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Homeownership Set-Aside Program - with FHLBank

Posted in: Home Ownership, Personal Banking, The DFB Difference

Homeownership Set-Aside Program - with FHLBank

Many Americans dream of owning their first home. However, it can be daunting to begin the home-buying process when you’re unsure you can afford it.

That’s why Dream First Bank is excited to continue our partnership with FHLTopeka to bring you the Homeownership Set-Aside Program. This unique program is specially designed to help you purchase your first home and simply give you up to $7,500 to help towards the closing costs and /or down payment.

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What is the Homeownership Set-Aside Program?

If you are a first-time homebuyer in Kansas, Colorado, Nebraska, or Oklahoma, and your household income is at or below 80% of the Area Median Income (AMI), then you may qualify for the Homeownership Set-Aside Program (HSP). This means that you can receive a grant of up to $7,500 to help with down payments, closing costs, repair assistance, and similar expenses.

The best part is that, as long as you live in the house for at least five years, the grant will be completely forgiven. No need to add to your debt!

Fast Facts

Considering applying for the Homeownership Set-Aside Program? There are a few nuts-and-bolts details that you’ll need to know before getting started.

  • All grant applicants must be first-time homebuyers.
  • Minimum grant per household: $2,500
  • Maximum grant per household: $7,500
  • Homebuyer education course required (one per household)
  • Non-occupying home co-borrowers / co-owners are not permitted.

How Difficult is the Homebuyer Education Requirement?

The short answer is, “Not at all.” The term “education course” may raise some eyebrows, but this is nothing like the lengthy driver’s education lessons you may have taken in high school.

To receive an HSP grant, homebuyers must complete a program provided by an organization that has experience in training first-time homeowners, or the program you take must be based on another established organization’s curriculum. Typically, these courses require you to watch a few videos, which take no more than a few hours, and then have you complete a test based on the content you just watched.

If you purchase a home with someone else, only one of you needs to take the course. One signed certificate is enough to qualify for the HSP. The course must be completed within the current or prior year of the home purchase closing date.

To help you get started, we’ve linked some tried-and-tested courses from acceptable educational providers below. 

What does the Homeownership Set-Aside Program look like in action?

Let’s say you’re thinking of purchasing a home for $100,000. Your down payment would be roughly $3,500, and your closing costs would come in somewhere around $4,500. However, you might also have $1,000 in credits from seller-paid fees, such as real estate tax proration. As such, you would only need $7,000 to get the purchasing process rolling.

In this case, you would have a choice: you could reduce the grant to only give you the $7,000 that you need. Or, you could use the additional $500 to raise your down payment.

Getting Started with the Homeownership Set-Aside Program

Buying your first home can be intimidating, regardless of your income level. We want you to achieve that dream, so we’re here to help.

At Dream First Bank, we assist with every step of the home-buying process, including grant applications. If the Homeownership Set-Aside Program sounds like the right move to get you closer to owning a house, talk to one of our home loan experts! We can’t wait to help get you into the home of your dreams.

Apply Now

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