RIVERSIDE COUNTY HOMEOWNERSHIP ASSISTANCE PROGRAMS Updated as of 4/12/10 1

Purpose Overview Assistance Type & Amount Eligible Locations & Search Tools Starting Point and Process for Buyers 2

Programs Each of the County’s 4 programs has a different funding source Each program therefore has a different set of guidelines 3

NSHP NEIGHBORHOOD STABILIZATION HOMEOWNERSHIP PROGRAM 4

NSHP- Purpose 1. Stabilize neighborhoods with a high number of foreclosures. 2. Provide purchase price assistance to first time home buyers for the purchase of a foreclosed home in certain target areas of Riverside County. 3. Provide optional home rehab/repair assistance. 5

NSHP- Background From 2008 HERA Act passed by President Bush Funding received February 2009 HUD required funds to be obligated 18 months after program inception 6

NSHP- Purchase Price Assistance 1. Purchase Price Assistance Up to 20% of the purchase price for gap assistance (makes up the difference between the 1 st TD & purchase price). Silent 2 nd mortgage with no monthly payments at 0% interest forgiven after 15 years No resale restrictions or equity share component No minimum buyer contribution towards down payment required 7

NSHP- Optional Rehab Component 2. Home Rehab/Repair Assistance (optional) To increase long term affordability and sustainability MINOR Curb appeal, landscaping and energy efficient improvements Silent 3 rd mortgage requiring no monthly payment at 0% interest 3 rd mortgage forgiven after 15 years Rehab items identified by EDA prior to close of escrow Rehab starts after the client moves into the home Purchase price assistance 2 nd loan + Rehab/Repair assistance 3 rd loan Not to Exceed $75,000 Total 8

NSHP- Property Requirements Foreclosed, Bank Owned Only Purchase price not to exceed $292,686 SFR, condo, PUD or manufactured home (on permanent foundation) built 1979 or later If property was tenant occupied at or after foreclosure, foreclosing lender must have given 90 day’s written notice to vacate at least 90 days prior to execution of purchase contract If previously owner occupied- 90 day vacancy requirement is waived Purchase price must be at least 1% below fair market value as appraised by EDA 9

NSHP- Eligible Locations Within the NSHP Target areas of Riverside County Target areas include a portion of 15 cities and 10 unincorporated areas: Cities: Banning, Beaumont, Blythe, Canyon Lake, Cathedral City, Desert Hot Springs, Indio, Lake Elsinore, Menifee, Murrieta, Norco, Perris, San Jacinto, Temecula, and Wildomar. Unincorporated Areas: East Hemet, Eastvale, French Valley, Highgrove, Home Gardens, Lakeland Village, Rubidoux, Temescal Canyon, and Thousand Palms, Winchester 10

NSHP- Target Area Search Step 1: NSP Target Area Search Search by the APN or Address Provides a confirmation of the property eligibility with a “Congratulatory” message EDA website at 11

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1. Enter APN 2. Select APN

NSHP- Target Area Maps Step 2: NSP Target Area Maps If property does not produce “congratulatory message” To get a general idea of target areas (useful when showing properties) 16

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NSHP Target Areas TARGET AREA NAME DISTRICTHUD RISK SCORES NSP MAP NUMBER Lakeland Village / Wildomar Lake Elsinore Temescal Canyon ,8,9 8 I – 1 I – 2 I - 3 Eastvale Home Gardens Norco Rubidoux 2 1, ,9,10 7,8 7,8,9 II – 1 II – 2 II – 3 II - 4 Canyon Lake East Hemet French Valley Menifee Murrieta San Jacinto Temecula ,9 8 8,9 7,8 8,9 7,8 III – 1 III – 2 III – 3 III – 4 III – 5 III – 6 III - 7 Blythe Cathedral City Indio Thousand Palms ,8,9 9,10 IV – 1 IV – 2 IV – 3 IV - 4 Banning Beaumont Desert Hot Springs Highgrove Perris ,9,10 8, ,9 V – 1 V – 2 V – 3 V – 4 V

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RHP REDEVELOPMENT HOMEOWNERSHIP PROGRAM 21

RHP- Type of Assistance Redevelopment Agency for the County of Riverside (RDA) Up to 20% of the purchase price for down payment assistance not to exceed $75,000 Silent 2 nd mortgage with no monthly payments at 0% interest forgiven after 45 years No equity share component If buyer sells home within 45 year affordability period, it must be offered to or otherwise made available for purchase by qualified low or moderate income households No minimum buyer contribution towards down payment required 22

RHP- Property Requirements Foreclosed, Short Sale or “Normal” Private Party sale OK Purchase price & appraised value cannot exceed $292,686 SFR, condo/townhouse/PUD or NEW manufactured home (on permanent foundation) No In-Ground Pools or Spas Minimum 2 Bedrooms If property currently is or was tenant occupied, seller must have given tenant 90 day’s written notice to vacate at least 90 days prior to execution of purchase contract If property is currently owner occupied or was owner occupied at foreclosure for REO’s- 90 day vacancy waived 23

RHP- Eligible Locations Option 1: Properties in Unincorporated areas of Riverside County- Shaded Yellow on the Thomas Guide *Menifee and Wildomar recently became cities but may still show as unincorporated areas on the Thomas Guide TLMA Map shows Property as Not Being Within a City Limit 24

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RHP- Eligible Locations Option 2: Properties in County Redevelopment Areas TLMA Map must show that the property is within a Riverside County Redevelopment area 27

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FTHB FIRST TIME HOME BUYER 29

FTHB- Type of Assistance EDA’s original first time buyer program Up to 20% of the purchase price for down payment assistance not to exceed $75,000 Silent 2 nd mortgage with no monthly payments at 0% interest forgiven after 15 years No resale restrictions or equity share component No minimum buyer contribution towards down payment required 30

FTHB- Property Requirements ** No Foreclosed, Bank Owned Properties Allowed Purchase price & appraised value cannot exceed $292,686 SFR, condo/townhouse/PUD or NEW manufactured home (on permanent foundation) No In-Ground Pools or Spas Minimum 2 Bedrooms If property was tenant occupied, it must be vacant for 90 days prior to the execution of the purchase contract (exception- when tenant is going to purchase the home they’re renting) If property is currently owner occupied- 90 day vacancy requirement is waived **This is subject to change upon exhaustion of NSHP funds 31

FTHB- Eligible Locations 1. Properties in Unincorporated Areas of Riverside County- Shaded Yellow on the Thomas Guide *Menifee and Wildomar recently became cities but may still show as unincorporated areas on the Thomas Guide 2. Or within any Participating City All Cities are Eligible EXCEPT: Calimesa, Coachella, Corona, Hemet, Indio, Moreno Valley, Palm Desert, Palm Springs, Perris, Rancho Mirage, Riverside 32

Buyer Qualifications for NSHP, RHP, FTHB Must be a first-time homebuyer: no ownership interest in real estate in the past 3 years Buyer within income limits- (see matrix) Primary Residence Has attended an 8 hour homebuyer education course from HUD approved provider Riverside County Programs have NO minimum credit score or quality requirement. Buyer must qualify for eligible 1 st mortgage (30 year term, fixed rate fully amortized) through participating lender 33

Home condition for NSHP, RHP & FTHB A home will not be eligible for purchase under these Programs unless it is in “standard” condition and suitable for occupancy upon purchase. Homes purchased through these programs must meet Housing Quality Standards (HQS) Home inspections are required on all homes All health and safety issues on home inspection report are repaired prior to EDA drawing docs 34

MCC MORTGAGE CREDIT CERTIFICATE 35

MCC- Type of Assistance Not a down payment Assistance Program Entitles qualified homebuyers to a federal income tax credit in the amount of 15% of the interest paid on the primary mortgage Borrower’s income taxes reduced by amount of the credit, increasing the take-home pay by the amount of the credit. The amount of the MCC is taken into consideration by the 1 st mortgage underwriter and may give the borrower more buying power 36

MCC- Type of Assistance Con’t MCC May be combined with NSHP, RHP and FTHB programs Recapture tax may apply if borrower sells home at a profit before end of first 9 years and is over the income limit at time of sale 37

MCC- Calculating the Annual Credit 1 st Mortgage Loan Amount x Interest Rate x 15% Example: Loan Amount = $200,000 Interest Rate = 6% MCC = $200,000 x 6% x 15% = $1,800/yr 38

MCC- Tax Deduction vs. Tax Credit A tax deduction (such as mortgage interest or property taxes)is subtracted from adjusted gross income before federal income taxes are computed, decreasing taxable income A tax credit entitles a tax payer to subtract the amount of credit from their total federal tax bill 39

MCC- Buyer Qualifications Must be a first-time homebuyer: no ownership interest in real estate in the past 3 years *Exception- if buyer purchases property located in an MCC Target Area Census Tracts Buyer within income limits (see matrix) *Exception-higher income limits apply within MCC Target Area Census Tracts Will occupy subject property as primary residence No minimum credit score or quality requirement-defer to the first mortgage lender’s credit underwriting 40

MCC- Property Requirements Foreclosed, Short Sale or Private party sales are all OK Purchase price limits Outside Target Area $339,146 Inside Target Area $414,512 SFR, condo/townhouse/PUD or manufactured home (on permanent foundation) 41

MCC- Eligible Locations All areas in Riverside County are eligible for MCC assistance EXCEPT the following cities: Banning, Indian Wells, Palm Desert and Rancho Mirage 42

QUALIFYING PROCESS NSHP, RHP, FTHB & MCC Borrower works with approved loan officer Lenders go through rigorous corporate approval process and loan officers must attend annual training Loan officer pre-qualifies borrower simultaneously for 1 st mortgage and County Assistance Loan Officer is responsible for informing buyer and realtor regarding program details Program forms must accompany offer for seller’s signature (NSHP 3, NSHP 6; RHP 3; FTHB 3) Buyer enters into purchase agreement, escrow opens, lender processes file and submits complete application package to EDA 43

Program Income Limits *subject to change 44

QUESTIONS? 45

EDA HOUSING STAFF - Leslie Trainor - Bernadette Cruz - Melissa Barnes - Wanda Lewis th Street, Suite 500 Riverside, CA