San Miguel County Down Payment and Closing Cost Assistance Program

820 Black Bear Road, Telluride, CO 81435

Print out the Application and the Guidelines.
You will need the Adobe Acrobat Reader to open the Application file.

Do you need help with down payment or closing costs?
This program might help you………

SAN MIGUEL COUNTY
DOWN PAYMENT & CLOSING COST ASSISTANCE PROGRAM

Made possible by grants received from:
Town of Telluride, San Miguel County, and the Town of Mountain Village

Effective 7/06/2006

820 Black Bear Road, P

What is it?

The Down Payment & Closing Cost (DP&CC) Assistance Program provides a loan of up to $10,000 or 5% of the purchase price, whichever is less, for down payment and closing costs. The eligible purchase is in San Miguel County and is a primary residence or a mortgage loan for construction of a primary residence. The mortgage loan must be a conventional, conforming loan. The loan is in conjunction with a minimum personal contribution by the borrower of 2% of the purchase price. This program is not for the purchase of vacant land, it is not limited to first time homebuyers, and it is not transferable. Borrowers are not eligible for a loan if any outstanding DP&CC loan has not been repaid.

No monthly payments are required. Repayment of the assistance loan will be due upon sale, transfer, refinance, when the house is no longer used as a primary home, or death of the borrower. The amount repaid will be the original amount of assistance increased by the percent appreciation of the home. Households can also repay the assistance within the first three years at 5% interest per annum. The funds repaid are recycled to new families needing assistance to become homeowners.

Example of Property Appreciation Payback Model

Purchase Price	$120,000
Sales Price (10% increase)	$132,000
Appreciation Gain	$12,000
Principal amount borrowed	$10,000
Repayment to Down Payment Fund ($10,000 originally borrowed + $1,000, the 10% appreciation factor)	$11,000

820 Black Bear Road, P

How to Qualify:

Please refer to the Guidelines and Program Requirements in Table 1.

When and How to Apply:

Submit a commitment letter for a mortgage loan (see Exhibit A), your executed purchase contract, a completed DP&CC application, and a non-refundable $300.00 application fee to the San Miguel Regional Housing Authority. A portion of your application fee ($150) will be credited against the loan servicing fee at closing. Incomplete applications will not be accepted. To apply or to inquire for more information, please contact Elke Mullins, the Financial Program Manager of the San Miguel Regional Housing Authority (phone number 728-3034) or visit our web site (www.smrha.org). The program is subject to fund availability and the guidelines are subject to change.

Table 1. San Miguel County Down Payment and Closing Costs Assistance Program

Guidelines	*Program Requirements*
What is it?	A loan, without monthly payments, to help with down payment and/or closing costs for the purchase of a primary residence (or mortgage loan for construction of a primary residence); not for vacant land.
Type of mortgage financing:	The home buyer must be able to qualify for Fannie Mae (FNMA)-type financing, excluding non-conforming loans except as approved by the Housing Authority. FNMA-type financing is limited to conforming loans from commercial banking and lending institutions licensed to engage in mortgage lending practices in the State of Colorado.
Possibility of third position:	If necessary, the Housing Authority may agree to take third position behind lenders providing acceptable mortgage financing as defined above has been obtained. Silent thirds are not permitted.
Timing of use:	This loan can be used only at closing and its use as a "bridge loan" is not permitted. The loan can not be utilized separate transaction after the closing. This is to protect the borrower from unwittingly committing any fraud.
Maximum gross household income per household size:	The incomes are calculated at 132% of the median income for San Miguel County. These figures are from the Colorado Division of Housing and are based on a HUD March 8, 2006 release date.
	1 person - $65,888; 2 persons - $75,240; 3 persons -$84,744; 4 persons -$94,116
Location of property:	San Miguel County
Maximum purchase price (or mortgage loan value):	The purchase price is based upon the Fannie Mae 2005 Single-Family Mortgage Loan Limits for a one-family loan effective Jan 1, 2005. $359,650.
Personal contribution from applicant:	2% of the purchase price
Residency requirement:	San Miguel County
Occupancy requirement:	As primary and sole residence
Amount of assistance:	As needed, with a maximum award of $10,000 or 5% of the purchase price (or mortgage loan value), whichever is less. The amount of the DP&CC loan and the name of SMRHA must be shown on the Title Commitment. The total loan value, including all liens, must not exceed the purchase price.
When repayment will be due:	No monthly payments are required. Repayment of the assistance loan will be due upon sale, transfer, refinance, when the house is no longer used as a primary home. The assistance loan will also become due upon the death of the borrower; however, if there is a surviving family member, he/she will be able to keep the assistance until one of the other triggering events occurs, or the surviving family member’s own death. Borrowers may pay back the assistance loan in advance with no penalty. Repayment is necessary before a new DP&CC loan can be issued.
Determination of amount of repayment:	The amount repaid will be the original amount of assistance increased by the percent appreciation of the home. For example, if the home buyer received $10,000 in assistance and his/her home increased in value 10%, then he/she will pay back $11,000 Households may choose instead to repay the assistance within the first three years at a rate of 5% simple interest.
Application fee:	$300.00 due at time of application
Loan servicing fee:	The lesser of 7% of amount of assistance requested or $500 (due at closing). $150.00 of the $300.00 application fee will be credited against the loan servicing fee at closing.

820 Black Bear Road, P

[recommended form for lender commitment letter]

*************[lender letterhead]*****************

[date]

San Miguel Regional Housing Authority

Attn: Elke Mullins

PO Box 840

Telluride, CO 81435

RE: [name of employee and property description]

Dear Ms. Mullins,

[lender] is working with [employee] concerning the purchase of [property], a property with improvements located in San Miguel County. [lender] is a commercial lending institution licensed to engage in mortgage lending practices in the State of Colorado.

[employee] has qualified for a conforming and conventional mortgage of $[mortgage amount], based on the employee’s household income of $[qualifying yearly income of household]. [lender] has verified the employee’s income and has committed to provide the employee with $[mortgage amount] in permanent financing for the purpose of purchasing the property identified above. To consummate the purchase of the property, the employee will need San Miguel County Down Payment and Closing Costs Program assistance in the amount of $[total DP&CC assistance required]. The employee’s personal contribution of funds toward this purchase will be at least 2% of the purchase price in the amount of $[employee’s personal contribution].

If you have any questions about this correspondence or the financing, please contact [lender’s contact person] at [telephone number]. Thank you for your consideration of this employee’s DP&CC assistance application.

Sincerely,

[authorized signature from lender]

__________________________________

[printed name and title of signing lender official]

Print out the Application.

You will need the Adobe Acrobat Reader to open the Application file.
You can download the program for free.

Guidelines

Location of property:

Maximum purchase price (or mortgage loan value):