Frequently Asked Home Buyer Down Payment and Closing Cost Assistance Program Questions
1. Does the program currently have funds available? If so, how long do you believe those funds will last? How often is your program funded?
2. Does the program dictate how much of the assistance is to be used toward the down payment vs the closing costs or escrows?
3. FHA requires a minimum cash investment of 3.5% to 5% for the down payment from the borrower (all of which can be a gift); conventional loans requires 10% minimum cash investment (5% has to be from the borrower's own funds). If the buyer gets down payment assistance from the City of St. Petersburg, can this be applied towards the minimum cash required thereby allowing in some cases zero cash out of the buyer's pocket?
4. Why will the city not allow you to exceed ratios on the first mortgage if the first mortgage lender will approve it?
5. When is the second completely forgiven?
6. What are the most common mistakes that first time users of the down payment and closing cost assistance program make?
7. What is the most common mistake repeat users make?
8. If I am married and my husband is out of the country do I have to include his income?
9. If I am married and my husband is in jail how will this affect my application for down payment assistance?
10. If a friend is staying with me on a temporary basis do I have to include his or her income as part of my household?
11. Can down payment assistance be used to payoff delinquent credit?
12. Do I have to include my under age child who is working in my household income?
13. Can the down payment assistance program be used in conjunction with ARM loans?
14. Are the home buyer classes posted on the site?
15 If there are two applicants, do they both have to take the class?
16. Is non-occupant co-borrowers income used to calculate the household income?
17. What collection do customers have to pay?
18. If an FHA lender has approved a client, even though they have some old collections, will WIN allow them?
19. If a husband and wife are separated (3 years or more) and the wife is on title but not mortgage of original home and can prove that she has a rental history elsewhere, can she be considered a first time homebuyer and qualify for DPA?
20. When will the $8,000 tax incentive be made available for use at the closing? (THIS PROGRAM IS NO LONGER AVAILABLE)
21. Other than a stove, does WIN require any other appliances in the home to qualify for DPA?
22. If I have the homebuyer as the only one earning income; I still use his income on the chart but would go under 2 people (as his girlfriend lives with him and earns nothing.) Correct?
23. WIN doesn't have a credit score requirement does it?
24. Would a 2 unit property qualify for the W.I.N. program?
25. How are paid collections verified?
26. Do you calculate the 41% back end ratio using all the households income?
27. Do closing costs include escrows for taxes and insurance too?
28. If you start the 8k bridge loan, then that would be three loans correct?
29. How do you calculate income? Is it different than mortgage lenders?
1. We currently have funds available through the State Housing Initiatives Partnership (SHIP) Program for down payment and closing cost assistance for households up to 80% AMI.
2. Only 4% of the sales price may be utilized for closing costs. The balance of assistance may be used as down payment or to "buy-down" the interest rate on a fixed rate mortgage product.
3. No, the borrower must contribute a minimum of 2% of their own funds into the transaction. The 2% may include e borrower's pre-paid items such as appraisal fee, credit report fee, home inspection cost and other items.
4. The ratio guidelines are put in place by policy. The city's experience has proven that the 41% back-end-ratio is a fair and reasonable guideline.
5. The A+ Teacher's Loan is the only down payment and closing cost assistance loan that is forgiven. Others are either deferred or amortized depending on percent of median income. (NOTE: THIS PROGRAM IS CURRENTLY NOT BEING OFFERED)
6. The number one mistake is not submitting a complete application package.
7. Same, not submitting a complete application package.
8.Temporarily absent family members are considered family members. For example, an administrator may consider a family member who is working in another state on assignment or who is on active military duty to be temporarily absent.
9. Incarcerated individuals are not counted as household members if they are scheduled to be incarcerated during all of the next 12 months.
10. A temporary visitor is not considered a household member.
11. No, only for the purpose of paying 4% of the sales price in closing costs, down payment and permanent interest rate buy-down.
12. Earnings in excess of $480.00 for each full-time student 18 years old or older (excluding heard of household and spouse) is excluded.
13. No, Adjustable Rate Mortgage loans are excluded; only a 15, 30 or 40 year fixed rate product is permitted.
14. Yes, Classes are provided by:
Tampa Bay Community Development Corporation (727) 442-7075
St. Petersburg Neighborhood Home Solutions (727) 821-6897
Community Services Foundation (727) 461-0618
Consumer Credit Counseling Services (800) 251-2227
There are links on the Home Buyer Loan page on our website to the websites that offer the classes.
15. Yes, both borrower and co-borrower are required to attend the classes.
16. The income of non-occupant co-borrowers is not calculated; only those who occupy the home.
17. All collections other than "medical" must be paid prior to closing.
18. No, all collections with the exception of "medical" must be paid prior to closing.
19. An applicant may own other properties and still receive assistance to purchase another property that must be occupied by the borrower as a primary, homestead residence.
20. (THIS PROGRAM IS NO LONGER AVAILABLE.)
The city of St. Petersburg is currently discussing a strategy and creating a process and procedure for administration of the Florida Housing Opportunity Program (FHOP), which is a $8,000 tax credit program being instituted by the Federal government through the State of Florida State Housing Initiatives Partnership (SHIP) Program.
Funding is currently available to certain municipalities. However, at this point in time, the funding program is not specific and money for home buyers may not be available until the first week of August. Lawmakers have funded the program through doc stamp taxes applicable in the new fiscal year rather than through a lump sum commitment so the program will not be fully funded until the state collects new doc stamp taxes.
IMPORTANT: Funding to first-time-home-buyers is a bridge loan. Repayment terms have not yet been finalized.
City representatives will be communicating with State officials this week to develop specific guidelines. Until such time that we conclude our research we are not in a position to move forward with applications.
Please check back with us periodically. We anticipate publishing a Notice of Funds Availability once we finalize the down-payment loan program plan.
For specific questions about the $8,000 tax credit, home buyers should consult a tax professional.
21. The home must be ready for occupancy with essential appliances including appropriate appliances: Stove or cook surface and refrigerator. Dishwashers, washers, dryers, microwaves, garbage disposals, etc. are not considered essential appliances and are not required.
22. Yes, all permanent household members are included in determining household size and only the income of those with income is considered in calculating percent of median income.
23. The city's relies on the lender for first mortgage loan approval. We do not have a guideline relative to a credit score requirement. We do, however, require that all non-medical collections be paid prior to closing.
24. Cooperative units, condominiums and single family only, Duplex, triplex, quadruplex or multi-family units are not eligible.
25. Collections are paid at closing or prior to with receipts as proof of payment.
26. We rely on the lender to approve the ratios using income from the borrower. Should the household income be greater we may, in some cases as with a wife or husband living in the household, consider household income as a compensating factor.
27. Closing costs include prepaid items.
28. A strategy for the Florida Housing Opportunity bridge loan is being formulated for submission to City Counsel. The proposed term of the loan is 5 years; repayment in 90 days without interest; or, if not paid, the loan will accrue interest at a rate equal to that of the first mortgage. Of course, the borrower may only receive the amount they would anticipate being refunded from their tax returns for 2008 as amended.
29. Income is calculated from all household members over the age of 18. We look at all household member's income not just the borrowers.