St Bernard Soft Second Mortgage Program NO DOWN PAYMENT

St Bernard Soft Second Mortgage Program NO DOWN PAYMENT

ST. BERNARD PARISH HOME MORTGAGE AUTHORITY is now accepting Applications from First-Time Homebuyers For a Soft Second Mortgage and a Grant       

The St. Bernard Parish Home Mortgage Authority is taking applications for a CDBG Soft Second Mortgage Program that offers qualified Homebuyers a soft second loan of 20% of the purchase price up to $30,000 at a 0% interest rate and no monthly payments and a grant of up to $5,000 for closing costs and downpayment assistance on a need basis.  The Soft Second Mortgage will be forgiven after the Homeowner has met the requirements of the program and has lived in the home for five years.  The Homeowner must quality for a FHA approved First Mortgage Loan.   

CDBG Assistance                                CDBG Assistance to be given in the following order: a)  A Soft Second Loan of 20% of the purchase price up to $30,000                                                                  per borrower at 0% interest and no monthly payments b)  A Grant of up to $5,000 per borrower for Closing Costs                                                                  and Down Payment Assistance on a need basis   Documents Required to Reserve        Borrower must present                                                                  a legally binding purchase agreement with Funds  application for funds and must close on the transaction within 90                                                                  days tapplying for assistance under this program.  Properties must be essentially “move in” ready when the                                                                  purchase agreement is executed.   Application date is based on the date that a complete application is received by                                                                  the Program Administrator and all applicants will be served on a “first come, first served” basis.                                                                                                                         

Minimum Required by Homebuyer          1% of Purchase Price or $1,000, whichever is greater Investment                                                                                                                                                        

Maximum Homebuyer Investment          Greater of 10% of Purchase Price or $10,000   

Maximum Liquidity                                         Homebuyer’s cash and or liquid assets must not be greater than 6 months of the monthly Principal &                                                                                 Interest plus Taxes and Insurance after down payment and out of pocket closing costs are paid.  Any excess                                                                                 will reduce the $5,000 Grant.   

Type of Eligible Units                                       New and Existing Residential (1 and 2 Unit Dwellings)                        

Maximum Purchase Price                             $200,000   

Mortgage Rate of First Mortgage               Established Rate, plus 1% origination fee                                              

Soft Second Payment Requirement          Repayment of a portion of the principal amount, up to $30,000 of (Sale or Refinance) the CDBG Soft Second                                                                                 Loan, shall be due if the First Mortgage Loan is paid in full upon sale or refinance within five (5) years from                                                                                 Date of closing.                                                               

                                                                                 0-3 years:   100% of Soft Second Loan          

                                                                                 3-4 years:   80% of Soft Second Loan   

                                                                                 4-5 years:   60% of Soft Second Loan                                                             

                                                                                After 5 years:   $0 due                                                                                                                         

First Mortgage Loan Type                             Only FHA loans will be accepted at this time.  Borrower must have a minimum 640 credit score and stable                                                                                 taxable income for a minimum of 2 years.   

Second Mortgage Loan Payee                     The Second Mortgage will be made payable to the State of Louisiana, Division of Administration Office of                                                                                         Community Development (“OCD”).   

Closing Costs and Down Payment             The Closing Costs and Down Payment Assistance Grant limit is $5000.  The $5000 can include funding for                                                                                 prepaids (homeowners insurance, flood insurance, mortgage insurance premium, and taxes) and other                                                                                 customary costs associated with closing a real estate transaction.  Advance payments for Homeowners,                                                                                 Flood Insurance, and Taxes are limited to 24 months of premiums.    

Eligible Borrowers                                              First time homebuyers with annual household incomes at or below 120% area median income (per                                                                                  Metropolitan Statistical Area data) who are purchasing a principal residence in St. Bernard Parish.  A first time                                                                                  homebuyer is an individual who meets any one of the following criteria:   -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). -A single                                                                                  parent who has only owned with a former spouse while married. -An individual who is a displaced                                                                                  homemaker and has only owned with a spouse.   Homebuyers who have already received payments from                                                                                  the State under the “sell” or “relocate” option under the Road Home Compensation Program are not eligible                                                                                  to receive additional financial assistance from this program.   

Household Income Limits                             Call The Craig Real Estate Group today for details 504-382-3724 or 504-862-4139                

Insurance Requirements                               Eligible properties must be insured with flood, wind, and standard homeowner's coverage in an amount                                                                                 equal to the first and second mortgage balances.  Prior to closing, proof of mortgagee clauselisting the State                                                                                 of Louisiana, Division of Administration Office of Community Development (“OCD”), as 2nd position lien                                                                                 holder must be received by Compliance Agent.   

Physical Standards/Inspection                   All properties must meet St. Bernard Parish Building Code requirements, Zoning Code requirements and the                                                                                physical standards and inspection procedures of the FHA/VA or Fannie Mae mortgage loan product                                                                                associated with the First Mortgage Loan.  All properties must have an HRS inspection.   

Occupancy Requirement                              Program recipients must occupy purchased unit as their principal residence for at least 5 years in order to                                                                                receive forgiveness of entire indebtedness.  Failure to do so without the written permission of the St. Bernard                                                                                HMA will result in the soft second  loan balance being immediately due and payable as described under                                                                                Second Mortgage Repayment above.   There will be no waiver of the occupancy requirement during the first                                                                                36 months from date of purchase of the unit.  The St. Bernard HMA may exercise its right to waive the                                                                                acceleration of payments due upon proof of job related relocation of over 150 miles, serious illness or death                                                                                of the homebuyer.  Upon HMA’s determination that borrower meets the “hardship” test per supporting                                                                                documents submitted and if the borrower has provided proof of continuous occupancy of the residence as                                                                                the primary residence, the HMA may will reduce the principal amounts due according to the following                                                                                schedule:    After 36 months:  40% of principal balance due After 48 months:  20% of principal balance due                                                                                After 60 months:  full forgiveness of debt  

Homebuyer Education                                  All eligible homebuyers must receive at least 12 hours of homebuyer education and/or training from one of                                                                                the participating homebuyer training organizations certified by the Louisiana Homebuyer Training                                                                                Collaborative, Inc.  Homebuyers of a two unit residence must also complete a landlord training seminar from                                                                                one of the participating homebuyer training organizations certified by the Louisiana Homebuyer Training                                                                                Collaborative, Inc.  The Lender will be responsible to coordinate and verify that the training has been                                                                                completed.   

Approved List of Lenders                             (1)  Gulf Coast Bank & Trust Company

                                                                               (2)     First NBC (formerly Dryades Savings Bank, FSB)                                                  

Compliance                                                       Providence Community Housing will be the Compliance Agent and will process and provide all compliance                                                                                reviews and reporting requirements related to the CDBG Soft Second Mortgage Loan Program.                                                              

Annual Compliance                                        The borrower must provide, on an annual basis, the following documents for the term of the Soft Second                                                                                Loan Program:  

                                                                               1.   Proof of Homestead Exemption 

                                                                               2.   Homeowners Insurance Policy    


Interested in getting QUALIFIED?  CALL US TODAY 504-382-3724 or 504-862-4139


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Phone: 504-352-6190
Dated: January 6th 2015
Views: 830
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