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Affordable Purchase Programs
The information provided below is only a guide. Lenders will provide borrowers with a handbook and loan documents specific to the home they are purchasing. After reviewing the information below, please feel free to contact the Housing Division with any questions you may have at housing@Roseville.ca.us
Income Limits for low-income household
1 or 2 persons - $55,500
3 or more persons - $64,400
Income limits for middle-income household
1 or 2 persons - $69,400
3 or more persons - $73,300
In the City of Roseville Affordable Purchase Programs, both new construction and affordable resale, the purchaser does not have to be a first time home buyer. However, the goal of all of the affordable purchase housing programs is to make home purchase possible for those who do not have sufficient income to otherwise buy a home in the City of Roseville.
The Guidelines are as follows:
Interest only loans are not acceptable
Stated income loans are not acceptable because the City of Roseville requires complete third party documentation of all actual income and assets
Loans through CalHFA will not be accepted
Prime loans only
Housing costs (front end ratio) must be at a minimum of 30% not to exceed 40%
Options can be financed as long as the front end ratio does not exceed 40%
Options can be paid for with cash
The preferred first loan is a thirty-year fixed term loan
No prepayment penalties
Although the affordable purchaser does not have to be a first time home buyer, if the purchaser owns other residential real estate, it must be sold prior to closing on the purchase of the affordable home.
1% down payment will be expected of all affordable purchases.
Also, the city reserves the right to consider the application on a case-by-case basis where:
The down payment exceeds 20% of the purchase price
The purchaser is receiving a gift from an outside source
Assets exceed $100,000
The purchase requires a co-mortgagor in order to qualify the purchaser. In these cases, the co-mortgagor must be an immediate family member.
The purchaser must provide verification of all sources of income and assets; and if applicable, a gift letter or statement from co-mortgagors. This documentation must be submitted at the time of the mortgage application. The City's Housing Division is responsible for review of the purchaser's eligibility and the terms of the loan the lender or the first mortgage is offering. The City will either approve or disapprove the purchaser for the affordable purchase programs. This process will take approximately ten (10) business days, but could take longer depending on the requirements of the application.
Priority for City of Roseville Residents/Employees
Residents and employees in the City of Roseville will be given priority over applications that do not live and/or work within the city limits. Interested persons from outside this jurisdiction are not excluded from applying for an affordable purchase unit.
Affordable Lottery Process
All prospective affordable purchases will need to complete an application. Completed applications for specific affordable communities should be returned to the City of Roseville Housing Division. All applications received that meet income eligibility requirements will be included in the affordable lottery. Names are drawn randomly and placed in the numerical order drawn.
Two (2) separate lottery lists will be created; one for prospective purchasers currently living or working within the City of Roseville (local). The other list for prospective purchasers that do not live or work within the City of Roseville (non-local). After the lottery, both lists of prospective purchasers will be sent to the developer's sales office. If there is a preferred lender for the community, the preferred lender will contact all of the prospective purchasers in the order they were drawn in the affordable lottery in order to start the loan qualification process. Prospective purchasers with local preference will be contacted first. If the local preference lottery list is exhausted, the sales office will proceed to contact the non-local prospective purchasers. Once contacted, prospective purchasers should contact a lender of their choice. The City of Roseville does not qualify prospective purchasers for first mortgages.
Some factors may preclude individuals from qualifying regardless of their placement on either lottery list. These factors are low credit scores, debt-to-income ratios, insufficient funds available for down payment or closing costs, etc.
Home Buyer Training
All affordable purchasers, new construction and resale's, are required to attend eight (8) hours of home buyer training. This training will be performed by an accredited home buying counseling agency or lender. A typical training would include 3 hours of home buying process, 2 hours of budgeting and credit workshop and 3 hours of home maintenance/good neighbor training.
For a list of HUD approved Housing Counseling Agencies visit their webpage here.
Each affordable home will be appraised by an independent appraiser approved by the City to determine its market value prior to sale. The allow developers to sell these homes at market price, the City of Roseville will carry a second mortgage on the property equal to the difference between the market value and the calculated affordable price as assistance to the purchaser. The note terms of the second will be one of the following loan
types to be determined by the City:
Simple Interest: 2% simple interest accruing for the first 15 years.
Shared appreciation: 0% interest rate with a shared appreciation component. The city will share a portion of the net profit the purchaser would make in subsequent sales, based on the original 2nd mortgage value divided by the market value of the home.
No Payments Required: During the 30 year term no payments are required as long as the home remains the primary residence of the affordable purchaser. The 2nd mortgage becomes due and payable either when the initial purchaser sells the property, the end of the 30 year term or if the affordable purchaser should:
Rent the home
Change the use form single family residential
Change ownership of the property without prior City approval
Refinance the home and that refinance is not approved by the Housing Division or the refinance exceeds the affordable purchaser's equity at the time of refinance.
Affordable Purchase Resale Program
There are continuing obligations for the purchaser of an affordable home. For a period of 15 years the affordable purchaser must notify the City's Housing Division in writing of their intent to sell their home. For the first 60 days the home is on the market or listed on MLS, the home must be sold to another income-qualified purchaser. During the 60-day period, the City of Roseville Housing Division will list the available home on the Affordable Purchase Reseal website page in an attempt to find another qualified affordable purchaser for the home. If the city is unable to find an affordable purchaser for the home within the 60 days, the homeowner may proceed with the selling the home to the general public.
At the time of sale, the 2nd mortgage will be repaid to the City of Roseville. In addition, the interest will be calculated based on the length of years the home was owned. If the net proceeds are not sufficient to pay the City's note plus enable the homeowner to recover the amount of the homeowner's down payment, principal payments, and any capital improvement investment, the City will forgive up to 6% of the total note plus accrued interest for each year of ownership. The forgiveness of this debt shall in now way exceed the total amount of the homeowner's down payment, principal payments, and capital improvement investments. In order to have these costs deducted, the Housing Programs Manager must approve proof of payment for the capital improvements.
The City of Roseville's Housing Division will review the affordable home purchase on an on-going basis to ensure the home has remained affordable and that no condition (stated in the "initial purchase" section) which would require payment of the assistance second note has occurred. This review will include, at a minimum, the City annually contacting the affordable homeowner to verify their continued primary residency.