Program Benefits

The East San Fernando Valley Homeownership Program provides up to $75,000 in down payment assistance to help low- and moderate-income first-time home buyers purchase a home in the East San Fernando Valley. The E-HOP assistance is a deferred repayment ("silent") loan that requires no monthly payment for 45 years.  The E-HOP loan is a subordinate (junior) loan to the home buyer's Conventional or FHA first mortgage.  E-HOP is sponsored by the Community Redevelopment Agency of Los Angeles.

Eligible Areas & Homes

E-HOP can be used to help purchase a home in the City of Los Angeles areas of the East San Fernando Valley including Sun Valley, Panorama City, and portions of Van Nuys, Mission Hills, North Hills, Pacoima and Sylmar.  Specifically the program is an available in Los Angeles City Council Districts 6 and 7.  To verify if a particular address is located in City Council District 6 or 7 go to www.LACITY.org. Eligible properties include single-family homes, town homes and condominiums.  Privately owned properties as well as bank-owned (REO) and approved "short sale" homes are eligible for purchase using the E-HOP program.

Terms and Conditions of East Valley HOP Loan

The East Valley HOP loan is subordinate to the first mortgage and requires no monthly payment for 45 years.  As such, this loan does not impact the applicant’s debt-to-income ratio so it acts to boost their home buying power.  The loan is due and payable in 45 years or when the home is sold or if the owner refinances the first mortgage and takes cash out. 

The East Valley HOP loan carries no interest charges.  However, when the loan is repaid the borrower will owe back the unpaid principal balance plus a share of the home’s appreciated equity equal to the percentage of assistance that E-HOP loan provided at the time home was purchased.  During years 6 through 10 of the loan term, the principal balance is forgiven 10% each year so that by the end of the tenth year, the original principal balance has been reduced by 50%.  If you or your lender wish to receive a sample copy of the E-HOP loan document please send an e-mail to Matt@GoHomeLA.com

Program Income and Housing Payment Limits

Applicants to the East Valley HOP program must be first-time home buyers meaning they have not owned a home in the last three years.  They must also be either low- or moderate-income based on household size.  The chart below provides the current household income limits:

Please note that the household income may be different than the applicant's income.  In other words, the actual applicant may fall within the income limits but if other adult household members have income it will be counted as part of the overall household income which may disqualify the applicant.   Household income determinations are based on gross income (before taxes and other deductions) and include almost all sources of income available to the household.

Once an applicant has been determined to have either a Low-Income or Moderate-Income household, the next consideration is the maximum permitted house payment.  This maximum permitted house payment is generally lower than the maximum payment that would be permitted by conventional mortgage underwriting guidelines, especially for Low-Income Households.

The maximum permitted house payment is based on the number of bedrooms in the home to be purchased and must include the mortgage, property taxes, hazard insurance, HOA fess (if applicable) and a utility allowance that ranges between $26 and $172.  The following table provides the current maximum permitted house payment under the E-HOP program:

There is a special provision available to applicants with household incomes between 71% and 100% of the Low-Income Household Income limit.  These applicants are permitted to have a maximum household payment equal to 30% of their actual household income.  This may make it possible for low-income households whose income is in the higher range to make effective use of the E-HOP program.   A similar flexibility exists for applicants with household incomes between 71% and 100% of the Moderate-Income limits, these applicants are allowed to expend up to 35% of their actual household income. 

Special Requirement for Single-Person Households

Please note that in accordance with state redevelopment law requirements for the use of local tax-increment funds (the source of funding for the East Valley HOP Program) in home ownership programs; single-person households are limited to homes with zero (0), one (1) and two (2) bedrooms only.

Additional Applicant Eligibility Requirements

In addition to meeting the requirements described above, applicants to the E-HOP program must comply with the following:

You must be able to document all income and asset sources with bank statements, three years of tax returns, pay stubs, W2 forms and related documents.

The middle FICO credit scores for all applicants must be at least 620. 

All applicants must be legal residences of the United States.

Prior to the closing, applicants must complete an approved home buyer education course that lasts at least three hours.  You may register for an approved course at the www.EastValleyHOP.org website.

The CRA/LA East Valley HOP Program requires that the applicant expend at least 28% of their gross monthly income on their new housing cost (inclusive of mortgage, taxes, insurance, HOA if applicable and utility allowance).  

The applicant's total debt-to-income ratio ("back-end" ratio) may not exceed 55% of their gross monthly income.

Careful attention is paid to the applicant's household size and membership.  Applicants who list household members on their E-HOP application who are not currently part of the applicant's household but who will live with them in their new home will be required to provide financial records and other documentation to substantiate that this person(s) will actually be part of the new household.  Additionally, if a person was claimed as a dependent on the applicant's prior-year tax return but is NOT included as a household member on the East Valley HOP application, written explanations supported by documentation (such as a signed lease agreement or death certificates) will be required that supports that this person(s) is no longer part of the household.

In determining an applicant's debt-to-income ratio, the East Valley HOP program will include all debt listed on the applicant's credit report including co-signed debt where the applicant has demonstrated that a third part is actually liable for the debt and is successfully making payments.  This is an important variance from conventional underwriting guidelines and your lender must take this into consideration when determining your loan approval and eligibility.

If you intend to utilize gift funds as part of the transaction, please note that gift funds must be both sourced and seasoned by the gift provider.  Therefore, the gift provider may be required to provide up to six months of bank statements.  This is a substantial variation from conventional underwriting guidelines that your lender must take into consideration.

Finally, you must meet the underwriting requirements of your first mortgage lender.  The first mortgage loan provided by your lender must be a 30-year fixed rate loan with no pre-payment penalties.  The East Valley HOP program will generally follow the same underwriting requirements (with the exceptions noted above) as your first mortgage lender, however, applicants whose income, credit and asset profile only meets the minimum requirements of the first mortgage lender may not meet the requirements of the East Valley HOP program.

Reserving Funds for the East Valley HOP Program

You can reserve funds for the East Valley HOP program once you have a fully executed purchase agreement for an eligible property.  Please fax the contract to the Lender Coordinator at (562) 724-6080.  The reservation will be valid for 90 days and can be extended if necessary.

Pre-Approval for the East Valley HOP Program

CRA/LA does not provide pre-approvals for the East Valley HOP program.  However, with the assistance of your real estate agent and your first mortgage lender and after carefully reviewing these program guidelines you may conclude on your own that you might be eligible for the program.  Therefore, you can inform home sellers that you intend to use the E-HOP loan program as part of your overall financing for the purchase of their home.  However, it is recommend that you also explain to all parties involved including the home seller that you will not receive final and official loan approval for the East Valley HOP program from CRA/LA until approximately two months after you have opened up escrow on your home purchase.  Therefore, you should not release your financing contingencies until you have received this formal loan approval from CRA/LA. 

Loan Approval and Closing Process

The CRA/LA advises applicants that the total time to approve, process and fund the East Valley HOP program loan may be as much as three months.  Shorter time frames may be possible (but not less than 60 days) and in some instances longer time periods may be required.  The following outline is provided to help you understand the loan approval and closing process for the E-HOP Program.

Loan Submission - Your first mortgage lender must prepare and submit a loan package in accordance with the E-HOP program requirements to the Lender Coordinator.  You or your lender may request an E-HOP Application and Submission package which includes the application form, disclosure and file stacking order by sending an e-mail to Matt@GoHomeLA.com.  Normally your lender will be able to submit this package 7-10 days after you have opened escrow.  You should encourage your lender to submit the package as soon as possible.

Initial Loan Review – The Lender Coordinator will forward your E-HOP loan package to the CRA/LA's consultant.  The consultant’s review of your loan file normally takes between 3-6 weeks depending on the eligibility and underwriting issues identified by the consultant.  At the end of this process you will receive initial feedback as to your possible eligibility for the program.  However, this should not be considered final loan approval and you should not release your loan contingencies based on this feedback.

Final Loan Review - The CRA/LA's consultant will forward their recommendations to the CRA/LA for review and approval or rejection.  This final review process can take between 1-3 weeks depending on the complexity of this issues presented in the loan file and the overall workload of the CRA/LA at that time. If your loan is approved you will receive a copy of the formal loan approval letter. 

Loan Document Signing - Once your loan has been approved, the CRA/LA's consultant will prepare the loan documents for signature by the applicant and CRA/LA.  The process of preparing, routing and signing the loan documents by all parties can take up to two weeks.

Loan Funding - Once the loan documents have been signed by all parties a check request will be submitted to the CRA/LA Accounting Department.  The review and processing of this request may take between 3-4 weeks.  Once the check has been approved for release it will be mailed to the Title and/or Escrow Company overseeing your purchase contract.  The CRA/LA has no control over the delivery time frame of the US Postal Service but it is reasonable expect as much as five business days.  Since the CRA/LA does not wire funds or provide certified checks it is possible that the bank for the Title Company may place a hold on the CRA/LA check for up to 10 business days or longer, depending on their bank policy.  Once the hold (if any) has been released your purchase escrow can close.

Selecting a Lender

You may use any lender you chose.  However, it is important to select a lender that is willing and able to cooperate with the E-HOP loan program.  Not all lenders are able to accommodate the E-HOP subordinate financing with their first mortgages.  To obtain a list of lenders who have participated in the East Valley HOP program in the past, please send an e-mail to Matt@GoHomeLA.com

Appeals & Requests for Expedited Processing

The loan submission, review, approval and funding process described above can not be altered or expedited to accommodate a particular closing schedule.  Additionally, once a final determination regarding your application has been made by the CRA/LA there is no appeal process available. The determination is final.  Federal, state, and local government elected officials are unable to expedite the process described above or override decisions made by the CRA/LA with respect to your loan application.