Agenda Packets - 1995/06/05 - Laserfiche WebLink

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-4- PROGRAM REQUIREMENTS: The primary objective of the MCPP is to provide affordable mortgage financing for low and moderate income first time home buyers through the issuance of mortgage revenue bonds. These mortgages typically have interest rates approximately 1% below market at the time of bond issuance. Mortgages provided under the MCPP are 30 year, level payment, fixed rate loans with all optional loan guaranty types available (FHA, VA, RECD (formerly FmHA), insured and uninsured conventional loans). In addition, the mortgages must meet the requirements of standard mortgage insuring and guaranteeing entities, mortgage industry accepted underwriting standards, and state and federal law governing mortgages provided through the issuance of mortgage revenue bonds. Among such requirements are that borrowers must be first-time home buyers (borrowers that have not had an ownership interest in a principal residence for the -past three -years), must occupy -the property within 60 days of mortgage clo-sing, must meet certain household income limits, and must purchase a home under certain purchase price limits (maximum income and house price limits for the MCPP are detailed below). In addition to the purchase price limit, .properties financed under the MCPP must also meet other specific requirements. Generally, single family detached homes, townhomes and condominiums (new or existing) and duplexes (existing only) are eligible for financing under this program. Within seven of the eleven metro area counties, however, new construction can only- be done under certain "affordability initiatives" specified by statute (see "New Construction" below). Mobile homes, recreational or investment properties, however, are ineligible. Properties must also be in good repair, cannot provide any significant income for the borrower, and must involve only a limited amount of land as part of the financing request. Finally, all mortgage revenue bond programs like the MCPP prohibit the financing of personal property (e.g., free standing appliances) as part of the transaction. A "pocket guide" describing the requirements of the Agency's mortgage revenue bond program, The Minnesota Mortgage Program, is available upon request to provide further details on program requirements. • Borrower Income Limits: Under state law governing mortgage revenue bond programs, adjusted borrower income limits may not exceed 80% of area median income as determined by the Department of Housing and Urban Development (HUD). Accordingly, cities placing applications under the MCPP must set their local program income limit at or below these figures. "Adjusted income" refers to gross annual household income less certain deductions, including a deduction of $1,000 for each household resident. Currently 80% of HUD's median family income figures are as follows: