What is the grant?
The Orange County Association of REALTORS® (OCAR) was approved for a $50,000 grant from the California Association of REALTORS® (C.A.R.) Housing Affordability Fund (HAF).
It is currently very difficult for first-time homebuyers to purchase a home in the communities of Ladera Ranch and Talega. The Federal Housing Administration (FHA) has restrictions on community enhancement fees, of which both of these communities have.
The purpose of this grant will be to pay the enhancement fee for first-time homebuyers to make it easier for them to move into these communities.
Who qualifies for the grant?
This grant is for first-time home buyers who purchase a home under $650,000 with 10% or less down in Ladera Ranch or Talega.
From the U.S. Department of Housing and Urban Development,
A first-time homebuyer is an individual who meets any 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.
- An individual who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations.
- An individual who has only owned a property that was not in compliance with state, local or model building codes and which cannot be brought into compliance for less than the cost of constructing a permanent structure.
The buyer or seller’s agent must also be an OCR member.
How much is the community enhancement fee?
The enhancement fee is equal to 1/4 of 1% of the purchase price.
What is the application process?
- The buyer’s agent will add suggested language to the RPA as an addendum that states:
- Enhancement fee of 1/4 of 1% of purchase price to be paid by grant administered by the Housing Opportunities Coalition (HOC).
- The buyer’s agent will fill out a Hold Application. This form works as the application and holds the funds until escrow closes. The form must include the buyer and lender’s signatures, and can be sent to Tony Capitelli at firstname.lastname@example.org. We also suggest sending a copy of this form to your escrow holder.
- Upon approval of the application, HAF, OCAR, and HOC will send an acceptance letter to the buyer’s agent assuring that the enhancement fee will be paid through this grant.
- Prior to close of escrow, the buyer’s agent must fill out a Check Disbursement Form. The buyer’s agent must sign this form and submit it to Tony Capitelli at email@example.com as soon as the closing document goes out, or loan documents are being signed. A check that is made out to the HOA will then be sent to the escrow company from HOC. It is the buyer’s agents’ responsibility to ensure that the check is received.
What are the tax implications?
Program grants may be considered taxable income by federal and or state taxing authorities. Please consult a tax professional for more information.
How long will the grant be available?
The grant will be available until September 27, 2017, or until the funds are exhausted.
If you are considering buying a home for the first time, let me help you take advantage of this amazing opportunity. Call me now.
FAQ’s originally published on OCAR website.