Shared Equity Loan Program

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	SHARED EQUITY LOAN PROGRAM The City of Vacaville is pleased to announce the release of the 2008 Shared Equity Loan Program. Applications will be accepted beginning July 1, 2008. The purpose of the program is to expand homeownership opportunities to low and moderate-income households. The amount borrowed is the minimum needed to close the gap between lender requirements and buyer’s cash for down payment assistance and/or closing costs. Qualified homebuyers may receive a maximum loan amount of 20% of the purchase price up to $50,000 towards the purchase of a home located in Vacaville. What is the eligibility criteria for this loan program? Preference will be given to persons living or working in Vacaville for one year or longer. Homebuyer may not have owned a home within the last three years. Household income must be at or below 100% of Area Median Income for Solano County. Household Size 2008 Maximum Income Limit 1 $52,800 2 $60,300 3 $67,700 4 $75,400 5 $81,400 6 $87,500 7 $93,500 8 $99,500 Homebuyer must attend a first time homebuyer workshop, such as those offered by City of Vacaville Housing Counseling Center or other pre-approved first time homebuyer education program. Homebuyer may purchase a new or existing single-family, condominium or townhouse unit located within the incorporated city limits of Vacaville. Mobile homes are not eligible in most cases. The home must be the homebuyer’s principal place of residence ( will be monitored annually). Homebuyer must contribute a minimum investment of 1 percent (1%) of purchase price towards the down payment. Homebuyer must have good credit and income criteria meeting first mortgage requirements. Allowable first mortgage loans can be either level payment fixed rate loans, CalHFA, FHA and FNMA loans. This loan cannot be combined with interest only or 2-1 buydown loans except for CalHFA products. What are the terms of the loan? The deferred loan terms are 45 years at zero interest with no payments required during that time as long as the homebuyer does not sell, transfer ownership, rent the property, refinance it with cash back, or prepay the loan with any other funds. The loan will be forgiven if the borrower remains in the home for the full 45 year loan term. Are there any loan restrictions? There is a 45 year Resale Restriction Agreement that will be recorded against the property. The City will hold an option to purchase the home at a restricted sales price to keep the home affordable for another buyer. How does Share Appreciation work? In exchange for receiving the loan at zero percent (0%) interest, the homebuyer agrees to share a portion of the home’s appreciation (from the original purchase price) when the home is sold. This is an example of how the Shared Appreciation is determined. City contributed $50,000 (14% of original purchase price) Resale Price: $450,880 Original Purchase Price: - 350,000 Difference $100,880 Closing Costs & Eligible Capital Improvements: - 17,500 Total Appreciation: $ 83,380 Owner’s Share (93%): $ 95,043 City’s Share (83,380 x 7%) $5,837 Is there an application fee? Homebuyer will be charged an application fee up to $375 to secure a Shared Equity loan. § $250 is due and payable to the City of Vacaville at time the application is submitted. § $125 may be collected by the lender. Application fees must be from homebuyer’s own funds and are not reimbursable from escrow. Where do I need to begin? § Homebuyer must meet the eligibility criteria listed above; § Complete a first time homebuyer workshop; § Apply with one of the participating lenders. Additional requirements may apply. For program information or if you are interested in becoming a participating lender, please contact the City of Vacaville at (707) 449-5660 or send an email to dhr@cityofvacaville.com You may contact the Vacaville Housing Counseling Center at (707) 449-5693 or email dhr@cityofvacaville.com for information on the next homebuyer workshop.

SHARED EQUITY LOAN PROGRAM