RES 93113 - Laserfiche WebLink

Program EHgibility First time homebuyers. (First time homebuyer is defined as any individual(s), who has not previously been the sole owner of residential property for the previous five years.) Buyer(s) must live in the home for the duration of the time they own it. (Emergency provisions exist to allow for rental of the property for a maximum total of 12 months over any 10 year period for circumstances such as illness, sabbatical or temporary transfer.) · Buyer(s) income must not exceed the lower income limits for the Oakland PSMA at time of purchase. · Buyer(s) must provide a minimum 5% down payment on the property and meet closing costs. · Occupancy restrictions allow no more than four person households to occupy the two bedroom homes at the time of purchase and no less than three people for the three bedroom homes at the time of purchase. · Limitations of the City's Second The City's financial assistance in the form of a second mortgage loan is intended to "bridge the gap" between the amount of the fast mortgage that the buyer can qualify for and the money needed, less the buyer(s) down payment, to purchase the property. The City's second mortgage loan may not exceed 10% of the property's purchase price. In general, depending on one's financial situation, the principal and interest payments on the second mortgage will be waived for five years after which time the homeowner will be required to begin interest and principal payments at a predetermined interest rate which will be equal to the City's average general pool investment rate for the twelve months preceding the date when payments are scheduled to begin. However, at the end of two years after the purchase of the property, the City will review the owner(s) financial situation and if the review indicates an increase in income of approximately 10% or more, the owner will be required to begin interest payments on the loan. If required as a result of financial hardship, the initial five year waiver period may be extended up to and until the sale of the property if approved by the City Manager. · First Mortgage Restrictions The buyer(s) will be required to secure a fast mortgage which best suits their financial situation. However, the City's marketing agent will provide assistance in helping buyers obtain a loan. An important aspect of the program is that if a second mortgage is requested, the buyer(s) must commit a minimum of 38% of their income toward the total monthly payments for the property including principal and interest on the fast loan, Private Mortgage Insurance (PMI) and homeowner's insurance, homeowner's association September 7, 1993 Page 2