Home Buyer Grant March 3, 2014 - Welcome Home Program
need assistance with your Down Payment or Closing Costs
on a Home? This Program May Be A Great Option for You!
* 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
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
- 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
- The interest rate on the second mortgage may not exceed
- 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;
- 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
- 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
- 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
fill out the form below to get in touch with an expert on
the $5000 Grant to discuss your specific eligibility for