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Lewisville

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The City of Lewisville has established a First-time Homebuyer Assistance Program (FHAP) to provide low and moderate-income families with affordable homeownership opportunities through the reduction of costs associated with the purchase of a home. The FHAP is funded through the Community Development Block Grant (CDBG) from the U.S. Department of Housing and Urban Development (HUD). When available, HOME Investment Partnerships Program (HOME) funds received from Texas Department of Housing and Community Affairs (TDHCA) will be used to assist applicants that qualify in the lowest income category.
If HOME funding is available and applicant falls into the Very Low Income category, then these CDBG/FHAP guidelines will no longer apply. Their application will be governed by the HOME rules established by TDHCA at time of application.
Applications for the City’s FHAP will be considered on a first-come, first served basis. It is the intent of the City to operate the FHAP until funds are depleted. Annual funding may be provided in the City’s Annual Action Plan submitted to HUD each August and effective October first of each year. Policy clarifications or general questions should be addressed to the City’s Economic Development & Planning Department at the following address or telephone number: 151 West Church Street, Lewisville, Texas 75057, Phone Number (972) 219-5026 or Fax Number (972) 219-3698.

II. APPLICANT ELIGIBILITY

A. First-time Homebuyer
A first-time homebuyer is defined as: 1) an individual who has never owned a home, 2) an individual who has not owned a home in the last three years, or 3) an individual that may have previously owned a home with a former spouse, but no longer resides in the home and can document loss of ownership in a divorce decree or equivalent document(s) approved by staff. Applicants who own mobile homes that are not permanently affixed to a permanent foundation and who are renting the land that the mobile home rests on are considered first-time homebuyers.
Co-applicants include the head of household, his or her spouse (regardless of who will be listed on the mortgage), and any other adult household members that will be listed on the mortgage. All co-applicants must meet the first-time homebuyer definition.

B. Income

Household income must be at or below 80% of the Area Median Income (AMI) adjusted for household size. Income for all household members must be reviewed and may affect applicant’s eligibility for assistance. Eligibility will be determined using the most current HUD Income Limits, the Annual Income definition of income as defined by 24 CFR Part 5, and procedures located in the Technical Guide for Determining Income and Allowances. To determine eligibility, staff will verify the household size and compare it to the most recent AMI limits (See FHAP Income Limits/Fact Sheet). Household Size includes all persons who will live in the applicant’s household(s) at the time of occupancy.
Adopted October 4, 2010

C. Assets

If applicants have liquid assets greater than $12,000, grant assistance will be reduced dollar for dollar for the amount in excess of $12,000. Liquid assets are those that can be readily converted to cash such as checking, savings, CDs, stocks, and bonds. Tax deferred accounts such as IRAs, 401Ks, and other retirement accounts are excluded from the definition of liquid assets.

D. Citizenship/Residency

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 provides, with certain exceptions, that only United States citizens, United States non-citizen nationals, and “qualified aliens” are eligible for public benefits. Applicant must declare whether they meet one of the following definitions:
1. A U.S. Citizen is:
a) a person (other than the child of a foreign diplomat) born in one of the several states of the United States or in the District of Columbia, Puerto Rico, Guam, the United States Virgin Islands, or the Northern Mariana Islands who has not renounced or otherwise lost his or her citizenship;
b) a person born outside the United States to at least one United States citizen parent; or
c) a naturalized United States citizen
2. A U.S. Non-Citizen National is:
a) a person born in the outlying possession of the United States (American Samoa or Swain’s Island) on or after the date the United States acquired the possession; or
b) a person whose parents are United States non-citizen nationals (subject to certain residency requirements).
3. A Qualified Alien is:
(a) an alien lawfully admitted for permanent residence under the Immigration and Nationality Act (INA);
(b) an alien granted asylum under § 208 of the INA;
(c) a refugee admitted to the United States under § 207 of the INA;
(d) an alien paroled into the United States under § 212(d)(5) of the INA for at least one year;
(e) an alien whose deportation is being withheld under § 243(h) of the INA as in effect prior to April 1, 1997, or whose removal is being withheld under § 241(b)(3) of the INA;
(f) an alien granted conditional entry pursuant to § 203(a)(7) of the INA as in effect prior to April 1, 1980;
(g) an alien who is a Cuban or Haitian entrant as defined in § 501(e) of the Refugee Education Assistance Act of 1980; or
(h) an alien who (or whose child or parent) has been battered or subjected to extreme cruelty in the United States and otherwise satisfies the requirement so § 431 (c) of the Act.
Applicant must provide verification of citizenship/residency status (e.g. birth certificate, resident alien card, etc) with submission of Final Application Packet.
Adopted October 4, 2010

III. PROGRAMS BENEFITS & LEVELS OF ASSISTANCE

The FHAP provides down payment and closing cost assistance to eligible applicants. Applicants will fall into one of three income categories, Moderate, Low, or Very Low (See FHAP Income Limits/Fact Sheet). Applicants in each income category will receive a different level of assistance. The maximum grant amount for all levels of assistance shall be limited to $15,000.
A. Moderate Income Basic Program Benefits
Applicants in the Moderate Income category will receive the basic program assistance level.
1. Down Payment Assistance is ½ of the FHA minimum down payment; currently 1.75% of the sales price.
Total Sales Price
X
½ of FHA Minimum
(Currently 1.75%)
=
Down Payment Assistance
2. Closing Cost Assistance is up to $5,000 of normal and customary buyer’s closing cost. Closing cost assistance will be reduced for FHAP non-allowables and when closing cost assistance plus seller contributions and/or gift funds will be greater than buyer’s total settlement charges.
Buyer’s Total Settlement Charges
Less Seller Concessions and Gift Funds
Less FHAP Non-allowables
If greater than or equal to $5,000, CCA = $5,000
Buyers Total Settlement Charges
Less Seller Concessions and Gift Funds
Less FHAP non-allowables
If less than $5,000, CCA = balance amount

B. Low Income Program Benefits

Applicants in the Low Income category will receive basic program assistance and Principal Reduction Assistance.
1. Down Payment Assistance: same as above. LEVELS OF ASSISTANCE VERY LOW INCOME 0-50% of AMI LOW INCOME 50-60% of AMI MODERATE 60 -80% of AMI Down Payment Assistance ½ of FHA Minimum ½ of FHA Minimum ½ of FHA Minimum Closing Cost Assistance up to $5,000 up to $5,000 up to $5,000 Principal Reduction Assistance $8,000 $3,000 $0 Location Incentive TRAIN areas $1,500 $1,500 $1,500
Adopted October 4, 2010

2. Closing Cost Assistance: same as above.
3. Low Income applicants will receive $3,000 in Principal Reduction Assistance. Principal Reduction Assistance must be used to reduce the applicant’s loan amount and may not be used to subsidize any other expenses.
C. Very Low Income Program Benefits
When HOME funds are not available, applicants in the Very Low Income category will receive the following assistance.
1. Down Payment Assistance: same as above.
2. Closing Cost: same as above.
3. Very Low Income applicants will receive $8,000 in Principal Reduction Assistance. Principal Reduction Assistance must be used to reduce the applicant’s loan amount and may not be used to subsidize any other expenses.
D. Target Neighborhoods Incentive
Applicants in all eligible income levels purchasing properties in the City’s Targeted Reinvestment And Improvement Neighborhoods (TRAIN) area are eligible for an additional $1,500 in Principal Reduction Assistance.