Down Payment Assistance

This page is for people currently in the Down Payment Assistance Program who want to learn how the program works.

Applications are Closed

This program is closed. We are not taking new applications. This page is only for people who have already applied.

About the Program

The Down Payment Assistance Program is helping 45 families buy a home.

This program helps families:

  • With low or moderate incomes
  • Living in Tooele County
  • Who are first-time home buyers

This program helps with:

  • Up to $10,000 in a loan or grant

This program cannot be used for:

  • Cash back
  • Realtor’s commissions
  • Buying down points on your loan

Eligible Properties

You can buy any of these homes:

  • A single-family home
  • A manufactured home
  • One unit in a larger building

You can also buy a home without owning the land if:

  • The home is on a permanent foundation, and
  • You have the right to live on the land for at 40 years or more.

You might not be able to buy a new home:

  • The home must have had at least one owner who lived in it before.
  • If the home is brand new, it must be approved by the Housing Authority first.

You might not be able to buy a home used as a rental:

  • If you are renting the home right now, you can buy it.
  • If the owner lived in the home while renting it out, you can buy it.
  • If the home was only rented to other people, it must be empty for 6 months before you can buy it.

Program Process

Applications are closed. These steps are only for people already in the program.

1) Before You Make an Offer

If your application was approved, you must complete these steps before you make an offer on a home:

  • Take an approved First-Time Home Buyer class.
  • Send your class certificate to the Housing Authority.
  • Your realter must attend an orientation meeting.
  • Your realtor must sign a form saying they attended the orientation and understand the program rules.

2) Before You Close

  • Use a realtor to help you find a home.
  • Make an offer on the home.
  • At least 15 business days before loan closing: Your realtor, lender, or title company must fax, email or hand-deliver these documents to the Housing Authority:
    • Executed Real Estate Purchase Contract
    • Home Appraisal
    • Preliminary Title Report
    • Proof of Homeowner’s Insurance
    • Income/Mortgage Analysis or DU Findings (from your lender)
    • Pre-approval letter (from your lender)
    • Good Faith Estimate (from your lender)
  • During those 15 business days, the Housing Authority will schedule an inspection with your realter or lender.
  • The Housing Authority will complete these inspections:
    • Housing Quality Standards (HQS) inspection
    • Lead-based paint inspection
  • If the home passes inspection, the Housing Authority will send a check to the title company before closing.

3) After You Close

  • You will close on the home with the seller, lender, title company, and your realtor.
  • After closing, the lender or title company must send these documents to the Housing Authority:
    • Settlement statements showing how the grant funds were used
    • Lender affidavit
    • A copy of the recorded First Trust Deed
    • A copy of the Title Policy on the First Trust Deed
    • Promissory Note (signed and notarized)
    • Trust Deed (signed and notarized)
    • Notice of Default (signed and notarized)
    • Other documents (as needed)

Postponing Scheduled Closing Date

The Housing Authority may delay your closing date for these reasons:

  • Not enough time to process the check request
  • Scheduling issues
  • Missing or incomplete paperwork
  • False or changed documents
  • The home did not pass the inspections

Closeout Due to Inactivity

If you do not turn in any paperwork or take any steps for 60 days, the Housing Authority may close your file. You will no longer be part of the program. Normally, you would need to reapply, but applications are currently closed.

Financing Requirements

You can use this program on a loan through:

  • Conventional Financing
  • Federal Housing Administration
  • Veteran Affairs

These loans are allowed:

  • Fixed-rate

These loans are not allowed:

  • Variable-rate
  • Adjustable rate
  • Interest-only
  • Balloon payment
  • 80/20 split

Signing requirements:

  • You must qualify using your own credit (no co-signers).
  • Everyone who applied with you for the Down Payment Assistant Program must also be listed on the loan.

Your Contribution:

  • You must put in at least $1,000 of your own money, OR
  • You may use sweat equity (your own work) if you are in the Mutual Self Help Program

Pay Back Requirements

Refinancing:

When you refinance your home, you may choose to pay off this loan.

Pay Back Before 5 Years:

You must pay back the full loan if you sell your home, change the title, refinance, or move within the first 5 years.

Pay Back After 5 Years:

You only need to pay back 25% of the loan if you stay in the home more than 5 years. The rest is forgiven (you do not need to pay it back).

Immediate Pay Back:

You may have to pay back the full loan right away if:

  • You sell the home in the first 5 years.
  • You give the home to someone else.
  • You change the name on the title without approval.
  • You rent out the home.
  • You move out of the home.
  • You do not use the home as your main home.

If you need to do any of these things, contact the Housing Authority first.

Loan Position

Second Position:

This program is second in line to be paid. Your main mortgage is paid first. This loan is paid after that.

Changing Loan Position (Subordination):

Your lender might ask the Housing Authority to move this loan to a lower position. We will only do that if you have a serious problem, such as:

  • Job loss
  • Your income went down
  • Major emergencies
  • Refinancing will remove high fees
  • Your interest rate will drop by 1% or more

Applying for a Subordination

If you need to move this loan to a lower position:

  • Call the Housing Authority to set up a meeting.
  • Bring these documents to your meeting:
    • A letter that says why you need the subordination
    • Good Faith Estimate
    • Letter from lender saying it is a streamline refinance (no cash back)
    • Mortgage statement
    • Papers showing the new loan amount
    • Proof that your interest rate will drop by 1% or more and will stay fixed-rate
    • Income Analysis (MCAW) worksheet
    • 1003 loan application
  • The Housing Authority will review your documents and decide within 10 business days.
  • If you are approved, the Housing Authority will sign a subordination agreement. It is good for 30 days.
  • If anything changes, you must start again.

Appeal (Ask for A Review)

If you think a decision is wrong, you can ask the Housing Authority to look at it again. The Executive Director will meet with you and other people involved to review the decision. This meeting is informal.

Program Note

This program is funded through the Community Development Block Grant (CDBG). (This does not change how you apply.)