SACRAMENTO REALTORS® CREATE HOMEBUYER ASSISTANCE FUND

Moderate-income, first-time home buyers will be assisted by a new program developed by the Sacramento Association of REALTORS® and the Sacramento Credit Union.

The Homebuyers Equity Leveraging Program (HELP) will provide direct loan assistance for 30 to 50 buyers.

The Sacramento Credit Union (SCU) will administer the program and will maintain a waiting list of applicants. To participate, potential buyers must join the Sacramento Credit Union and maintain a $100 balance. Other lenders that are members of the Sacramento Association of REALTORS® may also participate in the financing.

The buyer must also live in the home. Once applicants are approved, they will have 90 days to find a home, using a REALTOR® who is a member of the Sacramento Association of REALTORS®.

The SAR Board of Directors conditionally approved the initial allocation of $250,000 of the Association’s reserve assets to create the HELP Fund. The Housing Opportunities Committee then developed the critical features of an effective housing assistance loan program and developed an agreement with the Sacramento Credit Union to provide the loans. The California Association of REALTORS® also provided an additional $50,000 for local loans. The program was initially conceived by Dave Tanner, RE/MAX Gold Laguna and past president of SAR.

The program is also designed to: 1) be replicated in other cities and 2) develop a revolving loan fund that can be sustained with a minimum of risk.

The goal of the program is to provide low-cost, low-interest loans that -- when combined with other available mortgage financing products, grants and assistance – will enable a significant number of first-time homebuyers with mid-range incomes to complete a home financing package. The estimated range for loans will be up to 3% of the purchase price with a maximum loan of $10,000.

• Must be a first-time buyer, as defined by the Department of Housing and Urban Development (HUD).
• Property must be owner-occupied for the life of the loan.
• Income limits: 80% to 120% of area median income, based on family size.
• Cash reserves: one month principle, interest, taxes and insurance (PITI).
• Completion of eight hours of HUD-approved homeownership education.
• Borrower contribution: Minimum of 1% of the sales price, which may be in the form of down payment; or fees paid for appraisal, home inspection, credit review, or other closing costs.

• Type of properties allowed are a single family home, condominium, PUD, or manufactured home on permanent foundation,
• Homes purchased must be located within the SAR jurisdictional boundaries: Sacramento County and the City of West Sacramento.
• A property inspection and roof inspection must be conducted prior to loan approval. An appraisal must be conducted by a current Affiliate Member of SAR.

• A secured loan, in 2nd or 3rd lien position, to provide down payment and/or closing cost assistance to owner-occupied home purchasers
• Maximum loan amount: up to 3% of the sales price, to a maximum of $10,000.
• Interest rate: in line with the first mortgage.
• Amortization: fully amortized for up to 15 years.
• The portion of the loan representing at least 80% of the loan-to-value must be at a fixed interest rate for the life of the loan.
• Maximum combined loan-to-value ratio (CLTV) = 103%

SAR's commitment is to maintain the fund into perpetuity, so that payments and proceeds will be continually reinvested into leveraging home ownership opportunities for Sacramento's skilled workforce. It's one more way that REALTORS® are making Sacramento a better place to call home.

More information is available from:

Janelle K Fallan Director of Public Affairs and Commercial Division, Sacramento Association of REALTORS® jfallan@sacrealtor.org 916/437-1208

Peggy Coughlin Mortgage Loan Manager, Sacramento Credit Union pcoughlin@sactocu.org 916/444-8599, ext 3026