HOMEOWNERSHIP ASSISTANCE PROGRAM SUMMARY

Assistance Program: City of Los Angeles Low Income Purchase Assistance Program (LIPA) Zero Interest

Code: DCALIPADP

HOMEOWNERSHIP ASSISTANCE PROGRAM SUMMARY

Product Description

Allowable Origination Channel Program Name

Second mortgage loan program to be used in conjunction with: ? FHA Fixed Rate ? Fannie Mae Fixed 30-year Conforming Product (DU) ? Fannie Mae Housing Authority Product ? Fannie Mae HomeReady with Community Second ? Freddie Mac Fixed 30 Conforming Product (LPA) ? Freddie Mac Home Possible with Community Second ? VA

NOTE: DPA qualifies as a Fannie Mae Community Second or Freddie Mac Affordable Second. Retail and Wholesale (Loan Officer and Broker must contact Authority for required Lender Training)

Low Income Purchase Assistance Program (LIPA)

Program Approval Expiration Housing Authority

Housing Authority EIN DPA Provider Classification First Mortgage Maximum LTV

First Mortgage Maximum CLTV

Subject to Availability approval expires: 10/11/2020 City of Los Angeles Housing and Community Investment Department 1200 West 7th Street, 1st Floor Los Angeles, CA 90017 Contact: Esther Barajas or Tim Donis Telephone: (213) 922-9672 Email: esther.lira-barajas@ or tim.donis@ Website: 95-6000735 Government Entity Secondary Financing Programs

? FHA: Refer to Product Profile ? Fannie Mae Housing Authority Product. Refer to Product Profile ? Fannie Mae Conforming Product: Refer to Product Profile ? Fannie Mae HomeReady with Community Second: Refer to Product Profile

o Purchase only: o 1 unit: LTV >95-97% (NO first-time home-buyer (FTHB) requirement). o Purchase and Limited Cash Out (Rate/Term): o 1 unit: 95% FRM; 90% ARM ? Freddie Mac Fixed 30 Conforming Product (LPA) : Refer to Product Profile ? Freddie Mac Home Possible with Community Second: Refer to Product Profile ? VA: Refer to Product Profile ? FHA: Refer to Product Profile ? Fannie Mae Housing Authority Product. Refer to Product Profile ? Fannie Mae Conforming Product: Refer to Product Profile for CLTV requirements, may not exceed limits in product profile ? Fannie Mae HomeReady: Refer to Product Profile ? Freddie Mac Fixed 30 Conforming Product (LPA) : Refer to Product Profile ? Freddie Mac Home Possible with Community Second: Refer to Product Profile ? VA: Refer to Product Profile

Maximum Second Mortgage Loan Amount

The CLTV may not exceed 105% on HomeReady loans, unless further restricted by product profile. The sum of all financing may not exceed 105% of the cost to acquire the property plus any normal prepaid expenses. Up to $90,000

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Assistance Program: City of Los Angeles Low Income Purchase Assistance Program (LIPA) Zero Interest

Code: DCALIPADP

Second Mortgage Loan Interest Rate Minimum Borrower Down Payment

0%

? Minimum of 1% of the purchase price (These funds may not be gift funds) ? FHA: Refer to Product Profile ? Fannie Mae Housing Authority Product. Refer to Product Profile ? Fannie Mae Conforming Product: Refer to Product Profile ? Fannie Mae HomeReady with Community Second: Refer to Product Profile ? Freddie Mac Fixed 30 Conforming Product (LPA) : Refer to Product Profile ? Freddie Mac Home Possible with Community Second: Refer to Product Profile ? VA: Refer to Product Profile

Second Mortgage Purpose

Second Mortgage Loan Repayment Terms

NOTE: If first mortgage guidelines are higher than the Agency's for borrower's minimum investment, the first mortgage guidelines prevail.

? Down payment ? Closing costs (including prepaids) This second mortgage loan is a zero interest no monthly payment deferred 30-year loan with shared appreciation due at the end of the loan term. There is a clause in the loan documents referring to Paint Stabilization the City of Los Angeles has advised the Paint Stabilization section will indicate "N/A". Repayment is due in full upon sale, transfer, lease, refinancing, change of ownership or home no longer is occupied as primary residence. Loan proceeds may not be used to pay off other loans, advances or consumer debts.

However, if any of the following repayment triggering events occur, the principal balance and any accrued interest shall be due and payable in full:

? Evidence of the act of fraud committed to falsely obtain assistance funds ? The property is sold ? Transferred title ? Refinancing with cash out ? A default on the first mortgage ? The borrower(s) ceases to occupy the property as their principal place of residence ? Upon the death of the last surviving applicant ? The filing of any bankruptcy by the applicants ? Upon divorce, unless one of the applicants continues residing in the property by the

decree of divorce ? Loan may be pre-paid in full at anytime ? Loan is NOT assumable

Types of Financing Occupancy

Geographic Location Eligible Properties

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Note: The City of Los Angeles has different funding sources under the Low Income Purchase Assistance Program, the executed documents (Note, Loan Agreement and Deed of Trust) will indicate CalHome, ADDI, HOME First Time Homebuyer Program or Purchase Assistance with the terms as outlined above. ? Purchase Money Mortgage

o 30 year fixed rate (No ARM, balloon payment or prepayment penalty) ? Owner occupied primary residence only ? All co-borrowers must occupy ? Borrower(s) may not have an ownership interest in any other residential dwelling at the time of

loan closing ? Properties must be located within the City of Los Angeles, California Acquisition Limit: Existing and New Construction Single Family Residence: $745,750 Condominiums and Townhomes $513,000

Assistance Program: City of Los Angeles Low Income Purchase Assistance Program (LIPA) Zero Interest

Code: DCALIPADP

Underwriting

Eligible Borrowers Assets Income Limits

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Properties shall be sited on a permanent foundation, with a permanent utility hook-up, and may include:

? Single family - detached, attached (Fixed Rate) ? Condominiums or Townhomes or Planned Urban Development -detached, attached ? Must be currently occupied by the owner, vacant or occupied by the homebuyer ? Property cannot be occupied by tenants

All properties are inspected by the City of Los Angeles to ensure the property meets all applicable and local housing standards and code requirements. If the house was built prior to January 1, 1978, a lead based paint inspection will be required.

ALL repairs called for by inspections MUST be completed prior to closing.

NOTE: The City of Los Angeles has advised they no longer provide funds for Paint Stabilization. If the property requires it, the work must be completed prior to the close of escrow by the seller or buyer or the City of Los Angeles will not provide the funds for down payment and closing costs. The section in the loan documents that reference Paint Stabilization will indicate "N/A".

Refer to product profile for additional property eligibility requirements, not all property types are allowed on all products. Lender to pre-approve all borrowers for the first mortgage product. Standard FHA, Fannie Mae Conforming Product, and Fannie Mae HomeReady, except as described herein:

? The Loan Officer will assist the borrower in completing and submitting all of the required documents directly to the Authority.

? The application package is reviewed, and the approval letter is sent to the lender approximately one (1) week after review is complete.

? The housing authority continues to process the loan application which includes scheduling a loan signing appointment with the borrower. The funding check is issued approximately three (3) weeks after the loan approval was issued.

? The total process timeframe from application submission to funding is four (4) weeks. ? Upon approval, a copy of DPA Approval Letter MUST be in each file. ? Borrower(s) must qualify for the first mortgage selected. ? First Time Home Buyers (FTHB) only ? Borrowers may not currently own a house and may not

have owned a house during the last three years prior to making application. ? Must be a U.S. Citizen, lawful permanent resident alien or other qualified alien. ? Back end ratio not to exceed 42%. ? Minimum middle FICO score for each borrower 620. ? Borrower must have required amount of their own funds in the transaction for type of first

mortgage financing selected. ? All assets will be considered when calculating annual income (i.e.: checking/savings accounts,

IRA's, 401(k)'s, CD's, cash value life insurance, etc.) Household Income Limits 80% AMI Los Angeles County Effective June 1, 2019

1 Person 2 Persons 3 Persons 4 Persons 5 Persons 6 Persons 7 Persons 8 Persons

$58,450 $66,800

$75,150 $83,500 $90,200 $96,900 $103,550 $110,250

NOTE: If first mortgage guidelines are more restrictive than the Agency's for borrower's income limit, the first mortgage guidelines prevail.

Assistance Program: City of Los Angeles Low Income Purchase Assistance Program (LIPA) Zero Interest

Code: DCALIPADP

MI Coverage Special Provisions

? FHA: Standard UFMIP and monthly if applicable ? Fannie Mae Housing Authority Product Refer to Product Profile ? Fannie Mae Conforming Product Refer to Product Profile ? Fannie Mae HomeReady and Conforming (DU) Products: Standard mortgage insurance

requirements must be met, if applicable, as described in Product Profile ? Freddie Mac Fixed 30 Conforming Product (LPA): Refer to Product Profile ? Freddie Mac Home Possible with Community Second: Refer to Product Profile ? VA: Refer to Product Profile Homeownership Counseling:

? Refer to product profile for specific product requirements ? Borrowers must successfully complete an 8-hour homebuyer education class provided by

a HUD approved counseling agency refer to City of Los Angeles approved list of providers ? Borrower's Certification of Completion of Homeownership Counseling is required

Fannie Mae HomeReady Only: See Product Profile for Homeownership Counseling requirements.

Freddie Mac Home Possible Only: See Product Profile for Homeownership Counseling requirements.

DPA Processing Fee

Special Feature Code Underwriting Requirements

All: ? May be funded by a municipality, state, county or local housing finance agency, non-profit organization, a regional Federal Home Loan Bank or an employer ? May be used to fund all or part of the down payment or closing costs ? The more restrictive down payment requirement between the product and the second mortgage will apply ? No reporting requirements permitted

Costs incurred for down payment assistance secondary financing program may only be included in the amount of the second lien. The fee cannot be included in the first mortgage transaction or appear on the Closing Disclosure. N/A

? Receipt of borrowers approval from DPA provider ? Receipt of DPA Funds (at closing) ? No cash back at closing (at closing) ? Copy of DPA's Executed Promissory Note, Loan Agreement and Deed of Trust (at closing)

Note: The City of Los Angeles has different funding sources under the Low Income Purchase Assistance Program, the executed documents (Note, Loan Agreement) will indicate CalHome First Time Homebuyer Program or Purchase Assistance with the terms as outlined above.

First Mortgage Loan Documents Second Mortgage Loan Documents

DPA Program Restrictions That Are Not Permitted

Loan documents and security instruments must conform to Agency requirements (FHA, Fannie Mae, Freddie Mac loan type) Loan documents and security instruments must conform to Agency requirements (FHA, Fannie Mae, Freddie Mac loan type)

PRMG The Low Income Purchase Assistance Program may not ? Restrict the transfer of servicing rights of the first Mortgage ? Require prior notification or approval from the sponsoring authority in the event of the transfer

of the first mortgage servicing rights. If there is any evidence of this verbiage in the subordinate documents, the program will no longer be eligible.

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Assistance Program: City of Los Angeles Low Income Purchase Assistance Program (LIPA) Zero Interest

Code: DCALIPADP

The First Mortgage ? may not be subject to a bond program ? loan documents and security instruments must conform to Agency requirements (FHA, Fannie

Mae loan type)

Special Requirements:

NOTE: City of Los Angeles requires a Lender Agreement. City of Los Angeles has advised they no longer provide funds for Paint Stabilization. If the property requires it, the work must be completed prior to the close of escrow by the seller or buyer or the City of Los Angeles will not provide the funds for down payment and closing costs. The section in the loan documents that reference Paint Stabilization will indicate "N/A".

The City of Los Angeles has different funding sources under the Low Income Purchase Assistance Program, the executed documents (Note, Loan Agreement and Deed of Trust) will indicate CalHome First Time Homebuyer Program or Purchase Assistance with the terms as outlined above.

This Fact Sheet form and Housing Authority Borrower Approval Letter MUST be placed in each loan file at the time of submission.

Additional Comments:

Approved with Closing Instructions for Closing the DPA Mortgage needs to be recorded in 2nd lien position.

STATUS

APPROVAL

ELIGIBLE

INELIGIBLE

The DPA IS eligible for use with the programs below The DPA IS NOT eligible for use with the programs below

CONV

FHA

VA

USDA

CONV

FHA

VA

X

X

X

USDA X

PRMG Approved By:

PRMG DPA Review Department Name / Title

10/11/2019 Date

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