Chapter 1 - San Diego Housing Commission

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Chapter 15 – Moving Forward: Housing Choice Voucher Homeownership Program financing approach. However, HUD encourages local public housing authorities to develop partnerships with lenders to better serve the needs of families. SDHC will counsel the family to avoid predatory lenders or lending practices. SDHC will review any financing package that arises from any lender approved by SDHC. 4. Underwriting Options The following underwriting options are suggested under this program. The lender will decide upon the option based upon income and borrower qualifications determined on a case-by-case basis by the lender, and dependent upon the specific loan products utilized. However, because of the high cost market and other conditions, SDHC has determined the most feasible model for the program in the area is the Two Mortgage Approach and has established partners to be successful by using this model. - Option One: Deduct HAP from Principal, Interest, Taxes & Insurance (PITI) The borrower’s HAP is applied directly to the PITI, and the housing debt to income ratio is calculated on the “net housing obligation” of the borrower. - Option Two: Add HAP to Borrower’s Income Calculate total income as a combination of the tax-exempt HAP (grossed up by 25%) and the borrower’s income from employment using underwriting ratios specific to the loan product being used. - Option Three: Two-Mortgage Approach Borrower qualifies for the first mortgage (PITI) using the family’s income. The HAP is used to qualify the P&I for a second mortgage. 5. Loan Restrictions Mortgages with negative amortization, interest-only, adjustable or variable interest rates are not allowed under this program. The buyer may not enter into private seller financing. Lease-purchase agreements will be explored on a case-by-case basis subject to changing conditions in the market. SDHC reserves the right to review lender qualifications and the loan terms before authorizing homeownership assistance. SDHC may disapprove proposed financing of the debt if SDHC determines that the debt is unaffordable. In making this determination, SDHC will take into account family expenses such as childcare, un-reimbursed medical expenses, homeownership expenses, and other family expenses, in addition to the participant’s income. On the initial purchase, SDHC has determined it will use an affordability cap that the family share can be no greater than 45% of their adjusted income. Family share will be the homeowner expenses less the HAP. SDHC must review and approve any proposed refinancing of the property and any requests to open home equity lines of credit. Refinancing the property, without prior written approval from SDHC, may result in termination of the HCV Homeownership assistance. In making its determination, SDHC will take into account the reason(s) for the request to refinance, as well as the current assets and liabilities of the family, and how the refinancing will affect the total tenant payment. Homeownership assistance may continue if refinancing is approved, but will be limited to the remaining term on the initial mortgage loan. 15-12
Chapter 15 – Moving Forward: Housing Choice Voucher Homeownership Program L. CONTINUED ASSISTANCE: FAMILY OBLIGATIONS Before a family is allowed to search, the family and SDHC must execute a HUD prescribed “Statement of Homeowner Obligations.” In the statement, the family agrees to comply with all obligations under the homeownership option. The initial “Statement of Homeowner Obligations, HUD-52649” will be reviewed and executed at SDHC HCV homeownership eligibility interview. The family must also execute SDHC Statement of Family Obligations, which details the additional SDHC HCV Homeownership Program obligations. 1. Continuous Reporting Requirements SDHC will reexamine the family’s income and composition on an annual basis. All Home of Your Own participant families will be excluded from the Moving Forward triennial recertification cycle. After purchase of the home, the family must continue to adhere to the “HUD Statement of Homeowner Obligations” and the “Housing Commission Statement of Family Obligations” in order to continue to receive the monthly housing assistance payment. The “Housing Commission Statement of Homeowner Obligations” and the “HUD Statement of Homeowner Obligations” will both will be reviewed by the family and signed at each annual reexamination. A new Certificate of Housing Assistance Payment and, if a change in lenders, a new Servicing Agreement must be signed prior to any change in the housing assistance payment. Working families are required to annually document continued compliance with the full-time work requirement of the program by annual completion of the HCV Homeownership Personal Declaration and independent verification. A family must disclose all changes in writing in income within ten (10) calendar days of the change and at the annual reexamination. Failure to disclose or accurately report changes will jeopardize a family’s continued participation in this program. A family may not add an adult household member without prior SDHC approval. SDHC will deny admission to any individual who would otherwise not qualify for admission to the program due to criminal history, drug related history, program violations, registry on a sex-offender list or other factors used to determine eligibility. Participant must agree to attend post-purchase counseling sessions in conjunction with acceptance into this program to continue to receive assistance. SDHC may require families who become delinquent on their mortgage payments to participate in additional homeownership and/or credit counseling classes. SDHC may deny or terminate assistance for violation of participant obligations as described in the “HUD Statement of Homeowner Obligations”, SDHC Statement of Family Obligations or other program requirements. 2. Continuous Employment Obligations The applicant head of household, spouse, or adult on the mortgage document must remain continuously employed (average of no less than 35 hours per week) while participating in the program. Part-time employment by both parties, totaling over 35 hours per week, does not constitute fulltime employment by either party. For continued eligibility purposes, continuous employment is defined in two ways: 15-13
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CHAPTER 1 - STATEMENT OF POLICIES A
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CHAPTER 5 - SUBSITY STANDARDS, VOUC
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CHAPTER 8 - ANNUAL REEXAMINATIONS A
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C. MOVING FORWARD: INSPECTIONS AND
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X. INFORMAL HEARING POLICY ________
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CHAPTER 15 - MOVING FORWARD: HOUSIN
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Chapter 1 - Statement of Policies a
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Chapter 2 - Waiting List, Admission
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Chapter 3 - Verification, Income, A
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Chapter 4 - Tenant Rent Calculation
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Chapter 12 - Special Housing Types
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Chapter 1 - San Diego Housing Commission

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