Logan, Utah, Cache Valley, Realtors, Logan Real Estate, Cache County, UT

The HomeStart Savings Program

GRANT ALERT: THE VERY DAY YOU READ THIS IS THE DAY YOU NEED TO CONTACT BRADY PIERCE...THE GRANT MONEY IS GOING FAST. CALL (435) 787-8351 TO MAKE APPLICATION AND TO MAKE SURE YOU RECEIVE THESE FUNDS.

Owning your own home is part of the American Dream. But the difficulties many of us face in saving money for the downpayment are part of today's American Reality. In fact, the challenge of accumulating sufficient money for a downpayment is the most common reason many families do not buy their own homes. Most Lenders require a 3% to 5% downpayment to purchase a home. This is where the HomeStart Savings Program (HSP) can help!

The HomeStart Savings Program is a partnership between local lending institutions and the federal government, including the Federal Home Loan Bank of Seattle (which covers Utah). The HSP is designed to help you accumulate funds for your downpayment and closing costs by matching every $1 you save (or are gifted) with $3, up to a maximum of $3,000 to $5,000 toward the purchase of your first home. For every year that you live in the home 1/5 of the HSP Grant is forgiven.

Commonly Asked Questions about the HomeStart Program:

How does the HSP work?
Who qualifies for an HSP Grant?
Can I qualify if I have owned a home before?
How do I enroll in the HSP?
What if my financial situation changes after I enroll?
How do I qualify for a mortgage?
Can I buy any type of home I want?
Are there restrictions on how the HSP Grant can be used?
What happens if I sell my house?
What interest rate can I expect?

1. How does the HSP work?
To be eligible for the HSP grant, you must be a first-time homebuyer, show proof of having had a Savings Account for at least 45 days (no minimum balance required), open a "New" Savings Account at a local participating financial institution, complete a Homebuyer Education Class (to help you become a successful homeowner), and qualify for mortgage financing through the participating financial institution.

Most families that enroll and have proof of having had a Savings Account can close on their home purchase within 20 - 47 days. However, you have as long as two years after you enroll in HSP to obtain your matching grant and purchase your home.

For every $1 you have saved or that is gifted to you, you can receive $3. For example, if you have a $1,000 in you Savings Account, you will receive a matching grant of $3,000 and have a total of $4,000 for your downpayment and closing costs or you can choose to not use the $1,000 that is in your Savings Account and only use the $3,000 matching grant for your Downpayment and Closing costs.

The maximum matching grant you can receive is $5,000. In Utah and several other states, most financial institutions caped the grant to no more than $3,000 to be able to help as many families as possible but as of 4/22/04 you can now receive $5000 if you quickly sign up.

2. Who qualifies for an HSP Grant?
The HSP is open to households with annual incomes of 80 percent or less of their area's median income. Median income data is tracked by the Department of Housing and Urban Development and is available from your local participating lending institution. The income level is adjusted depending on the size of your household.

3. Can I qualify if I have owned a home before?
You will qualify if you, or you and your spouse, have not owned a home during the past three years.

4. How do I enroll in the HSP?
Simply make an appointment with Brady Pierce and he will have a Loan Officer that works at a local participating financial institution contact you. It's easy to apply!

5. What if my financial situation changes after I enroll?
Your eligibility for the HSP will be established when you enroll, based on your current income and family size (meaning you can make more money without affecting your eligibility). You will remain eligible in the HSP for two years from your enrollment date even if your income or family size changes.

6. How do I qualify for a mortgage?
The Loan Officer will work with you to determine your eligibility for a mortgage. Important factors that determine the size of the loan you qualify for include your monthly household income, job history, credit record and the amount of consumer debt you carry (credit card balances, car loans, student loans, etc.)

7. Can I buy any type of home I want?
HSP matching grants can only be used to purchase Single-family Homes.

8. Are there restrictions on how the HSP Grant can be used?
Yes. The HSP Grant must be used for downpayment costs towards an FHA Loan. It cannot be used to cover construction, rehabilitation expenses, moving costs, or to pay off your bills.

9. What happens if I sell my house?
If you sell the house you purchased with the HSP grant within five years, you may have to return a portion of the grant to the Federal Home Loan Bank of Seattle. This amount will be pro-rated based on the length of time you own the home. The funds will be taken from the proceeds of the sale of the house. For every year you live in the home 1/5 of the grant is forgiven.

10. What interest rate can I expect?
Current interest rates for a FHA Utah Housing Loan are currently fixed at 5.17 % for 30 years (10/2004).

For more information about the HomeStart Savings Program, please Brady Pierce at (435) 787-8351 or bradypierce@comcast.net and he can have a local Loan Officer contact you.

Program participation subject to qualifying and funds being available. Interest rates subject to change.