In an effort to increase affordable housing
opportunities in the cities of Hamilton and Middletown, Neighborhood Housing Services of Hamilton, Inc. has partnered with
both the City of Hamilton, Butler County, and the City of Middletown to provide a “forgivable” loan for
down payment or closing cost assistance to qualified homebuyers. FUNDS ARE PROVIDED ON A FIRST COME, FIRST SERVE BASIS.
What is a Forgivable Loan and How
Does it Work?
A “forgivable loan”
is a loan that does not have to be paid back once all of the terms and guidelines have been met. The forgivable
loan would be forgiven over a period of five years. This means that if you live in the property for five years the “loan”
would not have to be paid back. However, if you sell the home before the five year period is completed, a pro-rated portion
of the loan would have to be paid back at the time of the sale or transfer.
For Your First Home?
For more information, contact NHS. HUD
certified housing counselors are available to work with you to purchase your home.
Are the Requirements to Qualify for the Down Payment Assistance?
Applicant must meet income requirements (at or below 80% of the area median income)
must attend 8 hours of pre and post purchase counseling (provided by NHS or other HUD approved homebuyer counseling
Applicant must purchase a qualified home in the City of Hamilton
requirements may apply. Contact NHS for details.
Type of Property Is Eligible?
Single Family Residences
- Maximum Purchase Price of $138,000
Will I Learn in the Pre and Post Purchase Counseling Sessions?
NHS has HUD Certified Housing Counselors to
review the topics listed below in a private, one on one counseling session.
- Are You Ready to Buy a Home?
- Managing Your Money
- Understanding Credit
- Getting a Mortgage
- Shopping For a Home
- Keeping Your Home
- Managing Your Finances
Down Payment Assistance Forgivable Loans
is required of the lender?
The lender must either
deliver or mail a copy of the completed loan application packet to Neighborhood Housing Services, 100 S. Martin Luther King,
Jr. Blvd., Hamilton, OH 45011. This packet must include the loan application, credit report, TIL, GFE,
tax returns, paycheck stubs, and appraisal.
The lender must review the program design and
requirements themselves and with their borrower. The lender and borrower must abide by the program design
The lender must work with Neighborhood Housing Services to ensure that all documentation
has been received and inspections of the property have been completed, etc.
Lender must forward the
program requirements to the title company.
REMEMBER: Due to the inspection
time frame, it is very important that you send all of the required documentation at the earliest date possible.
There is a two week turn around time on completion of inspections from the jurisdiction (City of Hamilton or Butler
What is required
of the title company?
The title company must fax or email a copy of the settlement statement to NHS for review
at least 48 hours before closing. This allows NHS time to review the settlement statement and to
Immediately after closing,
the title company MUST fax a signed copy of the HUD Settlement Statement and a signed copy of the Mortgage and Note
for the down payment assistance forgivable loan to NHS at 513-737-9304.
FISCAL YEAR 2016 HUD HOME PROGRAM INCOME LIMITS*
Butler County, Ohio
of Persons Per Household||Low 80% of Income||Very Low 50% of Income||Extremely Low 30% of Limits|
Note: These household income
limits were established by HUD EFFECTIVE June 6, 2016, Department of Housing & Urban Development *Source huduser.org/datasets/il.html (link from
City of Hamilton DPA Program Design and Requirements *Funds are available on
a first come first serve basis and dependent upon the availibility of funds. Please note loans that are closed
after February 13, 2014, the maximum amount of down payment assistance will be capped at $5,000.
• Applicants below
80% of the Area Median income will be eligible to receive up to $5,000 for down payment assistance for an
eligible single family detached house, (defined as a one family residence for down payment assistance, condominiums DO NOT
apply). Applicant may not receive funds back at closing.
• Applicants must purchase a qualified home in the City of Hamilton.
• Applicants will be required to provide 1% of the purchase price of the home as
equity contribution to the house purchase. The equity contribution can be in the form of down payment, closing costs, homeowners
insurance, earnest money, application fee, and/or the cost of a whole house inspection. The applicant's contribution to the
program must be in the form of a cash contribution; it cannot be borrowed money or gifted.
• After Neighborhood Housing Services has verified the eligibility of a client
for down payment assistance funds, and a purchase contract has been executed, Neighborhood Housing Services will schedule
a Housing Quality Standards (HQS) Inspection of the property with the respective jurisdiction. This inspection is to ensure
that the property meets Minimum Quality Standards (CFR 982.401) and is not meant to substitute for a Whole House Inspection
obtained by the buyer. Any property that does not pass HQS or where the seller in unwilling or unable to bring the property
to HQS Standards, will be ineligible for the program. Buyer may obtain a third party inspector to perform a whole house
inspection at buyers expense if they choose to do so. However, the whole house inspection does not replace the HQS inspection.
• Down Payment Assistance Program participants may
obtain a loan from the lending institution of their choice. That loan must meet the following underwriting criteria: No more
than 30% of family income devoted to principal, interest, taxes and insurance and no more than 42% of family income for overall
indebtedness. Closing costs cannot exceed 5% of the purchase price. Borrower must have sufficient creditworthiness that satisfies
the first mortgage lenders guidelines. Creditworthiness also includes not having filed bankruptcy in the last 2 years. First
mortgages must be fixed rate loans with no negative amortization, balloon payments, or adjustable rate features. Borrower
may use a cosigner when qualifying for the first mortgage. However, the cosigners' total household income shall be included
as part of the buyer's total income when determining the borrower's income eligibility level. Taxes and insurance must be escrowed.
• Execution of a restrictive covenant must be performed at
closing and recorded at the Butler County Recorder's Office due to this being a five (5) year forgivable loan. Participants
must remain in the premises as their primary residence for a period of five years. If the participant sells, gets foreclosed
upon, or uses the property for rental purposes before the five (5) year period has expired, they will be required to reimburse
Neighborhood Housing Services of Hamilton a pro-rated portion of the forgivable loan.
Fulfilling the above requirements is the sole responsibility of the homebuyer. Failure to fully satisfy the
above Program requirements as determined by Neighborhood Housing Services of Hamilton, Inc. may result in a delay in funding
or forgivable loan denial. Revised 09/13 Certificate #MB.803439.000