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05/01/2013 Dear Program Participant: Thank you for your interest in the federal Neighborhood Stabilization Program (NSP) offered by Anoka County Community Development. The goal of the program is to stabilize our communities and the properties in the neighborhoods. Attached is documentation that is required for your participation in the program. In order for Community Development to accept your request to purchase an NSP property, all attached forms must be completed and required documentation submitted. Any missing or incomplete information will delay the process. Please do not submit original documents with your application. Complete, original applications should be mailed or delivered to: Anoka County Government Center Community Development Department 2100 3rd Ave., Suite 700 Anoka, MN 55303 This program has specific federal requirements that need approval prior to the acceptance of your purchase agreement. Please read all sections carefully. If you have additional questions, contact: Kate Thunstrom Community Development Specialist [EMAIL REDACTED] [PHONE REDACTED] Anoka County Housing and Redevelopment Authority ---PAGE BREAK--- Anoka County NSP Property Purchase Application Page 2 Program At a Glance Eligible First Mortgage Loan Products Prime, Fixed Rate (HUD, VA, Conventional) Maximum Borrower Income Household annual income maximum based on household size, Effective 2013 Size/AMI 1 2 3 4 5 6 7 8 120% $69,150 $79,000 $88,900 $98,750 $106,650 $114,550 $122,450 $130,350 Maximum Housing Ratio 26-35% Minimum Borrower Investment $1,000 earnest money submitted with Purchase Agreement Eligible Down Payment and Closing Cost Assistance Households may be eligible for 3% of the purchase prices of direct homeownership assistance towards buyers required closing costs and prepaids after an initial buyer contribution of 3.5%. Funds will be secured by a mortgage and promissory note. The mortgage payments are deferred for 5 years and have 0% interest. The mortgage will be forgiven in the 6th year. If the buyer sells, refinances, or no longer occupies the home as his/her principal residence during the 5 years, the mortgage becomes immediately due in full. Other Borrowers may NOT receive any cash back at closing. There is no first-time homebuyer requirement. A Home Buyer Education Certificate is required always. Borrowers are required to complete a Homebuyer Education Course before the scheduled closing. For a listing of HUD approved agencies, visit HUD’s Web site: Borrower Occupancy Requirement Borrowers must owner occupy the property purchased as their principal place of residence and cannot have an ownership interest in any other property. Property Terms All properties will have an Affordability Period declaration filed against the property. This means that for 20 years the property will remain the principal residence of a “low to middle income family”. If the property is sold during those 20 years, it must be sold to a “low, to middle income family” as defined in 42 U.S.C. 5302(a) at the time of the purchase. Additional terms are discussed in the Declaration of Covenants, Conditions and Restrictions. / Applicant initial(s) ---PAGE BREAK--- Anoka County NSP Property Purchase Application Page 3 Homebuyer Information Full Name of Applicant/Head of Household Full name of Co-Applicant Relationship to Applicant: Social Security Number U.S. Citizen Legal Permanent Resident Social Security Number U.S. Citizen Legal Permanent Resident Marital Status Married Unmarried (widowed, single, or divorced) Marital Status Married Unmarried (widowed, single, or divorced) Current Address Current Address Phone Number (home): ( ) Alternate Phone: ( ) Email: Phone Number (home): ( ) Alternate Phone: ( ) Email: Name of Employer: Estimated Gross Income: Occupation: Number of Years with Name of Employer: Estimated Gross Income: Occupation: Number of Years with All applicants are required to attend Home Stretch classes. Have you attended a Homebuyer Education class within the last 12 months? Yes No If Yes, please attach a copy of the Homebuyer Education Completion Certificate. If No, you will be required to attend this class before closing on the property. All applicants are required to attend Home Stretch classes. Have you attended a Homebuyer Education class within the last 12 months? Yes No If Yes, please attach a copy of the Homebuyer Education Completion Certificate. If No, you will be required to attend this class before closing on the property. Household Information List the names of all individuals who will reside in the household in addition to the Applicant and Co-Applicant Name Birthdate Relationship to Applicant/Co-Applicant Student (Yes or No) Social Security Number Income (Yes or No) / / / / / / / / / / ---PAGE BREAK--- Anoka County NSP Property Purchase Application Page 4 / Applicant initial(s) General Documentation - Required Original signatures and full application to be submitted with all required attachments. Faxed or scanned applications will not be accepted. Copy of applicant(s) photo identification Copy of applicants(s) Social Security Card and/or Permanent Resident Card Copy of W2 forms for the last 3 years for every member of the household Copy of tax returns for the last 2 years for all household members Copy of mortgage pre-approval letter or approval letter Homebuyer Education Certificate from a HUD approved Housing Counseling Agency (REQUIRED PRIOR TO CLOSING) Income Documentation - Required Do NOT submit originals. Has any member of the household 18 years and older received, or is expected to receive in the next 12 months, the following: (Three months of documentation must be submitted if any are selected) Wages, salaries, overtime pay, commissions, fees, tips, bonuses, or other compensation Income or gain from CD’s, money market accounts, brokerage accounts, stocks, bonds, or Treasury Bills Periodic payments from Social Security, disability/death benefits, pensions, retirement funds, annuities, insurance policies, or similar types of periodic benefits payments Payments in lieu of earnings, such as unemployment and disability compensation, workers compensation or severance pay Welfare assistance or TANF benefits Child support, spousal support/alimony, or regular contribution or gifts from persons not residing in the household including scholarships, parental gifts for tuition, etc. Revocable trust Lump sum payment or receipt of inheritances, capital gains, lottery winnings, victims’ restitution or insurance settlements Real estate other than the primary residence or other capital investments Does any member of the household have any of the following: (Three months of documentation must be submitted if any are selected) Checking account Savings account Retirement, pension, IRA, Koegh fund accounts Life insurance policy available before death (whole or universal life insurance) Holding of personal property as an investment Mortgage or deed of trust Interest or payments from Indian Land Trust(s) / Applicant initial(s) ---PAGE BREAK--- Anoka County NSP Property Purchase Application Page 5 Property Information Address of property to be purchased - (If not yet determined, this section may be left blank) Requesting 3% closing cost assistance in purchase agreement Purchase NSP property only, not requesting closing cost assistance Mortgage/Realtor Information Loan Information Type of Loan FHA Conventional Veterans Administration Other: Mortgage Lending Company Company Loan Officer Address Phone Number Fax E-mail Realtor Contact Information, if applicable Realtor Name Affiliated Company Phone Fax E-mail Conflict of Interest Provision The conflict of interest provision of the federal program applies to any individual, business, or private entity receiving federal assistance, who has any family, business, contract or subcontract ties to: an employee, agent, consultant, officer, or elected official or appointed official of Anoka County, CDBG/NSP designated public agencies, or subrecipients that are receiving funds for their tenure or for one year after. If there are questions in regards to your participation with this program all information needs to be disclosed and Anoka County will work HUD to determine your eligibility. If it is later found that a conflict of interest occurred and was not reported, the loan balance will immediately become due and payable. No conflict of interest exists Yes, there is a conflict or potential conflict of interest. That relationship is as follows: / Applicant initial(s) ---PAGE BREAK--- Anoka County NSP Property Purchase Application Page 6 Program Affidavit I/We certify that the information contained in all required and signed program-related documents submitted is true and correct. I/We further certify that: I am (We are) a U.S. citizen or I/we have legal permanent resident status. The house I/we purchase will be my/our principal place of residence. I/We will notify Anoka County Community Development in writing if the home ceases to be my/our principal residence. I/We further certify that I/We will comply with the 20-year Affordability Period attached to the property: As described in the formal Declaration of Covenants, Conditions and Restrictions, which will be signed at the closing of the property: 1. I/We agree to take such steps and execute such documents to insure that each UNIT shall be maintained in compliance with the Federal Act for a period of twenty (20) years from the date hereof. To that end, I/We hereby agree to the following: a. During the Affordability Period the property will be the principal residence of an owner whose family qualifies as a “low, moderate or middle income family” as defined in 42 U.S.C. 5302(a), at the time of purchase. b. During the Affordability Period the property shall be available for subsequent purchase only to subsequent purchasers whose family qualifies as a “low, moderate or middle income family” which will use the property as its principal residence. The property may be re-purchased by the Declarent during the Affordability Period but the unit must then be re-sold to an income qualified family within one year of the date of re-purchase. If the Declarent fails to re-sell during the one year period, it shall be considered an event of default and the Agency may pursue the remedies set forth in the Declaration. c. These affordability restrictions terminate upon the expiration of the Affordability Period. d. During the Affordability Period the property will be sold for a price which does not exceed the total estimated mortgage expense (including principal interest, taxes and insurance) for a qualified purchaser of 120% of the Area Median Income (AMI) for the area, as determined by HUD. The full Declaration is available for review prior to the closing and may be requested by contacting Anoka County Community Development at [PHONE REDACTED]. Applicant Signature Date Co-Applicant Signature Date ---PAGE BREAK--- Anoka County NSP Property Purchase Application Page 7 Government Monitoring The information being requested below is for determining compliance with federal equal credit opportunity, fair housing and home mortgage disclosure law. You are not required to furnish this information, but are encouraged to do so. The law provides that a Lender may not discriminate on the basis of this information, or on whether you choose to furnish the information. If you choose not to furnish this information and you have made the application in person, we are required to note ethnicity, race and sex on the basis of visual observation or surname. Please check below if you choose not to furnish this information. Date of Application: Applicant Co-Applicant Applicant Name: Co-Applicant Name: I do not wish to furnish this information I do not wish to furnish this information Ethnicity: (select only one) Hispanic or Latino Not Hispanic or Latino Ethnicity: (select only one) Hispanic or Latino Not Hispanic or Latino Gender: Male Female Gender: Male Female Race: (select one or more) White Black/African American Asian American Indian/Alaska Native Native Hawaiian/Other Pacific Islander American Indian/Alaska Native & White Asian & White Black/African American & White American Indian/Alaska Native & Black/African American Other Multi Racial Race: (select one or more) White Black/African American Asian American Indian/Alaska Native Native Hawaiian/Other Pacific Islander American Indian/Alaska Native & White Asian & White Black/African American & White American Indian/Alaska Native & Black/African American Other Multi Racial Applicant Signature Co-Applicant Signature This Section for Anoka County’s Use Only Application received by: Mail Face-to-face Interview Telephone Staff Name: Date: ---PAGE BREAK--- Anoka County NSP Property Purchase Application Page 8 Data Privacy NSP Invest in Neighborhood Program NOTICE OF RIGHTS CONCERNING THE INFORMATION YOU SUPPLY TO ANOKA COUNTY COMMUNITY DEVELOPMENT In accordance with the Minnesota Government Data Practices Act (“MGDPA”), Anoka County (“County”) is required to inform you of your rights as they pertain to private information collected from you. Private data is that information held by the county that is available to you, but not to the public. The private data collected from you, or from other agencies or individuals authorized by you, is used to determine your eligibility for the NSP Invest in Neighborhood program assistance from Anoka County. You are not required to provide information relating to your marital status, race, ethnicity, or citizenship, but it is requested for federal reporting, statistical information and monitoring purposes. All other information is required to determine your eligibility for assistance from the county. If you choose not to supply the required information, Anoka County will not be able to determine your eligibility for this program. The dissemination and use of private data the county collects is limited to that necessary for the administration and management of the NSP Invest in Neighborhood program. Persons or agencies with whom this information may be shared are: 1. Anoka County personnel involved in administering the NSP program; 2. Authorized personnel from the United States Department of Housing and Urban Development; 3. Federal, state, local and contracted auditors; 4. Law enforcement personnel in the case of suspected criminal activity; and, 5. Those individuals or agencies to which you give your express written permission for release of information. Unless otherwise authorized by state or federal law, other government agencies utilizing the reported private data must also treat the information as private. You may wish to exercise your rights as contained in the MGDPA. Those rights include: 1. The right to see and obtain copies of the data maintained on you. 2. The right to be told the contents and meaning of the data. 3. The right to contest the accuracy and completeness of the data. I have read and understand the above information regarding my rights relative to the collection of personal data for government programs. Applicant Date Co-Applicant Date ---PAGE BREAK--- Anoka County NSP Property Purchase Application Page 9 Authorization to Release Information I have applied for a loan or grant through Anoka County Community Development. As part of the application process, employees of Anoka County may verify information contained in my/our loan or grant application and in other documents required in connection with the loan, including, but not limited to employment history, income; bank, money market and other financial account balances; credit history; copies of income tax returns and property information. A copy of this authorization may be accepted as an original. Applicant (Print Name) Social Security Number Date Signature Co-Applicant (Print Name) Social Security Number Date Signature ---PAGE BREAK--- Anoka County NSP Property Purchase Application Page 10 Subordination Disclosure If you wish to refinance your home or take out a home equity loan in the future, please review carefully! FYI: Anoka County’s rehab lien is, by state law, considered a “special mortgage” and, as such, the homeowner may be required to attend debt counseling as part of the refinance process. The County records liens on property according to the date they were filed. The older the date the higher the payoff position. Usually, the primary mortgage is in 1st position, the next lien in order of date is in 2nd position, and so on. If you chose to sell or refinance your property, whatever is left over after payment of all liens on the property is considered “equity” for the homeowner. All lenders want to be in the highest payoff position possible because they have a better chance of being fully repaid. As a result, the lender you use to refinance your current mortgage or to obtain a home equity loan may approach the holder of your existing lien (in this case, Anoka County) to request that they subordinate, or allow the new loan to take a higher payoff position than the county’s existing lien. For Anoka County to agree to subordinate, certain requirements as noted below must be met. 1. Subordination Requests - Requests for subordination of an Anoka County lien will be considered after the lender has completed and submitted a Subordination Request form (Anoka County will provide upon request) which includes the following: a. The reason for the subordination. b. Info on all active loan(s) including: current balance, term, interest rate and whether the rate is fixed or adjustable. c. The amount of the new loan, the term, interest rate and whether the rate is fixed or adjustable. d. The full name of the lending institution as it would appear on the subordination, if granted. e. A copy of the prepared title work which shows any other lien/s secured by the property. f. A copy of the current property appraisal. g. A copy of the Good Faith Estimate signed and dated by the applicant/s. h. Income verification. i. Upon closing, submit a completed HUD-1 (Closing Statement) form signed by applicant/s. 2. Approved Costs and Liens a. Borrowers shall be allowed to include reasonable closing costs and settlement costs to the extent typical in the industry for a new mortgage. b. Only existing mortgages that were originated prior to the Anoka County Lien may be included in the new mortgage. 3. Denial of Subordination Requests - Anoka County will not subordinate it’s lien in situations including, but not limited to: a. The proposed mortgage does not conform to current State of Minnesota lending practices as regulated by Minnesota Statutes 58 et seq. b. Mortgages using more than 40% of the gross household income towards P.I.T.I (principal, interest, taxes & insurance). If taxes and insurance are not included in the mortgage payment, Anoka County will divide annual costs by 12 months and add to the proposed payment to determine payment to income ratio. c. Consolidation of mortgages originated after the Anoka County lien. d. If the annual household income exceeds 80% of the area median income. e. The borrower is receiving cash back from the mortgage company or other source as a result of the refinance. f. The funds secured by the proposed new mortgage are being provided for consolidation and payoff of personal debts of the borrower or another. g. The borrower is delinquent, or in arrears, on payment of their real estate taxes, federal or state income tax, or bankruptcy payments. h. The county’s payoff position moves to 3rd or lower than it currently is. i. Reverse Mortgages will not be subordinated. ---PAGE BREAK--- Anoka County NSP Property Purchase Application Page 11 j. Down Payment Assistance and NSP Incentive Fund Assistance received from Anoka County will not be subordinated. 4. Subsequent Subordination Requests - Subordination requests are handled on a case-by-case basis. If a subordination is granted, only one per property will be allowed. 5. Processing Subordinations a. Please allow a minimum of ten (10) working days for the county to process requests for subordinations. The 10- day minimum starts once the county has received the required documentation from the party requesting the subordination. b. Subordination requests will be processed by the Community Development department staff, who will then submit the request, with a recommendation for action, to the Division Manager. The Division Manager will approve or deny all requests for subordination. 6. Satisfaction of Mortgage/Agreement If the property is being sold or if the subordination is denied and the client wants to continue the refinance, the county’s lien must be paid in full. Upon request, the county will provide a payoff statement to the lender or title company. At closing, a payoff check should be cut and delivered to Anoka County. A Satisfaction of Agreement will be drafted and recorded on the property. The recorded Satisfaction of Agreement removes the existing Anoka County lien from the property. I have read the Anoka County Subordination Policy and understand the requirements that apply should I choose to refinance or obtain a new mortgage on my property. I understand what a Satisfaction of Mortgage/Agreement is and how it applies to me if I do not qualify for a subordination or choose to sell my home. Signature Date Signature Date ---PAGE BREAK--- Anoka County NSP Property Purchase Application Page 12 Signature Page I/We hereby submit the information contained in the attached Application, Uniform Residential Loan Application, tax returns, and other furnished documents to be considered for the Anoka County NSP Invest in Neighborhood program. I/We read, completed all forms in connection with this application. I/We understand that any discrepancy or omissions in the information I/we have provided may disqualify me/us from participation in the program. If such discrepancies or omissions are discovered after any loan is approved or granted to me/us, I/we understand that any outstanding loan balance may immediately become due and payable. Applicant Signature Date Co-Applicant Signature Date WARNING: Title 18, Section 1001 of the U.S. Code states that a person is guilty of a felony for knowingly and willingly making false or fraudulent statements to any department of the United States Government.