Program 2 0 Guidelines — Commerce City Council, April 25, 2023

FIRST-TIME HOMEBUYER PROGRAM 2.0 GUIDELINES
April 25, 2023
Program Description
In keeping with the spirit and vision of the former Commerce Community Development Commission (the “Commission”), the First-Time Homebuyer Program 2.0 (referred to hereafter as “Program” or “FTHB 2.0 Program”), provides financial assistance to persons who meet certain income and other eligibility requirements to be used toward the purchase of their principal residence in the City of Commerce (“City”).

The intent of the Program is to offset some of the impact of high housing costs in our region, while encouraging investments in the community and helping qualified applicants purchase a home within the City. The Program provides purchase money loans to assist with down payment and closing costs in the form of a low- and zero-interest, deferred payment loan. Program loans are evidenced by a promissory note secured by a second deed of trust and are subject to owner-occupancy and resale requirements. The Program may be utilized by eligible applicants together with any other housing assistance program offered by the City, County or State.

II. Program Financial Limits
Funding for the Program is limited. Funds are available from the net sale proceeds of three City-owned parcels purchased by City Ventures Homebuilding, LLC (“Developer”) for a new housing development project consisting of 133 single-family housing units (“City Ventures Project” also known as “Rosewood Village”).

Program loans will be made to no more than nine (9) eligible first time homebuyers selected on a lottery basis from a pool of qualified applicants. Up to $150,000 of Program funds may be loaned to an eligible applicant to assist with down payment and closing costs.

To be eligible for the Program, applicants, including co-borrowers, must demonstrate their ability to contribute a portion of the down payment from their own resources and prequalify for a first mortgage by meeting the following prerequisites:

The applicant’s cash assets are sufficient to provide a minimum of three percent (3%) of the purchase price to be used for down payment and/or closing costs; and The applicant must provide substantial proof in written form showing satisfactory credit (e.g., a FICO score of not less than 620) and the ability to carry a first mortgage note covering at minimum 80 percent (80%) of the cost of an eligible residence within the boundaries of the City.

Primary financing shall be in the form of a 30-year fully amortized fixed rate loan. The first mortgage shall be in an amount sufficient to purchase the subject property together with the FTBH Program loan amount, the applicant’s cash assets, and any other housing assistance programs the applicant qualifies for. The monthly mortgage payment must include impound account costs for the payment of property taxes and property insurance.

EXAMPLE Financing Calculation:

Contract Purchase Price $600,000
Estimated Closing Costs (6% of $600,000) $ 36,000
Total funds needed $636,000
Minimum First-Mortgage Pre-Approval $480,000
(80% of $600,000)
Borrower’s 3% cash contribution ($ 18,000)
FTHB Program maximum loan amount ($150,000)
Other housing assistance programs ($ 10,000)
Actual First-Mortgage Loan Amount ($458,000)
Total funds available ($636,000)
III. Loan Rates and Terms
The Program loan term shall be for 45 years. Program loan repayments are deferred until the sooner occurrence of sale, transfer or the expiration of 45 years, or when owner-occupancy requirements are no longer met. Program loans shall bear either zero interest or simple interest at the rate of one percent (1%) for the first 120 months (10 years) determined based on household income as follows.

Household Income Interest Rate
80% or less of County median 0%
More than 80%, but not more than 100% 0%
More than 100%, but not more than 175% 1%
Beginning with the 121st month and continuing through the 540th month of the term, the Program loans are interest free.

Income level is based on Los Angeles County median income adjusted by household size established by the California Department of Housing and Community Development (HCD).

IV. Program Loans
Program loans for selected borrower(s) (“Borrower”) will be evidenced by a loan agreement and promissory note secured by a deed of trust which shall be recorded with respect to the assisted property. Program loans will be subordinate to the primary loan, which shall be secured by a first deed of trust. The Program loan is not assumable.

Occupancy Requirements and Resale Restrictions
In addition, and as a condition of making a Program loan, a Resale Restriction and Option to Purchase Agreement (“RROPA”) shall also be recorded with respect to the assisted property. Among other things, during the term of the Program loan, the RROPA: provides that should the Borrower sell or transfer title to the subject property prior to the end of the 45-year period for any reason or if Borrower fails to occupy the property as their principal residence, the Borrower shall repay to the City the principal loan amount plus any interest accrued, plus a percentage of the increase in equity the property has realized. The loan and equity share shall be repaid as follows:

Year of Transfer/Sale
Equity paid to
City
Loan Interest
Rate
0-10
15%
0% - 1%
11-15
10%
0%
16-30
5%
0%
31-45
2%
0%
After 45*
0%
*Loan is forgiven
The RROPA also gives the City the first right of refusal to purchase the property at its appraised fair market value if the proposed sale or transfer does not meet Program requirements. Program loans are due and payable upon sale or transfer of title, except for permitted transfers as defined in the loan documents. For the purposes of this Program, the term “sale or transfer” shall mean any change in title, occupancy or use.

Certain types of changes are typical for estate planning purposes or upon the death of a Borrower when property is transferred to heirs. Upon receipt of documentation to the City’s satisfaction demonstrating a good faith transfer, and in its sole discretion, the following will be deemed permitted transfers under the loan documents:

A transfer of the property where a spouse becomes a co-owner or joint tenant of the property.

A transfer to an inter vivos trust in which the Borrower is and remains the beneficiary and occupant of the property.

The transfer of the property to a surviving spouse, child or parent, upon the death of a Borrower.

A transfer of the property resulting from a decree of dissolution of marriage or legal separation, whereby one of the original owners remains on the title.

Refinancing and Requests for Subordination
In the event the assisted property is refinanced and said refinancing requires the City to subordinate its Program loan lien and the refinancing produces net proceeds (i.e., beyond the amount needed to pay off secured loans and/or make further capital improvements to the assisted property), then any such net proceeds of the refinancing shall first be applied to reducing the principal amount of the Program loan. In such an instance, refinancing of the initial senior position loan (“Primary Loan”) is permissible if the refinancing is for a lower interest rate and/or shorter term and the new loan amount does not exceed the then outstanding balance (plus the costs of refinancing, closing and/or further capital improvements to the assisted property, if applicable) of the existing Primary Loan. Only one subordination to a new Primary Loan lender per Program loan is permissible. At the City’s sole discretion, the City may consider the subordination of its Program loan lien based on the Program loan recipient’s unique hardship condition (e.g., medical emergency). Applications for subordination will be processed through the Loan Review Committee defined below. An assisted property shall not be sold for less than the sum of the existing liens and encumbrances, including property tax liability (i.e., a “Short Sale”), without the express written consent of the City. At the time of a refinancing or a Short Sale an appraisal by a licensed real estate appraiser must be prepared to establish the market rate value of the property.

V. Eligibility Criteria
Eligible Applicants
Eligible applicant(s) must meet all the following criteria:

Must be a first time home buyer. For purposes of this Program a first time homebuyer means a person who has not previously owned, held ownership interest in or title to a residence.

Have a combined household income that does not exceed 175% of the County median income adjusted by household size as established by HCD.

Must occupy the property as their principal residence.

Shall demonstrate ability to carry mortgage note and meet other threshold financial requirements as indicated in Section II. (Must provide necessary supporting documentation affirming applicant has positive credit history, is pre-approved for a fixed-rate first mortgage, and has cash assets sufficient to contribute at least three percent (3%) of the purchase price.) Must be a current resident of the City who (i) has lived within the incorporated City boundaries for a minimum of five (5) calendar years prior to application submittal and ii) can provide satisfactory proof of residency. Top priority will be given in the lottery to eligible applicants who have lived in the City a minimum of 10 years.

Co-applicants must be co-owners and must also occupy the subject property as their principal place of residence and meet other eligibility criteria.

Any current City Council Member, employee, official or agent of the City who exercises any policy or decision-making function in connection with the Program (each a “City Affiliate”) is ineligible for assistance under the Program. An immediate relative (defined as spouse, registered domestic partner, child, parent, grandparent, grandchild or sibling) of a City Affiliate is ineligible for assistance under the Program.

If there is not a sufficient list of applicants that qualify for the Program as set forth in Section V (Eligibility Criteria), the City reserves the right to revise the criteria to expand the eligible applicant pool and reopen the application period. (For example, the residency requirement may be revised to allow former City residents displaced by the COVID-19 pandemic who can substantially prove that an unforeseen condition due COVID-19, resulted in a loss of tenancy in the City after March 4, 2020.) Eligible Properties
Properties eligible for acquisition under the Program must be new and existing single-family homes, condominiums or Planned Unit Development (PUD) homes located within the boundaries of the City of Commerce. Relocation assistance costs for displaced tenants are ineligible under the Program, therefore all of the properties proposed for acquisition by an eligible applicant must be either owner occupied or vacant.

The following properties are ineligible for acquisition under the Program: (i) Mobile homes; (ii) multi-family dwellings, such as duplexes and triplexes; . (iii) a property leased to a tenant with lawful possession, unless the tenant is an eligible applicant ; and (iv) a property proposed for acquisition by an eligible applicant(s) from a seller who is an immediate relative (defined as spouse, registered domestic partner, child, parent, grandparent, grandchild or sibling) of such qualified applicant(s).

At the time of the purchase, the subject property must comply with all applicable local or state health and safety and housing quality standards and must be free of any deed restriction that would affect the resale of the property. Prior to final loan approval, City staff will inspect each home and obtain and review relevant documentation to ensure that the property complies with the City’s building, zoning and other code requirements.

VI. Implementation
Interest List and Application Period
Interest List Forms for the FTHB 2.0 Program will be available to the public on an ongoing basis while the Program is active. Staff will place all households who file an Interest List Form in the FTHB 2.0 Program database for the purpose of marketing the FTHB 2.0 Program’s Application Opening Period. The Application Opening Period will be announced by mail and/or email to all those placed on the Interest List and to the public via the City web page, social media, cable, and other acceptable forms of communication, so that the City may receive a sufficient number of applications to process during the open application period. Application forms will be made available on the City’s website at www.ci.commerce.ca.us and at City Hall.

Applications and all supporting documentation for participation in the Program must be returned by a designated due date to the Economic Development and Planning, Housing Division at City Hall located at 2535 Commerce Way, Commerce, CA 90040. A date and time stamp will be used to document the receipt of applications.

Application Packet
The application must be completed in its entirety and submitted together with the following documentation:

Application Form signed by each applicant;
Copies of three months most recent pay stubs for each applicant; Signed copies of last three years federal tax returns;
Evidence in a form of a bank statement or other satisfactory written evidence that the borrower has a minimum of 3% of the purchase price to be used for down payment and/or closing costs; Employment verification form;
Evidence in the form of a First Mortgage Pre-Approval Letter from a City-approved lender with regard to the amount that has been pre-approved for the participating household; Residency verification; and
Any other documents determined necessary by the City.

VII. Application Selection Process
Pre-qualification
Each application package filed by the application deadline will be date and time stamped and will be processed in the order received. Staff will review applications for completeness and verify the applicant’s eligibility for this Program. Staff will notify applicants in writing if additional information is required and any requested information must be submitted by applicant no later than the due date for such additional information as determined by the City. Incomplete applications will not be processed until all requested information is submitted. Staff shall notify all applicants deemed ineligible of their status by letter. No late applications will be processed. Staff will establish a list of pre-qualified applicants who will be eligible to participate in the lottery process and shall notify applicants deemed eligible of their status by letter.

Lottery Procedures
The FTHB 2.0 Program’s lottery procedures will further assist the City to ensure fair and prudent implementation of the Program is achieved.

The lottery will be duly publicized and conducted in a public meeting at a time and place to be determined by the Director of Economic Development and Planning (Director) in consultation with the City Manager and City Council.

Borrowers for loan funding shall be chosen through a lottery process as follows:

Eligible applicants are permitted only one FTHB Program application. Individuals cannot submit supporting documentation for multiple FTHB applications. Multiple applications may be subject to disqualification.

All eligible applicants who successfully complete a FTHB 2.0 Program application and are deemed eligible may participate in the lottery.

Staff will provide a “lottery machine” for the random selection of Borrowers to be selected from the pool(s) of applicants. A total of nine (9) Borrowers will be selected.

The designated lottery machine operator may be selected at the discretion of the Director or his/her designee.

Application identification numbers will be used in-lieu of eligible applicant names to insure fairness and transparency in conducting the lottery.

Applicants do not need to be present to be selected in the lottery.

The drawing will be conducted in two tiers:

Tier 1: Pre-qualified applicants who have lived in the City of Commerce for at least 10 years will qualify for priority consideration and will be part of an initial drawing (Tier 1). Up to nine (9) Borrowers will be selected from the Tier 1 pool if there are enough pre-qualified applicants.

Tier 2: There will be a second drawing for pre-qualified applicants who have lived in the City of Commerce at least 5 years but less than 10 years (Tier 2). Borrowers from the Tier 2 pool will only be selected if there are any remaining slots available after the Tier 1 drawing is complete.

Order of Priority. The Tier 1 and Tier 2 drawings will determine the order of priority for qualifying Borrowers for the FTHB Program loan for a qualifying property.

Wait List. Numbers for all pre-qualified applicants will be drawn from the Tier 1 and Tier 2 pool, as applicable, until all numbers have been drawn and will be automatically placed on a waitlist in the order drawn.

Applicants who are selected in the lottery will receive an award letter in the order they were drawn requiring them to maintain eligibility requirements and to close escrow within a reasonable timeframe (i.e., usually within 90 days from the date of the award letter).

Applicants must provide the City a copy of escrow instructions within ten (10) days after the offer to purchase an eligible property has been accepted by the seller and a residential purchase agreement is fully executed. Failure to submit escrow instructions may forfeit the applicant’s opportunity to continue their participation in the Program.

Applicants who are selected for the waitlist will receive a notification letter indicting their placement on the waitlist. Selected applicants may withdraw from the waitlist at any time by notifying the Director in writing.

The results of the lottery drawing will be final and binding and may not be appealed.

Loan Review Committee
The Loan Review Committee (“Committee") shall be comprised of three City representatives consisting of the following members:

Economic Development and Planning Director
One member, selected by the City Manager, or designee, who may include, but not be limited to housing staff, planning staff, or members of the administration team Finance Director, or designee
Complete application packages of selected applicants will be reviewed by the Committee for approval or disapproval based upon the Program underwriter’s recommendations. In order to proceed, a majority of Committee members must approve each Program loan. The Committee will also be responsible for reviewing and approval or disapproval by majority vote of requests to subordinate Program loan liens and requests for Short Sales. The Committee may establish specific underwriting standards as may be required form time to time. Loans will be awarded based on funding availability.

All actions of the Committee shall be reflected in meeting minutes to be prepared by staff of the Economic Development and Planning Department.

Loan Documents
Loan Agreement;
Promissory Note;
Deed of Trust; and
Resale Restriction and Option to Purchase agreement.

Request for Notice of Default on first mortgage.

Any other documents determined necessary by the Director.

The City shall not be committed to fund a Program loan prior to the prospective buyer’s execution of the Program Loan Documents as Borrower.

Approval of legal documents
All Program legal documents shall be approved as to form by the City’s Legal Counsel prior to execution.

Administration
The preparation and use of all required Program procedures manual, forms, documents and agreements shall be administered by the Director or his/her designee(s) in accordance with these Program guidelines. Program Staff shall administer the Program under the purview of the Director. As used herein, the term “Staff” may include either employees or consultants of the City’s Economic Development and Planning Department. The administration of the Program includes, without limitation, application evaluation procedures, inspection and disbursement of Program funds, and ongoing Program administration.

Participants shall be required to submit an annual certification verifying owner-occupancy requirements, along with supporting documentation as required by the City.

First-Time Homebuyer 2.0 Program Interest Form and Application are attached as Exhibit A to these Guidelines.

Non-Discrimination
The Program will be implemented consistent with the City’s commitment to non-discrimination. No person shall be excluded from participation in, denied the benefit of, or be subject to discrimination under any program or activity on the basis of his or her religion or religious affiliation, age, race, color, creed, gender, sexual orientation, marital status, familial status (children), physical or mental disability, nation origin, ancestry, or any other arbitrary cause.

Program Contingencies
No more than nine (9) Borrowers will ultimately receive a FTHB Program loan from the City for the purchase of a qualifying property. Loan assistance is subject to availability of funds and final loan approval by the Committee, and disbursement of funds will be contingent on selected Borrowers meeting all lending requirements.

These guidelines may change at the City’s sole discretion. The City, at its sole discretion, reserves the right to grant or deny Program loans that do not represent the best interest of the City AND satisfy the purposes of this Program.

If you have any questions, please submit them to [email protected] Exhibit A – Sample FTHB 2.0 Program Interest Form Exhibit A – Sample FTHB 2.0 Program Interest Form Exhibit A – Sample FTHB 2.0 Program Interest Form
Exhibit A – Sample FTHB 2.0 Program Interest Form
FIRST-TIME HOMEBUYER 2.0 PROGRAM INTEREST FORMECONOMIC DEVELOPMENT AND PLANNINGSECTION I - APPLICANT CONTACT INFORMATION:Name of Applicant:________________________________________________________Name of Co-Applicant: ____________________________________________________Mailing Address:__________________________________________________________Telephone Number:_______________________________________________________SECTION II – ELIGIBILITY QUESTIONS:Number of People in Household? Adults over 18:_______ + Children: _______ = Total ________Estimated Annual Household Income of ALL Adults over 18 who will live in the home (specify total ANNUAL amount): $_______________Is your household income less than 175% of the Area Median Income adjusted by Household Size (Please see the column for your Household Size and Maximum Income Limit)?YES NO (if NO, you are not eligible for the FTHB 2.0 Program)2021 INCOME LIMITSFamily Size12345678 (175% of Area Median Income)$98,000$112,000$126,000$140,000$151,200$162,400$173,600$184,800Are you a current City of Commerce Resident? YES NO If yes, how many years? _______(If NO, you are not eligible for the FTHB 2.0 Program)(If YES, and you have lived in the City of Commerce for less than 5 calendar years immediately preceding 2022, you are not eligible for the FTHB 2.0 Program)Have you ever owned a home? YES NO (If YES, you are not eligible for the FTHB 2.0 Program)Do you have access to enough personal funds to make a minimum down payment equal to 3% of the purchase price? YES NO (If NO, you are not eligible for the FTHB 2.0 Program)PLEASE SUBMIT THIS FORM IN PERSON TO THE ECONOMIC DEVELOPMENT AND PLANNING DEPARTMENT LOCATED ATHousing Division2535 Commerce WayCommerce, CA 90040Attention: HOUSING STAFFNote: Staff will date/time stamp all Interest Forms received and an application will be mailed to you if it is determined that you may be qualified. If you have any questions, please call 1-877-260-3549.Should you have any questions about the program please contact Tierra West Advisors at 1-877-260-3549. Note: City staff will contact you when funding is available to continue application process.FIRST-TIME HOMEBUYER 2.0 PROGRAM INTEREST FORMECONOMIC DEVELOPMENT AND PLANNINGSECTION I - APPLICANT CONTACT INFORMATION:Name of Applicant:________________________________________________________Name of Co-Applicant: ____________________________________________________Mailing Address:__________________________________________________________Telephone Number:_______________________________________________________SECTION II – ELIGIBILITY QUESTIONS:Number of People in Household? Adults over 18:_______ + Children: _______ = Total ________Estimated Annual Household Income of ALL Adults over 18 who will live in the home (specify total ANNUAL amount): $_______________Is your household income less than 175% of the Area Median Income adjusted by Household Size (Please see the column for your Household Size and Maximum Income Limit)?YES NO (if NO, you are not eligible for the FTHB 2.0 Program)2021 INCOME LIMITSFamily Size12345678 (175% of Area Median Income)$98,000$112,000$126,000$140,000$151,200$162,400$173,600$184,800Are you a current City of Commerce Resident? YES NO If yes, how many years? _______(If NO, you are not eligible for the FTHB 2.0 Program)(If YES, and you have lived in the City of Commerce for less than 5 calendar years immediately preceding 2022, you are not eligible for the FTHB 2.0 Program)Have you ever owned a home? YES NO (If YES, you are not eligible for the FTHB 2.0 Program)Do you have access to enough personal funds to make a minimum down payment equal to 3% of the purchase price? YES NO (If NO, you are not eligible for the FTHB 2.0 Program)PLEASE SUBMIT THIS FORM IN PERSON TO THE ECONOMIC DEVELOPMENT AND PLANNING DEPARTMENT LOCATED ATHousing Division2535 Commerce WayCommerce, CA 90040Attention: HOUSING STAFFNote: Staff will date/time stamp all Interest Forms received and an application will be mailed to you if it is determined that you may be qualified. If you have any questions, please call 1-877-260-3549.Should you have any questions about the program please contact Tierra West Advisors at 1-877-260-3549. Note: City staff will contact you when funding is available to continue application process.

FIRST-TIME HOMEBUYER 2.0 PROGRAM INTEREST FORM

ECONOMIC DEVELOPMENT AND PLANNING
SECTION I - APPLICANT CONTACT INFORMATION:

Name of Applicant:________________________________________________________ Name of Co-Applicant: ____________________________________________________ Mailing Address:__________________________________________________________ Telephone Number:_______________________________________________________ SECTION II – ELIGIBILITY QUESTIONS:

Number of People in Household? Adults over 18:_______ + Children: _______ = Total ________ Estimated Annual Household Income of ALL Adults over 18 who will live in the home (specify total ANNUAL amount): $_______________ Is your household income less than 175% of the Area Median Income adjusted by Household Size (Please see the column for your Household Size and Maximum Income Limit)? YES NO (if NO, you are not eligible for the FTHB 2.0 Program) 2021 INCOME LIMITS
Family Size
1 2
3 4
5 6
7 8
(175% of Area Median Income)
$98,000
$112,000
$126,000
$140,000
$151,200
$162,400
$173,600
$184,800
Are you a current City of Commerce Resident? YES NO If yes, how many years? _______ (If NO, you are not eligible for the FTHB 2.0 Program)
(If YES, and you have lived in the City of Commerce for less than 5 calendar years immediately preceding 2022, you are not eligible for the FTHB 2.0 Program) Have you ever owned a home?
YES NO (If YES, you are not eligible for the FTHB 2.0 Program) Do you have access to enough personal funds to make a minimum down payment equal to 3% of the purchase price? YES NO (If NO, you are not eligible for the FTHB 2.0 Program)

PLEASE SUBMIT THIS FORM IN PERSON TO THE ECONOMIC DEVELOPMENT AND PLANNING DEPARTMENT LOCATED AT Housing Division
2535 Commerce Way
Commerce, CA 90040
Attention: HOUSING STAFF
Note: Staff will date/time stamp all Interest Forms received and an application will be mailed to you if it is determined that you may be qualified. If you have any questions, please call 1-877-260-3549.

Should you have any questions about the program please contact Tierra West Advisors at 1-877-260-3549.

Note: City staff will contact you when funding is available to continue application process.

FIRST-TIME HOMEBUYER 2.0 PROGRAM INTEREST FORM

ECONOMIC DEVELOPMENT AND PLANNING
SECTION I - APPLICANT CONTACT INFORMATION:

Should you have any questions about the program please contact Tierra West Advisors at 1-877-260-3549.

Note: City staff will contact you when funding is available to continue application process.

Application ID #Application ID #Exhibit A Continued– Sample FTHB 2.0 Program ApplicationExhibit A Continued– Sample FTHB 2.0 Program Application Application ID #
Application ID #
Exhibit A Continued– Sample FTHB 2.0 Program Application Exhibit A Continued– Sample FTHB 2.0 Program Application FIRST TIME HOMEBUYER PROGRAM 2.0
The First Time Homebuyer Program 2.0 (FTHB 2.0 Program) is designed to assist creditworthy, income-qualified applicants who are residents of the City of Commerce and wish to purchase their first home within the City of Commerce.

Program Guidelines
2021 INCOME LIMITS
Family Size
1 2
3 4
5 6
7 8
(175% of Area Median Income)
$98,000
$112,000
$126,000
$140,000
$151,200
$162,400
$173,600
$184,800
New and existing single family homes, condominiums and Planned Unit Development (PUD) homes located in the City of Commerce are eligible for purchase by eligible first time homebuyers. The following properties do not qualify for the FTHB 2.0 Program: Mobile homes, multi-family dwellings (e.g. duplex, triplex), properties occupied by a lawful tenant who is entitled to relocation assistance (except for an eligible borrower), properties subject to deed restrictions that would affect the resale of the property, properties owned by an immediate relative of an eligible borrower and offered for sale to such eligible borrower. ; FTHB 2.0 Program loans will be made to eligible borrowers selected among successfully completed applications submitted before the deadline via a lottery. The lottery will be duly publicized and conducted in a public meeting held at a designated time and date as determined by the Director in consultation with the City Manager and Council; Up to $150,000 in the form of a second mortgage loan deferred for 45 years can be provided by the City for down payment assistance; 3% minimum borrower contribution is required;
Adjustable interest rate first mortgage loans are not allowed under this Program; Applicants and co-applicants must be first-time home buyers, defined as: someone who has never had an ownership interest in a residential property; Only current City of Commerce residents are eligible. Eligible applicants are those who: i) have lived within the incorporated city boundaries for the City of Commerce a minimum of 5 calendar years, with top priority given to those who have lived in the City a minimum of 10 years prior to submitting the Program application.

The borrower will be required to pay the City a share of the home equity if any of the following occur within 45 years of the loan origination: (1) the borrower sells the property; (2) the borrower transfers title/ownership of the property; (3) the borrower no longer occupies the property as their primary residence; or (4) the borrower refinances their first deed of trust without the City’s prior approval.

Application Process Overview
Complete Applications must be postmarked and received by the Department by a designated time as determined by the Director; A lottery will take place to select up to nine (9) Applicants. The remaining Applicants will be placed on a “back-up” list in the order the names are drawn. Lottery will take place at a time and date to be determined by the Director, in consultation with the City Manager and Council. Priority will be given to eligible applicants who have lived in the City a minimum of 10 years; and A Certificate of Occupancy for any new housing unit must be issued by City prior to funding the FTHB 2.0 Program loan.

A copy of escrow instructions must be provided to the City within ten (10) days after the offer has been accepted and residential purchase agreement is fully executed. Failure to submit escrow instructions may forfeit the applicant’s opportunity to continue their participation in the Program.

Application Checklist
In order to assist the City in reviewing and processing your application, the following information is required. Please return the following items:

Signed application including the following:

Section 1 - Applicant(s) Information
Section 2 - Household Composition
Section 3 - Employment History
Section 4 - Monthly Income Declaration
Section 5 - Monthly Expenses
Section 6 - Applicant(s) Assets
Section 7 - Federal Income Tax Return Filing Statement (if applicable) Section 8 - Equity Share Disclosure
Section 9 - Monitoring Disclosure
Section 10 - Release of Information
Section 11 - Consent and Declaration
Attach the following supporting documentation to your signed application:

1. COPY of last three (3) years’ federal income tax return, with W-2s for applicant(s) and other household members 18 and older, if any.

2. COPY of three (3) most recent paycheck stubs for applicant(s) and other household members 18 and older, if any. Self-employed persons must provide a year-to-date profit and loss statement from a certified public accountant.

3. COPY of three (3) most recent savings account statements and six (6) most recent checking accounts statements for all accounts (all pages) demonstrating evidence of your 3% minimum contribution toward down payment.

4. COPY of purchase and sales agreement (California Association of Realtors standard form) and/or escrow instructions (if any)

5. COPY of first mortgage loan approval commitment letter

6. COPY of other income documentation (supply a copy of the award letter or a copy of the check or direct deposit bank statement):

Child Support (If Child Support Has Been Ordered But Never Or Periodically Received Please Provide Proof From The District Attorney Office) Alimony
Social Security, SSI
Retirement
Disability
AFDC
Proof Of Income For All Persons Living In Household
Interest On Savings/Income Earning Accounts

7. COPY of a credit report no more than 3 months old for applicant(s)

8. PROOF of residency. Applicant(s) will be required to provide COPIES of documents demonstrating history of residency in the City. Documentation may include tax returns, utility bills, rent receipts, lease or rent agreement or other documents, as determined by staff to verify residency eligibility. *******************IMPORTANT*********************
Please submit your original signed application with all the exhibits & photocopies of items 1 through 8. The City will not be responsible for returning or safeguarding original personal documents for items 1 through 8.

Section 1
Down Payment Assistance
First-Time Homebuyer Program Application
For City Staff Use Only
Application Received
Application #:

Approved:

Denied:

Date:

Comments:

Time:

Applicant Information
Applicant Name:

Primary Telephone Number:

Social Security Number:

Date Of Birth:

Co-Applicant Name:

Primary Telephone Number:

Social Security Number:

Date Of Birth:

Home Address:

Mailing Address (If Different):

Previous Address (if residing less than 3 years at above address):

Marital Status: Married Single Divorced Legal Separation Widow Applicant Current Employer:

Work Telephone:

Employer’s Address:

Co-Applicant Current Employer:

Work Telephone:

Employer’s Address:

Section 2

HOUSEHOLD COMPOSITION
(Please List All Individuals Who Will Live In The House) Member No.

Name
Relationship
Age
Social Security Number
Head of Household
Applicant
1 2
3 4
5 6
7 8
9 10
Please check the racial/ethnic group which applies to applicant(s) (optional). Mark all that apply:

White African American Native American
Asian Latino Other:______________
Alaska native Native Hawaiian or other Pacific Islander Does anyone live with you now who is not listed above? Yes No Does anyone plan to live with you in the future who is not listed above? Yes No Please explain any yes answers to the questions above:
_______________________________________________________________________ _______________________________________________________________________ The information provided above is true and complete to the best of my/our knowledge and belief. I/we consent to the disclosure of income and financial information from my/our employer and financial reference for purposes of income and asset verification related to my/our application. ____________________________________ _____________________ Applicant Date
____________________________________ _____________________ Co- Applicant Date

Section 3

EMPLOYMENT INFORMATION
Applicant Information
Current Employer:

Occupation:

Monthly Gross Income:

Length of Employment:

Phone Number:

Address:

City/State/Zip
Previous Employer (if less than 2 years):

Phone Number:

Occupation:

Monthly Gross Income:

Length of Employment:

Phone Number:

Address:

City/State/Zip
Co-Applicant Information
Current Employer:

Occupation:

Monthly Gross Income:

Length of Employment:

Phone Number:

Address:

City/State/Zip
Previous Employer (if less than 2 years):

Occupation:

Monthly Gross Income:

Length of Employment:

Phone Number:

Address:

City/State/Zip
Section 4

CURRENT MONTHLY INCOME CHART
(Please List All Sources Of Household Income)
Source
Applicant
Co-Applicant
Other Household Members 18 Or Older
Total Monthly Income
Salary/Base Pay
$
$
$
$
Overtime Pay
$
$
$
$
Commissions
$
$
$
$
Fees
$
$
$
$
Tips
$
$
$
$
Interest And Or/Dividends
$
$
$
$
Bonus
$
$
$
$
Rental Income
$
$
$
$
Social Security/Pension/Retirement
$
$
$
$
Alimony/Child Support
$
$
$
$
AFDC/Unemployment
$
$
$
$
Other
$
$
$
$
Other
$
$
$
$
Total Monthly Household Income
$
Section 5
Applicants Monthly Expenses
Applicant(s)
Creditor
Monthly Payment
Balance
Rent Payment
$
$
Auto Payment
$
$
Auto Payment
$
$
Student Loan
$
$
Student Loan
$
$
Credit Card
$
$
Credit Card
$
$
Credit Card
$
$
Credit Card
$
$
Credit Card
$
$
Other
$
$
Other
$
$
Other
$
$
Other
$
$
Other
$
$
Other
$
$
Other
$
$
Other
$
$
Total
$
$
Have you or any other person listed on this application as a co-applicant previously purchased or had prior ownership interest in residential real estate? Yes No Please explain any yes answer to the question above:

Section 6
Applicant(s) Assets
Applicant(s)
Institution/Bank
Account No.

Balance
Checking
$
Checking
$
Savings
$
Savings
$
Certificate of Deposits (CDs)
$
Stocks
$
Stocks
$
Bonds
$
Bonds
$
IRA
$
401ks
$
Other Retirement Accts.
$
Other
$
Other
$
Other
$
Other
$
Total
$
I (we) certify that the above statement is true. I (we) authorize the City to verify credit worthiness. ______________________________ ______________________ Applicant Signature Date
______________________________ ______________________ Co-Applicant Signature Date
Section 7
Federal Income Tax Return Filing Statement
(Submit only if applicable)
Please complete the following if you did not file a federal income tax return for any of the last three (3) years.

I/we, ___________________________________________________ (Print Your Name), did not file a federal income tax return for the following years: _______________, for one of the following reasons:

I/we were instructed by the internal revenue services that my/our income was not sufficient to file a federal income tax return. Please indicate the year: _____________________.

I did not work, I was ________________________________________________. Please indicate the year(s): __________________________.

Other: __________________________________________________________________.

I/we, the above-named applicant(s), by signing below, hereby acknowledge, under penalty of perjury, and assert that the statement herein is true and correct, and that any false statement will be just cause for the City to request the full repayment of any loan assistance provided through the Program. ____________________________________ _____________ Applicant Signature Date
____________________________________ _____________ Co-Applicant Signature Date

Section 8
Equity Share Disclosure
I/we hereby agree and understand that the City will share a portion of the net profit (see table below) I/we could make in a subsequent sale or transfer, based on the appreciation of the home. In the event that there is no positive appreciation in the value of the home, the equity share would be zero ($0). The original loan amount will be due and payable upon the sale or transfer/change of ownership of the property, except for a permitted transfer, if the property is no longer occupied as my/our primary residence, or an unapproved refinance before expiration of the 45 year term.

Year of Transfer/Sale
Equity paid to
City
Loan Interest
Rate
0-10
15%
0%-1%
11-15
10%
0%
16-30
5%
0%
31-45
2%
0%
After 45*
0%
Loan is forgiven
An example of this equity share, as it would apply to a Program borrower selling or transferring the home at year 15 is as follows:

A borrower assisted with a Loan of $100,000 for the purchase of a home with a fair market value of $500,000 at the time of its purchase, sells or transfers the home in year 15 and the value of the home has increased to $700,000.

As indicated in the table above, the borrower must repay the original loan amount of $100,000, and share 10% of the equity or appreciated value. In this example, the borrower would repay the loan of $100,000 and $20,000 in City’s equity share, (10% of $200,000 which is the difference between $500,000 and $700,000) for a total of $120,000, plus any applicable interest. ____________________________________ _____________ Applicant Signature Date
____________________________________ _____________ Co-Applicant Signature Date

SECTION 9
Monitoring Disclosure
I/we hereby agree and understand that the City will monitor annually to ensure the home has remained my/our primary residence. I/We will be required to mail to the City a copy of my/our hazard insurance policy, home telephone bill, a copy of my/our property tax bill, and a copy of my/our electricity and water utility bill by July 1st of each year.

In addition, the City will monitor the general upkeep of the home purchased with City assistance. I/We agree to keep the home in good condition and repair, with no excessive weeds, debris or chipped paint. I/We agree to comply with property maintenance standards as established in the City’s municipal code. ____________________________________ _____________ Applicant Signature Date
____________________________________ _____________ Co-Applicant Signature Date
Section 10

RELEASE OF INFORMATION
I/we, ____________________________________, the undersigned hereby authorize ___________________________________________________, to release without liability to the City of Commerce, any and all information they may request.

INFORMATION COVERED
I/we understand that, depending on Program policies and requirements, previous or current information regarding my/our household or me/us may be needed. Verification and inquiries that may be requested include, but are not limited to:

Identity and Marital Status
Residences and Rental Activity
Employment
Medical or Child Care Allowance
Income and Assets
Credit and Criminal Activity
I/we understand that this authorization cannot be used to obtain any information about me/us that is not pertinent to my/our eligibility for, and continued participation in, the First-Time Homebuyer 2.0 Program.

GROUPS OR INDIVIDUALS THAT MAY BE ASKED
The groups or individuals that may be asked to release information (depending on Program requirements) include, but are not limited to:

Previous Landlords
Home Inspector Report
Utility Companies
Welfare Agencies
State Unemployment Agencies
Real Estate Appraisers
Courts and Post Offices
Social Security Administration
Law Enforcement Agencies
Schools and Colleges
Medical and Child Care Providers
Retirement Systems
Support and Alimony Providers
Credit Provides and Credit Bureaus
Credit Rating Agencies
Banks and other Financial Institutions
Veterans Administration

CONDITIONS
I/we agree that a photocopy of this authorization may be used for the purposes stated above. The original of this authorization will be retained by the City and remain in effect for one year from the date signed. I/we understand I/we have a right to review my/our file and correct any information that I/we can prove is incorrect. __________________________ ____________________ __________________ Signature (Head of Household) (Print Name) Date __________________________ ____________________ __________________ Signature (Spouse/Co-applicant) (Print Name) Date Section 11

CONSENT AND DECLARATION
I/We, as undersigned, hereby agree to arrange for an authorized representative of the City of Commerce to enter my/our proposed single family residence for the purpose of evaluating the housing structure. This evaluation will be performed jointly by the property owner (or property owner’s agent), the undersigned and an authorized representative of the City. In addition, by signing below, I/We declare that the information provided within my/our application package is true and accurate to the best of my/our belief and knowledge that I/We made no misrepresentations in the application or its related documents, nor did I/We omit pertinent information and that I/We under penalty of perjury have received and read the City’s First-Time Homebuyer 2.0 Program Guidelines.

The undersigned certify the following: I/We have applied for a loan under the First-Time Homebuyer 2.0 Program funded by the City. In applying for assistance, I/We completed this application containing private information for the purpose of obtaining a loan. I/We understand and agree that the City shall maintain my/our application package as a confidential file and shall not reveal any of its contents to any third party without my/our authorization, unless the City is required to treat such information differently pursuant to applicable law or court order.

I/We understand and agree that the City reserves the right to change the review process to a full documentation Program on a case by case basis. This may include independent verification of the information provided on the application. I/We expressly consent to and authorize City of Commerce to verify the information on the application and hereby instruct all persons so requested to fully cooperate with the City, including, but not limited to providing further confirmation or documentation as the City may request from time to time. I/We understand and agree that the City reserves the right to change the requirements of this application and the FTHB 2.0 Program at any time. ____________________________________ _____________ Applicant Signature Date
____________________________________ _____________ Co-Applicant Signature Date
First Time Homebuyer Program 2.0
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Commerce City CouncilApril 25, 2023

Commerce City Council
April 25, 2023