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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 and the City of Middletown to provide a “forgivable” loan of up to $10,000 for
down payment or closing cost assistance to qualified homebuyers.
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.
Looking
For Your First Home?
For more information, contact NHS. HUD
certified housing counselors are available to work with you to purchase your home.
What
Are the Requirements to Qualify for the Down Payment Assistance?
Applicant must meet income requirements (at or below 80% of the area median income) Applicant
must attend 8 hours of pre and post purchase counseling (provided by NHS) Applicant must purchase
a qualified home in the City of Hamilton Other requirements may apply. Contact
NHS for details.
What
Type of Property Is Eligible?
Single Family Residences
What
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
Loan
- Shopping For a Home
- Keeping Your Home
- Managing Your Finances
Down Payment Assistance Forgivable Loans
What
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
and requirements 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. NHS does charge a $550.00 processing fee that needs
to be disclosed by the lender when the buyer is purchasing a City of Hamilton property.
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 County). 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 cut checks. 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 2012 HUD HOME PROGRAM INCOME LIMITS*
Butler County, Ohio
| Number of Persons Per Household | Low 80% of Income | Very Low 50% of Income | Extremely Low 30% of Limits | 1 | $38,500 | $24,040 | $14,450 | 2 | $44,000 | $27,500 | $16,500 | 3 | $49,500 | $30,950 | $18,550 | 4 | $54,950 | $34,350 | $20,600 | 5 | $59,530 | $37,100 | $22,250 | 6 | $63,750 | $39,850 | $23,900 | 7 | $68,150 | $42,600 | $25,550 | 8 | $72,550 | $45,350 | $27,200 |
Note: These household income
limits were established by HUD EFFECTIVE December 1, 2011, Department of Housing & Urban Development *Source huduser.org/datasets/il.html
(link from hud.gov)
City of
Hamilton DPA Program Design and Requirements
• Applicants below 80% of the Area Median income will be eligible to receive up to $10,000
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. 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 must submit $300.00 to a third party inspector for the cost of
the inspection. Please be advised that if an inspection is performed and the house does not meet Minimum Quality Standards
and the seller is unwilling to make the necessary repairs, the $300 fee is non-refundable. After the inspection has been performed,
the City of Hamilton will send an inspector for a final inspection before the down payment assistance funds will be released
for down payment assistance.
• 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 (collections,
charge offs, and judgments must be paid in full). 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. A $550 FEE WILL BE CHARGED BY NEIGHBORHOOD HOUSING
SERVICES FOR THE PROCESSING OF THE APPLICATION AND MUST BE PLACED ON THE SETTLEMENT STATEMENT. Revised 12/09 Certificate #MB.803439.000
Hamilton Grant.pdf
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