Homebuyer Advantage Program, up to 40k grant for buying a foreclosure.

oh my, so people who cant afford houses are getting help buying a house?

I swear I have that exact movie lying around here somewhere...

i dont know how they expect people making 35k/year to afford these houses..

can you circumvent this restriction by making tons of charitable donations, maxing out FSA, 401k and any other tax free device that year

indeed it looks like a grant if you live in the property for 10 years. its a loan that you dont have to pay back unless you move out or sell before the term limit.

they should run spell check
" Th Home Buyer Advantage grant will carry 0% interest and be forgiven over 5 or 10 years based on the amount received. The required occupancy period for $14,999 is 5 years and 10 years for $15,000 - $39,999. You do not have to stay in the house for 5 or 10 years but if you move before completing your occupancy period of 5 or 10 years, then you will pay back a portion of the grant based on the number of months you lived in the home. The longer you live in the home, the less money you pay back."

yes, it's a grant, I haven't received the paperwork yet to see how it's going to be structured.
@CrazierRus - yes, but don't forget I'm in Mississippi. 50k goes a long way.
@Grizybaer - it's the same HUD income qualifications as a Section 8 house, so it's all gross household income, even if it's your 19 year old kid.

Direct quote from their site (except they spelled the first word "th". I took the liberty of fixing that for them.

"The Home Buyer Advantage grant will carry 0% interest and be forgiven over 5 or 10 years based on the amount received. The required occupancy period for $14,999 is 5 years and 10 years for $15,000 - $39,999. You do not have to stay in the house for 5 or 10 years but if you move before completing your occupancy period of 5 or 10 years, then you will pay back a portion of the grant based on the number of months you lived in the home. The longer you live in the home, the less money you pay back."

So here's how it works:
The two grants get credited against the balance of the loan (including origination fees and other prepaids).
The grants are secured by a lien against the property.
The loan has to be underwritten first, with me paying the downpayment. Once the loan is underwritten, the loan goes to two or three agencies who all must approve the grant.
The downside to this is that it can take up to three weeks after the loan is underwritten to get grant approval, so you've got to make sure that the seller is willing to push out the closing date far enough so that you can get everything funded.

So Svallarian, have you closed on the house? If so, tell me about it. I'm in MS getting ready to go through my process of closing with grant soon.

svallarian said: Right now, the loan is being held up in underwriting because Bank of America didn't know how to fund the loan since they had never seen such a large grant amount before...and apparently since I did a conventional instead of FHA loan it threw up a red flag.... Wow, I thought all the money in the NSP programs flowed through the HUD and therefore FHA funding is required (I think that is the case in Georgia, but I doubt there's anything preventing you from refinancing immediately).

On the MS website, it said any fannie mae or freddie mac loan qualifies also, which I *think* means conventional according to my hba class (see, I did get one thing out of it!)

Oh yeah, penfed will be getting the refinance documents, especially if it is going to be a BoA loan.

shevar said: BoA was not listed as one of the approved lenders for the hba.(are you using a broker) Do you think that may have something to do with the delay as well? Or are they just funding the loan?

My bad, they are approved as a lender.

aw ok, you sound like you are close to me. Desoto?

Hey.. another MS resident here trying to get through this Homebuyers advantage mess...
I placed a bid on a HUD repo and of course they offer incentives IF I do FHA financing.. BUT, the program won't work with FHA..meaning, I will lose my 100 down and repair escrow if I get the grant money. So, this means that I must find another loan.. Fannie Mae was suggested and of course there are different terms... like a 3% down payment vs HUD 100 dollars down. Sooo... my next hurdle is that the property has to have a historical report requested which takes 2-3 weeks.. Then an environmental report must be requested..thats another 2-3 weeks.. and finally THEN the funds can be officially requested and wired to MS for me. The HUGE problem is that my contract to close with HUD is Dec. 21. These reports are quoted to be back within those timeframes stated, however it is not guaranteed that they will be received by Dec. 21. So now I have to ask for an extension with HUD..but I don't know how long I need..since I don't know when my reports are coming back. In the process.. we determined that my purchase price wasn't 1% less than the appraised value..of which HUD listed as the list price. So now I have to request that a new appraisal be done and HOPE it is substantial so that I qualify. This has my head hurting. After speaking with MHC, they just basically said that it is a new program and new information is becoming available...some info and quidelines are not in stone just yet. Lenders are scrambling to understand it for their customers..and apparently.. nobody was listening at the workshop that was held by MHC introducing this program. Can I just get to the end of the whole process...??? Now.. question.. I heard, but have not substantiated this with anything in writing..that if you receive MHC grants through Homebuyers Advantage, you will not get the 8000 dollar tax credit. Is that true?? Please help.. help stop the surprises..

SlimTim said: This looks like it may be entirely specific to Mississippi. Or at least it goes by a totally different name in my state, I couldn't find any info.

I don't understand your 1% below appraisal rule. Does the purchase price need to be exactly 1% less, at least 1% less, or no more than 1% less than appraisal?

I am still unsure about the 1% rule myself. I am assuming that the house has to appraise for at least 1% above the purchase price. The home I am purchasing is 192k and the appraisal came in at 196 and the LO said we were good.

Yes this grant is for MS.

SlimTim said: This looks like it may be entirely specific to Mississippi. Or at least it goes by a totally different name in my state, I couldn't find any info.

I don't understand your 1% below appraisal rule. Does the purchase price need to be exactly 1% less, at least 1% less, or no more than 1% less than appraisal?

Check HUD's website for other states. HUD has a map which you can click on that provides the contact person for each state. I found the map on HUD's site last night, but can't find it right now because HUD's site has so many different programs that it is a PIA to navigate. If I find the link again, I'll post it. The HUD site did state that the grants may not be the same amount in all states. And the program for example, in Pennsylvania, was limited to just a few counties and cities.

svallarian said: shevar, i'm in Tupelo.

The 1% rule is that the purchase price has to be at least 1% less than the apprasial. (and they are sticking to the rule per MHC) This is to keep people from being ripped off, I suppose, even though last time I checked banks don't try to rip people off who are buying foreclosures.

Nikola, I don't see why you can't do the FHA financing and still do the grant. I was offered the FHA loan before I talked her into a Fannie Mae conventional.

I don't think I'm going to meet my dec 15 close date. There's no way with the holiday that I'll be able to get the grant pushed through before then. I've got a $50/day penalty in my contract, so if anyone else is doing this make sure and get that taken OUT. The bank that I am buying the house from gave me 2 months to close as part of their counter offer. I sure hope you close on Dec. 15th. This is so stressful.

Ok, I recieved some conditions for HBA loan approval from the loan officer yesterday. Everything is pretty simple, they just wanted to get some updated bank statements and other documents. Last items on the list PENDING HISTORICAL AND ENVIRONMENTAL REVIEWS which are ordered by MHC. From my understanding that is where the delays take place. I will give my loan officer the docs and hopefully we can close before the month is over.

Just a pointer that could help speed things up; tell your loan officer to go ahead and send your grant packet to ms homecorp. A lot of the loan officers think that they need the appraisal back to process. Ms homecorp will just make the appraisal part of the conditions.

As for your question, I don't think anyone really has the answer to the length of time it takes right now. I called and they told me the same thing. They recieved my appraisal right before Thanksgiving. The only thing I am waiting for is the enviromental review. I will let you all know when I am clear to close. My LO says it has been moving pretty fast though. It's really a case by case basis I think.

Well the 15th has come and went, and I'm with still with no house. Due to the house being built in 1976, MHC is asking for an asbestos and lead paint inspection, both of which you have to have a certified person do...and guess what? No one is available in the local area!

So I get my agent to get ahold of the seller and ask for an extension until sometime in January. No luck, the seller (i.e. the bank) will not go past Dec 30. I can understand them wanting them to get this off of their books for 2009, but apparently they are too dense to understand that if *I* don't buy the house, someone else will and will have to go through the same 2 month process.

Svallarian, have you offered to pay an extension fee if they will extend the contract?

My LO said she previously sent in my grant application last week and the appraisal was supposed to of been completed today. I am keeping my fingers crossed that since the house is just 2 years old maybe that will speed up the process.