With the elimination of redevelopment agencies in the State of California on February 1, 2012, Port Hueneme lost its principal resource for the City’s Home Buyer Assistance Program (“HBAP”) leaving only a limited amount of CalHome funding to operate a much more limited down payment assistance programs. As a result, HBAP assistance is now available exclusively only to low income buyers. Down payment assistance is in the form of a 3% simple interest secured subordinate mortgage of up to $40,000. Loan proceeds may only be used toward the purchase of a single family home, condominium, or townhome located within the City of Port Hueneme. Eligible Borrowers are low income first time buyers, regardless of the city of current residency.
Loan Amount. The City’s down payment assistance is designed to serve as gap financing. The loan amount is computed as the difference between the largest first trust deed mortgage deemed affordable to the Borrower by the participating lender and the Borrower’s down payment. The maximum assistance available under HBAP may not exceed the lesser of the following:
First Time Buyer. A first time buyer is
defined as a person who:
Income Limits. Household income includes gross wages before deductions, tips, bonuses, commissions, unemployment, social security, SSI, pensions, CalWorks, child support, alimony, disability payments, workers compensation, rental income, interest and dividend income, plus net income from owning or operating a farm or business, and any other income received regularly. Income of all persons over 18 years of age in the household must be included in the computation of household income, even if some adult members of the household will not be signatory to the first or second mortgage. The projected annual household income for HBAP Borrowers effective December 1, 2011 may not exceed the following:
Household
Size Maximum Annual Income 1 $
47,400 2 $
54,150 3 $
60,900 4 $
67,650 5
$ 73,100 6 $ 78,500 7 $ 83,900 8 $ 89,300
Down
Payment. The
Borrower must contribute a minimum of 3.5% of the purchase price.
At the discretion of the participating lender, part of the minimum down payment may be gift funds provided that the borrower contributes 1.5% of the purchase price (minimum of $5,000) from his or her own savings. Larger
down payments will be required where buyers would otherwise retain
liquid or convertible assets of more than $10,000 after closing costs.
Monthly Payment. No monthly payments are required. Deferred interest is added to the principal and the entire amount of principal plus accrued interest is due in a lump sum in thirty years or earlier if the home is sold, refinanced, or the borrower no longer resides in the property.
Interest
Rate. Given the HBAP interest rate of 3% per year, Borrowers who receive the $40,000 maximum loan would accrue $1,200 in deferred interest each year. Deferred interest is added to the loan principal. After thirty years, the total principal and interest owing would be $76,000. HBAP loans may be repaid at any time without a prepayment penalty.
Loan
Term. The HBAP loan must be repaid after forty-five years, or
at such earlier time as any of the following occurs:
Credit Standards. The minimum credit score for HBAP assistance is 620. However, for those applicants without a credit history, three or more non-traditional credit references such as rent, utilities, medical bills, or car insurance payments may be an acceptable substitute. The Borrower’s housing costs may not exceed 45% of income.
Purchase Price Limit.. he maximum purchase price may not exceed 95% of the median price in Ventura County for a single family home.
Post-Purchase Occupancy. HBAP-assisted buyers must continuously reside in the property purchased with HBAP assistance. No dwelling assisted under HBAP may be occupied by more than two (2) persons per bedroom.
Financial Capacity. Borrowers must qualify for a thirty year fixed rate first mortgage through a participating lender approved by the City of Port Hueneme. Co-signers who will not reside in the property are not permitted.
Code Compliance. Eligible property must comply with local land use regulations, building codes, and Federal Housing Quality Standards. Defective paint surfaces must be tested for lead-based paint. Corrections, if required, must be made in accordance with all State and Federal standards. At the City’s discretion, and in all cases where property is sold “as is,” a code compliance inspection will be required and HBAP loan approval may be contingent upon the completion of specified repairs.
Escrow Requirements. All HBAP-assisted purchase transactions must be processed through a local escrow company, which has been trained and approved in advance by the City of Port Hueneme. Contact City staff or the participating lender for a current list of approved escrows.
Photo Gallery. Click here to view examples of typical Port Hueneme housing stock.
