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' Introduction <br />3 <br />The First-time Homebuyer Programs of Orange County and other local housing non-profit <br />organizations were designed to address the following barriers to homeownership for low income <br />families that exist in our community. These include: <br />1. High property costs; <br />2. Insufficient funds for downpayment; <br />3. Insufficient funds for closing costs; <br />4. High existing debts and poor credit; and the <br />5. Need for property repairs. <br />Thus, the primary objective of first-time homebuyer programs is to overcome these barriers to <br />increase the level of homeownership among low-income households while increasing the <br />number of affordable housing units in the community. (Low-income households is defined as <br />families earning 80% or less of area median income.) This report looks specifically at how these <br />programs can not only increase the number of affordable housing units in the community but <br />also identifies strategies for maintaining long-term affordability. The. report outline is as follows. <br />A. Definitions <br />B. Current County Programs <br />C. Available Strategies <br />D. Concluding Comments <br />Definitions <br />Affordability -Affordability to the original purchaser and subsequent purchaser is a function of <br />property value changes, income changes, and the prevailing interest rates or the cost of money. <br />Traditionally, the U.S. Department of Housing and Urban Development (HUD) has determined <br />that affordability means that the actual principal, interest, property taxes, and insurance (PITI) <br />for the purchase cannot exceed more than 30 `percent of the family's monthly income. This <br />definition means that different properties will be affordable to .different families depending on <br />.their monthly income. For example, a family at 80% of median income may be able to afford a <br />home that is not affordable to a family at 60% of median income. Thus, each prospective <br />family's income will need to be examined in relation to the sales price of the home to be <br />purchased under this program. <br />First-time homebuyer - A first-time homebuyer for the purposes of this program is any low <br />income household .that has not owned a home within the past three (3) years including <br />households living in manufactured housing not permanently affixed to a foundation, or owner- <br />occupants of homes not feasible for renovation. <br />