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Income Qualified Home Requirements

INTRODUCTION:

Thank you for your interest in the Income Qualified Homes at West Village. Please read the following Pre-Application Checklist to learn about the approval process and determine if you are eligible for this opportunity.

This Pre-Application Checklist is to be used as a preliminary self-qualification tool. The Checklist is only to be used as a guide for a potential applicant to determine if they may be eligible to purchase an Income Qualified Unit developed under the requirements imposed by the City of Brea on the West Village project.

Capitalized terms used in this Checklist are defined in the Affordable Housing Agreement with Resale Restrictions and Option to Purchase. As a part of purchase of this home, you will be required to execute the Affordable Housing Agreement with resale restrictions.

This Pre-Application Checklist does not establish, expressly or by implication, that a potential applicant will be eligible for or will be approved or selected for the purchase of an Income Qualified Unit. The applicant will be required to submit a significant amount of documentary evidence to the builder, mortgage lender and the City during the formal approval process.

STEP ONE: PROGRAM DETAILS

The Income Qualified Housing opportunity at West Village has been created in partnership with the City of Brea to provide affordable housing for median-to-moderate income households. This particular opportunity has been created to serve those households who are within the median to moderate income levels, earning no more than 120% of the County Median Income, adjusted for family size as defined by the Department of Housing and Urban Development.

These are for-sale homes, not rentals. The purchaser of these homes must meet all requirements for consideration and agree to execute and comply with all regulations and limitations set forth in the Affordable Housing Agreement.

Please read further to understand the details of the offering and the eligibility requirements.

STEP TWO: HOME & COMMUNITY DETAILS

West Village at Brea will offer 20 for-sale homes for Income Qualified Buyers in one building. The Income Qualified homes will be available as follows:

View Floor Plans

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If this type of home and these terms are agreeable to you, please move on to Step Three.

STEP THREE: PROGRAM ELIGIBILITY

Household Eligibility:

If your household contains 1–7 people you may be eligible to purchase a home. Please move on to Income Eligibility.

As noted above, maximum occupants per home are as follows:

Income Eligibility:

To purchase the Property, Buyer must qualify as a “Qualified Household,” which is defined as a household whose annual income does not exceed the qualifying limits under California law for “persons or families of moderate income,” as further defined in the Affordable Housing Agreement. Housing costs (including principal, interest, property taxes, property insurance, HOA fees and utilities) cannot be less than 28% and no more than 35% of the gross income of the household.

What is your total Gross Income for the preceding 12 months?

The specific definition of Gross Income is provided in the Affordable Housing Agreement. For the purposes of this Checklist, Gross Income means ALL income from whatever source from ALL persons over the age of 18 who will reside in the Income Qualified Unit as their primary residence. Gross income is the amount of income received before any deductions.

Household Size Maximum Gross Income (2019)
1 $82,250
2 $94,000
3 $105,750
4 $117,500
5 $126,900
6 $136,300
7 $145,700

Based on the number of persons that will be residing in the Income Qualified Unit as their primary residence, is your Gross Income less than the maximum allowable income limit presented in the chart?

If the answer to this question is NO, then you are NOT eligible to purchase an Affordable Unit.

Sufficient Funds Available For Down Payment and Closing Costs:

Minimum Home Buyer Contribution

What is the total amount of funds that you have available in savings accounts, checking accounts and time deposits that are not subject to a penalty for early withdrawal?

The Affordable Housing Agreement requires that home buyers contribute at least 3% of the Affordable Sales Price to the purchase of an Income Qualified Unit.

By way of example and based on potential sales prices, the cash requirements are as follows:

One-bedroom price:

$370,000, cash required is $11,100

Two-bedroom price:

$478,000, cash required is $14,340

Three-bedroom price:

$544,000 cash required $16,320

Do you have the available funds that are required to meet the minimum contribution amount?

If the answer to this question is NO, then you are NOT eligible to purchase an Income Qualified Unit.

Maximum Down Payment

The Affordable Housing Agreement does not limit the amount of the down payment that can be used to purchase an Income Qualified Unit; however, it does limit the total amount of liquid assets to no more than 20% of the Median Home price in Brea ($731,045 x 20% = $146,207 Maximum Liquid Asset).

At the time of application, an applicant may not have liquid assets in excess of 20% of the median home price in Brea, including equity in his/her current home if the applicant is already a homeowner. Applicants may not own other residential properties at the time escrow closes on their Income Qualified Unit. Only persons who will occupy the Income Qualified Unit are permitted to participate in the program: therefore, co-owners who will not occupy the property are prohibited.

Primary Residence:

Do you intend to make the Income Qualified Unit your primary residence?

If the answer to this question is NO, then you are NOT eligible to purchase an Income Qualified Unit.

Resale Controls:

The Income Qualified Unit is subject to resale controls that remain in effect for 45 years. This means that the Income Qualified Unit can only be resold to a Moderate-Income Household based on the Income Limits in effect at the time of the resale. Buyer may not lease the Property to another person.

You will not be able to sell or transfer the ownership or the title of the Income Qualified Unit without first receiving approval from the City.

Do you understand that the Income Qualified Unit is subject to resale controls that remain in effect for 45 years?

Do you understand that you will not be able to transfer the ownership or the title of the Income Qualified Unit without first receiving approval from the City?

Refinancing Controls:

Do you understand that your ability to refinance the first trust deed mortgage will be limited to an amount equal to the outstanding principal balance owed on the mortgage, plus any customary fees or costs associated with the refinancing? You cannot receive any cash from the refinancing proceeds.

If ALL of the above terms are agreeable to you, please move on to Step Four.

STEP FOUR: PROCESS

If you have read through this Pre-Application Checklist and have determined that you may be eligible to purchase an Income Qualified Unit, the next step will be to submit your information to pre-qualify for an Income Qualified Home. Prequalification will open on February 24th and sales will begin on April 18th.

The order of purchase will be determined by the completion of the prequalification process through our preferred lender. Once the West Village Sales team is informed of your prequalification by our lender, potential applicants will be contacted by the West Village Sales team sales team via phone and email.

If potential applicant is approved through the lending review, they will be passed on to the City of Brea for final review and application.

Submitting information to the lender does not establish, expressly or by implication, that a potential applicant will be eligible for, or will be approved for, the purchase of an Income Qualified Unit. The applicant will be required to submit a significant amount of documentary evidence to the builder, mortgage lender and the City during the formal underwriting process.

If you meet All above criteria, please contact the West Village sales team by email at [email protected] or by phone: Terry Sullivan 949-683-1481 or Liberty Martin 949-922-0128