DOWN PAYMENT ASSISTANCE LOAN PROGRAM PROPOSED POLICIES - ALAMEDA COUNTY MEASURE A1 AFFORDABLE HOUSING BOND

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       ALAMEDA COUNTY
         MEASURE A1
   AFFORDABLE HOUSING BOND

DOWN PAYMENT ASSISTANCE LOAN
         PROGRAM
     PROPOSED POLICIES

     Health Committee of the Board – June 25, 2018

Policy Framework
Down Payment Assistance Loan Program ($50 million)

   Serving 120% AMI, first time homebuyer households
    that live, work or have been displaced from Alameda
    County
   Loan is a silent, deferred payment, shared appreciation
    loan
   $50M in funds over the next 6 years.
   Must be owner occupied
Adopted by Board of Supervisors, June 2016

Down Payment Assistance Loan Program
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       Summer of 2017 - HCD Issued an RFP for Program
        Administrator
       March 2018 - Board authorized contract with Hello
        Housing
       March – June 2018 - Implementation-level policy
        development

PUBLIC COMMENT

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Public Comments
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       Stakeholder meetings and outreach to those who work
        with these programs informed the draft policies
       Public comment Period held May 8-25, 2018
           6 People submitted 13 comments
               Changes to the proposed policies included
                     an expansion in the definition of educator
                     including tenant occupied homes where the tenant was purchasing
                      the home
                     additional language on transit proximity that narrows the
                      qualification to those that will actually use it
               Attachment B to the Staff report is a summary of comments and
                responses

PROPOSED

    IMPLEMENTATION LEVEL
          POLICIES

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Eligible Buyers
 Must live or work in Alameda County, or have
  been displaced
    Criteria for displacement exists, and
       procedures for how to apply will be in the
       procedure manual
 Limit on the amount of assets a household may
  have
 Down Payment Requirement of 3%, and less if
  using VA or other “No Down” loan programs
 Minimum 25% housing cost floor, maximum 45%
  Debt to Income ratio
 First Time Homebuyer Counseling required for all
  participants

Income Levels
Income Qualified at 120% of Area Median Income (AMI) initially

 Household Size           1            2           3             4

    100% AMI          $78,438      $89,625 $100,813 $104,400

    120% AMI          $94,125 $107,550 $120,975 $125,280

Maximum Loan Amounts
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       For Buyers earning less than 100% of Area Median
        Income, the initial DALP Loan limit will be
        $150,000

       For Buyers earning more than 100% of Area
        Median Income, the initial DALP Loan limit will
        be $100,000

       The DALP Loan amount will not be limited to a
        percentage of the purchase price.

Proposed Amount of DALP Loans

 Target Income (120% AMI)      $125,280
Income Available for Housing   $46,353
          Per Month             $3,863    How much can a
                                          family of 4
             HOA                 $356     earning 120% of
           Insurance             $50      median income
             Taxes               $806
                                          afford to pay?
      Mortgage Insurance          $-
 Remaining for Mortgage PMT     $2,651
  Max Loan Amount (4.5%)       $523,171
     Downpayment (5%)          $27,535
Purchase Price without DALP    $552,664

With a DALP Loan
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      DALP will allow a family access to more
      units on the market
      Purchase Price without DALP   $552,664
      Purchase Price with DALP      $652,664

               Price Range           Homes Sold in
                                        2017
     Below $550,000                          1,720
     $550,000 to $650,000                    1,472
     $650,000 to $675,000                      421
     $675,000 to $1,250,000                  5,077

Eligible Homes
 Located in Alameda County
 Must be owner occupied or vacant for 90 days
    Tenant occupied allowed when the tenant is purchaser
 Single Family Homes, Condo’s and Townhomes
    Mobile Home, Duplex or Multi Family not currently allowed
 Below Market Rate units are eligible at
  resale.
 Land Trusts/Ground Lease are allowed
 The size of the home (# of Bedrooms)
  will not be limited by household size

Repayment & Loan Terms
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        No payments due until sale or transfer of property
        Repayment at sale will include a share of the
         property appreciation based on the share of the
         initial purchase priced financed with the DALP
         loan
        May be assumed by future buyers of the same
         home if income qualified and pre-approved
        DALP Loan must be in the second position. Will
         not subordinate to other soft financing.

First Loan Requirements
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      Must be 30 year fixed rate
      Impound account for taxes and insurance

      No reserve requirements

      Proof of Citizenship for DALP is not
       required, but the first lender may require
       it

Eligible Use of Funds
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        Downpayment

        Rehabilitation of the home is not allowed

        Below Market Rate (BMR) Units are allowed
         at resale, and new construction BMR units
         may be evaluated for inclusion in the program.

Application Process

 Lottery by set dates, roll to first
  complete first served if funds remain
  available
 Reservation of funds for 90 days with
  options to extend reservation at least
  another 90 days.
 Small allocation kept in reserve from
  the first allocation to allow those who
  might be in contract to quickly access
  while others are still looking.

 Seller Reservation Concept as a future
  possible process

Annual Monitoring
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        Program Administrator will conduct annual
         monitoring's of those who receive DALP to ensure
         that the homes continue to be owner occupied and
         that the County funds remain in second position.

Program Delivery
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        Similar to approved policies for the Measure A1
         Rental Housing Development Program and the
         Innovation and Opportunity Fund, 10% of the
         Down payment Assistance Loan Program funds
         will be reserved for cost of issuance and County
         administrative costs.
        Any funds not used shall be returned to the
         program.

Next Steps
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        Recommendation to the Full Board of
         Supervisors in July
        Program Marketing and Implementation in
         August

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DISCUSSION