The City of Kenner’s Department of Community Development (COKCD) administers the City’s FTHB Assistance Program for eligible low- to moderate-income families. FTHB funds may be used in paying down payment, closing costs, or principal buydown for an applicant who intends to occupy the home as their principal residence during the affordability period. HOME funds for FTHB can close the gap between the sales price of the house and the amount of private mortgage the buyer can secure, making the dream of home ownership possible.
Homebuyer Assistance Program Qualifications:
- Must be an eligible first-time home-buyer or not have owned a home within the last three years.
- Must not have more than $5,000 in liquid assets prior to closing (deferred assets such as pensions, 401(k)s, etc. are not included).
- The buyer and co-borrower must be a U.S. citizen or permanent resident alien.
- Buyer must be able to obtain a fixed-rate mortgage. The program does not accept adjustable-rate mortgages (ARM) or seller-financed mortgages.
- Combined household income must be at or below the incomes listed in the chart below.
ELIGIBLE FIRST-TIME HOMEBUYERS
Eligible “First-Time Homebuyers” must be
(1) a U.S. Citizen or Legal Alien with permanent residential status (in the U.S); and,
(2) applicant or co-borrower has not owned a home during the past three year period.
INCOME QUALIFICATION
Eligible program participants must meet HUD income requirements. Therefore, the FTHB program is only open to low-to-moderate (LMI) individuals. The incomes of households receiving HUD assistance must not exceed 80 percent of the area median for Jefferson HOME Consortium. HOME income limits are published each year by HUD. Combined household income must be at or below the incomes listed in the following chart based on household size:
| 2019 Maximum Annual Household Income Limits (effective June 28, 2019) | |||
| Household Size | 80% of the Area Median Income (AMI) * | ||
| 1 | $37,750 | ||
| 2 | $43,150 | ||
| 3 | $48,550 | ||
| 4 | $53,900 | ||
| 5 | $58,250 | ||
| 6 | $62,550 | ||
| 7 | $66,850 | ||
| 8 | $71,150 | ||
HUD requires that each participating jurisdiction conduct an underwriting and subsidy layering review to develop a needs assessment of what a family can afford versus the amount given to a family in a subsidy. For the Jefferson HOME Consortium, FTHB Program clients must fall within the income limits of not less than 51% and not more than 80% AMI. The below chart represents the household income limits for 2019.
Lenders are required to use the most up to date data when determining eligibility. A homeowner cannot use their kid’s income (i.e. social security or child support or any other income of a minor child) as a qualifying income, they must demonstrate sustainably on their own income.
PROPERTY QUALIFICATION
The HOME Program requires a property inspection for every unit of housing assisted with HOME funds to determine that the property meets the applicable standards. The purpose of these standards and inspections is to ensure that assisted units are safe, decent, and sanitary premises for its occupants. Therefore, the property must be turn key ready.
Congress created the HOME program with sales price limits in the statute to ensure that the housing produced would be modest and affordable to low income households. Therefore, the initial purchase price or after-rehabilitation value of home ownership units assisted with HOME funds must not exceed 95 percent of the area median purchase price for single family housing, as determined by HUD.
For example, effective April 15, 2019, the current sales price limit set for the City of Kenner for existing homes is $196,000 and $227,000. HUD updates the HOME value Limits annually.
Before committing funds to a property, the City will adhere to the Environmental Review Requirements required by HUD.
FTHB Program Guidelines
An eligible homebuyer at or below 80% AMI may receive up to $40,000 in assistance.
- The selected home must be located within the property tax jurisdiction of the City of Kenner.
- Eligible property types include single-family homes, attached townhomes, and condominiums.
- Each applicant must have taken and completed Homebuyer Education Course through an approved HUD counseling agency.
- Applicants must occupy the home as their principal residence for the minimum affordability period.
- The back-end ratio cannot exceed 43%.
- Property must pass an environmental and inspection review.
- The borrower(s) cannot be delinquent on any student loans, federal income taxes, as well as state and local taxing authorities, utility payments, or City services.
Frequently Asked Questions
- May I qualify for more than $50,000 of assistance?
No, the maximum amount of assistance under this program is $50,000, unless the property is being sold by a certified CHDO.
- How is the back-end ratio calculated?
The back-end ratio is calculated by adding together all of a borrower’s monthly debt payments and dividing the sum by the borrower’s monthly gross income. For example, a borrower whose monthly gross income is $5,000 ($60,000 annually divided by 12) and who has total monthly debt payments of $2,000 has a back-end ratio of 40% ($2,000/$5,000).
- May I take the homebuyer education course online?
A HUD-approved homebuyer education course may be done online, as long as you complete a one-on-one homebuyer advising/counseling session with a HUD-approved counseling agency. Each applicant must obtain a Homebuyer Education Certificate through a HUD-approved counseling agency.
- What if I need to sell my home before I have lived in it for affordability period?
The City of Kenner, as a member of the HOME Consortium, will abide by the Consolidated Plan approved by HUD that set the HOME AFFORDABILITY AND RECAPTURE PROVISION. That provision reads, as follows:
Should the mortgaged property be sold or no longer be occupied by the MORTGAGOR, or the MORTGAGOR’s spouse or heirs during the term of the mortgage, the full amount of the mortgage becomes due and payable according to; if this mortgage represents financial assistance provided the mortgagor to acquire the herein mortgaged property, the full amount of the mortgage becomes due from the net sale proceeds, except as provided in (b), below:
a. Net proceeds means the sale price minus repayment of superior mortgages and closing cost.
b. If the net proceeds are not sufficient to recapture the full amount of the mortgage plus enable the homeowner to recover its down-payment, principal payments, and any capital improvements investment, the mortgagee may reduce the mortgage amount pro-rata based on the time the mortgagor has owned and occupied the property measured against the term of the mortgage; except the mortgagor may not recover more than the down-payment, principal payments, and the capital improvements investment.
- I am ready to buy a home. What are the next steps?
After finding your potential home, contact one of the lenders listed on the approved lenders list. The lenders will evaluate the application for pre-approval and determine if HOME funds are needed as gap financing to make the purchase affordable. The lender will forward all required documents to the City of Kenner for review.
The City of Kenner, upon receipt of a completed packet from the lender, will schedule an inspection of the property, conduct an environmental review, and set an appointment for the applicant to determine if the applicant meets HUD eligibility requirements.
- Am I required to work with an approved program lender?
Yes, the program has an approved lender list. Applicants may choose any lender off the list. Approved Lenders List
- How can I be deemed ineligible for the HOME funds when I have been approved by the bank?
While lenders determine a borrower’s income, and verify it with source documentation, HUD requires that participating jurisdictions have different purposes for determining income eligibility, and therefore have different methodologies. The PJ’s income determination is done for the purpose of determining whether or not a buyer meets the definition of low-income in order to establish eligibility for HOME assistance. The lender’s income evaluation is done to determine if the buyer has sufficient income to carry the mortgage. Thus, there is not a guarantee of FTHB funds upon applying for the program.
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