RIVERSIDE COUNTY HOMEOWNERSHIP PROGRAMS Updated as of 11/5/09 1

Purpose Provide an overview of Riverside County’s 4 homeownership Programs Equip with valuable information to pass along to your clients Inform as to how to assist your clients with County programs * All 4 Programs are Currently Funded! 2

Programs Each of the 4 Riverside County 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 $9,700,000 in funding received by Riverside County in February 2009 HUD requires funds to be obligated in 18 months (August 2010 deadline) 6

NSHP- Purchase Price Assistance 1. Purchase Price Assistance Provides up to 20% of the purchase price for gap assistance (makes up the difference between the 1 st mortgage and the 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 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 Rehab completed within 30 days after notice to proceed is issued Purchase price assistance 2 nd loan + Rehab/Repair assistance 3 rd loan not to exceed $75,000 total 8

NSHP- Buyer Qualifications Must be a first-time homebuyer: no ownership interest in real estate in the past 3 years Buyer within income limits- 120% of the HUD area median income Will occupy subject property as primary residence Has attended an 8 hour homebuyer education course NSHP has no minimum credit score requirement- EDA defers to the first mortgage lender’s credit underwriting 9

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 previously owner occupied- 90 day vacancy requirement is waived 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 Purchase price must be at least 1% below fair market value as appraised by EDA 10

NSHP- Eligible Locations Within the NSHP Target areas of Riverside County (with HUD risk scores 7-10) Target areas include a portion of 15 cities and 9 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. 11

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 12

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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) 17

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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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NSHP- Qualifying Process Borrower works with NSHP 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 NSHP Assistance Loan Officer is responsible for informing buyer and realtor regarding program details NSHP 3 and NSHP 6 forms must accompany offer for seller’s signature Buyer enters into purchase agreement, escrow opens, lender processes file and submits complete application package to EDA 22

RHP REDEVELOPMENT HOMEOWNERSHIP PROGRAM 23

RHP- Type of Assistance Redevelopment Agency for the County of Riverside (RDA) Provides 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 or otherwise made available for purchase by qualified low or moderate income households No minimum buyer contribution towards down payment required 24

RHP- Buyer Qualifications Must be a first-time homebuyer: no ownership interest in real estate in the past 3 years Buyer within income limits- 120% of the HCD area median income Will occupy subject property as primary residence Has attended an 8 hour homebuyer education course RHP has no minimum credit score requirement- EDA defers to the first mortgage lender’s credit underwriting 25

RHP- Property Requirements Foreclosed, Short Sale or “Normal” Private Party sale OK Purchase price & appraised value cannot exceed $292,686 Single family home, condo/townhouse/PUD or NEW manufactured home (on permanent foundation) No In-Ground Pools or Spas Minimum 2 Bedrooms If property is currently owner occupied or was owner occupied at foreclosure for REO’s- 90 day vacancy waived 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 26

RHP- Eligible Locations Option 1: Properties in unincorporated areas of Riverside County- Shaded Yellow on the Thomas Guide *Menifee and Wildomar just became cities but may still show as unincorporated areas on the Thomas Guide TLMA Map shows Property as Not Being Within a City Limit 27

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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 30

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RHP- Qualifying Process Borrower works with RHP approved loan officer Loan officer pre-qualifies borrower simultaneously for 1 st mortgage and RHP Assistance Loan Officer is responsible for informing buyer and realtor regarding program details RHP 3 forms must accompany offer for seller’s signature Buyer enters into purchase agreement, escrow opens, lender processes file and submits complete application package to EDA 32

FTHB FIRST TIME HOME BUYER 33

FTHB- Type of Assistance EDA’s original first time buyer program Provides 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 34

FTHB- Buyer Qualifications Must be a first-time homebuyer: no ownership interest in real estate in the past 3 years Buyer within income limits- 80% of the HUD area median income Will occupy subject property as primary residence Has attended an 8 hour homebuyer education course FTHB has no minimum credit score requirement- EDA defers to the first mortgage lender’s credit underwriting 35

FTHB- Property Requirements No Foreclosed, Bank Owned Properties Allowed Purchase price & appraised value cannot exceed $292,686 Single family home, condo/townhouse/PUD or NEW manufactured home (on permanent foundation) No In-Ground Pools or Spas Minimum 2 Bedrooms If property is currently owner occupied- 90 day vacancy requirement is waived 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) 36

FTHB- Eligible Locations 1. Properties in Unincorporated Areas of Riverside County- Shaded Yellow on the Thomas Guide *Menifee and Wildomar just became cities but may still show as unincorporated areas on the Thomas Guide 2. Or within any Participating City All Cities are Eligible EXCEPT: Coachella, Corona, Hemet, Indian Wells, Indio, Moreno Valley, Palm Desert, Palm Springs, Perris, Rancho Mirage, Riverside 37

FTHB- Qualifying Process Borrower works with FTHB approved loan officer Loan officer pre-qualifies borrower simultaneously for 1 st mortgage and FTHB Assistance Loan Officer is responsible for informing buyer and realtor regarding program details FTHB 3 forms must accompany offer for seller’s signature Buyer enters into purchase agreement, escrow opens, lender processes file and submits complete application package to EDA 38

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 39

MCC MORTGAGE CREDIT CERTIFICATE 40

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 Since the borrower’s taxes are being reduced by the amount of the credit, this increases 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 41

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 42

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 43

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 44

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 Tract Buyer within income limits *Higher income limits apply within MCC Target Area Census Tracts Will occupy subject property as primary residence MCC has no minimum credit score requirement- EDA defers to the 1st mortgage lender’s credit underwriting 45

MCC- TARGET AREA CENSUS TRACTS 46

MCC- Property Requirements Foreclosed, Short Sale or Private party sales Purchase price limits Outside Target Area Census Tracts $339,146 Inside Target Area Census Tracts $414,512 Single family home, condo/townhouse/PUD or manufactured home (on permanent foundation) 47

MCC- Eligible Locations All areas in Riverside County are eligible for MCC assistance EXCEPT the following cities: Coachella, Indian Wells, La Quinta, Palm Desert and Rancho Mirage 48

MCC- Qualifying Process Borrower works with MCC approved loan officer Loan officer pre-qualifies borrower simultaneously for 1 st mortgage and MCC Assistance Loan Officer is responsible for informing buyer and realtor regarding program details Buyer enters into purchase agreement, escrow opens, lender processes file and submits complete application package to EDA 49

Program Income Limits 50

QUESTIONS? 51

EDA HOUSING STAFF - Leslie Trainor - Bernadette Cruz - Melissa Barnes - Wanda Lewis Spruce Street, Suite 400 Riverside, CA