Home Ownership Assistance

Introduction

The Windsor Downpayment Assistance Program has three major components that will aid applicants in the purchase and enjoyment of their first home:

Funding for the Windsor Downpayment Assistance Program is provided through the federal Community Development Block Grant - Small Cities Program which is administered by the State Department of Economic & Community Development and, at the local level, through the Office of Community Development.

Eligible Borrowers

To qualify for a Windsor Downpayment Assistance Loan, an applicant must meet the eligibility criteria set forth in this section.

• INCOME.Eligibility for this program is based on household income. More particularly, household income must be at or below 80% of the area median. Income includes all wages and salaries, interest income, net business income, social security income, pensions, educational benefits, V.A. benefits, alimony, unemployment compensation, child care, and income from assets. Household income is determined by adding the sum total of the income of all adult members of a household. Area median is adjusted for household size and adjusted annually. Applicants must have gross annual income less than the following dollar amounts based on household size:

  Household Size	Household Income
  1	$43,050
  2	$49,200
  3	$55,350
  4	$61,500
  5	$66,400
  6	$71,350

  Income must be supported by copies of the signed borrower's federal income tax returns of all other adult wage earners.
• ASSETS. The Windsor Downpayment Assistance Program Regulations require borrowers to use all but $4,000.00 of their available assets toward the closing costs and purchase of the property. Assets are those funds which are cash and/or readily converted to cash. Assets include all assets of the potential owner occupant(s) and all other nondependent resident members of the household.
• LEGAL AND FINANCIAL CAPACITY TO UNDERTAKE LOAN.While the purpose of the Windsor Downpayment Assistance Program is to help families purchase a home in Windsor, certain criteria applicable to any home purchase must be met. Applicants must have:
  
  
  1. The legal capacity to incur the obligations of the mortgage loans.
  2. Sufficient income to make first and second mortgage payments.
  3. Good credit. This will be documented through receipt and analysis of a professionally prepared credit report submitted by the applicant to the Office of Community Development. Applicants with credit histories that will render them ineligible for Windsor assistance will be referred to a credit counseling agency.
  4. Adequate savings. The applicant must have savings adequate to cover the purchaser's share of down payment costs while still maintaining the minimum reserve required by the lender.
  5. Good employment history to help assure a stable income source.
  6. Income to debt ratios employed by the first mortgage lender.
• COMPLETION OF PRE-PURCHASE COUNSELING. The applicant must have participated in and have received a Certificate of Completion from the Windsor Home Ownership Counseling Program or an approved alternative counseling program.

Eligible Dwellings

• LOCATION. The home to be purchased must be located in Windsor, CT.
• TYPE OF HOME. The home to be purchased must be an existing one to two family home or condominium.
• CONDITION OF HOME. The home to be purchased must meet residential property standards required by the first mortgage lender. The home should be free of health or safety hazards, be structurally sound, and meet all applicable zoning requirements and housing codes. The home must have a permanent certificate of occupancy if newly-constructed. If applicable, it must also pass acceptable well and septic system tests. An evaluation of the condition of the home will be based on the appraisal and inspection reports.
• REQUIRED INSURANCE.The following types of insurance must be obtained by the home purchaser and must be in place at the home purchase closing.
  1. Closing Costs/Downpayment Assistance Loan Title Policy - The borrower must obtain a Title Policy for the Closing Costs/Downpayment Loan.
  2. Hazard Insurance - An additional Windsor Hazard Insurance Certificate is not necessary for Windsor Downpayment/Closing Cost Loans. All certificates submitted with the first mortgage loan should provide sufficient coverage to cover the amount of the first loan plus the Downpayment/Closing Cost Loan.
  3. Flood Insurance - Federal regulations require that persons purchasing a home located in an area identified by FEMA as having special flood hazards obtain and maintain flood hazard insurance under the National Flood Insurance Program. If the home being purchased with Windsor assistance is located in a flood hazard area, proof that a Flood Insurance Policy has been purchased will be required at closing. As with Hazard Insurance, an additional Windsor Flood Insurance Certificate is not necessary for Windsor Downpayment/Closing Cost Loans. All flood insurance certificates submitted with the first mortgage loan should provide sufficient coverage to cover the amount of the first loan plus the Downpayment/Closing Cost Loan.
• OTHER REQUIREMENTS
  1. The home to be purchased must be the applicant's principal residence. This program may not be used to purchase properties solely for investment purposes.
  2. The home to be purchased must be the first home purchased by the applicant. For the purposes of this program, first-time home buyers may include households who may have owned a home in the past, but have not owned a home within the last three years.
  3. Since federal funds are being utilized for this program we are bound by the Uniform Relocation Assistance Act which protects tenants who are subject to displacement because of federally-funded programs. Assistance under the act includes relocation expenses. The Office of Community Development should be notified prior to the buyer making an offer if the home to be purchased is presently occupied by tenants who will be displaced. The purchase of a tenant-occupied home may result in some delays in the closing of a Windsor program loan. In addition, the Office of Community Development reserves the right to deny a Windsor program loan if the costs associated with the Uniform Relocation Assistance Act are determined to be too great.

Financial Assistance Available

1. Maximum Loan Amount	$8,000.00
   Minimum Loan Amount	$3,000.00

Application Process

1. How Loan May be UsedLoan may be used to fund closing costs and fund up to 50% of the down payment required to purchase the home. The following maximum limits for each component of the loan will be applied:
   • Closing Costs--$4,000.00.Eligible closing costs include:
     • Loan origination fee
     • Appraisal fee
     • Credit report
     • Flood determination/ certification fee
     • Title examination and attorney fee
     • Title insurance
     • Survey
     • Recording fees
     • Pest inspection and/or home inspection
     • Prepaid interest
     • Mortgage insurance premium
     • First year hazard/flood insurance premium
     • Hazard/flood insurance escrow
     • Mortgage insurance reserve
     • Town property tax escrow
   • Downpayment--$8,000.00. The Windsor Downpayment Assistance Program may fund up to but no more than 50% of the required down payment.

Applicants will generally follow the steps listed below to apply for and obtain financial assistance through the Windsor Downpayment Assistance Program. Procedures may vary slightly based on the lender or real estate professional used in the home purchase process. In all cases, applicants must complete pre-purchase counseling through the Windsor Home Ownership Counseling Program or an approved alternative counseling program prior to applying for financial assistance.

• DETERMINATION OF INCOME ELIGIBILITY. Applicants must submit a copy of their previous year's income tax return, and other requested documentation, to the Office of Community Development for determination of income eligibility.
• PARTICIPATE IN PRE-PURCHASE COUNSELING. The applicant must participate in and receive a Certificate of Completion from the Windsor Home Ownership Counseling Program or an approved alternative counseling program.
• SELECT PARTICIPATING LENDER AND GET PRE-QUALIFIED. The applicant must select and be pre-qualified by a Windsor Participating Lender to purchase a home. The "Windsor Participating Lender" designation is open to any lender who attends an Educational Session and is willing to accept the responsibilities of participation in the Windsor financial assistance program.
• FIND A HOME AND EXECUTE A SALES CONTRACT. An applicant must sign a sales contract prior to applying for a mortgage. If an applicant uses a real estate professional to assist in finding a home, they are encouraged to work with a "Windsor Participating Real Estate Professional" who will be knowledgeable about the Windsor Downpayment Assistance Program. The "Windsor Participating Real Estate Professional" designation is open to any real estate professional who attends an Educational Session and is willing to become informed about the Windsor financial assistance programs.
• FILE AN APPLICATION FOR A MORTGAGE LOAN AND WINDSOR DOWN PAYMENT ASSISTANCE WITH A WINDSOR PARTICIPATING LENDER. It will be the responsibility of the prospective purchaser and the lender to determine what mix of financial assistance is necessary and reasonable to make home purchase possible. Applications for Windsor Downpayment Assistance will be completed in the office of the Participating Lender.
• APPLICATION PROCESSING AND APPROVAL OF FINANCIAL ASSISTANCE. The Windsor Participating Lender is responsible for evaluating applicants' credit worthiness for first mortgage and Windsor loans. The Windsor Program underwriting standards are those used by the participating lenders. The Windsor Program is committed to working cooperatively with lenders and applicants to process applications as quickly as possible and to make Windsor funds available prior to scheduled closing dates.
• ISSUANCE OF FUNDS. The Windsor Downpayment Assistance Program Administrator will issue a check for the full loan amount made payable to the home buyer. The Office of Community Development will deliver the check to the lender or the attorney in charge of the closing proceedings.
• POST-OCCUPANCY COUNSELING. All households receiving Windsor Downpayment Assistance are required to participate in post-occupancy counseling. Topics will include: financial adjustments; repairs and maintenance issues; energy conservation; and other relevant topics. The sessions will also provide the opportunity for discussion of problems or questions the new owners have encountered during their initial months of home ownership. The Program Administrator will notify buyers of the times and locations of these sessions.

Equal Housing Opportunity Statement

The Town of Windsor Downpayment Assistance Program is governed by state and federal law regarding fair housing and equal opportunity in lending. All financing for which the funds are provided by Windsor shall be open to all persons, regardless of race, color, creed, national origin, ancestry, religion, sex, marital status, physical or mental disability, age, lawful source of income, and sexual orientation. The Windsor Downpayment Assistance Program is an equal opportunity lender.