$5000 Home Buyer Grant March 3, 2014 - Welcome Home Program

Do you need assistance with your Down Payment or Closing Costs on a Home? This Program May Be A Great Option for You!

Program Highlights

* Up to $5000 per household/home

* Franklin and surrounding counties

* Home buyer must contribute $500 of their own money

* Program not limited to first time home buyers

* Grants subject to retention agreements- 5 yrs

Eligibility Requirements

These are some of the requirements that must be met In order to receive Welcome Home funding:

  • Funds must be used to assist households whose incomes are at or below 80% of the Mortgage Revenue Bond (MRB) income limits, as adopted by the appropriate state housing finance agency, adjusted for family size. MRB limits for KY, OH, and TN are available at www.fhlbcin.com. Please note that 2013 MRB limits will be used until the 2014 MRB limits are published by the respective state housing finance agencies.
  • Welcome Home funds are intended only for homebuyers who would qualify for the first mortgage based on their current income. Co-signors and co-borrowers are not allowed unless they will occupy the home as their primary residence and their incomes are included in determining eligibility.
  • The Member who reserves the Welcome Home funds must originate the first mortgage, but may close in the name of a third party.
  • Homebuyers must contribute at least $500 of their own funds toward down payment and closing costs (60% of these funds may be received as a gift).
  • The rate of interest, points, fees, and any other charges must not exceed a reasonable market rate for a loan of similar maturity, term, and risk.
  • The interest rate on the first mortgage (or the fully indexed rate for an Adjustable Rate Mortgage (ARM)) may not exceed 7.00%. (Note: the fully indexed rate means the index at the time of loan origination plus the stated margin.)
  • The interest rate on the second mortgage may not exceed 10.50%.
  • Welcome Home funds may not be used in transactions involving a second mortgage provided by an individual as seller. Second mortgages provided by formal organizations, including financial institutions, Community Development Financial Institutions, housing finance agencies, non-profit organizations, etc. are acceptable. Should you have any questions, please contact the FHLBank prior to submitting the Reservation Request.
  • Interest only loans are not eligible for Welcome Home.
  • All fixed rate loans must have a minimum term and amortization of 10 years.
  • All ARMs must have a minimum term of 10 years and a minimum amortization of 20 years.
  • Welcome Home first mortgage loans must comply with applicable federal, state and local anti-predatory lending laws, regulations and orders designed to prevent or regulate abusive and deceptive lending practices and loan terms (collectively, “Anti-Predatory Lending Laws”). For example, Anti-Predatory Lending Laws may prohibit or limit certain practices and characteristics, including, but not limited to the following:
    • Requiring the borrower to obtain prepaid, single-premium credit life, credit disability, credit unemployment, or other similar credit insurance;
    • Requiring mandatory arbitration provisions with respect to dispute resolution in the loan document; or
    • Charging prepayment penalties for the payoff of the loan beyond the early years of such a loan.
  • The FHLBank will not provide Welcome Home assistance to any transaction in which a loan exceeds the annual percentage rate, or points and fees thresholds of the Home Ownership and Equity Protection Act of 1994 and its implementing regulations (Federal Reserve Board Regulation Z).
  • Applicants do not have to be first-time homebuyers. However, all first-time homebuyers must complete a homebuyer counseling program. The counseling program must be provided by, or based on one provided by, an organization recognized as experienced in homeownership counseling. The counseling program must cover, at a minimum, mortgage financing, credit-worthiness, household budgeting, and home maintenance. Welcome Home funds may be used to pay up to $300 of the costs provided they are not covered by another funding source. Homebuyer counseling is only required for first-time homebuyers.
  • The housing assisted with Welcome Home funds must be subject to a legally enforceable restriction in the Warranty Deed or restrictive covenant to the Warranty Deed requiring that the FHLBank be given notice of any refinancing, sale, foreclosure, or change in ownership of the unit prior to the end of a five-year retention period. If the home is sold or refinanced during the five-year retention period, the homebuyers may be required to pay back a pro rata amount of the Welcome Home grant. If the home is foreclosed, no repayment is required. (Note: a “deed in lieu of foreclosure” or an assignment of an FHA first mortgage to the Secretary of HUD is treated as a foreclosure.) The 2014 Welcome Home Retention language is available at www.fhlbcin.com.

Please fill out the form below to get in touch with an expert on the $5000 Grant to discuss your specific eligibility for the program:


 

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