Washington County: First Time Home Buyer Program

Washington County Homebuyer Assistance Program: Consumer Guidelines for Homebuyers

Happy family standinding next to a for sale singn, in front of their new homeAre you looking to purchase an affordable single-family home in Washington County but struggling with finances? Look no further than the Washington County Homebuyer Assistance Program.

Created by the Redevelopment Authority of the County of Washington (RACW), the program aims to help low- and moderate-income households in the area purchase their dream home.

Thanks to funding from the U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) and Home Investment Partnerships (HOME) programs, the Washington County Homebuyer Assistance Program provides financial assistance to first-time homebuyers through two loans: one for down payment assistance and the other for rehabilitation assistance. Keep reading to learn more about the program's purpose and eligibility requirements.

Eligibility Requirements

Are you interested in applying for the homebuyer program? Here are the eligibility requirements you need to know:

  1. First-Time Homebuyers: To qualify, you must not have owned a house in the past three years, except for displaced homemakers.

  2. Income Guidelines: Your annual household income should fall within HUD's statistical guidelines for low- and moderate-income households.

  3. Creditworthiness: Low-income homebuyers must have a satisfactory credit history and obtain a 71% mortgage, while moderate-income homebuyers must obtain an 80% mortgage from a participating lending institution. Credit reports will be assessed to determine your creditworthiness.

  4. Down Payment: Homebuyers must provide a 3% down payment when closing, ensuring they have some financial stake in the property and are more likely to be responsible homeowners.

  5. Homebuyer Counseling: Completing the pre-purchase counseling class is a prerequisite. This class is designed to educate potential homebuyers on the responsibilities and challenges of homeownership.

  6. Affordable Housing: The value of the purchased house cannot exceed $201,000 after rehabilitation. This ensures that the program's benefits are directed toward affordable housing options.

Meeting these requirements may qualify for the homebuyer program and be one step closer to purchasing your own affordable single-family home in Washington County.

Income Requirements for Applicants

Income categories have been established for participation in the program by HUD's statistical guidelines. A household's annual Income is defined as the adjusted gross income of all adults who will reside in the house to be purchased as reported on their yearly federal tax return, IRS Form 1040, with permissible adjustments by HUD.

Maximum income allowances are adjusted according to the size of the family. Low Income is 50% of the local median income, while moderate Income is 80% of the local median Income. Income should not exceed the applicable limits during the six-month eligibility period.

Household Size Low Income (50% of Median) Moderate Income (80% of Median)
1 Occupant $33,200 $53,100
2 Occupants $37,950 $60,700
3 Occupants $42,700 $68,300
4 Occupants $47,400 $75,850
5 Occupants $51,200 $81,950
6 Occupants $55,000 $88,000
7 Occupants $58,800 $94,100
8 Occupants $62,600 $100,150

Pre-Purchase Counseling Class

All applicants must complete a HUD-approved homebuyer pre-purchase counseling class. The comprehensive class prepares participants to obtain a mortgage and purchase and maintain a home.

Loan Amount and Repayment Terms

The down payment assistance loan is provided to eligible low-income households when funds are available in the amount of 26% of the house's purchase price plus the reasonable closing costs. When sufficient funding is unavailable for a 26% down payment, down payment assistance will be 17% of the house's purchase price plus the reasonable closing costs. Down payment assistance of 17% of the house's purchase price and reasonable closing costs will be provided to eligible moderate-income households.

Rehabilitation assistance will be provided to eligible low- and moderate-income households approved by a lending institution to purchase a house. The amount to be loaned for home rehabilitation shall not exceed $24,500. No additional funds will be made available.

The loans made for down payment assistance will be deferred loans at 0% interest. Monthly payments are not required, but the principal amount of the loan will become due and payable when the first mortgage is paid off.

Eligible Properties For Purchase And Rehabilitation

If you're interested in participating in the homebuyer program, knowing that not all houses are eligible is essential. Here are some key factors to keep in mind:

  1. Eligible houses must be structurally sound, single-family detached or single-family units in a two, three, or four-unit building in the County of Washington. Condominiums, mobile homes, double-wide homes, and newly constructed or existing housing units will not be considered.

  2. If the house was previously a rental unit, it must have been vacant for at least 90 days before the sale to be eligible for the program. If the applicant is the current tenant, this requirement does not apply.

  3. After home rehabilitation is completed, the house must comply with the ICC International Property Maintenance Code for existing houses and all applicable codes, including state and local codes. Additionally, the house must be free from all noted health and safety defects. If the house fails to meet these requirements after rehabilitation, it will not be eligible.

  4. Houses located in a 100-year flood plain are not eligible.

  5. The house must meet the criteria established by Section 215 of Title II of the National Affordable Housing Act. The unit's value may not exceed Section 203 (b) Property Value Limits after completing the unit's rehabilitation. If the housing unit doesn't meet the criteria, it will not be considered for the program.

  6. Before purchasing a house, RACW will inspect the property to ensure that it meets all of the necessary program requirements and prepare the work specifications for the rehabilitation of the house. RACW reserves the right to reject houses that do not meeting the necessary program requirements. If a house is rejected, another will be inspected.

By understanding these eligibility requirements, you can ensure that the houses you're considering are eligible for the program and increase your chances of being approved.

When Will The Rehabilitation Of The Purchased House Occur?

The rehabilitation contract documents will be executed on the same day as the closing of the house being purchased or soon after. The house's rehabilitation will occur per the contract between the contractor and the homebuyer. HUD regulations require each home to be inspected for lead-based paint hazards and to meet the ICC International Property Maintenance Code for existing houses. If lead hazards or code deficiencies exist, rehabilitation must correct them.

Conclusion

The Washington County, Homebuyer Assistance Program is an excellent option for low- and moderate-income households in Washington County who are looking to buy their first home. The program offers two loans: one for down payment assistance and the other for rehabilitation assistance, made possible by funding from the U.S. Department of Housing and Urban Development. 

Eligibility requirements include being a first-time homebuyer, having an income that falls within HUD's statistical guidelines for low- and moderate-income households, having a satisfactory credit history, and providing a 3% down payment at closing. Completion of a pre-purchase counseling class is also mandatory. The program has income categories for applicants and maximum income allowances based on household size.

Eligible properties must be single-family detached or single-family units in a two, three, or four-unit building in the County of Washington. They must comply with all codes and health and safety requirements.

QUESTIONS?

Please call 724-228-6875 to speak with a RACW’s Home Improvement Department member.

This site is not affiliated with Washington County or the Redevelopment Authority of the County of Washington.

Credit counseling & First Time Home Buyer Classes in Washington County PA

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