F.A.Q. HOME Program for Homebuyers below 80% Area Median Income

              Updated Income Limits 12/18/13

About the HOME Program

The U.S. Department of Housing and Urban Development’s (HUD) HOME Program provides assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities.

The Builders Development Corporation (BDC), a nonprofit 501c3 community development corporation, was named as a Community Housing Development Organization by Johnson County, KS.  Funding is provided to the BDC for the acquisition/rehab, or new construction, of homes for sale to homebuyers below 80% of Area Median Income. 

The HOME Program will help individuals and families realize the dream of homeownership. Buyers may receive HOME funding in the form of a deferred second mortgage to assist with down payment and/or closing costs.

Below are some Frequently Asked Questions (FAQ) regarding the HOME:

Q. How do I know if I meet the income qualifications?
A. Your total household income based on family size must be less than the incomes listed on the following chart:

Family Size

 1 person household

2 person household

3 person household

4 person household

5 person household

6 person household

7 person household

8 person household

Income

$39,150

$44,750

$50,350

$55,900

$60,400

$64,850

$69,350

$73,800

Q. What are the other eligibility qualifications?
A. In order to be eligible, the buyers must:
1. Be a U.S. citizen, qualified alien or a non-immigrant.
2. Qualify for a mortgage for the purchase of the home and provide the required documentation necessary to meet the HOME program requirements and obtain mortgage loan approval from an approved lender.
3. Obtain a certificate of completion from a HUD approved housing counseling agency.
4. Secure an executed real estate contract with the BDC for the property to be purchased.
5. Contribute a minimum of $1000 of your own funds toward purchase of the home.  Note:     Individual lenders may require an additional downpayment.
6. Purchase and occupy the HOME Program home as your primary residence.

Q. How much assistance is the HOME program providing?
A. Eligible homebuyers will receive funds for down payment and/or closing costs for the purchase of a home funded with HOME funding.

Amount of potential assistance will be determined by need, sales price, and other factors but shall not exceed $10,000.

 

 

Q.  What is the application process?

A.  All prospective buyers must complete a HOME Application, and submit a non-refundable payment of $200 to the Builders Development Corporation.  This payment is for the Income Qualification process, which is a required component of the program.

Q. Is this a grant or a loan?
A. The assistance provided by the HOME program is in the form of a 0% interest deferred loan. A deferred loan means that you will not have to make payments on the assistance provided by the Johnson County KS or BDC during the affordability period. You will not be required to pay the loan back as long as the property remains your primary residence and there is no change in title or ownership during the affordability period.

Q. What is the affordability period?

A.  Johnson County minimum affordability period is as follows:

 

Direct funds provided         Minimum Affordability Period

To Buyer

 

$0  –  $15,000                      5 years

$15,001 – $40,000              10 years

$40,001 and over                15 years

  

Q.  What happens at the end of the affordability period?

A.  If all the terms of the Second Deed and Promissory Note are met, at the end of the affordability period the Deed will be automatically release.  In other words, the loan becomes a grant once the affordability period is completed.

Q. Can I select a home and present it for participation in this program?
A. No, all homes will be selected by the Builders Development Corporation and placed on an available inventory list.

Q. Can I select my own real estate agent to assist me with the purchase of a HOME Program home?
A. Yes, however the agent must represent you at the time you make application. 

Q. Where are the available homes located and how can I view a list of the inventory?
A. Homes available in this program will be located throughout Johnson County, Kansas in identified areas.  The listings will be posted on the Builders Development Corporation website, area churches, Johnson County website and bulletin boards, MLS (Metro Listing Services by the KC Realtors Association) and other venues as they become available.

Q. Do I need good credit to participate in this program?
A. Credit will be reviewed by the lenders.  Lenders are using specific underwriting criteria to determine whether you qualify for a mortgage. The HOME program requires that you must obtain a pre-qualification or pre-approval letter from an approved lender in order to submit a purchase contract for a home.

Q. Can a homebuyer use other assistance programs with the ME Programs?
A. Possibly. We will allow the HOME funds to be layered with other programs. However, not all programs allow layering of assistance. You or your lender should check with the program administrator to confirm with them if they allow layering. Your lender will also need to be sure they can layer the funds with whatever type of first mortgage you are getting from them.  The Johnson County or BDC 0% loan shall always remain in second position to the primary first mortgage.

Q. What benefits are available to the buyer?
A. Buyers will benefit in the following ways:
1. “Move-in” ready home
2. A zero percent second mortgage loan in the amount as determined for principal reduction, closing cost and/or down payment for the purchase of the home. The HOME second mortgage loan is due in full upon sale, transfer, or when home is no longer owner occupied for the duration of the affordability period.
3. Not just for first-time homebuyers

Q. If I meet the eligibility qualifications, what do I do to participate in the program?
A.  1. Complete homebuyer education training and obtain your certificate of completion.
2. Apply for mortgage loan pre-qualification from a lender and provide the required information as requested by the lender and the HOME program.
3. Obtain the list of available homes, select a home, contact BDC to assist you with the submittal of your purchase contract and close on your home.

Q.  Are all loan products acceptable for homebuyers?

A.  No.  If a loan product could be considered as “predatory”, the homebuyer would need to seek another financing option.

 

Q.  What types of loan products are acceptable?

A.  While there is not currently an “accepted lender list”, in general the BDC HOME Program will accept 30 year fixed loan products with interest rates at/near the current 30 year average.  In addition, closing costs and other fees will be reviewed by BDC to ensure they provide a sound product for the buyer.  The BDC reserves the right to reject any product deemed as predatory or otherwise unacceptable in order to protect the homebuyer.

Q. How do I get additional information on this program?
A. Visit the Builders Development website ( www.bdc-kc.org ) for updates and more information. You may also contact Michael Snodgrass at [email protected] or call 816-733-2240.