First Time Homebuyer Assistance Presentation - PowerPoint Presentation

Slide1

First Time Homebuyer

Assistance PresentationSlide2

Who We Are:

City of Oxnard Affordable Housing and Rehabilitation Division

Note: We are not the Oxnard Housing AuthoritySlide3

Affordable Housing and Rehabilitation Division

Mary ChappellConnie HernandezHermila HernandezRuth Johnson Hopkins

Karl LawsonEva MagañaSlide4

Presentation:

Part 1: The Basics of Homeownership

Part 2: City of Oxnard Assistance for First-Time HomebuyersSlide5

PART 1:

THE BASICS OF HOMEOWNERSHIPSlide6

Should I buy a house?Slide7

Some Advantages of Renting

Cheaper (at the beginning)Flexibility – easier to moveMaintenance and upkeep of the property are the responsibility of the landlord

You don’t pay property taxesSlide8

Advantages of Homeownership

Cheaper (over the long term)Financial stability for your family: you build up equityYou do pay property taxes

It is your homeSlide9

About Homeownership

Homeownership is not for everyoneIt is not always the right time to buy a homeOnly 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 failSlide10

What does a house cost?

Median Home price in Oxnard as of September 30, 2013:$345,600Slide11

Change in Home Prices

Median price in Oxnard: Sept. 2012: $312,000

Sept. 2013: $345,600(10.5% increase in one year)Slide12

Two Ways to Buy a HouseSlide13

How to Pay for a House:

Pay cashor

Borrow moneySlide14

Mortgages

Most homes in the United States are purchased when the homebuyer borrows from a bank or credit union by taking out a mortgage loanSlide15

What is a mortgage?

A long-term loan (usually 30 years) secured by the propertyThe lender “holds” the mortgage (similar to a car dealer holding a “pink slip”)Slide16

Qualifying for a mortgage loan:

1. Meet lender’s requirements

2. Make a down-paymentSlide17

Example: $315,000 houseSlide18

How Much will my Monthly

Mortgage Payment be?Your monthly house payment will be determined by the following factors:

Cost of the house (purchase price plus closing costs)Amount of your down paymentInterest Rate of the loanSlide19

What determines the interest rate?

Your incomeYour assets

Your debts and credit historyYour credit scoreSlide20

Interest Rate Trends

November 2012: 3.25%May 2013: 3.25%

September 2013: 4.16%(Average, 1980-2011: 6.3%)Slide21

Comparison: $300,000 loan

For a 30-year Loan, Fixed Interest Rate, the monthly payment would be:4.0%: $1760

4.5%: $18485.0%: $19395.5%: $2032Slide22

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?Slide23

Preparing to Buy a Home:

Get your finances in orderAttend a Homebuyer Education classSlide24

End of Part 1

Note: This has been a brief overview of the Basics of Homeownership.Slide25

PART 2

CITY OF OXNARD ASSISTANCE FOR FIRST-TIME HOMEBUYERSSlide26

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. Slide27

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?Slide28

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. Slide29

Purchase Price of Property $250,000

Plus estimated Closing costs +7,000Total Cost $257,000

Mortgage Loan $224,000 Downpayment 5,000 $229,000 -229,000City “GAP” $28,000 HOW MUCH “GAP” CAN I RECEIVE?Slide30

Example: $257,000

houseSlide31

Terms of City Assistance Loans

Forgiven after 5 years if the loan amount is up to $15,000Forgiven after 10 years if the loan amount is from $15,001 to $30,000

The loan has 0% annual interestLoans must be paid back if there are any defaults within the term of the loanSlide32

Terms of City Assistance Loans

5-30 year loans

May require monthly paymentsDetails to followSlide33

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.Slide34

What is a default?

Renting out the property

Not paying your first mortgageTaking “cash out” from a refinanceRefinancing without City’s authorizationSlide35

Income: Combined annual gross income may not exceed eighty

percent (80%) of the Area Median Incomes (AMI)

Household SizeLow-Income (80%)1 Person$48,9502 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?Slide36

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 loanSlide37

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 Slide38

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. 138Surepath Financial Solutions – 805.383-7700BORROWER REQUIREMENTSSlide39

DATES AND COST OF HOMEBUYER COURSES

Cabrillo Economic Development Corporation

- December 7, 2013 (Free class)Surepath Financial Solutions - November 23, 2013 (Free class)Slide40

PROPERTY

REQUIREMENTSProperty 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. Slide41

Where are the houses that the City is building for us to buy?Slide42

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.Slide43

CITYWIDE HOMEBUYER LOAN

APPLICATIONSlide44

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:Slide45

WHAT DOCUMENTS DO I NEED?

Income Documents

Copy of most recent pay check stubs that cover 3 full monthsCopy of Federal Income Tax Return – most current yearSlide46

WHAT DOCUMENTS DO I NEED?

Assets Documents

Copy of Bank statements that cover 6 full months for all accountsCopy of most recent documentation on asset income; 401KSlide47

WHAT DOCUMENTS DO I NEED?

Lender’s Documents

Copy of Uniform Residential Loan Application (Fannie Mae Form 1003) on all borrowersLetter of Lender’s Loan Pre-ApprovalCopy of Good Faith Estimate (GFE)Copy of Credit Report on all borrowersSlide48

WHAT DOCUMENTS DO I NEED?

Homebuyer Course Document

Copy of HUD-approved homebuyer education certificate for all buyersSlide49

ACQUISITION & REHABILITATION LOAN

PROGRAMThe 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.Slide50

TERMS OF LOAN

Income cannot exceed 80% AMIDue and payable after 30 years

The loan has a 3% annual interestNo monthly paymentsSlide51

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. Slide52

Purchase Price of Property $150,000

Plus 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?Slide53

CITY LOAN APPLICATIONS

Applications can be obtained at

Affordable Housing & Rehabilitation Division, 435 South D Street, Oxnard, CA 93030Division’s Website: http://housing.cityofoxnard.org/page/10/935 - Click on Homebuyer Program ApplicationSlide54

LOAN APPLICATIONS MAY BE SUBMITTED BEGINNING ON TUESDAY, JANUARY 21, 2014 AT 10:00 AM AT

435 SOUTH “D” STREET

Completed Applications:All information on application is completedAll required documents indicated on page 3 of application must be submitted with the applicationMust 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.Slide55

City of Oxnard Affordable Housing &

Rehabilitation Division435 South D StreetOxnard, CA 93030805.385-7400

805.385-7416 FAXhttp://housing.cityofoxnard.org/page/10/935