Housing Authority of the City of Colorado Springs
831 S. Nevada Ave
P.O. Box 1575, MC 1490
Colorado Springs, CO 80901-1575 
719-387-6700; Fax - 719-632-7807; TDD - 800-659-3656

Down Payment Assistance Program Procedures - 2 pages – Updated 2/16/2006

To all lenders and Realtors:

All loans must be approved by our Loan Review Committee. They meet once a month (the third Thursday of the month). However, the homeownership office needs all information that will be reviewed by the board at least 7 days earlier so the information can be put in the packets to be picked up for review before the committee meeting. What this means is that it is more difficult for us to do ‘rush’ loans.

Before a meeting is set up with your client, the lender will need to provide:

v     a pre-approval or pre-qualification letter stating:

(1)   how much assistance is being requested (i.e., $2,500, $5,000, $7,500, $10,000);

(2)   how many are going to be living in the home;

(3)   ratios;

(4)   income (all income must be considered);

v     a copy of the1003;

v     a copy of the GFE;

v     current pay stubs (and income information on spouses that may not be on the 1^st mortgage but they are going to be living in the property; child support; SSI; roommate income and any other income which has to be considered by the Housing Authority, but the lender might not be using to qualify).

v     copy of the contract, if there is one (it would be better to get your clients in the ‘pre-approval’ stage rather than the ‘waiting to close’ stage!)

v     Credit report - all three bureaus are required and I need the complete report

As much of this information as possible is needed, as well as a meeting with the client at least 7 days before the board meets, because the board picks up the applications with their board packets the Thursday before each board meeting. This information can be faxed to 635-6046, attention Judy.

The loan committee looks at:

v     credit scores – need all scores 600 and above. (scores below 600 will need good compensating factors for them to be considered.)

v     Ratios – The board will need a good reason to accept front end ratios above 32% and back end ratios above 45%, even though automated DE underwriting programs seem to be allowing very high ratios, on either end.

v     Rent payment vs. new housing payment – They will be looking at increases 1 ½ times or below (i.e., currently paying $400/mo, 1 ½ times would be $600/mo for total new payment). Anything above 1 ½ times will require an explanation as to how they plan to make the larger payment, especially if they don’t have a history of savings.

v     Job stability – at least 2 years in the same line of work.

We also require:

v     at least a $1,000.00 investment by the borrower (must be own money, not a gift);

v     Attendance at a HUD approved 1^st time homebuyer workshop and a copy of the certificate before closing;

v     Income within our guidelines for the size of the household;

v     Sales price within current guidelines

v     Must be first time homebuyer (or not have owned a home or received benefits from homeownership for at least 3 years)

v     Bankruptcies must be at least 2 years old

Program guidelines:

v     First mortgage must be considered ‘A’ paper;

v     First mortgage must be fixed rate; no ARMs, interest-only or balloon products.

v     No discount points allowed to be paid with Housing Authority funds. If the borrower wants to permanently buy the rate down, the fee can only be paid by the seller or the borrower –if it is by the borrower, it must be in addition to the borrower’s $1,000 investment;

v     Debt cannot be paid off with Housing Authority funds;

v     Maximum loan amount is $10,000, minimum loan amount is $2,500. Interest rate is 1.5% amortized over 30 years;

v     Property cannot be manufactured housing – Modular housing is looked at on a case by case basis (i.e., must be on permanent foundation, not tied-down, and must taped and textured, not just paneling on studs);

v     Townhomes and condos are acceptable;

v     Our program will work in conjunction with CHFA’s MRB FirstStep Program (the one with the lowest interest rate and no assistance from CHFA) and El Paso County Bond Program, as well as FHA, VA conforming Conventional and lender portfolio ‘A’ paper products

v     On the issue of aliens – the Housing Authority requires resident alien status (green card). A work visa is not enough. We do not accept ITINs.

We will also need a full hard copy of the appraisal (including the 4 page ‘Notice to the Lender’, and the 1 page ‘Notice to the Homebuyer’ if applicable), as well as the first 2 pages when you fax the closing information sheet, and if there is a home inspection done, a full copy of the inspection is also required, not just the summary pages.

This program is a wonderful program for first time homebuyers that have good credit but just haven’t been able to save enough for their down payment.

Please call 387-6714 if you have any questions or concerns.

We look forward to providing down payment assistance to your qualified borrowers, just as we have in the past, for a long time to come.