Costa Mesa offers a home buyer assistance program to first time buyers.
QUICK SUMMARY
The City of Costa Mesa will offer up to a $240,000 second mortgage towards the purchase of a home for first time buyers for homes in Costa Mesa.
The buyer must have 3% of the down payment in savings.
The purchase price must be $655,000 or less.
The buyer must owner occupy the home.
The City's loan is at ZERO (0%) PERCENT interest.
Loan repayment begins after 30 years.
The City will share in the equity gains made on the property based upon their share of the loan to purchase price.
The Equity Sharing Payment can be completely forgiven if the buyer lives in the property for 45 years and will be forgiven on a pro rata basis between years 30 and 45.
Costa Mesa does not currently have funding for the program this year but hopes to have it by September 3, 2008.
MORE DETAILS
This program provides a deferred 45 year second mortgage up to $240,000 for low and moderate income home buyers who purchase a home in Costa Mesa. It can be a single family residence, a condo or a townhome.
In order to be eligible for this program, the buyer must meet the following criteria:
1) he cannot have had ownership interest in a property in the last 3 years
2) he must have sufficient funds to contribute 3% of the purchase price as a down payment
3) he must purchase a home in Costa Mesa for $655,000 or less and plan to live in it has his primary residence.
4) he cannot exceed certain income limitations - 120% of the area's median income* based upon the size of the household.
- 1 person - $66,100
- 2 people - $75,500
- 3 people - $85,000
- 4 people - $94,900
- 5 people - $102,000
- 6 people - $109,500
- 7 people - $117,100
- 8 people - $124,600
There are other restrictions. The first mortgage must be a fixed rate, fully amortized 30 year loan with a lender approved by the City of Costa Mesa.
Refinancing is only permitted with express written approval from the City. Approved refinancing will not require immediate repayment of the City's loan. Refinances may be for a term of less than 30 years, though there can be no increase in the principal amount owed except for reasonable closing costs.
The interest rate on the City loan is ZERO (0%) PERCENT.
The loan shall be repaid as follows:
The principal and equity sharing payment are due in full upon
- Resale, full or partial transfer, or refinancing without express permission of the Program Director.
- Default by buyer on the agency loan
If the loan has not been repaid by the 30th anniversary, the principal shall become fully amortized and fixed, level payment shall be due and payable on the first of every month based upon 15 year amortization.
Equity Sharing
In addition to repayment of the principal amount, the buyer shall pay to the Agency an amount equivalent to the percentage share of the appreciation the property has had. These percentages are based upon the proportionate share of the Agency's loan compared to the purchase price (ie. purchase price of $500,000. Agency gives a loan of $100,000. The Agency has a 20% interest in any equity. The buyer must pay the Agency 20% of any net gain in equity).
Equity sharing payment is due at resale or default on Agency loan, which ever is earliest.
Equity Sharing Payment Forgiveness
If the Equity Sharing Payment is not due and repaid prior to the 30th anniversary, 1/15 of the Equity Sharing Payment will be forgiven every year for 15 years.
The buyer must continue to occupy the home for the full 45 years in order to have the full Equity Sharing Payment forgiven.
For more information on purchasing a home in Costa Mesa, visit Costa Mesa Real Estate.
If you would like more information Costa Mesa's Buyer Assistance Program or other Affordable Housing Programs in Orange County, please contact me at (800) 610-7253.
*Current income requirements for 2008
All information is believed accurate but is not guaranteed.
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