The Home buyer Program (HP) promotes home ownership for low income, first time home buyers. Assistance is in the form of a deferred loan (second mortgage), due and payable when the property is sold, transferred, or at the end of the loan term.
Eligible households are those whose annual income does not exceed 80% of the Area Median Income (AMI), adjusted by household size. Income limits are set by the State of California Department Housing and Community Development (HCD) Community Development guidelines, updated annually.
2012 Maximum Gross Income Limits
Household Size Maximum Annual Income
First-Time Home buyer
Eligible participants (both applicant and co-applicants) must meet at least one of the definitions of a first time home buyer as described below:
Applicant(s) shall not have owned a home except a mobile home not affixed to permanent foundations, during the three years prior to applying for assistance under the HP Program. or
A displaced homemaker who, while a homemaker, owned a home with his/her 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 under employed, experienced difficulty obtaining or upgrading employment and worked primarily without remuneration to care for his/her home and family; or
A single parent who, while married owned a home with his/her spouse or resided in a home with 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; or
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: not permanently affixed to a permanent foundation in accordance with local or state regulations; or not in compliance with state or local building codes and cannot be brought into compliance for less than the cost of replacement.
Purchase Price and Loan Terms
The purchase price of the house cannot exceed $150,000.
Loan Amount and Terms
The amount borrowed is the minimum needed to close the gap between lender requirements and the buyer’s available cash for down payment/closing costs. The maximum HP loan amount cannot exceed $60,000. The borrower must contribute 3% of the purchase price towards the purchase.
Loan repayment is deferred for 30 years at an annual interest rate of 0% (equity share conditions may apply). Borrowers must pay the remaining balance if the property is sold, transferred, or is no longer owner occupied. The City of Shasta Lake HP Loan is recorded as a second mortgage against the property.
1. HP Applicants will complete a City of Shasta Lake Home buyer Program Interest Form. This will enable housing staff to quickly review preliminary information.
2. Program Staff will mail a complete application packet including the: Application Instructions, Housing Application, Required Document Checklist, and Home buyer Education Seminar Course Schedule.
3. Only original applications and all supporting documentation will be accepted. If the application is incomplete or the applicant is deemed ineligible, a letter will be sent to that effect.
4. All HP applicants must complete a First Time Home buyer Seminar prior to eligibility approval. Program Staff will provide a schedule to the applicant.
5. If the applicant is determined eligible, a meeting between the applicant and program staff will be scheduled and an eligibility letter will be provided to the applicant. The eligibility letter is not a loan commitment. When the eligibility letter is issued, the applicant may enter into a contract to purchase a home contingent on receiving first mortgage and HP financing. No purchase contracts dated prior to the eligibility letter will be accepted.
6. The applicants Real Estate agent and Lender will carefully review the checklist for lenders and RE agents, to properly find a home that will conform to the program guidelines. Once a purchase agreement is executed, RE and/or HP Applicant will forward a copy of the executed purchase agreement to Program Staff. All homes must pass a Code Compliance Inspection. This inspection is provided by the City and is no charge to the applicant.
7. Program Staff will provide RE Agent and Applicant a letter of all items that will need to be received prior to loan committee. These items must be completed in a timely manner.
8. Loan Committee meetings are schedule on an as need basis. Following HP loan approval, HP loan documents and escrow instructions will be sent to the title company. The executed documents must be received back to the HP Program Staff for review prior to release of funds.
Please contact Stewart Real Estate Company for any further questions.
Stewart Real Estate Company
1700 Market St #102
Redding CA 96001