Montgomery County: First-Time Home Buyer

Homebuyer Assistance Program in Montgomery County

The Montgomery County First Time Home Buyers Program aims to assist eligible first-time homebuyers in Montgomery County in purchasing a home through down payment and closing cost assistance. The program provides financial assistance to those with a household income below the median limits and meets specific eligibility requirements.

The American Rescue Plan Act (ARPA) provides additional down-payment assistance to eligible applicants whose household income is below 80% of the median limits. Proper disclosure of all assets is necessary during the application process to determine eligibility and the amount of financial assistance that can be provided. This article explains the grant terms, eligibility requirements, the importance of proper disclosure, program funding, and household eligibility requirements for loans.

Grant Terms

The applicant's household's financial need, the property's selling price, and household assets determine the grant amount.

Participants can receive assistance up to 10% of the estimated affordable sales price (not to exceed $10,000). The assistance amount is based on the selling price, liquid assets, closing costs, mortgage amount, and other fees paid to acquire the property.

The interest rate is zero percent (0%).

Repayment is necessary only if the participant sells, conveys, grants, or otherwise transfers the home; vacates or abandons the property as a primary residence within 15 years from the purchase date; or uses the property as an investment or income-producing property.

How the American Rescue Plan Act Helps First-Time Homebuyers in Montgomery County

In response to the COVID-19 pandemic, the American Rescue Plan Act (ARPA) was enacted by Congress on March 11, 2021, to provide relief funds. The Montgomery County First Time Homebuyers (FTHB) Program was among the recipients of ARPA funds. These funds are intended to assist eligible FTHB applicants whose household income is below 80% of the median limits.

Additional Down-Payment Assistance:

The ARPA funds provide additional down-payment assistance to eligible FTHB applicants, as follows:

$15,000 to households with income below 80% median ($15,000 ARPA + $10,000 FTHB = $25,000.00)

$30,000 to households with income below 60% median ($30,000 ARPA + $10,000 FTHB = $40,000.00)

Eligibility Requirements

To qualify for the ARPA down-payment assistance, applicants must meet the following eligibility requirements:

Be a first-time homebuyer
Have a household income below 80% of the median limits
Purchase a home in Montgomery County
Complete a homebuyer education course

Note that the ARPA down-payment assistance is only available for a limited time, and applicants must act fast to take advantage of this opportunity.

The Importance of Proper Disclosure in the First-Time Home Buyer's Program

Proper disclosure of all assets is a critical requirement when applying for the First Time Home Buyer's Program. This Program provides financial assistance to eligible first-time homebuyers to purchase a home. Providing accurate and complete financial information is essential to avoid any issues or complications.

Full Disclosure of Assets

At the time of application, all assets must be fully disclosed. This includes any savings accounts, checking accounts, stocks, bonds, retirement accounts, and other assets. Providing complete information will help determine eligibility and the amount of financial assistance that can be provided.

Notification of Changes

It is also essential to notify the First Time Home Buyer's Program if there are any changes in financial information while going through the Program. For example, if an applicant receives a windfall or experiences a significant loss, this information must be disclosed immediately to avoid any potential issues or delays in the Program.

By providing accurate and complete financial information and notifying the Program of any changes, applicants can ensure a smooth and successful application process. It is crucial to remember that any misinformation or lack of disclosure can result in disqualification from the Program.

Assisting First Time Home Buyers in Montgomery County

The Montgomery County First Time Home Buyers Program is designed to help low, moderate, and median-income households in Montgomery County who are interested in purchasing a home. The commissioners and the Office of Housing & Community Development establish and administer the program. The Program provides eligible participants with a down payment and closing cost assistance.

Program Funding: Funds for the Program are supplied through the County's Affordable Trust Fund in coordination with the Recorder of Deeds Office. The Program is committed to providing financial assistance and counseling to eligible first-time home buyers to make homeownership a reality for those who may not otherwise have the means.

Household Eligibility Requirements for Loans:

Are you looking to buy a house and need a loan? If so, there are specific eligibility requirements you need to meet. Here are seven things you need to know to qualify for a home loan:

First-time homebuyers or those who have not owned a home within the previous three years. To qualify for a loan, you must either be a first-time homebuyer or not have owned a home within the previous three years.
Household income below the area median income Another requirement is that your household income must be below the area median to qualify for a loan.
Intend to occupy the property as a primary residence. You must intend to occupy the property you purchase as your primary residence to be eligible for a loan.
Creditworthy and able to qualify for a mortgage at or below the current market rate. To be considered for a loan, you must be creditworthy and able to qualify for a mortgage (Conventional, FHA, or VA) at or below the current market rate.
Currently residing and being employed full-time in Montgomery County You must currently reside and be employed full-time within Montgomery County at the time of program application and closing to meet eligibility requirements.
Complete the required counseling program before executing any contract of sale. Before executing any sale contract for the real estate purchase, you must complete the required counseling program as a prerequisite for eligibility.
Minimum of $3,000.00 liquid assets at the time of application. Finally, you must have a minimum of $3,000.00 in liquid assets at the time of application, and no gifts of cash or equity are permitted towards the first 3% to be eligible for a loan.

Ensure you meet these requirements to increase your chances of qualifying for a home loan.

2022 Household Income Limits by Family Size

To help households determine their eligibility for loans, it's essential to understand the income limits based on family size. Here is a table of the 2022 household income limits based on family size:

Family Size	60% Median Income	80% Median Income	Median Income
1 Person	$44,280	$59,050	$73,800
2 Person	$50,640	$67,450	$84,400
3 Person	$56,940	$75,900	$94,900
4+ Person	$63,240	$84,300	$105,400

It's important to note that these income limits are based on the median income for the area and may vary depending on the location. Additionally, eligibility for specific loans may have different income requirements.

Cash Requirements for Loan Program Participants

Before applying for a loan program, participants must ensure they meet the cash requirements to be eligible for assistance. Here are the minimum cash requirements that loan program participants must meet:

Down payment: Participants must pay at least three percent (3%) of the sales price towards the down payment.
Mortgage reserve: Two months' mortgage reserve (PITI) must be provided before the letter of intent is issued.
Home Warranty: Participants must obtain a home warranty for their acquired property.
Use of liquid assets: Applicants must use their assets (savings, checking, money markets, certificates of deposits, mutual funds, stocks, bonds, etc.) before accessing Homebuyer Funds.
Limit on assistance: Assistance is not available if the applicant has 10% or more of the sales price to put towards the purchase.
Assistance amount: The assistance amount is based on several factors, including the selling price, liquid assets, closing costs, mortgage amount, and other fees paid to acquire the property.

It's essential to understand the cash requirements of the loan program to ensure that you are eligible for assistance and can meet the minimum requirements. By meeting these requirements, loan program participants can realize their dream of homeownership.

Counseling and Guidance

In addition to financial assistance, participants must complete a counseling package and meet one-on-one with the counselor. The counselor will guide budgeting, credit, mortgage financing, and home ownership responsibilities. This ensures that participants are fully prepared and informed about home ownership responsibilities. See Counseling Agencies

Property Eligibility

Property eligibility is an essential factor for the program participants. Here are some critical requirements for the property purchased under the Program:

Location: The property must be an existing or newly constructed single-family residence in Montgomery County.
Affordability: The contracted sales price of the property must not exceed the Program's determined affordability limits.
Standards: The property must meet local codes, Housing Quality Standards, and lead-based paint standards to ensure it is safe and livable for the homebuyer.
Acceptance: The property must be acceptable to the primary lender and insurer to ensure that the home buyer can obtain financing and insurance for the property.

By ensuring that the purchased property meets these eligibility requirements, the Program aims to provide safe and affordable housing options for eligible homebuyers in Montgomery County.

Application Process for the Montgomery County First Time Home Buyers Program

The application process is straightforward if you want to apply for the Montgomery County First Time Home Buyers Program. Here are the steps to follow:

Contact the Office of Housing & Community Development: The application for the Program can be obtained by contacting the Office of Housing & Community Development at (610) 278-3540.
Submit Your Application: Once you have obtained the application, complete it, ensuring all the necessary information is provided. Submit your completed application to the Office of Housing & Community Development.
Eligibility Review: After your application is received, the Housing Programs Manager will review it to determine if you are eligible for the Program. Eligibility is based on income and loan eligibility.
Application Fee: There is a non-refundable fee of $25.00 payable at the time of application. This fee covers the cost of processing your application.
First Come, First Serve Basis: The program funds are available to all qualified applicants on a first-come, first-serve basis. Therefore, it is recommended that you submit your application as soon as possible to increase your chances of being approved for the Program.

The Montgomery County First Time Home Buyers Program is an excellent opportunity for low, moderate, and median-income households interested in purchasing a home in Montgomery County. If you meet the eligibility criteria and complete the application process, you may receive assistance with a down payment and closing costs.

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