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Step 3: Financial Assistance
For qualified homebuyers GAHLI provides a no-interest second mortgage. Repayment is deferred until the property is sold (properties must remain owner-occupied) or the first mortgage is paid. Funds may be used for downpayment, closing costs, and/or principal reduction, but GAHLI funds cannot be used to pay discount points, buydowns, or prepaid expenses*. In order to receive a second mortgage, participants in GAHLI must obtain a fixed-rate, 30-year first mortgage from participating FHA, VA, conventional (non-conforming, high interest rate and fee loans will not be accepted) or portfolio lenders. Lender- or seller-paid 2:1 buydowns will be accepted. GAHLI funds will not be approved in conjunction with ARM or balloon first mortgage financing. Participating lenders must receive an orientation session from GHCS and should assist the homebuyer in understanding GAHLI’s eligibility requirements.
The amount of GAHLI's financial assistance is determined by household size and income based upon the HUD figures for the Greensboro area.
The chart below shows the maximum assistance available.
|
Household |
Below 50% |
Maximum |
Below 65% |
Maximum |
Below 80% |
Maximum |
|
Size |
Median |
Assistance |
Median |
Assistance |
Median |
Assistance |
|
1 |
$20,500 |
$4,000 |
$26,650 |
$3,000 |
$32,750 |
$2,000 |
|
2 |
$23,400 |
$5,000 |
$30,420 |
$4,000 |
$37,450 |
$3,000 |
|
3 |
$26,350 |
$5,000 |
$34,255 |
$4,000 |
$42,100 |
$3,000 |
|
4 |
$29,250 |
$5,000 |
$38,025 |
$4,000 |
$46,800 |
$3,000 |
|
5 |
$31,600 |
$5,500 |
$41,080 |
$4,500 |
$50,550 |
$3,500 |
|
6 |
$33,950 |
$5,500 |
$44,135 |
$4,500 |
$54,300 |
$3,500 |
|
7 |
$36,250 |
$5,500 |
$47,125 |
$4,500 |
$58,050 |
$3,500 |
|
8 |
$38,600 |
$5,500 |
$50,180 |
$4,500 |
$61,800 |
$3,500 |
In addition to any financial assistance provided by GAHLI, purchasers must provide, from their own funds, the minimum downpayment and prepaid costs described in the following chart. This homebuyer contribution is also based upon household income and family size.
Income Minimum Downpayment Requirement
Below 80% Median $1,250 + prepaids* at closing
Below 65% Median $1,000 + prepaids* at closing
Below 50% Median $ 750 + prepaids* at closing
*The seller or a third party if allowed by the first mortgage lender and loan underwriting can pay prepaids.
For purposes of calculating program eligibility and homebuyer subsidies, a maximum housing expense-to-income ratio in the range of 29-33 percent will be acceptable and a maximum debt-to-income ratio in the range of 38-41 percent will be allowed. In addition, homebuyers are required to reserve the amount of one house payment in their savings or checking account. The lender must verify reserves.
Eligible properties include new, existing, or rehabilitated single-family homes and condominiums. First time home buyers may purchase new homes with a sales price up to $175,000 and existing homes with a sales price up to $160,000 and located within Greensboro’s city limits. Properties must meet housing code standards. A home inspection, ordered and paid for by GHCS, is made on all existing homes.
Eligibility Requirements
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