The Northampton County First Time Homebuyer Program provides loans to
eligible first time
buyers of Northampton County homes. These loans provide up
to $5,000 to help with the cost of the house and closing costs. The home must be
located in an area of the County where at least 42% of the residents have
middle incomes or less. This includes the cities of Easton and Bethlehem and
parts of almost all other municipalities in the County.
The home buyer assistance is in the form of a forgivable loan on the subject property for 5 years or until the property is sold. For each year you stay in your home, 20% of the loan is forgiven. The loan is completely forgiven if the homebuyer stays in the house for at least 5 years.
1. You must be a first time homebuyer or have not owned a home for at least three years.
2. The home you are purchasing must be in an area that qualifies based on the incomes of the residents. Qualifying areas are the Cities of Easton and Bethlehem, as well as portions of almost all other Boroughs and Townships.
3. You do not need not to currently reside within Northampton County. The house to be purchased can be either a single unit or range up to four (4) units, but the you must occupy the residence or, in the case of a multi-unit house, you must occupy one of the units.
4. You must obtain your first mortgage from one of the partner financial institutions.
5. You must complete a HUD certified Homebuyer Education
Counseling Program from an
accredited agency before closing.
6. Your annual household income can not exceed 80% of the median income for the Lehigh Valley as determined by HUD.
There is no limit on the price of the home you are purchasing, but the lender will determine if the primary mortgage and escrowed costs are within your ability to pay.
The applicant must contribute a minimum of 1.5% of the lesser of the purchase
price. These funds must come from the applicant’s assets which must be verified
in a deposit account by an institution of depository, or constituted by cash on
hand, for a minimum of three (3) months prior to the settlement date.
At the time of settlement, the buyer’s liquid assets may not exceed the total of 3% purchase price. Any amount above the 3% must be applied to the purchase of the home, e.g. a person can have a total of 4.5% of the sale price in liquid assets, use 1.5% as a down payment and keep the remaining 3%.
Applicants must need the subordinated mortgage in order to afford the house.
Repayment of Loans
If the homeowner remains in the home for a period of five (5) years, the subordinated mortgage will be forgiven. However, repayment of the subordinated mortgage is required upon homeowner's resale of the home if it is within those five (5) years. Upon this sale, the original principle amount of the loan is due and payable in full at settlement. If the homeowner refinances the original mortgage, the Northampton County mortgage may be subordinated to the new first mortgage. Subject premises shall be released from the lien and operation of the written mortgage in the event of an arms length sale and in the event the net proceeds from the sale are not sufficient to satisfy the obligation, although the borrower shall continue to be personally obligated to repay the unpaid loan in such event.