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associated with obtaining a first mortgage when an applicant proposes to utilize the SHIP downpayment/ closing cost loan funds to pay for these points (no points from SHIP funds for conventional loans, maximum one (1) point from SHIP funds for FHA loans, additional points can be allowed only for bond program loans). The county should accept only fixed rate loans for very low income and low income households. Moderate income households can utilize either fixed or adjustable loans. No loan requiring a balloon payment should be acceptable. The county should also require title insurance for all downpayment/closing cost loan closings. • Housing costs, including mortgage, interest, taxes, and insurance, shall not exceed 30% of an applicant's monthly household income. Housing cost to income ratio shall not be lower than 28%, unless a lower ratio is needed to ensure that the total debt to income ratio does not exceed 41%. For moderate income group households only, the loan to value ratio shall not fall below 90%. o Credit History The lenders committee recommends that the county adopt less stringent guidelines as outlined in Attachment 1. The purpose of this change is to ensure that applicants with minor credit problems are not penalized. At its February meeting, the Affordable Housing Advisory Committee (AHAC) considered the lenders committee recommendations. At that time, AHAC accepted the recommendations, making minor changes to the sections related to maximum monetary award, loan requirements, and credit history requirements. Also, AHAC revised the credit history requirement for rehabilitation loans. As revised, only an active charge off or judgement would disqualify a rehabilitation loan applicant. Finally, the Affordable Housing Advisory Committee decided to include a new section in the plan regarding housing insections. The proposed amendments to the plan are shown as for deletions and underlined for additions. Staff, the SHIP lenders committee, and the Affordable Housing Advisory Committee believe that, by revising the Local Housing Assistance Plan and implementing recommendations as outlined above, the county will ensure that only applicants who really need assistance will utilize the SHIP program and receive SHIP funds. By limiting SHIP funds to those in need, the county may experience a reduction in the minimum amount of SHIP funds provided to each applicant, thereby allowing more applicants to receive assistance. ALTERNATIVES With respect to the recommendations outlined above and also depicted in attachment 2 (amended Indian River County Local Housing Assistance Plan), the Board of County Commissioners has three alternatives. These are: c To adopt the recommendations as outlined above. c To adopt the recommendations with changes. FEBRUARY 28, 1995 47 BOOK, 94 PERI,,- 488