First-time Homebuyer
Down Payment Assistance Loan Program
PURPOSETo expand homeownership opportunities to low- and moderate-income persons by providing down payment assistance and/or closing costs.
WHAT IS THE DEFINITION OF FIRST-TIME HOMEBUYER?A household who has not owned its principal place of residence within the last three years.
WHO IS ELIGIBLE FOR A FIRST-TIME HOMEBUYER LOAN?Households whose incomes do not exceed 120% of the Area Median Income, adjusted by household size. The income limits follow the U.S. Department of Housing and Urban Development (HUD) guidelines, which are updated yearly.
2008 MAXIMUM QUALIFYING INCOME
| Household Size |
120% of AMI |
| 1 |
$63,300 |
| 2 |
$72,400 |
| 3 |
$81,500 |
| 4 |
$90,500 |
| 5 |
$97,700 |
| 6 |
$105,000 |
| 7 |
$112,200 |
| 8 |
$119,500 |
IS HOMEBUYER EDUCATION REQUIRED?
A potential homebuyer must attend a First Time Homebuyer Workshop, such as the City of Vacaville Homeownership Education Learning Program or other pre-approved first time homebuyer education program.
ARE THERE PREFERENCES IN QUALIFYING?
Preference is given to homebuyers who have lived or worked in Vacaville for one year or longer.
WHAT TYPE OF UNIT CAN I BUY?Homebuyers may purchase a new or existing single-family, condominium or townhouse unit. Mobile homes are not eligible in most cases.
MUST THE HOME BE LOCATED IN VACAVILLE?Yes, the home must be located within the incorporated limits of the City of Vacaville.
HOW MUCH CAN I BORROW?
The amount borrowed is the minimum needed to close the gap between lender requirements and the buyer's available cash for down payment/closing costs. The maximum loan amount is up to $15,000. Borrowers must provide documentation that they have less than $10,000 in liquid assets. DPAL proceeds cannot be used as borrower reserves, to offset payment of borrower's bills or to pay for property repairs.
IS THERE A BUYER CONTRIBUTION REQUIRED?
Borrower must provide a minimum investment of $1,000 toward purchase.
IS THERE A FEE TO OBTAIN A FIRST-TIME HOMEBUYER LOAN?Yes. The borrower will be charged a fee of $325 to obtain a First-Time Homebuyer Loan. $125 of this fee will be payable to the lender and $200 will be payable to the City of Vacaville. The fee is due at the time the application is submitted, must be from borrower's own funds, and is not reimbursable. The application fee is non-refundable once application processing has commenced and is IN ADDITION TO the required $1,000 minimum investment.
WHAT ARE THE TERMS OF THE LOAN AND INTEREST RATE?
Loan repayment is deferred for the first five years. Payments of principal and interest begin in year 6 and continue through year 20. Borrower must pay remaining balance if property is sold, transferred, or converted to rental property at any time during loan period.
The annual interest rate is 5%. Interest does not accrue during the five-year deferral period.
The Vacaville First-Time Homebuyer Program loan is recorded as a second mortgage against the property.
IS OWNER OCCUPANCY REQUIRED?Yes, owner occupancy is requred.
WHAT HAPPENS IF A HOMEBUYER DECIDES TO SELL WITHIN THE FIRST FIVE YEARS?The amount of principal borrowed will be due in full at the close of escrow. Streamline refinancing maybe permitted with prior Agency approval. Also, the Agency may, at its option, permit assumption of the loan to another qualifying first-time homebuyer.
WHERE DO I APPLY FOR A FIRST-TIME HOMEBUYER LOAN?
You may apply with one of the participating lenders. Lender pre-qualifies the buyer for a primary mortgage and determines amount needed from the Vacaville First-Time Homebuyer Program. The lender then sends a completed application packet to the Agency for review and approval. Loan proceeds are issued directly to the title company.
For a list of current participating lenders, click here.
Information on other home-buying assistance programs that the City of Vacaville is affiliated with is available at www.calrural.org or email; info@phfa.net.
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