St Bernard Soft Second Program no down payment

St Bernard Soft Second Program no down payment

ST. BERNARD PARISH HOME MORTGAGE AUTHORITY

 

Accepting Applications from First-Time Homebuyers

For a Soft Second Mortgage and a Grant

 

 

The St. Bernard Parish Home Mortgage Authority is taking applications for a CDBG Soft Second Mortgage Program that offers qualified Homebuyers a soft second loan of 20% of the purchase price up to $30,000 at a 0% interest rate and no monthly payments and a grant of up to $5,000 for closing costs and downpayment assistance on a need basis.  The Soft Second Mortgage will be forgiven after the Homeowner has met the requirements of the program and has lived in the home for five years.  The Homeowner must quality for a FHA approved First Mortgage Loan.

 

CDBG Assistance                               CDBG Assistance to be given in the following order:

a)  A Soft Second Loan of 20% of the purchase price up to $30,000 per borrower at 0% interest and no monthly payments

b)  A Grant of up to $5,000 per borrower for Closing Costs and Down Payment Assistance on a need basis

 

Documents Required to Reserve        Borrower must present a legally binding purchase agreement with

Funds                                                  application for funds and must close on the transaction within 90 days tapplying for assistance under this program.  Properties must be essentially “move in” ready when the purchase agreement is executed.   Application date is based on the date that a complete application is received by the Program Administrator and all applicants will be served on a “first come, first served” basis.                                                                                                                        

Minimum Required Homebuyer        1% of Purchase Price or $1,000, whichever is greater

Investment                                                                                                                                                     

 

Maximum Homebuyer Investment    Greater of 10% of Purchase Price or $10,000

 

Maximum Liquidity                            Homebuyer’s cash and or liquid assets must not be greater than 6 months of the monthly Principal & Interest plus Taxes and Insurance after down payment and out of pocket closing costs are paid.  Any excess will reduce the $5,000 Grant.

 

Type of Eligible Units                          New and Existing Residential (1 and 2 Unit Dwellings)                     

 

Maximum Purchase Price                  $200,000

 

Mortgage Rate of First Mortgage     Established Rate, plus 1% origination fee                                           

 

Soft Second Payment Requirement    Repayment of a portion of the principal amount, up to $30,000 of

(Sale or Refinance)                             the CDBG Soft Second Loan, shall be due if the First Mortgage

                                                            Loan is paid in full upon sale or refinance within five (5) years from

                                                            Date of closing.

 

                                                            0–3 years:                    100% of Soft Second Loan    

                                                            3-4 years:                     80% of Soft Second Loan

                                                            4-5 years:                     60% of Soft Second Loan

                                                            After 5 years:               $0 due

                                                                                                                       

First Mortgage Loan Type                   Only FHA loans will be accepted at this time.  Borrower must have a minimum 640 credit score and stable taxable income for a minimum of 2 years.

 

Second Mortgage Loan Payee           The Second Mortgage will be made payable to the State of

                                                            Louisiana, Division of Administration Office of Community

                                                            Development (“OCD”).

 

Closing Costs and Down Payment     The Closing Costs and Down Payment Assistance Grant limit is

Assistance Grant                                $5000.  The $5000 can include funding for prepaids (homeowners insurance, flood insurance, mortgage insurance premium, and taxes) and other customary costs associated with closing a real estate transaction.  Advance payments for Homeowners, Flood Insurance, and Taxes are limited to 24 months of premiums. 

 

Eligible Borrowers                             First time homebuyers with annual household incomes at or below 120% area median income (per Metropolitan Statistical Area data) who are purchasing a principal residence in St. Bernard Parish.  A first-time homebuyer is an individual who meets any one of the following criteria:

 

-An individual who has had no ownership in a principal residence during                                   the 3-year period ending on the date of purchase of the property.  This includes a spouse (if either meets the above test, they are considered first-time homebuyers).

-A single parent who has only owned with a former spouse while married.

-An individual who is a displaced homemaker and has only owned with a spouse.

 

Homebuyers who have already received payments from the State under the “sell” or “relocate” option under the Road Home Compensation Program are not eligible to receive additional financial assistance from this program.

 

Household Income Limits        Call us for details 504-339-6999                 

 

Insurance Requirements                    Eligible properties must be insured with flood, wind, and standard homeowner's coverage in an amount equal to the first and second mortgage balances.  Prior to closing, proof of mortgagee clause

listing the State of Louisiana, Division of Administration Office of Community Development (“OCD”), as 2nd position lien holder must be received by Compliance Agent.

 

Physical Standards/Inspection           All properties must meet St. Bernard Parish Building Code requirements, Zoning Code requirements and the physical standards and inspection procedures of the FHA/VA or Fannie Mae mortgage loan product associated with the First Mortgage Loan.  All properties must have an HRS inspection.

 

Occupancy Requirement                    Program recipients must occupy purchased unit as their principal residence for at least 5 years in order to receive forgiveness of entire indebtedness.  Failure to do so without the written permission of the St. Bernard HMA will result in the soft second  loan balance being immediately due and payable as described under Second Mortgage Repayment above.

 

There will be no waiver of the occupancy requirement during the first 36 months from date of purchase of the unit.  The St. Bernard HMA may exercise its right to waive the acceleration of payments due upon proof of job related relocation of over 150 miles, serious illness or death of the homebuyer.  Upon HMA’s determination that borrower meets the “hardship” test per supporting documents submitted and if the borrower has provided proof of continuous occupancy of the residence as the primary residence, the HMA may will reduce the principal amounts due according to the following schedule: 

 

After 36 months:  40% of principal balance due

After 48 months:  20% of principal balance due

After 60 months:  full forgiveness of debt

 

Homebuyer Education                       All eligible homebuyers must receive at least 12 hours of homebuyer education and/or training from one of the participating homebuyer training organizations certified by the Louisiana Homebuyer Training Collaborative, Inc.  Homebuyers of a two unit residence must also complete a landlord training seminar from one of the participating homebuyer training organizations certified by the Louisiana Homebuyer Training Collaborative, Inc.

                                                            The Lender will be responsible to coordinate and verify that the training has been completed.

 

Approved List of Lenders                  (1)  Gulf Coast Bank & Trust Company

(2)     First NBC (formerly Dryades Savings Bank, FSB)                                                    

Compliance                                         Providence Community Housing will be the Compliance Agent and will process and provide all compliance reviews and reporting requirements related to the CDBG Soft Second Mortgage Loan Program. 

                                                           

Annual Compliance                            The borrower must provide, on an annual basis, the following documents for the term of the Soft Second Loan:

 

1.      Proof of Homestead Exemption

2.      Homeowners Insurance Policy

 

 

CALL US TODAY TO SEE IF YOU QUALIFY

504-339-6999


Tiffani Robin Headshot
Author:
Phone: 504-339-6999
Dated: January 24th 2013
Views: 26,533
About Tiffani: Tiffani is the CEO of The Robin Realty Group sponsored by Keller Williams Realty Services located in...

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