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0 <br />a <br />Downpayment/Closing Cost/Principal-Reduction Loans <br />Description <br />The IRCLHAProgram anticipates providing no interest <br />deferred payment loans to eligible persons acquiring an <br />eligible housing unit for downpayments, payment of <br />closing costs, and/or principal reduction. <br />For the purchase of either new or existing housing units, <br />the funds for downpayment/closing `cost loans shall be <br />delivered at the time of closing, whereby the transaction <br />transferring ownership of the eligible housing unit to <br />the eligible person is completed. Downpayment/closing <br />cost loans shall. not be provided for the acquisition of <br />housing,units requiring rehabilitation prior to.approval <br />for occupancy by residents unless the rehabilitation loan <br />is provided through SHIP funds in conjunction with the <br />dowripayment/closing cost loan. <br />As structured, the LHAProgram does not require an <br />applicant to provide a minimum monetary contribution <br />towards the downpayment or closing costs. This LHAProgram <br />policy, however, does not exempt an applicant from a <br />financial institution's minimum monetary contribution <br />requirement, if applicable. <br />For purchase of a house financed by the owner, the <br />applicant, as part of the loan application process, will <br />be required to pay for a credit report. <br />Except as otherwise provided for herein, SHIP funds shall <br />not be provided to any household where that household's <br />projected monthly housing cost, including mortgage <br />principal, interest, taxes, and insurance, will exceed <br />30% of the, household's gross income, or where the <br />household's total debt will exceed 410 of the household's <br />gross income. The monthly housing cost to gross income <br />ratio may exceed 30% and the total debt to income ratio <br />may exceed 41% if the first mortgage lender.is satisfied <br />that the applicant household can afford mortgage payments <br />that exceed the 30% frontend and 41% backend benchmarks. <br />In such a cases, the first mortgage lender must inform <br />the county in writing of its determination. This <br />determination must be based on specific characteristics <br />applicable to the applicant such as the applicant's debts <br />being short term, the applicant having a good history of <br />debt management, or other pertinent reasons. These <br />requirements apply to all income categories. No SHIP <br />funds will be provided to households for <br />downpayment/closing costs when the household's housing <br />cost to income ratio will be lower than 20%, unless a <br />housing cost to income ratio lower than 20% is needed to <br />20 <br />