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HomeMy WebLinkAboutC08-092EAGLE COUNTYEMPLOYER ASSISTED HOUSING BENEFIT EMPLOYEE HOME OWNERSHIP PROGRAM (SHOP) Revised and Adop ed by a Eagle County Commissioners 2008 EXHIBIT "A" TO RESOLUTION APPROVING EAGLE COUNTY EMPLOYER ASSISTED HOUSING BENEFIT EMPLOYEE HOME OWNERSHIP PROGRAM (EHOP) I. PURPOSE The purpose of the Eagle County Employee Home Ownership Program (hereinafter the "Eagle County EHOP") is to provide down-payment assistance to full-time, year-round employees of Eagle County for the purchase of the employee's primary residence in Eagle County. II. DEFINITIONS , A. "Default" means any delinquency or default on any loan that uses the Eligible Property as collateral. B. "Eligible Borrowers" mean, and are limited to, natural persons employed year-round by Eagle County for at least 30 hours per week who own no other residential property anywhere at the time of closing on the Eligible Property, except it is permissible to own residential property outside of Eagle County that is currently listed for sale or rented at fair-market value, as determined in the sole and exclusive discretion of the Equity Sbare Mortgage Committee. C. Eligible Property" means condominiums, town homes, duplexes, single family homes, manufactured homes on a permanent foundation taxed as real property or other code-compliant, habitable residences located within Eagle County. EHOP. D. Equity Share Mortgage" means mortgage as provided herein under the Eagle County E. uEquity Share Mortgage Committee" means a five member committee composed of the County Manager, one County Commissioner, the Housing Director (or successive position), the Finance Director, and the Human Resource Director . F. KNet Profits" mean the sales price of the Eligible Property. With the exception of transfer assessments, net profits do not include any applicable taxes or fees on the sale proceeds, broker's commission, transfer assessments or loan closing costs. G. ~5ham Transactions" means sale of an Eligible Property at less than market value, as determined through an appraisal performed by aCounty-approved appraiser III. STAFF ADMINISTRATION AND DISCRETION All Equity Share Mortgage determinations shall be made by a majority vote the Equity Share Mortgage Committee. A representative from the County Attorney's office shall attend Equity Share Mortgage Committee meetings. All discretionary decisions, including, but not limited to all eligibility decisions, shall be made by the Equity Share Mortgage Committee, at its exclusive discretion. A quorum shall be three voting members. IV. ELIGIBLE BORROWERS ELtgible Borrowers must be currently employed at least 30 hours per week by Eagle County. Eligible Borrowers may be given priority for length of service as employees of Eagle County, job performance, Eagle County's recruiting or retention needs, or other relevant factors as determined by Colorado law at the Equity Share Mortgage Committee's sole discretion. V. ELIGIBLE PROPERTY Eligible Property must be located within Eagle County. At the sole discretion of the Equity Share Mortgage Committee, priority may be given to employees within 3 miles of their place of employment; secondary priority may be given to employees within 10 miles of their place of employment. Bold denotes defined terms. VI. INCOME LIMITATIONS The Eagle County EHOP imposes no income restrictions on Eligible Borrowers. Verified household net assets may not exceed one and one half times the household income excluding retirement funds. VII. EQUITY SHARE MORTGAGE AMOUNT AND APPLICATION OF FUNDS The amount of Eagle County's Equity Share Mortgage assistance through EHOP shall not exceed 10 percent of the purchase price of the Eligible Property or $50,000, whichever is less. Equity Share Mortgage funds maybe used only for down payments, closing costs, and pre-paid items related to the primary loan. Equity Share Mortgages will be evidenced by a promissory note executed by Eligible Borrower at the time of Eligible Property settlement and a deed of trust recorded on the Eligible Property. VIII. EMPLOYEE CONTRIBUTION Eligible Borrowers must contribute 3 percent of the purchase price of the Eligible Property or $3,000, whichever is less, to be qualified for the Eagle County EHOP. Preference may be given to Eligible Borrowers who agree to contribute the greater of $5,000 or 5 percent as total down payment. IX. EQUITY SHARE MORTGAGE REPAYMENT Equity Share Mortgages shall have a maximum fifteen year term. Equity Share Mortgages maybe repaid at any time. If the Equity Share Mortgage is completely repaid within 24 months, the initial Equity Share Mortgage may be repaid with no appreciation. Repayments after 24 months include equity principal plus a pro rata share of recognized appreciation (if any) based upon the percentage of the EHOP Equity Share Mortgage to the original purchase price. (If EHOP Equity Share Mortgage represents 10% of original purchase price, the bon ower would repay the original principal balance plus 10% of the equity gain at the time of Equity Share Mortgage repayment.) At time of the pay off request, the appreciation of the home shall be established by an appraisal, sales price, or satisfactory comparative market analysis. Sham Transactions are prohibited. EARLY REPAYMENT Equity Share Mortgage must be repaid prior to maturity in the event Eligible Borrower: a) no longer occupies Eligible Property as the primary residence; b) sells, refinances or restructures financing of the Eligible Property; c) transfers or sells any ownership interest, in whole or in part, in the Eligible Property; d) refinances or restructures any indebtedness due under and secured by a Senior Lien Instrument, or any portion of sums due under this Equity Share Mortgage; e) allows the Eligible Property to be used in any manner that violates any laws, regulations or ordinances relating to zoning, building, or health, or allows the Eligible Property to be used for any purpose that maybe determined to be illegal under any applicable law, regulation or ordinance; or, f) is in default of any Senior Lien Instrument or otherwise fails to comply with the terms of this Equity Share Mortgage. X. RECORDATION Eagle County has the right to record a deed of trust on the Eligible.Property for the amount of the initial Equity Share Mortgage and any accrued interest pursuant to the terms herein. XI. PRIORITY AND EQUITY SHARE MORTGAGE TO VALUE The Eagle County Equity Share Mortgage shall be subordinate only to one primary loan on the Eligible Property and any other down-payment assistance programs. At the Equity Share Mortgage Committee's discretion, no Equity Share Mortgage shall be issued subordinate to two or more loans, excluding other down-payment assistance programs. The value of all Equity Share Mortgages and loans on the Eligible Property shall not exceed 105 percent of the purchase price of the home at the time of purchase. XII. ANNUAL APPROPRIATION Funds available for Eagle County EHOP shall be subject to annual appropriation. XIII. COUNTY'S RIGHT OF FIRST REFUSAL Eagle County shall have the right of first refusal to purchase an Eligible Property from an Eligible Borrower at Eligible Borrower's asking price for the property or upon default. Eagle County has the right to record this right in a deed of trust. The price and sales terms shall be set exclusively by the Eligible Borrower (or by default seller), but must be the same as offered to the general public and set in good faith. Eagle County shall have 30 days to exercise this option after being notified in writing of the pending sale. Notice shall be provided to the following address with a copy to Eagle County Housing Director: Eagle County Attorney Eagle County Building Box 850 Eagle, CO 81631-0850 Five days shall be added for notice provided by fax or mail. The Eligible Borrower may offer the Eligible Property to the Eagle County prior to listing the Eligible Property for sale to the general public. XTV. HOMEBUYER TRAINING Homebuyer training is required on all Equity Share Mortgages, as evidenced by a Fannie Mae, Freddie Mac, HUD, or a CHFA-approved provider. XV. ORIGINATION PROCEDURES 1. Funding Partners for Housing Solutions, Inc., (dba "Funding Partners") anon-profit corporation, shall administer the Eagle County EHOP. 2. Equity Share Mortgage Application: Eligible Borrower's loan officer must submit the Funding Partners Loan File Checklist to Funding Partners complete with all documentation shown on the form and any additional documentation required by Funding Partners. 3. Equity Share Mortgage Processing: Funding Partners will order the title commitment and evidence of hazard insurance. Final Equity Share Mortgage documents will be delivered electronically to the borrower's Equity Share Mortgage representative. The Eligible Borrower must comply with any informational and document requests from Funding Partners or Eagle County prior to Equity Share Mortgage funding. 4. Equity Share Mortgage Closing: Funding Partx-ers will deliver closing instructions and Equity Share Mortgage proceeds directly to the applicable escrow company. Funds transferred by wire should be sent 24 hours prior to the scheduled closing date. The loan officer shall advise of any schedule changes as soon as possible. 5. Fees Collected: Funding Partners will collect an application fee, $350, at closing, in addition to the public recording fee for the deed of trust. This information will appear on the applicable HUD1 Settlement Statement. All settlement figures should appear on a single statement. Funding Partners will review and approve the final statement prior to funding. Application fee is subject to change, upon prior notification to Eagle County and Eligible Borrower. 6. Requirements: 'The Eligible Borrower's loan officer shall present all required documents at, or prior to, closing. The Eligible Borrower and his or her loan officer shall execute the Lender Certification form, acknowledging disclosure of all loan terms and contact information. 7. Settlement: No changes to loan documents or loan amount shown on the HUD1 are permitted. 8. County EHOP documents returned to Funding Partners via overnight courier. Post Closing: The original deed will be recorded by title with all other original Eagle Residential Assistance Eagle County Employer Assisted Housing Benefit Employee Home Ownership (EHOP) Product Guideline Eligible Borrowers: Eligible Borrowers mean, and are not limited to, natural persons employed year- round by Eagle County for at least 30 hours per week, who own no other residential property in Eagle County at the time of closing. It may be permissible to own residential property anywhere outside of Eagle County that is currently listed for sale or rented at fair-market value, as determined in the sole and exclusive discretion of the Equity Share Mortgage Committee. Eligible Properties: Single family homes, condominiums, townhomes, duplexes, modular homes or manufactured homes on a permanent foundation taxed as real property within the jurisdictional boundaries of Eagle County. Max. Purchase Price: None. Income Threshold: No income limitations. Equity Share Mortgage: Assistance through Eagle County EHOP shall not exceed 10% of the purchase price or $50,000, whichever is less. Application of Funds: Equity Share Mortgage funds may only be used for down payment, closing costs, and pre-paid items related to the primary loan. Compatible Mortgages: EHOP may be used in conjunction with any first mortgage product except first mortgages containing a negative amortization feature or a prepayment penalty. Loan to Value: Maximum Combined Loan to Value is 105% of purchase price. Debt Ratio: Recommended back ratio of up to 50%.* Minimum Investment: Borrower must have a minimum investment of 3% of the purchase price or $3,000, whichever is less, from a source acceptable to the primary lender. In no case may the Seller or the premium pricing of the mortgage interest rate satisfy the minimum requirement. Assets: Borrower may not have verified net assets in excess of one and one half times the household income, excluding govennment approved retirement funds. Repayment: Equity Share Mortgage may be repaid at any time. If the Equity Share Mortgage is repaid within 24 months, only the principal must be repaid. Repayments after 24 months will include principal plus a pro rata share of the recognized appreciation (if any) based upon the percentage of the EHOP equity share to the original purchase price. Right of First Refusal: Language in the Deed of Trust will include a Right of First Refusal by Eagle County to purchase the property in the case of sale or default. Homebuyer Training: Required on all loans, as evidenced by a Fannie Mae, Freddie Mac, HUD or , CHFA-approved provider. Term: Maximum term is 15 years. Fees: $350 Application Fee shall be charged only at the time of loan closing and reflected on the HUDI Settlement Statement. Collateral: Subordinate lien priority on subject real property. * Back ratio is the sum of the house payment and all other consumer debt divid d b i e y gross ncome. Residential Assistance Rate Caps: Not Applicable. Exceptions Policy: All aspects of the Eagle County EHOP eligibility and underwriting criteria are subject to staff-level exception authority. Equity Share Mortgage terms and pricing must be approved by Funding Partners for Housing Solutions, Inc., (dba "Funding Partners"). Origination Procedures Application: Mortgage loan officer shall submit to Funding Partners the Loan File Checklist complete with all documentation shown on the form. Processing: Funding Partners will order title commitment and evidence of hazard insurance. Final equity share documents are delivered electronically to loan officer for presentation to borrower. All outstanding items must be cleared prior to funding. Closing: Funding Partners will deliver closing instructions and equity share proceeds directly to the title company. Funds transferred by wire should be sent 24 hours prior to scheduled closing date. The loan officer shall advise of any schedule changes as soon as possible. Fees Collected: The Application Fee of $350 shall be collected at closing. This is in addition to the public recording fee for the deed of trust. This information will appear on the HUD1 Settlement Statement. All settlement figures should appear on a single statement. Funding Partners will review and approve the final statement prior to funding. Requirements: The Eligible Borrower's loan officer shall present all required documentsg at, or prior to, closing. The borrower and loan officer shall execute the Lender Certification form, acknowledging disclosure of all loan terms and contact information. Settlement: No changes to loan documents or loan amount shown on the HUD 1 are permitted. Post Closing: The original deed will be recorded by title with all other original Eagle County SHOP documents returned to Funding Partners via overnight courier. EAGLE COUNTY GOVERNMENT E1~TPLOYEE HO1~TE OWNERSHIP PROGRAI~T APPLICATION Purpose: To provide down-payment assistance to full-time employees of Eagle County Government in an effort to offset a portion of the high cost of housing in our region. Date: Name: Phone Number: Current Address: Position with County: Employment Date: _ Address of Prospective Housing Purchase: Employee Number: Is the property located in Eagle County? Purchase Price: Property type: Single Family Town home Condo Duplex Modular Home Manufactured Home on permanent foundation Do you own other residential real estate? Yes No Address of other residential real estate owned: 1 Is this property listed For Sale? Yes No Is this property currently rented for market value? Yes No Rental amount per month $ Length of Lease. Mortgage Lender(s) Information Lender Name Address Telephone Contact Person ACKNOWLEDGMENTS Fax E-mail I am applying for the Employee Home Ownership Program (SHOP) under the Eagle County Government Benefit Plan All statements made in this Application aze true and correct; this Application contains no false statements, misrepresentations, or omissions of fact; these statements aze made with the purpose of obtaining an EHOP Equity Shaze Mortgage under the Eagle County Government Benefit Plan. Any false statements, misrepresentations or omission of fact in this Application may disqualify me for an EHOP Equity Shaze Mortgage and may result in legal or disciplinary action, or both. I authorize the mortgage lender(s), Eagle County, the Federal Credit Union, or any person designated by Eagle County to verify all information I submit in connection with this Application. I authorize the release to mortgage lender(s), Eagle County or any person designated by Eagle County of information about me to confirm that I am eligible for EHOP. I authorize Eagle County, any person designated by Eagle County, or any servicer to obtain a consumer report when administering or collecting any EHOP funds, and to obtain any other information about my income, my assets and my liabilities. BY SIGNING THIS APPLICATION, I ACKNOWLEDGE RECEIVING, READING, UNDERSTANDING, AND AGREEING TO THE TERMS AND CONDITIONS OF THE BENEFIT PLAN DESCRIPTION. • Employee Home Ownership Equity Share Mortgage Guidelines • Employee Home Ownership (SHOP) Program • Eagle County (EHOP) Application Signature Date 2