[StBernard] St. Bernard Parish Home Mortgage Authority accepting applications from first-time homeowners for a program that grants Soft Second Mortgages that can be forgiven after five years

Westley Annis westley at da-parish.com
Wed Jul 20 01:15:56 EDT 2011

St. Bernard Parish Home Mortgage Authority accepting applications

from first-time homeowners for a program that grants Soft Second Mortgages
that can be forgiven after five years

The St. Bernard Parish Home Mortgage Authority is taking applications for a
CDBG Soft Second Mortgage Program that offers qualified homebuyers a soft
second loan of 20 percent of the purchase price up to $30,000 at 0% rate and
no monthly payments per borrower and a grant of up to $5,000 per borrower
for closing costs and down payment assistance on a need basis. The soft
second mortgage will be forgiven after the homeowner has met the
requirements of the program and has lived in the home for five years.

Gulf Coast Bank & Trust Co., Iberia Bank Mortgage Co., and First NBC are the
approved list of lenders who are taking applications for the program. For
more information, call or visit one of these institutions.

The program, funded through the Community Development Block Grants
administered through the Governor's Division of Administration Office of
Community Development was approved at the local level by the local board
members, St. Bernard Parish President Craig P. Taffaro, Jr., who is the
chair of the St. Bernard Home Mortgage Authority, Parish Councilman Wayne
Landry, Norris Delamore and Sheriff Jack Stephens. Anthony Fernandez serves
as legal counsel to the Authority.

"We welcome the opportunity to grow our St. Bernard community and this
program will give more residents a chance to realize the American dream of
home ownership," President Taffaro said.

The program is for first time homebuyers with annual household incomes at or
below 120% area median income (per Metropolitan Statistical Area data) who
are purchasing a principal residence in St. Bernard Parish. A first-time
homebuyer is an individual who meets anyone of the following criteria:

* An individual who has had no ownership in a principal residence
during the 3-year period ending on the date of purchase of the property.
This includes a spouse. If either meets the above test, they are considered
first-time homebuyers.
* A single parent who has only owned with a former spouse while
* An individual who is a displaced homemaker and has only owned with a

Homebuyers who have already received payments from the State under the
"sell" or "relocate" option under the Road Home Compensation Program are not
eligible to receive additional financial assistance from this program.

Income Limits will be adjusted annually according to HUD MSA publications.
Household Size Income Limit
1 $51,360
2 $58,800
3 $66,120
4 $73,440
5 $79,320
6 $85,200
7 $91,080
8 $96,960

Borrowers must present a legally binding purchase agreement with their
application, and they must close on the transaction within 90 days of
applying for assistance under this program. Properties must be essentially
"move in" ready when the purchase agreement is executed. Application date is
based on the date that a complete application is received by the Program
Administrator and all applicants will be served on a "first come, first
served" basis. Among other requirements, the homebuyer must have a minimum
investment of 1% of Purchase Price or $1,000, whichever is greater.

The program is for people purchasing new and existing residential units that
are either single family or double structures.

Program recipients must occupy purchased unit as their principal residence
for at least 5 years in order to receive forgiveness of entire indebtedness.
Failure to do so without the written permission of the St. Bernard HMA will
result in the soft second loan balance being immediately due and payable as
described. Repayment of a portion of the principal amount, up to $30,000 of
the CDBG Soft second Loan, shall be due if the first Mortgage Loan is paid
in full upon sale or refinance within five years from date of closing.

* 0-3 years: 100% of Soft Second Loan
* 3-4 years: 80% of Soft Second Loan
* 4-5 years: 60% of Soft Second Loan
* After 5 years: 0 due

There will be no waiver of the occupancy requirement during the first 36
months from date of purchase of the unit. The St. Bernard HMA may exercise
its right to waive the acceleration of payments due upon proof of job
related relocation of over 150 miles, serious illness or death of the
homebuyer. Upon HMA's determination that borrower meets the "hardship" test
per supporting documents submitted and if the borrower has provided proof of
continuous occupancy of the residence as the primary residence, the HMA may
reduce the principal amounts due according to the following schedule:

* After 36 months: 40% of principal balance due
* After 48 months: 20% of principal balance due
* After 60 months: full forgiveness of debt


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