As we roll into the new year, it’s important to discuss several grant options that now have enhanced perks and greater accessibility for future homeowners.
The grant options come from the Federal Home Loan Bank (FHLB). Previously, FHLB made the grant available to first-time homebuyers, civil servants or current/retired military. Now, the program is open to “essential workers” during COVID.
Who is an “essential worker”? The term applies to a variety of occupations like medical professionals, food manufacturers, transportation workers, people in the legal world and more. On its website, the Centers for Disease Control (CDC) provides a full list of jobs deemed “essential” during the pandemic.
The FHLB grant is available in North Carolina and Virginia. And the grant money can go towards your down payment or closing costs.
Below I lay out the parameters for each loan program and eligibility requirements.
First-Time Homebuyer Product (FHP)
You need to make a $1,000 contribution to participate in the grant to receive up to $7,600.
For the loan program, a first-time homebuyer is defined as anyone who has not owned a home for three years as well as single parents and displaced homemakers who owned or resided in a home with a spouse during the last three years.
Community Partners Product (CPP)
Again, you need to make a minimum $1,000 contribution to participate but the max funding this time is $10,000.
For the loan program, a community partner is defined as employed or retired law enforcement officer, educator, firefighter, EMS or health care worker, other first responders and non-active- duty National Guard Reservists. This program has also expanded its criteria to include COVID- related “essential workers” as defined by local or state governmental entities. You are not required to be a first-time homebuyer.
For both options, the grant funding is forgivable if you stay in the house for at least five years.
It’s important to note that to qualify, household income may not exceed 80% of the HUD median income limit, adjusted for family size. In simple terms, that means these loan programs are designed for low to middle-income families.
Even though the FHLB grant has existed for some time, the program reaches far more people with the addition of “essential workers.” Take advantage of this terrific loan program while you can.
Shikma Rubin is a loan officer at Tidewater Home Funding in Chesapeake (NMLS ID #1114873). She enjoys the chance to lead workshops and webinars on how to buy a home in 2021. Have mortgage questions? You can reach her at email@example.com or 757-490-4726.