Appendix 1: Loan Program Summary
Loan Program
Repayment and Interest Terms
Acceleration
Resale Restrictions
Agency Purchase Option
Equity Sharing
First Time Home Buyer
(“FTHB”)
Low to moderate-income first-time homebuyers
30 year term
Repayments deferred first ten years, repaid over 20 years 3% simple interest
Balance due upon: 1) sale or transfer; 2) refinance; 3) failure to occupy as principal residence.
Transfer by gift, devise, or inheritance to any existing spouse who is an obligator under the note; transfer to spouse who becomes a co-owner of the residence, or transfer to trust in which owner is beneficiary is permitted with prior notice to Agency.
Provide 45-day notice of intended transfer. Sell at fair market value or agreed upon purchase price to an “Eligible Purchaser” who is low to moderate income or to an “Ineligible Purchaser” who is not low to moderate income.
At the owner’s request, an Eligible Purchaser may assume the amounts due under the loan and credit such balance against the purchase price as long as the new owner enters into new loan agreements with the Agency.
Agency has option to purchase at fair market value or agreed upon sales price within 30 days of receiving 45-day notice of transfer. Agency loan repaid in the form of a credit against purchase price.
None
Citywide Employee Incentive Homeownership Program
(“Citywide”)
Low to moderate income homebuyers in eligible job categories 30 year term
Repayments deferred the first ten years, repaid over 20 years 0% simple interest
Forgivable after first ten years at 5% per annum if borrower remains employed in qualified job category providing service within corporate boundaries of the City Balance due upon: 1) cease to be employed within selected job category; 2) cease to provide employment services to citizens of Hercules; 3) sale or transfer; 4) refinance, 5) fail to occupy as principal residence.
Transfer by gift, devise, or inheritance to any existing spouse who is an obligator under the note; transfer to spouse who becomes a co-owner of the residence, or transfer to trust in which owner is beneficiary is permitted with prior notice to Agency.
Provide 45-day notice of intended transfer. Sell at fair market value or agreed upon purchase price to an “Eligible Purchaser” who is low to moderate income and meets job criteria or to an “Ineligible Purchaser” who is not low to moderate income.
At the owner’s request, an Eligible Purchaser may assume the amounts due under the loan and credit such balance against the purchase price as long as the new owner enters into new loan agreements with the Agency.
Agency has option to purchase at fair market value or agreed upon sales price within 30 days of receiving 45-day notice of transfer. Agency loan repaid in the form of a credit against purchase price.
None
Homeownership Retention & Loss Mitigation Program
(“HRLMP”)
Low to moderate income homeowners at risk of foreclosure 30-45 year term
No deferral period
3-5% simple interest
Balance due upon: 1) sale or transfer; 2) refinance; 3) failure to occupy as principal residence.
Transfer as result of marriage, divorce, incompetence or death shall not accelerate terms if transferee gives notice to Agency within 45 days and assumes debt obligations via assignment and assumption agreement.
Provide 45-day notice to Agency prior to sale, transfer, or refinance No other restrictions
One outstanding loan gave option to sell to “Eligible Person” at low to moderate income, but Note amount would remain due and payable upon sale None
None
Inclusionary Housing Homeownership Program
(“Inclusionary”)
Low to moderate income homebuyers who purchase home affordable through inclusionary housing program 40 year term
Repayments deferred first 20 years, repaid over 20 years 0% interest during deferment then 3% simple plus Equity Sharing Amount Balance due upon: 1) sale or transfer; 2) refinance; 3) failure to occupy as principal residence.
Transfer by gift, devise, or inheritance to any existing spouse who is an obligator under the note; transfer to spouse who becomes a co-owner of the residence, or transfer to trust in which owner is beneficiary is permitted with 45-day notice to Agency.
Provide 45-day notice of intended transfer. Sell at to an “Eligible Purchaser” whose household income does not exceed the category under which the owner qualified. Note remains due and payable.
Sales price restricted at $330,000 (except for one loan at $386,575.67), increased by percentage increase in Area Median Income set by HCD. May adjust upward to reflect value of substantial structural or permanent fixed improvement safter home purchase whose costs exceed 1% of purchase price, if approved by Agency.
Agency has option to purchase at fair market value or agreed upon sales price within 60 days of receiving 45-day notice of transfer.
In event of acceleration during note term, equity sharing is required. 5% share of difference between borrower Purchase Price and Sales Price paid by new buyer (unless Sales Price is 3% below fair market value as determined by an appraisal).
Equity sharing is waived if sold to a low to moderate income purchaser at an affordable housing cost.
If owner transfers home at an unrestricted price, 94% of gross sales proceeds received by the owner is due to the Agency.
Home Emergency Repair Program
(“Emergency”)
Low to moderate income homeowners to fund emergency repairs 10 year term
No deferment
3% simple
Balance due upon: 1) sale or transfer, 2) refinance, 3) failure to occupy as principal residence.
Exempts transfer due to marriage, divorce, incompetence, or death.
Provide 30-day notice of sale or transfer
No other restrictions
None
None
BEGIN Homeownership Program
(“BEGIN”)
Low to moderate-income first-time homebuyers
30 year term
Repayments deferred 30 years; payable at end of loan term 0% interest through loan term
1% interest if balance is not paid upon event of acceleration, failure to observe Note terms, or event of default under Deed of Trust Balance due upon 1) default; 2) failure to occupy as principal residence during first five years; 3) sale, transfer, lease, encumbrance of property without lender approval.
Exempts transfer to surviving tenant upon death of a joint tenant, where spouse becomes an owner, dissolution of marriage, or to a trust where borrower is a beneficiary.
Provide written notice to lender.
May be sold to an income-qualifying household after five years from the recordation of deed of trust for the BEGIN loan.
None
None
Revitalization and Beautification Program
(R&B”)
Low to moderate income homeowners for rehabilitation
30 years
Repayment deferred 10 years, repaid over 20 years
0% interest during deferment then 3% simple
Balance due upon: 1) sale or transfer; 2) refinance; 3) failure to occupy as principal residence.
Exempts transfer due to marriage, divorce, incompetence, or death.
Provide 30-day notice to Agency.
None
None
Business Development Loan Program
(“BDLP”)
Small business loans
10-20 year term
No deferment
2-5% interest
Balance due upon sale of collateral property or refinance of collateral property amount in excess of current loan balance secured by such lien Provide 30-day notice to Agency.
None
None