OHFA Offers Second-Mortgage to Assist Buyers in Delaware

Ohio Housing Finance Agency has once again created a program to assist first-time home buyers in obtaining a home. The program goes into effect today and allows buyers to use the $8,000 government tax credit as security to roll closing costs, or other expenses into the second mortgage.

The agency’s press release:

The Homebuyer Tax Credit Advantage Program offers a second mortgage to borrowers who obtain a first mortgage through the OHFA First Time Homebuyer Program. In order to encourage first time homebuyers to enter the market in 2009, the program will allow OHFA first time homebuyers to leverage the benefit of the federal first time homebuyer tax credit for down payment and/or closing costs. The American Recovery and Reinvestment Act of 2009 amended and extended the first-time homebuyer credit to include purchases January 1 through November 30, 2009.

For qualified first-time homebuyers who purchase a home in 2009, the maximum credit is $8,000 and can be claimed on a buyer’s 2008 or 2009 federal tax return.

• The loan may be up to three percent of the purchase price. No cash back may be issued to the borrower.
• Principle and interest payments are deferred until July 1, 2010 after which, loans will amortize over 15 years at an interest rate 1% above the first mortgage rate.
• The OHFA application fee will be $300 can be paid by the buyer, seller or financed in the loan.
• There is an incentive for early repayment of the loan. If the loan is paid in full prior to July 1, 2010, OHFA will forgive $300 of principal.
• Lenders may charge a special processing fee of $75.
• All loans must be recorded as second mortgages using OHFA note and mortgage documents.
• Borrowers must have a minimum 600 credit score.
• Borrowers must complete homebuyer education through a HUD approved counseling agency or through OHFA’s streamlined program.

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