Simi Valley First-Time Homebuyer Assistance Program

Simi Valley First-Time Homebuyer Program

The City of Simi Valley offers a First-Time Homebuyer Assistance Program to qualified low-income first-time homebuyers who wish to purchase their first home in Simi Valley. The property may be a detached or an attached single-family home, a condominium, or a townhome.   The Program is available to those who have not owned a home in the last three years.  Single parents who owned a home while married and displaced homemakers may qualify even if they owned a home in the previous three years.  Following is a brief summary of the Program:

• The Simi Valley Program offers low-income housholds a deferred payment second trust deed loan (no monthly payments required) up to $50,000 per bedroom, not to exceed $200,000.
• Restrictive Covenants (Resale Restrictions) will be recorded against each property upon the initial purchase and shall restrict the resale of the unit at a price-affordable to low-income first- time homebuyers for 55 years.  The 2nd trust deed loan will be assumed by an eligible low-income first time homebuyer throughout the 55-year term of affordability.
• Applicants with an average FICO score of 700 or higher will be required to provide a minimum of 3% down payment.  Applicants with an average score between 600 and 700 will be required to provide a 5% down payment.  Buyers with additional cash assets in excess of $10,000 will be required to use such assets towards down payment and closing costs.
• Applicants with an average FICO score below 600 or who have had a bankruptcy within the past four years are not eligible to participate in the Program.
• Gift letters are acceptable in meeting up to one half of the minimum down payment requirement as long as there are no repayment terms.  A minimum of one half of the required down payment must come from the applicant’s personal assets.
• The household’s projected annual gross income (income before taxes) cannot exceed the folllowing limits:

• Simi Valley’s Program eligibility will be based on total household income, a housing cost ratio not to exceed 35%, and a debt-to-income ratio not to exceed 45%.  Housing costs include principal and interest, property taxes and insurance, private mortgage insurance, homeowner association dues, if any, and a utility allowance.  Ratios are determined by dividing monthly housing and long-term installment expenses by the gross monthly income.
• The primary loan must be a fully amortized loan provided by a bank, savings and loan, mortgage banker or other institutional lender.  The City will not allow balloon payments or stated income loans.
• Buyers must occupy the unit as their primary residence.
• A portion of the proposed $50,000 per bedroom subsidy may be used for necessary repairs to bring the property into compliance with the City’s Housing Quality Standards (HQS).  A third trust deed for a home rehabilitation loan will be recorded after the close of escrow to address repairs identified. The maximum $50,000 per bedroom subsidy will not be exceeded since the City’s second will be reduced by the amount of the rehabilitation loan.

The maximum home price and City subsidy limits appear below:

Maximum home price limits are subject to change when new Income Limits for Ventura County are published each year. Please note that the City’s per bedroom subsidy will at no time write down the property to an amount lower than the maximum affordable sale’s price. Therefore, the maximum per bedroom subsidy may be lower than the amount shown above.

• Upon Pre-Qualification of Eligibility, applicants will be provided a copy of the Policies and Procedures Manual for the Program, which gives detailed information on the Program.

Applications are available through the Department of Environmental Services.  The First Time Homebuyer Application is available as an Adobe Acrobat document.  Complete and return the Application and all required documents to the Department of Environmental Services, Housing & Special Projects Division, 3855-A Alamo Street, Simi Valley.  If you need further help please contact me at (805) 432-7705 or via email.

The City also partners with other available First-Time Homebuyer Programs such as the Ventura County Regional Mortgage Credit Certificate Program (MCC) administered by the County of Ventura  and the California Housing and Finance Authority (CHFA).  The CHFA Programs offer down payment assistance and in some cases assistance with closing costs.  The MCC Program offers a 15% tax credit of the annual interest you pay on the home mortgage, reducing your federal income taxes and increasing your earnings.  The income limits, the down payment assistance, the type of 1^st and 2^nd mortgage loans, and the maximum purchase price differ for each First-Time Homebuyer Program.

NOTE: This information was obtained from the City of Simi Valley.