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Hope Brings You Home is the name of the recently launched down payment assistance program for the Southern Nevada residents. The program provides funding to qualified homeowners living in specific zip codes considered distraught from the housing crisis.
The plan targets homeowners living in Henderson, Las Vegas and North Las Vegas to help those who can’t afford and qualify for the initial down payment required by banks to buy property.
Those who sign up for the program obtain a down payment of 10% of the property’s purchase price up to $20,000. The program applies to single-family units that consist of manufactured homes, townhomes and condos.
What the DPA Program Means to Homeowners
The program is issuing 30-year, fixed rate mortgage loans (fully amortizing) and second DPA loan whose value is 10% of the main property with a maximum amount of $20,000.
Borrowers can use funds from the second mortgage for:
- Paying any part of the purchase price of the property which is due and payable during the Closing and has not been funded by the Mortgage Loan
- Paying for any prepaid or closing costs
- Paying for mortgage insurance premiums
Since the DPA second mortgage is provided in a fixed percentage, any unused DPA Grant Assistance should be used as a principal reduction. As such, the mortgage is not applied by the lender for any other purpose without the consent of the Servicer or NAHAC.
The DPA Second Mortgage has the following components:
- 0% interest rate
- Does not have monthly payments
- A three-year period of the deferred loan is forgiven
How the DPA Program is Funded
The US Department of the Treasury is providing funding for the Second DPA Mortgage Program through the Troubled Asset Relief Program known as the Hardest-Hit Fund. As a result, the DPA Program has allocated $36M at the Nevada Affordable Housing Assistance Corporation for the Hardest Hit Fund.
The funds are available for homeowners on a first-come , first-serve basis and should be distributed from 1st May 2018. Borrowers can find the interest rates for the first mortgage plan on the eHousingPlus.com site. The availability of the second DPA mortgage and its interest rate are subject to change until the borrower reserves the loan.
Who Qualifies for the Loan
It is the lender who determines if the borrower meets all the requirements of the first loan and the DPA Second Mortgage. As such, if the lender reserves the first mortgage on the eHousingPlus system, the second DPA loan is also reserved automatically. It requires buyers to obtain a fully-executed sales contract for a particular property prior the loan application. Program funds are only reserved for buyers who have a valid contract. The eligibility criteria for the loans cites:
- All the borrowers should be considered regardless of their race, age, religion, color, marital status, physical ability, nationality or military status
- The applicant must not have an ownership interest in another property
- Borrowers should occupy the house as their main residence and move to the property within 60 days of closing
Additionally, the loans purchased can only be reserved if they meet the purchase, processing, and delivery timetable requirements. For example, a loan that has not been certified by an underwriter within twenty days after reservation is subject to cancellation.
The reserved loan should also be closed and delivered within 45 days but the period can be extended up to 70 days of reservation.
Purchase and Income Limits
The monthly income (gross) of the credit qualifying borrower should be factored in. According to the agency income guidelines, the borrower’s income should not exceed $98,500. The borrower’s income is disclosed on the Universal Residential Application Form 1003 that was lasted signed.
The Hope Brings You Home plan also imposes limits as to the purchase price of the property. It will only provide mortgages for properties whose value does not exceed $400,000.
This cost is the sales price of a completed residential unit and includes all the expenses the buyer pays for exclusive of Agency-permitted costs. If the agency rules and policies permit a lower purchase price then the buyer should adhere to these requirements.
Why Hope Bring You Home was Formed
The program was launched after the Nevada Affordable Housing Assistance Corporation (NAHAC) obtained approval to use the money from Nevada’s Hardest Hit Fund. The new NAHAC management under the leadership of President Verise Campbell announced the new program in a bid to bring freshness to the already tainted corporation.
It was after the federal audit exposed the widespread abuse and waste of funds within the NAHAC in 2016. The agency has been a subject of discussion due to its inefficiency in providing funds to the Nevadans.
The 2016 audit, for example, found up to $ 8M wasted by the management. The special inspector also found NAHAC had spent $10,963 on staff lunches, employee bonuses, outings and employee perks and $5811 on gifts and holiday parties. It is this outrageous use of funds that prompted Senator Charles Grassley R-Lowa to conduct a program-wide audit.
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