Dallas Homebuyer Assistance Program Federally Funded Tammi Southall

Dallas Homebuyer Assistance Program (Federally Funded) Tammi Southall, Housing Project Manager Housing & Neighborhood Revitalization City of Dallas

Presentation Overview • Background/History • Purpose • Applicant Requirements • Property Requirements • Funding Determination and Requirements • How to apply 2

Background/History • The City of Dallas has provided homebuyer assistance for over 29 years. • Increase availability for affordable housing opportunities. • Support neighborhood and community-based preservation and revitalization efforts. 3

Purpose • Provide homeownership opportunities for low to moderate income families. • Assist with down payment, closing costs and principal reduction for home purchases in the City of Dallas. • Stabilize neighborhoods. 4

Applicant Requirements • Applicant(s) must be a U. S. citizen or permanent resident with a valid Social Security Card • Household projected annual income must be 60% - 120% of the Average Median Family Income determination includes acceptable income and assets. Income eligibility is valid for 6 months from the date of the income determination. • Capped at 80% AMI for federal funding • Capped at 120% AMI for Targeted Occupations • Teachers & Librarian Services • Healthcare technical and support staff • Protective Services – (fire fighters, law enforcement) • Employed homebuyers must have a continuous employment history for the past six months. • Self employed applicants must provide previous two years tax returns. 5

Applicant Requirements ANNUAL HOUSEHOLD INCOME The table below illustrates the household income requirements for each family size. *Income figures as published by H*Income Household Size 1 figures as published by HUD as of July 1, 2020 60% AMI 80% AMI 120% AMI Minimum Income Maximum Income -Targeted Occupations $36, 240 $48, 300 $72, 408 2 $41, 400 $55, 200 $82, 752 3 $46, 560 $62, 100 $93, 096 4 $51, 720 $68, 950 $103, 440 5 $55, 860 $74, 500 $111, 715 6 $60, 000 $80, 000 $119, 990 6

Applicant Requirements • Applicant must owner/occupy the purchase property as their homestead. • Applicant must qualify for a 30 year amortizing, fixed rate mortgage from a program approved mortgage lender. • Credit must be acceptable; no high cost, subprime loan, adjustable rate mortgages or interest only loans. • Lenders must establish an escrow account for taxes and insurance. • Applicant must take a homebuyer counseling course within 12 months of the application. (In person or online). Course provider must be HUD certified. • Applicant must make a minimum initial cash investment of $1, 000 toward purchase of home. • Applicant must have two months reserves in liquid assets after closing. 7

Property Requirements • • • Properties must be located within the City Limits of Dallas. This may be verified by entering the property address at http: //gis. dallascityhall. com. This property search system will provide the Dallas City Council District that covers such property. Property sales price must not exceed the HOME maximum sales price: • Existing Properties - $237, 000 • New Construction - $251, 000 Properties must appraise for at least 100 percent of the sales price. Properties can be single-family, detached structures; condominium units; town houses; or one-to-four-unit developments. Properties may be occupied by the owner or borrower. If tenant occupied, owners may not enter into a contract for a period of at least 60 days after tenant vacates the property. 8

Property Requirements Properties must meet City of Dallas Minimum Housing Standards (MHS), including lead- based paint regulations at time of closing. Inspections should occur during the contract option period. MHS repairs must be completed prior to closing. The Borrower must sign Notification: Watch Out for Lead-Based Paint Poisoning. Borrower must receive a copy of Protect Your Family from Lead in Your Home, EPA 747 -K- 99 -001 available at www. hud. gov/offices/lead. The booklet may also be reproduced from the DHAP web site. Borrower must deliver to Seller, who must sign “Notice to Real Property Owner/Seller. ” 9

Property Requirements HUD Real Estate Owned (REO) Properties built after January 1, 1978 are eligible for DHAP subsidy. HUD Homes must meet all DHAP guidelines. All MHS required repairs must be completed prior to submission of DHAP loan file. FHA 203 K loans are not eligible for DHAP funding. 10

Funding Determination & Requirements The maximum assistance available will not exceed: High Opportunity Areas** - $60, 000 High Opportunity Areas are census tract areas with poverty rates 20% or below. Non-High Opportunity Areas - $40, 000 Targeted Occupations - $45, 000 The actual amount of assistance is based on need as determined by the sales price, an approved primary mortgage loan and closing costs. The primary mortgage loan must meet the following debt to income ratios: Housing Expense to Income Ratio (front ratio) – at least 26% not to exceed 32% Total Debt to Income Ratio (back ratio) – not to exceed 45% 11

Funding Determination & Requirements The assistance is a deferred, forgivable interest free loan with forgiveness occurring annually with the residency term of the loan (affordability period). Partial payment is due upon sale, lease with option to purchase, transfer or other disposition (including contract for deed) of the property. Assistance under $15, 000 has a 5 -year affordability period; assistance of $15, 000 - $40, 000 has a 10 -year affordability period; assistance more than $40, 000 has a 15 -year affordability period. 12

Funding Determination & Requirements Homebuyers are required to sign homebuyer written agreements for the assistance provided. These loans are secured by a second lien on the property. Funding will be provided at closing at an approved title company. Source of funding is provided by HOME Investment Partnership Program, Community Development Block Grant Program and General Funds. 13

Funding Determination & Requirements Subsidies are subject to fund availability on a first-come, first-served basis. Acceptance of an application for DHAP in no way constitutes a commitment or obligation on the part of the City of Dallas. No commitment is made or implied until the City of Dallas has approved funding for each application. Due to funding limitations, no applicant should assume any commitment even when an applicant must expend personal funds to meet application requirements. 14

How to Apply Prequalification is required. Visit our website, www. dallashousingpolicy. com Click on the Homebuyer Tile and Homebuyer First Steps Call us at 214 -670 -3644 for information 15

Dallas Homebuyer Assistance Program (Federally Funded) Presenter Name, Title Housing & Neighborhood Revitalization City of Dallas 16