If your wondering if your target neighborhood is inside one of these tracts you can check out the online mapping from the U.S. Census Bureau or just give me a call and I will give you a hand.

This is a pretty limited program and hard to tell if there is still time to take advantage of this opportunity but it can’t hurt to get on the list for an application.  According to the City of Redding housing division the first 20 applications have already been sent out. As not everyone will qualify or complete the process they will keep moving down the list until funds are depleted.

There are some quirks that will have to be dealt with for buyers using C4-HAP funds.  As with DAP (or Homebuyer Program as they now call it) the house must pass the Home Quality Standards ( HQS ) inspection to qualify for funding.  In order to pass the home has to be pretty move in ready or the bank must be willing to repair. I have closed a few DAP / REO properties so I know it can be done but not every bank owned home will work out.

The really unusual twist to C4-HAP is the pre-offer appraisel process they are requiring.  Unless this is modified to be a post offer value assesment it has the potential to make it very difficult to use C4-HAP. What I am being told right now is that a County Appraiser must assign a value to the property before offer is submitted to seller and the offer must be for at least 1% less than this value. This process could take a minimum of 24 to 48 hours once property is identified. This could pose a problem as move in ready REO homes are in such high demand these days we are seeing multiple offers the day they hit the market.  I have posed this question to the various housing authorities involved with the C4-HAP and sounds like this could be modified but no answer on that yet. As for lender requirements I recieved this from one local lender.

• 3% down payment can be from gift
• Debt ratio’s requirement 26 – 49% (this will determine amount of C4-HAP contribution)
• Applicant must not own any other real estate
• Normal credit standards apply (use of Alternate Credit for thin profile is acceptable)
• Subject Property must be valued by County Appraiser prior to offer being submitted (offer submitted must be for 1% less than appraised value)
• Subject Property must meet HQS (Home Quality Standards)

As C4-HAP is only targeted for REO properties it can’t be used on a conventional seller owned home for sale. For the purchase of a non-REO home buyers should check with the City of Redding DAP or Shasta Lake City DAP to see if they qualify for their DAP programs (no longer called DAP but basically the same thing).  Both now have funds for qualified applicants. Shasta County DAP should have funds as early as June 2010.

Debt to income ratio adjusts based on credit score.

• No Fico or under 620 score max DTI – 43%
• 620 to 659 max DTI- 45%
• 660 and over max DTI- 47%

The basic 3% second mortgage rate is fixed at 8.25% with credit score adjustments

• No Fico or under 600 plus 2%
• 600 to 619 plus 1.5%
• 620 to 639 plus 1%
• 640 to 659 plus .5%
• 660 to 679 plus .25%
• 680 and over plus 0%

The 1st mortgage is a fully amortized 30 year fixed rate FHA loan.  The adjustments above apply to the 3% second only.

Keep in mind that there is no pre-pay penalty on either 1st or 2nd and paying off 2nd loan with tax credit (if applicable) after close of escrow is an option to keep monthly house payment lower.

Even with $5,000,000 set aside for this program it won’t last forever. If you are renting now I highly encourage you to give us a call for more information on buying your first home. (530) 224-6702 or email reddinghomes@gmail.com