Upper Darby: First Time Homebuyers Program

Nice suburban home with a two car garageUpper Darby Township offers a unique opportunity to eligible first-time homebuyers through its First-Time Homebuyer Program. This government-funded Program aims to assist qualified buyers in purchasing their first home by providing up to $6,000 in down payment assistance, thereby reducing the financial burden of buying a home.

To be eligible for the Program, buyers must meet specific requirements set by the Federal government, including contributing 3.5% of the property's sale price or appraised value, whichever is lower, and meeting certain income and citizenship criteria. This comprehensive guide provides a detailed overview of the Program's requirements, eligibility criteria, and property and lender requirements to help eligible applicants take advantage of this valuable opportunity.

Program Requirements

The Payment Assistance Program, also known as the First-Time Homebuyers Program, offers financial assistance for individuals and families looking to achieve homeownership for the first time. To qualify, applicants must be permanent resident aliens and contribute 3.5% of the property's sale price or appraised value, whichever is lower.

The Program provides a second mortgage for up to $6,000.00, which can cover payment and closing costs. However, the home's total price cannot surpass $180,000.00, and the Program only applies to Single-Family Dwellings, not Multi-Family Units.

The Loan Program may provide additional financial assistance, depending on the applicant's gross income and eligibility for a Community Development Block Grant. A home inspection is required, and applicants may need to refinance to meet Program requirements. By participating in this Program, first-time homebuyers can receive the financial support they need to achieve homeownership and improve their quality of life.

Eligibility Requirements

To qualify for the First-Time Homebuyer Program, the applicant must meet the following eligibility requirements:

Income Limits:

The annual gross income of all deed holders and residents must not exceed the limits set by Congress for the year 2022, as shown below:

Household SizeIncome Limit
One person$52,950
Two persons$60,500
Three persons$68,050
Four persons$75,600
Five persons$81,650
Six persons$87,700
Seven persons$93,750
Eight persons$99,800

Owners cannot exceed the total household income limit set by Congress. The income of all buyers and residents 18 years and older of the home must be calculated, even if they are not on the deed. Proof of income must be provided to determine eligibility, including but not limited to the following:

  • Complete copies of the Federal Income Tax Return with all attachments for all Buyers and Residents;
  • Copies of 3 months of current pay stubs or 3rd party proof of income must be provided for all Buyers and Residents;
  • Copies of Bank Statements may also be requested;
  • The Township reserves the right to request any documentation needed to determine eligibility.

*The income of any person listed on the deed must also be considered, even if they do not live at the property.

**Total income for the 2021 tax return, including wages, pensions, workers' compensation, social security, welfare, unemployment benefits, child support, alimony, dividend, interest income, and rentals from rental properties.

The total of your preceding year's federal tax return, W-2, and 1099 papers, all of which you must provide with your application, is used to calculate your annual income. Unless they are full-time students, ALL adults living in the household who are 18 or older must report their income. (Income must be considered if a student is purchasing the house.) Those under the age of 18 should not have their incomes listed.

Citizenship:

To comply with federal law, the buyer must be a citizen of the United States or a permanent resident alien who has lived there continuously for at least five (5) years.

First-Time Homebuyer Requirement:

A first-time homebuyer is a low-income family that has not bought a home in the previous three (3) years. If a family satisfies HUD's stated criteria of a "displaced homemaker" or "single parent," they may be eligible to enroll. This applies to families that have owned a house within the last three (3) years.

Home Buyer Education

Counseling is not mandatory for participation in the Program; however, attached is information on Counseling Services provided by CLARIFI, a HUD-certified counseling agency, should you desire to take advantage of this service. Phone: 800-989-2227

Home Inspection

The Buyer must arrange for a full Home Inspection to be completed and provide a copy of the inspection with the application (see Property Requirements Item C in the Guidelines)

Lender Requirements

The Buyer is in charge of securing a mortgage. Before the Township commits, the lender MUST attest to the Township that the requested mortgage loan amount is the highest amount that the borrower(s) may bear based on monthly cash availability and the Bank's underwriting. The lender must fill out the included form, which must be sent with your application.

Home Buyer - Real Estate Agent:

Before signing a formal purchase agreement, the buyer or the buyer's real estate agent must speak with the Upper Darby Township Office of Community Development.

The notification that the property must adhere to the Program's paint inspection standards must be included in the Agreement of Sale. The Buyer shall have a comprehensive home inspection performed by an ASHI or NAHI-certified inspection business and must provide to the Township a copy of the paid receipt on a form including the full name, address, and telephone number of the inspection company.

Before requesting the Township's visual inspection, you are responsible for thoroughly inspecting all painted surfaces on the inside and outside of the property and bringing any faulty paint surfaces to the Seller's notice for rectification. The property will not qualify for the Program if the Township's examination shows damaged paint surfaces.

Property Requirements

To be eligible for the First-Time Homebuyer Program, the property being purchased must meet the following requirements:

Property Type:

  • Single-family, vacant, or owner-occupied existing or new construction properties in Upper Darby Township are eligible. Rental properties are eligible only if they are vacant at the time of the agreement of sale or if the Buyer is the current tenant. Multi-unit dwellings (i.e., duplexes) are ineligible. Please note that the properties must be within the Township boundaries and not just part of the Township school district.
  • Properties must conform with the Federal lead-based paint requirements at 24 CFR Part 35 K, WHICH STATE THAT THERE CANNOT DETERIORATED PAINT SURFACES WHERE INSIDE OR OUTSIDE OF THE PROPERTY.
  • Principal Residence - The purchasing household must use the property as its principal residence. Any violation of the principal residency requirement will automatically trigger the Township's subsidy repayment.

Lead-Based Paint Requirements:

The property must conform with the Federal lead-based paint requirements at 24 CFR Part 35 K, which states that there cannot be any deteriorated paint surfaces anywhere inside or outside the property. The Township will complete a visual inspection at no charge to the Buyer. There is no second inspection; the property will be inspected once and either pass or fail. If the property fails the visual paint inspection, no assistance will be provided, and your file will be closed.

Inspection Requirements:

To qualify for the assistance program, the Buyer must obtain an inspection of the property from an ASHI Certified or other certification recognized by the State of Pennsylvania Senate Bill 1034 as amended 9126/2000 PA Title 68 and Chapter 75. The inspection report and the application for the mortgage loan amount should be provided.

Furthermore, the assistance program is available to qualified individuals, including displaced homemakers. The Buyer may also benefit from a counseling program to receive further support.

Sales Price Limit and Minimum Down Payment Requirement

The total price of the home cannot exceed $180,000, and buyers are required to put in 3.5% of either the sale price or appraised value of the property, whichever is lower of the property. The Township will provide the funding gap amount.

Other Conditions:

  • There is no requirement that the homebuyer remain income eligible after purchase.
  • Affordability Conditions:
    Buyers must use the property as their principal residence for the duration of the agreement; no leasing or rental is permitted. Any violations of the principal residency requirement will automatically trigger the Township's loan repayment.

Repayment Terms

The township mortgage is not forgiven during the first four (4) years from the settlement date. The entire principal on this loan is payable to Upper Darby Township at the time of sale, transfer of the property, conversion to non-residential use, conversion to rental property, default on the first mortgage, death(s) of the owner(s), or destruction of the property due to fire or unknown reasons. The Buyer is required to maintain fire insurance on the property for the duration of the agreement, which lists Upper Darby Township as a lien holder. A certificate of insurance, which shows this, must be submitted before or during settlement.

Beginning with the 5th year and ending with the 10th year, the Upper Darby Township mortgage will be forgiven at 16.67% per year. The mortgage will completely dissolve and be removed at the end of the 10th year (from the settlement date). No payment is due.

Grant Calculation:

  1. Sales Price
  2. Estimated Closing Costs
  3. Less Mortgage Amount
  4. Less than 3% Down Payment
  5. Less any other payments or assistance

Equals Net amount of township assistance (max $6,000)

How to Apply

To apply for the First-Time Homebuyer Program, the applicant must submit complete applications with all attachments, including the Closing Estimate, Inspection, and Appraisal, for review at least three weeks before the settlement date.

The eligibility determination process has two parts: one for the Buyer and the other for the purchased property. The income of all buyers and residents 18 years and older of the home must be calculated, even if they are not on the deed, and proof of income must be provided to determine eligibility.

Township Of Upper Darby
100 Garrett Road
Upper Darby, Pa 19082
Phone: 610-352-5555

SOURCE:

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