Davis Community Housing Authority
Down Payment Assistance Program Summary
The Davis Community Housing Authority (DCHA) provides a Down Payment Assistance (DPA) Program for qualified first time home buyers. This is a federally funded program that will provide eligible home buyers with a grant of $5,000 to be used for closing costs or down payment with the purchase of the home. The home must be a single-family dwelling; meaning a one family residence, condominium unit, cooperative unit, combination of manufactured housing and lot.
The home must be located in Davis County. Homes in Fruit Heights, South Weber, Layton or Clearfield City are not eligible. It is the responsibility of the applicant to select a home in the eligible areas.
Applicants must be at or below the applicable income limits and be first time home buyers. Definition of a first time home buyer is an individual, and his or her spouse who have not owned a home during the 3-year period ending on the date of purchase of property. The term first-time home buyer also includes a displaced homemaker or a single parent who has only owned a home with a spouse.
Applicants who meet the necessary qualifications will receive their grant on a first come, first serve basis. There are limited funds available, and the Board of the DCHA reserves the right to expand or terminate the program depending on the availability of funds.
In order to qualify, the applicant must complete all requirements as outlined in the application instructions. The applicant must also provide a minimum of $1,500.00 of their own money toward the down payment or closing costs and the provided funds must be reflected as such on the settlement statement. Earnest money and any buyer pre-paid costs are considered buyer provided funds. At least one of the applicants must complete a Housing and Urban Development (HUD) approved homebuyer education class and provide a certificate of completion at the time of application.
An applicant must receive an approved FHA, VA, or conventional fixed rate mortgage loan. No variable rate, adjustable rate, interest only, balloon payment or 80/20 split will be allowed. The applicant’s title company or closing agent must be willing to execute and provide the DCHA with all the real estate documents. A list of instructions will be provided to the agency responsible for conducting the closing transaction. It is the applicant's responsibility to ensure that all documents are properly prepared and forwarded to the DCHA in a timely manner.
All loans are non assumable and no subordinations subsequent to initial financing. If the buyer(s) sell, exchange, transfer title, obtain a second mortgage, or decide to refinance for any reason within the first five years from the date of purchase, a pro-rata share of the funds provided by the DCHA must be repaid by the home buyer. The payoff amount will be based on the settlement date of the original purchase and will be calculated as of the last day of the month in which the home is sold. Payoff is not required under the following circumstances:
a. The new home purchaser is a household with an annual income at 80% or less of HUD’s area median income adjusted for family size. In such case, the full grant will be forgiven and the original lien will be reconveyed such that the new eligible household is not subject to the remainder of the retention period.
b. If the home that was purchased is sold within five years of the date of the loan closing and no net gain is realized, the full grant will be forgiven. Any net gain up to the pro-rated.
A Visual Assessment must be completed by the DCHA on all homes for health and safety concerns and for Lead Based Paint concerns for homes built prior to 1978 as outlined in “Attachment A”. If the home was built prior to 1978, a representative from DCHA will determine whether there are deteriorated paint surfaces present that could be a potential hazard to occupants. If potential hazardous Lead Based Paint conditions exist, the Seller and/or Buyer must take actions to remove the hazardous conditions, pursuant to HUD guidelines. The Visual Assessment is required by the federal government in order to alert homebuyers to potential health and safety concerns as well as potential lead-based paint dangers prior to the closing. Federal funds may be withheld if certain problems exist and the seller and/or buyer do not wish to mitigate them. The seller or buyer, however, is free to complete the transaction without federal assistance.
The homebuyer is encouraged to have a professional inspection regardless of the visual assessment conducted by the DCHA. The visual assessment is not intended to determine the nature and extent of health and safety problems, nor
does it determine if unseen problems exist in the home.
Davis Community Housing Authority
DPA Eligibility Criteria
1. Applicant’s total annual household income must be equal to or less than 80% of the current area median income limits as established by HUD. Eligibility is determined by calculating anticipated income from all household members 18 years or older, including members not on the mortgage loan,and number of household members.
80% Area Median Income Limits (AMI) FY 2012
Household Size Maximum Yearly Income
1 Person $40,050
2 Person $45,800
3 Person $51,500
4 Person $57,200
5 Person $61,800
6 Person $66,400
7 Person $70,950
8 Person $75,550
2. Applicant must complete and submit all of the attached forms as per the application instructions.
3. Applicant must be a U. S. Citizen or Resident Alien and be 18 years of age or older.
4. Applicant must be a first-time home buyer as determined by HUD: 1) An individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property. This includes a spouse (if either meets the above test, they are considered first-time homebuyers). 2) A single parent who has only owned with a former spouse while married. 3) An individual who is a displaced homemaker and has only owned with a spouse.
5. Eligible Boundaries: Area within Davis County except Fruit Heights, South Weber, Layton, or Clearfield City.
6. Eligible properties must be zoned for residential use only and are limited to Single Family Residences such as: condominiums, town homes, and combination of manufactured housing and lot.
7. Applicant must contribute a minimum $1,500.00 of their own money towards the down payment or closing costs and the provided funds must be reflected on the settlement statement.
8. The $5,000 must be applied to the down payment and/or closing costs.
9. Applicant must complete a HUD approved home buyer education course and obtain a home buyer certificate of course completion. Certificate must be provided with application.
10. Applicant must secure FHA, VA, or conventional financing for property purchase. No variable rate, adjustable rate, interest only, balloon payment or 80/20 split will be allowed.
11. Real property must not exceed $200,000.
12. A Visual Assessment must be completed by the DCHA on all homes for health and safety concerns and for Lead Based Paint concerns for homes built prior to 1978.
Davis Community Housing Authority
Applicant Instructions
1. An applicant will be considered for the Down Payment Assistance Program once they have entered into a contract with the seller and have submitted the following to the DCHA:
A. Completed and signed DCHA Application.
B. Seller Affidavit attesting that purchasing the selected property does not lead to displacement of any current tenants.
C. Copy of applicant's Real Estate Purchase Contract with Seller.
D. Copy of previous year's tax return. If either applicant or co-applicant did not file a previous year's tax return, they must submit a letter stating why there was no tax return filed for the previous year.
E. Four most current pay stubs and verification for any source of income for everyone in the household over 18. Income includes but not limited to: Salary, Overtime pay, commissions, tips, regular bonuses, social security, net business income, pension/retirement, child support, alimony, unemployment benefits, worker compensation)
F. Signed and notarized First Time Homebuyer's Affidavit.
G. Identification Documentation: A copy of birth certificate, passport, naturalization certificate, or resident alien card and valid Utah driver’s license or identification card.
H. Signed Program Summary Page.
I. Signed Original Letter of Commitment.
J. Declaration of US Citizenship or Resident Alien form.
K. Homebuyer Education Certificate from a HUD approved course or counseling agency.
L. Completed Visual Assessment form.
2. Upon receipt, review and approval of the above, the DCHA upon request, will issue a Letter of Commitment. The applicant must also submit the following documents:
A. A copy of the Preliminary Title Report stating property appears free and clear for sale to applicant.
B. The completed Lender Affidavit which states the lender agrees to the terms of the DCHA Down Payment Assistance Program. The completed Preliminary Credit Approval form from the Lender, stating that the applicant has received preliminary credit approval and information regarding verification of current income.
D. Copy of Real Estate Appraisal.
NOTE: The DCHA must be informed of any participation by a co-owner, co-borrower or cosigner that will be participating in the purchase of the home whose name does not appear on the initial DCHA application. Co-signers are allowable when meeting the following conditions: 1) a co-signer cannot have any ownership interest in the property (they cannot be on the title) and2) the co-signer cannot reside in the property being purchased.
A representative of the DCHA must perform a Visual Assessment for the presence of health and safety concerns, and the presence of potential lead-based paint dangers in homes built prior to 1978. If any potentially hazardous lead based paint conditions exist, they must be mitigated (responsibility of Seller and/or Buyer) before the DCHA can approve. The procedure outlined in “Attachment A” must be followed.
3. Upon acceptance of the required documents, the DCHA will issue a check made payable to the title company to be disbursed according to a letter of instruction. The DCHA must be notified at least 10 working days prior to the date of closing. After closing, the escrow agent is to return to the DCHA
all the completed documents described in the Letter of Instruction to the escrow agent. These documents include:
A. Promissory Note - This document states that the Applicant agrees to pay the DCHA the loan amount if they should move, sell or refinance the property within 5 years of the purchase of the property. Please note that the DCHA will not subordinate to second mortgages or refinances.
B. Trust Deed - This document states the DCHA is a beneficiary whereby the DCHA has a lien on the purchased property until the grant is forgiven or repaid.
C. Notice of Default - This document states that the first mortgage holder will notify the DCHA if and when the Applicant defaults on payments and property goes to foreclosure.
D. Copy of the final Title Report or copy of Title Insurance policy issued to Buyer.
If you have any questions or concerns regarding the application process, please call Mary Swanstrom at (801) 939-9198.
MAIL OR DELIVER DOCUMENTS TO: OR EMAIL TO:
Davis Community Housing Authority dchamswanstrom@xmission.com
P.O. Box 328
352 South 200 West Suite 1
Farmington, Utah 84025
FAX 801-451-6484
REQUIREMENTS
1. Buyer shall have a period of forty-five (45) days from the date of the Letter of Commitment to close on the property. FHA, VA or other conventional first mortgage financing shall be allowed. There shall be no seller financing.
2. After receiving this Letter of Commitment and before any funds can be released, the buyer(s) shall provide to the DCHA:
a. A copy of a preliminary title report covering the property listed above.
b. Preliminary credit approval from the lender and verification of current household income reflecting applicant's total household income does not exceed eligibility criteria.
c. An executed Lender's Affidavit.
d. A copy of the appraisal for the property to be purchased.
3. After receipt of the above listed documents, our office will require 10 business days before funds can be issued.
4. Before funds can be released, the DCHA must complete a Visual Assessment of the home for health and safety concerns and the presence of lead based paint dangers in homes built prior to 1978.
5. At the time of closing the Buyer will be required to sign a Visual Assessment Disclaimer acknowledging that the DCHA accepts no responsibility for any problems disclosed or not disclosed in their Visual Assessment Report.
6. At the time of closing, title must be vested in fee simple interest of the buyer(s), and the Trust Deed and Notice of Default securing the interest of the DCHA are properly recorded.
7. Buyer(s) must provide at least $1,500.00 of personal funds toward the purchase price or closing costs.
8. The $5,000.00 grant provided by the DCHA to the buyer(s) must be used by the buyer(s) for down payment and/or closing costs only.
9. The $5,000.00 funds provided by the DCHA shall be repaid pro-rata share by the buyer(s), if the buyer(s) sell, exchange, transfer title, obtain a second mortgage, decide to refinance for any reason or cease using the purchased property as their primary residence.
10. The $5,000.00 shall be disbursed at time of closing and duly recorded on the closing settlement statement. These funds shall only be disbursed after the Promissory Note, Trust Deed, Request for Notice of Default, and Visual Assessment Disclaimer Affidavit are executed and notarized.
11. The residence to be purchased must be zoned for residential use only and is limited to Single Family Residences such as: Condominiums, Town Homes, cooperative unit, and combination of manufactured housing and lot located within eligible areas, verified and approved by the DCHA.
12. The buyer(s) must occupy the property to be acquired as the buyer(s)' primary personal residence.
13. No Member of the Board of Directors, or any staff member of the DCHA shall have any interest in the transaction with the buyer(s).
14. The purchase of said property must not lead to the displacement of any individual other than the seller and his/her immediate family.