To be eligible for a mortgage loan to be financed through the Program, a borrower is required to provide affidavits and other verification of compliance with ownership, occupancy, and financial requirements. Ownership and Occupancy Requirements. Principal Residence. Individuals taking title to an eligible residence are required to execute an affidavit stating that they intend to occupy the property as their principal residence within a reasonable time after closing of the loan. Prior Ownership Disqualification; Exceptions to Disqualification. Each individual taking title to an eligible residence: May not have had an ownership interest in their principal residence at any time during the 3 years preceding the date of the closing of the mortgage loan; or Is an honorably discharged veteran, as evidenced by proper documentation, exercising their one-time exemption to the first time homebuyer requirement under the Code. The restriction in §B(2) of this regulation does not apply if the eligible residence being financed: Is located in a targeted area; Meets the following requirements: Is at least 20 years old, Has rehabilitation expenses in excess of 25 percent of the purchase price, and The external and internal walls and internal structural framework are retained to the extent required for a qualified rehabilitation loan under §143(k) of the Code; Is financed with taxable mortgage revenue bonds, as determined by the Administration; or Is financed from other sources available to the Program, as determined by the Program. Ownership of Other Real Estate. The borrower may not own any other real property at the time the mortgage loan closes except: A cemetery plot; A recreational vehicle lot; A 1/20th (2.6 weeks) or less interest time-sharing unit; A lot on which the residential housing unit to be financed with proceeds of the mortgage loan is to be built; or An existing principal residence of a borrower if it is subject to a contract of sale at the time of application and is conveyed before the mortgage loan is closed if the mortgage is financed with: Tax-exempt mortgage revenue bonds and the residence is located in a targeted area under the Code; or Taxable mortgage revenue bonds or another source of financing available to the Program. Minimum Age. Each single applicant and at least one married applicant taking title to the residence shall be 18 years old or older. Form of Ownership. Individuals shall take title to the property in the form required by the Administration. Purchase Contract Inspection Contingency. The Administration may require that a home inspection be conducted before closing by a home inspector acceptable to the purchaser and lender. The inspection may be required by the purchaser as a contingency to the purchase contract. The purchaser shall obtain the inspection report although the cost to the purchaser may be reimbursed by the seller. Financial Requirements. Borrower's Household Income. The total anticipated annual household income of all individuals, except those individuals identified in §D(1)(b) of this regulation, who intend to occupy an eligible residence which will secure a mortgage loan financed by the Administration may not, at the time the mortgage loan is closed, exceed the lesser of the: Maximum annual income limits as determined under federal law for the area in which the residence is located; or Maximum income limits as determined by the Secretary from time to time. Total anticipated annual household income does not include the income of full-time high school or undergraduate students who are dependent children, unless that individual is a mortgagor or guarantor. Responsibility for Repayment. All of the individuals who take title to an eligible residence are required to execute the deed of trust subjecting their interest in the residence to the lien of the deed of trust. Ability to Repay. The borrower shall meet the mortgage insurer's underwriting criteria regarding creditworthiness and ability to repay the mortgage loan. Minimum Payment to Close. Payment made at closing by or on behalf of the borrower shall be the difference between the: Total expense of acquiring the residence including settlement costs and any down payment; and Principal amount of the mortgage loan as permitted under Regulation .06 of this chapter. Maximum Assets. Purchase Loans. Borrowers with liquid assets equal to 20 percent or more of the sales contract price may not be eligible for a mortgage loan under the Program if those assets, in the estimation of the Administration, would enable the borrower to obtain financing in the current unassisted private lending market. Refinance Loans. Borrowers with liquid assets and equity in their residence may not be eligible for a mortgage loan under the Program if those assets, in the estimation of the Administration, would enable the borrower to obtain financing in the current unassisted private lending market. Minimum Cash Contribution by Borrower. The borrower is required to contribute an amount acceptable to the mortgage insurer.