COMPLETED BOARD ORDER�"���S-3
Before the Board of Supervisors in and for the
County of Monterey, State of California
Conduct a public hearing and accept the Homebuyer
Assistance Study funded by a Community
Development Block Grant CDBG) Planning and
Technical Assistance PTA) Grant.
Upon motion of Supervisor Potter, seconded by Supervisor Armenta, and carried by those
members present, the Board hereby:
Conducted a public hearing and accepted the Homebuyer Assistance Study funded by a
Community Development Block Grant CDBG) Planning and Technical Assistance PTA)
Grant.
PASSED AND ADOPTED this 27th day of July, 2010, by the following vote, to wit:
AYES: Supervisors Armenta, Calcagno, Salinas, Parker, Potter
NOES: None
ABSENT: None
I, Gail T. Borkowski, Clerk of the Board of Supervisors of the County of Monterey, State of California, hereby
certify that the foregoing is a true copy of an original order of said Board of Supervisors duly made and entered in
the minutes thereof of Minute Book 75 for the meeting on July 27, 2010.
Dated: August 2, 2010 Gail T. Borkowski, Clerk of the Board of Supervisors
County of Monterey, State of California
By 112,
Deputy
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SIGNED BOARD REPORTX��"���MONTEREY COUNTY BOARD OF SUPERVISORS
MEETING: July 27, 2010 SET MATTER AGENDA NO.:
SUBJECT: Conduct a public hearing and accept the Homebuyer Assistance Study funded by a
Community Development Block Grant CDBG) Planning and Technical
Assistance PTA) Grant
DEPARTMENT: RMA Redevelopment and Housing Office
RECOMMENDATION:
It is recommended that the Board of Supervisors conduct a public hearing and accept the Homebuyer
Assistance Study funded by a Community Development Block Grant CDBG) Planning and Technical
Assistance PTA) Grant.
SUMMARY:
The Redevelopment and Housing Office RHO) prepared a study using CDBG grant funds to evaluate
housing affordability, incomes, and funding sources with the goal of making the County's Homebuyer
Assistance Program more effective. As a result of this study, a revised First Time Home Buyer FTHB)
Program Manual will be prepared. The CDBG grant requires that the Board of Supervisors conduct a
public hearing to receive and accept the Homebuyer Assistance Study.
DISCUSSION:
On December 10, 2008, the County was awarded a General Allocation Community Development Block
Grant CDBG) Planning and Technical Assistant PTA) grant for $70,000 from the California
Department of Housing and Community Development HCD). The grant was awarded to fund two
separate studies, a Water System Improvement Study for the community of San Lucas and a Home
Buyer Assistance Study.
The Homebuyer Assistance Study has been completed. A new FTHB Program Manual Manual),
including program guidelines is being prepared. In addition, the RHO intends to prepare an application
for $800,000 in State HOME funds to provide down payment assistance under the revised FTHB
Program. The grant application and FTHB Manual are scheduled to be considered by the Board of
Supervisors in August.
The primary conclusions of the Homebuyer Assistance Study are summarized below:
Median home prices in Monterey County have declined to a point where they are affordable to
moderate-income households, earning up to 120% of Area Median Income AMI) in the South
County and Salinas sub-areas. Moderate-income affordability gaps remain for the units in the
North County and Marina/Seaside/Ft. Ord and Peninsula sub-areas.
Median home prices generally remain unaffordable to low-income households earning up to
80% of AMI) throughout the County.
The affordability gaps vary considerably from one part of the County to another, with the lowest
affordability gaps existing in the South County sub-area and the highest gaps in the Peninsula
sub-area.
Recommendations
Adopt separate loan limits for low and moderate-income borrowers.
Update standard loan limits to reflect the lower affordability gaps.
Keep guidelines for the FTHB Program flexible to allow for the use of funding from a variety of
sources
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SIGNED BOARD REPORTX��"��� Consider utilizing higher loan limits for residents of the South County and Marina/Seaside/Ft.
Ord sub-areas since median incomes in those areas are below the countywide AMI.
Seek funding from State funding sources including Ca1HOME, BEGIN, HOME, and the Joe
Sema Jr. Farmworker Program.
In order to make the down payment assistance sufficient to serve a wider range of potential
homebuyers, layer funding sources as some of the recommended loan limits exceed those set by
Ca1HOME, BEGIN, HOME, and the Joe Serna Jr. Farmworker Program.
The primary focus of the recommendations is to develop an effective program that will allow the
maximum number of households to take advantage of the current availability of affordable market rate
homes. It is further recommended that the revised program address the requirements of a variety of
funding sources including State HOME, BEGIN and Cal HOME funds, as well as local Redevelopment
funds. Generally these funding sources provide assistance to households earning less than 80% of the
County's Area Median Income AMI), however some sources allow qualifying households to earn up to
120% of AMI.
OTHER AGENCY INVOLVEMENT:
On July 9, 2008, the Monterey County Housing Advisory Committee HAC) recommended that the
Board of Supervisors approve the 2008 CDBG PTA Grant application. On March 10, 2010, the HAC
received the Homebuyer Assistance Study.
FINANCING:
The preparation of the Homebuyer Assistance Study was funded with the CDBG Grant. The
recommended action has no impact on the County's General Fund.
Prepared by:
e Royer B Housing Program Manager Ji ook, irector
development and Housing Office / 1j development and Housing Office
Date: J /
Date: 7/ /y
Attachments: Home Buyer Assistance Study is on file with the Clerk to the Board of Supervisors
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ATTACHMENT - HOMEBUYER ASSIST��P�HOMEBUYER ASSISTANCE STUDY
Prepared for
County of Monterey
Prepared by
Keyser Marston Associates, Inc.
February 2010
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ATTACHMENT - HOMEBUYER ASSIST��P�Table of Contents
Page
Introduction
Key Findings and Recommendations
1
Background 4
Market Rate Sales Prices 6
Maximum 2009 Affordable Sale Prices 8
Affordability Gap Analysis 10
Demographic Profiles 11
Mortgage Availability 13
Homeownership Funding Programs 13
Future Program Updates 15
Appendices
Map: Monterey County Subareas
Appendix Tables
Current First Time Homebuyer Manual
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ATTACHMENT - HOMEBUYER ASSIST��P�Introduction
Keyser Marston Associates, Inc. KMA) has undertaken an assessment of Monterey County's
First Time Homebuyer Assistance FTHB) Program in order to update the program to reflect
current demographic and market conditions in the County. The market and demographic data
used in the update of the FTHB program can also be used in designing the new Neighborhood
Stabilization Program NSP) homebuyer assistance program. The NSP program will be used
until the federal NSP funds are exhausted. The FTHB program is a permanent program that will
continue to seek funding from a variety of local and state funding programs. The following are
the primary goals of this assessment:
1. To evaluate current market rate home prices in various sub-markets of Monterey
County, particularly in light of the downturn in the residential real estate market;
2. To update the affordability gaps between affordable sale prices and market rate sale
prices based on current market conditions;
3. To evaluate the demographic profiles of potential first-time homebuyers living in various
sub-areas of Monterey County in order to determine how the homebuyer programs can
be designed to best address the particular housing needs of residents in these sub-
areas;
4. To survey available funding programs that the County may utilize to fund the FTHB
program as well as programs that provide assistance directly to homebuyers; and
5. To make recommendations regarding the design/redesign of the homebuyer programs
based on the conclusions drawn from this assessment.
Key Findings and Recommendations
A. Key Findings
1. Median home prices in Monterey County have declined to a point where they are
affordable to Moderate income households earning up to 120% of AMI) of all sizes in
the South County and Salinas sub-areas; there remain Moderate income affordability
gaps for the larger units in the North County and Marina/Seaside/Ft. Ord sub-areas and
very sizable gaps for all unit sizes in the Peninsula sub-area see the following Table 1);
2. Median home prices remain unaffordable to Low income households earning up to 80%
of AMI) throughout the County except for the smaller units in the South County and
Salinas sub-areas;
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ATTACHMENT - HOMEBUYER ASSIST��P�3. The affordability gaps vary considerably from one part of the County to another, with the
lowest affordability gaps existing in the South County sub-area and the highest gaps in
the Peninsula sub-area; from a practical point of view it is cost prohibitive for the
County's homebuyer programs to make median priced homes affordable to both Low
and Moderate income households in the Peninsula sub-area;
4. The Area Median Income AMI) is a county-wide standard and does not vary from one
part of the County to another; however there is a large disparity of median incomes
among the sub-areas. The South County and Marina/Seaside/Ft. Ord sub-areas have
medians that are below the county-wide median and the other sub-areas are above the
county-wide median see Table 9). For this reason, the affordability gaps that are
calculated based on the county-wide median are actually larger for residents of these
two sub-areas. The affordability gaps for households in these sub-areas could be
calculated and utilized as alternative loan limits to those described in this report.
However, such alternative loan limits would make implementation of the program and
the process for regularly updating the loan limits somewhat more complex.
5. The demographic group that is most likely to participate in the homebuyer programs is
Low and Moderate income renter households under the age of 55 available data does
not break down age groups under age 55); the largest numbers of these households
reside in the Salinas sub-area.
6. There are a number of State funding sources that are available to fund the County's
FTHB program. These include HOME, CalHome, BEGIN, and the Joe Serna
Farmworker program.
B. Recommendations
1. KMA recommends that the County adopt separate standard loan limits for Low income
and Moderate income borrowers;
2. Given the reduction in median home prices in Monterey County, the affordability gaps
have been reduced since the peaks of the housing market and we recommend that the
County update its standard loan limits to reflect the lower affordability gaps. If the County
desires to set loan limits for each sub-area of the County, the following are the
recommended limits, which are based on the calculated affordability gaps:
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ATTACHMENT - HOMEBUYER ASSIST��P�Table 1
Affordability Gaps by Sub-Area /
Recommended Standard Loan Limits if based on Sub-Areas
Monterey County Homebuyer Assistance Study
Sub-Areas of the Homebuyer Assistance Study
South Salinas North Marina/Seaside/ Peninsula
County County Ft. Ord
Low Income
1-bedroom $4,000 $19,000 $276,000
2-bedroom $3,000 $64,000 $89,000 $459,000
3-bedroom $15,000 $64,000 $153,000 $199,000 $684,000
4-bedroom+ $46,000 $112,000 $186,000 $256,000 $966,000
Moderate Income
1-bedroom $147,000
2-bedroom $314,000
3-bedroom $38,000 $523,000
4-bedroom+ $12,000 $82,000 $792,000
Note: If HOME funds are utilized, a separate total loan limit applies ranging from $147,250 for a one-bedroom
unit to $254,270 for a four-bedroom unit.
3. If the County desires to continue to have loan limits consistent throughout the County
not by sub-area), we have calculated the affordability gaps for the whole County except
the Peninsula sub-area. The Peninsula sub-area has been excluded from this calculation
due to the extraordinarily high affordability gaps in the Peninsula relative to the other
sub-areas in the County. As the table indicates, there are no affordability gaps for
Moderate income homebuyers to purchase median priced homes in Monterey County
when home prices in the Peninsula sub-area are excluded. The County could continue
to use higher Exception" loan limits currently set at HUD 221(d)(3) limits) on a case by
case basis as is the County's practice with the current FTHB program.
Table 2
Countywide Affordability Gaps excluding Peninsula Sub-Area /
Recommended Standard Loan Limits if not based on Sub-Areas
Monterey County Homebuyer Assistance Study
Recommended Limits Current County
FTHB Standard Loan
Limits Low Income)
Home Size Low Income Moderate Income
1-bed room $60,000
2-bedroom $9,000 $85,000
3-bedroom $64,000 $98,000
4-bedroom $86,000 $100,000
Note: The affordability gaps for the whole county including the Peninsula sub-area are shown
on the bottom of Table 8.
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ATTACHMENT - HOMEBUYER ASSIST��P�4. For the FTHB Program, the County will likely be seeking funding from State funding
programs as well as possibly utilizing local sources such as Redevelopment funding and
Inclusionary Housing in-lieu fees, and the guidelines for the FTHB program should
remain flexible with respect to its various criteria to allow for the use of funding from a
variety of sources. As one example, the County's Inclusionary Housing program requires
resale to an income-qualified buyer while the FTHB program does not. As another
example, the term of affordability under Redevelopment is 45 years while the term of
affordability under the Inclusionary Housing program is perpetuity.
5. Because the median incomes in the South County and Marina/Seaside/Ft. Ord sub-
areas are below the county-wide AMI, the County could consider utilizing higher loan
limits for residents of these areas.
6. We recommend that the County seek funding from State funding sources including
HOME, CalHome, BEGIN, and the Joe Serna Farmworker program. According to HCD,
these programs will be funded in 2010 and they appear to be good candidates to be
used to fund the FTHB program. These programs offer assistance of up to $80,000,
$60,000, $30,000 and $70,000 per unit.
7. Given the fact that some of the recommended loan limits either by the sub-area or the
county-wide approach) exceed the loan limits set by HOME, CalHome, BEGIN, and the
Joe Serna program, we recommend the County combine, or layer", these programs in
order to make the down payment assistance high enough to serve a wider range of
potential homebuyers.
Background
Monterey County's FTHB program has been in existence for many years but has not been
funded for the last several years due to the exhaustion of prior State funding and/or prioritization
of local funding to other activities. The County intends to seek funding in the near future from
State sources. In addition, federal Neighborhood Stabilization Program NSP) funds are
separately funding an NSP homebuyer assistance program. The County hopes to use the
current market and demographic analysis to help set some of the criteria for this new program.
One difference with the FTHB program is that the NSP homebuyer program is not specifically
for first-time homebuyers. However, it is anticipated that most homebuyers utilizing the NSP
program will be first-time homebuyers due to its limitation to households earning no more than
120% of AMI.
During the last decade, Monterey County had experienced a significant escalation in home
prices, one result of which is that homeownership had become unaffordable for many Low and
Moderate income households. The County's FTHB was designed to help bridge the
affordability gap" between market rate home prices and what Low and Moderate income
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ATTACHMENT - HOMEBUYER ASSIST��P�households can afford to pay. One problem that the FTHB program confronted when the
program was funded, particularly during the housing boom years, was that the maximum home
price that was set by HOME funding sources was too low for Monterey County and homebuyers
were unable to find homes priced below the HOME limits. Given the steep decline in home
prices in Monterey County, the HOME price limits as well as the price limits for the other
available funding sources as discussed later in this report) do not appear to present an issue
today, with the exception of the Peninsula sub-area, where median home prices for most unit
sizes exceed the HOME limits.
The following are some of the key criteria under the existing FTHB program for reference, the
latest FTHB Program Manual is included in the appendix of this report):
1. Household income Qualifying household income is limited to 80% to 120% of Area
Median Income AMI) depending on the funding source utilized;
2. Loan limits Standard loan limits for Low income households range from $50,000 for a
studio unit to $100,000 for a four-bedroom or larger unit, however the program does
permit exceptions that allow the Housing Loan Committee to increase the loan limits up
to maximum permitted by HOME program regulations currently, from $128,454 up to
$254,270 for studios up to four bedrooms); there are no specified loan limits currently for
Moderate income households even though the current FTHB program can be used by
Moderate income homebuyers if the funding sources permit;
3. Minimum homebuyer contribution Homebuyers are required to contribute a 3% down
payment; however exceptions may be considered by the Housing Loan Committee;
4. Loan terms payments deferred for the first five years after which the borrower's ability
to re-pay will be evaluated; term of the loan depends on funding program used; interest
rate is 3% per year;
5. Resale restrictions depends on the funding program used; resale to an income-
qualified homebuyer is required through the County's Inclusionary Housing and
Redevelopment programs but not through other programs that have been used to fund
the FTHB program.
The loan limits in the current FTHB program apply throughout Monterey County even though
there is a wide range of market home prices and resident incomes in the County. The County
has requested that KMA assess these differences in order to determine if the FTHB program
can be updated to better address the needs of residents in various sub-areas of the County.
County staff identified five sub-areas for this assessment; each sub-area consists of one or
more of the County's existing Planning Areas. These five sub-areas, their corresponding County
Planning Areas and incorporated cities, are as follows see also the attached map):
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ATTACHMENT - HOMEBUYER ASSIST��P�Table 3
Sub-Areas for Homebuyer Assistance Study
Incorporated Cities
Sub-Area County Planning Areas Included within Sub-Area
1. North County North County PA None
2. Salinas Area Greater Salinas and Toro PA's Salinas
3. South County Central Salinas Valley and South Gonzales
County PA's Greenfield
King City
Soledad
4. Peninsula Coast and Cachagua PA's and a portion Carmel-by-the-Sea
of the Greater Monterey Peninsula PA Del Rey Oaks
Monterey
Pacific Grove
Sand City
5. Marina/Seaside/Ft. Ord Portion of the Greater Monterey Marina
Peninsula PA cities of Marina and Seaside
Seaside and the former Ft. Ord
While the County's FTHB program must be used to purchase a home in the unincorporated
areas of the county, the potential homebuyers can come from throughout the county, both in
unincorporated areas and incorporated cities, and there is no preference or targeting to
residents of the unincorporated areas. Therefore, KMA's analysis of the demographics included
all residents in the county. It should be noted that due to the way NSP funds were allocated in
Monterey County, the NSP 1 homebuyer program will be serving the unincorporated areas as
well as six incorporated cities in the County Marina, Seaside, King City, Greenfield, Soledad,
and Gonzales.
In terms of methodology, KMA collected both demographic and market data by census tracts.
The boundaries of the five sub-areas correspond roughly but not exactly with the boundaries of
an assemblage of census tracts'. These disparities are minimal, however, and do not detract
from the overall conclusions drawn from this analysis.
Market Rate Sales Prices
Overall, home prices in Monterey County have experienced a steep decline in the last several
years. According to the California Association of Realtors, the median sale price of all homes in
Monterey County condominiums and single family homes) declined from $310,000 to $210,000
in the 12-month period from July 2008 to July 2009; and according to the Monterey County
1 The single exception is the Cachagua Planning Area, which is essentially split by one larger census tract
shared with the Central Salinas Valley Planning Area and one larger census tract shared with the Coast
and Greater Monterey Peninsula Planning Areas.
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ATTACHMENT - HOMEBUYER ASSIST�� P�Association of Realtors, the average single family home price in Monterey County peaked at
$1.1 million in the third quarter of 2007 and declined to $465,000 in the third quarter of 2009.
Table 4
Average Single Family Home Price
Monterey County
Source: Monterey County Association of Realtors
The decline in median and average home prices is partly a reflection of the large number of
foreclosed homes in Monterey County and homes sold under the threat of foreclosure. In 2008,
3,875 homes were foreclosed upon in Monterey County compared to 893 in 2007. Foreclosure
rates in parts of Monterey County rank as some of the highest in the country. The sub-areas of
the County with the highest rates of Notices of Default the first step in the foreclosure process)
were in the South County and Salinas sub-areas and the sub-area with the lowest rate was the
Peninsula. As shown on Table 5 below, there is a correlation between home price and
foreclosure rate.
KMA analyzed market rate sale prices for all homes sold in Monterey County within the 12-
month period starting October 1, 2008 and ending September 30, 2009. The 12-month period
was chosen in order to have a large enough set of sales data for statistically significant results,
particularly when the data is broken down to the sub-area level. There were approximately
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P�4,900 homes sold within this time period2. The median prices of all homes sold within each sub-
area were as follows lowest to highest):
Table 5
Monterey County Median Home Prices
October 1, 2008 to September 30, 2009
Sub-Area
Homes Sold Median Home Price
all unit sizes) Rate of Notices of
Default % of total units)
South County 1,051 $160,000 6.4%
Salinas Area 2,636 $199,000 4.6%
North County 145 $246,000 1.7%
Mari na/Seaside/Ft. Ord 481 $315,000 2.2%
Peninsula 629 $710,000 1.2%
County-wide 4,942 $217,000 3.2%
Source: Dataquick
The majority of homes sold in Monterey County in this period were three- and four-bedroom
homes and there was not a statistically significant number of studio or one-bedroom unit sales.
The average number of bedrooms among the homes sold was 3.2 county-wide, with the largest
homes sold in the South County sub-area at 3.6 bedrooms) and the smallest in the Peninsula
and North County sub-areas at 2.7 and 2.6 bedrooms respectively). The average year built" of
homes sold was 1977 county-wide, with the newest homes sold in the South County sub-area
1990) and the oldest in the Peninsula sub-area 1963). For additional detail, see Appendix 1.
Overall, the single family residential market has improved in Monterey County since the early
part of 2009. Statistics from the Monterey County Association of Realtors indicates that between
the 2nd and 3rd quarters of 2009, inventories of homes on the market have decreased, average
days-on-market before homes sold is down, and the average sale price is up. On a national
level, real estate experts generally predict that the market will remain soft in 2010 and that the
recovery will be slow. At least three factors going forward will play a role in the overall pace of
the recovery: 1) the willingness of the federal government to continue to extend current federal
homebuyer tax credits and ability to continue to keep mortgage interest rates low; 2) the extent
to which current Alt-A and Option ARM mortgages lead to a second bout of foreclosures; and
3) the speed at which the overall economy and employment improves.
Maximum 2009 Affordable Sale Prices
The following are the maximum qualifying incomes for Low income and Moderate income
households in Monterey County:
2 A small number of sales were not included in the analysis because complete information was not
reported by Dataquick location, unit size, etc.).
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P�Table 6
2009 Maximum Qualifying Incomes for Affordable Housing
Monterey County
Household Size
2-Person 3-Person 4-Person 5-Person
2009 Area Median Income $53,850 $60,550 $67,300 $72,700
Monterey County
Low Income $43,080 $48,440 $53,840 $58,160
51 % to 80% of AMl)
Moderate Income $64,620 $72,660 $80,760 $87,240
81 % to 120% of AMI)
Source: California HCD
In terms of calculating the supportable affordable home prices, the California Health and Safety
Code Section 50052.5 specifies that the sale price for a Low income household be set
assuming a housing expense of 30% of 70% of AMI, adjusted for household size, and for a
Moderate income household, 35% of 110% of AMI. Housing expense includes mortgage
payments as well as property taxes, utilities, insurance, etc. The following are some of the key
assumptions utilized in the affordable price calculations:
1. Down payment at 3.5% of the sale price this assumption was based on requirements
of FHA financing;
2. Mortgage interest rate at 5.5% fixed rate for 30 years based on FHA financing3;
3. Property taxes at 1.2% of the market rate home price this is the 1 % base property tax
plus an assumption for additional assessments applicable to the average home
throughout the County;
4. HOA/insurance/utilities ranging from $200 per month for a one-bedroom up to $275 per
month for a 4-bedroom home these expenses can vary significantly from one
residential development to another this is an assumption of the expense for the average
home in the County);
5. Mortgage Insurance at 0.5% of mortgage amount this assumption is based on FHA
mortgage requirements
It should be noted that the FTHB program and the County's Inclusionary Housing program have
different restrictions on re-sale of homes, which influences the underwriting assumptions. Under
the FTHB program, homebuyers can re-sell their home for an unrestricted market price. The
County works with potential homebuyers to maximize the first mortgage amount given current
interest rates, which are in the range of 5.5%, in order to minimize the amount of FTHB
3 KMA interviews of mortgage brokers with Bank of America and Wells Fargo indicated that FHA is the
most commonly used financing for Low and Moderate income buyers due to the low down payment
requirement of 3.5% and FICO score requirements that are more lenient than other funding programs
such as through CaIHFA.
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P�assistance. The County's Inclusionary program requires re-sale to another income-qualified
homebuyer and calculates the affordable home price based on a pre-determined 7.5% interest
rate. The 7.5% interest rate provides a buffer" that reduces the risk that an Inclusionary
Housing homeowner would have to sell the home for a lower price than they paid due to rising
mortgage interest rates.
Based on the assumptions described above, the 2009 affordable home prices are as follows
see Appendix 3 and Appendix 4 for additional detail):
Table 7
Affordable Home Prices
Unit Size Low Income Moderate Income
1-bedroom $104,000 $233,000
2-bedroom $116,000 $261,000
3-bedroom $126,000 $287,000
4-bedroom $134,000 $308,000
Source: Estimated by KMA
Since the affordable prices are determined based on the county-wide AMI, the above-prices
apply to all sub-areas of the County regardless of the actual median incomes within each sub-
area. As mentioned previously, however, the County could consider raising the loan limits to
residents of the South County and Marina/Seaside/Ft. Ord sub-areas based on the actual
estimated medians in those sub-areas because they are below the county-wide median.
Affordability Gap Analysis
An affordability gap exists when market rate home prices exceed the affordable sale prices.
Based on the median market rate price and affordable sale prices, the following table
summarizes the affordability gap for one-, two-, three-, and four-bedroom units see Appendix 5
and Appendix 6 for complete detail)4:
4 Due to the limited number of one-bedroom unit sales in certain sub-areas, KMA estimated the one-
bedroom median prices in certain sub-areas for purposes of the gap calculation.
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P�Table 8
Affordability Gaps lowest to highest)
Sub-Area 1-bedroom 2-bedroom 3-bedroom 4-bedroom
South County
Low Income No gap No gap $15,000 $46,000
Moderate Income No gap No gap No gap No gap
Salinas
Low Income No gap $3,000 $64,000 $112,000
Moderate Income No gap No gap No gap No gap
North County
Low Income $4,000 $64,000 $153,000 $186,000
Moderate Income No gap No gap No gap $12,000
Marina/Seaside/Ft. Ord
Low Income $19,000 $89,000 $199,000 $256,000
Moderate Income No gap No gap $38,000 $82,000
Peninsula
Low Income $276,000 $459,000 $684,000 $966,000
Moderate Income $147,000 $314,000 $523,000 $792,000
County-wide
Low Income $36,000 $44,000 $81,000 $92,000
Moderate Income No gap No gap No gap No gap
Source: Estimated by KMA
Where there is an affordability gap shown in the table above, additional financial assistance will
be needed in order for the median priced home to be made affordable to Low and Moderate
income households. As shown, the median priced home is already affordable to Moderate
income households in the South County and Salinas sub-areas in all home sizes and in the
smaller home sizes in the North County and Marina/Seaside/Ft. Ord sub-areas. There remains
an affordability gap for Low income households throughout the County except for the smaller
units in the South County and Salinas sub-areas. In the Peninsula sub-area, median home
prices continue to be so high that the affordability gap even for Moderate income households is
very high. From a practical point of view, it is cost-prohibitive for the County's homebuyer
programs to afford to close the affordability gaps that exist for median priced homes in the
Peninsula sub-area.
Demographic Profiles
KMA reviewed some of the key demographic characteristics of each of the five sub-areas.
Inclusive of all incorporated cities in the County, the most populous sub-area by a wide margin
is the Salinas sub-area. The largest average household size is in the South County sub-area
and the smallest is the Peninsula sub-area. Conversely, the Peninsula sub-area has the highest
incomes and the South County sub-area the lowest.
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ATTACHMENT - HOMEBUYER ASSIST��P�Table 9
Summary 2009 Demographic Characteristics of County Sub-Areas
Monterey County including all cities)
Monterey North Salinas South Peninsula Marina/Seaside/
County County Area County Ft. Ord
Population 417,125 35,310 180,081 65,929 74,687 61,118
Avg. HH
3.19 3.68 3.61 4.22 2.10 2.99
Size
Median HH
1)
$59,867
$66,098
$59,798
$50,358
$68,101
$51,019
Income
Avg. HH $78,665 $82,389 $75,805 $63,069 $97,570 $62,030
Income
Per Capita $24,269 $22,401 $20,603 $15,203 $45,139 $20,429
Income
Median household income for all household sizes. KMA estimates that, adjusted for household size, the Salinas
and Marina/Seaside/Ft. Ord sub-area medians are below the countywide medians.
Source: Claritas. Note: due to differing source data and methodologies for example, how part-time residents are
counted), Claritas projections differ somewhat from those of the California Department of Finance.
Since the FTHB program is for first-time homebuyers, we have focused on the demographics of
current renter households in Monterey County. Approximately 44% of households are renters
and 56% are owners.
KMA also used the demographic data reported by Claritas and Ribbon Demographics to isolate
the age group most likely to participate in the County's FTHB program current renters under
the age of 55 the Claritas and Ribbon Demographics data do not further break down age
groups under 55). We then utilized household income data for each sub-area to estimate the
number of renter households under age 55 in the Low and Moderate income categories. Given
that the NSP funds are targeted to households up to 120% of AMI and the availability of other
funding programs targeted to households at both 120% of AMI and 80% of AMI, we believe that
it makes sense for the FTHB to continue to target these two income groups, although as this
analysis has indicated, there is no affordability gap for Moderate income homebuyers in the
South County or Salinas sub-areas. As a matter of public policy, the County could choose to
serve Very Low income households as well, however this would require significantly larger
amounts of financial assistance for each household served in order to make homeownership
affordable to this income group.
It is estimated that there are 9,553 renter households under age 55 that fall within the 51 % to
80% of AMI category county-wide, which represents 22% of the total. There are 7,138
households in the 81 % to 120% of AMI category representing 17% of the total see Appendix 9
for additional detail). Since the County's FTHB program is available to all residents of Monterey
County, the demographics analyzed in this study have been of the entire County population.
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ATTACHMENT - HOMEBUYER ASSIST��P�Table 10
2009 Renter Households under Age 55
Monterey County including all cities)
% of AMI County-
wide North
County Salinas
Area South
County
Peninsula Marina/
Seaside/ Ft. Ord
51%to80% 9,553 496 3,871 1,350 1,782 2,054
81%to 120% 7,138 401 2,408 849 1,801 1,679
Other income categories 25,962 1,457 9,836 3,410 6,333 4,926
Total 42,653 2,354 16,115 5,609 9,916 8,659
Source: Ribbon Demographics, KMA
The largest numbers of potential homebuyers reside in the Salinas sub-area and the North
County sub-area contains the smallest. Of course, for a variety of reasons not all of these renter
households would be eligible to or would choose to purchase a home even if financial
assistance were available to them.
Mortgage Availability
KMA analyzed mortgage financing availability for lower income households in order to assess
the challenges that financing presents for these households. Interviews with mortgage lenders
specializing in CaIHFA and FHA financing indicate that Low and Moderate income households
often have difficulty obtaining conventional mortgage financing because they cannot make the
necessary down payment amounts of 10% to 20% of the purchase price. As a result, most Low
and Moderate income homebuyers seek mortgage financing from FHA through FHA's 203(b)
single family housing program which requires down payments of just 3.5% of the purchase
price, or from CaIHFA. However, because the credit requirements for CaIHFA financing are
difficult to achieve for most Low and Moderate income homebuyers minimum FICO score of
680 to 720), most homebuyers in these income brackets rely on FHA financing minimum FICO
score of 620). We believe it is appropriate to increase the current requirement that homebuyers
contribute 3% toward the down payment to 3.5% based on the feedback from lenders.
Review of mortgage approval rates made available through the Home Mortgage Disclosure Act
indicate that in 2008 approximately 25% of applicants were denied conventional home mortgage
loans county-wide. In regard to the five sub-areas, the highest rates of denials were in the North
County, South County, and Salinas sub-areas all at about 30%) and the lowest in the
Marina/Seaside/Ft. Ord and Peninsula sub-areas less than 20%). This data indicates that
households in the former three sub-areas have more difficulty qualifying for conventional loans
than do households in the latter two sub-areas.
Homeownership Funding Programs
KMA reviewed available funding programs for homeownership projects in order to assess those
programs that might be used both to fund the FTHB program and programs that provide
assistance directly to homebuyers. KMA reviewed programs available from the California
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ATTACHMENT - HOMEBUYER ASSIST��P�Department of Housing and Community Development HCD), the California Housing Finance
Agency CaIHFA), the Federal Home Loan Bank FHLB), and the United States Department of
Agriculture USDA).
Based on our review, we have deemed the programs listed below to be the best candidates to
be used with the County's FTHB program primarily because they are programs that are either
currently funded or expect to be funded later in 2010. We have not listed the programs that offer
first mortgages to homebuyers; however a summary of all the funding programs we reviewed is
included in Appendix 11.
The programs listed below can be divided into programs that provide funding to local public
agencies to fund their affordable homebuyer programs and programs that provide funding
directly to homebuyers. Each of these programs is targeted to Low or Moderate income
households.
A. Programs providing funding to public agencies
1. Neighborhood Stabilization Program NSP)(HCD) grants to purchase, rehab, and sell
foreclosed homes and provide gap financing; up to 120% of AMI; up to $50,000 loan per
unit; purchase price up to 99% of appraised value; term of 5-15 years depending on the
amount of NSP funds per unit; no interest.
2. HOME Investment Partnerships assistance for acquisition, rehabilitation, and new
construction of single-family and multifamily projects and first time homebuyer programs;
up to 80% of AMI; purchase price up to $399,000; up to $80,000 loan per unit; minimum
affordability period of 5-15 years depending on the amount of HOME funds per unit; $2
million funding limit per year.
3. CalHome HCD) grants to localities or non-profit developers for deferred payment
down payment assistance loans; up to 80% of AMI; up to $60,000 loan per unit;
purchase price up to 100% of median single family home price in the city or county; 30-
year loan term; simple annual interest up to 3%; $900,000 funding limit per year.
4. BEGIN HCD) grants to localities for deferred payment down payment assistance
loans in newly constructed projects; up to 120% of AMI; up to $30,000 loan per unit;
purchase price up to 100% of median single family home price in city or county; 30-year
loan term; simple annual interest at 1-3%; funding limit based on the number of units in
the proposed project per year.
5. Joe Serna Farmworker program HCD) grants for rehab or new construction, rolled
into assistance to homebuyers; preference up to 80% of AMI; up to $70,000 loan per
unit; matching share from federal, state, local, or private sources required equal to 100%
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ATTACHMENT - HOMEBUYER ASSIST��P�of the requested funds; purchase price up to 100% of appraised value; 20-year term; no
interest; $1,500,000 funding limit per year.
B. Programs providing funding directly to homebuyers
1. CA Homebuyers' Down Payment Assistance Program CHDAP)(CaIHFA) deferred
payment junior subordinate) loan; up to 120% of AMI; loan per unit up to 3% of
purchase price or appraised value; 3.25% current interest rate.
KMA also investigated the WISH and IDEA programs offered through the Federal Home
Loan Bank. These are down payment assistance programs available to low income
homebuyers providing grants up to $15,000. These funds are available only through
member financial institutions of the Federal Home Loan Bank, however, and none of the
member institutions in Monterey or Santa Cruz counties are currently participating in the
WISH or IDEA programs. In addition, lenders who do offer the program often restrict the
WISH and IDEA funds to people who live within close proximity to the lender and/or
those who also obtain first mortgage financing through them. Therefore, it is not likely
that the WISH and IDEA programs will be utilized in any significant way by Monterey
County residents at this time.
Future Program Updates
With regard to future updates, the affordable home pricing, market rate pricing, and affordability
gaps should be updated periodically to reflect changes in market conditions, along with the
homebuyer program loan limits. Median home prices can be obtained from Dataquick or other
market data sources. The records can be organized by sub-area by sorting the census tracts
identified for each sub-area a listing of census tracts is included in Appendix 10). Updates of
the median home prices by sub-area will allow the loan limits to reflect the affordability gaps
based on the most current market information.
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ATTACHMENT - HOMEBUYER ASSIST��P�Monterey County Subareas
W-11~ AN
/ r1
Caa
North County
Salinas
South County
Peninsula
Marina/Seaside/Ft. Ord
5 10 20 30 40
Miles
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ATTACHMENT - HOMEBUYER ASSIST��P�Appendix 1.
Summary of Home Sales Data October 1, 2008 to September 30, 2009
Homebuyer Assistance Study
Monterey County
Monterey
County
North County
Homebuyer Assistance Study Sub-Areas
Salinas Area
South County
Peninsula
1
Marina/Seaside/
Ft. Ord
Number of Sales 4,942 145 2,636 1,051 629 481
100% 3% 53% 21% 13% 10%
Number of Sales
1-Bedroom 90 2 44 2 35 7
2-Bedroom 841 27 421 76 220 96
3-Bedroom 2,347 85 1,254 438 272 299
4-Bedroom 1,316 28 736 398 83 71
5+-Bedroom 348 3 181 137 19 8
4,942 145 2,636 1,051 629 481
Average Bedrooms 3.2 2.6 3.2 3.6 2.7 3.0
Average Sq. Ft. 1,561 1,503 1,522 1,595 1,824 1,371
Average Year Built 1977 1973 1977 1990 1963 1968
Median Price all home sizes) $217,000 $246,000 $199,000 $160,000 $710,000 $315,000
Median Price
1-Bedroom $140,000 Note $65,000 Note $380,000 Note
2-Bedroom $160,000 $180,000 $118,500 $76,000 $575,000 $205,000
3-Bedroom $207,000 $278,500 $190,000 $141,000 $810,000 $325,000
4-Bedroom $226,000 $320,000 $246,000 $180,000 $1,100,000 $390,000
Source: MDA Dataquick; only includes records with all data points shown in this table.
1) There were not a sufficient number of studio and one-bedroom units in all sub-areas to calculate the median price for these unit sizes.
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ATTACHMENT - HOMEBUYER ASSIST��P�Appendix 2.
Notices of Default Recorded October 1, 2008 to September 30, 2009
Homebuyer Assistance Study
Monterey County
Monterey
County
Total Housing Units 137,657
Notices of Default 4,456
3.2%
Homebuyer Assistance Study Sub-Areas
1
North
County Salinas
Area South
County
Peninsula Marina/Seaside/
Ft. Ord
9,886 49,236 16,800 39,605 22,130
166 2,261 1,073 471 485
1.7% 4.6% 6.4% 1.2% 2.2%
Source: MDA Dataquick notices of default); Claritas total housing units).
Note: excludes records with no census tract reported
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ATTACHMENT - HOMEBUYER ASSIST��P�Appendix 3.
Affordable Home Price Worksheet
Homebuyer Assistance Study
Monterey County
LOW INCOME COUNTY-WIDE AMO
1-Bedroom I 2-Bedroom 3-Bedroom I 4-Bedroom
Assumed Household Size 2 person 3 person 4 person 5 person
100% AMI $53,850 $60,550 $67,300 $72,700
Low Income 70% of AMI $37,695 $42,385 $47,110 $50,890
Available for Housing Costs 30% $11,309 $12,716 $14,133 $15,267
Less) Property Taxes $1,680) $1,920) $2,484) $2,712)
Less) HOA/Insurance/Utilities $2,400) $2,700) $3,000) $3,300)
Less) Mortgage Insurance $495) $555) $590) $635)
Income Available for Mortgage $6,734 $7,541 $8,059 $8,620
Mortgage Amount $98,800 $110,700 $118,300 $126,500
Down Payment $4,900 $5,600 $7,245 $7,910
Supported Home Price $103,700 $116,300 $125,545 $134,410
Rounded $104,000 $116,000 $126,000 $134,000
Key Assumptions
Mortgage Interest Rate 5.5% 5.5% 5.5% 5.5%
Down Payment based on FHA) 3.5% 3.5% 3.5% 3.5%
Property Taxes % of sales price) 1.2% 1.2% 1.2% 1.2%
HOA/Insurance/Utilities per month) $200 $225 $250 $275
Annual Mortgage Insurance % of loan
amount; assumes FHA financing)
0.5%
0.5%
0.5%
0.5%
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ATTACHMENT - HOMEBUYER ASSIST��P�Appendix 4.
Affordable Home Price Worksheet
Homebuyer Assistance Study
Monterey County
MODERATE INCOME COUNTY-WIDE AMI)
1-Bedroom 2-Bedroom 3-Bedroom 4-Bedroom
Assumed Household Size 2 person 3 person 4 person 5 person
100% AMI $53,850 $60,550 $67,300 $72,700
Moderate Income 110% AMI $59,235 $66,605 $74,030 $79,970
Available for Housing Costs 35% $20,732 $23,312 $25,911 $27,990
Less) Property Taxes $1,680) $1,920) $2,484) $2,712)
Less) HOA/Insurance/Utilities $2,400) $2,700) $3,000) $3,300)
Less) Mortgage Insurance $1,140) $1,275) $1,395) $1,500)
Income Available for Mortgage $15,512 $17,417 $19,032 $20,478
Mortgage Amount $227,700 $255,600 $279,300 $300,500
Down Payment $4,900 $5,600 $7,245 $7,910
Supported Home Price $232,600 $261,200 $286,545 $308,410
Rounded
Key Assumptions $233,000 $261,000 $287,000 $308,000
Mortgage Interest Rate 5.5% 5.5% 5.5% 5.5%
Down Payment based on FHA) 3.5% 3.5% 3.5% 3.5%
Property Taxes % of sales price) 1.2% 1.2% 1.2% 1.2%
HOA/Insurance/Utilities per month) $200 $225 $250 $275
Annual Mortgage Insurance % of loan
amount; assumes FHA financing)
0.5%
0.5%
0.5%
0.5%
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Affordability Gap Calculations lowest to highest)
Homebuyer Assistance Study
Monterey County
WITH COUNTY-WIDE AMl
1-Bedroom 2-Bedroom 3-Bedroom 4-Bedroom
1. South County
Median Market Price $46,000 $76,000 $141,000 $180,000
Less) Low Income Price $104.000) $116,000) $126.000) $134,000)
Difference/Affordability Gap no gap no gap $15,000 $46,000
Median Market Price $46,000 $76,000 $141,000 $180,000
Less) Moderate Income Price $233.000) $261,000) $287,000) $308.000)
Difference/Affordability Gap no gap no gap no gap no gap
II. Salinas Area
Median Market Price
$65,000
$119,000
$190,000
$246,000
Less) Low Income Price $104.000) $116,000) $126,000) $134,000)
Difference/Affordability Gap no gap $3,000 $64,000 $112,000
Median Market Price $65,000 $119,000 $190,000 $246,000
Less) Moderate Income Price $233,000) $261,000) $287,000) $308,000)
Difference/Affordability Gap no gap no gap no gap no gap
Ill. North County
Median Market Price
$108,000
$180,000
$279,000
$320,000
Less) Low Income Price $104,000) $116,000) $126,000) $134,000)
Difference/Affordability Gap $4,000 $64,000 $153,000 $186,000
Median Market Price $108,000 $180,000 $279,000 $320,000
Less) Moderate Income Price $233.000) $261,000) $287,000) $308.000)
Difference/Affordability Gap no gap no gap no gap $12,000
IV. Mari na/Seaside/Ft. Ord
Median Market Price
$123,000
1)
$205,000
$325,000
$390,000
Less) Low Income Price $104,000) $116,000) $126,000) $134,000)
Difference/Affordability Gap $19,000 $89,000 $199,000 $256,000
Median Market Price $123,000 $205,000 $325,000 $390,000
Less) Moderate Income Price $233,000) $261,000) $287.000) $308,000
Difference/Affordability Gap no gap no gap $38,000 $82,000
V. Peninsula
Median Market Price
$380,000
$575,000
$810,000
$1,100,000
Less) Low Income Price $104,000) $116,000) $126,000) $134,000)
Difference/Affordability Gap $276,000 $459,000 $684,000 $966,000
Median Market Price $380,000 $575,000 $810,000 $1,100,000
Less) Moderate Income Price $233.000) $261,000) $287,000) $308,000)
Difference/Affordability Gap $147,000 $314,000 $523,000 $792,000
Monterey County
Median Market Price
$140,000
$160,000
$207,000
$226,000
Less) Low Income Price $104.000) $116,000) $126,000) $134,000)
Difference/Affordability Gap $36,000 $44,000 $81,000 $92,000
Median Market Price $140,000 $160,000 $207,000 $226,000
Less) Moderate Income Price $233,000) $261,000) $287,000) $308,000)
Difference/Affordability Gap no gap no gap no gap no gap
1) Due to the limited number of one-bedroom unit sales in the South County, North County, and Marina/Seaside/Ft. Ord sub-areas,
for purposes of the affordability gap calculation the median market price of the one-bedroom units was estimated by KMA.
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ATTACHMENT - HOMEBUYER ASSIST��P�Appendix 6.
Summary of Affordability Gaps lowest to highest)
Homebuyer Assistance Study
Monterey County
11-Bed room 2-Bedroom 3-Bedroom 4-Bedroom
1. South County
Low Income no gap no gap $15,000 $46,000
II. Moderate Income
Salinas Area
Low Income no gap
no gap no gap
$3,000 no gap
$64,000 no gap
$112,000
III. Moderate Income
North County
Low Income no gap
$4,000 no gap
$64,000 no gap
$153,000 no gap
$186,000
Moderate Income no gap no gap no gap $12,000
IV. Mari na/Seaside/Ft. Ord
Low Income
$19,000
$89,000
$199,000
$256,000
Moderate Income no gap no gap $38,000 $82,000
V. Peninsula
Low Income
$276,000
$459,000
$684,000
$966,000
Moderate Income $147,000 $314,000 $523,000 $792,000
Monterey County
Low Income
$36,000
$44,000
$81,000
$92,000
Moderate Income no gap no gap no gap no gap
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ATTACHMENT - HOMEBUYER ASSIST��P�Appendix 7.
Summary 2009 Demographic Data by Sub-Area
Monterey County
Homebuyer Assistance Study
COUNTY-WIDE INCLUDING ALL CITIES AND UNINCORPORATED AREAS
Monterey
County
Population 417,125
Average HH Size 3.19
Median HH Income $59,867
Average HH Income $78,665
Per Capita Income $24,269
Homebuyer Assistance Study Sub-Areas
North County
Salinas Area
South County
Peninsula Marina/Seaside/
Ft. Ord
35,310 180,081 65,929 74,687 61,118
3.68 3.61 4.22 2.10 2.99
$66,098 $59,798 $50,358 $68,101 $51,019
$82,389 $75,805 $63,069 $97,570 $62,030
$22,401 $20,603 $15,203 $45,139 $20,429
1
Source: Claritas. Note: due to differing source data and methodologies for example, how part-time residents are counted), Claritas projections
differ somewhat from those of the California Department of Finance.
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ATTACHMENT - HOMEBUYER ASSIST��P�Appendix 8.
2009 Housing Tenure
Monterey County
Homebuyer Assistance Study
Homebuyer Assistance Study Sub-Areas
Monterey County
North County
Salinas Area
South County
Peninsula Marina/Seaside/
Ft. Ord
Renter Households 54,877 44% 2,823 30% 20,218 43% 6,805 44% 14,935 44% 10,096 56%
Owner Households 68,980 56% 6,718 70% 26,571 57% 8,757 56% 18,983 56% 7,951 44%
Total 123,857 100% 9,541 100% 46,789 100% 15,562 100% 33,918 100% 18,047 100%
Source: Ribbon Demographics
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ATTACHMENT - HOMEBUYER ASSIST��P�Appendix 9.
2009 Renter Households under age 55 by Affordability Level
Monterey County
Homebuyer Assistance Study
COUNTY-WIDE INCLUDING ALL CITIES AND UNINCORPORATED AREAS
Income Bracket Monterey County
Up to 50% of AMI 12,917 30%
51% to 80% of AMI 9,553 22%
81 % to 120% of AMI 7,138 17%
Subtotal 29,608 69%
120% to 160% of AMI 4,272 10%
Over 160% of AMI 8.773 21%
Total 42,653 100%
Source: Ribbon Demographics, KMA
Homebu er Assistance Stud Sub-Areas
Marina/Seaside/
North County Salinas Area South County Peninsula Ft. Ord
707 30% 5,582 35% 2,233 40% 1,803 18% 2,592 30%
496 21% 3,871 24% 1,350 24% 1,782 18% 2,054 24%
401 17% 2,408 15% 849 15% 1,801 18% 1,679 19%
1,604 68% 11,861 74% 4,432 79% 5,386 54% 6,325 73%
255 11% 1,473 9% 494 9% 1,092 11% 958 11%
495 21% 2,781 17% 683 12% 3,438 35% 1,376 16%
2,354 100% 16,115 100% 5,609 100% 9,916 100% 8,659 100%
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ATTACHMENT - HOMEBUYER ASSIST�� P�Appendix 10.
Census Tracts in Monterey County
Homebuyer Assistance Study
I
Homebuyer Assistance Study Sub-Areas
I
North County
Salinas Area
South County
Peninsula Marina/Seaside/
Ft. Ord
10101* 101* 10801 11000* 13500
10102* 102 10802* 11500* 13600
10201* 103 10900 11600* 13700
10202* 104 11101 11700* 13800
10303* 200 11102 11800 13900
10304* 300 11201 11900* 14000
10305* 400 11202 12000 14101
10400* 500 11301 12100 14102
12301* 600 11302 12200 14103
700 11400* 12302 14200
800 12401 14301
900 12402 14302
1000 12500
1100 12600
1200 12700
1300 12800
1400 13000
1500 13100
1600 13200*
1700 13300
1800 13400
10302*
10501 *
10503
10504
10602
10603
10604
10605
10606
10701 *
10702*
* Census tracts that are in the unincorporated areas of the County.
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ATTACHMENT - HOMEBUYER ASSIST�� P�Appendix 11
Summary of Homeownership Funding Programs
Program Status of Loan Type Max. Purchase Loan Limits Qualifying HH Other Notes
Program Price Income
Programs Providing Funding Directly to Public Agencies
1 Neighborhood Implementation; Funding to purchase, 99% of appraised $65,000/unit max: up Up to 120% of
Stabilization Roll out in rehab, and resell value to $50,000/unit for AMI
Program NSP) January 2010 foreclosed homes and financing and
HCD) provide financing $30,000/unit for
mechanism for gap rehab
2 CalHome HCD expects Grants to localities and 100% of the median $60,000/unit Up to 80% of AMI
HCD) funding in 2010 non-profit developers sale price of single
to provide down family home in the
payment assistance to city or county
first-time homebuyers,
among other eligible
activities
3 BEGIN HCD expects Grants to localities to 100% of the median Lesser of 20% of Low and Localities must
HCD) funding in 2010 provide down payment sale price of single home price or Moderate up to provide regulatory
assistance to first-time family home in the $30,000/unit 120% of AMI relief and
homebuyers for newly city or county development
constructed projects incentives
4 Joe Serna, Jr. HCD expects Finance the new 100% of appraised Based on the Priority to lower Funds provided to
Farmworker funding in 2010 construction, rehab, value homebuyer's gap income public entity, non-
Housing Grant and acquisition of gap remaining after households profit, LLC, or
Program owner-occupied and down payment and partnership; all funds
HCD) rental units for all other loans), but subsequently to be
agricultural workers no more than rolled over to
$70,000/unit homebuyers
5 HOME Investment Active First-time homebuyer Based on HUD Based on HUD Up to 80% of AMI
Partnerships mortgage assistance 203(b) limits 221(d)(3) limits
or down payment
assistance
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ATTACHMENT - HOMEBUYER ASSIST�� P� Program Status of Loan Type Max. Purchase Loan Limits Qualifying HH Other Notes
Program Price Income
Programs Providing Funding Directly to Homebuyers
1 CA Homebuyers' Active Deferred payment Up to 3% of purchase Up to 120% of Can be used for
Down Payment junior loan for first-time price or appraised AMI down payment or
Assistance homebuyers value, whichever is closing costs;
Program CHDAP) less current interest rate
CaIHFA) is 3.25%
2 Affordable Active Allows first-time $637,645 to If CaIHFA Up to 120% of Monterey County is
Housing homebuyers to $779,344 for re-sale subordinate loan is AMI a participating AHPP
Partnership combine a CaIHFA homes used borrower must partner through its
Program AHPP) first mortgage with contribute a minimum inclusionary housing
CaIHFA) down payment of 3% of purchase program
assistance from the price or appraised
local AHPP partner value of borrower's
own funds
3 Ca130 Active Conventional first $637,645 to Up to 95% Up to 120% of Requires higher
CaIHFA) mortgage loan $779,344 for re-sale AMI FICO scores than
program for first-time homes FHA; current interest
homebuyers rate is 5.25%
4 SMART Loan Active Conventional first Up to 100% LTV Ranging from There are currently
Program mortgage loan $48,456 to no eligible properties
CaIHFA) program for first-time $94,220 for re- in Monterey County
homebuyers of sale homes not
designated CaIHFA- clear how these
owned properties are set)
5 Community Active Conventional first Ranging from There are currently
Stabilization mortgage loan $48,456 to six eligible
Home Loan program for first-time $94,220 for re- properties in
Program homebuyers of vacant sale homes not Monterey County
CaIHFA) homes that are owned clear how these four of which are
by participating are set) pending sale)
financial institutions
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Program Price Income
6 WISH Funded annually Grants for down No maximum Lesser of $15,000 or Up to 80% of AMI Assistance subject
FHLB) payment assistance or three times the w/ exceptions for to 5-year retention
closing costs to first- amount of USDA 502 agreement
time homebuyers homebuyer's down program)
payment
7 IDEA Funded annually Grants for down No maximum Lesser of $15,000 or Up to 80% of AMI Assistance subject
FHLB) payment assistance or three times the w/ exceptions for to 5-year retention
closing costs to first- amount of a) USDA 502 agreement
time homebuyers who homebuyer's down program)
have completed a FSS payment, or b) an
contract through HUD escrow account
8 USDA 502 Loan guarantee Up to 100% of the Up to 115% of
Program program for rural appraised value of AMI
residents to purchase, the home; loan terms
construct, or rehab to be set by the
homes participating lender
but interest rate is
limited by Fannie
Mae rate
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ATTACHMENT - HOMEBUYER ASSIST�� P�County of Monterey.
First Time Home Buyer Program Manual
December 2008
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ATTACHMENT - HOMEBUYER ASSIST��!P�County of Monterey First Time Home Buyer Program Manual
Table of Contents
INTRODUCTION 1
DEFINITION OF FIRST TIME HOME BUYER 1
FIRST-TIME HOME BUYER PROGRAM 2
1. DESCRIPTION OF PROGRAM 2
Qualifying Households 2
Qualifying Properties 3
Other Financing 3
2. ELIGIBILITY REVIEW AND PROCESSING PROCEDURES 4
Marketing 4
Program Interest 5
Preliminary Screening 5
Eligibility Determination 6
Homebuyer Education 6
Applicant Selection 6
Equal Housing Opportunity/Affirmative Marketing 6
Conflict of Interest Provisions 7
3. LENDER APPLICATION PROCESS 7
4. HOME SELECTION AND PURCHASE 7
Acquisition Notices and Affidavit 8
Home Protection Plan 8
Relocation 8
Vacant units 9
New Homes 9
Existing Homes: 9
5. INSPECTION CLEARANCES 9
Lead-based Paint Hazards 9
Inspections 10
6. INSURANCE REQUIREMENTS 11
Hazard Insurance 11
Flood Insurance 12
Approvals 12
Denials 12
7. HOUSING LOAN COMMITTEE 12
8. LOAN REVIEW BY COUNTY 13
9. PROGRAM COMPLAINT AND APPEAL PROCEDURE 13
10. LOAN CLOSING 13
11. AMENDMENTS AND EXCEPTIONS 14
12. LOAN SET-UP 14
13. LOAN MAINTENANCE 14
Period of Affordability 15
Home 15
14. LOAN MANAGEMENT 15
Monitoring 15
Subordination 15
Loan Modification and Forbearance 17
Loan Assumptions 17
Loan Repayment, Payoffs, and Recapture 18
15. DEFAULT AND FORECLOSURE: 19
Default on Loan Repayment 20
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Non-Monetary Defaults/Acceleration of Note 20
APPENDIX A INCOME & UNDERWRITING STANDARDS 21
1. INCOME DETERMINATION AND INCOME LIMITS 21
Determining Income Eligibility 21
Income Verification Requirements 24
Income Worksheet 25
Maximum Income Limits 25
APPENDIX B. UNDERWRITING STANDARDS 27
CREDIT HISTORY 27
STABILITY OF INCOME 28
ASSETS AND GIFT FOR DOWN PAYMENT & CLOSING COSTS 28
DEBT RATIOS 28
Housing Expense to Income Ratio 28
OTHER COMPENSATING FACTORS 29
Non Taxable Income: 29
Determining FTHB Loan Amount 29
APPENDIX C LOAN LIMITS 31
APPENDIX D: MAXIMUM PURCHASE PRICE 33
ATTACHMENT E 35
LOAN SERVICING POLICIES AND PROCEDURES 35
ATTACHMENT E 39
SELLERS LEAD-BASED PAINT DISCLOSURE 39
ATTACHMENT G 41
HOMEBUYER ASSISTANCE PROGRAM SAMPLE LEAD-BASED PAINT CONTRACT CONTINGENCY LANGUAGE 41
ATTACHMENT H 42
SAMPLE DISCLOSURES TO SELLER WITH VOLUNTARY, ARM'S LENGTH, PURCHASE OFFER 42
ATTACHMENT I 44
ATTACHMENT J 45
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INTRODUCTION
The Monterey County First Time Homebuyer Program FTHB Program) provides
down payment assistance loans primarily to lower income families and individuals
who are first time homebuyers.
DEFINITION OF FIRST TIME HOME BUYER
A First-time homebuyer" means an individual or individuals or an individual and
his or her spouse who have not owned a home during the three-year period before the
purchase of a home with subsidy assistance, except that the following individual or
individuals may not be excluded from consideration as a first-time homebuyer under
this definition:
1) a displaced homemaker who, while a homemaker, owned a home
with his or her spouse or resided in a home owned by the spouse.
A displaced homemaker is an adult who has not, within the
preceding two years, worked on a full-time basis as a member of
the labor force for a consecutive twelve-month period and who has
been unemployed or underemployed, experienced difficulty in
obtaining or upgrading employment and worked primarily without
remuneration to care for his or her home and family;
2) a single parent who, while married, owned a home with his or her
spouse or resided in a home owned by the spouse. A single parent
is an individual who is unmarried or legally separated from a
spouse and has one or more minor children for whom the
individual has custody or joint custody or is pregnant; and
3) an individual or individuals who owns or owned, as a principal
residence during the three-year period before the purchase of a
home with assistance, a dwelling unit whose structure is:
a) not permanently affixed to a permanent foundation in
accordance with local or state regulations; or
b) not in compliance with state, local, or model building
codes and cannot be brought into compliance with such
codes for less than the cost of constructing a permanent
structure.
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FIRST-TIME HOMEBUYER PROGRAM
1. DESCRIPTION OF PROGRAM
Qualifying Households
Priority will be given to current residents of Monterey County and/or employed in
Monterey County.Total income for all members of the household over the age of 18
is at or under 80% of Monterey Co unity median income as adjusted for household
size. The current median income schedule and methodology for determining income
are included in Appendix A. Depending on the availability of alternative funding
such as BEGIN or redevelopment or other IICD fiulding sources, households with
income between 81-120% of median may be eligible for FTHB assistance.
FTHB Loan
Loan Type:
Generally, the loan will be a deferred silent second) loan for the first 5 years of the
loan term. After the initial 5-year term, the borrower's ability.to re-pay will be
evaluated. The loan may be converted to full or partial amortization or payments
may continue to be deferred, depending on debt to income ratios at the time of
review. In general, grants will not be given except lead based paint remediation
grants may be approved by the Housing Loan Committee on a case by case basis.
When funds are available from other sources, such as Cal HOME or Redevelopment,
the payment provisions of that program will apply.
Interest Rate:
The rate will be three percent 3%) simple interest per year.
Term:
The FTHB loan funded by HOME, BEGIN and Cal HOME principal and accrued
interest) shall become all due and payable 30 years from the closure of escrow.
However, the Note shall become all due and payable immediately if title to the
property changes or if the property is no longer the primary residence of the
borrower. Where primary financing is provided by the USDA 502 program and/or
Redevelopment funds, the FTHB loan term shall match the requirements of the
fiulding source.
Resale Controls and Affordability Periods:
The County's Inclusionary Housing Program, Redevelopment Program and the
HOME program have minimum affordability periods and resale controls. The
provisions of those programs will be utilized in regard to loan type, resale/recapture
provisions and affordability period. In the event of a conflict of provisions, the
program provision with the longer term and more conservative policy will apply.
Maximum Loan Amounts:
The approved standard loan amount for Monterey County is shown in Appendix C.
The Housing Loan Committee may approve exceptions to the standard limit case by-
case basis upon review of the applicant's circumstances and fiulding priorities. An
exception may also be granted by the Housing Loan Committee where other sources
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of funding are utilized for the FTHB loan and different limits are in effect. In no
event will the down payment assistance exceed HOME Program subsidy limits when
HOME Program fluids are utilized. No additional HOME assistance will be provided
during the period starting one year following the filing of the HCD Project
Completion Report through the end of the affordability period.
Qualifying Properties
Maximum Purchase Price
Maximum Purchase Price of the home is limited by HUD or HCD and is adjusted on
a regular basis. The Monterey County FTIIB Program will be available for the
purchase of property at or below the HUD or HCD maximum. The current
maximum purchase price is included in Appendix D. The Housing Loan Committee
may establish lower limits to respond to changes in market conditions, local priorities
and availability of below market rate units.
Eligible Properties
Eligible Properties include single-family homes, condominiums, community land
trusts, limited equity co-ops and mobile/manufactured homes on permanent
foundations in the unincorporated areas of Monterey County and other forms of
ownership that enables the buyer to make improvements on and encumber the
property over a term sufficient to secure the FTHB loan. Note: Non-owner occupied
units in 2-4 unit properties funded by HOME or CDBG inust meet Program rental
requirements as outlined in the HOME or CDBG Program Contract Management
Manuals. Properties must be located in rural census tracts for loans to be funded with
rural HOME or Cal HOME grant fiulds. Eligible census tracts are included in
Appendix III. BEGIN loans may only be funded in approved new developments.
Other Financing
Buyer Contributions:
Buyers will be required to put a minimum of three percent 3%) of the purchase price
into an escrow account as their portion of the down payment. At its sole discretion,
the Housing Loan Committee may make a finding of financial hardship upon review
of applicants' circumstances and approve a reduction in the down payment
requirement. Exceptions may also be granted by the Loan Committee where a
financing program including, but not limited to the Fans worker Housing Grant
Program, provides special terms or additional funds for the acquisition or where the
buyer invests f nds or sweat equity to build or rehabilitate the unit prior to close of
escrow.
Primary Financing
California Housing Finance Agency CalHFA) loans will generally be used to
finance the first mortgage. Loans from other sources may be approved by the
Housing Loan Committee on a case-by-case basis. The primary loan shall be fully
amortized and have a term all due and payable" in no fewer than 30 years. There
shall not be a balloon payment due before the maturity date of the program loan.
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Maximizing Primary Financing:
The County requires that the buyers obtain the maximums loan for which they are
qualified. The County of Monterey intends to assist as many families as possible and
therefore will provide the minimum assistance required to each qualified family.
Current underwriting standards are shown in Appendix A. Additional information on
determining County FTHB loan amounts can be found in
Appendix B.
2. ELIGIBILITY REVIEW AND PROCESSING PROCEDURES
Marketing
The County of Monterey will market the First Time Homebuyer Program first to
households meeting adopted affordable housing priorities specified in the Annual
Housing Report:
Preference for projects that address the needs of targeted areas, including
Chualar, Boronda, Castroville, Pajaro, Las Lomas and other urbanized areas
where the project will substantially benefit unincorporated residents.
Preference to projects that provide new housing or access to housing for large
low and very low-income families.
Preference for projects that preserve existing housing when that housing is
sound and is affordable to current low and very low-income residents.
Support and enhance homebuyer capacity and opportunities.
All outreach efforts will be done in accordance with state and federal fair lending
regulations to assure nondiscriminatory treatment, outreach and access to the
Program. No person shall, on the grounds of age, ancestry, color, creed, physical or
mental disability or handicap, marital or familial status, medical condition, national
origin, race, religion, gender or sexual orientation be excluded, denied benefits or
subjected to discrimination under the Program. The County will ensure that all
persons, including those qualified individuals with handicaps have access to the
Program.
A. The Fair Housing Lender logo will be placed on all outreach materials.
Fair housing marketing actions will be based upon a characteristic analysis
comparison census data may be used) of the Program's eligible area compared to the
ethnicity of the population served by the Program includes, separately, all
applications given out and those receiving assistance) and an explanation of any
underserved segments of the population. This information is used to show that
protected classes age, gender, ethnicity, race, and disability) are not being excluded
from the Program. For HOME, the Sponsor shall develop a Fair Housing Marketing
Plan prior to project set tip). Flyers or other outreach materials, in English and any
other language that is the primary language of a significant portion of the area
residents, will be widely distributed in the Program-eligible area and will be provided
to any local social service agencies. The County has and will continue to sponsor
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homebuyer classes to help educate homebuyers about the home buying process and
future responsibilities. Persons who have participated in local homebuyer seminars
will be notified about the Program.
B. Section 504 of the Rehabilitation Act of 1973 prohibits the exclusion of
an otherwise qualified individual, solely by reason of disability, from participation
under any program receiving Federal funds. The County shall take appropriate steps
to ensure effective communication with disabled housing applicants, residents and
members of the public.
At least annually local realtors and lenders will be advised of the availability of
program resources. Information regarding the program is included on the County's
website and is available at County offices and the Monterey County Housing
Alliance MOCHA). Public service announcements and press releases are issued
annually or as additional grants are received. Marketing information, application
forms and other available information such as the lead based paint brochures and
notices are made available in English and Spanish. In addition, program materials
are provided to non profit service agencies, the Housing Authority and Citizens
Advisory groups to insure a wide distribution. Notices are published in newspapers
of general circulation in Spanish and English. The County of Monterey will follow
the affirmative fair marketing procedures contained in the Fair Housing and Equal
Opportunity Procedural Guidelines.
Program Interest
The County will establish a database of interested parties who have inquired about
the First Time Homebuyer program. A form is completed for each telephone call and
actions taken i.e. mailing the flyer or Program Interest Forms and Realtor/Lender
packets) are noted.
An applicant calls, picks up or downloads a Program Interest Form' from the County
website, completes the form, and returns it to the County. The returned form is date-
stamped and logged on the database.
Preliminary Screening
The County makes a preliminary determination of eligibility and priority status
according to current stated income and residence in the County, First Time
Homebuyer status and adopted priorities. Those applicants who meet the
qualifications are added to the First Time Homebuyer database. A letter will be sent
to ineligible applicants citing the basis for the determination of ineligibility for the
Program. Income determination and underwriting criteria are included in Appendix
1.
Applicants who meet the guidelines for priority processing will receive a letter
explaining the step-by-step process for participation. An information packet is
included for the applicant to present to the lender. A_Realtor packet is also provided.
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Applications from households who do not meet a designated priority for processing
will be held for one month before the packet is mailed.
First Time Homebuyer Re-certification: Applicant information will be maintained in
the FTHB database for a period of one year. Annual re- certification of eligibility is
required. Applicants who do not comply with a re- certification request or other
County inquiries requiring a written response shall be considered inactive and
removed from the database.
Eligibility Determination
An application is deemed complete when an eligible property is under contract,
completed lender and realtor packets plus required documentation of eligibility are
returned to the County and proof of approval of primary financing is in place.
Homebuyer Education
Prior to loan closing the borrower must complete a homebuyer education program
that meets Cal HOME guidelines. The borrower will be required to provide a course
completion certificate from a County approved course which shall become part of the
permanent loan file. Course fees are an eligible closing cost to be funded by the
FTHB loan unless prohibited by the regulations of the funding source.
Applicant Selection
In general, completed applications will be processed in the order received. However,
the Housing Loan Committee shall, at its sole discretion, have the ability to prioritize
applications as necessary to meet adopted County housing program objectives or
grant milestones or to set aside applications that require additional documentation to
satisfy questions that arise during the loan review process.
Equal Housing Opportunity/Affirmative Marketing
The County of Monterey is committed to providing equal access to FTHB funds, by
all eligible households in the County without consideration for race, creed, religion,
color, national origin, sex, disability, or other classification.
During the operation of the FTHB Program, the County will supervise the review of
the loan applications and screening of applicants to insure that all Fair Housing Laws
are upheld.
The County uses the Equal Housing Opportunity logo on all advertising. Copies of
the Federal and State Fair Housing Laws will be made available to all interested
parties. A copy of all advertising and marketing materials will be retained by the
County and made available to HCD or other funding agencies during monitoring or
as otherwise requested.
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Conflict of Interest Provisions
No member of the governing body of the locality and no other official, employee, or
agent of the County government who exercises policy, decision-malting functions, or
responsibilities in connection with the planning and implementation of the FTHB
Program shall directly or indirectly be eligible for this program, unless the
application for assistance has been reviewed and approved according to applicable
California Department of Housing and Community Development HCD) or other
funding source guidelines. This ineligibility shall continue for one year after an
individual's relationship with the County ends.
3. LENDER APPLICATION PROCESS
Applicants contact a lender of their choice to complete the loan application. A list of
Ca1HFA approved lenders is made available upon request. Ca1HFA underwriting
standards which include providing verification of income, expenses, family size, and
other information and requirements listed in the County of Monterey First-Time
Homebuyer Lending Guidelines" will be utilized. The lender has the applicant
complete an Applicant Certification of Eligibility Form, which becomes part of the
loan package.
If the applicant's income is within program guidelines and is sufficient to purchase
available homes with Down payment Assistance, the applicant will be directed to
select a Realtor to find a home, write a contract and begin the purchase process. The
applicant provides the Realtor with the Realtor Packet.
Applicants pay the lender for a credit report. The lender will then calculate the price
range that the buyer can afford and complete an Initial Eligibility Review and
Determination Form. The lender forwards copies to the County and the realtor.
The maximum allowable overall debt to income ratio shall conform to private and/or
conventional lending standards and shall not exceed fifty percent 50%) of the
applicant household's income for HOME and CDBG funded loans. The
underwriting criteria of other funding shall prevail when those funds are matched
with HOME or CDBG resources or are the sole source of FTHB assistance.
Co-borrower or co-signer loans may be approved where the applicant is unable to
qualify without a co-borrower or co-signer. The co-borrower must sign an affidavit
of non-occupancy for the residence to be purchased and co-sign on the Note for the
primary financing. If the primary lender requires the co-borrower on title, the co-
borrower must sign all standard FTHB documents in addition to the Co-Borrower
Affidavit.
4. HOME SELECTION AND PURCHASE
Applicants will select a realtor of their choice to help them find a home and write a
purchase agreement. The County of Monterey may consider applications for real
estate transactions if the applicant and/or seller choose not to use a Realtor or
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attorney. The applicant and seller shall be required to sign an Acknowledgment form
for such transactions.
Acquisition Notices and Affidavit
Prior to presenting the offer to purchase an existing home, the Buyer and/or the
Buyer's agent shall require the Seller to sign the following forms as appropriate:
Acquisition Notice to Seller": This form includes; a) certification that the
purchaser has no power of eminent domain and will not acquire the property
if negotiations fail to result in an amicable agreement, b) an estimate of the
fair market value of the property to be finally determined by a state licensed
appraiser, and c) a statement that if an Acquisition Notice is not given prior
to acceptance of the purchase offer, the seller may withdraw from the
agreement after this information is provided.
A Notice to Sellers of Existing Homes": This form requires that the
property is subject to inspection and seller will make all necessary repairs to
the property prior to the close of escrow unless the purchase is for acquisition
and rehabilitation.
All housing units built prior to January 1, 1978 will require a lead paint
disclosure to be signed by both the homebuyer and the seller.
Since the purchase would be voluntary, the seller would not be eligible for
relocation payments or other relocation assistance.
An Affidavit of Prior Occupancy": This form provides information
regarding occupancy of the unit for four months prior to acceptance of the
purchase offer.
Home Protection Plan
The County will recommend that the buyer purchase a Home Protection Plan. These
plans provide insurance on all interior electrical, plumbing, and appliances for the
first twelve 12) months. The cost of the protection plan may be included in the
FTHB loan and paid through escrow as a part of the closing costs.
Relocation
Tenant occupied homes are not eligible for HOME funding under the County of
Monterey First-time Homebuyer Down-Payment Assistance Program unless the
existing tenant is purchasing the unit. It is not anticipated that the implementation of
the FTHB program will result in the displacement of any persons, households, or
families.
However, in the event relocation is necessary, activities will be carried out in
compliance with Federal relocation law, Section 104(d) of the Housing and
Community Development Act of 1974, as amended 42 USG Section 5301 et seq.),
CFR Part 42, Section 305 et seq. and the County's Relocation Plan.
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Vacant units
Seller must provide documentation of recent owner occupancy or submit acceptable
proof of vacancy for a minimum of four months if the unit was previously tenant
occupied and will be funded with HOME Program resources.
New Homes
Construction must be complete, the property must comply with all local codes and
standards, and a Certificate of Completion / Occupancy made available prior to close
of escrow. Improvement bonds shall be paid-in-full by the seller prior to or at close
of escrow.
Existing Homes
Unless rehabilitation costs are included in the FTHB loan, prior to close of escrow
the property must comply with all local codes and standards. For acquisition and
rehabilitation loans, the property must comply with the County's Property
Rehabilitation Standards within six months of the acquisition.
5. INSPECTION CLEARANCES
The County contract is with qualified property inspection and architectural firms for
inspection services.
Lead-based Paint Hazards
All housing units built prior to 1978 for which HOME or CDBG funding is
anticipated are subject to the requirements of this section. Such homes must undergo
a visual assessment by a person who has taken HUD's online Visual Assessment
course. Deteriorated paint must be stabilized using work safe methods. Clearance
must be obtained after paint stabilization by a DHS certified LBP Risk
Assessor/Inspector. HOME and CDBG general administrative and activity delivery
funds may be used to pay for lead-based paint visual assessments, and if lead
mitigation and clearance costs are incurred, these programs may incorporate the costs
into the calculation of Program assistance. Note: the CDBG Program allows grants
for lead hazard evaluation and reduction activities. The HOME Program allows
grants for lead hazard evaluation and reduction activities only for acquisition with
rehabilitation programs where the proposed paint stabilization measures do not add
value to the home, and upon approval of revised regulations expected to be adopted
in April, 2004, HOME will also allow grants for lead hazard evaluation and reduction
activities that do not add value to the home for acquisition-only programs.)
The following requirements must be met:
1. Notification: a) Prior to homebuyer's obligation to purchase a pre-1978 home, the
Buyer will be given a copy of and asked to read the EPA pamphlet Protect Your
family From Lead in Your Home". EPA 747-K-94-001, September 2001) A signed
receipt of the pamphlet will be kept in the Sponsor's homebuyer file; b) A notice to
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residents is required following a risk assessment/inspection using form DHS 8552,
which is provided by the DHS-certified Risk Assessor/Inspector; c) a notice to
residents is required following lead-based paint mitigation work using Visual
Assessment and Lead-based Paint Notice of Presumption and Hazard Reduction
form, LBP 1 Attachment J).
2. Disclosure: Prior to the homebuyer's obligation to purchase a pre-1978 housing
unit, the HUD disclosure Attachment F), Seller's Lead-based Paint Disclosure"
notice must be provided by the seller to the homebuyer.
3. Inspections: The Inspector shall conduct a Visual Assessment" of all the
dwelling unit's painted surfaces in order to identify deteriorated paint. All
deteriorated paint will be stabilized in accordance with CFR 35.1330 a) and b); and
a Clearance shall be made in accordance with CFR 35.1340.
4. Mitigation: If stabilization is required, the contractor performing the mitigation
work must use appropriately trained workers. Prior to the contractor starting
mitigation work the Program Operator shall obtain copies of the contractor's and
workers' appropriate proof of LBP training, as applicable to the job in order to assure
that only qualified contractors and workers are allowed to perform the mitigation.
5. Purchase Contract Contingency Language: Before a homebuyer is obligated
under any contract to purchase a pre-1978 housing unit, the seller shall permit the
homebuyer a 10-day period unless the parties mutually agree, in writing, upon a
different period of time) to conduct a risk assessment or inspection for the presence
of lead-based paint and/or lead-based paint hazards. See Attachment G. for sample
lead-based paint contract contingency language).
A homebuyer may waive the opportunity to conduct the risk assessment or inspection
by so indicating in writing, such as in Attachment F, item e)(ii). In this case the
purchase contract contingency language is not required.
The County will: 1) confirm that the housing unit is within the eligible area, and 2) will
review each proposed housing unit to ensure that it meets all eligibility criteria before
funding.
Inspections
Pest Control Inspection:
A licensed inspector shall make a pest inspection of the property. Any work required
to correct existing substandard conditions shall be completed prior to the close of
escrow. For acquisition and rehabilitation loans, the property must comply with the
County's Property Rehabilitation Standards within six months of the acquisition.
Building Standards:
All homes will meet as a minimum requirement, the County's Property Rehabilitation
Standards. The Rehabilitation Standards to be utilized in order to determine the scope,
eligibility, and completion of rehabilitation work are:
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Federal Housing Quality Standards
State of California, Health and Safety Code
If unit was built prior to 1978, Lead-Based Paint Regulations as provided in Title X of
the Housing and Community Development Act of 1992
Cost Effective Energy Conservation and Effectiveness Standards
The following codes adopted by Monterey County as they relate to:
Repairs/replacement and rehabilitation completion in existing housing or new
construction
Uniform Building Code
Uniform Mechanical Code
Uniform Plumbing Code
National Electrical Code
Uniform Housing Code
To determine compliance with necessary local codes and health and safety standards,
existing homes will be inspected by either 1) an FHA appraiser as a Lender requirement on
all Call A/FHA loans, or 2) by the Monterey County Housing Division Inspector or
representative. The County contracts for housing inspection services and requires HQS
format reports. FHA appraisals with HQS checklists may be substituted for the County
inspection report.
New Homes will be built under the requirements of the Uniform Building Codes and the
adopted Building Code of the County of Monterey. Newly constructed housing must also
meet the requirements of the current edition of the Model Energy Code.
The Primary lender may require other inspections and. repairs before making a loan on the
property.
INSURANCE REQUIREMENTS
Hazard Insurance
The borrower shall secure and maintain hazard insurance on the property for the
duration of the loan(s). This insurance must be an amount adequate to cover all
encumbrances on the property. The insurer must identify the County as Loss Payee
for the amount of the loan(s). In situations of financial hardship where the owner
does not have insurance at the time the loan is made, the County may include the cost
of such insurance in the loan. An insurance certificate shall be provided to the
County. In the event the owner fails to make the insurance preiniuun payments in a
timely fashion, the Couuity at its option may make such payments for a period up to
12 months. The County may, in its discretion and upon the showing of special
circumstances, make such premium payments for a longer period of time. Should the
County make any payments, it may, in its sole discretion, add such payments to the
principal amount that the owner is obligated to repay the County under this program.
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Flood Insurance
In areas designated by I-IUD or the Federal Emergency Management Agency
FEMA) as a 100- year flood zone, the owner is required to secure and maintain
flood insurance in an amount adequate to secure the FTIIB Loan and all other
encumbrances. This policy must designate the County as Loss Payee. The premium
may be paid by the County as described above.
Approvals
Upon receipt of the accepted purchase agreement the lender will process the loan and
send the loan package to CaIHFA or alternate lender and the County for approvals.
The entire loan application, credit report, appraisal, title report, verification of
income, assets and liabilities and other documents are forwarded to the County along
with the loan package checklist. Upon receipt by the County, the package is date-
stamped, entered into the log, and a loan file is set up for the borrower. When
Ca1HFA has approved the loan the lender will send the Ca1HFA approval to the
County. The lender will notify the applicant and title company of loan approval.
Escrow will be scheduled to close within approximately 14 days. At this time the
Buyers contribute their down payment finds into escrow.
Denials
Loans denied by CalHFA may be repackaged and resubmitted to an alternate lender.' The,
lender will provide such information to the Comity for review prior to consideration by
the Housing Loan Comrlittee. The staff report shall include the reason for denial,
source of matching fluids, if required and any other information relevant to
underwriting analysis. Except for seller fuzancing and goverment programs, the
lender must be able to provide a fixed-rate loan for a 3 0-year term at competitive rates
with no interest rate buy-down, negative amortization, principal increases, deferred
interest or balloon payment. All households will be required to have impound
accounts for the payment of taxes and insurance to ensure they remain current.
7. HOUSING LOAN COMMITTEE
The Housing Loan Committee HLC) consists of representatives from the Office of
the County Counsel, Revenue Division and Housing and Redevelopment Division.
The Committee reviews and approves individual loan applications, subordination
requests, default, foreclosures and modification proposals. In addition, the HLC
reviews program policy insures and procedures as necessary to enhance the
effectiveness of the Program. The HLC meets monthly or more frequently as
required. Application evaluation criteria to be considered includes:
Applicant's income status, and property characteristics to verify that program
eligibility and loan requirements have been met.
Credit report, loan to value ratio, debt coverage ratio, appraised value,
preliminary title report and any other information that may be required to
minimize the risk of loss to the County in the event of foreclosure.
Priority in approving finding will follow housing policies adopted by the
Board of Supervisors in the Annual Housing Report.
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All. applicants and borrowers will be notified in writing of the Loan Committee
decisions.
Loan Committee decisions may be appealed. The process is described in Section 10
below.
8. LOAN REVIEW BY COUNTY
Upon receipt of the loan package, the County will review the package for compliance
with FTHB guidelines. Housing staff will complete an analysis of the application
and prepare an Income Worksheet. Utilizing the criteria in the Income and
Underwriting Standards Appendix A) the loan will be processed for HLC review.
A staff report, which includes the analysis, debt to income ratios and proposed loan
amounts will be prepared for review by the Housing Loan Committee. The item will
be scheduled for the next available meeting. The agenda and standard notices for the
meeting will be posted and distributed.
After the HLC has taken action on the application, staff will complete loan
processing subject to final approval of primary financing by Ca1HFA or alternate
lender and satisfaction of other conditions of approval. In the case of denial, written
notification will be mailed to the applicant with copies to the lender and realtor.
9. PROGRAM COMPLAINT AND APPEAL PROCEDURE
Complaints concerning the FTHB Program should be made to housing staff. If
unresolved in this matuner, the complaint or appeal shall be made in writing and filed
with the Housing Program Manager. The Program Manager will schedule a meeting
with the applicant. A written response will be made within fifteen 15) working days
of the meeting. Appeals of the Program Manager response are made to the Housing
Loan Committee.
10. LOAN CLOSING
An appointment is scheduled for loan document review. The First Time Homebuyer
Program Agreement, Loan Disclosure, 3-Day Notice of Right to Rescind, Privacy
Act Notice, Fair Housing Notice, Promissory Note and Deed of Trust are reviewed
with the Borrower and signed. The Request for Notice of Default and Deed of Trust
are notarized. Hazard and flood insurance requirements are reviewed and an
acknowledgment signed.
The County will issue escrow instructions and forward the Deed of Trust and the
Request for Notice of Default to the Title Company. The County will then draw a
check for the FTHB loan, which will be picked up by the escrow company or
delivered by housing staff.
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The Escrow agent at the Title Company prepares the documents for execution and
recording. The Borrowers Estimated Closing Statement is forwarded to the County
for review and approval. No cash out of escrow to borrowers will be approved; the
FTHB loan amount will be reduced by the amount of overage and amended escrow
instructions shall be forwarded to the Title Company.
The Escrow agent records the Deed of Trust and Request for Notice of Default and
forwards conformed copies along with the HUD 1 Settlement Statement and
insurance binder to the County within five 5) days. The Title Policy is generally
sent under separate cover.
Borrowers move into their new home.
11. AMENDMENTS AND EXCEPTIONS
Amendments to these policies for HCD funded programs may be made by the
County and submitted to HCD for approval. Any amendments required by state or
federal law or regulations shall be implemented by the date specified by such Law or
regulation without requiring further approval by the County or HCD. Adjustments to
income and property valuation limits promulgated by HUD, HCD or other funding
source shall become effective upon notice to the County.
Exceptions to these guidelines require Monterey County Board of Supervisors and
HCD approval unless required by Law or changes to State or Federal regulations or
regulations of the funding source for new programs. The Guidelines shall be
reviewed for conformance with current regulations at least annually or in conjunction
with the acceptance of new grants or loans that provide program funding.
12. LOAN SET-UP
On HOME loans, the County prepares the Project Set-Up Report, Funding Source
Detail, Draw-Down Request and Project Completion Report and sends to State HCD
along with the HUD-1 and Income Worksheet. Loans funded from other sources
such as Cal HOME shall follow the fiscal procedures specified by the program.
Upon receipt of the Draw-Down Request the State will set up the request with HUD
and send the County a reimbursement check within approximately sixty 60) days.
The loan is added to the Loan Log and flagged for annual and 5-year review as
appropriate.
The Original Promissory Note, Deed of Trust, Title Policy and insurance binder are
set up in a Vault File and stored in a fireproof file cabinet. A financial file consisting
of copies of the security documents, draw-down request, match documentation, loan
approval and related matters is set up for the Fiscal Officer's records. The Master
loan file shall, in,addition to the previously related information, contain income and
asset verification and other eligibility related documentation.
13. LOAN MAINTENANCE
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Period of Affordability
Home
Each loan funded by HOME is required to meet the following period of
affordability based on the amount of HOME assistance:
Less than $15,000 5 years
$15,000 to $40,000 10 years
More than $40,000 15 years
During the period of affordability, the borrower is required to document occupancy
and certify that the home is the primary residence of the household.
If the house is sold and the loan is not assumed, the period of affordability ends and
funds are recaptured. If the loan is assumed by an eligible household and the sales
price is affordable under HOME regulations, the original term of affordability
applies.
Redevelopment
Loans funded through Redevelopment Agency resources are required to maintain
affordability for 45 years. The affordability period for rentals is 55 years and a
Regulatory Agreement is recorded on the property to document the restriction.
14. LOAN MANAGEMENT
Monitoring
Annual:
The County will perform an annual monitoring of the properties, which have been
assisted with First-Time Home Buyer Down-Payment Assistance to determine that:
The qualified household is in residence, the unit has not been rented or sold and
remains the primary residence of the borrower;
Hazard insurance, including flood insurance if required) is in place that complies
with terms of the Loan documents.
Five Year Reviews:
At the conclusion of five years from the loan closing date and at five-year intervals
thereafter, the County will evaluate the Borrowers ability to repay HOME and CDBG
funded loans based on income housing expenses and total long-term debt to income
ratios.
The Housing Loan Committee shall review and approve any proposed modifications
to the terms of the loan including continued deferral of payments.
Subordination
Requests for subordination will be processed in accordance with the following
guidelines.
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General Procedures:
Borrower completes Subordination Request form and submits the form along
with any required documentation of special circumstances to the Housing and
Redevelopment Division. Copies of the Subordination Request Forms, lender
letters and sample letters are included in the FTHB Forms Binder.
Borrower has lender forward copies of the credit report, loan application,
appraisal, income verification, preliminary title report and preliminary loan
closing statement.
Staff reviews information and determines conformance with the subordination
guidelines for the type of loan. See Attachment 1 for the method of
determining household income.
Subordination requests can be approved at the staff level when the proposed
loan to value ratio is sunder 90% of the current appraisal value of the property
and no change in borrowers equity is proposed no cash out). Cal HOME and
Joe Serna Farm worker Housing Chant funded loans do not allow refinancing
with cash to the borrower.
The Housing Loan Committee reviews all requests where the proposed loan
to value ratio exceeds 90% of the current appraised value of the property or
where the borrower proposes to take cash out.
Subordination requests will generally be approved when the new loan results
in a lower interest rate, reduces payments or otherwise improves the
borrower's or the County's position and no cash is taken out. Also, the
program loan's repayment schedule cannot be compromised by the new loan.
The borrower will be notified in writing of the approval/denial of the
Subordination Request.
The Subordination Agreement is prepared by the Title Company and forwarded to
the County for execution after the borrowers have signed and the document is
notarized. The Housing Program Manager or designee is authorized to sign the
documents on behalf of the County. Upon execution, the Agreement is returned to
the Title Company for recording. The recorded Agreement is copied and the original
document is removed to the vault file for the loan.
Amortized:
The borrower's payment record will be reviewed to determine if payments
have been made in a timely marnler. Subordination will not be approved
when the borrower has a record of chronic late payments to the County unless
loan proceeds are to be used to bring the County's loan current.
To the extent allowable by the regulations of the funding source. A borrower
may be allowed to take equity out with the new loan when there are special
circumstances, such as, medical or educational expenses or necessary home
repairs.
Deferred Loans:
The proposed debt cost to income ratio shall not exceed 40%.
The borrower's ability and willingness to make payments on the County's
loan, in addition to the proposed loan will be determined and considered by
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the' Housing Loan Committee in reviewing the proposed subordination. The
ability of the borrower to pay the FTHB loan in fall will be determined by the
lender and such information shall be considered by the Housing Loan
Committee.
Borrowers will be allowed to take equity out when there are special
circumstances as described above, however, the Loan Committee may require
the borrower to begin making full or partial payments on the County's loan as
a condition of approval of the subordination.
Borrower will be required to sign a Modification of Promissory Note with the
terms approved by the Housing Loan Committee and execute a Memorandum of
Modification of Deed of Trust to be recorded prior to or concurrent with recordation
of the of the Subordination Agreement.
Loan Modification and Forbearance
Loan modifications and forbearance are considered by the Housing Loan Committee
in connection with the Five Year Review and upon request by a borrower who is
temporarily or permanently unable to make scheduled loan payments due to financial
hardship and at the loan maturity date.
The borrower is required to submit updated information on household
composition, documentation of current income, assets, insurance, mortgage
and long-term debts for evaluation. Two years federal tax returns are
required.
In the case of financial hardship, the type of documentation required will
depend on the basis of the hardship for example, a claim of disability would
necessitate review of amount of disability benefits, doctors statements
estimating term of disability and documentation of medical expenses not
covered by insurance.
Loan modifications will be recommended if the hardship is expected to
continue for more than one year or the household debt to income ratio
exceeds 50% excluding the FTHB loan. A new five-year review term is
established and payments are deferred.
If the financial hardship is short-term in nature, payments will be temporarily
suspended. A forbearance plan will be developed to allow the borrower to
bring the loan current over a reasonable time period.
Options available at loan maturity date are deferral of the principal and
interest for 5 years or conversion to an amortized loan payable within 15
years. BEGIN loans convert to zero interest in these situations and are
deferred for an additional 30 years. All other FTHB loans continue at the
original interest rate.
Loan Assumptions
The First Time Homebuyer Loan may be assumed by an income-eligible purchaser,
household income is 80% of median or less) who meets all other criteria for the
FTHB Program. However, Cal HOME loans are not assumable.
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of the loan term. HOME loans that are assumed must meet all the resale" criteria of
the HOME program.
The purchaser must qualify as a First Time Homebuyer and meet standard
underwriting criteria.
The purchase price may not exceed the limit for Monterey County as
approved by the federal Department of Housing & Urban Development or
HCD.
Primary financing must be a fixed rate conventional loan. However, the
purchaser will not be required to obtain financing through CalHFA.
The Housing Loan Committee will review all Loan Assumption requests. The HLC
shall have the ability to deny such requests if it determines that Housing Program
objectives and milestones would be better served by loan recapture prior to
expiration of the minimum affordability period) or repayment.
Loan Repayment, Payoffs, and Recapture
Borrowers may make voluntary payments of principal and interest without
penalty.
Payments are first applied to accrued interest.
The remaining payment amount reduces the principal balance.
The County maintains records of all payments and issues an annual statement
of interest paid.
Borrowers may request a payment history and principal balance remaining by
contracting the Housing Office.
Loan Payoff Procedures
Borrower or borrower's representative requests payoff demand
Demand calculation form is completed.
Housing Staff reviews loan files to confirm number of loans, terms, balances
and regulatory agreements.
Demand for Title Company is prepared and sent via fax and mail.
Upon receipt of payment in full, the reconveyance is prepared and forwarded
to Recorder's Office for recording.
Housing and Redevelopment Office will make copies or recorded
reconveyance for file. The original is forwarded to the owner.
Recaptured Funds
Borrowers are permitted to payoff their loan at any time. HOME loans that are
repaid before expiration of the affordability period are recaptured.
Recaptured funds may not be used for program administration.
Sale of other FTHB assisted property
Inclusionary Units/Redevelopment Assisted Units
Units developed under the County's Inclusionary Ordinance and Redevelopment
Program have affordability restrictions with specific terms. Existing units with FTHB
loans will follow the re-sale provision of the County's Inclusionary Administrative
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Manual for Inclusionary Units and Redevelopment law provisions for
Redevelopment units.
Re-sale Restricted Units
FTHB Loans provided in conjunction non-profit housing developments may have
project specific re-sale restrictions as approved by the Housing Loan Committee and
as provided by approved source of funding.
Market Rate Re-sales
Unless otherwise restricted as described above, the FTHB assisted unit may be sold
at fair market value.
15. DEFAULT AND FORECLOSURE:
Foreclosure actions must be reviewed and approved by the Housing Loan
Committee.
County as Junior Lien holder
It is the County's policy to prepare and record a Request for Notice" on all senior
lien placed on properties financed by a loan or loans through FTHB program funds
with notification to come to the Housing and Redevelopment Program Manager.
This document requires any senior lien holder to notify the County of initiation
recordation of Notice of Default") of a foreclosure. The junior lien holder may
cancel the foreclosure proceedings by reinstating" the senior lien holder. The
reinstatement amount must be obtained by contacting the senior lien holder. This
amount will include all delinquent payments, late charges, advances fire insurance
premiums, property taxes, property protection costs, etc.), and foreclosure costs fees
for legal counsel, recordings, certified mail, etc.).
Once the County has the information on the reinstatement amount, staff must then
determine if it is cost effective to protect the County's position by reinstating the
senior lien holder, keeping the first loan current by submitting a monthly payment
thereafter, foreclosing on the property possibly resulting in owning the property at
the end of foreclosure, protecting the property against vandalism and paying
marketing costs readying the home for marketing, paying for yard maintenance,
paying a real estate broker a sales commission):
If the County decides to reinstate, the senior lien holder will accept the amount to
reinstate the loan up until five 5) days prior to the set foreclosure sale date". This
foreclosure sale date" usually occurs about four 4) to six 6) months from the date
of recording of the Notice of Default". If the County fails to reinstate the senior lien
holder before five 5) days prior to the foreclosure sale date, the senior lien holder
would then require a full payoff of the balance, plus costs, to cancel foreclosure. If
the County determines the reinstatement and maintenance of the property not to be
cost effective and allows the senior lien holder to complete foreclosure, the County's
lien may be eliminated due to insufficient proceeds from the sale of the property.
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Default on Loan Repayment
When the Borrower is in default on the County loan, active collection efforts will
begin on any loan that is 31 or more days in arrears. Attempts will be made to assist
the homeowner in bringing and keeping the loan current.
These attempts will be conveyed in an increasingly urgent manner until loan
payments have reached 60 days in arrears, at which time the County may consider
foreclosure. An appointment will be scheduled to discuss the reason for the
arrearages. If due to job loss, reduction in income or other financial hardship, the
Housing Loan Committee will consider forbearance or modification of the loan
terms. County staff will consider the following factors before initiating foreclosure.
Determine if the borrower is willing to refinance with a commercial lender or to sell
the property to pay off the County First Time Homebuyer Loan.
Review the loan balance; if the balance is under $5,000, the expense to foreclose may
exceed the loan amount.
Determine if the sale of home as is," will be sufficient to cover the principal balance
owing, necessary advances, maintain fire insurance, maintain or bring current
delinquent property taxes, monthly yard maintenance, periodic inspections of
property to prevent vandalism, etc.) foreclosure, and marketing costs.
If the balance is substantial and all of the above factors have been considered, the
County may opt to initiate foreclosure. The owner must receive, by certified mail, a
thirty-day notification of foreclosure initiation. This notification must include the
exact amount of funds to be remitted to the County to prevent foreclosure.
At the end of thirty days, the County will contact a reputable foreclosure service or
local title company to prepare and record foreclosure documents and make all
necessary notifications to the owner and junior lien holders. The service will advise
the County of all required documentation to initiate foreclosure and funds required
from the owner to cancel foreclosure proceedings.
When the process is completed, and the property has reverted to the beneficiary" at
the foreclosure sale, the County would then contact a real estate broker to market the
home.
Non-Monetary Defaults/Acceleration of Note
The County may issue a Demand for Repayment in situations where the Borrower
has breached the terms of the Promissory Note, Deed of Trust or First Time
Homebuyer Agreement. Examples include: failure to maintain adequate insurance
coverage; no longer occupying the property as primary residence; or failing to
document occupancy, sale, transfer or assignment of the property or in the case of
misrepresentation or fraud for the purpose of obtaining the FTHB loan.
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APPENDIX A INCOME & UNDERWRITING STANDARDS
1. INCOME DETERMINATION AND INCOME LIMITS
Determining Income Eligibility
Annual income includes the gross amount of income of all adult household members
anticipated to be received during the coming 12 months. The current employment and
income situation of the family should be used to determine the anticipated annual
income. When determining the household size, the following are not counted as
household members: co-borrowers, foster children, live-in aides, and unborn children
and children being pursued for legal custody or adoption who are not currently living in
the household. Once the annual household income has been established, it must be
compared to the most recent HUD area income limits. In no event will HOME, Cal
HOME or CDBG Program assistance be provided to households whose incomes
exceed HUD income limits for 80% of the median income of the Monterey Countyl
Area as adjusted for household size. Depending on the availability of BEGIN,
Redevelopment, Inclusionary, Joe Serna Farm worker Housing Grant or other funding
that has higher limits including exceptions to CDBG funding), households with incomes
between 80-120% of median may be eligible for FTHB Program loans.
All persons in residence are considered household members for purposes of income
eligibility unless specifically excluded in the paragraph above. Listed below are
definitions of income.
24 CFR Part 5 ANNUAL INCOME INCLUSIONS AND EXCLUSIONS
Part 5 Inclusions
This table presents the Part 5 income inclusions as stated in the Code of Federal regulations.
General Category Statement from 24 CFR 5.609 paragraph b) April 1, 2004)
1. Income from The full amount, before any payroll deductions, of wages and salaries, overtime pay,
wages, salaries, commissions, fees, tips and bonuses, and other compensation for personal services.
tips, etc.
The net income from.the operation of a business or profession.' Expenditures for business
expansion or amortization of capital indebtedness shall not be used as deductions in
determining net:.income. An allowance for depreciation of assets used in a business or
2. Business. Income profession may be deducted,: based on straight-line depreciation, as;provided.inInternal i
Revenue Service regulations. Any. withdrawal of cash or assets from the operation of a
a business or profession will be included in income, except to=theextent-.the withdrawal is
reimbursementof cash or assets invested in the operationcby, tthe family.
Interest, dividends, and other net income of any kind from real or personal property.
Expenditures for amortization of capital indebtedness shall not be used as deductions in
determining net Income. An allowance for depreciation is permitted only as authorized in 11
number 2 above). Any withdrawal of cash or assets from an investment will be included
3. Interest & in income, except to the extent the withdrawal is reimbursement of cash or assets
Dividend Income invested by the family. Where the family has net family assets in excess of $5,000,
annual income shall include the greater of the actual income derived from all net family I
assets or a percentage of the value of such assets based on the current passbook savings
rate, as determined by HUD.
The"full amount of; periodic amounts received from Social' Security, annuities,-insurance
policies, retirement funds, pensions, disability or death benefits, and other similar types
4. Retirement & of periodic receipts, including a lump-sum amount or prospective monthly amounts for
Insurance Income the delayed start of a periodic amount except as provided in number 14 of.Income
Exclusions).
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15. Unemployment Payments in lieu of earnings, such as unemployment and disability compensation,
& Disability Income worker's compensation, and severance pay except as provided in number 3 of Income
Exclusions).
Welfare Assistance. Welfare assistance payments made under the"Temporary Assistance
for Needy Families TANF) program are included in annual income:
Qualify as assistance under the TANF program. definition at 45 CFR 260.31; and
Are otherwise excluded from the calculation of annual income per 24 CFR 5.609(c).
If the-welfare assistance payment includes an amount specifically-designated nated,for shelter
6. Welfare and utilities that is subject toadjustment by the welfare assistance agency in accordance
Assistance with the actual cost of shelter and utilities, the amount of welfare assistance income to
be included as income shall consist of:
the amount of the allowance or grant exclusive of the amount. specifically
designated for shelter or utilities; plus
the maximum amount that the welfare assistance agency could in fact allow the
family for. shelter and_utilities.-If the family's welfare assistance is reduced from the
l standard. of need by. applying a-percentage, the amount calculated under.24 CFR
5.609 shall.be.the amount resulting from one application of the percentage.
7. Alimony, Child Periodic and determinable allowances, such as alimony and child support payments, and
Support, & Gift regular contributions or gifts received from organizations or from persons not residing in.
Income the dwelling.
8 Armed Forces All regular pay special day and allowances of a member of the Armed Forces except as
Income provided in number 7 of.Income Exclusions)
Part 5 exclusions
This table presents the Part 5 income exclusions as stated in the Code of Federal
Regulations.
General Category Statement from 24 CFR 5 609 paragraph c) April 1, 2004).1--
1. Income of Income from employment of children including foster children) under the age of 18
Children ears
y
2. Foster Care Payments received for the care of foster children or foster adults usually: persons-with
Payments disabilities, unrelated to the tenant family, who are unable:to live alone).
3. Inheritance and Lump sum additions to family assets, such as inheritances, insurance payments
Insurance Income including payments under health and accident insurance and workers compensation),
capital gains and settlement for personal or property losses except as provided in
number 5 of Income inclusions).
4. Medical Expense mounts received by the family that are: specifically for, or.in reimbursement of, the cost
Reimbursements of medical expenses for any family-member.
5. Income of Live-in
Aides
Income of a live-in aide as defined in 24, CFR 5.403).
6. Disabled Persons Certain increases in income of a disabled member of qualified families residing in HOME
assisted housing or receiving HOME enant-basedrental assistance 24 CFR5.671(a))
7. Student Financial The full amount of student financial assistance paid directly to the student or to the
Aid educational institution.
7-1
8.:Armed Forces
he-special pay to a family member serving in.the Armed Forces who is exposed to
Hostile Fire Pa hostile fire,
9. Self Sufficiency
Program Income a. Amounts received under training programs funded by HUD.
b. Amounts received by a person with a disability that are disregarded for a
limited time for purposes of Supplemental Security Income eligibility and
benefits because they are set side for use under a Plan to Attain Self-
Sufficiency PASS).
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c. Amounts received by a participant in other publicly assisted programs that are
specifically for, or in reimbursement of, out-of-pocket expenses incurred
special equipment, clothing, transportation, childcare, etc.) and which are
made solely to allow participation in a specific program.
d. Amounts received under a resident service stipend. A resident service stipend
is a modest amount not to exceed $200 per month) received by a resident for
performing a service for the PHA or owner, on a part-time basis, that enhances
the quality of life in the development, Such services may include, but are not
limited to, fire patrol, hall monitoring, lawn maintenance, resident initiatives
coordination, and serving as a member of the PHA's-governing board. No
resident may receive more than one such stipend during the same period of
time.
e. Incremental earnings and benefits resulting to any family member from
participation in qualifying state or local employment training programs
including training not affiliated with a local government) and training of a
family member as resident management staff. Amounts excluded by this
provision must be received under employment training programs with clearly
defined goals and objectives, and are excluded only for the period during which
the family member participates in the employment training program.
10:^Gifts Temporary, nonrecurring, or sporadic income including, gifts).
11. Reparations Reparation payments paid by a foreign government pursuant to claims filed under the
laws of that government by persons who were persecuted during the Nazi era.
12, Incomefrom Earnings in excess of $480 for each full=time student 18 years old or older.(excludingthe
Full time Students head of household or spouse).
13. Adoption
Assistance Adoption assistance payments in excess of $480 per adopted child.
Payments
14 Social Security
Deferred periodic amounts from SSI and Social Security: that are received in a
& SSI Income lump sum amount or in prospective monthly amounts
15. Property Tax Amounts received by the family in the form of refunds or rebates under state or local law:.
Refunds for property taxes paid on the dwelling unit.
16.HomeCare Amounts paid by aatate agency to a family with a member who has a developmental
Assistance disability and is living athometo offset the cost of services and equipment needed to
keep thisdevelopmentally: disabled family member at home,
17. Other Federal
Exclusions Amounts specifically excluded by any other federal statute from consideration as income
for purposes of determining eligibility or benefits under a category of assistance
programs that includes assistance under any program to which the exclusions of 24 CFR
5.609(c) apply, including:
The value of the allotment made under the Food Stamp Act of 1977;
Payments received under the Domestic Volunteer Service Act of 1973 employment
through VISTA, Retired Senior Volunteer Program, Foster Grandparents Program,
youthful offender incarceration alternatives, senior companions);
h Payments received under the Alaskan Native Claims Settlement Act;
Income derived from the disposition of funds to the Grand River Band of Ottawa
Indians;
b Income derived from certain sub-marginal land of the United States that is held in
trust for certain Indian tribes;
Payments or allowances made under the Department of Health and Human
Services' Low-Income Home Energy Assistance Program;
Payments received under the Maine Indian Claims Settlement Act of 1980 25
U.S.C. 1721);
The first $2,000 of per capita shares received from judgment funds awarded by the
Indian Claims Commission or the U.S. Claims Court and the interests of individual
Indians in trust or restricted lands, including the first $2,000 per year of income
received by individual Indians from funds derived from interests held in such trust
or restricted lands;
k Amounts of scholarships funded under Title IV of the Higher Education Act of 1965,
including awards under the Federal work study program or under the Bureau of
Indian Affairs student assistance programs;
T:\RDA_HOUSING\HOUSING\Final Hsing Docs\Other GUIDELINES\FTHB Program Manual 12_08.doc 23
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ATTACHMENT - HOMEBUYER ASSIST��:P�County of Monterey First Time Home Buyer Program Manual
M
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M Payments received from programs funded under Title V of the Older Americans Act
of 1985 Green Thumb, Senior Aides, Older-American Community Service
Employment Program);
Payments received on or after January 1, 1989, from the Agent Orange Settlement
Fund or any other fund established pursuant to the settlement in the In Re Agent
Orange product liability litigation, M.D.L. No. 381 E.D.N.Y.);
Earned income tax credit refund payments received on or after January 1, 1991,
including advanced earned income credit payments;
The value of any child care provided or arranged or any amount received as
payment for such care or reimbursement for costs incurred for such care) under the
Child Care and Development Block Grant Act of 1990;
Payments received under programs funded in whole or in part under the Job
Training Partnership Act employment and training programs for Native Americans
and migrant and seasonal farm workers, Job Corps, veterans employment
programs, state job training programs and career intern programs, AmeriCorps);
Payments by the Indian Claims Commission to the Confederated Tribes and Bands
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Allowances, earnings, and payments to AmeriCorps participants under the National
and Community Service Act of 1990;
Any allowance paid under the provisions of 38 U.S.C. 1805 to a child suffering from
spina bifida who is the child of a Vietnam veteran;
Any amount of crime victim compensation under the Victims of Crime Act)
received through crime victim assistance or payment or reimbursement of the cost
of such assistance) as determined under the Victims of Crime Act because of the
commission of a crime against the applicant under the Victims of Crime Act; and
Allowances, earnings, and payments to individuals participating in programs under
the Workforce Investment Act of 1998.
Income Verification Requirements
The primary lender is responsible for obtaining income verification and forwarding such
information to the County with the Lender packet. The Housing Staff will review the
packet for completeness and request additional documentation; if necessary to clarify
actual and projected income for the household.
The two procedures for verifying income are as follows:
1. Third-Party Verification. Through this method, the lender contacts outside sources
in writing to provide information. Before you can obtain the information from the
third-party entity you must have a written release from the household. The forms
for these requests are listed below:
Verification of Employment;
Verification of Social Security;
Verification of Pension and Annuities;
Verification of Veterans Benefits;
Verification of Unemployment Benefits;
Verification of Public Assistance; or
2. Review documentation provided by the applicants, including the following:
Current 30-day consecutive pay stubs
Last three years of Federal Tax returns;
Last two years of W2's;
T: RDA HOUSING\HOUSING\Final Hsing Docs\Other GUIDELINES\FTHB Program Manual 12_08.doc 24
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ATTACHMENT - HOMEBUYER ASSIST��;P�County of Monterey First Time Home Buyer Program Manual
Last two months of bank statements;
If self employed, last two years of Schedule C of Federal tax returns and a
current profit and loss statement;
Divorce documents showing child support and alimony received;
Benefits statements pension, Social Security, etc.).
Income Worksheet
The Housing Analyst prepares an Income Worksheet using household income, as
projected for the next twelve months.
It is important when assessing the information, to note whether the employee is paid
hourly, weekly, or monthly, and note average overtime pay. If an employee gets paid
twice a month, that is 24 times per year, whereas if an employee is paid every two weeks,
that is 26 times per year. It is also important to determine if overtime is continuous or
sporadic. Documentation must be included in the Borrower's file.
In cases where the net assets are below $5,000 use actual income. If net assets are in
excess of $5,000, use the higher of income generated by those assets or use the current
passbook savings rate, which is currently 2%.
Maximum Income Limits
HCD and HUD issue annual income limits based usually in the early spring of each year.
Applicants with incomes at or below 80% of median as adjusted by household size are
eligible for HOME, Cal HOME and CDBG Program funded loans. Households with
income between 80-120% of median may be eligible if alternative funding is available
with these income limits. The next page identifies the income limits for the Monterey
County area.
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ATTACHMENT - HOMEBUYER ASSIST��<P�State CDBG's and HOME's Table of 2008 Income Limits
NUMBER OF PERSONS IN HOUSEHOLD
Page 3 of 6
INCOME*
County CATEGORY 1 2 3 4 5 6 7 8
Marin County
Mariposa County
Mendocino County
Merced County
Modoc County
Mono County
Monterey County
Napa County
Nevada County
Orange County
30%". Limit 23,750 27,150 30,550 33,950 36,650 39,400 42,100 44,800
50%" Limit 39,600 45,250 50,900 56,550 61,050 65,600 70,100 74,650
60%" Limit 47,520 54,300 61,080 67,860 73,260 78,720 84,120 89,580
80%" Limit 63,350 72,400 81,450 90,500 97,700 104,950 112,200 119,450
30%" Limit 11,350 12,950 14,600 16,200 17,500 18,800 20,100 21,400
50%" Limit 18,900 21,600 24,300 27,000 29,150 31,300 33,500 35,650
60%" Limit 22,680 25,920 29,160 32,400 34,980 37,560 40,200 42,780
80%" Limit 30,250 34,550 38,900 43,200 46,650 50,100 53,550 57,000
30%" Limit 11,300 12,900 14,550 16,150 17,450 18,750 20,050 21,300
50%" Limit 18,850 21,500 24,200 26,900 29,050 31,200 33,350 35,500
60%" Limit 22,620 25,800 29,040 32,280 34,860 37,440 40,020 42,600
80%" Limit 30,150 34,450 38,750 43,050 46,500 49,950 53,400 56,850
30%" Limit 11,300 12,900 14,550 16,150 17,450 18,750 20,050 21,300
50%" Limit 18,850 21,500 24,200 26,900 29,050 31,200 33,350 35,500
60%" Limit 22,620 25,800 29,040 32,280 34,860 37,440 40,020 42,600
80%" Limit 30,150 34,450 38,750 43,050 46,500 49,950 53,400 56,850
30%" Limit 11,300 12,900 14,550 16,150 17,450 18,750 20,050 21,300
50%" Limit 18,850 21,500 24,200 26,900 29,050 31,200 33,350 35,500
60%" Limit 22,620 25,800 29,040 32,280 34,860 37,440 40,020 42,600
80%" Limit 30,150 34,450 38,750 43,050 46,500 49,950 53,400 56,850
30%" Limit 13,850 15,800 17,800 19,750 21,350 22,900 24,500 26,050
50%" Limit 23,050 26,350 29,650 32,950 35,600 38,200 40,850 43,500
60%" Limit 27,660 31,620 35,580 39,540 42,720 45,840 49,020 52,200
80%" Limit 36,900 42,150 47,450 52,700 56,900 61,150 65,350 69,550
30%" Limit 13,600 15,550 17,500 19,450 21,000 22,550 24,100 25,650
50%" Limit 22,700 25,900 29,150 32,400 35,000 37,600 40,200 42,750
60%" Limit 27,240 31,080 34,980 38,880 42,000 45,120 48,240 51,300
80%" Limit 36,300 41,500 46,650 51,850 56,000 60,150 64,300 68,450
30%" Limit 16,750 19,100 21,500 23,900 25,800 27,700 29,650 31,550
50%" Limit 27,850 31,850 35,800 39,800 43,000 46,150 49,350 52,550
60%" Limit 33,420 38,220 42,960 47,760 51,600 55,380 59,220 63,060
80%" Limit 43,050 49,200 55,350 61,500 66,400 71,350 76,250 81,200
30%" Limit 13,700 15,650 17,600 19,550 21,100 22,700 24,250 25,800
50%" Limit 22,800 26,050 29,300 32,550 35,150 37,750 40,350 42,950
60%" Limit 27,360 31,260 35,160 39,060 42,180 45,300 48,420 51,540
80%" Limit 36,450 41,700 46,900 52,100 56,250 60,450 64,600 68,750
30%" Limit 19,550 22,300 25,1 OD 27,900 30,150 32,350 34,600 36,850
50%" Limit 32,550 37,200 41,850 46,500 50,200 53,950 57,650 61,400
60%" Limit 39,060 44,640 50,220 55,800 60,240 64,740 69,180 73,680
80%" Limit 52,100 59,500 66,950 74,400 80,350 86,300 92,250 98,200
* Percentages may not be mathematically related to each other. Percents are used as names for the categories because programs' actual
names for limits differ.
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ATTACHMENT - HOMEBUYER ASSIST��=P�County of Monterey First Time Home Buyer Program Manual
APPENDIX B. UNDERWRITING STANDARDS
CREDIT HISTORY
Past credit history and credit patterns are verified by the primary lender and a copy of the
report is included in the loan package for the County.
Previous rental or mortgage payment history covering the most recent twelve
month period must be documented if not included in the credit report
Collections & Judgments: Court ordered judgments must be paid off prior to
close of escrow unless a payment agreement is in effect and documentation of
acceptable payments is made available.
In the case of bankruptcy:
Chapter 7 Liquidation At least two years must have passed since the
bankruptcy was discharged.
Chapter 13 A borrower paying off debts under Chapter 13 may be qualified if
the Bankruptcy Court approves both the primary loan and FTHB additional debt
and monthly payments.
Borrowers Without Credit History:
Utility payment records, insurance payments, non-commercial loan receipts and
other documentation may be accepted when a borrower's Credit Report does not
reflect adequate credit history.
Borrowers with Poor Credit History:
In general, poor credit history more than two years past will not affect the credit
review. More recent derogatory information will require written explanation
from the borrower that is consistent with other credit information.
Poor Credit: Borrowers with continuous slow payments and delinquent accounts
within the last two years will not be eligible unless a co-borrower or co-signer
with a compensating excellent credit history is willing to co-sign on the primary
promissory note. The co-borrower or co-signer must sign the loan application
and provide documentation of income, assets and credit history.
Previous Mortgage Foreclosure:
If foreclosure on the borrowers home was
more than 3 years past;
the result of extenuating circumstances beyond the borrowers control; and
the borrower has since established good credit, then the foreclosure will not
adversely affect eligibility under the FTHB Underwriting Standards.
Primary Lender Credit Disqualification:
The primary lender may disqualify applicants under additional credit criteria such as
credit scores, delinquent state or federal debts, Credit Alert Interactive Voice
Response System records or other factors that are part of the primary lender's or
CaIBFA's Underwriting Standards.
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STABILITY OF INCOME
Borrowers must demonstrate at least two years of income stability unless there are
extenuating circumstances such as recent entry into the job market after college, trade
school, staying out of the workforce to care for children or other family members; or job
changes within the same industry or line of work.
Self-Employed Borrowers
Income from self-employment is considered stable if the borrower has been self-
employed for two years with a 25% or greater interest in a business and is able to
provide tax returns and a profit and loss statement to document income and
expenses.
ASSETS AND GIFT FOR DOWN PAYMENT & CLOSING COSTS
Required FTHB Down payment:
A 3% down payment of the purchase price is required for the FTHB loan unless the
borrower meets all other criteria-and demonstrates financial hardship. Exceptions
may be granted for special terms of other subsidized financing, sweat equity or
buyer.investment in property repairs prior to close of escrow. Ca1HFA down
payment assistance loans, in particular are encouraged.
An outright gift of funds is acceptable for the down payment if the donor is a
relative, employer, charitable organization, government or quasi-governmental
agency or friend not otherwise party to the sales transaction.
Loans for the required down payment from collateralized sources, such as
retirement funds, life insurance and deposited funds are allowable as long as
repayments may be provided by liquidating the asset.
The primary lender may require additional documentation and additional funds
beyond the County's requirements.
The reason for the additional borrower funds must be provided to the County in
writing with copies of the lender's or Ca1HFA's Standard Underwriting Criteria
to support the request for additional funds.
DEBT RATIOS
Housing Expense to Income Ratio
In general, the total of principal and interest payments, real estate taxes, hazard
insurance premiums and homeowner's association dues should not exceed 40% of
the household's income. Higher ratios are acceptable if the household has a co-
signer, low recurring expenses or other compensating factors described in the next
section.
Total Debt to Income Ratio
In addition to housing costs, the following types of liabilities are to be included
in the calculation of total debt to income: installment loans, revolving charge
accounts, child support, alimony and any other debt lasting more than 12
months.
Revolving accounts are calculated at 5 per cent of the current balance unless the
account shows a specific minimum payment.
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Contingent liabilities are included unless a 12 to 24 month history demonstrating
payment by another party is provided.
The total debt to income ratio should not exceed 45 per cent unless there are
substantial compensating factors. However, the Housing Loan Committee may
approve higher ratios of up to 50% upon review of the borrowers credit history,
projected income and assets and compensating factors.
OTHER COMPENSATING FACTORS
Non Taxable Income:
Income that is not subject to federal taxes may be considered as compensating factor
when a borrower's credit history or income stability is otherwise less than desired.
For underwriting purposes an adjustment of 125% is acceptable.
Housing Expenses:
Borrower has successfully paid housing expenses, nearly equal to, equal to or
greater than the proposed monthly expense over the last 12 months.
Down payment:
Borrower makes a large down payment toward purchase price plus closing costs.
Asset Reserves
Borrower has substantial liquid or readily converted asset reserves after closing and
has contributed at least 3 % towards the purchase of the property.
Co-signer
Co-signer or co-borrower has excellent credit history, substantial assets and/or low
debt to income ratios. Co-signers contribution to the borrower's housing expense
can be factored into the housing expense ratio with written documentation of the
planned contribution including the period for which the co-signer will contribute.
Debt Pay down
When the borrower agrees to pay down existing debts in order to lower the total
debt to income ratio and submits verification prior to loan closing.
Energy Efficient Homes
Higher ratios are allowed for homes built after April 1994 under the Model Energy
Codes or otherwise determined to be- energy efficient by the FHA, a home energy
rating system or energy consultant generally, up to 2%).
Determining FTHB Loan Amount
The Housing staff will analyze the proposed loan utilizing the underwriting criteria
described in previous sections above and:
Review primary lenders Mortgage Credit Underwriting Worksheet to determine
if the lender has maximized the first mortgage amount.
Review the projected income including income from assets and complete the
Income Worksheet.
Calculate debt to income ratios based on documentation in the Credit Report,
loan application and Lender's Estimated Borrower's Statement. Confirm
principal and interest payments, estimated property tax and hazard insurance
premiums.
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Confirm earnest money deposit, final purchase price, estimated closing costs,
and funds available from the borrower for down payment.
Contact borrower to discuss potential assistance from employers, family
members and co-signers.
Review compensating factors to determine if the borrower meets criteria for
higher debt to income ratios.
Calculate maximum loan based on total acquisition costs, funds from borrower
for down payment and standard maximum ratios.
Ensure that the term of program loan is less than or equal to the primary loan.
Verify that the total loan to value of all loans is no more than 90%, unless special
circumstances are approved by Housing Loan Committee.
Calculate maximum loan based on higher ratios if compensating factors are
significant. For BEGIN assisted units, the combined indebtedness shall not
exceed one hundred percent of the sales price plus a maximum of up to 5
percent of the sales price to cover actual closing costs.
Prepare a staff report for the Housing Loan Committee detailing the
underwriting process and presenting standard and exception loan alternatives.
30
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ATTACHMENT - HOMEBUYER ASSIST��AP�County of Monterey First Time Home Buyer Program Manual
APPENDIX C LOAN LIMITS
The Monterey County First Time Homebuyer Loan Program FTHB) is intended to provide
the minimum gap financing to enable a household to qualify to purchase a home in the
unincorporated areas of the County. The actual FTI-1B loan amount is determined based on
underwriting criteria in APPENDIX A.
The standard loan limits shown below are the maximums that will be allowed unless the
Housing Loan Committee determines that it is appropriate to approve a larger loan to reduce
debt ratios. Exceptions to the limits will not be granted if the combined total of the primary
financing, borrowers down payment, and standard FTHB loan amount are sufficient to cover
the purchase price and closing costs. Borrowers are encouraged to utilize other programs
such as CalHFA deferred payment loans to reduce the FTHB loan amount. Other resources,
such as Cal HOME funding may be used as match.
Exceptions may also be approved based on, but not limited to, the following adopted
Monterey County affordable housing priorities:
Preference for projects that address the needs of targeted areas, including
Chualar, Boronda, Castroville, PaJaro, Las Lomas and other urbanized areas
where the project will substantially benefit unincorporated residents.
Preference to projects that provide new housing or access to housing for large
low and very low-income families.
Preference for projects that preserve existing housing when that housing is sound
and is affordable to current low and very low-income residents.
Under no circumstances will HOME Assistance, including ADDI loans, by unit size)
exceed the HUD approved limits for Monterey County. These are maximum HOME
subsidy limits and are included on the next page.
Bedrooms in Unit Standard Loan Limit Exception Limits
Studio $ 50,000 $ 84,960
One $ 60,000 $ 97,390
Two $ 85,000 $118,425
Three $ 98,000 $153,202
Four or more $100,000 $168,168
Note: CaIHOME limit is $50,000
BEGIN loan limit is $30,000 or 20% of purchase price, whichever is less.
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ATTACHMENT - HOMEBUYER ASSIST��BP�HOME PROGRAM
SUBSIDY LIMITS PER UNIT SECTION 221(d) 3)
All limits are effective 5/28/08 except those which are highlighted and were effective 1/1/08)
COUNTY NAME 0-BDR 1-BDR 2-BDR 3-BDR 4-BDR
Alameda $133,250 $152,746 $185,739 $240,285 $263,760
Alpine $131,216 $150,414 $182,903 $236,616 $259,733
Amador $131,216 $150,414 $182,903 $236,616 $259,733
Butte $128,164 $146,916 $178,650 $231,114 $253,693
Calaveras $125,621 $144,001 $175,105 $226,528 $248,659
Colusa $129,181 $148,082 $180,068 $232,948 $255,706
Contra Costa $132,233 $151,580 $184,321 $238,451 $261,747
Del Norte $125,113 $143,418 $174,396 $225,611 $247,653
El Dorado $134,776 $154,495 $187,866 $243,036 $266,780
not including
Lake Tahoe Area) 4
rt;.'J
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Fresno $119,010 $136,422 $165,889 $214,606 $235,572
Glenn $129,181 $148,082 $180,068 $232,948 $255,706
Humboldt $125,113 $143,418 $174,396 $225,611 $247,653
Imperial $122,061 $139,920 $170,143 $220,108 $241,612
In yo $122,061 $139,920 $170,143 $220,108 $241,612
Kern $122,061 $139,920 $170,143 $220,108 $241,612
Kings $111,889 $128,260 $155,964 $201,766 $221,478
Lake $116,975 $134,090 $163,053 $210,937 $231,545
Lassen $129,181 $148,082 $180,068 $232,948 $255,706
Los Angeles $122,061 $139,920 $170,143 $220,108 $241,612
Madera $110,872 $127,094 $154,546 $199,932 $219,464
Marin $130,199 $149,248 $181,486 $234,782 $257,720
Mariposa $111,889 $128,260 $155,964 $201,766 $221,478
Mendocino $110,872 $127,094 $154,546 $199,932 $219,464
Merced $110,872 $127,094 $154,546 $199,932 $219,464
Modoc $129,181 $148,082 $180,068 $232,948 $255,706
Mono $122,061 $139,920 $170,143 $220,108 $241,612
Monterey $126,130 $144,584 $175,814 $227,445 $249,666
Napa $124,095 $142,252 $172,978 $223,777 $245,639
Nevada $130,199 $149,248 $181,486 $234,782 $257,720
Orange $122,061 $139,920 $170,143 $220,108 $241,612
Placer $132,741 $152,163 $185,030 $239,368 $262,753
not including n
Lake Tahoe Area F u
rw~ J o r t 3 V~ o 3 a'
3'r'~I'I
J,,
Plumas $132,741 $152,163 $185,030 $239,368 $262,753
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ATTACHMENT - HOMEBUYER ASSIST��CP�County of Monterey First Time Home Buyer Program Manual
APPENDIX D: MAXIMUM PURCHASE PRICE
HOME publishes annual maximum purchase price limits by unit size annually:
Section 203(b)
The County can choose to lower these maximum purchase price limits but in no case
can a home sale exceed these limits.
See the next page for maximum purchase price limits.
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ATTACHMENT - HOMEBUYER ASSIST��DP�2008 NOFA Appendix D
Maximum Purchase Price/After-Rehabilitation Value Limits
One-
Family Two-
Family Three-
Family Four;
Family Last
Revised::;
Alameda County 612,750 784,452 948,220 1,178,405 4/3/2008
Alpine Count),: 415,625 532,090 643,172 799,306 4/3/2008`
Amador County 337,250 431,753 521,888 648,579 4/3/2008
Butte County 304,000 389,186 470,435 584,635 4/3/2008``
Calaveras County 362,790 449,996 543,940 675,984 4/3/2008
Colusa"County, 302,100:" 386,753 467,4:94 8,0981 4/3/2008;
Contra Costa County 567,150 726,074 877,654 1,090,710 4/3/2008
Del Norte. County 236,550 302,83,5 366,057 454,919" 4/3/200
El Dorado County 440,563 564,015 681,763 847,264 4/3/2008
Fresno County 289,750 370,943:" 448,383- 557,23.0 4/3/2008,,:
Glenn County 218,250 279, 119 337,390 419,293 4/3/2008
Huu boldt Coui ty 299;250 383,105 463,,084 575,500. 4/3/2008�
Imperial County 247,000 316,213 382,228 475,016 4/3/2008
lnyo County 362,790- T" 425,6,7,2,,' 514,538,1 63"9,445 4/3/2008,';
Kern County 280,250 358,780 433,682 538,960 4/3/2008
Kings County 247000�`x' 316,213". 3:82,228:; 475 413/2'00,'83
Lake County 304,950 390,402 471,905 586,462 4/3/2008
Lassen-;County 216,600:~ 277,295 335,185 416,552 4/3/2008':"'
Los Angeles County 531,050 679,859 821,790 1,021,284 4/3/2008
Madera County 323,000 413;510 499,837. 621;175 4/3/2008
Mann County 945,250 1,210,124 1,462,757 1,817,850 4/3/2008
MarposaCounty r r, 3.12,895 40.0,573 4:84,199, 601,741 4/3/200
Mendocino County 389,500 498,644 602,744 749,0.64 4/3/2008
Merced County 358,383,; 554, 689,221 4/3/2008
Modoc County 200,160 256,248 309,744 384,936 4/3/2008
Mono County 4 352,790: 464,449 561,4;1.1,; 697,696T 4/31200
Monterey County 569,050 728,507 880,595 1,094,364 4/3/2008
Nap41C01_111ty 584,250:` 747;966 904,116, 1;123,595 4/3/2008
Nevada County 427,500 547,292 661,549 822,143 4/3/2008
Orange County 671,500 863,506: 1;04.3,777, 1,297,159 4/3/2008
Placer County 412,300 527,833 638,027 792,911 4/3/2008
Plus asCou ity 3 I 600 398,915 482,195 599,251 4/3/2008
Riverside County 380,000 486,482 588,043 730,794 4/3/2008
Sacramento County 362,790 446 542,100'., 625,500 4/3/2008
San Benito County 551,000 705,399 852,663 1,059,651 4/3/2008
San Bernard n 362,790 441 482 533,649 663,195
663,195 4/3/2008`'
San Diego County 530,100 678,642 820,320 1,019,457 4/3/2008
San Francisco Co:ui ty.
8`12 250
1;039,855,
1.,256,942.
1,562,072 991
4/3/2008,.
111-0-2
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ATTACHMENT - HOMEBUYER ASSIST��EP�County of Monterey First Time Home Buyer Program Manual
ATTACHMENT E
LOAN SERVICING POLICIES AND PROCEDURES
FOR County of Monterey
The County of Monterey here after called Lender" has adopted these policies and procedures in
order to preserve its financial interest in properties, who's Borrowers" have been assisted with
public funds. The Lender will to the greatest extent possible follow these policies and procedures
but each loan will be evaluated and handled on a case-by-case basis. The Lender has
formulated this document to comply with state and federal regulations regarding the use of these
public funds and any property restrictions, which are associated with them.
The policies and procedures are broken down into the follow areas: 1) making required monthly
payments or voluntary payments on a loan's principal and interest; 2) required payment of
property taxes and insurance; 3) required Request for Notice of Default on all second mortgages;
4) loans with annual occupancy restrictions and certifications 5) required noticing and limitations
on any changes in title or use of property; 6) required noticing and process for requesting a
subordination during a refinance; 7) processing of foreclosure in case of default on the loan.
1. Loan Repayments:
The Lender will collect monthly payments from those borrowers who are obligated to do so under
Notes, which are amortized promissory notes, or Lender will use loan
collection Company to collect payments). Late fees will be charged for payments received after
the assigned monthly date.
For Notes, which are deferred payment loans; the Lender may accept voluntary payments on the
loan. Loan payments will be credited to the interest first and then to principal. The borrower may
repay the loan balance at any time with no penalty.
2. Payment of Property Taxes and Insurance:
As part of keeping the loan from going into default, borrower must maintain property insurance
coverage naming the Lender as loss payee in first position or additional insured if the loan is a
junior lien. If borrower fails to maintain the necessary insurance, the Lender may take out forced
place insurance to cover the property while the Borrower puts a new insurance policy in place.
All costs for installing the necessary insurance will be added to the loan balance at time of
installation of Borrower's new insurance.
When a property is located in a 100 year flood plain, the Borrower will be required to carry the
necessary flood insurance. A certificate of insurance for flood and for standard property
insurance will be required at close of escrow. The lender may verify the insurance on an annual
basis.
Property taxes must be kept current during the term of the loan. If the Borrower fails to maintain
payment of property taxes then the lender may pay the taxes current and add the balance of the
tax payment plus any penalties to the balance of the loan. Wherever possible, the Lender
encourages Borrower to have impound accounts set up with their first mortgagee wherein they
pay their taxes and insurance as part of their monthly mortgage payment.
3. Required Request for Notice of Default:
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When the Borrower's loan is in second position behind an existing first mortgage, it is the
Lender's policy to prepare and record a Request for Notice of Default" for each senior lien in
front of Lender's loan. This document requires any senior lien holder listed in the notice to notify
the lender of initiation of a foreclosure action. The Lender will then have time to contact the
Borrower and assist them in bringing the first loan current. The Lender can also monitor the
foreclosure process and go through the necessary analysis to determine if the loan can be made
whole or preserved. When the Lender is in a third position and receives notification of
foreclosure from only one senior lien holder, it is in their best interest to contact any other senior
lien holders regarding the status of their loans.
4. Annual Occupancy Restrictions and Certifications:
On some owner occupant loans the Lender may require that Borrowers submit utility bills and/or
other documentation annually to prove occupancy during the term of the loan. Other loans may
have income and housing cost evaluations, which require a household to document that they are
not able to make repayments, typically every five years. These loan terms are incorporated in the
original note and deed of trust.
5. Required Noticing and Restrictions on Any Changes of Title or Occupancy:
In all cases where there is a change in title or occupancy or use, the Borrower must notify the
Lender in writing of any change. Lender and borrower will work together to ensure the property
is kept in compliance with the original Program terms and conditions such that it remains
available as an affordable home for low income families. These types of changes are typical
when Borrowers do estate planning adding a relative to title) or if a Borrower dies and property
is transferred to heirs or when the property is sold or transferred as part of a business
transaction. In some cases the Borrower may move and turn the property into a rental unit
without notifying the Lender. Changes in title or occupancy must be in keeping with the objective
of benefit to low-income households below 80 percent of AMI).
Change from owner-occupant to owner-occupant occurs at a sale. When a new owner-occupant
is not low-income, the loan is not assumable and the loan balance is immediately due and
payable. If the new owner-occupant qualifies as low-income, the purchaser may either pay the
loan in full or assume all loan repayment obligations of the original owner-occupant, subject to
the approval of the Lender's Loan Committee depends on the HCD program).
If a transfer of the property occurs through inheritance, the heir as owner-occupant) may be
provided the opportunity to assume the loan at an interest rate based on household size and
household income, provided the heir is in the TIG. If the heir intends to occupy the property and
is not low-income, the balance of the loan is due and payable. If the heir intends to act as an
owner-investor, the balance of the loan may be converted to an owner/investor interest rate and
loan term and a rent limitation agreement is signed and recorded on title. All such changes are
subject to the review and approval of the Lender's Loan Committee.
Change from owner-occupant to owner-investor occurs when an owner-occupant decides to
move out and rent the assisted property, or if the property is sold to an investor. If the owner
converts any assisted unit from owner occupied to rental, the loan is due in full.
Conversion to use other than residential use is not allowable where the full use of the property is
changed from residential to commercial or other. In some cases, Borrowers may request that the
Lender allow for a partial conversion where some of the residence is used for a business but the
household still resides in the property. Partial conversions can be allowed if it is reviewed and
approved by any and all agencies required by local statute. If the use of the property is
converted to a fully non-residential use, the loan balance is due and payable.
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6. Requests for Subordinations:
When a Borrower wishes to refinance the property, they must request a subordination request to
the Lender. The Lender will only subordinate their loan when there is no cash out" as part of the
refinance. Cash out means there are no additional charges on the transaction above loan and
escrow closing fees. There can be no third party debt pay offs or additional encumbrance on the
property above traditional refinance transaction costs. Furthermore, the refinance should lower
the housing cost of the household with a lower interest rate and the total indebtedness on the
property should not exceed the current market value.
Upon receiving the proper documentation from the refinance lender, the request will be
considered by the loan committee for review and approval. Upon approval, the escrow company
will provide the proper subordination document for execution and recordation by the Lender.
7. Process for Loan Foreclosure:
Upon any condition of loan default: 1) non payment; 2) lack of insurance or property tax payment;
3) violation of rent limitation agreement; 4) change in title or use without approval; 5) default on
senior loans, the Lender will send out a letter to the Borrower notifying them of the default
situation. If the default situation continues then the Lender may start a formal process of
foreclosure.
When a senior lien holder starts a foreclosure process and the Lender is notified via a Request
for Notice of Default, the Lender, who is the junior lien holder, may cancel the foreclosure
proceedings by reinstating" the senior lien holder. The reinstatement amount or payoff amount
must be obtained by contacting the senior lien holder. This amount will include all delinquent
payments, late charges and fees to date. Lender must confer with Borrower to determine if,
upon paying the senior lien holder current, the Borrower can provide future payments. If this is
the case then the Lender may cure the foreclosure and add the costs to the balance of the loan
with a Notice of Additional Advance on the existing note.
If the Lender determines, based on information on the reinstatement amount and status of
borrower, that bringing the loan current will not preserve the loan, then staff must determine if it is
cost effective to protect their position by paying off the senior lien holder in total and restructure
the debt such that the unit is made affordable to the Borrower. If the Lender does not have
sufficient funds to pay the senior lien holder in full, then they may choose to cure the senior lien
holder and foreclose on the property them selves. As long as there is sufficient value in the
property, the Lender can afford to pay for the foreclosure process and pay off the senior lien
holder and retain some or all of their investment.
If the Lender decides to reinstate, the senior lien holder will accept the amount to reinstate the
loan up until five 5) days prior to the set foreclosure sale date." This foreclosure sale date"
usually occurs about four 4) to six 6) months from the date of recording of the Notice of
Default." If the Lender fails.to reinstate the senior lien holder before five 5) days prior to the
foreclosure sale date, the senior lien holder would then require a full pay off of the balance, plus
costs, to cancel foreclosure. If the Lender determines the reinstatement and maintenance of the
property not to be cost effective and allows the senior lien holder to complete foreclosure, the
Lender's lien may be eliminated due to insufficient sales proceeds.
8. Lender as Senior Lien holder
When the Lender is first position as a senior lien holder, active collection efforts will begin on any
loan that is 31 or more days in arrears. Attempts will be made to assist the homeowner in
bringing and keeping the loan current. These attempts will be conveyed in an increasingly urgent
manner until loan payments have reached 90 days in arrears, at which time the Lender may
consider foreclosure. Lender's staff will consider the following factors before initiating
foreclosure:
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1) Can the loan be cured and can the rates and terms be adjusted to allow for affordable
payments such that foreclosure is not necessary?
2) Can the Borrower refinance with a private lender and pay off the Lender?
3) Can the Borrower sell the property and pay off the Lender?
4) Does the balance warrant foreclosure? If the balance is under $5, 000, the expense to
foreclose may not be worth pursuing.)
5) Will the sales price of home as is" cover the principal balance owing, necessary
advances, maintain fire insurance, maintain or bring current delinquent property
taxes, monthly yard maintenance, periodic inspections of property to prevent
vandalism, etc.) foreclosure, and marketing costs?
If the balance is substantial and all of the above factors have been considered, the Lender may
opt to initiate foreclosure. The Borrower must receive, by certified mail, a thirty-day notification of
foreclosure initiation. This notification must include the exact amount of funds to be remitted to
the Lender to prevent foreclosure such as, funds to bring a delinquent BMIR current or pay off a
DPL).
At the end of thirty days, the Lender should contact a reputable foreclosure service or local title
company to prepare and record foreclosure documents and make all necessary notifications to
the owner and junior lien holders. The service will advise the Lender of all required
documentation to initiate foreclosure Note and Deed of Trust usually) and funds required from
the owner to cancel foreclosure proceedings. The service will keep the Lender informed of the
progress of the foreclosure proceedings.
When the process is completed, and the property has reverted to the beneficiary" at the
foreclosure sale, the Lender could sell the home themselves under a homebuyer program or use
it for an affordable rental property managed by a local housing authority or use it for transitional
housing facility or other eligible use. The Lender could contract with a local real estate broker to
list and sell the home and use those funds for program income eligible uses.
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ATTACHMENT F
SELLERS LEAD-BASED PAINT DISCLOSURE
Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards Lead Warning
Statement
Every purchaser of any interest in residential real property on which a residential dwelling was built
prior to 1978 is notified that such property may present exposure to lead from lead-based paint that
may place young children at risk of developing lead poisoning. Lead poisoning in young children may
produce permanent neurological damage, including learning disabilities, reduced intelligence quotient,
behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant
women. The seller of any interest in residential real property is required to provide the buyer with any
information on lead-based paint hazards from risk assessments or inspections in the seller's
possession and notify the buyer of any known lead-based paint hazards. A risk assessment or
inspection for possible lead-based paint hazards is recommended prior to purchase.
Seller's Disclosure
a) Presence of lead-based paint and/or lead-based paint hazards check i) or ii) below):
i) Known lead-based paint and/or lead-based paint hazards are present in the housing
explain).
ii)_ Seller has no knowledge of lead-based paint and/or lead-based paint hazards in the
housing.
b) Records and reports available to the seller check i) or ii) below):
i) Seller has provided the purchaser with all available records and reports pertaining to
Lead-based paint and/or lead-based paint hazards in the housing list documents below).
ii) Seller has no reports or records pertaining to lead-based paint and/or lead-based paint
hazards in the housing.
Purchaser's Acknowledgment initial)
c) Purchaser has received copies of all information listed above.
d) Purchaser has received the pamphlet Protect your Family from Lead in Your Home.
e) Purchaser has check i) or ii) below):
i) received a 10-day opportunity or mutually agreed upon period) to conduct a risk
assessment or inspection for the presence of lead-based paint and/or lead-based paint
hazards; or;
ii) waived the opportunity to conduct a risk assessment or inspection for the presence of
Lead-based paint and/or lead-based paint hazards.
Agent's Acknowledgment initial)
f) Agent has informed the seller of the seller's obligations under 42 U.S.C. 4852d and is aware
of his/her responsibility to ensure compliance.
Certification of Accuracy
The following parties have reviewed the information above and certify, to the best of their knowledge,
that the information they have provided is true and accurate.
Seller Date Seller Date
Purchaser Date Purchaser Date
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Agent Date Agent Date
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ATTACHMENT G
HOMEBUYER ASSISTANCE PROGRAM SAMPLE LEAD-BASED PAINT CONTRACT
CONTINGENCY LANGUAGE
This contract is contingent upon a risk assessment or inspection of the property for the presence
of lead-based paint and/or lead-based paint hazards at the Purchaser's expense until 9 p.m. on
the tenth calendar-day after ratification. This ending date is: Insert date 10
days after contract ratification or a date mutually agreed upon]. Intact lead-based paint that is in
good condition is not necessarily a hazard. See the EPA pamphlet Protect Your Family From
Lead in Your Home" for more information.)
This contingency will terminate at the above predetermined deadline unless the Purchaser or
Purchaser's agent) delivers to the Seller or Seller's agent) a written contract addendum listing
the specific existing deficiencies and corrections needed, together with a copy of the inspection
and/or risk assessment report.
The Seller may, at the Seller's option, within days after Delivery of the addendum, elect in
writing whether to correct the condition(s) prior to settlement. If the Seller will correct the
condition, the Seller shall furnish the Purchaser with certification from a risk assessor or inspector
demonstrating that the condition has been remedied before the date of the settlement. If the
Seller does not elect to make the repairs, or if the Seller makes a counteroffer, the Purchaser
shall have days to respond to the counter-offer or remove this contingency and take the
property in as is" condition or this contract shall become void. The Purchaser may remove this
contingency at any time without cause.
Seller: Date:
Purchaser: Date:
Property Address:
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ATTACHMENT - HOMEBUYER ASSIST��LP�County of Monterey First Time Home Buyer Program Manual
ATTACHMENT H
SAMPLE DISCLOSURES TO SELLER WITH VOLUNTARY, ARM'S LENGTH, PURCHASE
OFFER
DECLARATION
This is to inform you that name of buyers) would like to purchase the property,
located at address) if a satisfactory agreement can be reached. We are
prepared to pay $ for a clear title to the property under conditions described in the
attached proposed contract of sale.
Because Federal funds may be used in the purchase, we are required to disclose to you the
following information:
1. The sale is voluntary. If you do not wish to sell, the buyer,
thru the agency, name of
agency/Sponsor) will not acquire your property. The buyer does
not have the power of eminent domain to acquire your property by condemnation
i.e. eminent domain) and the agency/Sponsor
will not use the power of eminent domain
to acquire the property.
2. The estimated fair market value of the property is $ and was
estimated by to be finally
determined by a professional appraiser prior to close of escrow.
Since the purchase would be a voluntary, arms length, transaction you would not be eligible for
relocation payments or other relocation assistance under the Uniform Relocation Assistance and
Real Property Acquisition Policies Act of 1970 URA), or any other law or regulation. Also, as
indicated in the contract of sale, this offer is made on the condition that no tenant will be
permitted to occupy the property before the sale is completed.
Again, please understand that if you do not wish to sell your property, we will take no further
action to acquire it. If you are willing to sell the property under the conditions described in the
attached contract of sale, please sign the contract and return it to us at:
If you have any questions about this
matter, please contact at
Sincerely,
Title
Buyer Date
Buyer Date
Form continues on next page with Seller's Acknowledgment
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ATTACHMENT - HOMEBUYER ASSIST��MP�County of Monterey First Time Home Buyer Program Manual
Sample Disclosures to Seller with Voluntary, Arm's Length Purchase Offer
Page 2)
Acknowledgement
As the Seller I/we understand that the affiliation and title of inspector) will
inspect the property for health and safety deficienciesI/we also understand that public funds
may be involved in this transaction and, as such, if the property was built before 1978, a lead-
based paint disclosure must be signed by both the buyer and seller, and that a Visual
Assessment will be conducted to determine the presence of deteriorated paint.
As the Seller, I/we understand that under the City's or County's) program, the property must be
currently owner-occupied, vacant for four months at the time of submission of purchase offer,
new never occupied), or renter purchasing the unit. I/we hereby certify that the property is:
Vacant at least 4 months; Owner-occupied; New; or Being Purchased by
Occupant
I/we hereby certify that I have read and understand this Declaration" and a copy of
said Notice was given to me prior to the offer to purchase. If received after presentation
of the purchase offer, I/We choose to withdraw or not to withdraw, from the
Purchase Agreement.
Seller Date
Seller Date
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ATTACHMENT - HOMEBUYER ASSIST��NP�County of Monterey First Time Home Buyer Program Manual
ATTACHMENT I
IMPLEMENTATION STEPS
INSTRUCTIONS TO HOMEBUYER
Name of Sponsor)
A. Participant works with lender of choice to obtain the primary lender's pre-qualification
letter.
B. Participant works with real estate agent to select home. Program disclosures are
reviewed with agent for presentation to seller. Preference will be given to vacant or
owner occupied homes rather then tenant occupied.
C. Participant selects home and enters into a purchase contract contingent upon
receiving Program loan approval). Lender provides the Program Operator with a copy
of:
real estate sales contract
residential loan application
credit report
verified income documentation
disclosure statement
proof of personal funds for participation in program
breakdown of closing costs
structural pest control clearance
appraisal with photos
escrow instructions
preliminary title report
D. Program Operator reviews paper work to determine program eligibility and financing
affordability for participant etc.
E. Program Operator staff meets with qualified applicant to provide information relative to
the program requirements, the lending process, and home ownership responsibilities.
F. Program Operator has home inspected if necessary) to meet HQS or code compliance
dependent upon the program). Notice of any deficiencies or needed corrections are
given to participant's real estate agent, with recommended course of action.
G. Program Operator requests loan approval from Sponsor's CAO City
Manager/Administrator or County Administrative/Executive Officer). Following loan
approval, Program Operator prepares Deed of Trust, Promissory Note, Notice of
Default, Grant Agreement, Owner Occupant Agreement with City/County, requests
checks and deposits same into escrow.
H. Escrow company furnishes Program Operator with proof of documents to be recorded,
and any escrow close out information. After receipt of recorded loan documents, HUD
I, Insurance Loss Payee Certification and Final Title Insurance Policy Program
Operator) closes out the loan file.
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ATTACHMENT - HOMEBUYER ASSIST��OP�ATTACHMENT J
LEAD-BASED PAINT VISUAL ASSESSMENT, NOTICE OF PRESUMPTION AND HAZARD REDUCTION FORM
Section 1: Background Information
Property Address:
Select one:
Visual Assessment
Presumption
No LBP found or LBP exempt
Hazard Reduction
Section 2: Visual Assessment. Fill out Sections 1, 2, and 6. If paint stabilization is performed, also fill out
Sections 4 and 5 after the work is completed.
Visual Assessment Date: Report Date:
Check if no deteriorated paint found
Attachment A: Summary where deteriorated paint was found. For multi-family housing, list at least the housing
unit numbers and common areas and building components including type of room or space, and the material
underneath the paint).
Section 3: Notice of Presumption. Fill out Sections 1, 3, 5, and 6. Provide to'occupant Win 15 days of
presumption.
Date of Presumption Notice:
Lead-based paint is presumed to be present and/or Lead-based paint hazards are presumed to be present
Attachment B: Summary of Presumption: For multi-family housing, list at least the housing unit numbers and
common areas, bare soil locations, dust-lead location, and or building components including type of room or
space, and the materials underneath the paint) of lead-based paint and/or hazards presumed to be present.
Section 4: Notice of Lead-Based Paint Hazard Reduction Activity. Fill out Sections 1, 4, 5, and 6. Provide
to occupant w/in 15 days of after work completed.
Date of Hazard Reduction Notice:
Initial Hazard Reduction Notice? Yes No Start & Completion Dates:
If No", dates of previous Hazard Reduction Activity Notices:
Attachment C: Activity locations and types. For multi-family housing, list at least the housing unit numbers and
common areas for multifamily housing), bare soil locations, dust-lead locations, and/or building components
including type of room or space, and the material underneath the paint), and the types of lead-based paint
hazard reduction activities performed at the location listed.
Attachment D: Location of building components with lead-based paint remaining in the rooms, spaces or areas
where activities were conducted.
Attachment E: Attach clearance report(s), using DHS form 8552 and 8551 for abatement activities)
Section 5: Resident Receipt of Notice for Presumption or Lead-Based Paint Hazard Reduction Activity
Printed Name: Signature: Date:
Section 6: Contact Information
Contact Name:
Date:
Address:
Organization:
Contact Signature:
Phone:
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