7Some Advantages of Renting Cheaper (at the beginning)Flexibility – easier to moveMaintenance and upkeep of the property are the responsibility of the landlordYou don’t pay property taxes
8Advantages of Homeownership Cheaper (over the long term)Financial stability for your family: you build up equityYou do pay property taxesIt is your home
9About Homeownership Homeownership is not for everyone It is not always the right time to buy a homeOnly buy a house because you want it – not simply because you canBuying a home is the biggest purchase you will ever make; don’t set yourself up to fail
10Median Home price in Oxnard as of What does a house cost?Median Home price in Oxnard as ofSeptember 30, 2013:$345,600
11Median price in Oxnard: (10.5% increase in one year) Change in Home PricesMedian price in Oxnard:Sept. 2012: $312,000Sept. 2013: $345,600(10.5% increase in one year)
18How 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 loan
19What determines the interest rate? Your incomeYour assetsYour debts and credit historyYour credit score
20Interest Rate Trends November 2012: 3.25% May 2013: 3.25% September 2013: 4.16%(Average, : 6.3%)
21Comparison: $300,000 loan 4.0%: $1760 4.5%: $1848 5.0%: $1939 For a 30-year Loan, Fixed Interest Rate, the monthly payment would be:4.0%: $17604.5%: $18485.0%: $19395.5%: $2032
22Questions 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?
23Preparing to Buy a Home: Get your finances in orderAttend a Homebuyer Education class
24Note: This has been a brief overview of the Basics of Homeownership. End of Part 1Note: This has been a brief overview of theBasics of Homeownership.
25CITY OF OXNARD ASSISTANCE FOR FIRST-TIME HOMEBUYERS PART 2CITY OF OXNARD ASSISTANCE FOR FIRST-TIME HOMEBUYERS
26CITYWIDE 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.Good evening everyone!
27WHAT IS GAP?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.Our assistances is called City “Gap” and we’re going to explain to you what it is.
28HOW 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.You might ask yourself, “How much can I get”
29HOW MUCH “GAP” CAN I RECEIVE? Purchase Price of Property $250,000 Plus estimated Closing costs +7,000 Total Cost $257,000 Mortgage Loan $224,000 Downpayment 5,000 $229, ,000 City “GAP” $28,000We don’t give you a check for our maximum loan amount of $30,000 and send you off to go find a house. That’s not what we do so we’re going to illustrate how the amount of Gap needed is determined.
30Example: $257,000 houseTo further illustrate that example. We have indicating here in the darker green the buyer’s dp, the blue being the mortgage loan, the lighter green is the City Gap. If we add all this it would give us a total of $257,000 which is enough to cover the total costs of $257,000.
31Terms 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 $30,000The loan has 0% annual interestLoans must be paid back if there are any defaults within the term of the loanYou might be asking yourself if this is free money. After reading the bullet points say; these loans are forgivable but if at any time you sell before the end of the terms, you will need to pay the loan. Since there is no interest being charged on these loans, you will just need to pay the principal.
32Terms of City Assistance Loans 5-30 year loansMay require monthly paymentsDetails to followSome other loans have slightly different terms……..
33Homebuyer 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.
34What is a default? Renting out the property Not paying your first mortgageTaking “cash out” from a refinanceRefinancing without City’s authorizationWe mentioned before that the loan would be paid off in case of any default so here are some examples.
35WHO QUALIFIES?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$55,9503 Persons$62,9504 Persons$69,9005 Persons$75,5006 Persons$81,1007 Persons$86,700Now, let’s talk about who qualifies.
36BORROWER REQUIREMENTS Must be an Oxnard residentMust be a first-time homebuyer(must have not owned a home for thepast 3 years)Must obtain a mortgage loan that is fully amortized and has a fixed interest rate for the life of the loanFor other first-time homebuyer definitions please see handout (color)
37WHO DOESN’T QUALIFY?Anyone who currently owns a home (owning a mobilehome is an exception)Any with an income over the 80% AMISomeone who has obtained a loan from the City’s Affordable Housing DivisionThat includes someone who has received a loan to repair or to buy a mobilehome.
38BORROWER REQUIREMENTS 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 – ext. 138Surepath Financial Solutions –
39DATES AND COST OF HOMEBUYER COURSES Cabrillo Economic Development Corporation- December 7, 2013 (Free class)Surepath Financial Solutions- November 23, 2013 (Free class)
40PROPERTY 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.
41Where are the houses that the City is building for us to buy?
42The City is not building any houses 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.
44WHAT DOCUMENTS DO I NEED? Identification Documents: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
45WHAT DOCUMENTS DO I NEED? Income DocumentsCopy of most recent pay check stubs that cover 3 full monthsCopy of Federal Income Tax Return – most current year
46WHAT DOCUMENTS DO I NEED? Assets DocumentsCopy of Bank statements that cover 6 full months for all accountsCopy of most recent documentation on asset income; 401K
47WHAT DOCUMENTS DO I NEED? Lender’s DocumentsCopy 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 borrowers
48WHAT DOCUMENTS DO I NEED? Homebuyer Course DocumentCopy of HUD-approved homebuyer education certificate for all buyersLast slide for Eva
49ACQUISITION & 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.
50TERMS OF LOAN Income cannot exceed 80% AMI Due and payable after 30 yearsThe loan has a 3% annual interestNo monthly paymentsYou might be asking yourself if this is free money. After reading the bullet points say; these loans are forgivable but if at any time you sell before the end of the terms, you will need to pay the loan. Since there is no interest being charged on these loans, you will just need to pay the principal.
51HOW 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.You might ask yourself, “How much can I get”
52HOW MUCH “GAP” CAN I RECEIVE? Purchase Price of Property $150,000 Plus estimated Closing Costs (3%) +4,500 Total Cost $154,500 Max Mortgage Loan $124,000 Buyer Contribution (3%) 4,500 $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 $29,000We don’t give you a check for our maximum loan amount of $30,000 and send you off to go find a house. That’s not what we do so we’re going to illustrate how the amount of Gap needed is determined.
53CITY LOAN APPLICATIONS Applications can be obtained atAffordable Housing & Rehabilitation Division, 435 South D Street, Oxnard, CA 93030Division’s Website:- Click on Homebuyer Program Application
54LOAN APPLICATIONS MAY BE SUBMITTED BEGINNING ON TUESDAY, JANUARY 21, 2014 AT 10:00 AM AT 435 SOUTH “D” STREETCompleted 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, :00am.
55Rehabilitation Division City of OxnardAffordable Housing &Rehabilitation Division435 South D StreetOxnard, CA 93030FAX