Amount of Assistance and Targeted Areas

Ø The Community Assisted Mortgage Program (CAMP) was developed to address a number of needs within the City of Tempe . First, the city lacked an affordable homebuyer program for low-income first time households. Secondly, CAMP seeks to increase the owner-occupancy rate. Lastly, providing financial incentives to homebuyers encourages reinvestment in Tempe ’s neighborhoods.

CAMP will provide deferred loans to eligible households that wish to purchase a primary residence on an owner-occupied basis within the geographic boundaries of the City. Loans are available for down payment assistance, prepaid expenses and reasonable closing costs.

Ø The American Dream Downpayment Initiative (ADDI) is another program offered through the City. Under the ADDI program, additional downpayment assistance is offered to low-income families who are first-time homebuyers for the purchase of single family housing that will service as the family’s principal residence. As with CAMP funds, the ADDI assistance is also offered in the form of a deferred loan.

Up to thirty five thousand dollars ($35,000) is available to households purchasing a home in a city-designated Neighborhood Enhancement Area.

ü Neighborhood Enhancement Areas are defined in General Plan 2020 (currently all neighborhoods north of Alameda Drive in Tempe ) .

Households purchasing homes outside of a Neighborhood Enhancement Area are eligible for up to thirty thousand dollars ($30,000).

Up to an ADDITIONAL ten thousand dollars ($10,000) or six percent of the purchase amount is available to households earning less than 60% AMI and purchase a home in the city-designated Neighborhood Enhancement Area.

ü Neighborhood Enhancement Areas are defined in General Plan 2020 (currently all neighborhoods north of Alameda Drive in Tempe ) .

Income eligible households purchasing a home outside of the Enhancement Area are eligible for up to eighty five hundred dollars ($8,500), or six percent of purchase amount.

CAMP: Applicants must be at or below 80% of the area median (adjusted for family size) for Maricopa County .

ADDI: Applicants must be at or below 60% of the area median (adjusted for family size) for Maricopa County .

ü Area median income limits are established by the U.S. Department of Housing & Urban Development (HUD) on an annual basis.

Ø Completion of a HUD/City of Tempe approved homebuyer education class

ü Currently, one agency has agreed to educate and/or counsel CAMP applicants. They are:

ü FHA defines first time homebuyer as an individual who meets any one of the following criteria:

· An individual who has had no ownership in a principal residence during the three year period ending on the date of purchase of the property. This includes a spouse;

Ø Single family homes, patio homes, town homes, condominiums or manufactured homes attached to a permanent foundation on land owned by the purchaser located within the City of Tempe .

Ø The property must be vacant or owner-occupied at the time of purchase offer.

ü Properties that have been rented to tenants within 30 days prior to the time of purchase offer are not eligible, unless the applicant is the current tenant.

ü Vacancy or owner-occupancy must be confirmed by a certificate signed by the seller.

ü All sellers must be furnished with a letter explaining the Uniform Relocation Act and that this is a voluntary sale. Sellers are not eligible for relocation assistance.

ü The City will perform the HQS inspection and report all deficiencies to the Real Estate Agent of the program participant; all deficiencies must be corrected prior to closing.

ü The applicant must order an independent inspection from a licensed residential home inspector. the applicant or the seller must pay for this inspection.

ü FHA mortgage limits are published by the Department Housing and Urban Development (HUD). The current purchase price limit can be found on the HUD website, or by clicking here.

Ø The City’s investment will be secured with a Deed of Trust or other approved and recorded lien instrument.

Ø The assistance is in the form of a zero percent, non-amortizing loan due in full upon transfer of title, refinancing for other than a change in rate and/or term, or when the borrower discontinues use of the property as his/her primary residence.

ü ANY refinancing that allows for cash/equity to be taken out of the property, regardless of the purpose, requires repayment of the assistance.

ü The City will only subordinate its second position for a favorable change in rate and/or term.

ü Upon transfer of title, the assistance is due immediately in full (usually from sale proceeds).

ü Upon disclosure to or discovery by the City that the property is no longer the primary residence of the borrower, the assistance is due in full within 30 days of notification by the City to the borrower; primary residence is defined as occupation of the residence by the homeowner for a minimum of ten months per calendar year.

ü The lien may be assumed by income eligible heirs (<80% of area median) if using the property as a principal residence; heirs need not be first-time homebuyers or graduates of a homebuyer education class.

Ø Borrower must contribute the greater of $1,000 or 1% of the purchase price

ü If the first mortgage product requires more than $1,000 or 1% of the purchase price, it satisfies this requirement.

ü Borrower’s funds may be used for down payment assistance, prepaid expenses or closing costs.

ü Funds must come from borrower’s personal accounts, they may not be gifted or from other sources.

Ø Borrower is responsible for securing either a fixed rate or variable rate mortgage. In either case, the points and lender fees cannot exceed 5% of the mortgage amount.

Ø The amount of assistance will not exceed the difference between the maximum mortgage sustainable by the household and the purchase price of the property.

Purchase Price		145,000
Closing Costs + Prepaids		3,000
Acquisition Amount		148,000
Maximum Sustainable Mortgage		120,000
Buyer down payment, or 1% of purchase price		1,450
Total Buyer contribution		121,450
Maximum CAMP Subsidy		26,550
Maximum ADDI Subsidy		0
Additional buyer contribution		0
Total		148,000

Purchase Price		165,000
Closing Costs + Prepaids		3,000
Acquisition Amount		168,000
Maximum Sustainable Mortgage		120,000
Buyer down payment, or 1% of purchase price		1,650
Total Buyer contribution		121650
Maximum CAMP Subsidy		35,000
Maximum ADDI Subsidy		10,000
Additional buyer contribution		1,350
Total		168,000

CITY OF TEMPE