San Mateo County Dow n Paym ent Assistance Program Exclusive San Mateo County Em ployee and Housing Authority Benefit Pre-approval process Budget & Affordability • Qualification process • Payment Examples • Finding a property • Application & Free Personalized Consultation Mem bership at SMCU 2
Purpose Purpose : : The County Employee Down Payment Assistance Program is an employee benefit open to all regular County and Housing Authority employees regardless of income, designed to encourage employees to live within the county, decreasing the environmental impact and the physical/emotional impact on the employees from their long commutes. 3
Four eligible County and Housing Authority (HA) Employees will be drawn this quarter. Drawing is to qualify for a $100,000 second mortgage to be used towards the ◦ purchase of a home in San Mateo County. Drawing will occur quarterly until the funds have been exhausted. Eligibility Eligibility: County and Housing Authority (HA) employees who do not currently own a home in San Mateo County and are currently full time employees for at least 18 months. Income restrictions: Income restrictions: none Maximum home price: Maximum home price: $1,500,000 Down payment requirement: Down payment requirement: minimum of 3% from borrower and up to $100,000 from County Program Maximum County Loan Program towards down payment: Maximum County Loan Program towards down payment: $100,000 Terms of Terms of County County loan: loan: 3%, deferred five years, 30 ‐ year amortization after deferral, this is considered taxable income and will be included in your annual earning. 4
Timelines Timelines: All pre-approval letters need to be in by November 7 th , 2019 Friday, November 8 th the Dept. of Housing is CLOSED & Monday, November 11 th ◦ is Veteran’s Day Last day to get preapproved with SMCU: Thursday, November 7th ◦ Drawing date: November 12, 2019 at 1 p.m. at 264 Harbor Blvd., 264 Harbor Blvd., Belmont Belmont If the chosen applicant cannot locate a property within the time limit, they can choose to have their name placed back on the list for the next drawing. 5
Closin Closing cost assista g cost assistance ce: : ◦ SMCU waiver of $1,295 lender fees for all loans ◦ County grant of $5,000 to employees who currently live outside of San Mateo County. This grant will be considered as taxable income. Repayment requirements: Repayment requirements: ◦ Upon sale of the home ◦ If the home is converted to rental property (non ‐ owner occupied) ◦ If for any reason the employee leaves County employment such as, change employment, terminated for cause, retirement etc., within the 5 year deferral period. Any time after the deferral period the County loan will continue according to the original terms of the loan. 6
How much ‘liquid funds’ do you have available for a down • payment on a home purchase? Examples of liquid funds: • Gifts Savings 401K Stocks Grants or Down Payment Assistance Programs How much money do you want to spend on a monthly basis • for your mortgage? 7
Bill and Sue Miller have been chosen for the DPAP. They have $150,000.00 in liquid • funds. Their payment budget allocated for a housing payment is $4500.00. Purchase Price: $ 800,000.00 100.00% Down Payment: $ 106,650.00 13.33% SMCU Loan : $ 640,000.00 80.00% County DPAP: $ 100,000.00 6.67% 100.00% 1st loan: 7/1 ARM 40 YR @4.375% APR 4.958% Principal & Interest: $2,826.03 2nd loan: 30/15 35 YR /5 YR no int and no pymt Principal & Interest: $421.60 Property Taxes: $833.33 Hazard Insurance: $215.83 Total Housing Payment: $4,296.79 8
Total Housing Payment: $ 4,296.79 Car Payment: $ 450.00 Credit Card payments: $ 250.00 $ 4,996.79 $ 11,103.98 Monthly gross income needed to qualify: * This num ber is based on a 4 5 % debt to incom e ratio ( DTI ) 9
John and Jane Jones have been chosen for the DPAP. They have $22,000.00 in liquid • funds. Their payment budget allocated for a housing payment is $3,200.00. Purchase Price: $ 550,000.00 100.00% Down Payment: $ 16,500.00 3.00% SMCU Loan : $ 433,500.00 78.82% County DPAP: $ 100,000.00 18.18% 100.00% 1st loan: 7/1 ARM 40 YR @4.375% APR 4.958% Principal & Interest: $1,914.16 2nd loan: 30/15 35 YR /5 YR no int and no pymt Principal & Interest: $421.60 Property Taxes: $572.92 Hazard Insurance: $155.60 Total Housing Payment: $3,064.28 10
Total Housing Payment: $3,064.28 Car Payment: $450.00 Credit Card Payments: $250.00 $3,764.28 Monthly gross income needed to qualify: $8,365.07 *This number is based on 45% *This number is based on 45% debt to debt to income ratio (DTI) income ratio (DTI) 11
What kind of What kind of documentation do documentation do you need you need ? For a typical scenario involving W2 wage earning employees, here is an example of the documents needed to submit a full application; Most current paystubs covering a one month period Previous 2 years W2s 2 months most current bank accounts and/or retirement statements Running Credit Running Credit Note:To Note:To quali ualify for a fy for a mortgage, mortgage, the score that is the score that is used is the middl used is the middle of th e of the three Credit Bureau's e three Credit Bureau's scores and scor es and then the lowest of those middl then the lowest of those middle scor e scores es out out of all the borrower of all the borrowers on on the appli the applicati tion. on. Here is an example: John Smith’s middle score 700 Jane Smith’s middle score 730 Larry Smith’s middle score score 680 680 In this scenario, Larry’s middle score will be what is used to qualify for the mortgage and rate. 12
What to do with your Pre‐Approval Letter Once the underwriter has reviewed your loan and issued a credit approval, your loan officer will send you a San Mateo Credit Union Pre‐Approval Letter. 1. Send your San Mateo Credit Union Pre‐Approval Letter to the Department of Housing to be entered into the quarterly Down Payment Assistance Program drawing. Nila Kim Nhkim@smchousing.org For more info, visit http://housing.smcgov.org/employee‐down‐ payment‐assistanceprogram 13
San Mateo Credit Union First mortgage option: San Mateo Credit Union First mortgage option: 40 ‐ year Hybrid Portfolio Loan Product through San Mateo Credit Union • 7/1 & 10/1 (fixed for 7 or 10 years) • Creditworthiness : editworthiness : Minimum 680 FICO • 47% maximum debt ‐ to ‐ income ratio • Reserves of 2 months of principal, interest, taxes, and insurance • 14
Type of Home Purchased: As of 07/01/2019 1 Condo 10 Single Family Home Townhouse 11 15
Areas of Purchase within the County: As of 07/01/2019 3 6 Redwood City 1 San Mateo San Bruno Pacifica Belmont 5 South San Francisco 3 3 16
Average Purchase Price of Homes in the County: $861,577 • Twenty-seven (27) Employees who have purchased Home in San • Mateo County Twenty-two (22) Loans that were completed under the Employee • Down Payment Assistance Program: Twenty-two (22) Employees Participating • Five (5) Employees who moved from outside of the County into • the County of San Mateo Five (5) individuals that were selected, their partner was also a • County Employee 17
Here is the link to get prequalified with SMC: http://www.smcu.org/CountyMortgage 18
Silvio Gomez Real Estate Sales Manager sgomez@smcu.org Set up your appointment for • 650-817-1992 a free consultation with one Jan Regala-Freeman MBA Sr. Mortgage Loan Officer of our mortgage team jregalafreeman@smcu.org 650-817-1997 experts! Veronica Fitzsimmons Real Estate Loan Officer vfitzsimmons@smcu.org All preapprovals must be • 650-817-1983 rendered and delivered to the Chris Sinhbandith Real Estate Loan Officer County by Thursday, csinhbandith@smcu.org 650-817-1985 November 7th. Mike Daddona Real Estate Loan Officer mdaddona@smcu.org Last day for preapproval • 650-817-1980 letters to be issued: Angelica Luna Real Estate Loan Officer Thursday, November 7th. aluna@sm cu.org 650-817-1954 19
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