Buying a Home

Buying a home gets easier! The latest market news – Federal Home Loan Bank (FHLB) replenished their funds for 2015. Funds are limited and will go very fast because the grant is very popular and easy to obtain for buyers.

Federal Home Loan Bank is offering $5,000 to first time homebuyers if they contribute a minimum of $1,250 into buying their home. And, those monies can actually be gifted as well. Buyers can actually contribute less monies but their grant will be reduced because it is based on a 4:1 ratio. For example, if a buyer wanted to obtain $2,500 of grant monies then they would only have to contribute $625 or half of the $1,250. And, the fees they pay upfront can be used to meet their contribution so the earnest money deposit and appraisal fee can be used towards their minimum contribution.

The reasons why this grant is better for buying a home over other programs if a buyer’s income qualifies:
• The grant is forgivable after 5 years entirely. If a buyer vacates the property prior to 5 years then the grant is forgiven at 20% per year.
• FHLB does not cap out the buyer’s debt ratio at 45% like most other grant programs. This allows first time buyers to qualify for more house value because of there is more flexibility in the debt ratios.
• The buyer is qualified based on total household income and dependents and FHLB follows HUD’s median guidelines at 80% of income.
• The process to obtain the grant is SUPER EASY! The grant paperwork is processed at the BEGINNING of the process unlike a CDA, MALP, ACDS or some of the other grants out there.
• The buyer only has to provide two month’s of bank statements, a Verification of Employment, (lender takes care of) and sign a Intake Certification certifying the accuracy of the information.

Here is a link which can be used to find the 80% median income limits in the State of Maryland. http://www.huduser.org/portal/datasets/il/il2012/select_Geography.odn

Mortgage Lender will send the paperwork to FHLB and in approximately 5 days, you will have your commitment for the grant funds. The buyer does their home buying counseling over the phone and viola…they have $5,000.