California First Time Home Buyer Programs

Inman News Features

Question: How does FHA work?

Answer: The U.S. Department of Housing and Urban Development offers a variety of loan insurance programs through the Federal Housing Administration which require approximately 3 to 5 percent cash down. FHA loan limits vary depending on the county where the property is located. FHA loans administered by HUD are originated by private lenders. For more information, contact lenders who offer FHA loans or a regional HUD office.

Resources:

* "FHA Forms, Booklets and Publications," U.S. Department of Housing and Urban Development Printing Branch, Room B-100, 451 7th St., Washington, DC 20410; call (800) 767-7468.

Question: Rules for a FHA Loan?

Answer: The U.S. Dept. of Housing and Urban Development offers a variety of loan insurance programs through the Federal Housing Administration, which requires approximately 3 to 4 percent cash down. There are no income requirements to qualify for a FHA mortgage. Other advantages are that FHA loans do not contain prepayment penalties and in some cases they are assumable by qualified purchasers.

FHA loan limits vary, depending on the county where the property is located. FHA loans are originated and serviced by private lenders.

FHA does not lend money. The mortgage is made by a bank, savings and loan, mortgage company or other FHA-approved lender. In addition, FHA does not set the rates and points. The lender determines these, so it is best to shop around by calling several FHA-approved lenders.

Question: Are there programs for fixer-uppers?

Answer: If you need home loan to buy a "fixer-upper" and remodel it, look at the U.S. Department of Housing and Urban Development's Section 203(K) loan program. The program is designed to facilitate major structural rehabilitation of houses with one to four units that are more than one year old. Condominiums are not eligible.

A 203(K) loan is usually done as a combination loan to purchase a "fixer-upper" property "as is" and rehabilitate it, or to refinance a temporary loan to buy the property and do the rehabilitation. It can also be done as a rehabilitation-only loan.

Investors no longer may participate - only owner-occupants. Owner-occupants are required to come up with only 3 to 5 percent. HUD requires that a minimum of $5,000 be spent on improvements.

Two appraisals are required. Plans and specifications for the proposed work must be submitted for architectural review and cost estimation. Mortgage proceeds are advanced periodically during the rehabilitation period to finance the construction costs.

Question: How do you find government-repossessed homes?

Answer: The U.S. Department of Housing and Urban Development acquires properties from lenders who foreclose on mortgages insured by HUD. These properties are available for sale to both homeowner-occupants and investors.

You can only purchase HUD-owned properties through a licensed real estate broker. HUD will pay the broker's commission up to 6 percent of the sales price.

Down payments vary depending on whether the property is eligible for FHA insurance. If not, payments range from the conventional market's 5 to 20 percent.

One caution. HUD homes are sold "as is," meaning limited repairs have been made made but no structural or mechanical warranties are implied.

c 2000 Inman News Features

You can contact a local loan agent for details on why this product fit your situation or not. Alameda County and Contra Costa County California FHA loan limit as of 5/2003 is Each county has a maximum loan limit based on the medium income for that county

Hayward First-Time Homebuyer Assitance Program

What is the Hayward First-time Homebuyer Assistance Program?

The City of Hayward is committed to increasing the number of residents who own their homes. The city recognizes that there are many families who want to own a home and can qualify for a mortgage and afford the monthly payments, but are unable to save enough for a down payment. The First-Time Homebuyer Program (FHP) helps eligible families purchase a home in the City of Hayward.

The First-Time Homebuyer Program is designed to work with a number of different mortgage programs. The FHP provides down payment and closing cost assistance.

Am I eligible for the Program?

The FHP is designed to help first-time homebuyers who, without City assistance would not be able to own a home.

· To qualify, you must not have owned a home, condominium or townhome within the last three (3) years.

· You must not earn more than 120% of the area median income adjusted by household size as listed in the following table:

FHP INCOME LIMITS

FAMILY INCOME

SIZE LIMITS

1 $64,300

2 $73,500

3 $82,700

4 $91,900

5 $99,300

6 $106,600

What kind of home can I purchase?

· You may purchase any new or existing home, single-family detached, or townhome (no manufactured housing units, duplexes or mobile homes).

· The home must be located within the municipal boundaries of the City of Hayward (i.e., homes within the unincorporated areas do not qualify for assistance).

· The maximum purchase price of the residence may not exceed $330,000.

The City cannot provide assistance to purchase properties with health and safety deficiencies or structural problems.

Can my family really afford to own a home?

Buying a home is the largest purchase most families will ever make. Plan on attending one of the City's free Homebuyer Workshops. The Workshop takes you through the entire homebuying process step-by-step. Topics include deciding whether home ownership is right for you, shopping for a home that meets your needs, obtaining a home mortgage, closing the sale, and even maintaining your new home. You will know more about home buying and will be able to negotiate the purchase and financing of the home you want. You will understand the terms of your mortgage and be confident that you can afford home ownership.

For more information, please call Samuel Thompson at (510) 583-4244 or Sam.Thompson@ci.hayward.ca.us

What are the terms of the FHP loan?

The City will provide qualified homebuyers up to $20,000.00, which includes:

· Down Payment Assistance; and/or

· Closing Cost Assistance

The FHP assistance is a 30- year, fully amortized loan. It has an interest rate that is established by the Federal Home Loan Bank, 11th District cost of Funds Index (COFI) at the time of City approval. The loan is secured by a second deed of trust.

You must have a downpayment of at least 3% of the purchase price, plus funds for recurring closing costs. If a CalHFA or FHA loan is used in conjunction with the City's assistance, buyers must pay at least 1% of the purchase price plus recurring closing costs from their own funds.

Loan payments are due to the City on the first of each month and must be made by an electronic transfer of funds from your checking/savings account to the City. You authorize this transaction and maintain sufficient funds in your account for these payments.

Do I need to qualify for a mortgage?

Yes. In order to receive assistance, you must qualify for a home mortgage. Any of the participating lenders listed in this brochure can determine if you qualify for a first mortgage and for the City's First-Time Homebuyer Assistance Program. You MUST use a lender listed in this brochure to participate in this program.

A suggested debt-to-income ratio should not exceed 45% of gross income for housing expenses and a combined (housing costs and debt)-to-income ratio should not exceed 45%. (45% front-end debt ratio/45% back-end ratio.)

A $200 processing fee is charged for each loan.

How do I get started?

1. Attend a Workshop Call the City of Hayward, Department of Community and Economic Development at (510) 583-4244, or a participating lender, to reserve a space in a First-Time Homebuyer workshop.

2. Become Pre-Approved for a First Mortgage Contact participating lender to be pre-approved for a home loan and to check your eligibility for the First-Time Homebuyer Assistance Program. You MUST use a participating lender.

3. Find a Home Locate an eligible house or townhome within the incorporated areas of Hayward.

4. Sign a Contract Enter into a written contract with the seller to purchase the property.

5. Finalize your Mortgage See your lender to finalize your mortgage and FHP loan. The lender will submit an application to the City for approval. The City will verify your eligibility and that of the home to be purchased and approve the FHP loan.

6. Sign the Loan Papers Following application approval, you will sign the FHP loan documents and the first mortgage loan documents before the close of escrow.

7. Enjoy Your New Home! The City will deposit the down payment and/or closing assistance funds in the escrow account for your mortgage. When escrow closes, you are now able to move into your new home!

FIRST-TIME HOMEBUYER ASSISTANCE PROGRAM

PARTICIPATING LENDERS

Bank of America* Olympic Funding Home Loans

Debbra Carriagan Helena M. Jones

180 Grand Ave. Ste. 1000 7139 Koil Center Pkwy.

Oakland, CA 94612 Pleasanton, CA 94566

(510) 587-8322 (925) 226-2088

Chase Manhattan Mortgage Co* Union Planters Mortgage

135 Grand Ave. Ste. 102 Sherry Barto or Jon DeForest

Piedmont, CA 94610 39111 Paseo Padre Pkwy.

Jacquline Malic Fremont, CA 94538

(510)772-7628 (510) 574-1898

Citimortgage Washington Mutual Bank*

Jerry Medina Eva Swan

39138 Fremont Blvd. 5050 Broadway Avenue

Fremont, CA 94538 Oakland, CA 94611

(877) 494-0834 (510) 302-3402

Citimortgage Washington Mutual Bank*

Anna M. Hamilton Robert T. Gray

704 Haight Street 7600 Dublin Blvd.

Alameda, CA 94501 Dublin, CA 94568

(510) 521-2578 (510) 247-8358

Countrywide Home Loans* Wells Fargo Home Mortgage*

Kamino McDowell Christina Nelson

3201 Danville Blvd. 3040 Castro Valley Blvd.

Alamo, CA 94507 Castro Valley, CA 94546

(925) 552-4740- Ext. 4748 (877) 310-4288

Countrywide Home Loans* World Savings

Sheri Powers Karyl Thompson-Owens

802 Southampton Rd. 3500 Castro Valley Blvd.

Benicia, CA 94510 Castro Valley, CA 94546

(866) 445-3353 (510) 538-5725

Fremont Bank

Latisha Thierry

2151 Clawiter Road

Hayward, CA 94545

(510) 723-5708

*These lenders are approved to offer California Housing Finance Agency (CalHFA) HiCAP loans may provide up to $25,000 for down payment and closing cost assistance to qualified buyers. You must use of the CalHFA-approved lenders listed above in order to participate in this program.

REVISED: MARCH 2003