Neighborhood Housing Services of Hamilton, Inc.

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Grants-Down Payment/Closing Cost Assistance

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. 

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 or other HUD approved homebuyer counseling agency)
  • 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 - Maximum Purchase Price of $170,000
New Construction - Maximum Purchase Price of $250,000
 
Effective June 1, 2021 new purchase price limits go into effect.
 

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? 
  1. 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.
  2. 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
  3. 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.
  4. Lender must forward the program requirements to the title company.
  5. 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 2021 HUD HOME PROGRAM INCOME LIMITS* 
Butler County, Ohio 
Number of Persons Per HouseholdLow 80% of IncomeVery Low 50% of IncomeExtremely Low 30% of Limits

1

$47,850

$29,900

$17,950

2

$54,650

$34,200

$20,500

3

$61,500

$38,450

$23,050

4

$68,300

$42,700

$25,600

5

$73,800

$46,150

$27,650

6

$79,250

$49,550

$29,700

7

$84,700

$52,950

$31,750

8

$90,200

$56,400

$33,800

Note: These household income limits were established by HUD EFFECTIVE June 1, 2021, Department of Housing & Urban Development *Source huduser.org/datasets/il.html (link from hud.gov)

Down Payment and Closing Cost Assistance Program

 

For Butler County, City of Hamilton and City of Middletown

 

 Guidelines and Criteria

 Program Summary

 Neighborhood Housing Services of Hamilton, Inc. (NHSH) partners with and administers the Down Payment and Closing Cost Assistance (DPA) Program for Butler County, City of Hamilton, and City of Middletown. The DPA program provides down payment assistance to eligible homebuyers who are purchasing a home in Butler County, City of Hamilton and City of Middletown in an effort to support successful sustainable homeownership. The assistance can be used towards down payment and eligible closing costs on single family home or condominium (Butler County & Middletown ONLY).

 The assistance is in the form of a 5 year non-amortized forgivable loan. The loan is completely forgiven when the qualified participant resides in the property for 5 years. Twenty percent of the loan is forgiven each and every year until it's completely forgiven. In the event the participant fails to occupy the property as their principal residence or sells the property before the 5 year forgivable loan term is up, the forgivable loan amount will be pro-rated and the remaining balance of the forgivable loan will have to be paid back or collected at closing from the proceeds from the sale of the house.

 The maximum DPA amount is $5,000 for the City of Hamilton, Butler County and City of Middletown is 6% of the purchase price - not to exceed $5,000.

 Program Qualifications

 

To be eligible for the DPA program, qualified participants must occupy the property as their primary residence, meet the DPA program's income limits, meet the DPA program's credit requirements, complete and obtain a Homebuyer Education certificate from a HUD approved counseling agency, have a signed Offer to Purchase contract that is within the DPA program's purchase price limits, and obtain first mortgage financing for the purchase that meets the DPA program underwriting criteria.

 

Primary Residence Requirement

 The qualified participant must occupy the property they purchased as their primary residence for 5 years or will be required to pay back a prorated portion of the down payment assistance.

 Minimum Participant Contribution

 Program participants must meet the minimum contribution requirement. All qualified participants must contribute at least 1% of the purchase price for Butler County and City of Hamilton (or $500 for Middletown Applicants only) of their own funds towards purchasing the home. Eligible expenses paid by the participant/borrower: Earnest Money, Application Fee, Appraisal Fee, Home Inspection, Homebuyer Education, Termite Fee, Homeowners Insurance, Flood Insurance, or Closing Costs paid by borrower at closing. Funds required to meet the minimum participant contribution cannot be gifted.

 Income Limits

 In order to be eligible for the DPA program a total household's income must be at 80% of the area median income (AMI) or below, per HUD guidelines. In determining household income, income from all household members who are 18 years of age or older will be included in the income eligibility (excluding full-time students).

 

 Applicant Eligibility - Adjusted Gross Annual Income Effective June 1, 2021

 One Person Household           $47,850                         Two Person Household           $54,650

 Three Person Household         $61,500                        Four Person Household           $68,300

 Five Person Household            $73,800                       Six Person Household              $79,250

 Seven Person Household         $84,700                       Eight Person Household          $90,200

 *Household Income Limits subject to annual change as determined by the U.S. Dept. of Housing and Urban Development

 Credit Requirements

 All Bankruptcies have to be at least 2 years old from the date of discharge.

 Homebuyer Education

 Qualified applicants must complete and obtain a Homebuyer Education Certificate prior to closing by a HUD approved counseling agency. Please reference https://apps.hud.gov/offices/hsg/sfh/hcc/hcs.cfm for a list of HUD approved agencies. Homebuyer Education Certificates are good 1 year from date issued. If certificate has expired, participant will be required to re-take the Homebuyer Education course again from a HUD certified counseling agency.

 Unit Eligibility

 Properties purchased using DPA funds are limited to single family homes in Butler County, City of Hamilton and City of Middletown and condominiums in Butler County and City of Middletown (only). In order to be eligible for the DPA funds, the property must pass a Housing Quality Standards (HQS) inspection completed by each individual municipality or third party inspector and must be free of lead based paint hazards (no chipping and peeling paint on houses (inside or outside) built prior to 1978). Please allow up to 10 business days for the inspection to be completed and inspection report completed. If the inspection fails, the necessary repairs will have to be made and re-inspected before a Final Commitment Letter can be issued. Please note, inspectors will complete the HQS inspection and report. If the property fails the HQS Inspection and the items listed on the HQS Report have been addressed the HQS inspector will re-inspect the property and revise the HQS Inspection Report one time. Any additional re-inspections will require additional payment by the participant - City of Hamilton only.

 The municipalities (Butler County, City of Hamilton, and City of Middletown), reserves the right to deny down payment closing cost assistance for any property.

 Homes purchased with the DPA funds must be meet the following price limits:

 New Construction units cannot exceed $250,000

  • Existing Units cannot exceed $170,000

 *Price limits subject to annual change as determined by the U.S. Dept. of Housing and Urban Development

 Mortgage Financing and Underwriting

 DPA participants must obtain primary mortgage financing for the purchase of their home. The first mortgage on the property must be a fixed interest rate, fully amortizing loan with escrows included into the monthly mortgage payment.

 The housing-to-income ratio for the DPA program participants should not exceed 32% of a household's gross monthly income and the debt-to-income ratio should not exceed 42% of gross monthly income for Butler County and City of Hamilton. The down payment assistance is intended to help participants meet these qualifying ratio requirements.  The DPA program prohibits participants from receiving any cash back at closing. The DPA funds have to be applied towards the purchase of the property, not eligible to payoff personal debt.

 Type and Amount of Assistance

 The DPA funds offered is in the form of a 5 year non-amortizing loan. The loan is completely forgiven when the qualified participant resides in the property for 5 years. Twenty percent of the loan is forgiven each and every year until it's completely forgiven. In the event the participant fails to occupy the property as their principal residence or sells the property before the 5 years forgivable loan term is up, the forgivable loan will be pro-rated and the remaining balance of the forgivable loan will have to be paid back or collected from the proceeds from the sale of the house which will be collected at closing.

 The assistance is in the form of a 5 year non-amortized forgivable loan. The loan is completely forgiven when the qualified participant resides in the property for 5 years. Twenty percent of the loan is forgiven each and every year until it's completely forgiven. In the event the participant fails to occupy the property as their principal residence or sells the property before the 5 year forgivable loan term is up, the forgivable loan amount will be pro-rated and the remaining balance of the forgivable loan will have to be paid back or collected from the proceeds from the sale of the house. The forgivable loan is secured by a subordinate mortgage held by the municipality based on the location of the property (Butler County, City of Hamilton, or City of Middletown). The principal residence requirement will be enforced through a mortgage on the property. DPA Forgivable Loans close in the name of the municipality based on the location of the property. Therefore, the DPA amount given to qualified participants can also be applied towards FHA Loans 3.5% down payment requirement.

 The minimum amount of DPA funds available is $1,000. The maximum DPA amount is $5,000 for the City of Hamilton and 6% of the purchase price for Butler County and City of Middletown - not to exceed $5,000.

 Process to Request DPA Funds

 DPA funds are accepted on a first-come, first serve basis; funding is subject to eligibility determinations, HQS Inspections and funding availability. In order to begin the approval process and to obtain funds from the DPA program, applicants/lenders need to submit all the requested information/documentation as listed on NHSH's Required Documentation Form preferably no less than 4 weeks from the scheduled date of their closing.

 Neighborhood Housing Services of Hamilton, Inc. partners with and administers the Down Payment and Closing Cost Assistance Program for Butler County, City of Hamilton, and City of Middletown. NHSH is responsible for working with applicants/lenders, processing and pre-qualifying eligible participants, requesting HQS inspections, coordinating the loan closing with the first mortgage lender and Title Company, and wire the DPA funds at closing. 

NHSH will gladly work with those interested participants in the early stages of the home buying process or those who have an Offer to Purchase Contract and are working towards a closing date.

Please contact NHSH's DPA Program Manager, Rosemary Jones with questions about the DPA Program at 513-737-9301 or at Rosemary@nhshome.net

 0720

 #MB.803439.000


   

 

Grant Application

Neighborhood Housing Services of Hamilton, Inc.
100 S. Martin Luther King Jr. Blvd
Hamilton, Ohio 45011

Ohio Mortgage Broker License #  MB.803439.000
Ohio Mortgage Lender License # SM.501559.000