Refinancing a Market Rate Unit with City Loan (Information for Homeowners)

An owner of a market rate unit should have their chosen real estate professionals contact the City at the start of the refinance process. The information below will help homeowners who have a market rate unit with a City loan understand their options. 

Options:

Borrowers who have a City loan and are looking to refinance may have a couple of options. Sometimes your options may be dependent on your Lender and/or your financial situation. 

  1. Payoff your City loan
  2. Request the City subordinate the City loan to your new Lender loan

City Payoff Request Process:

  • Connect your chosen real estate professionals with the City. Ask your real estate professionals to e-mail doris.tang@hayward-ca.gov as soon as possible to make a payoff request and ensure a timely close of escrow.
  • Provide Required Documents. Your real estate professionals will need to provide the Required Documents for Payoff Request.
  • Payoff Statement. Once the City has received the Required Documents, we will provide a Payoff Statement, summarizing the amount outstanding owed on the loan.
  • Pay the payoff amount to the City. The Escrow Officer will ensure the City is paid concurrently with the close of escrow, the amount outstanding on the Payoff Statement. 
  • Close.

Required Documents for Payoff Request:

Escrow Officer

Your Escrow Officer needs to provide the City with the documents below:

  • Prelim report
  • Payoff demand letter
  • Estimated Closing Settlement Statement
  • Prepaid shipping label to send reconveyance to escrow after receipt of payment.

City Subordination Request Process:

  • Connect your chosen real estate professionals with the City. Ask your real estate professionals to e-mail doris.tang@hayward-ca.gov as soon as possible to make a subordination request and ensure a timely close of escrow. If you choose not to payoff your City loan, the City will need to review and approval the terms of your refinance. Approval is at the discretion of the City.
  • Provide Required Documents. Your real estate professionals will need to provide the Required Documents for Subordination Request to the City for review.
  • Review Required Documents. The City requires a minimum of seven (7) business days once all Required Documents are received to review. This timeline is only an estimate and may be extended if applications are incomplete or the City requires additional information to evaluate your refinance request.
  • Refinance Request Response Letter. Once the City has finished its review of the Required Documents, we will provide a Refinance Request Response Letter approving or denying the refinance. If the refinance is denied, the City will provide an explanation of the denial.  
  • Subordination. The City will require a minimum of 15 business days from the date of refinance approval or from the date of Lender’s subordination request, whichever is later, to route the paperwork for signatures and deposit in escrow.
  • Deposit City documents in escrow. Once the City documents are signed, the City will deposit in escrow.
  • Close.

Required Documents for Subordination Request

Lender

Your Lender needs to provide the City with the documents below:

  • 1003 - signed by Borrowers
  • 1008
  • Credit Report
  • Loan Estimate (include City's Administrative Fee - see below)
  • Anticipated closing date of new First Lender Loan
  • Subordination request (if applicable - see below)
  • Vesting for trustor, trustee, and beneficiary of new First Lender Loan as it will appear on new First Lender Note and Deed of Trust (if subordination requested)

Escrow Officer

Your Escrow Officer needs to provide the City with the documents below:

  • Prelim report
  • Estimated Closing Settlement Statement (include City's Administrative Fee - see below)
  • Prepaid shipping label so City documents can be deposited directly into escrow

Proof of Property Insurance:

Homeowners with a City loan are required to maintain a standard all risk property insurance policy equal to the replacement value of the Home naming the City as an additional insured and loss payee. The City requires proof of property insurance when a homeowner refinances. 

Signed in Counterpart

If subordination is requested, Lender/Broker must work with a third-party escrow company. Documents must be signed in counterpart and deposited with third-party escrow prior to close.

General Timelines:

  • The estimates given are general timelines. Please be advised that lender/broker/escrow delays responding to the City’s requests for information/documents can increase these timelines.
  • The City will require seven (7) business days from the date of receipt of the refinance documents to review and approve.
  • If subordination is requested, the City will require a minimum of 15 business days from date of refinance approval or from date of lender’s subordination request, whichever is later, to route the paperwork for signature and deposit in escrow. Timelines may be extended due to the COVID-19 shelter-in-place restrictions.
  • Please adjust your escrow closing date accordingly to accommodate these timeframes.

Submitting a Request:

Howeowners should have their real estate professionals e-mail doris.tang@hayward-ca.gov

General Questions:

For general questions, please e-mail doris.tang@hayward-ca.gov.