What is the Welcome Home Program?
The Welcome Home Program (WHP) offers grants to fund reasonable down payments and closing costs incurred in conjunction with the acquisition or construction of owner-occupied housing by low- and moderate-income homebuyers. The grants are limited to $7,500 for homebuyers who are honorably discharged veterans or active duty military personnel and $5,000 for all other homebuyers. All funds are reserved for specific homebuyers purchasing specific homes and cannot be transferred to other homebuyers or to other homes. Welcome Home funds will be available for reservation on a first-come, first-served basis beginning at 8:00 AM ET on March 4, 2019, and will remain available until all funds have been reserved.
Who Can Use the WHP?
Lenders establish a set-aside of Affordable Housing Program (AHP) funds to help create homeownership. These funds are available to homebuyers as grants to assist their mortgage loan applicants in the home buying process. This is a widely used program, ideally suited to the needs of community lenders and their customers.
What are the Program Requirements?
Below is an abbreviated list of program eligibility requirements:
- The total income for all occupants must be at or below 80 percent of the Mortgage Revenue Bond (MRB) limit for the county and state where the property is located.
- Homebuyers must contribute at least $500 of their own funds towards down payment and/or closing costs.
- WHP applicants do not have to be first-time homebuyers. However, all first-time homebuyers are required to complete a homeownership counseling program.
- WHP grant funds are intended only for homebuyers who qualify for the first mortgage based on their own merit. Co-signors and co-borrowers are not allowed unless they will occupy the home as their primary residence and their incomes are included in determining eligibility.
- The Member who reserves the WHP funds must originate the first loan, but the loan may close in the name of a third party.
- The interest rate for the first mortgage may not exceed 8.50 percent.
- The interest rate for the second mortgage may not exceed 12.00 percent.
- Only second mortgages provided by formal organizations, community development financial institutions, housing finance agencies, non-profit organizations, etc. are acceptable.
All eligible property assisted with WHP funds is subject to a five-year retention mechanism (Retention Agreement), which may require the household to repay all, or a portion, of the subsidy, if the home is sold or refinanced within five years from the closing of the transaction.
How Do I Apply?
Contact your bank to see if they are participating in the program or you can call me and I can help direct you to a loan officer.
Reserving WHP Funds
Homebuyers must apply with a participating lender. Contact me if you need direction!
Lenders will perform a preliminary review of the Reservation Request and the documentation submitted to determine eligibility of the homebuyer and availability of funds in the program. If any of the information is incomplete, additional documentation or information may be required. Note: The Reservation Request will be denied upon receipt if a fully executed loan application is not included.
Written notification will be provided to the Member as to the homebuyer’s eligibility. Submission of a Reservation Request does not constitute an approval of funds. Funds are reserved only upon written notification of approval from the Lender.
Disbursing WHP Funds
Welcome Home funds will only be disbursed after closing. Funds will be disbursed only to the extent they are required to fill the gap for down payment, closing costs, and counseling fees.