Federal Home Loan grant money to be released
The Welcome Home Funds from the Federal Home Loan Bank of Cincinnati will become available, by reservation only, beginning March 17 and continuing until the funds are gone. Borrowers can receive up to $2,000 in grant assistance. These funds will be available on a first-come, first-served basis.
To qualify, the borrower must:
Have an annual household income at or below $51,200 for Licking County and $55,632 in Muskingum County for a one- to two-family household. For households with three or more, the income limits are $58,880 in Licking and $64,904 in Muskingum.
Buy a property located within the specific lenders lending footprint.
Have a fully executed purchase contract on a specific property.
Contribute $500 of their own funds toward the transaction.
Occupy the property for a period of no less than five years.
These Welcome Home Funds are grant funds and are not repaid by the borrower. However, the borrower is required to live in the property for five years. You must allow at least four weeks for your reservation approval. The pool of Welcome Home Funds for 2008 is limited, and these funds are strictly first-come, first-served. It is important for you to know not all mortgage lenders are approved to participate in this pool of funds. Huntington is an approved lender, as well as several other lenders throughout central Ohio. Just ask them if they participate.
These grant funds can be used for closing costs and down payment assistance for several other unique mortgage lending programs that also will assist first-time buyers. Remember, a difference exists between your down payment and closing costs. Closing costs are costs associated with the loan closing, and the down payment is the part of the purchase price of a property the buyer pays in cash and does not finance with a mortgage loan. It’s always a good idea to count on paying some closing costs. Although if the loan is structured right, it’s possible to come to the closing with $500 or less out of your pocket. The rates on these unique mortgage programs are great. Some require Private Mortgage Insurance, and some don’t. Some require you must be a first-time homebuyer, and that’s defined as not being on a property title for the past three years.
Also keep in mind many of those loan programs are available for refinancing your current mortgage as long as you fit the qualifications:
1) Make under the HUD median income limit. Many homebuyers are fairly new in the working world and make less than the average income for their county. Loan programs are available for up to 100 percent financing at great rates. Check with a professional lender for the income levels for your county.
2) 100 percent financing. With a stellar credit history, you can qualify for 100 percent financing typically at a slightly higher rate than conforming rates. With a blemished credit history, 100 percent financing can be available, but the rates are higher, depending on the amount of late credit. Those mortgage loans can be available in one loan to 100 percent, or two loans of 75/25 programs to avoid PMI.
3) 3 percent down programs. With good credit, and even with damaged credit, FHA loans and down payment assistance programs can be used to raise the 3 percent.
4) Teacher, police officer and firefighter loans. If you are a full-time or part-time state accredited school teacher, a school administrator, a police officer or firefighter, you have earned some special consideration in the loan process. Up to 100 percent financing with expanded credit and expanded debt-to-income ratio guidelines is available. Income requirements might apply in certain areas.
5) Census tract. If the home is in a certain census tract, you can qualify for great financing. This is to encourage development of certain areas. Many neighborhoods in our area do fall within the census tract. Again, check with a professional lender to determine the location.
6) Non-occupant borrowers. Sometimes, an individual doesn’t have the credit history or the income to qualify. A relative can co-sign for the loan to assist on FHA financing. This is common with college students who want to buy a place to qualify for in-state tuition. The parents co-sign with them. This typically is called a “kiddie condo.”
I can not stress this enough: Make sure you are dealing with a professional lender and shop around to determine you’re not getting charged elevated fees. Some lenders tend to prey on the inexperience of a first-time home buyer.
