKE YOU INELIGIBLE FOR LOAN ASSISTANCE. COMPLETED APPLICATIONS WILL BE SUBMITTED TO THE BRA FOR UNDERWRITING ONLY AFTER ALL OF THE APPLICATION MATERIALS LISTED BELOW HAVE BEEN RECEIVED BY NWSOMA. APPLICATION PROCESSING TAKES APPROXIMATELY THREE (3) WEEKS PENDING BRA APPROVAL. If yu clse yur first mrtgage prir t apprval fr this prgram, yu will be ineligible fr assistance and yur applicatin will be vided. N lan funds will be disbursed after yur bank clsing. STEP 1: Immediately after signing the Purchase and Sale Agreement, cllect the fllwing dcuments then cntact Cindy Pendergast fr an Intake appintment. Yu can reach her by c.pendergast@nwsma.rg r by phne: ext Cmpleted Applicatin Frm. Sign and date. 2. Incme Dcuments The fllwing applies t all members f the husehld -Mst recent 2 mnths cnsecutive paystubs (4 if paid bi-weekly, 8 if paid weekly) -Current Scial Security award letter (1099 is nt acceptable). -Current pensin award letter (Award letters indicate mnthly grss incme fr the current year), and/r ther acceptable frms f current incme verificatin, which ever apply. 3. Federal Incme Tax frm 1040, with all schedules and W2 s. Cmplete cpy f each applicant s past 3 years If yu are self-emplyed r incrprated, please prvide financial statements fr the past three years and Prfit and Lss statement year t date. 4. Asset Incme 2 (tw) cnsecutive mnths f bank statement fr all bank accunts in the husehld (include all pages even if blank). Dcumentatin f any additinal incme r assets. 5. Three mnths f mst recent rent receipts. 6. Lan Estimate and Cmmitment Letter frm lender. 7. Purchase and Sale Agreement Signed phtcpy. 8. Appraisal. 9. First Time Hmebuyer s Wrkshp Certificate fr each brrwer. If purchasing a 2-family hme applicant must als prvide a Landlrd Training Certificate (visit and/r if yu need t sign up fr a landlrd training class). At yur intake appintment, there will be additinal frms yu will sign. Once all frms have been submitted and yur applicatin is cmplete, NWSOMA will cnduct an initial underwriting review t determine eligibility. If NWSOMA determines yu are nt eligible, yu will be infrmed f the reasns why and infrmed f any pssible ptins yu may have. Rev 4/1/16 Page 3 f 10

4 STEP 2: If yur applicatin passes the initial underwriting review, yu will be ntified in writing, and a cpy f yur file will be sent t the BRA fr final underwriting and apprval. If further dcumentatin is needed, Michelle Chishlm frm the BRA will cntact yu. STEP 3: A written cmmitment detailing yur funding amunt will be prvided t yu by the BRA after all the necessary paperwrk is in rder. At this pint, yu shuld ntify yur lender and the lender's clsing attrney s that they can schedule the clsing tw weeks r later frm receipt f the BRA cmmitment letter. Yu shuld ntify the BRA immediately f the clsing date and time. The BRA will ntify NWSOMA f the lan amunt and NWSOMA will frward a check t the clsing attrney nce the bank has apprved the clsing. Additinal Eligibility Criteria: This prgram is subject t availability f funds. Minimum Prperty Standards The BRA will require a HOME inspectin f the hme t certify the dwelling is decent, safe, sanitary, and in gd repair. Please nte, the HOME inspectin is in additin t any hme inspectin the lender requires. The fee fr this inspectin will be part f the ttal dwn payment assistance amunt. At a minimum, the hme must meet all applicable Federal, State and lcal husing quality standards and cde requirements, and the hme must nt cntain any specific deficiencies as thse prscribed by HUD in the Unifrm Physical Cnditin Standards inspectin prcedures as pursuant t 24 CFR If the inspectin des nt meet HOME cnditin standards, rehabilitatin wrk may als be undertaken befre the huse is purchased. The hme must be rehabilitated previus t the sale and brught up t cde and applicable standards, r therwise, it cannt be acquired with HOME funds. Prperties built prir t 1978 must be visually assessed t identify and stabilize deterirated paint. Prperties with presence f lead-based paint hazards may be eligible fr financing assistance fr lead abatement services thrugh NWSOMA. T btain mre infrmatin regarding the Lead Abatement Prgram, please visit If the prperty is lcated in a FEMA designated special Fld Hazard Area, the hmebuyer must purchase and maintain fld insurance fr the life f the lan. Determining Husehld Size Incme limits are adjusted by husehld size. T ensure that all prspective hmebuyers wh receive assistance are eligible, the BRA will need t determine the size f the applicants husehld. As such, all persns in the husehld will be cunted (including nn-related individuals) with the fllwing exceptins: live-in aides; and children f live-in aids. Determining Husehld Incme The BRA will als need t determine the annual incme f all eligible husehld members t ensure eligibility f all prspective hmebuyers wh receive assistance. When determining the husehld annual incme, the BRA must cunt the incme f all husehld members ver the age f 18 wh wrk (including nnrelated individuals) with the fllwing exceptins: fster children; fster adults; Rev 4/1/16 Page 4 f 10

5 The BRA uses the Part 5 Sectin 8 rules fr calculating grss incme, fund at 24 CFR Part 5 Subpart F, Incme Limits. These rules specify what frms f incme shuld be included and what shuld be excluded. The BRA will re-examine the husehld s incme if mre than six mnths has elapsed since eligibility was first determined. The BRA utilizes the Technical Guide fr Determining Incme and Allwances under the HOME Prgram t ensure cmpliance with husehld size determinatin. Determining Husehld Assets What assets may be included? 1. Cash held in savings accunts, checking accunts, safe depsit bxes, hmes, etc. Fr Savings accunts use the current balance. Fr checking accunts, use the average 6-mnth Balance. Assets held in freign cuntries are cnsidered assets. 2. Cash value f revcable trusts available t the applicant. 3. Cash value f stcks, bnds, Treasury bills, certificates f depsit, mutual funds, and mney market accunts. 4. Lump sum r ne-time receipts, such as inheritances, capital gains, lttery winnings, victim s restitutin, insurance settlements and ther amunts nt intended as peridic payments. What assets are excluded? 1. Assets nt effectively wned by the applicant. That is, when assets are held in an individual s name, but the assets and any incme they earn accrue t the benefit f smene else wh is nt a member f the husehld and that ther persn is respnsible fr incme taxes incurred n incme generated by the asset. 2. Assets nt accessible t and that prvide n incme fr the applicant. 3. Assets that are part f an active business. 4. Retirement accunts such as 401(k), 403(b), 457 and IRA accunts. 5. Gvernment apprved cllege savings plan. Hmebuyers shuld have sme residual savings left ver after clsing especially n a very lw dwn payment mrtgage t brrwers with high ttal debt ratis. Principal Residence Hmebuyers assisted thrugh this prgram must ccupy the prperty purchased as their principal residence thrughut the life f the lan. This requirement is enfrced thrugh a mrtgage between the BRA and the assisted hmebuyer which the BRA recrds with the Plymuth Cunty Registry f Deeds. If the HOME assisted prperty ceases t be the hmebuyer s principal residence at any time, the HOME lan must immediately be repaid in full t the BRA. The BRA will peridically request that the hmebuyer prvide dcumentatin f prf f wner-ccupancy. The BRA will mnitr the requirement f principal residency annually. Change in Ownership In the event there is a transfer f title, whether vluntary r invluntary, during the life f the lan, the BRA will recapture, at the sale f the hme, the full amunt f the HOME lan, subject t net prceeds. Recapture Prvisins A. Activity Types Recapture prvisins as utlined in 24 CFR Part (a)(5)(ii)(A)(1) thrugh (7) shall be enfrced in cases where HOME funds are prvided as a direct subsidy t a hmebuyer as dwn payment r clsing cst assistance. (1) Methds the recapture ptin allws the City f Brcktn t recapture the HOME subsidy, subject t net prceeds, if there is a transfer f wnership f the HOME assisted prperty OR if the prperty ceases t be hmebuyer s principal residence during the life f the lan. In the case f a sale, the hmebuyer may sell the prperty t any willing buyer at whatever price the market will bear. Hwever, the HOME subsidy must be repaid t the City f Brcktn HOME Investment Partnership s lcal accunt, subject t net prceeds. Any f the fllwing activities will trigger recapture: Rev 4/1/16 Page 5 f 10

6 sale f the prperty; transfer f title; refinancing (except fr rate and term refinances); if the prperty ceases t be the hmebuyer s principal residence; a breach f the terms f the prgram agreement; failure t maintain required prperty hazard insurance; and failure t pay prperty taxes. B. Enfrcement Mechanisms Recapture prvisins shall be enfrced thrugh a mrtgage filed with the Plymuth Cunty Registry f Deeds, and a prmissry nte filed with the BRA. C. Amunt f Repayment The City f Brcktn requires that when the recapture requirement is triggered, it will recapture the HOME Investment up t the ttal net prceeds remaining after the sale as mdified by prgram specific chices under 24 CFR Part (a)(5)(ii)(A)(2). Net prceeds are the sales price minus the superir nn-home lan repayment and any clsing csts. The amunt subject t recapture is the direct subsidy received by the hmebuyer under the hmewnership assistance prgram. D. Mrtgage Discharge Upn receipt f recaptured funds, the City f Brcktn, shall prepare a discharge f mrtgage t recrd with the Plymuth Cunty Registry f Deeds t discharge the riginal HOME mrtgage. Repayments f recaptured funds shall be remitted directly t the City f Brcktn HOME Investment Partnerships Prgram as fllws: Brcktn Redevelpment Authrity ATTN: First Time Hmebuyer Prgram 50 Schl Street Brcktn, MA Subrdinatin The Brcktn Redevelpment Authrity may, in limited situatins, agree t subrdinate its lien psitin upn request by the hmebuyer. The hmebuyer must submit a written request t the BRA explaining in detail the reasn fr the request. Sub-prime Lans N applicant will be cnsidered fr HOME assistance if their primary mrtgage lan cntains any f the fllwing features: (i) an intrductry interest rate granted fr a perid f 3 years r less and such intrductry rate is at least 2 per cent lwer than the fully indexed rate; (ii) interest-nly lans, except certain lans which include rehabilitatin f the prperty and interest nly payments d nt exceed 6 mnths while the repairs are being cmpleted; (iii) a payment ptin feature where any 1 f the payment ptins is less than principal and interest fully amrtized ver the life f the lan; (iv) the lan did nt require full dcumentatin f incme r assets; r (v) prepayment penalties that exceed M.G.L. Ch. 183, Sectin 56 r applicable federal law. Freclsure In the event f a freclsure, deed in lieu f freclsure r shrt sale, the BRA will take all precautins necessary t ensure the HOME funds invested in the prperty are prtected. The BRA will refer the hmewner fr husing cunseling and ntify the City f the ptential freclsure. The hmewner will be required t repay what is due nly ut f net prceeds (if any) received frm the transfer. Rev 4/1/16 Page 6 f 10

7 City f Brcktn First Time Hmebuyer Dwn Payment and Clsing Cst Assistance PROGRAM APPLICATION APPLICANT #1: (Circle) Mr. Mrs. Ms. Hw did yu hear abut prgram?: Veteran Yes N First Name Middle Last Name Scial Security Number Date f Birth Current Address City State ZIP Phne # Address Jb (1) Emplyer Name Address Phne # Hw lng at jb Jb(2) Emplyer Name Address Phne # Hw lng at jb APPLICANT #2: (Circle) Mr. Mrs. Ms. Veteran Yes N First Name Middle Last Name Scial Security Number Date f Birth Current Address City State ZIP Phne # address Jb (1) Emplyer Name Address Phne # Hw lng at jb Jb(2) Emplyer Name Address Phne # Hw lng at jb NEW PURCHASE PROPERTY INFORMATION: Street # Street Name City Zip Cde Single-Family Multi-Family If Multi, # units REALTOR: Cntact Name Phne Cell Phne LENDER: Cntact Name Phne Cell Phne Rev 4/1/16 Page 7 f 10

8 HOUSEHOLD INFORMATION NAME: D.O.B Relatinship t Applicant Cllege Student Annual Incme FOR STATISTICAL PURPOSES ONLY Race (Enter apprpriate number in husehld): White/Nn Hispanic African American Hispanic/Latin Other CURRENT HOUSING SITUATION: (Circle) OWN RENT LIVE W/ FAMILY OR FRIENDS Mnthly Rent Amunt: $ Mnthly Utilities Amunt: $ LIST ALL CURRENT DEBTS: Lender Minimum Mnthly Payments Balance 1. Car Lan $ $ 2. Persnal Lan $ $ 3. Student Lan $ $ 4. Credit Card $ $ 5. Credit Card $ $ 6. Other $ $ 7. Other $ $ Rev 4/1/16 Page 8 f 10

9 LIST ALL CURRENT ASSETS: Interest Rate 1. Average 6 mnth balance f Checking Accunt $ 2. Actual balance f Saving Accunts $ 3. Mutual Funds, Bnds & Annuities % $ 4. Certificates f Depsit % $ 5. Cash Value f Life Insurance Plicies $ 6. Retirement and Pensin Funds (current cash value) $ 7. Value f Stcks $ 8. Cash value frm Trust $ 9. Investments such as jewelry, antiques cars, cllectins $ 10. Inheritances, lttery winnings, capital gains, insurance settlements $ 11. Mrtgages r deeds held by applicants $ Has either the Applicant r C-applicant wned Real Estate befre? Yes N INCOME and ASSET DOCUMENTATION CHECKLIST Dcumentatin fr all surces f incme fr all husehld members ver 18 wh wrk must be attached t this applicatin t determine eligibility. Please refer t the list belw and prvide all that apply. Mst recent 2 mnths cnsecutive paystubs (4 if paid bi-weekly, 8 if paid weekly) Mst recent 2 (tw) cnsecutive mnths f bank statements fr all bank accunts fr each applicant Current Scial Security Award Letter Current Pensin Award Letter (indicating mnthly grss incme fr the current year). Federal Incme Tax frm 1040, with all schedules and W2 s fr mst recent 3 (three) years. Veteran Benefits Certificate. Prfit & Lss Statement year-t-date (If self-emplyed). Child Supprt and/r Alimny Statement (Curt statement). Unemplyment Dcumentatin (Cmputer run-ff sheet frm Unemplyment Office). Other incme (acceptable frms f current incme verificatin). Any husehld member ver the age f 18 years ld nt receiving any surce f incme must cmplete a signed NO INCOME STATEMENT. Statements may be picked up at NWSOMA. Rev 4/1/16 Page 9 f 10

10 CERTIFICATION OF THE APPLICANT(S) I, the undersigned, as part f my applicatin fr the City f Brcktn First Time Hmebuyer Dwn Payment Assistance Prgram in cnnectin with a purchase f a 1-2 family hme and an applicatin fr a mrtgage lan frm a lender f my chsing, d hereby state that I have carefully reviewed this dcument. I certify and acknwledge that this applicatin, as cmpleted abve, will be relied n fr determining my eligibility fr a FTHP Lan. I acknwledge that a material misstatement knwingly made by me in this applicatin fr a dwn payment assistance lan will cnstitute a vilatin punishable by a fine and pssible criminal penalties impsed by law, and will result in the cancellatin r revcatin f the Lan. I further acknwledge that any fraudulent use f any instrument, facility, article, r ther valuable thing r service pursuant t my participatin in the dwn payment assistance prgram is punishable by fine. Each applicant must make the fllwing certificatins: 1. Bth my spuse and I are first-time hmebuyers. Neither ne f us has had an wnership r interest in a residential prperty within the three years immediately preceding the date f this applicatin. We d nt and will nt have an wnership interest in a residence prir t the date f the lan clsing. 2. The Residence will be ccupied and used as ur principal place f residence and will nt be used as an investment prperty, vacatin hme r recreatin hme. 3. We have received a cpy f the FTHP Guidelines and understand these Guidelines. 4. All husehld members have received a cpy f the pamphlet Prtect Yur Family Frm Lead In Yur Hme and the HOME Prgram Disclsure Statement. APPLICANT #1 DATE APPLICANT #2 DATE *Incmplete applicatins will result in delay in prcessing We d business in accrdance with federal fair lending laws. Under the federal fair husing act, it is illegal, n the basis f race, clr, natinal rigin, religin, sex, handicap, r familial status (having children under the age f 18), t: deny a lan fr the purpse f purchasing, cnstructing, imprving, repairing r maintaining a dwelling, r deny any lan secured by a dwelling; r discriminate in fixing the amunt, interest rate, duratin, applicatin prcedures r ther terms r cnditins f such a lan, r in appraising prperty. We are pledged t the letter and spirit f U.S. Plicy fr the achievement f Equal Husing Opprtunity thrughut the Natin. We encurage and supprt an affirmative advertising and marketing prgram in which there are n barriers t btaining husing because f race, clr, religin, sex, handicap, familial status, r natinal rigin. Rev 4/1/16 Page 10 f 10