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HomeMy WebLinkAboutResolutions - 2004.10.07 - 27654MISCELLANEOUS RESOLUTION, 104286 BY: Planning and Building Committee, Charles ramie', Chairperson IN RE: DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT - COMMUNITY AND HOME IMPROVEMENT DIVISION - OAKLAND COUNTY AMERICAN DREAM DOWNPAYMENT INITIATIVE (ADDI) LOAN PROGRAM GUIDELINES To the Oakland County Board of Commissioners Chairperson, Ladies and Gentlemen: WHEREAS the U.S. Congress established the American Dream Downpayment Initiative program to increase homeownership opportunities for low-income first-time homebuyers through the HOME Investment Partnerships Grant under Title II of the National Affordable Housing Act; and WHEREAS in Miscellaneous Resolution #04165 the Oakland County Board of Commissioners accepted program year 2003 and 2004 HOME American Dream Downpayment Initiative Grant funds from the U.S. Department of Housing and Urban Development; and WHEREAS administration of the new ADDI grant requires specific program guidelines in accordance with federal ADDI requirements; and WHEREAS the Oakland County Community and Home Improvement Division has developed Oakland County American Dream Downpayment (ADDI) Loan Program Guidelines: and WHEREAS the Oakland County Community and Home Improvement Citizens Advisory Council voted unanimously to recommend approval of the ADDI Loan Program Guidelines to the Oakland County Board of Commissioners as written in Attachment A. NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners approve the Oakland County American Dream Downpayment Initiative (ADDI) Loan Program Guidelines in Attachment A. Chairperson, on behalf of the Planning and Building Committee, I move the adoption of the foregoing resolution. PLANNING AND BUILDING COMMITTEE Planning & Building Committee Vote: Motion carried on unanimous roll call vote Oakland County American Dream Downpayment Initiative (ADDI) Loan Program Guidelines Oakland County Community and Home Improvement Division Introduction Obtaining downpayment and closing costs is the biggest hurdle to homeownership for low-income families. By providing a dedicated stream of funding to cover these costs, the Oakland County American Dream Downpayment Initiative (ADD!) Loan Program can increase the homeownership rate, especially among low income and minority households, and revitalize and stabilize communities. In December 2003, the U.S. Congress authorized the ADDI program to be administered under the U.S. Department of Housing and Urban Development (HUD) HOME Investment Partnership Program. The ADDI program is administered locally by the Oakland County Community and Home Improvement Division. The County's ADD! Loan Program provides assistance with downpayment and closing costs associated with the purchase of eligible single family housing located within participating communities. General information on the ADDI Program may be found on the HUD website at www.hud.00vioffices/cod/affordablehousing/proorams/home/addi. For Oakland County ADDI information contact the Oakland County Community and Home Improvement Division, Bldg. 38E, 1200 N Telegraph Rd, Pontiac, MI 48341-0414 (248) 858-0493 or on the website at: www.co.oakland.mi. us/chi. Application Procedures Oakland County ADDI loan applications and a list of participating financial institutions can be obtained from the Oakland County Community and Home Improvement Division offices. Targeted Outreach Outreach efforts will be made to those low-income households who may qualify for ADDI assistance. Applicant Suitability The Oakland County Community and Home Improvement Division in partnership with participating financial institutions will evaluate homebuyer suitability for the ADDI program. Homebuyer Eligibility Requirements • Eligible Applicants Applicants are eligible if they meet suitability criteria and are first-time homebuyers purchasing single- family housing units for their own occupancy. The definition of "first-time homebuyer” is someone who has not owned a home during the three-year period before the purchase of a home with ADDI assistance. Exceptions to the rule are defined in 24 CFR 92.2. Eligible applicants must prove U.S. citizenship or permanent residency status. Eligible applicants must live or work in Oakland County as defined in 24 CFR 982.207 at the time of application. DRAFT ADD! GUIDELINES 09/11/04 Page 1 of 3 • Income Applicants are eligible for ADDI assistance if their gross household income does not exceed 80% of area median income (AMI) as established by HUD. Income limits that vary by family size will be periodically updated in accordance with HUD revisions. Income is determined in accordance with 24 CFR 92.203. • Asset Limitation Net household assets of the eligible applicant, determined in accordance with 24 CFR 92.203, are limited to no more than $50,000 at the time of application. • Credit Worthiness Eligible applicants must satisfy standard credit granting criteria and qualify for a fixed-rate first mortgage. All ADDI mortgages must demonstrate that property taxes and homeowner's insurance are escrowed as part of the first mortgage. • Homebuyer Education Eligible applicants must complete pre-purchase homeownership counseling through Oakland County's HUD approved Housing Counseling Unit, at no cost, after pre-approval by a participating financial institution and before any commitment to purchase. The County's housing counselor will provide a one-on-one session tailored to meet the needs of the potential homebuyer. Successful applicants must also agree to participate in post purchase counseling with the Oakland County housing counselor within six months of property closing. Property Eligibility • Maximum Purchase Price The appraised value of the property may not exceed the applicable Single Family Mortgage Limits under Section 203(b) of the National Housing Act, as periodically adjusted by HUD. • Location and Type ADDI eligible properties must be located in an Oakland County community participating in Oakland County's Community Development Block Grant and HOME programs. An eligible property is a single-family home, attached to a permanent foundation, or a condominium. Mobile homes, co-operatives and multi-family units are not eligible. The property may not be located in a 100-year flood plain. Homes purchased with ADDI assistance must be for purchaser occupancy. Property purchased must be currently vacant, owner occupied, or a rental property occupied by a current tenant purchasing the housing unit in which they reside. Homes purchased under the ADDI program may not displace a tenant. • Property Standards Properties purchased with ADDI assistance must meet minimum HUD Section 8 Housing Quality Standards (HQS) as documented by Oakland County Community and Home Improvement. Properties must also conform to the Residential Lead-Based Paint Hazard Reduction Act of 1992. The HQS inspection will be conducted by Division staff at no cost to the applicant. DRAFT ADDI GUIDELINES 09/11/04 Page 2 of 3 Funding • Eligible Uses Funds may be used to pay for downpayment assistance and reasonable and customary closing costs as defined in 24 CFR 92.602. ADDI funds may not be used to complete or pay for any repairs to the property. • Amount of Assistance The amount of ADDI assistance is a $10,000 loan. ADDI funds will only pay for costs incurred in the property purchase. Homebuyers cannot receive cash back at mortgage closing. • Homebuyer Contribution Homebuyers must personally contribute a minimum of 2% toward the purchase price of the home. • Form of Assistance Funds will be provided to qualified homebuyers in the form of a zero-interest rate, deferred payment loan. This is a non-forgivable loan. The loan becomes due and payable when the mortgagor transfers interest in the property, except as prohibited by law, upon property sale, or when the property changes ownership either by sale, mortgage, gift, land contract, inheritance or rental property conversion. Homebuyers must execute an Oakland County Mortgage and Note securing the property as collateral for the amount of ADDI assistance. • Subordination Oakland County may consider subordination of the ADDI loan if the homeowner refinances for a lower interest rate or term and does not take cash out. • Program Income Program income generated under ADDI will be treated as HOME program income. These funds will be used to carry out HOME-eligible activities. DRAFT ADDI GUIDELINES 09/11/04 Page 3 of 3 PY 2004 Oakland County American Dream Down payment Initiative (ADDI) Loan Program Guidelines Attachment Ferndale Hazel Park Huntington Woods Keego Harbor Lathrup Village Madison Heights Participating Communities CITIES Auburn Hills Berkley Birmingham Clarkston Clawson Farmington Novi Oak Park Orchard Lake Village Northville Pleasant Ridge Rochester Rochester Hills South Lyon Sylvan Lake Troy Walled Lake Wixom TOWNSHIPS Addison Brandon Commerce Groveland Highland VILLAGES Beverly Hills Franklin Holly Independence Lyon Milford Oakland Holly Lake Orion Orion Oxford Rose Royal Oak Springfield Leonard Milford West Bloomfield White Lake Ortonville Oxford Wolverine Lake Maximum Gross Annual Income Levels Effective 2/04 Household Size Maximum Gross Annual Income 1 $39,150 2 $44,750 3 $50,350 $55,900 5 $60,400 6 $64,850 7 [ $69,350 8 1 $73,800 Gross annual income includes income from all household members over the age of 18, regardless of relationship. Income limits are established annually by the U.S. Department of Housing and Urban Development. Single Family Mortgage Limit Maximum Purchase Price: $226,100.00 Resolution #04286 October 7, 2004 Moved by Wilson supported by KowaII the resolutions on the Consent Agenda be adopted. AYES: Coleman, Coulter, Crawford, Douglas, Gregory, Hatchett, Jamian, Knollenberg, KowaII, Law, Long, McMillin, Moffitt, Moss, Palmer, Patterson, Potter, Rogers, Scott, Suarez, Webster, Wilson, Zack, Bullard. (24) NAYS: None. (0) A sufficient majority having voted therefore, the resolutions on the Consent Agenda were adopted. ,1••••• I HEREBY APPIEVE THE FOREGOIV REsonvi STATE OF MICHIGAN) COUNTY OF OAKLAND) I, G. William Caddell, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on October 7th, 2004 with the original record thereof now remaining in my office. In Testimony Whereof, I have hereunto set my hand and affixed the seal of thp County of Oakland at Pontiac, Michigan this 7th day of October, 2004. °A;7(4614/ G. William Caddell, County Clerk