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Homeownership Set-Aside Program - with FHLBank

Posted in: Home Ownership, Personal Banking, Planning & Budgeting

Homeownership Set-Aside Program - with FHLBank

Before you can start making the home your own though, you’ll need to start the home buying process. Unfortunately, it can be daunting for you if you’re a first-time homebuyer, especially if you have a lower income level and would struggle to come up with the down payment and closing costs. Fortunately, there is an answer for aspiring homeowners like you!

Dream First Bank of Syracuse is teaming up with FHLBank of Topeka to make your home-buying dreams come true. In this article, we’ll discuss what you need to know about the Homeownership Set-Aside Program available to first-time homebuyers. The sound of jingling keys to your home and the feel of the cold metal in your hands is just a few months away if you get started now.

Read on to learn more about this great opportunity from DFB!

What is the Homeownership Set-Aside Program?

The Homeownership Set-Aside program is a grant that is available to first-time homebuyers in Kansas, Colorado, Nebraska, and Oklahoma who meet certain qualifications. The program provides up to $7,500 that can be used for the down payment, closing costs, and/or eligible repairs. The grant is forgiven as long as the buyers live in the home for five years.

This year is an especially good year for the program due to the higher availability of funds and fewer limitations. In previous years, homebuyers were required to contribute $500 of their own money toward the purchase transaction. Starting this year, the $500 contribution has been eliminated. Some households may be able to get $250 cashback at loan closing. The program starts March 7th this year and continues until it runs out of money.

Details about the Homeownership Set-Aside Program?

Here’s more info on the program in case you’re interested:

  • Maximum grant amount: $7,500
  • Minimum grant amount: $2,500
  • All buyers must be first-time homebuyers
  • Non-occupying home co-borrowers/co-owners aren’t allowed
  • Household income limitation to qualify
    • All household income counts: base income/overtime/bonus/additional income
    • This goes for anyone in the home over 18 years old, even if they aren’t listed on the loan
    • Each county has a different income limitation based on the number of persons who will live in the home
    • Household income is calculated based on current and projected earnings
  • Investment properties and/or income-producing properties not allowed
  • Homebuyer education is required
    • National Industry Standards for Homeownership Education & Counseling
    • HUD
    • Fannie Mae
    • Freddie Mac
    • Habitat for Humanity

An Example of Funds Are Used

Here’s a practical application for how the funds could be used. Imagine you’re looking at a $100,000 home. The down payment would be $3,500 and closing costs would be $4,500 (a total of $8,000). However, if you had $1,000 in credits for real estate tax proration or other fees that are paid by the seller, you would only need $7,000. In this situation, the grant can either be reduced or you could use the additional $500 to make a higher down payment.

Homebuyer Education Requirement Information

If the homebuyer education requirement sounds intimidating, it’s not. A homebuyer is given a link to a 45-minute video and takes a test at the end. If they pass, a certificate is emailed to them and to the bank to verify that they completed their homebuyer education. Borrowers can create joint registration and only one is needed to take and pass the test. They must sign the certificate, stating that they took the test and someone else didn’t take it for them. Not bad!

This program is a great way for 1st-time home buyers to get into the home they’ve always wanted. The awesome thing about this grant is that it is forgiven as long as the owners have remained in the home for five years.

Who Can I Contact About the Program?

If you’re a first-time homebuyer and think you may qualify for the program, let us know! Here at DFB, we’re always excited to help you reach your goals. To learn more about the program, feel free to contact one of our home mortgage loan experts via the link. We can’t wait to hear from you and get you the keys to your very first home.

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