****AS OF JUNE 30, 2019, THE CITY OF VACAVILLE HOME FIRST-TIME HOMEBUYER PROGRAM HAS EXPIRED.  IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT THERESA CRISTOBAL, HOUSING & COMMUNITY SERVICES DEPARTMENT, 707-449-5606.****

HOME FIRST-TIME HOMEBUYER PROGRAM

2019 HOME Program Fact Sheet

PURPOSE
The purpose of this program is to provide assistance in the form of a deferred payment loan as ‘gap’ financing to eligible households in purchasing their first home. These loans are available for down payment and closing cost assistance to low and very low income households.

Qualified homebuyers may receive a maximum loan amount of $75,000 towards the purchase of a home located within the city limits of Vacaville. The minimum loan amount is $10,000.

CITY LOAN

Term and Interest Rate

The loan term will be a minimum 30-year deferred payment loan. The interest rate shall be 3% per annum for the first ten (10) years.  At the end of the ten-year period, ten percent (10%) of the interest is forgiven each year until all interest is fully forgiven at year 20, and only the principal remains due and payable at year 30, as long as there is no event of default.

Lien Position

Subordinate to the first deed of trust and is recorded as a second deed of trust. City must approve all senior financing.

Use of Funds

Down payment and non-recurring closing costs. Non-recurring closing costs includes credit report, escrow, closing and recording fees, title report, title insurance, and title updates.

Monitoring Agreement

The monitoring period is 30 years; under special circumstances, an additional 15 – 30 years may apply. The City will monitor the loan agreement to ensure adherence to program requirements which includes, but is not limited to, the following: 

            • Owner-occupancy 
            • Property Tax Payment 
            • Hazard Insurance Coverage 
            • Good Standing on Primary Loan 
            • General Upkeep of Housing Unit 

Ratios

Front-end ratio: 28% to 35%
Back-end ratio: 36% to 45%

Loan to Value

Combined with all other indebtedness shall not exceed 100 percent of the sales price plus a maximum of up to 5 percent of the sales price to cover actual closing costs.

HOMEBUYER

What is the definition of First-Time Homebuyer?

A First-Time Homebuyer has not had an ownership interest in a residence at any time within the last three years.

Buyer's Down Payment

Homebuyer must contribute a minimum investment of 1% of the purchase price towards the down payment.

Homebuyer Education

Certificate required from a HUD-approved housing counseling agency. For information on where to sign up for a Homebuyer Education workshop, click here.

Occupancy

Owner-occupant, primary residence

Credit History

A good pattern of credit behavior. Negative reports must be explained.

Income Requirements

Current state published "low income limits" for Solano County. The income guidelines are published annually by the State of California Department of Community Development.

PROPERTY

Eligible Properties

New or previously owned single-family detached homes, townhomes, or condominiums located within Vacaville city limits. 

The home must be “modest”; it may not exceed three bedrooms and two bathrooms unless there are documented extenuating circumstances.

Purchase Price Limit

The value cannot exceed 95 percent of the HOME program area median purchase price maximum as follows:

        • Existing: $418,000 
        • New: $418,000

Condition

        • City HQS inspection is required. Must comply with local codes and health and safety requirements. 
        • Lead based paint visual assessment required for pre-1978 homes. 
        • Pest inspection with “Section 1” clearance required. 
        • Any deficiencies must be cleared prior to closing. 
        • If located within a 100-year flood zone; proof of flood insurance is required. 
        • Homeowner’s warranty policy is encouraged, but not required.

Occupancy Requirements

Owner-occupied. Owner-occupancy to be certified annually.

SENIOR LOAN

Type

The loan shall be fully amortized and have a term “all due and payable” in no fewer than 30 years.     

Loan Term and Interest Rate

Fully amortized, fixed interest rate that does not exceed the current market rate. A permanent loan buy-down is permitted as long as it does not cost more than 1% of the loan amount.

Mortgage shall not include provisions for negative amortization, principal increases, balloon payments or deferred interest. Adjustable Rate Loans (ARM’s) and Graduated Payment Loans (GPM’s) are not allowed.

Impound Account

Required for hazard insurance and property taxes.

Application Process

        1. Homebuyer applies with one of the participating lenders. 
        2. Lender pre-qualifies buyer for primary mortgage and determines amount needed from the First Time 
            Homebuyer Program. 
        3. Lender sends the completed application packet to the City of Vacaville for review and loan approval. 
        4. Upon approval, loan documents and funds will be sent directly to the title company.

Additional requirements may apply. For a pdf/printable version of this information, click here.

To apply for the program, any of the lenders on the City approved lender list may be contacted. For additional information or questions call (707) 449-5675 or visit our website at www.cityofvacaville.com.  

The City of Vacaville provides its programs and services in a non-discriminatory manner and is an Equal Opportunity/Affirmative Action Employer.