THE LONG BEACH HOUSING DEVELOPMENT COMPANY OLIVE COURT SECOND MORTGAGE ASSISTANCE PROGRAM

GENERAL DESCRIPTION

FINANCING PROVISIONS

• Second Mortgage Assistance Amount(s): The Long Beach Housing Development Company's (LBHDC) Olive Court Second Mortgage Assistance Program is designed to be gap financing. The loan amount(s) ranging from $29,700 to $122,200 is/are computed as the difference between the purchase price and the sum of the largest first trust deed mortgage deemed affordable to the Borrower and Borrower's down payment. Two loans may be required to be combined to provide the appropriate level of gap financing.



• Interest Rate(s):
  1) Contingent, deferred interest in the form of equity sharing equal to the percentage which the Second Mortgage Assistance represents of the original purchase price, reduced for each full year which the Borrower owns and occupies the property. All deferred interest (equity share) is forgiven after 30 years of continuous occupancy. (See attached as Exhibit "B");
  
  
  • Equity Share = Second Mortgage Assistance/Purchase Price x (Sales Price - Purchase Price)
  
  
  • Interest Due = Equity Share - Forgivable Interest (See attached Exhibit "B" for interest forgiveness schedule).
  
  2) 3% simple interest deferred for the life of the loan. (See attached as Exhibit "C")



• Interest Penalty: Eligibility for a reduction in equity sharing will be forfeited in the event any of the following occur:
  
  
  • Discovery of fraudulent information provided by Borrower; or
  
  
  • Violation of any of the following conditions as set forth in the Promissory Note:
    
    
    • The Borrower must continuously occupy the property as his or her principal residence;
    
    
    • The property must at all times be maintained in compliance with local laws;
    
    
    • The property must be used only as a single family residence; and
    
    
    • No occupant of the property may engage in drug related criminal activities or engage in violent acts.


• Collateral: Promissory Note, secured by Second and/or Third Deed of Trust.
  
• Fees to Borrower: None.
  
• Term: Thirty (30) years or the earliest date that any of the following occur:
  
  
  • The date the property is sold or title is transferred;
  
  
  • The date the property is no longer occupied by Borrower; and
  
  
  • The date the first mortgage loan is refinanced (except as approved by the LBHDC).
  
  
  • Any violations of the conditions set forth above under "Interest Penalty".
  
  
• Monthly Payment: None.


• Down Payment: Borrower must contribute at least 1% for conventional loans or 3.5% for FHA loans of the purchase price from their personal funds. Subject to approval by the first trust deed lender, Borrower's Down Payment in excess of the required 1% may consist of any combination of gifts or grants, but may not be from the proceeds of a loan.


• Insurance: : Fire hazard insurance, covering total debt secured on the property, is required. A Loss- Payable Endorsement, naming the City of Long Beach, the LBHDC and first trust deed lender, must be obtained.


• Escrow Processing: : All purchases will be processed through an escrow company selected by Dayman Estates, LLC.

BORROWER ELIGIBILITY REQUIREMENTS



• First Time Buyer: Borrower must meet the following first time buyer requirements:
  
  
  • Persons who have not owned a home in the last three years; or
    
  • Persons who previously owned a home with his or her spouse but no longer hold title due to divorce.


• Household Income: Projected annual income of all adult members of Borrower's household cannot exceed the following thresholds (adjusted annually according the income schedule in effect at time of application adopted pursuant to Title 25, Section 6932 of the California Code of Administrative Regulations):

  Household Size	Moderate-Income Limit	Household Size	Moderate-Income Limit
  1	$ 52,100	5	$ 80,450
  2	$ 59,600	6	$ 86,400
  3	$ 67,050	7	$ 92,400
  4	$ 74,500	8	$ 98,350



• Long Beach Resident or Employee: Borrower must currently live or work in Long Beach or show evidence of a job offer in Long Beach.


• Homebuyer Education Certificate: Borrower must complete an 8-hour Homebuyer Education Class.


• Financial Capacity: Borrower must qualify for a 30-year fixed rate, first trust deed mortgage, in an amount between $187,900 and $250,000, from an institutional lender approved by the LBHDC. Co-signers who will not reside in the property are not permitted.