The Ohio Housing Finance Agency (OHFA) is encouraging first time home buyers in Ohio to take advantage of the Agency’s First-Time Homebuyer Program. OHFA Executive Director Doug Garver even released a statement where he expressed the importance of taking advantage of programs such as this one. “It’s our mission to design affordable home loan products that promote sustainable home ownership.” Said Carver.
Under the program designed for new qualified borrowers, individuals and families can receive down payment assistance of up to $10,000 (2.5%) of the home’s purchase price, a new mortgage tax credit, and a special interest rate reduction of .25% on all home loans (available for the initial 250 loans reserved by participating OHFA lenders). To find an OHFA-approved lender in your area, you can go to MyOhioHome.org. Current mortgage interest rates and a variety of information regarding the OHFA’s programs can also be found at this link.
Some may ask, what can the down payment assistance be used for? This money can be used for pre-ownership expenses such as down payment or closing costs. With less out-of-pocket to pay, this program can definitely be used by potential borrowers who have student loan or other debts, but who still qualify for a mortgage.
A requirement that all first time homebuyers must fulfill before qualifying for this program is attending a free home buyer education session. You can search for HUD-approved housing counseling agency at this HUD link.
Through OHFA’s Mortgage Credit Certificate, first time home buyers can receive a direct federal tax credit on a portion of the interest payments. Through this benefit, home buyers can lower their federal tax liability by 40% with a maximum of $2,000 per year for the life of the mortgage. Something important to keep in mind is that the mortgage credit is in addition to the home mortgage interest deduction on IRS Schedule A.
To qualify for an MCC, a buyer must also meet one of the following requirements:
* Be a first-time home buyer—someone who has not owned or had an ownership interest in his/her principal residence in the last three years,
* Purchase a home in a target area—an economically distressed area designated by the U.S. Department of Housing and Urban Development (HUD), (download Ohio’s target areas from our download center or visit our target area maps page), or
* Be a military veteran who has received an honorable discharge.
* Occupy the property as the primary residence for every year the borrower claims the MCC. If the property ever ceases to be the borrower’s primary residence, OHFA may revoke the MCC approval.
* Qualify for the loan being requested. Borrowers must meet standard credit and underwriting criteria established by the IRS and HUD for the MCC Program. See IRS Publication 530.
Borrowers who want to buy a home should start shopping ASAP to be one of the first 250 who close their loan and receive the .25% interest rate reduction. If your career is one that offers a public service such as a police officer, firefighter, teacher, direct patient caregiver, military or veteran, you could be defined as an “Ohio Hero,” under the OHFA program. Having this title enables many first time buyers to receive an additional .25 percent rate discount and optional down payment assistance. The mortgage rate for Ohio Heroes with down payment assistance is currently 4.1 percent.
This mortgage product is available to the following full-time employees who are:
* Active Military, Active Reserve, or a Veteran – Qualified Active Duty Service personnel include Armed Services or Reserve Forces. Qualified veterans include military members honorably discharged from any branch of the U.S. Armed Forces.
* Firefighters, Emergency Medical Technicians or Paramedics – Sworn paid members of a fire department whose regular duties include fire suppression or prevention, emergency medical response, hazardous materials response.
* Health Care Workers – Certified, accredited, or licensed health care workers who are employed full-time as a medical resident or fellow, dental hygienist, nurse, nursing assistant, pharmacist, pharmacy technician, physician’s assistant, medical technician, technologist, or therapist.
* Police Officers – Individuals commissioned as a police officer by a federal, state, county, or municipal or township government, or a public or private college or university; must be sworn to uphold, and make arrests for violations of federal, state, county, municipal, or township law or respond to terrorism.
* Teachers – Individuals employed full-time by an accredited or state recognized public school, private school, or federal, state, county, or municipal educational agency as a state-certified classroom teacher or administrator in grades K-12 or higher education. Full-time instructors must teach a minimum of 12 credit hours per academic term. License and paystub from education facility required to validate credentials.
Graduates who have received a degree within the last 2 years (24 months), can also receive down payment assistance and a discounted OHFA rate through the Grants for Grads program.The rate for Grants for Grads applicants is currently 4%.
To qualify for the Grants for Grads product, you must:
* Be a first-time home buyer purchasing a single family home
* Meet OHFA income and purchase price limits. The limits vary by county.
* Be a high school graduate or have received a GED
* Apply for the grant within 24 months of graduating from an educational institute recognized by the US Department of Education‘s Database of Accredited Postsecondary Institutes having earned an associate’s, bachelor’s, master’s, or doctoral degree
* Obtain a mortgage through an OHFA participating lender
In addition, you must either:
* Complete a free home buyer education course offered by a HUD-approved housing counseling agency, or
* Use OHFA’s Streamlined Homebuyer Education.
All the information you could need on this program is available at this link.