Thanks to some compatible programs, two local organizations have found opportunities to partner to help expand homeownership.
The Warren-Forest Economic Opportunities Council (EOC) and Northwest Savings Bank are working together to steer low- to moderate-income individuals and families exploring the option of homeownership toward separate, complimentary programs offered by the two organizations.
According to Julia Roque, community service director with the EOC, the genesis of the partnership can be traced back to a call to Northwest Savings she made on behalf of a client. Roque said she spoke with Margaret Harris, mortgage loan officer with Northwest. The two had a discussion of available programs that eventually made it apparent both organizations offered programs that could benefit potential homebuyers.
"We discussed the First Time Homebuyer Program and went from there" Harris said, referring to a Northwest program.
"Any time we ask for advice for financial matters and loans we're always told, go to your local bank," Roque said. "That way your loan stays here. As an agency, it's easier to talk to your local financial institution."
The grant and loan programs available through the two agencies, along with budget counseling offered by EOC, fit together hand-in glove.
For instance, both the First Time Homebuyers and First Front Door Programs offered by Northwest require applicants to obtain a homebuyers class certificate of completion, something the EOC's financial counseling services can provide.
The EOC, according to Jason Walters, who handles housing finance counseling for the agency, provides potential homebuyers with information aimed at helping them understand and budget for the costs of owning a home, especially those that individuals renting don't face, such as property insurance and taxes.
Meanwhile, both Northwest and the EOC offer financial aid through grant funding to help buyers cover the costs of purchasing a home, the EOC through the Warren County Housing Trust Fund and Northwest as part of the First Front Door Loan Program through the Federal Home Loan Bank of Pittsburgh.
All of the programs have income guidelines based on a percentage of either state or local median household income, usually 80 percent of the median.
"Just because you're low-income doesn't mean you can't afford permanent housing," Roque noted. "That's who the programs are for. It's to open up home ownership for people who didn't think they could afford it."
The First Time Homebuyers Program offers loans with varying loan-to-value ratios, essentially the percentage of the cost of purchase of a property the loan covers, based on credit scores. Those with credit scores from 620 to 640, 640 to 680 and 680 and higher can receive loans covering 90, 95 and 97 percent of the property values, respectively. A higher loan-to-value ratio loan, by definition, requires less of a down payment on a property up front.
In addition to completing financial counseling, to qualify for the program a household must make less than 80 percent of the median household income for state and be what is considered a first-time homebuyer. A first-time homebuyer, for program purposes, is a borrower who has not owned a home, a single person who has owned a home only while married or a married couple either of whom have not owned a home in the previous three years according to tax return information.
The program does not require payment of application and loan processing fees, and offers discounted loan interest rates through usage of a no add-on calculation method.
The First Front Door Loan Program follows nearly the same guidelines and offers nearly the same benefits as the First Time Homebuyers Program, but there are some notable differences.
Income guidelines are still 80 percent of median household, but are based on county-level medians rather than state-level figures.
The program also offers closing cost assistance up to $5,000. The assistance is offered as a grant, meaning it doesn't have to be repaid, but a lien is placed against the property for the funds, which is forgivable after five years.
The two programs are similar to programs offered through the Federal Housing Assistance (FHA) Program and the U.S. Department of Veterans Affairs (VA) Home Loans Program. No one in the county offers loans through the FHA program.
"Although we don't offer the FHA or VA loans," Harris said, "we do offer these programs which have proven to be more successful."
Northwest also offers the Affordable Home Loan Program, which follows the same guidelines as the First Time Homebuyers Program but is open to those who do not qualify as first time homebuyer or individuals interested in refinancing existing home loans.
Additional grant aid for potential homebuyers who qualify is available through the Warren County Housing Trust Fund. The aid can be applied for through the EOC, but final determinations are approved through Warren County Grants Administrator Lorri Dunlap.
To qualify for the grants, borrowers must be purchasing a home within the county and have income within current U.S. Department of Housing and Urban Development Section 8 guidelines, which are set at 80 percent of the county median household income.
Up to $3,500 can be awarded per grantee which can be used toward closing costs, down payments or to buy down loan interest rates.
"Don't be afraid to use the resources available," Harris urged.
"It's not hard to own a home," Roque added. "Don't be afraid to own a home."