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HomeMy WebLinkAboutExhibit AFirst -Time Homebuyer Expanded Program ("Expanded Program") Program Guidelines Program Objective: To mitigate the effects of gentrification; to provide residents with home ownership opportunities; to assist in creating generational wealth; to provide long-term housing support; and to encourage economic stability. Income Limits: ■ The Expanded Program's applicant ("Applicant" or `Borrower") must provide documentation that shows that the Applicant's annual household income is equal to or less than one hundred percent (100%) of area median income as provided by the City of Miami's ("City") Department of Housing and Community Development and adjusted for family size ("AMI"); however, if the Applicant can provide documentation proving that he or she is a current City or Miami -Dade County ("County") first responder (including police, fire, emergency medical personnel) or an active or retired member of the United States Air Force, Army, Navy, Coast Guard, or Marines, then such Applicant shall be eligible for the Expanded Program if that Applicant can provide documentation that shows that the annual household income is equal to or less than one hundred forty percent (140%) of AMI, and adjusted for family size. Eligible ■ Single Family Residences Properties: ■ Townhomes ■ Condominiums ■ Must be located in the District providing the funding Eligible ■ Must not have previously owned a home Borrowers: ■ Household income complies with the `Income Limits' detailed above; ■ Must be able to afford monthly payments based on debt to income ratio calculation ■ Must contribute at least Two Thousand Dollars ($2,000.00) of personal funds towards down payment/closing costs ■ Must attend and successfully complete United States Department of Housing and Urban Development approved housing counseling Maximum Not to exceed Five Hundred Thousand Dollars ($500,000.00) for new construction Sales Price: or existing properties Maximum If the Applicant qualifies and is selected pursuant to the process established herein, Assistance: the City will then provide up to Two Hundred Thousand Dollars ($200,000.00) in the form of a forgivable second mortgage with a thirty (30) year term. Loan Terms: ■ 0% interest, non -amortizing ■ Deferred payment 30-year loan ■ Payment of principal will be forgiven at end of maturity period provided that the homeowner resided in the home as their primary residence and complies with the terms of the loan documents throughout the mortgage's term ■ The City shall have the right of first refusal for any encumbered property that is sold or otherwise conveyed during the mortgage's term Security: ■ The loan will be secured by a recorded second mortgage on the property First Mortgage Restrictions: Term of the loan must be 30 years with a fixed interest rate and cannot exceed more than 150 basis points over Freddie Mac's weekly average 30-year rate, as published in the Primary Mortgage Market Survey ("PMMS"); no prepayment penalties; total percentage charged for Discount, Origination & Broker fees must not exceed 2 points; all other lending fees must be reasonable and cannot exceed $500 or 0.5% of the loan amount, whichever is greater ■ The Applicant will be required to secure a first mortgage in an amount that would result in a total payment, inclusive of principal, interest, taxes and insurance, equal to thirty percent (30%) of the Applicant's total gross family income Other Applicant must reside in purchased home at all times. The loan will be due at sale, Restrictions: transfer of property or if the home ceases to be the main residence of the Applicant. The property must become their owner -occupied homesteaded property, and there is to be only one application per household. The Applicant may not lease the Property, or any portion thereof, during the term of the mortgage Resale Restrictions: If the Applicant sells and/ or transfer the home before the end of the City's mortgage term, the following provisions will apply: 1) The Borrower will be required to repay the original amount given as assistance. 2) The City shall share in any `gain' realized, based on its pro -rated share of participation in the original purchase. Furthermore, if the sale occurs within the first 3 years of the purchase, the City shall keep 100% of its pro -rated share of the `gain', from year 3 up to year 20, the City's share of its pro -rated `gain' shall decrease by 5% every year, while in turn, the owner's share shall increase by 5% each year. At year 20, up to the City's loan maturity, the owner shall retain 100% of the City's `gain.' 3) This above shared gain proposal terminates in the event of a foreclosure, with the lender required to provide the City the right of first refusal to purchase the loan at a negotiated price. In the event of a foreclosure, the City will recapture any amount of net proceeds available from the sale of the property. Additional Information for Participating Districts: District 1: TBD ■ District 2: TBD ■ District 3: TBD ■ District 4: TBD ■ District 5: 1) Chairperson Christine King allocates Miami Forever Bond funds in the amount of three million dollars ($3,000,000.00) to supplement the City's First Time Homebuyer Program to benefit eligible Applicants who are selected and who wish to purchase a home in District 5. 2) Property to be purchased must be located in District 5. 3) Additional funding sources available, subject to further approval, may include the Southeast Overtown/Park West Community Redevelopment Agency ("CRA") or the Little Haiti Revitalization Trust ("Trust"). If the property is located with the designated areas of the CRA or the Trust, then CRA or the Trust, as applicable, may provide funding and will receive the second mortgage rather than the City. 4) In the avoidance of doubt, the Trust and the CRA's participation in the Expanded Program, as described herein, is not a condition precedent to the establishment of the Expanded Program, and the Expanded Program may proceed in accordance with the provisions of this resolution in the event that the CRA and/or the Trust do not adopt appropriate legislation in a timely manner.