Well the Los Angeles Housing Department (LAHD) is at it again. LAHD is pleased to announce that the Low Income Purchase Assistance (LIPA) program has finally received funding and is effective August 18, 2009. The program has received $4,142,164 this year and will assist homebuyers on a first come, first serve basis. In other words, the program is in effect for as long as the money lasts.
The LIPA program offers purchase assistance in the form of a deferred loan of up to $75,000 to low income households for down payment, closing costs, and acquisition financing. Medium income households are still eligible for HERO & NSP.
The program is limited to first time buyers who have not had an ownership interest in any real property at any time during the last three (3) years. LIPA funds may be used to assist buyers who purchase a home in the NSP eligible areas only.
Eligible homes must be either aproved short sales or regular equity sales. Unapproved short sales are not eligible. Vacant foreclosed and REO properties are eligible under NSP. Properties applying under the LIPA program will not be inspected by LAHD. No rehabilitation/repair loan funds will be made available for properties applying under the LIPA program. Rehabilitation/repair funds are still available under NSP.
First Time Buyers: Need some help in purchasing your first home here in LA county? Contact me today to find out if you are eligible for the LIPA program.
Realtors: Do have a listing here in LA county that needs a qualified and motivated buyer? Contact me today to find out if your listing is in an NSP eligible area.
Los Angeles Housing Department (LAHD) is pleased to announce that Los Angeles county's Neighborhood Stabilization Program (NSP) eligible areas have been expanded significantly!
LAHD has expanded the NSP eligible areas to at least three times larger than its current size!
Part of the purchase assistance loan, up to 5% of the purchase price (previously the maximum was 4%), may be used to cover closing costs.
First Time Buyers: Need some help in purchasing your first home here in LA county? Contact me today to find out if you are eligible for NSP down payment assistance.
REO Realtors: Do have a vacant, distressed foreclosure listing in LA county that needs repairs? Contact me today to find out if your listing is in an NSP eligible area.
As the next part of my continuing series of affordable loan options for first time buyers here in the LA & Ventura counties, I want to now present the various down payment assistance (dpa) programs that are available to first time buyers here in LA & Ventura counties.
For many low-medium income first time buyers here in LA & Ventura counties, going with an FHA loan program is their only option. Partnering their FHA loan with a dpa program allows them to not only reduce their down payment requirement but it also allows them to keep their payments at an affordable level.
My favorite dpa program is the City of Simi Valley First Time Buyer Program. Basically, qualified low-medium income, first time buyers can receive up to $50,000 per bedroom in down payment assistance. The down payment assistance comes in the form of a "silent second" so borrowers make no payments on it for as long as they hold the loan.
Just recently, I had the pleasure of qualifying a family of five for this program. This family had spent the past nine years renting a small three bedroom apartment and the ability of buying their own home with a yard for the children to play in is an absolute dream comes true.
This family is looking to purchase a four bedroom home and they're approved for up to 414k, however, their payment will only be based on a loan amount of only 214k.
Furthermore, through a special arrangement with the County of Ventura Tax Assessor Board, the property taxes for the program participants are based on the base loan amount and not the sales price, which is just another way borrowers are able to keep their housing payments affordable.
In LA county, low-medium income borrowers have two different dpa programs to choose from: HERO & NSP. HERO is offered by the LA Community Development Commission (LACDC) and NSP is offered by the LA Housing Department.
Both programs offer up to 50k in down payment assistance for medium income borrowers and up to 75k in down payment assistance for low income borrowers.
Both programs are specifically designed to restore and stabilize neighborhoods that have been devastated by foreclosures so assistance for programs is strictly limited to vacant foreclosures.
Furthermore, NSP allows up to another 50k to be used towards repairs and upgrades after the close of escrow.
Just recently, I had the pleasure of reserving funds for an absolutely lovely couple who are starting their family and they wanted a place big enough to raise a couple of kids. They also wanted to find something close to where they work in the San Fernando valley because they didn't want to spend hours a day commuting anymore.
Fortunately for them, there are several eligible areas in the valley (with new areas being added all the time) and they found a nice 4bd/2ba home on a huge lot in the north valley with a great view of the mountains from the backyard along with several fruit trees. It's perfect for them and their future family.
This post is the third in my series of affordable loan options available to first time buyers here in LA & Ventura counties. Check back for the next post in the series where I address how buyers here in LA & Ventura counties can still get 100% financing. Until then, check out my first two posts on affordable home loan options here in LA & Ventura counties.
If you're interested in purchasing your first home here in LA or Ventura counties, contact me about affordable home loan options that you may be eligible for.
As the next part of my continuing series of affordable loan options for first time buyers here in the LA & Ventura counties, I want to now present FHA's 203k loan program as a viable option for first time buyers looking in buy an REO property.
I don't know what the REO's look like in other markets across the country but here in LA and Ventura counties, many of the bank owned properties are too rundown and simply uninhabitable to qualify for a standard 203b FHA loan. The FHA 203k loan program is a first time buyer's only option if they are interested in purchasing one of these properties. With an FHA 203k loan, a first time buyer can turn that dumpy and dilapidated house into a really lovely home.
FHA offers two different kinds of 203k programs: a) the streamlined program that allows up to 35k in repairs and/or upgrades and b) the standard program that has no maximum loan amount other than the county's FHA maximum loan amount. Some of the repairs that can be financed with a 203k loan program are as follows:
The FHA 203(k) program will finance both the purchase price and the renovation costs of a property. The mortgage amount is based on the projected value of the property with the work completed (taking into account the cost of the work). All this basically means is that you can buy the property and fix it up with one loan.
In addition to meeting the requirements of standard FHA guidelines, there are also a few inspection and appraisal procedures you must follow, for example, meeting with FHA approved inspectors and appraisers to determine the scope of work to be done as well as obtaining contractor bids for the project.
This is post is just the second in my series of affordable loan options available to first time buyers here in LA & Ventura counties. Check back for the next post in the series where I address down payment assistance that is available to low-medium income first time buyers here LA & Ventura counties. Until then, check out my other posts on affordable home loan options here in LA & Ventura counties.
If you're interested in purchasing your first home here in LA or Ventura counties, contact me about affordable home loan options that you may be eligible for.
For most of my first time buyer clients, FHA is, without a doubt, their best option for purchasing their first home here in LA & Ventura counties. For many first time buyers around here, they have been sitting on the sidelines for years waiting for the market to do exactly what it's doing: for home prices to fall and rates to remain historically low.
First and foremost, one of the best advantages of an FHA loan is the 3.5% minimum down payment. For many first timers who don't have the means to make the required 10% down payment for a conventional loan, FHA's modest requirement is just the ticket.
Furthermore, FHA has relatively simple qualifying terms: minimum 620 median fico score and no reserves. Unlike FHA's qualifying terms, a conventional loan will often include adjustments/add ons for lower fico scores and may require varying degrees of reserves.
Another benefit of an FHA loan is that FHA allows non-occupying co-borrowers (n/o/cb) to assist in qualifying primary borrowers. Now, while conventional loan programs also allow n/o/cb, with a conventional loan, as much as half of the 10% must come from the primary borrowers own funds. With an FHA purchase, the non-occupying co-borrower can provide the entire 3.5% required down payment in the form of a gift.
This one feature alone has made home ownership possible for so many of my first time buyers here in LA & Ventura counties. For many of my first timers, getting a little help from their family enabled them to realize their dream of homeownership.
Another advantage of an FHA loan is their monthly mortgage insurance (MMI) in comparison to a conventional loan program's private mortgage insurance (PMI). FHA's MMI program is more affordable than conventional's PMI program, even with conventional's lower loan-to-value (ltv) requirement.
Quite often, I have run the two scenarios for a client and have been able to show that even with a larger down payment, a borrower will pay less mortgage insurance with FHA's MMI than with conventional PMI and that is assuming that my first time buyer client can even qualify for PMI. Guidelines for conventional PMI coverage are more stringent than FHA's MMI coverage.
And last but by no means least, FHA loans are not subjected to the HVCC appraisal process. This feature alone can be one of the best reasons to go with an FHA loan instead of a conventional loan.
In today's lending environment, the loan transaction can be fraught with so many issues that can literally make or break the whole deal.
The appraisal process is simply one phase of the transaction and complicating the process by subjecting it to the extremely flawed HVCC process can make an already scary and stressful situation for many first time buyers an even more nerve-racking and frustrating experience. Personally as well as professionally, I won't subject any of my first time buyer clients through that if it's not necessary.
This post is just the first in my series of affordable loan options available to first time buyers here in LA & Ventura counties. Check out the next post in the series where I address how first time buyers here in LA & Ventura county don't have to worry about how they're going to make that run-down, dumpy, dilapidated REO they want to purchase habitable.
If you're interested in purchasing your first home here in LA or Ventura counties, contact me about affordable home loan options that you may be eligible for.
Cobalt is a HUD-approved lender providing affordable financing options for the low-medium income resident. As a HUD lender, we offer an array of federally-funded homeownership assistance programs.
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