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Tips for Buying in a Tight Market

Increase your chances of getting your dream house in a competitive housing market, and lower your chances of losing out to another buyer.

1. Get pre-qualified for a mortgage. You ll be able to make a firm commitment to buy and your offer will be more desirable to the seller.

2. Stay in close contact with your real estate agent to find out about the newest listings. Be ready to see a house as soon as it goes on the market  if it s a great home, it will go fast.

3. Scout out new listings yourself. Look at Web sites such as REALTOR.com, browse your local newspaper s real estate section, and drive through the neighborhood to spot For Sale signs. If you see a home you like, write down the address and the name of the listing agent. Your real estate agent will schedule a showing.

4. Be ready to make a decision. Spend a lot of time in advance deciding what you must have in a home so you won t be unsure when you have the chance to make an offer.

5. Bid competitively. You may not want to start out offering the absolute highest price you can afford, but don t go too low to get a deal. In a tight market, you ll lose out.

6. Keep contingencies to a minimum. Restrictions such as needing to sell your home before you move or wanting to delay the closing until a certain date can make your offer unappealing. In a tight market, you ll probably be able to sell your house rapidly. Or talk to your lender about getting a bridge loan to cover both mortgages for a short period.

7. Don t get caught in a buying frenzy. Just because there s competition doesn t mean you should just buy it. And even though you want to make your offer attractive, don t neglect inspections that help ensure that your house is sound.

Reprinted from REALTOR magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS .
Copyright 2008. All rights reserved.

Housing and Community Development (HCD) Programs

The mission of the Department of Housing and Community Development (HCD) is to provide leadership, policies and programs aimed to the preservation and expansion of safe and affordable housing opportunities and to promote strong communities for all Californians.

In accordance with its mission statement, HCD s main responsibilities are to:

  • Advocate and support housing development for all Californians. HCD develops the Statewide Housing Plan and assists cities and counties with the housing element of their General Plans. It also monitors the use of housing funds by local Redevelopment Agencies as well as provides technical assistance and statistical data to the Governor, members of the Legislature and the public. Although many parts of the department assist, the division of Housing Policy Development primarily carries out these tasks.
  • Develop, administer and enforce building codes, manufactured housing standards and mobile-home park regulations. HCD registers and issues titles on mobilehomes, oversees the construction of manufactured housing, licenses the professionals who sell manufactured housing and regulates mobilehome parks. The Department also works with industry and other governmental agencies to develop building codes for both conventional and manufactured housing. These functions are primarily handled by the Division of Codes and Standards.
  • Administer State and federal housing, community development and childcare facilities finance programs. HCD administers a number of loan and grant programs for these purposes. These loans and grants are awarded to local governments, non-profit and for-profit developers of rental and ownership housing, community infrastructure and childcare buildings. The Division of Community Affairs handles these programs.

To fulfill its housing administrative financing responsibilities, HCD has in place several programs that help the development and preservation of affordable housing. The programs offer loans, grants or both to localities, developers, non-profits and individuals that engage in the construction, development or rehabilitation of housing units. The overarching goal of this help is to produce more affordable housing and to increase the rates of homeownership of low- and median-income households.

HCD programs sometimes are multi-folded and thus, have funds available for more than one housing activity. For instance, a program like CalHome funds new construction, acquisition and rehabilitation of single-family and multifamily housing projects, and tenant-based assistance.

HCD works directly with local governments, counties, non-profits, for-profits, and in some instances, income eligible families and individuals, in order to allocate the financing resources needed toward specific housing uses. The best way to find the right program for a determined activity (and all of its requirements) is to consult the Loan and Grant Program Directory of HCD.

This directory lists all of the housing programs available for California by: purpose, assistance type, terms, eligible activities, eligible applicants, application procedures, and contact information for all the programs offered.

In addition to the links mentioned above, it is also important to visit HCD s website to become familiar with the housing resources the agency has developed:

  • Affordable Housing Preservation: Information on the preservation of government-assisted projects at-risk of conversion to market rate, state preservation notice requirements and charts, and status reports.
  • Building Codes and Standards: Information on the nine programs the Division of Codes and Standards administers which address manufactured and factory built housing issues; and employee housing, code enforcement and state housing law issues.
  • Financial Clearinghouse: A source of information on over 200 housing programs, government, private lenders and foundation grants, all of which are non-HCD funding sources.
  • HCD Loans and Grants: Contains a calendar of funding and links to recent developments in rental housing, guidelines for homebuyer programs, monitoring and management of HCD programs, proposition 46 and publications.
  • Housing Planning and Statistics: Information on housing topics technical assistance (i.e. NIMBY resources), state housing planning (i.e. housing element), state plans and reports (i.e. redevelopment agencies report), and links to federal plans and reports.
  • Income Limits: State income limits and income limits for California-administered CDBG and HOME programs.
  • Redevelopment Agency Data: Reports, activities, and technical assistance for form-completion
  • Registration and Titling: Laws, regulations, program activities, contacts, and investor links against fraud.

Other important HCD links:
Notices of Funding Availability: (NOFAs) Information on funding availability for HCD s programs.
Proposition 46 Programs List: Information on programs funded by the  Housing and Emergency Shelter Trust Fund Act of 2002 $2.1 billion dollar bond measure .

HOUSING PRIMER

It s Mine! It s All mine!

TAKING POSSESSION

Typically, the day escrow closes on your new home, you will be able to take possession of the property. Congratulations! Here are a few hints on closing day to keep in mind:

Check to see when you will actually take possession of the house. Often, a transaction has to be recorded at the City or County Recorder s office for it to be official.

Resist the urge to do any work to the house before escrow closes. If the deal falls through, you are out time and money.

Be sure to do a walk-through of the house before you sign final papers and move in. Is the house in the same condition as it was when you agreed to buy

Fannie Mae to offer 3.5 percent buyer assistance

Fannie Mae recently announced that people purchasing a Fannie Mae-owned HomePath property will receive up to 3.5 percent in closing cost assistance. The initial offer must be submitted on or after April 11, 2011; and the sale must close on or before June 30, 2011, to be eligible for the incentive. Additionally, buyers must reside in the home as their primary residence (sales to investors are excluded).

All Fannie Mae-owned HomePath properties are listed on HomePath.com and most listings include detailed property descriptions, photographs, community and school information, and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing, which offers home buyers an opportunity to purchase with as little as 3 percent down.

Department of Housing and Urban Development HUD

The U.S. Department of Housing and Urban Development has in place several programs to help homebuyers and homeowners with homeownership issues. The site is divided in six broad categories: HUD News, HUD Homes, HUD Communities, Working with HUD, Resources, and Tools. From all of these sections and its links, there are some very useful for the homebuyer or the real estate professional.
Useful information for homebuyers

HUD Homes Section

  • Buying: Homebuyer rights, how much mortgage can you afford, home wish list, finding a real estate broker, mortgages, local homebuyer programs, and shopping for a home.
  • Owning: Maintaining and improving your home, energy and home environment, paying the mortgage, refinancing, reverse mortgages, manufactured homes, disaster relief and homeownership government links.
  • Selling: Advice about selling a home, tips on interviewing brokers, getting your house ready to sell, selling your home, settlement costs.
  • Renting: Renters kit, housing counseling, federal financial assistance, apartment shopping, renters insurance, programs/services in federal rental housing, rent your home.
  • Homeless: Information for homeless people, assistance providers, advocates, and other resources.
  • Home improvements: Federal repair and rehabilitation programs
  • HUD homes: How to buy HUD s homes.
  • Fair housing: Fair Housing Policy and Research Forum, news, Housing Discrimination Complaint Form, and other miscellaneous information.
  • FHA refunds: For homeowners who had a HUD/FHA insured mortgage previous to Sept. 1983.
  • Foreclosure: How to avoid foreclosure questions and answers.
  • Consumer info: Protecting consumers rights links, i.e. lead hazard control or land sales complaints.

Working with HUD Section
HUD does not offer direct grants or loans to individuals; it works through local governments and non-profit organizations to make financial assistance and counseling available. These are the main resources available for homebuyers:

  • Housing Counseling: List of HUD approved agencies.
  • The American Dream Downpayment Act: Program created to assist low-income first-time homebuyers in purchasing single-family homes by providing funds for downpayment, closing costs, and rehabilitation carried out in conjunction with the assisted home purchase.
  • Low Downpayment Information: This homepage will facilitate approval of downpayment assistance through secondary financing programs
  • Housing Choice Vouchers (Section 8): Allow very low-income families to choose and lease or purchase safe, decent, and affordable privately-owned rental housing.

HUD Homes – When someone with a HUD insured mortgage is unable to meet the payments, the lender forecloses on the home; HUD pays the lender what is owed; and HUD takes ownership of the home. Then HUD sells it at market value as quickly as possible using a bid system.

From those properties, HUD sets apart some for HUD approved non-profits and/or for officer/teacher purchase only. The general public can buy the rest. These properties are commonly known as HUD homes and are sold in a  as is condition. If the HUD home, once active in the bid system is not sold within a six-month period, then a local government can buy it for $1. These Dollar HUD Homes for local governments can then be fixed, and put back in the market at considerable savings. The fixing of the property is done either by the government itself or in a joint partnership with local non-profit homeownership organizations or by taping into existing local programs to resell the homes to low- and moderate-income residents of the community.

Homes located in revitaltion areas have an additional discount.

In general, the dollar HUD homes, the set-aside properties for non-profits, officers and teachers and the HUD homes for the general public allow for the revitalization of neighborhoods and help maintain the affordable housing stock.

To buy a HUD home, it is necessary to use a real estate broker who will submit the buyers bid. The bids are submitted at 100% of the listed price value, which equals the appraised value. Properties sold through this system have clear deadlines and are also available for the officers and teachers program. They can purchase a property off the General List and still receive a 50% discount if:

(a) the property is located in a HUD-designated revitalization area; and

(b) no other acceptable offers have been received. In the case that multiple offers are entered into the bidding system, a lottery process will decide the bid winner. Officers or teachers must submit a contract bid at 100% of the “Listed Price”. When bids are submitted by officers and teachers on properties in the General Property List that are above or below 100% of the list price, they will be treated as standard “owner/occupant” bids and will not be eligible for the 50% Officer Next Door/ Teacher Next Door (OND/TND) discount.

The 50% discount, applicable to the OND/TND program will be applied at closing.

Other HUD Homes links of interest:

  • General Information about HUD homes
  • Selling HUD homes
  • Frequently asked questions about Marketing and Management program
  • HUD homes for sale
  • About Communities

This HUD section provides links to maps and statistics about virtually any locality in the United States. Searches can be performed either by name place or by zip code. The information helps REALTORS answer accurately general questions about the location of educational facilities, environmental conditions, and demographic data of any given home.

  • Community maps: Maps provide information from HUD and the Environmental Protection Agency (EPA), i.e. community development projects and toxic release sources.
  • Facts about your community from the Census: Statistical information about the population that inhabits a place, i.e. age, education, income, race, home values, homeownership, mortgage and housing starts.
  • Facts about the environment from EPA: For those who want to know more about radiation, superfunds, watersheds and other highly technical environmental questions.

Look for schools, colleges, and libraries Information on local public and private schools, colleges and libraries. If you are looking for the school performance index (ranking), log into the California Department of Education s web page Academic Performance Index.
Look for child care Find the closest child care facility to any given location.

Other Important HUD pages

  • Descriptions of Single Family Housing Programs
  • Approved Appraisers List
  • HUD Approved Lenders
  • Maximum Mortgage Limits

Revitalization Homes’ area locator: It allows you to find out if a single family property is located within a Revitalization Area. This online tool can help verify if a particular location is eligible for the discount sale programs offered in revitalization areas.

HOUSING PRIMER

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7 Homeowner Tax Advantages

By: G. M. Filisko

When you’re evaluating how much home you can afford, make sure you factor in the tax advantages of homeownership.

Owning your home not only allows you to build wealth through appreciation, but it can also reduce the amount of income tax you pay every year.

Here are seven tax benefits for homeowners.

1. Homebuyer tax credits
If you purchase your first home before April 30, 2010, you’re entitled to a tax credit of up to $8,000. If you currently own a home, but sell it to purchase another home before April 30, 2010, you’re eligible for a federal tax credit of up to $6,500.

2. Deductions for loan fees
Typically, you can deduct the “prepaid interest” you paid when you got your mortgage loan. That includes points, loan origination fees, and loan discount fees listed on your settlement statement, even if the seller paid those fees for you. Each time you refinance your home, you can deduct prepaid interest fees.

However, you must meet certain requirements to take the prepaid interest deductions when you purchase or refinance your home. Check with your accountant to be sure you’re following the rules.

3. Property tax deductions
In the year you purchase your home, you’re entitled to deduct the real estate taxes you paid at the closing table. You can continue to deduct the property taxes you pay each year.

4. The mortgage interest deduction
Every year, you can deduct the amount of interest and late charges you pay on your mortgage and home equity loans, though there are limitations. If you’re required to purchase private mortgage insurance (PMI) because you made a downpayment of less than 20% on your home, you can also deduct those premiums as mortgage interest expenses.

5. Home office expenses
If you have a home office you use only for business, you may be eligible to deduct the prorated costs of your mortgage, insurance, and other expenses related to that space. The government scrutinizes home-office deductions closely. Be sure you’re entitled to the deductions before claiming them.

6. The costs of selling your home
In the year you sell your home, you can deduct the costs of selling it, including real estate commissions, title insurance, legal fees, advertising, administrative costs, and inspection fees. You can also deduct decorating or repair costs you incur in the 90 days before you sell your home.

7. The gain on your home
If you lived in your home for at least two of the previous five years before you sell it, the government lets you to take up to $250,000 of profit on the sale of your home tax free. That amount is doubled for married couples. This deduction isn’t available on rental or second homes.

The government also allows you to subtract from your home sale profit any amounts you spend on improvements, such as window replacement, siding, or a kitchen remodel. Those deductions are in addition to the tax credits you can receive in 2010 for making energy-saving upgrades. Money invested for routine maintenance and repairs doesn’t count.

This article includes general information about tax laws and consequences, but is not intended to be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws vary by jurisdiction.

More from HouseLogic
More on the mortgage interest deduction
(http://www.houselogic.com/articles/mortgage-interest-deduction-vital-housing-market/)
Claiming your homebuyer tax credit (http://www.houselogic.com/articles/claim-your-homebuyer-tax-credits/)

Tips to use when preparing your return (http://www.houselogic.com/articles/tax-tips-homeowners-preparing-2009-returns/)

Other web resources
More information on homeownership deductions (http://www.nolo.com/legal-encyclopedia/article-29693.html)

IRS information on the mortgage interest deduction (http://www.irs.gov/pub/irs-pdf/p936.pdf)
G.M. Filisko is an attorney and award-winning writer who’s enjoyed the tax advantages of homeownership for more than 20 years. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Visit houselogic.com for more articles like this. Reprinted from HouseLogic with permission of the NATIONAL ASSOCIATION OF REALTORS
Copyright 2010. All rights reserved.

Its a Jungle Out There!

Because there is so much money and so many different professionals are involved in the real estate purchasing process, there is always room for professional incompetence or outright fraud. Here are some things to look out for in the team that assists you in your purchase.

Real Estate Agents: This is the key person on your team! Make sure he or she is competent! We cannot stress this point more! Do your homework. All real estate agents must be licensed by the California Department of Real Estate. Visit the Department’s web site (www.dre.ca.gov) to determine the license status of an agent.

Also, talk to others who have used the agent. This is the one person you really need to trust in this process.

There are some unscrupulous lenders out there who only want their commission or points from a loan and couldn’t care less if you are getting the best loan product. There are some lending tactics that are outright fraud.

Beware of the following illegal lending practices and predatory lending tactics:
Flipping the frequent making of new loans to refinance existing loans
Packing selling of additional products without the borrower’s informed consent
Charging of excessive fees
Bait and Switch offering of very attractive terms which are not available and then pressuring the borrower into more expensive terms and hidden fees
Door-to-Door High Pressure Sales typically trying to sell home improvement contracts funded by home equity loans usually with less than desirable terms
Trust Selling salespersons who try to gain your trust based on some common background and then sell you something that might not be in your best interest
No Job! No Problem! encouraging home equity loans to those with no job or bad credit with the knowledge that the borrower will probably lose their home because they can’t make the payments
Pressuring for Immediate Sale insisting that a loan contract be signed immediately before the good deal is gone.

Prior to using the services of a mortgage broker or lender, make sure they are properly licensed by checking the California Department of Corporations web site (www.corp.ca.gov) and/or the California Department of Real Estate’s web site (www.dre.ca.gov).

Home Inspectors: The competency of this person is key in making sure you’re purchasing a structurally sound, safe home. A home inspector who misses details can end up costing you tens of thousands of dollars in the long run. Or worse, missed details could cause you or a family member harm because of bad wiring, cracked glass and other hazards.

Escrow Officer: The escrow officer is the referee in the home buying game. Just as with your favorite sport, an incompetent  or cheating  referee is a huge headache. If bad calls are made on the part of the escrow officer, it can cost you large amounts of money or kill the whole deal.

Tax Advisor: A tax advisor can be a great asset to you financially. Finding out that certain expenses are not tax deductible after-the-fact can put you in a real bind with the IRS. Ask your real estate agent, family members, friends or others you trust if they can recommend the services of a reputable tax advisor in your area.

HUD Special For Police Officer, Teacher, Firefighters – GNND

The Good Neighbor Next Door (GNND) program offered is a great way for the everyday service heroes in the United States to purchase a home that has gone into a HUD foreclosure. These homes and their mortgages are insured through the FHA or Federal Housing Association and when the buyers who live in those homes can’t afford the payments go into foreclosure are offered to the public. Being on the list gives you an advantage in bidding for and obtaining these HUD homes.

Because the professions mentioned above are considered to be good neighbors, HUD offers the program to them as well as Emergency Medical Techs (EMT) and gives them the chance to own a home in the areas they work. There are some guidelines for the GNND rewards program in order for you to obtain a new home, let’s take a look at them and see how you can qualify if you are a firefighter, teacher, police officer, or EMT.

o Live Where You Work – The professionals who fall under the GNND program are restricted to those who choose to buy HUDhomes in the areas where they serve and work. For instance, if you serve in a certain neighborhood in a big city, and fall under one of the professions, you are eligible only to purchase within that neighborhood’s limits, unless you are a law enforcement officer. The live in/serve in rule does not apply to police officer.

o Time Limits and Employment – All people who wish to buy a HUD repo home must agree to make the HUD home their only residence for three years following the purchase and must be employed in their profession full time.

o Top Points – The rewards program offers these professionals a 50 percent discount off the listing price and the HUDhome must be in a revitalization area. All bidders are selected through a lottery program and offers must be submitted through a licensed real estate broker who is certified to sell. You must also be able to produce some earnest money at the time of your offer, which is returned to you if you do not receive the lottery bid win.

o Restrictions – If both you and your spouse fall into the professional rewards program, only one of you may apply and you can only apply once for the program.

o Descriptions of Each GNND – Each professional who qualified for the program has certain descriptions. Law Enforcement professionals or officers must be employed by a law enforcement agency of the federal, state, local or Indian tribal government and sworn to uphold their divisional or municipal laws. Law Enforcement Officers are not restricted to the work/live rule that other professionals must adhere to. Teachers must work in a state accredited public or private school teaching K-12 students and the serve students from the area where the hudhome is located. Firefighters and EMTs must be employed by a fire department or emergency medical services responder unit of the federal, state, town or local government or an Indian tribal government and serve in the area where the home is located.

o Owner Occupied – As stated above, you must agree to the restriction of living in the HUDhome in an owner-occupied manner for three years beyond the closing. If interruption of those three years occurs and is deemed as a hardship, you may be permitted to sell the HUD home. Long-term vacations must be in writing and you must agree to resume occupancy upon your return.

o Financing Incentives – You must finance all reasonable and customary closing costs and be able to make a down payment of at least one-hundred dollars and is not good for multiple properties, only one repo home may be purchased.

o Post Purchase Obligations – You must continue to own and live in the HUDhome you purchase and certify both initially and annually thereafter that you are continuing to reside in the home.

o Preliminary Interest – If no offers are made by any GNND during the preliminary interest on a HUDhome are made, HUD will release the property for general public bid on a competitive basis.

o Required Documents – If you utilize the program, along with your sales contract, you must complete and provide the following documents:

o Inspection Addendum
o Owner-Occupant Certification Form
o Radon Gas & Mold Notice and Release Agreement
o 9549-A if you are a law enforcement officer
o 9549-B is you are a teacher
o 9549-C if you are a firefighter or EMT
o 9549-E – Employer verification form
o Land Use Restriction Addendum
o Flood Zone Addendum
o Methamphetamine Disclosure Form from Seller in Minnesota and South Dakota only
o Mortgage Pre-Qualification Letter – this must be from a lending institution staring that an in-house credit check has been performed and you are pre-qualified to obtain a mortgage.
o Certification from the Financial Institution – this must state whether the purchase is cash or that funds will be available on the day of closing.

All professionals must follow these guidelines and submit the appropriate forms. Any real estate broker who is licensed to sell HUD homes will be able to help you understand and obtain all of these forms in order for you to complete your purchase. The Good Neighbor Next Door program is a great way for people who serve in certain professions to acquire these properties with discounts and guarantees.

HUD homes are explains at http://www.MNHUDhomes.org John Mazzara is involved with financial services in the Twin Cities, MN. Officing out of Edina, Minnesota-John is centrally located within the 7 county MN metropolitan area. John owns three separate businesses-a licensed real estate broker associate selling Minnesota real estate since 1986-affiliated with RE/MAX Associates Plus http://www.MinneapolisStPaulHomes.com , an independent CFP-certified financial planner since 1989 with an independent Minnesota financial planning firm-Financial Planning Associates and the owner of a Minnesota mortgage broker firm-Venture Development Inc-specializing in residential, commercial and investment mortgages for purchases of single family homes, investment properties and commercial property. Venture brokers FHA, VA, Conventional loans and lines of credit. If you are looking for someone to help you in the areas of real estate sales/purchase, mortgages, or and/or financial planning and insurance you should call John for a free 1 hour consultation to see if he can meet your needs. 952-929-2577. RE/MAX Associates Plus and Venture Development are located at 7300 France Ave S, Suite 410, Edina, MN 55435

Author: John Mazzara
Article Source: EzineArticles.com
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Compton First Time Homebuyers Assistance Program

CITY OF COMPTON FIRST TIME HOME BUYER PROGRAM

The Community Redevelopment Agency of the City of Compton has designed the First Time Homebuyers Program to relieve the prevailing housing affordability crisis in the community. The Program consists of a Second Mortgage, which is in the form of a Silent Second Deed of Trust loan. An eligible household may receive mortgage assistance up to $100,000 (if your household is Moderate Income) and up to $150,000 (if your household is Low Income). The amount awarded, however, will be based on the need for each household on a case by case basis.

WHAT IS SECOND MORTGAGE ASSISTANCE

Second Mortgage Assistance is a subsidy provided to qualified first time homebuyers in the form of a deferred Second Deed of Trust Loan. The Agency’s subsidy shall provide gap-financing to make up the difference between the market value of the property and a purchase price that renders monthly principal, interest, taxes and insurance (PITI) affordable to the homebuyer. The maximum loan awarded by the Agency is $100,000 (for moderate income households) and $150,000 (for low income households) which may be used towards purchase of the property including closing costs.

The funds may be used for a larger down payment to make up the difference between the amount in which the buyer qualifies and the actual sales price of the property. For example: If the property sells for $310,000 and the family qualifies for only $210,000, $90,000 of the $100,000 subsidy may be used to reduce the mortgage and up to $10,000 may be used towards closing costs.

After securing the loan with a Second Deed of Trust, a lien will be placed against the property that is being purchased with the Agency’s assistance.  The Agency will serve as the Program Administrator, and participating mortgage lenders will be responsible for processing and underwriting the homebuyer(s) applications for a first mortgage.

WHO QUALIFIES TO BUY A HOME UNDER THE PROGRAM ?

Qualified buyers must be a first time homebuyer or must not have owned or held an interest in a primary residence in the past 3 years. Priority shall be provided to residents and households who are employed or reside within the City of Compton.

Additionally, qualified buyers must:

A. Have sufficient income and credit worthiness to qualify for primary financing from a participating lender.

B. Occupy the purchased property as their principal residence for 15 years.

C. Attend and complete a first time homebuyer counseling and training session held by an approved Counselor Services Agency or Lender.

D. Have a combined gross annual income, which does not exceed 80% of low income limits or 120% of moderate income limits of the gross annual median income for Los Angeles County, adjusted for family size per the following chart:

Los Angeles County Housing Income Limits

Family Size Low Income Moderate Income
(80%)
(120%)
1
$42,450
$50,300
2
$48,500
$57,400
3
$54,600
$64,600
4
$60,650
$71,800
5
$65,500
$77,500
6
$70,350
$83,300
7
$75,200
$89,000
8
$80,050
$94,800

The above chart shows maximum annual household income per family size for low to moderate income households, which funds are allocated in each category as follows:

  • Participants that have an annual combined household income that falls at or bellow the 80% of the gross annual median income for Los Angeles County, will receive a federally funded HOME mortgage assistance program of up to $150,000 in a form of gap financing on a first-come, first-served basis.
  • Participants that have an annual combined household income between 80% and 120% of the gross annual median income for Los Angeles County will receive mortgage assistance up to $100,000 in a form of gap-financing under the State Low Cost Housing Fund Program on a first-come, first-served basis.

WHO IS A FIRST TIME HOMEBUYER ?

In accordance with HUD guidelines, first time homebuyer means:

A. Any individual and his or her spouse who has not owned a home during the 3-year period before the purchase of a home with HOME funds or Low Cost Housing funds.

B. Any individual who is a single parent who previously owned a home with his or her spouse or resided in a home owned by the spouse.

C. Any individual who has owned a mobile home during the 3-years prior to the purchase of a home under the Agency’s program.

WHAT DOCUMENTS MUST BE FIRST TIME HOMEBUYERS SIGN TO SECURE THE AGENCY LOAN ?

  1. Promissory Notes
  2. Deed of Trust (recorded)
  3. Loan Agreement / Resale Restriction (recorded)

WHAT PROPERTIES ARE ELIGIBLE ?

Any single family house, condominium, or townhome located within the City of Compton with a property value at HUD-prescribed levels (not to exceed 95% of the area medium home value for Compton) generally are eligible. This applies to those participants that receive HOME funds (Low Income).

HOW IS THE LOAN REPAYABLE TO THE AGENCY ?

The loan provided to the homebuyer is interest-free and does not require monthly payments. After five (5) years, the loan will be reduced 10% annually. Furthermore, the loan is forgiven if the borrower lives in the property for the entire 15 years.

However, the full loan amount will be due and payble upon the occurrence of either of the following:

A. The sale, refinancing, or transfer of the property.

B. The property is no longer owner-occupied.

C. The discovery of willful misrepresentation or fraud in connection with the program.

D. Death of Owner.

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The California Housing Finance Agency (CalHFA)

The California Housing Finance Agency (CalHFA) has as its mission to finance below market rate loans to create safe, decent and affordable rental housing and to assist first-time homebuyers in achieving the dream of homeownership.

To accomplish its goal, the agency has four separate divisions: homeownership programs, mortgage insurance, multifamily finance and small business development. All of the agency s programs are targeted to renters and homebuyers that meet five criteria: first-time homebuyer purchasing a primary residence, intend to occupy the property, HUD income limits, credit and loan requirements of the participating lender and mortgage insurer, and a U.S. citizen or permanent resident alien.

CalHFA funds most of its activities with Proposition 46 money. It administrates programs such as the California Homebuyer s Downpayment Assistance Program (CHDAP) and the Extra Credit Teacher s Home Purchase Assistance (Extra Credit Teacher Program).

Funding, is directly channeled to consumers (through approved financial institutions) in the form of down payment assistance, financing and mortgage insurance. Also, to maximize homeownership opportunities, the agency cultivates partnerships and establishes new relationships within the affordable housing market place. Interested partners should contact CalHFA at 800.789.2432 or any of its divisions directly.

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Daniel Andrade, REALTOR® DRE #: 01849983
Century 21 My Real Estate Co
7825 Florence Avenue, Downey , CA 90240
call today 323-215-9836
daniel@mynewhouses.com

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