Grant monies are back

Grant monies are back!  The Federal Home Loan Bank replenished their funds for 2016.  They are limited though and will go very fast because the grant is very popular and easy to obtain for buyers.

 

Federal Home Loan Bank offers $5,000 to first time home buyers 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.

 

Here are some other reasons to consider this grant over the other grant programs if a buyer’s income qualifies under it.  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 also does not cap out the buyer’s debt ratio at 45% like most other grant programs.  So, this allows the buyer to qualify for more house because we have more flexibility in our debt ratios.  The buyer is qualified based on total household income and dependents and FHLB follows HUD’s median guidelines at 80% of income.  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

 

Grant monies are back….And the process for 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 will order this) and sign a Intake Certification certifying the accuracy of the information.  Your lender sends the Intake Certification to FHLB. And in approximately 5 days your lender should have the buyer’s commitment for the grant funds.  The buyer does their home buying counseling over the phone and viola…they have $5,000.

 

Let’s do some quick math.  If you are a buyer purchasing a $200,000 house and the seller is picking up all of their closing costs and they are receiving a $5,000 grant, they only need $2,000 of their own monies.  And even if the seller isn’t picking up all of their closing costs, there is a way for your lender to help through a lender’s credit to cover some of their closing costs.

 

Grant monies are back. The bottom line is that between grant monies and a lender credit there are ways to purchase your that dream home with limited monies of their own! Don’t wait – contact us today to get on the right track in 2016 to purchase a home!