Title
Resolution to Amend the Administrative Plan Regarding Chapter 15 Special Housing Types: Part VII Homeownership.
Memorandum
The Ann Arbor Housing Commission's Housing Choice Voucher Administrative Plan details its policies and procedures for the management of its Housing Choice Voucher (HCV) Program. The AAHC periodically revises the Plan to reflect changes in HUD regulations and changes in AAHC policies.
Staff recommend amending language to the Administrative Plan Chapter 15 Special Housing Types: Part VII Homeownership to reduce the down payment requirement from 3% to 1% and to waive down payment for participants who are approved for home loans geared towards first time low-income home buyers. Staff request Board approval of these recommended changes.
PART VII: HOMEOWNERSHIP 15-VII.H. FINANCING [24 CFR 982.632]
Current PHA Policy
Other than for purchase of a Habitat Home, the mortgage the family applies for must require a minimum down payment of at least 3% of the sales price with 1% of the down payment coming from the purchaser's personal funds. The PHA will not require that the family have any more than the minimum of 1% of their own money in the transaction. However, in cases where a lender is requiring a larger amount, the family may be held to the underwriting guidelines set by their lending institution.
If purchasing a Habitat Home, the PHA requires a minimum of $500 down payment coming from the purchaser's personal funds. Exceptions may be granted on a case-by- case basis.
Proposed PHA Policy
The PHA will require a minimum contribution of at least 1% of the sales price coming from the purchaser's personal funds. The 1% contribution may be applied toward the down payment or closing cost including but not limited to loan fees, credit reports, inspection fees, appraisal fees, processing fees, mortgage insurance, pro-rata reserves for the insurance and taxes, settlement fees, attorney fees, title insurance and title search fees, recording fees, l...
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