A for sale sign stands in front of a bank-owned home in Las Vegas, Friday, Feb. 8, 2008. Regulators are trying to punish Wall Street for mortgage finance practices that expanded home ownership and spread risk among a host of new players _ but also may have duped borrowers and investors who supplied cash to fuel a housing boom that's turned bust. (AP Photo/Jae C. Hong)
TOPEKA -- In an effort to encourage first-time homebuyers into the market, Kansas Housing Resources Corporation (KHRC) has released $2.1 million in funding to help qualifying households purchase their first home. The funds, made possible through the First Time Homebuyer (FHTB) Program, help low to moderate-income homebuyers with closing costs and down payment assistance.
"Many homes today are priced lower than before, which means they can be a great buy for first-time homebuyers, but some households still need extra help to make the leap to homeownership," said Christine Reimler, FTHB Program Manager. "For those families, the First Time Homebuyer Program may provide the solution."
The dollar amount borrowers may receive through FTHB ranges from $1,000 to $20,000 and is based upon the borrower's income level and need. Funds are available on a first-come, first-served basis. Buyers are expected to make a minimum investment of $500 or two percent of the sale price, whichever is greater.
Eligible households must have incomes at or below 80 percent of the median income for their area and plan to reside outside the following Kansas entitlement areas: Topeka, Wichita, Lawrence, Kansas City, or Johnson County. While income limits in metro areas could be as high as $56,400, in most rural counties the income limit is $42,250 for a family of four.
Here's how the program works: All eligible homebuyers receive a forgivable loan that must be used for down payment, closing costs and/or legal fees associated with loan closing.
If the household's income is less than 50% of the area median income, the loan will be up to 20% of the home's sales price. If the household's income is greater than 50%, but less than 80% of the area median income, the loan will be up to 15% of the home's sales price.
If the original buyer lives in the home for 10 years, the FTHB loan is forgiven entirely. However, should the buyer leave the home before the 10 years is up, a portion of the money must be repaid.
Kansans who are either first-time homebuyers or those who have not owned a home in the last three years are eligible to apply for FTHB. Single parents and displaced homemakers may also be considered first-time homebuyers. First Time Homebuyer funds are paired with first mortgages from KHRC's participating lenders who originate, process and close the loans.
To apply for the program, please contact a participating lender in your county.
Kansas Housing Resources Corporation is a public corporation that finances and develops affordable housing opportunities for low and moderate-income residents throughout Kansas. We serve as the primary administrator of federal housing programs on behalf of the State of Kansas. For more information about KHRC, please call 1-800-752-4422 or visit our website at www.kshousingcorp.org.