As a First Time Homebuyer, you need all the advice and help you can get when purchasing your first home. In many instances, first time buyers may qualify for down payment assistance, closing cost assistance, special discounts, and other programs that will assist you in buying your first home.
Here is a summary of some of the First Time Home Buyer assistance programs that are available in Northeast Ohio:
If paying for a down payment and closing costs have kept you from getting into a home of your own, OHFA’s Down Payment Assistance Grant may be able to help. Eligible borrowers participating in the First-Time Homebuyer Program, Ohio Heroes Program, Target Area Loan Program can use the grant to greatly reduce the out-of-pocket expenses associated with buying a home.
FIRST-TIME HOME BUYER DOWN PAYMENT ASSISTANCE GRANT
If you qualify for one of OHFA’s home loan programs, you can choose to take advantage of the Down Payment Assistance Grant.
•OHFA will issue a grant in an amount for 2.5% of your home’s purchase price.
•You can use the grant to pay for the down payment, closing costs, or other prepaid expenses incurred prior to closing. Keep in mind that while the grant will greatly reduce your expenses, you may still be required to pay for some costs out of pocket.
•If you take advantage of the grant, your mortgage interest rate will be .5% higher than OHFA’s current mortgage rates.
In order to qualify for the Down Payment Assistance Grant, you must meet all requirements for your OHFA homeownership loan program.
In addition, you must either:
•Complete a free homebuyer education course offered by any HUD-approved housing counseling agency, or
•Use the streamlined OHFA homebuyer education program.
OHIO HEROES PROPGRAM
Ohio heroes make a difference in our lives by working hard in critical jobs every day. OHFA offers all the benefits of their First-Time Homebuyer Program to Ohio’s heroes at a .25% lower interest rate.
The Ohio Heroes Program is available to the following full-time employees who are:
•Active Military, Active Reserve, or a Veteran – Qualified Active Duty Service personnel include Armed Services or Reserve Forces. Qualified veterans include military members honorably discharged from any branch of the U.S. Armed Forces.
•Firefighters, Emergency Medical Technicians or Paramedics – Sworn paid members of a fire department whose regular duties include fire suppression or prevention, emergency medical response, hazardous materials response.
•Health Care Workers – Certified, accredited, or licensed health care workers who are employed full-time as a medical resident or fellow, dental hygienist, nurse, nursing assistant, pharmacist, pharmacy technician, physician’s assistant, medical technician, technologist, or therapist.
•Police Officers – Individuals commissioned as a police officer by a federal, state, county, or municipal or township government, or a public or private college or university; must be sworn to uphold, and make arrests for violations of federal, state, county, municipal, or township law or respond to terrorism.
•Teachers – Individuals employed full-time by an accredited or state recognized public school, private school, or federal, state, county, or municipal educational agency as a state-certified classroom teacher or administrator in grades K-12 or higher education. Full-time instructors must teach a minimum of 12 credit hours per academic term. License and paystub from education facility required to validate credentials.
Applicants for the Ohio Heroes Program must:
•Meet OHFA’s income and purchase price limits.
•Be a first-time homebuyer—someone who has not owned or had an ownership interest in his/her principal residence in the last three years.
•Be creditworthy. Minimum credit scores may apply.
•Have a signed Purchase and Sales Agreement.
•Qualify for the loan being requested. Lenders will assess your ability to afford a home by considering income, assets, job stability, liabilities, and other criteria.
To meet each homebuyer’s needs, OHFA offers a variety of loan products including:
•Fannie Mae conventional loans with special features and flexible terms
•Government-insured loans including traditional FHA, VA, and USDA-RD loans
GRANTS FOR GRADS
Recent college graduates can now receive down payment and closing cost assistance and a favorable mortgage interest rate from an OHFA participating lender through the Grants for Grads Program. Eligible borrowers can use the grant to reduce the out-of-pocket expenses associated with buying a home.
If you are an income-eligible first-time homebuyer, have graduated from high school or have a GED and have earned an associate’s, bachelor’s, master’s, doctorate or other postgraduate degree within the last 24 months and have not had ownership interest in a principal residence in the past 3 years, you can take advantage of the Grants for Grads Program.
•OHFA will issue a grant in an amount for 2.5% of your home’s purchase price.
•You can use the grant to pay for the down payment, closing costs, or other prepaid expenses incurred prior to closing. Keep in mind that while the grant will help cover some of your up-front costs, you may still be required to contribute some money as well.
•The grant will be issued as a second mortgage with a 0% interest rate with no payment due. The loan is forgivable after five years. However, if you move out of Ohio prior to the five-year mark, you are responsible for paying a portion of the grant back to OHFA
OHIO MORTGAGE CREDIT CERTIFICATE PROGRAM
Mortgage Credit Certificates (MCCs) can help some families realize the dream of homeownership. An MCC creates an income tax deduction that reduces a household’s federal income tax liability and allows the household to have more available income to make mortgage payments.
Homebuyers who qualify for the program receive a Mortgage Credit Certificate from OHFA, which can be used to reduce their household’s tax burden every year for the life of their mortgage loan. With an MCC, a percentage of what you pay in mortgage interest (20, 25, or 30%) becomes a tax credit that you can deduct dollar-for-dollar from your income tax liability. The remaining 80, 75, or 70% of your mortgage interest continues to qualify as an itemized tax deduction, as long as you have sufficient tax liability. The MCC Program cannot be used in conjunction with OHFA’s First-Time Homebuyer Program.
TARGET AREA LOAN PROGRAM (OPEN TO ANY HOME BUYER)
OHFA’s Target Area Loan Program helps revitalize federally-designated target areas by making our affordable first-time homebuyer loan products and competitive interest rates available to ANY qualifying buyer purchasing a home in these areas. A target area is an economically distressed area designated by the U.S. Department of Housing and Urban Development (HUD). Most Ohio counties contain both target and non-target areas. Target Area Loan applicants do not have to be first-time buyers. However, you must meet all program requirements.
OHFA PROGRAMS SUMMARY
OHFA does not offer the First Time Home Buyer Grants, home purchase loans, or Mortgage Credit Certificates (MCCs) directly to homebuyers. Instead, homebuyers apply for and receive OHFA’s low-interest mortgage loans and MCCs through a network of participating lenders covering all 88 counties in the state. If you’d like more info on all the OHFA programs (including the full brochure on program details) and the participating lenders, please contact me at (440) 476-4959 or via email at LisaHumenik@remax.net.
CUYAHOGA COUNTY HOMEBUYER DOWNPAYMENT ASSISTANCE
Down Payment Assistance Programs
Neighborhood Housing Services of Greater Cleveland (NHSGC) provides access to the Cuyahoga County Down Payment Loan Programs that includes the Cuyahoga County Down Payment Assistance Program.
Downpayment assistance, in excess of a minimum 3% that a home buyer would be required to provide from their own funds, is available to income qualified first-time home buyers for the purchase of a home in an eligible Cuyahoga County community. The assistance is provided in the form of a deferred mortgage loan (50% forgiven after 5 years of occupancy) that must be used for eligible costs, and it need not be repaid until re-sale or transfer of the property.
The Diversity Opportunity Forgivable Loan provides for the loan to convert into a grant for home buyers that purchase a property in a qualified census tract, in a community that we serve, and who live there for five (5) years. The Vacant/Abandoned Forgivable Loan provides for the loan to convert into a grant for home buyers that purchase a qualified property, as verified by the local community, in a community that we serve, and who live there for five (5) years. A portion of these funds may be used for repairs
All buyers are required to complete Pre-Purchase Homebuyer Education and Home Maintenance training and counseling from NHS of Greater Cleveland and obtain pre-qualification document, with the certificate of completion dated before any purchase agreement has been signed. Any home sales in process before and/or during the required training and counseling will be deemed ineligible for participation. Therefore, if you are under contract and/or have a purchase agreement in place before the dated certificate of completion you are not eligible for this program.
-Single family, owner-occupied
-Existing houses or new construction
-Property must be occupied by the seller, or vacant for at least 90 days before closing
-Property must be inspected for code violations and for defective paint
-Code violations and defective paint must be corrected before the buyer can take title or occupy the house
- Title Search Fee
- Recording Fees
- Filing Fees
- Credit Reports
- Pre-purchase inspection
- Buyer’s legal fees
- Closing costs
Rate, broker fee, origination fee, and points of the first mortgage must not be excessive (not to exceed 2.00% of the first mortgage loan amount) for the type of mortgage obtained by the buyer: conventional, VA or FHA. First mortgage must be fixed with no balloon payment or prepayment penalty allowed.
Maximum Assistance: The maximum amount available is 17% of the sales price or $10,000 whichever is less.
-Homebuyers may not have owned a home in the past 3 years.
-Homebuyers must occupy the dwelling as their primary residence.
-Homebuyers total household income cannot exceed the limits below and they must be current on all taxes.
Eligible Communities -Bedford, Bedford Heights, Berea, Brook Park, Brooklyn, Garfield Heights, Glenwillow, Highland Heights, Linndale, Maple Heights, Newburgh Heights, Oakwood, Richmond Heights, Shaker Heights, South Euclid, University Heights, Warrensville Heights.
CITY OF LAKEWOOD FIRST TIME HOME BUYER GRANT PROGRAM
First-Time Homebuyer HOME Program
The City of Lakewood HOME Program provides one of the best mortgage financing packages available to qualified first time home buyers interested in purchasing a Lakewood home. Assistance, which comes in the form of a 0% interest, no monthly payment second mortgage is used to assist with both down payment and closing costs.
The Lakewood First-Time Homebuyer HOME Program Offers:
1.deferred payment, zero percent (0%) interest second mortgage $10,000 for single-family property, or $14,000 for two-family property with forgiveness schedule.
Loan to be repaid immediately at time of resale, transfer, or if property becomes absentee-owned. Purchasers of two family properties are eligible for loan forgiveness. Fifty percent (50%) will be forgiven after the fifth year of owning and occupying the property and twenty percent (20%) each year thereafter until one hundred percent (100%) forgiven.
2.Pre-purchase counseling program to help homebuyers become more informed homeowners.
3.Homebuyers can be pre-qualified by participating lending institutions to determine their maximum purchasing ability.
- Homebuyer(s) must either be a displaced homemaker, single parent, or a person who has not owned a home for 3 years.
- Homebuyer(s) must provide a minimum of 1.5% of the sale price from personal funds.
- Homebuyer(s) must use the property as principal residence.
- Homebuyer(s) must meet credit standards of participating lender.
- Homebuyer(s) must participate in pre-purchase counseling program provided by the lender.
- Monthly payment of principal, interest, taxes and insurance should not exceed 33% of Homebuyer(s) gross monthly income.
- Homebuyer(s) must meet federal income requirements for household size. Current annual income is defined in the Federal Regulations at 24 CFR Part 813.
Maximum Household Income
1 – $35,200
2 – $40,200
3 – $45,250
4 – $50,250
5 – $54,300
6 – $58,300
7 – $62,350
8 – $66,350
Participating lenders offer:
- 30-year loan term;
- Discounted fixed interest rate; and
- First mortgage loan to qualified buyers.
Appraisal and credit bureau report fees are required at time of application. P.M.I. may be required.
HUD – GOOD NEIGHBOR PROGRAM – OHIO
The U.S. Department of Housing and Urban Development (HUD) wants to make American communities stronger, promote home ownership, build a safer nation, and take an active role in the revitalization of cities. The purpose of the Good Neighbor Next Door (GNND) sales program is to improve the quality of life in urban communities by encouraging Law Enforcement Officers, Teachers (PreK-12), Firefighters, and Emergency Responders (EMTs) to purchase and live in homes in these communities. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence, but after that time you can sell the home at a profit.
The lottery winner may purchase the property at a 50 percent discount from the current “AS IS” APPRAISED VALUE which is the LIST PRICE. For example, if the home has a LIST PRICE of $150,000, a participant can buy it for $75,000. You can also apply for an FHA-insured mortgage with a down payment of only $100 and you may finance all closing costs, repairs, improvements, appliances and all acquisition expenses.
If the home you want to purchase needs updating or repairs, you may use FHA’s 203(K) or the new 203(K) Streamline Mortgage program. This mortgage option allows you to finance both the purchase of the home and any needed repairs and/or updates you want to make to the home. You have the benefit of one loan for both costs and one monthly payment. It is a home improvement loan and property acquisition loan combined in one.
All participants must be employed full-time by a federal, state, county, municipal government, Indian tribal government, division of local government, or public/private school. Current homeowners CAN NOT participate and neither you nor your spouse can have owned any other residential real estate for 1 year prior to lottery submission.
Law Enforcement Officers
You must be sworn to uphold and make arrests for violations of the law. Your employer must certify that you are sworn to uphold, and make arrests for violations of, federal, state, tribal, county, township, or municipal laws. Law Enforcement Officers are restricted to GNND homes that are within a reasonable commuting distance, since the home must be their sole residence. Federal Law Enforcement officers are the only area UNRESTRICTED participants in the GNND program.
You must be employed as a teacher by a state-accredited public school or private school that provides direct services to students in grades Prekindergarten through 12th grade. Also the public or private school where the person is employed as a teacher serves students from the area where the home is located in the normal course of business.
Firefighters & Emergency Medical Technicians
You must be employed as a Firefighter or Emergency Medical Technician by a fire department or emergency medical services responder unit of the federal government, a state, unit of general local government, or an Indian tribal government serving the area where the home is located.
What are odds of winning? Very good! The odds of winning are directly proportional to the number of entries. Many homes have been awarded to participants because they were the only lottery entry.
CITY OF PARMA, OH FIRST TIME HOMEBUYER ASSISTANCE PROGRAMS
First Time Home Buyer Down Payment Assistance
This is a loan to assist income eligible first time homebuyers with the purchase of a single-family dwelling in Parma. Loan is equal to 10% of the purchase price, maximum $10,000. Loan is forgiven over a period of 5 years. Program applications available March 1, 2012.
Homes for Heroes
Provides 3% of the purchase price, maximum $5,000 forgivable down payment for first-time home buyers buying in Parma who are active/retired military or who are employed in most areas of law enforcement, firefighting and nursing. Applications are being accepted for 2012.
MORE INFORMATION ON OHIO FIRST TIME HOME BUYER ASSISTANCE PROGRAMS
If you’d like more information on all the available Northeast Ohio Homebuyer Grants and other assistance programs (including all the contact information, application information,and participating lenders), please contact me at (440) 476-4959 or via email at LisaHumenik@gmail.com.
Lisa Humenik, RE/MAX Crossroads (440) 476-4959 – Email: email@example.com