FIRST TIME HOMEBUYERS PROGRAM
The Community Redevelopment Agency (Agency) of the City of Compton has designed the First Time Homebuyers Program (Program) to relieve the prevailing housing affordability crisis in the community. The Program consists of a Second Mortgage, which is in the form of a Silent Second Deed of Trust. An eligible household may receive second mortgage assistance up to $100,000.00. The amount awarded, however, will be based on the need for each household on a case-by-case basis.
WHAT IS SECOND MORTGAGE ASSISTANCE?
Second Mortgage Assistance is a mortgage subsidy provided by the Agency to a first time homebuyer in the form of a deferred Second Deed of Trust loan. The Agency’s subsidy shall be used to reduce the price of the home to enable the homebuyer to qualify for the purchase of a home at an affordable level. The maximum loan awarded by the Agency is $100,000, which may be used towards down payment and closing costs.
The funds may be used for a larger down payment to satisfy the difference between the amount for which the buyer qualifies and the actual amount of the property. For example, if the property sells for $310,000 and the family qualifies for only $210,000, $90,000 of the $100,000 subsidy may be used to reduce the mortgage, and up to $10,000 may be used towards closing costs.
After securing the loan with a Second Deed of Trust, a lien will be placed against the property that is being purchased with the Agency’s assistance. The Agency will serve as the Program Administrator, and participating mortgage lenders will be responsible for processing and underwriting the homebuyer(s) applications for a first mortgage.
WHO QUALIFIES TO BUY A HOME UNDER THE PROGRAM?
Qualified buyers must be first time homebuyers or must not have owned or held an interest in a primary residence in the past three years. Priority shall be provided to residents and households who are employed or reside within the City of Compton.
Additionally, qualified buyers must:
Have sufficient income and credit worthiness to qualify for primary financing from a participating lender.
Occupy the purchased property as their principal residence for 15 years. However, the property must remain affordable for 45 years.
Attend and complete a first time homebuyer counseling and training session held by an approved Counselor Services Agency or Lender.
Have combined gross annual income, which does not exceed 80% for low income limits or 120% for moderate income limits of the gross annual median income for the Los Angeles County adjusted for family size per the following chart:
Los Angeles County Housing Income Limits
HOUSEHOLD
SIZE LOW INCOME LIMITS(80%) MODERATE INCOME LIMITS (120%)
1 $41,450 $47,500
2 $47,350 $54,200
3 $53,300 $61,000
4 $59,220 $67,800
5 $63,950 $73,200
6 $68,650 $78,600
7 $73,400 $84,100
8 $78,150 $89,500
The above chart shows maximum annual household income per family size for low to moderate income households, for which funds are allocated in each category as follows:
Participants that have an annual combined household income that falls at or below the 80% of the gross annual median income for Los Angeles County will receive assistance from HOME funds on a first-come, first-served basis.
Participants that have an annual combined household income between 80% and 120% of the gross annual median income for Los Angeles County will receive funding from Low Cost Housing funds on a first-come, first-served basis.
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