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ADVERTISMENT
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EQUITY FUNDING GROUP - FIRST TIME BUYERS PROGRAM |
MCC - Mortgage Credit Certificate Program
First-Time Buyers Only (May not have owned a home in the last three years.) May be utilized with almost any conventional lending program including fixed or adjustable and FHA or VA financing. (Negative amortization ARMs are not allowed, nor are other bond financed programs such as Cal Vet or CHFA.) Only for single family residences, Condos or PUDs. (Duplexes are allowed only in target areas.)
Income limits - Non-Target Area: $61,760 for family of one or two and $71,000 for family of three or more (May 31, 1998)
Sales Price Limits - Non-Target: $220,000 for existing homes $250,000 and for new construction
Sales Price Limits - Target Areas: $285,010 for existing homes $352,204 and for new construction - - (Note: Target areas are census tracts 5009 and 5010 on Thomas Brothers Map Page 62 in downtown San Jose. bounded by Washington St., First St., E. William St. and Tenth St.)
Buyer Advantages: Federal Tax Credit Equal to 10% of the interest paid during calendar year. Equivalent reduction of approximately 1.17% in effective interest rate. Allows buyers to qualify for a purchase price of about 10% more than they otherwise could.
Seller requirements: Must sign affidavit of purchase price in escrow. No specific requirement to pay any of the borrowers' costs unless dictated by underlying loan program (i.e. VA loans, etc.) May not pay any more of buyers' costs than allowed with underlying loan program (i.e. on Conventional loans the seller may pay up to 3% of the Sales Price toward buyers costs at LTVs above 90% and up to 6% on LTVs for 90% and below.)
Side Notes: Borrowers are subject to a potential recapture provision if they sell their home within 9 years of the purchase date. There is no significant increase in the escrow period required to close an MCC transaction.
Special Note -- Effective May 31, 1998, the County is allowing multiple refinances under the MCC program. The Reissued program (RMCC) allows current holders to maintain the same tax credit amounts under their original commitment (20% prior to June 30, 1995, 15% between July 1995 and January 31, 1998 and 10% thereafter) while allowing them to take advantage of today's lower rates. |
CHBP - Community Home Buyers Programs
May not presently be on title to a home.
Programs are somewhat limited. Most investors only allow 15 or 30 year fixed rate conforming programs. There are a few no-negative
Adjustables including a 5/1 ARM.
Only for single family residences, Condos or PUDs Income limits: $80,880 for all families
Sales Price Limits: $220,000 for existing homes $250,000 for new construction
May be used in junction with the MCC Program!
Minimum down payment of 3% from the borrowers' own funds. The balance, if any, may be gifted from an immediate family member or a grant/unsecured loan form a non-profit or governmental entity.
No reserve requirements.
Maximum loan to vale is 97% (Either 95% with additional 2% paid for by lender, which run 1/2% higher in interest rate to offset lender's subsidy, or a true 97% LTV.)
Buyer advantages: Among the lowest down payment requirements. Flexibility in underwriting. Required educational course should help with budgeting and home maintenance concerns. May be used with MCC.
Seller requirements: Must sign affidavit of purchase price in escrow. No specific requirement to pay any of the borrowers' costs. May not pay any more of buyers' costs than 3% of the Sales Price at LTVs above 90% and up to 6% on LTVs for 90% and below. The seller may also pay the buyers' pre- paid expenses. VA Loans - Veterans Administration Loan Program
Available for Veterans who have been discharged under conditions other than dishonorable and for active duty military personnel.
Property types: Single to Four Family homes, and approved condos or PUDs. Only for owner occupied properties.
No Income limits
Maximum Loan Amount: $203,000 - No increase in the loan amount for multiple units. Up to100% LTV.
Loan Types: 30 and 15 year fixed rate loans and 1 year ARMs tied to 1 year Constant Maturity T-Bills with 1/5 caps.
Buyer Advantages: Lowest Down Payment requirement of any type of financing. Greater flexibility in underwriting. May be used in conjunction with the MCC Program.
Seller requirements: Must pay several fees which are normally paid by the buyer including Underwriting, Document Preparation, Processing, Tax Service, all City Transfer Taxes and notary fees. These fees usually total approximately $1,000. Points may now be paid by either party and the interest rate is negotiable. The Seller may pay all the buyers closing costs including pre-paid expenses.
Side Notes: VA streamlined processing has allowed VA transactions to close within the 30 to 45 day normal escrow period. Contact with the VA is no longer required.
Like to know more about VA Loans? Check out our VA Loan Page.
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