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  • Borrower (S) Commitment Letter: Revised March 2016

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    Noor Azah Adam
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    This document is a commitment letter from a lender to provide a borrower with a loan of $X at 0% interest for down payment assistance. The key terms are: 1) The loan is for $X and has a 0% interest rate. 2) The loan must be repaid within 45 days if the home is sold, no longer the borrower's primary residence, or is refinanced. 3) The loan is forgivable at a rate of 20% per year over 5 years as long as the home remains the borrower's primary residence.

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    loan commitment letter

    Original Title

    borrower-loan-commitment

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    This document is a commitment letter from a lender to provide a borrower with a loan of $X at 0% interest for down payment assistance. The key terms are: 1) The loan is for $X and has a 0% interest rate. 2) The loan must be repaid within 45 days if the home is sold, no longer the borrower's primary residence, or is refinanced. 3) The loan is forgivable at a rate of 20% per year over 5 years as long as the home remains the borrower's primary residence.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    62 views4 pages

    Borrower (S) Commitment Letter: Revised March 2016

    Uploaded by

    Noor Azah Adam
    This document is a commitment letter from a lender to provide a borrower with a loan of $X at 0% interest for down payment assistance. The key terms are: 1) The loan is for $X and has a 0% interest rate. 2) The loan must be repaid within 45 days if the home is sold, no longer the borrower's primary residence, or is refinanced. 3) The loan is forgivable at a rate of 20% per year over 5 years as long as the home remains the borrower's primary residence.

    Copyright:

    © All Rights Reserved
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    of 4

    BORROWER(S) COMMITMENT LETTER

    DATE:

    RE: Loan No.:

    DEAR BORROWER(S):

    (“First Trust Lender”), on behalf of the District of


    Columbia Housing Finance Agency (the “Agency”), has approved your application for a DC
    Open Doors Program down payment assistance loan (the “Loan”) to be secured by a
    subordinate lien (as required by the Agency) on the property identified above, subject to the
    following terms and conditions of this commitment:

    1. BORROWER(S): ,

    2. AMOUNT OF LOAN: The amount of the Loan to be advanced at closing is


    $ .

    3. INTEREST RATE: (0 %) per annum.

    4. TERM: The term of the Loan is the earlier date of the sale of the Property, the
    date the Property ceases to be your principal place of residence, the date you
    refinance the Loan, or 60 months from the closing date of the Loan.

    5. PAYMENTS: You will pay the Principal Balance within forty-five (45) days of
    the date of the sale of the Property, the date the Property ceases to be your
    principal place of residence, or the date you refinance the Loan. The terms of the
    Agency’s DC Open Doors Program stipulate that your Loan is forgivable at a rate
    of twenty percent (20%) per year from the settlement date of the Loan.

    6. SETTLEMENT: The Loan shall close on or before the lock expiration provided
    by the First Trust Lender; otherwise, this commitment letter will terminate.
    Time is of the essence in this commitment.

    The Loan must close at the same time as the first trust loan from your First
    Trust Lender. You will make arrangements with the First Trust Lender for
    closing both loans.

    Page 1 of 4
    Revised March 2016
    7. CLOSING EXPENSES: You will be responsible for payment of any and all
    closing costs that are not covered by the Loan, including any fees for recording
    the loan document(s).

    8. FORM OF SUBORDINATE NOTE AND SUBORDINATE DEED OF TRUST:


    The Agency’s form of Subordinate Deed of Trust and Subordinate Deed of Trust
    Note will be used to evidence and secure the Loan. Please note that there is no
    prepayment penalty.

    9. FIRE AND EXTENDED COVERAGE INSURANCE: As required by First Trust


    Lender.

    10. FEDERAL FLOOD INSURANCE: As required by First Trust Lender.

    11. CONTINGENT COMMITMENT: This commitment is contingent upon your


    accepting the first mortgage commitment from the First Trust Lender. This
    commitment will be null and void if you fail to accept the first trust commitment.
    If you or the First Trust Lender terminates the first trust commitment for any
    reason, or if the first trust loan fails to close for any reason, this commitment will
    terminate.

    12. HOME PROGRAM REQUIREMENTS (Check Box if Applicable)

    □ Your Loan is funded by the Home Program, and all applicable HOME
    Program requirements contained in Title 24 of the Code of Federal
    Regulations (the “CFR”) Part 92 shall be applicable and made a part of this
    commitment. Such requirements shall include, but are not limited to the
    following:

    A. You must qualify as low-income with an annual income not exceeding


    80 percent (80%) of the area median income.
    B. All HOME Program requirements shall be applicable to you for a
    period of time called the “period of affordability,” based upon the
    amount of HOME assistance received as follows:

    • Under $15,000, the minimum period of affordability is five (5)


    years.
    • $15,000 to $40,000, the minimum period of affordability is ten (10)
    years.

    • Over $40,000, the minimum period of affordability is fifteen (15)


    years.

    Page 2 of 4
    Revised March 2016
    The period of affordability starts on the date the HOME Program
    Subordinate Deed of Trust Note is executed and will be monitored annually.

    The original amount of HOME funds received at the initial purchase will be
    subject to full recapture and payable in full to Subordinate Lender if you,
    within the applicable period of affordability described in paragraph (B)
    above: (1) sell the Property funded in whole or in part with HOME Program
    funds, (2) cease to occupy the Property as your principal place of residence,
    or (3) refinance the Property.

    * * *
    A facsimile copy of this commitment letter signed by the First Trust Lender on behalf
    of the Agency shall have the effect of a signed original. You should indicate your acceptance
    of this commitment by signing one copy and returning an original to the First Trust Lender
    within ten (10) days of the date of this commitment letter.

    This commitment is made in reliance upon information provided to the First Trust Lender
    by you in your request for the Loan and in the supporting representations and materials. The
    First Trust Lender’s obligation to proceed to closing is subject to the condition that all such
    information is true and correct as of the closing date. The First Trust Lender will be entitled to
    cancel this commitment and to retain any monies paid to it if there is any misrepresentation or
    inaccuracy in such information or if you fail to include material information with your
    application.

    If you have any questions concerning this commitment, please contact Deborah Jones
    at (202) 777-1652 or at [email protected]

    Sincerely yours,

    Lisa G. Hensley
    Director, Single Family Programs

    Page 3 of 4
    Revised March 2016
    The undersigned Borrower(s) accepts this commitment and all the terms and conditions found
    herein.

    Date: Borrower:
    Printed Name:

    Date: Borrower:
    Printed Name:

    Page 4 of 4
    Revised March 2016

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