PURCHASE ASSISTANCE LOAN PROGRAM
November 2011
The City of St. Petersburg is offering down payment and closing cost assistance second mortgage loans to eligible home buyers whose household income does not exceed 80% of Median Family Income (MFI) according to the 2011 INCOME MATRIX. Federal Home Investment Partnership Program (HOME) will be the primary source of funding down payment and closing cost assistance loans, which differs from the Florida State Housing Initiatives Partnership (SHIP) Program used in the past. Although a private sector home inspection is highly recommended, the program will now require that a city Housing Rehabilitation Officer physically inspect the property for compliance to city code. In addition, a home built prior to 1960 will require a historical property review, which is completed by the State of Florida.
To allow sufficient time for the in-house inspection and the historical property review, the Housing and Community Development Department will accept applications that may not include all documentation listed on the tracking sheet. We ask that enough information be submitted to provide for determination of income eligibility. The appraisal, home inspection, third party verifications, etc. may be delayed. Bank statements, pay-stubs, credit report and other income related documentation to determine eligibility should be submitted to determine eligibility, which may result in a conditional commitment for funding.
Individual loans, not exceeding $20,000, shall be made available to eligible first-time home buyers. The loan amount shall be based on the purchase price of the home, the first mortgage loan amount and the cost of closing the purchase transaction:
a. First: An amount equal to ten percent (10%) of the purchase price shall be attributed to the down-payment;
b. Second: An amount equal to one percent (1%) of the first mortgagee's loan amount shall be allocated to fund the up-front cost of the FHA Mortgage Insurance Premium (MIP) or the conventional Private Mortgage Insurance (PMI) premium.
c. Third: $4,000 shall be provided to fund standard closing costs. However, should the borrower's required two percent (2%) contribution to the transaction be insufficient to pay all additional and necessary prepaid items, the City shall consider funding those prepaid items in amount over and above the standard closing costs. In no case shall the total assistance exceed $20,000.
Monthly payments shall be amortized at an interest rate of zero percent (0%) for a term of 240 months. After 120 payments have been made, or the principal balance of the loan has been reduced by fifty percent (50%), the remaining principal balance or fifty percent (50%) of the loan balance shall be forgiven.
Please do not hesitate to contact Linda Byars at (727) 892-5572 or linda.byars@stpete.org for further information.
The City of St. Petersburg Housing and Community Development Department provides for down payment and closing cost assistance in the form of a second mortgage loan to eligible home buyers, whose household income does not exceed 80% of Median Family Income (MFI) as defined by the U.S. Department of Housing and Urban Development. Availability will continue to those at or below 80% MFI until funds are exhausted. The Housing and Community Development Department has budgeted funds, received from the State Housing Initiative Partnership (SHIP) Program and the Home Investment Partnership (HOME), sufficient to serve its citizens, at or below 80% MFI, well into the coming fiscal year.
The City has discontinued serving households whose income exceeds 80% MFI as per the 2011 INCOME MATRIX The City of St. Petersburg has updated and amended the CRA Agreement for mortgage brokers and bankers.
Please review and execute the revised agreement and return by Fax to (727) 893-4100 or e-mail to linda.byars@stpete.org.
- Document: CRA Agreement for Banks
- Document: Credit Unions or CRA Agreement for Brokers
Lenders are requested to submit a complete application package to the City of St. Petersburg Housing and Community Development Department at One Fourth Street North, Ninth Floor of the Municipal Services Building, St. Petersburg including the documentation requested on the Tracking Sheet and the HOME BUYER LOAN APPLICATION. Should the applicant receive Social Security income please have the Social Security Form 3288 signed, processed and submitted with the application.