San Benito Home Program

First-Time Homebuyer Assistance

Current Funding Sources

Participant Eligibility Requirements

Property Eligibility Requirements

Application Process

History of Home Program

The San Benito Home Program is designed to assist low-to-moderate income families (80% of the median income) with the purchase of decent, safe, and sanitary housing by providing financial assistance for down payment and closing costs. Now the San Benito Home Program also offers assistance for major home repairs. Currently, the Owner Occupied Rehabilitation Program is targeting the elderly residents (62 years or older) of the community. Applications the first-time homebuyer assistance program are available now. However, applications for the Owner Occupied Rehabilitation Program will be available beginning March 1, 2006.

The City of San Benito in collaboration with First National Bank was approved for $100,000 from the Federal Home Loan Bank of Dallas (FHLB) to assist families with up to $4,000 of assistance. These funds are now available for low-to-moderate income households who are looking to purchase a home in San Benito and are in the 60% income amounts of the current median income. (See the income limits table).

Current Funding Sources

The City of San Benito was recently awarded $300,000 from the Texas Department of Housing and Community Affairs (TDHCA) to assists first-time homebuyers with down payment and closing costs. Such funds should become available by this December. Additionally, the San Benito Community Development will make Community Development Block Grant (CDBG) funds available to augment the San Benito HOME Program.

SOURCE	YEAR	AMOUNT	BALANCE
TDHCA	2001	300,000	0
TDHCA	2003	300,000	0
TDHCA	2004	167,516	13,523
TDHCA	2005	300,000	300,000
CDBG	2001	32,000	0
CDBG	2003	50,000	0
CDBG	2004	50,000	4,350
CDBG	2005	50,004	50,004
FHLB	2004	100,000	38,000
	TOTAL	1,349,520	405,877

All of these resources shall be available as no-interest deferred loans and would be forgivable at the end of an affordability period of five years, if CDBG or FHLB funds are granted, or ten years, if TDHCA funds are granted. However, should the owner decide to refinance, sell, or pay off the first lien mortgage before the 5-year or 10-year provisionary period expires, then a prorated share of the assistance will be due and payable at the time of such occurrence. The City of San Benito will also continue to credit the owner for building permits and all inspection fees for the new construction of their home.

Another partnering resource is the San Benito Housing Authority’s Section 8 Home Choice Voucher (HCV). With this voucher a very-low income family is given the opportunity to become first-time homeowners. There are some requirements set forth by the housing authority. Please review the eligibility requirements for this program at HCV Slide Show. You can also contact the San Benito Housing Authority at (956) 399-7501 for more details on this program.

The San Benito Home Program operates in accordance with all applicable rules and regulations of the U. S. Department of Housing and Urban Development (HUD) and the Texas Department of Housing and Community Affairs (TDHCA) and the City of San Benito’s jurisdictional area. The program offers financial assistance to qualified applicants who meet the Participant Eligibility Requirements and Property Requirements. To be eligible for assistance, all applicants must meet the following criteria:

Top of Page

Participant Eligibility Requirements

· The City of San Benito must ensure that the applicants qualify as low-income households. To qualify as a low-income household the combined annual (gross) income of the applicant and all other persons residing in the household and who are over the age of eighteen (18) years, cannot exceed 80% of the area median income adjusted for family size as defined in 24 CFR Part 813 (Section 8 Housing Programs). This low-income status must be valid at the time of initial occupancy or when the HOME funds are invested, whichever is later. Please click 2005 Income Limits for more information on the amounts. (Current for a family household of 4 members, 80% of the median income is $33,900 annually).

· The Applicant must agree to purchase the property through a HOME program approved form of ownership or membership in a condominium or cooperative home subject only to a mortgage, deed of trust, or other debt instrument approved by the City of San Benito.

· Any low-income person or household who has not owned a home within the past three (3) years can apply. However, low-income applicants who have owned a home within the past (3) years may be able to participate if they meet the HOME regulations definition of a “displaced homemaker”, a “single parent” if former spouse owns the homestead, or an individual who owned a dwelling unit that was not affixed to a permanent foundation or was not in compliance with state, local, or model building codes.

· Additionally, each applicant will have to successfully complete a homebuyer education program before assistance can be awarded. A homebuyer education program will be offered on a scheduled basis (minimally once every six weeks.)

Top of Page

Property Eligibility Requirements

· Homebuyer assistance can only be used for a single-family dwelling located within the city limits of the City of San Benito or targeted surrounding subdivisions (call our office for details). A single-family dwelling can include a manufactured home, a condominium, or a cooperative unit.

· The dwelling must be in compliance with Texas Minimum New and Rehabilitation Construction Standards (or FHA minimum standards), local building codes, and zoning ordinances. The City of San Benito will conduct necessary inspections to ensure that all standards are met. If necessary, the homebuyer will be notified of deficiencies and items that require repair.

· The purchased property cannot be valued at more than 95% of the median purchase price as specified in Section 203 (b) of HUD’s FHA single-family mortgage insurance program.

· Any housing unit built before 1978 will be inspected for hazards associated with the presence of lead-based paint. Housing units that may contain lead-based paint will not be eligible for purchase unless the lead-based paint is abated. The City of San Benito must provide the homebuyer of such a unit with a Lead Based Paint Notification brochure.

· Housing units located in an area where Federal Assistance is not permitted by the Coastal Barriers Resource Act or within runway clear zones of either a civil or military airport are not eligible properties.

· Homeowners insurance in the amount adequate to cover the fair market replacement value of the dwelling shall be required throughout the loan period. If the property is located in a Flood Zone area, a flood insurance policy will be required.

Top of Page

Application Process

The City of San Benito shall make known to all sectors of the community, as set forth in the Affirmative Marketing Activities section, the location and times of application.

The City of San Benito will accept applications in person at the San Benito Home Program’s main office located at 210 E. Heywood, San Benito, Texas. Pre-qualification applications will be accepted on a continual basis.

At appointment setup, applicant will be informed of a list of required documents needed before final approval can be granted. The list includes, but is not limited to, Verification of Employment, Income Verification, and Proof of first-time homebuyer status. Information of the mortgage lending process and a list of participating mortgage lenders will be provided to each applicant. If home visits are needed, due to transportation difficulties, arrangements will be made.

All eligible applications will be selected based on a “first come, first serve” method, based on the date of the pre-approval letter from the mortgage lender. The City of San Benito desires to meet its targeted goals of: a minimum of four (4) families between 0% to 30% of AMFI; a minimum of four (4) families between 31% to 50% of AMFI; a minimum of seven (7) families between 51% to 60% of AMFI; and a minimum of two (2) families between 61% to 80% of AMFI.

After the prospective applicant has located a home, applicant will begin negotiating with a financial lending institution. The prospective applicant will complete application materials, provide necessary proof of income and other information as required in order to become eligible for program services.

Top of Page

History of Home Program

Funded by a Home Buyer Assistance grant from the Texas Department of Housing and Community Affairs, the City of San Benito initiated its Home Program on April 2002. San Benito exhausted its first grant of $300,000 and applied for a second grant in the amount of $300,000 in the spring of 2003. The city had 18 months to exhaust the current grant. However, due to the huge response from the public, funds were expended in a mere seven months. The San Benito HOME Program continues to administer grants from the Texas Department of Housing and Community Affairs, Community Development Block Grants, and the Federal Home Loan Bank of Dallas.

The following tables will show the income targets proposed and the actual number of families assisted in previous grants; plus the proposed number of families in the current grant of 2005.

2001 Home Grant ($332,000)

Income Targets	Proposed Number of Units	Actual Number of Units
31 – 50% AMFI	9	13 (1 with disabilities)
51 – 60% AMFI	9	9
61 – 80% AMFI	12	12 (2 with disabilities)
Total Number of Units	30 (3 with disabilities)	34 (3 with disabilities)

2003 Home Grant ($350,000)

Income Targets	Proposed Number of Units	Actual Number of Units
31 – 40% AMFI	4	8
41 – 50% AMFI	5	12
51 – 60% AMFI	9	5
61 – 80% AMFI	12	12
Total Number of Units	30	37

2004 Home Grant ($317,516)

Income Targets	Proposed Number of Units	Actual Number of Units
Below 30% AMFI	4	2
31 – 50% AMFI	4	13
51 – 60% AMFI	7	10
61 – 80% AMFI	2	4
Total Number of Units	17	29

2005 Home Grant ($350,004)

Income Targets	Proposed Number of Units	Actual Number of Units
Below 30% AMFI	5	0
31 – 50% AMFI	15	0
51 – 60% AMFI	5	0
61 – 80% AMFI	5	0
Total Number of Units	30	0

Top of Page

Last Update: January 25, 2006