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Program 13: Homebuyer Assistance
The County helps strengthen neighborhoods and empower families by supporting low and moderate income first-time homebuyers. The County offers financial assistance with down payment assistance loans, including closing cost assistance, federal income tax credits, and below market-rate loan programs. The following programs are offered by the County:
- Home Ownership Program (HOP): HOP is designed to meet the needs of low income households with the necessary down payment assistance. This program provides a 2nd Trust Deed loan at 0% interest with all payments deferred until sale or transfer.
- Mortgage Credit Certificate Program (MCC): The MCC Program offers first-time homebuyers a federal income tax credit. This credit reduces the amount of federal taxes the holder of the certificate would pay. It can also help first-time homebuyers qualify for a loan by allowing a lender to reduce the housing expense ratio by the amount of tax savings. The qualified homebuyer who is awarded an MCC may take an annual credit against their federal income taxes paid on the homebuyer’s mortgage. The credit is subtracted dollar-for-dollar from the federal income taxes. The qualified buyer is awarded a tax credit of up to 15% and the remaining 85% is deducted accordingly.
- Southern California Home Financing Authority (SCHFA): SCHFA is a joint powers authority between Los Angeles and Orange counties that formed in June 1988 to issue tax exempt mortgage revenue bonds for low and moderate income first-time homebuyers. This program makes purchasing a home more affordable for qualified homebuyers by offering a competitive fixed interest rate on a 30-year mortgage and a grant for down payment and closing costs assistance.
- Affordable Homeownership Opportunities Program (AHOP): The AHOP incorporates both local and federal resources to subsidize the financing of for-sale developments. Sales are restricted to buyers that do not exceed 120% of the Area Median Income. The subsidy to the development is at least partially assumed as debt by the income-qualified buyers. There is no direct cash assistance to the buyers.
| Objectives | Assist 1,050 low and moderate income first-time homebuyers in the unincorporated areas, along with 43 affordable units through AHOP, during the planning period. HOP – 200 households MCC – 250 households SCHFA – 600 households AHOP – 43 affordable units |
| Policies | Policy 4.1: Provide financial assistance and ensure that necessary supportive services are provided to assist low and moderate income households and those with special needs to attain and maintain affordable and adequate housing. |
| Timeframe | Ongoing |
| Responsible Agency | Community Development Commission |
| Funding Source | HOP/AHOP (HOME Funds), MCC (federal income tax credits), SCHFA (mortgage revenue bonds) |