First Time Homebuyer Assistance Presentation Music until start

Who We Are: City of Oxnard Affordable Housing and Rehabilitation Division Note: We are not the Oxnard Housing Authority

Affordable Housing and Rehabilitation Division Mary 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

THE BASICS OF HOMEOWNERSHIP 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

Median Home price in Oxnard as of What does a house cost? Median Home price in Oxnard as of September 30, 2013: $345,600

Median price in Oxnard: (10.5% increase in one year) 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: Cost of the house (purchase price plus closing costs) Amount of your down payment 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 4.0%: $1760 4.5%: $1848 5.0%: $1939 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

Note: This has been a brief overview of the Basics of Homeownership. End of Part 1 Note: This has been a brief overview of the Basics of Homeownership.

CITY OF OXNARD ASSISTANCE FOR FIRST-TIME HOMEBUYERS 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. Good evening everyone!

WHAT 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.

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. You might ask yourself, “How much can I get”

HOW 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 -229,000 City “GAP” $28,000 We 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.

Example: $257,000 house To 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.

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 You 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.

Terms of City Assistance Loans 5-30 year loans May require monthly payments Details to follow Some other loans have slightly different terms……..

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 We mentioned before that the loan would be paid off in case of any default so here are some examples.

WHO QUALIFIES? 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 Now, let’s talk about 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 For other first-time homebuyer definitions please see handout (color)

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 That includes someone who has received a loan to repair or to buy a mobilehome.

BORROWER 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 – 805.659-6868 ext. 138 Surepath Financial Solutions – 805.383-7700

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 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

WHAT 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

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 Last slide for Eva

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 You 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.

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. You might ask yourself, “How much can I get”

HOW 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 -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 We 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.

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 AT 435 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.

Rehabilitation Division City of Oxnard Affordable Housing & Rehabilitation Division 435 South D Street Oxnard, CA 93030 805.385-7400 805.385-7416 FAX http://housing.cityofoxnard.org/page/10/935