PURPOSE:        

    To expand homeownership opportunities to low and moderate-income persons living or working in San Leandro by providing gap financing for down payment and/or closing costs.


WHAT IS THE DEFINITION OF FIRST TIME
 HOMEBUYER LOAN?    

A household who has not owned its principal place of residence within the last three years.


WHO IS ELIGIBLE FOR A FIRST TIME
HOMEBUYER LOAN?

Households whose incomes do not exceed 120% of the Area Median income, adjusted by household size. The income limits follow the Department of Housing and Urban Development (HUD) guidelines, published yearly.

2005 Maximum Qualifying Income

Household Size                  120% of Median               Household Size                     120% of Median           1                                   $69,000                             4                                            $98,650           2                                   $78,900                             5 and above                           $106,525           3                                   $88,775

         ARE THERE PRIORITIES IN QUALIFYING?

Priority is given to homebuyers who have lived or worked in the City of San Leandro
for two years or longer.

WHAT TYPE OF UNIT CAN I BUY?

Homebuyers may purchase a new or existing single-family, condominium
or townhouse unit.

MUST THE HOME BE LOCATED IN SAN LEANDRO?

The home must be located within the City of San Leandro's municipal boundaries.

HOW MUCH CAN I BORROW?

The amount borrowed is the minimum needed to close the gap between lender requirements and buyer's available cash for down payment/closing costs.
The maximum loan amount is $30,000.

WHAT ARE THE TERMS OF THE LOAN AND
 INTEREST RATE?

Loan repayment is deferred for the first five years. Payments of principals and interest begin in year 6 and continue through year 20. Buyer must pay remaining balance if property is sold, transferred, refinanced, or converted to renta property. If buyer's income is 80% or less of the area median, repayment of principal and accrued interest may be deferred until property is sold, transferred, refinanced for cash out, or converted to rental property. The annual interest rate is 3%. The San Leandro First Time Homebuyer Program loan is subordinate to the first deed of trust.


IS OWNER OCCUPANCY REQUIRED?

Yes


WHAT HAPPENS IF HOMEBUYER DECIDES TO SELL WITHIN THE FIRST FIVE YEARS?

The amount of principal borrowed will be due in-full at close of escrow.


WHERE DO I APPLY FOR A FIRST TIME
 HOMEBUYER LOAN?

You may apply at one of the participating lenders. The lender pre-qualifies buyer for Primary mortgage and determines amount needed from San Leandro First Time Homebuyer Program. The lender then sends application packet
to the City for review and approval.



SAN LEANDRO FIRST-TIME HOMEBUYER PROGRAM APPROVAL PROCESS

1. Buyer locates an eligible unit within the City of San Leandro. 2. Buyer enters into a Purchase Contract. 3. Buyer obtains application forms from participating lender of buyer's choice and submits the following to lender: a) primary mortgage application and b) Agency's First-Time Homebuyer loan application. 4. Buyer attends Homebuyer Seminar presented by lender or other Fannie Mae approved program. 5. Participating lender determines buyer's eligibility for first mortgage and Agency's First-Time Homebuyer Program assistance. 6. Lender sends application packet and Pre-Funding Approval Form to Agency for review and approval. If packet incomplete, Agency contacts lender for missing documents. If packet complete, Agency date stamps packet and determines priority based on date completed. Agency makes final determination to approve or deny within 5 working days. Lender-assembled Agency packet checklist: a. First-Time Homebuyer Application b. Purchase Contract c. Certificate of Completion of Homebuyer Seminar d. Lender's Commitment Letter e. Authorization for Release of Credit Information f.  Income Verifications g. Copy of Lender's Application/Form 1003 or HUD 92900-WS h. Worksheet/1008 Form i. San Leandro Pre-Funding Approval Form 7. Agency signs off on Pre-funding Approval Form and sends signed Approval Form and Fund Reservation Certificate, with assigned number, to the lender (First-Time Homebuyer funds remain committed for 60 days) 8. Lender submits Funds Reservation Certificate to Agency; Agency fills out City Part and forwards to Finance Department with instructions to prepare check or wire transfer. 9. Lender submits first mortgage loan documents into escrow and Agency submits second mortgage loan documents into escrow (Truth-in-Lending, Loan Agreement, Promissory Note, Deed of Trust, Request for Notice of Sale of Transfer). 10. Lender confirms by FAX to Community Development Department the date of loan funding; Development staff releases check or wire transfer (5days notice required). 11. Borrower signs loan documents for first mortgage and Agency's loan. 12. Title company records and sends Agency confirmed copies of documents.