First Time Homebuyer Assistance

Presentation

Who We Are:

City of Oxnard Affordable Housing and

Rehabilitation Division

Note: We are not the Oxnard Housing Authority

Affordable Housing and Rehabilitation

DivisionMary Chappell

Connie Hernandez

Hermila Hernandez

Ruth Johnson Hopkins

Karl Lawson

Eva Magaña

Presentation:

Part 1:

The Basics of Homeownership

Part 2:

City of Oxnard Assistance for

First-Time Homebuyers

PART 1:

THE BASICS OF HOMEOWNERSHIP

Should I buy

a house?

Some Advantages of Renting Cheaper (at the beginning)

Flexibility – easier to move

Maintenance and upkeep of the property are the responsibility of the landlord

You don’t pay property taxes

Advantages of Homeownership Cheaper (over the long term)

Financial stability for your family: you build up equity

You do pay property taxes

It is your home

About Homeownership

Homeownership is not for everyone

It is not always the right time to buy a home

Only buy a house because you want it – not simply because you can

Buying a home is the biggest purchase you will ever make; don’t set yourself up to fail

What does a house cost?

Median Home price in Oxnard as of

September 30, 2013:

$345,600

Change in Home Prices

Median price in Oxnard:

Sept. 2012: $312,000

Sept. 2013: $345,600

(10.5% increase in one year)

Two Ways to Buy a House

How to Pay for a House:

Pay cash

or

Borrow money

Mortgages

Most homes in the United States are purchased when the homebuyer

borrows from a bank or credit union by taking out

a mortgage loan

What is a mortgage?

A long-term loan (usually 30 years) secured by the property

The lender “holds” the mortgage (similar to a car dealer holding a “pink slip”)

Qualifying for a mortgage loan:

1. Meet lender’s

requirements

2. Make a down-payment

Example: $315,000 house

How Much will my Monthly

Mortgage Payment be?Your monthly house payment will be

determined by the following factors:

1. Cost of the house (purchase price plus closing costs)

2. Amount of your down payment

3. Interest Rate of the loan

What determines the interest rate?

Your income

Your assets

Your debts and credit history

Your credit score

Interest Rate Trends

November 2012: 3.25%

May 2013: 3.25%

September 2013: 4.16%

(Average, 1980-2011: 6.3%)

Comparison: $300,000 loan

For a 30-year Loan, Fixed Interest Rate, the monthly payment would be:

4.0%: $1760

4.5%: $1848

5.0%: $1939

5.5%: $2032

Questions to Ask Yourself:

Do I have a bank account? Do I have money in savings? Can I document all my income? Have I done my taxes regularly? Do I know my credit history? How much debt do I have? Should I take on new debt? Do I already have a mortgage loan

application in process?

Preparing to Buy a Home:

Get your finances in order

Attend a Homebuyer Education class

End of Part 1

Note: This has been a brief overview of the

Basics of Homeownership.

PART 2

CITY OF OXNARD ASSISTANCE FOR

FIRST-TIME HOMEBUYERS

CITYWIDE HOMEBUYER LOAN PROGRAM

The City of Oxnard’s Affordable Housing and Rehabilitation Division has a Citywide Homebuyer Loan available to income-qualified families to purchase their first home in the City of Oxnard.

A loan to close the “gap” between the purchase price, primary lender’s loan amount, closing costs, and the homebuyer’s down payment of at least $5,000. Each borrower shall receive only the subsidy needed to allow them to become homeowners while keeping their housing costs affordable.

WHAT IS GAP?

HOW MUCH CAN I GET?

The maximum assistance is up to $30,000 and it’s used towards the down payment and/or closing costs for the purchase of a mobilehome, condominium, or single family dwelling.

Purchase Price of Property $250,000Plus estimated Closing costs +7,000Total Cost $257,000Mortgage Loan $224,000 Downpayment 5,000 $229,000 -229,000City “GAP” $28,000

HOW MUCH “GAP” CAN I RECEIVE?

Example: $257,000 house

Terms of City Assistance Loans

Forgiven after 5 years if the loan amount is up to $15,000

Forgiven after 10 years if the loan amount is from $15,001 to $30,000

The loan has 0% annual interest

Loans must be paid back if there are any defaults within the term of the loan

Terms of City Assistance Loans

5-30 year loans

May require monthly payments

Details to follow

Homebuyer Obligations

Owner-occupancy is required until the term expires (annual certification & reporting)

All refinances need written authorization from the City.

All loan amounts shall be due and payable to the City if the homeowner defaults on any loan terms.

What is a default?

Renting out the property

Not paying your first mortgage

Taking “cash out” from a refinance

Refinancing without City’s authorization

Income: Combined annual gross income may not exceed eighty percent (80%) of the Area Median Incomes (AMI)

Household Size

Low-Income (80%)

1 Person $48,950

2 Persons $55,950

3 Persons $62,950

4 Persons $69,900

5 Persons $75,500

6 Persons $81,100

7 Persons $86,700

WHO QUALIFIES?

BORROWER REQUIREMENTS

• Must be an Oxnard resident

• Must be a first-time homebuyer (must have not owned a home for the past 3 years)

• Must obtain a mortgage loan that is fully amortized and has a fixed interest rate for the life of the loan

WHO DOESN’T QUALIFY?

Anyone who currently owns a home (owning a mobilehome is an exception)

Any with an income over the 80% AMI

Someone who has obtained a loan from the City’s Affordable Housing Division

• Buyer must attend a homebuyer course, in person, and have a certificate of completion from either of the following HUD-approved agencies located in Ventura County:

• Cabrillo Economic Development Corporation – 805.659-6868 ext. 138

• Surepath Financial Solutions – 805.383-7700

BORROWER REQUIREMENTS

DATES AND COST OF HOMEBUYER COURSES

Cabrillo Economic Development Corporation - December 7, 2013 (Free class)

Surepath Financial Solutions

- November 23, 2013 (Free class)

PROPERTY REQUIREMENTS

• Property being purchased must be located within the Oxnard City limits.

• Property must pass inspection conducted by the City’s Inspectors.

• Property must be free from any defects that pose a danger to the health or safety of occupants prior to the close of escrow. Any building code violations must be corrected prior to sale or occupancy.

Where are the houses that the City is building for us to buy?

The City is not building any houses. The City assistance provided can be used to purchase houses or condominiums located anywhere you choose to buy, provided it is in the City of Oxnard.

CITYWIDE HOMEBUYER LOAN APPLICATION

• Copy of Government Photo I.D. for all adults (persons 18 years and older)

• Copy of Birth Certificate, Passport or Alien Registration Card for all household members

WHAT DOCUMENTS DO I NEED?

Identification Documents:

WHAT DOCUMENTS DO I NEED?

Income Documents

• Copy of most recent pay check stubs that cover 3 full months

• Copy of Federal Income Tax Return – most current year

WHAT DOCUMENTS DO I NEED?

Assets Documents

• Copy of Bank statements that cover 6 full months for all accounts

• Copy of most recent documentation on asset income; 401K

WHAT DOCUMENTS DO I NEED?

Lender’s Documents

• Copy of Uniform Residential Loan Application (Fannie Mae Form 1003) on all borrowers

• Letter of Lender’s Loan Pre-Approval

• Copy of Good Faith Estimate (GFE)

• Copy of Credit Report on all borrowers

WHAT DOCUMENTS DO I NEED?

Homebuyer Course Document

• Copy of HUD-approved homebuyer education certificate for all buyers

ACQUISITION & REHABILITATION LOAN PROGRAM

The City of Oxnard’s Affordable Housing and Rehabilitation Division has an Acquisition & Rehabilitation Loan Program available to income-qualified families to purchase and rehabilitate their first home in the City of Oxnard.

This program is designed to assist in purchasing dilapidated homes (fixer-uppers) that do not meet City code and do not qualify for the Citywide Homebuyer Loan Program.

TERMS OF LOAN

Income cannot exceed 80% AMI

Due and payable after 30 years

The loan has a 3% annual interest

No monthly payments

HOW MUCH CAN I GET?

The maximum assistance is up to $60,000 (minus activity delivery fees) and it’s used towards the down payment and the rehabilitation of a condominium, or single family dwelling. Mobilehomes are not eligible for this program.

The down payment portion of the loan is “Gap” financing. The buyer is required to provide a 3% contribution towards the purchase price.

The rehabilitation portion of the loan is based on actual costs from a contractor’s City-approved cost estimate.

Up to $5,000 of recurring closing costs, will be provided as a loan from the HOME Program.

The loan must be used for both down payment and rehabilitation assistance.

Purchase Price of Property $150,000Plus estimated Closing Costs (3%) +4,500Total Cost $154,500

Max Mortgage Loan $124,000 Buyer Contribution (3%) 4,500 $128,500 -128,500“GAP” Down Payment Assistance $26,000

Total Acq/Rehab Loan (minus Act Del) $55,000 “Gap” Down Payment Assistance -26,000 Available for Rehabilitation Work $29,000

HOW MUCH “GAP” CAN I RECEIVE?

CITY LOAN APPLICATIONS

Applications can be obtained at Affordable Housing & Rehabilitation Division, 435

South D Street, Oxnard, CA 93030

Division’s Website: http://housing.cityofoxnard.org/page/10/935

- Click on Homebuyer Program Application

LOAN APPLICATIONS MAY BE SUBMITTED BEGINNING ON TUESDAY, JANUARY 21,

2014 AT 10:00 AM AT435 SOUTH “D” STREET

Completed Applications: All information on application is completed All required documents indicated on page 3 of application must

be submitted with the application Must Bring in written pre-approval letter from a lender

(pre-approved NOT pre-qualified)

Only completed applications will be accepted.

Applications will not be accepted prior to January 21, 2014 10:00am.

City of Oxnard Affordable Housing & Rehabilitation Division

435 South D StreetOxnard, CA 93030

805.385-7400805.385-7416 FAX

http://housing.cityofoxnard.org/page/10/935