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Erlanger joins program to help homebuyers with down payment and closing costs

The city of Erlanger has officially joined the Northern Kentucky HOME Consortium, a collection of cities that drive home ownership through federal housing funding.

“Earlier in the year, Covington Mayor Joe Meyer came to speak to the 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 for membership.

The City of Covington is the primary gateway to The Home Consortium and maintains all program rules and regulations for cities.

Residents of Consortium member cities can primarily benefit from the down payment assistance program.

The Down Payment Assistance Program provides eligible homebuyers with an interest-free loan of up to $10,000 that can be used for down payment or closing costs. Funds are provided through HUD’s annual fund allocation. Eligible homebuyers must book these funds through a participating lender who works with the Department of Housing and Urban Development.

The Down Payment Assistance Loan is a forgivable loan with a 10-year term as long as the property is the owner’s primary residence at the end of the loan terms. The loan is pro-rated, however, and is forgiven by 10% for each year the buyer lives in the home. This loan can be combined with other aid offers.

“A lot of what I see now is people buying their fares,” said John Hammons, CDBG/Home program coordinator. “People who participate can call or contact me and I will send them information about the program.”

Qualifying residents must complete homebuyer counseling courses, which may be conducted by a HUD-licensed housing counseling agency with a HUD-licensed housing counselor.

“You can apply with me before or after you get the advice,” Hammons said. “I will need verification that you received the advice. You only need advice from one organization.

Hammons said the main criteria is household income based on how many people will live 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.”

Some other guidelines are:

–If the house currently has tenants, that house is not eligible.
–The house must pass the inspection by the inspectors of the program.
–Purchase price must be $195,000 in Kenton County, $199,000 in Campbell County or less for an existing home.
–Borrowers’ debt ratios cannot exceed 31% or 43%.
–Documents must be provided for each member of the household over the age of 18:
2 months of recent and consecutive pay stubs 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, 401k, etc.);
–Newer 1040 and W2
-ID photo
–Realtor and lender contact details
-Purchase contract
– Disclosure of information on the hazards of lead-based paints and/or lead-based paints (if you already have them) and closing date.

More detailed guidelines can be found in the document below:

Homeowners can get more specific information about the criteria by calling Hammons at 859-292-2105.

He said that once a person has a purchase contract, they can visit this website to apply.

“I’m 100% behind this,” Fette said. “With the rising cost of housing and the costs of general inflation, I think this will help people to be able to buy a house.”

Fette said the program not only helps people get into homes, but also provides budget training so families can learn how to manage household expenses. With this help, new owners can set themselves up for success.

“The program tries to encourage individuals to keep their homes by adding value to their investment,” Fette said. “And the city invests in its people by reaching out to them.”