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ii . Housing Unit Classification <br /> All housing units shall be owner- occupied single family or <br /> condominium residences . <br /> iii . Downpayment closing cost loans can be given in combination <br /> with a rehabilitation or impact fee loan , for purchase of <br /> existing homes or combination with an impact fee / capacity <br /> charge loan for construction of a new unit . <br /> iv . As structured , the Program does not require an applicant to <br /> provide a minimum monetary contribution towards the down <br /> payment or closing costs . This program policy , however , does <br /> not exempt an applicant from a financial institution ' s minimum <br /> monetary contribution requirement , if applicable . <br /> V . No owner financing is allowed . All down payment / closing cost <br /> applicants must receive their first mortgage from a financial <br /> institution . <br /> vi . Except as otherwise provided for herein , SHIP funds shall not <br /> be provided to any household where that household ' s projected <br /> monthly housing cost , including mortgage principal , interest , <br /> taxes , and insurance , will exceed 30 % of the household ' s gross <br /> income , or where the household ' s total debt will exceed 41 % of <br /> the household ' s gross income . It is not the intent of this <br /> plan to limit an individual household ' s ability to direct more <br /> than 30 % of its income for housing . The monthly housing cost <br /> to gross income ratio ( front end ratio ) may exceed 30 % as long <br /> as the back end ratio does not exceed 41 % ( 45 % for moderate- <br /> income only ) . For moderate- income households , only back end <br /> ratio may be as high as 45 % . In such cases , the first <br /> mortgage lender must inform the county in writing of its <br /> determination . This determination must be based on specific <br /> characteristics applicable to the applicant such as the <br /> applicant ' s debts being short term , the applicant having a <br /> good history of debt management , or other pertinent reasons . <br /> These requirements apply to all income categories . <br /> For the moderate - income group only , SHIP downpayment / closing <br /> cost funds shall not be provided to any household where that <br /> household ' s first mortgage loan to value ratio will fall below <br /> 85 % . <br /> Housing units constructed as new units , within one calendar <br /> year , substantially rehabilitated within one ( 1 ) calendar year <br /> prior to purchase , or units to be rehabilitated in conjunction <br /> with the downpayment / closing cost shall be classified as <br /> constructed , rehabilitated , or repaired units . <br /> The maximum term of a first mortgage shall not exceed 30 <br /> years . The maximum interest rate for the first mortgage shall <br /> not exceed the Federal National Mortgage Association ( FNMA) or <br /> Federal Home Loan Mortgage Corp . ( FHLMC ) fixed rate 30 or 60 - <br /> day delivery ( published daily in the Wall Street Journal ) <br /> rounded up to the nearest . 125 % . <br /> For SHIP downpayment / closing cost loans , the number of points , <br /> which may be charged by the financial institution providing <br /> the first mortgage shall be as follows : <br /> • For conventional loans , no points shall be charged . <br /> • For FHA loans , a maximum of one ( 1 ) point may be paid <br /> from SHIP funds . <br /> 11 <br />