The city of Erlanger has officially joined the Northern Kentucky HOME Consortium, a collection of cities which stimulate home ownership using federal home funding.
“Earlier in the year, Covington Mayor Joe Meyer came and talked to council about the program, and what it would mean to be part of the program,” said Mayor Jessica Fette. “We will be the sixth city in Northern Kentucky to belong to the Consortium, joining Newport, Covington, Ludlow, Bellevue, and Dayton.”
Fette said the consortium is the first of its kind in Kentucky, and the Department of Housing and Urban Development has approved Erlanger’s application to join.
The city of Covington is the lead entry for the Home Consortium and maintains all the rules and regulations of the program for the cities.
Residents of the cities who belong to the Consortium can benefit chiefly through the downpayment assistance program.
The downpayment assistance program provides eligible homebuyers with a no-interest loan of up to $10,000 that can be used for down-payment or closing costs. The funds are provided by HUD’s annual allocation of funds. The home buyers who are eligible have to reserve those funds through a participating lender who works with the Department of Housing and Urban Development.
The down payment assistance loan is a forgivable loan lasting for 10 years as long as the property is the homeowner’s primary residence at the end of the loan terms. The loan is pro-rated, however, and is forgiven 10 percent for each year the buyer lives in the home. This loan can be used with other offers of assistance.
“A lot of what I’m seeing now is people buying down their rates,” said CDBG/Home Program Coordinator John Hammons. “People who are participating can call me or contact me and I will send information on the program.”
Residents who qualify have to take homebuyer counseling courses, which can be provided by a HUD approved housing counseling agency with a HUD approved certified housing Counselor.
“You can apply with me before or after you have received the counseling,” said Hammons. “I will need verification that you received the counseling. You only need counseling from one organization.”
Hammons said the main criteria is the income of the household based on the amount of people who will be living there.
“We use gross income for our income calculation, and the income limits are on the guidelines,” Hammons explained. “For example, for one person, the limit is $53,500.”
A few other guidelines are:
–If the house currently has tenants, that house is not eligible.
–The house has to pass inspection by the program’s inspectors.
–The purchase price must be $195,000 in Kenton County, $199,000 in Campbell County, or below for an existing home.
–Borrowers’ debt ratios cannot exceed 31 percent or 43 percent.
–Documentation needs to be provided for every household member over the age of 18:
2 months of recent, consecutive paystubs from every job they may have, documentation of any other form of income;
–Bank statements: 6 months for all checking accounts and 1 month for all savings accounts;
–Documentation of any other assets (stocks, bonds, pensions, retirement accounts, IRA’s, 401k’s, etc.);
–Most recent 1040 and W2
–Photo ID
–Realtor and lender contact info
–Purchase contract
–Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards (If you have it already), and closing date.
More detailed guidelines can be found in the document below:
Homeowners can get more specific information on criteria by calling Hammons at 859-292-2105.
He said once a person has a purchase contract, they can visit this website to apply.
“I am 100 percent behind this,” Fette stated. “With the rising cost of housing and the generalized inflation costs, I think this will help people be able to buy a home.”
Fette said the program doesn’t just help people get into houses, but it also provides budget training so families can learn how to manage household expenses. With this help, first time homeowners can set themselves up for success.
“The program tries to encourage individuals to keep their house by treasuring their investment,” Fette said. “And the city invests in their residents by extending a helping hand.”
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