A Message from Mike Smalling, Mortgage Loan Originator with F&M Bank.
One of the cool things about working for F&M is that they participate in the FHLB (Federal Home Loan Bank) of Cincinnati’s Welcome Home program. This may be one of the coolest programs out there for low to moderate income buyers.
Welcome Home grants are used to fund reasonable down payments and closing costs incurred in conjunction with the acquisition or construction of owner-occupied housing. The grants are limited to $5,000 per homebuyer. All funds are reserved for specific homebuyers purchasing specific homes and cannot be transferred to other homebuyers or to other homes, and the funds are on a first come, first served basis.
Welcome Home funds will be available for reservation beginning at 8AM ET on March 2, 2015, and will remain available until all funds have been reserved. The funds are typically completely reserved (thus exhausted) by early April, so there is a narrow timeframe to take advantage of this. Once the funds are exhausted, FHLB will no longer accept requests for funds. Here are the basic eligibility requirements:
Applicants do not have to be first-time homebuyers. However, all first-time homebuyers must complete a homebuyer counseling program.
Income limits are based on 80% median income for the appropriate county.
For Davidson and surrounding counties, 1-2 person families must have household income of less than $61,440
For Davidson and surrounding counties, 3+ person families must have household income of less than $71,680
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).
Must be used for primary residence and one to four unit properties are eligible
Funds are to be used for reasonable down payment and closing costs
Funds must be used in conjunction with a government loan (like FHA, THDA, VA or USDA; but not 203K)
There is no repayment required of the funds if the property is retained for at least five years. If property sold inside of the five year retention period, the loan must be paid back. However, 20% of the initial loan balance is forgiven each year. So if the property is sold in year three, for example, 60% of the initial grant must be repaid.
If earnest money is paid and reflected on the HUD, the buyer may not receive that back through the use of these funds.
The review period for the grant can take a couple of weeks, so quick-turn contracts will not work with this program.