Both first-time home buyers and seasoned homeowners can benefit from the thousands of down payment aid programs available nationally. One such program is the National Homebuyers Fund. It has contributed millions of dollars since 2002 to support families in realizing their aspirations of becoming homes. Grants and loans from the NHF typically don't need to be repaid. Hence, if you are eligible for aid, it is effectively free money.
What is National Homebuyers Fund ?
The US National Homebuyers Fund, Inc. (NHF) is a nonprofit organization that provides down payment assistance grants and other forms of support to help low- and moderate-income individuals and families achieve homeownership in the United States.
The NHF was founded in 2002 and is based in Sacramento, California. Its mission is to create affordable housing opportunities for underserved communities by promoting responsible homeownership through education, counseling, and financial assistance.
The NHF offers several programs to help homebuyers, including grants of up to 5% of the purchase price of a home, closing cost assistance, and mortgage credit certificates that can reduce a borrower's federal income tax liability. These programs are available in partnership with approved lenders and can be used to purchase a variety of homes, including single-family homes, townhouses, and condominiums.
To qualify for NHF assistance, homebuyers must meet certain income and credit requirements, as well as complete a homebuyer education course. The NHF also offers counseling and support services to help homebuyers navigate the home buying process and achieve long-term financial stability.
Key Facts of NHF
- National Homebuyers Fund is a nationwide home buyer assistance program.
- For first-time homebuyers and others, it offers grants or 3 year forgiven loans.
- The help can be combined with a conventional, FHA, VA, or USDA mortgage and is typically limited to 5% of your loan amount.
- There are income requirements for eligibility because the fund is intended to assist low- and moderate-income homebuyers. However compared to many state, local, and county programs, the NHF may have a higher income cutoff.
- While having its headquarters in Sacramento, California, the NHF offers down payment and closing cost assistance to residents of all 50 states.
How the NHF Grants Works ?
The US National Homebuyers Fund (NHF) provides down payment assistance grants to eligible homebuyers to help cover the upfront costs associated with purchasing a home.
The National Homebuyers Fund grant can be used to cover the down payment and closing costs associated with purchasing a home. The grant is typically provided as a second mortgage that is subordinate to the primary mortgage. NHF grants can range from 2% to 5% of the purchase price of the home, depending on the program and the borrower's income level. The maximum grant amount is typically $15,000.
NHF works with approved lenders to provide these grants to eligible homebuyers. Homebuyers must obtain their primary mortgage from one of these partner lenders to be eligible for NHF grants.
NHF grants are generally forgivable after a certain period of time. For example, some programs may require the borrower to live in the home for a certain number of years before the grant is forgiven. If the borrower sells the home or refinances the primary mortgage before the grant is forgiven, they may be required to repay a portion of the grant.
National Homebuyers Fund comes in two forms. First is a grant of up to 5% of the final loan amount, that grants are free and do not have to be repaid, and second is 0% interest second mortgage loan that is forgiven after three years. Usually, this second loan is large enough to pay for your down payment or closing costs.
An NHF loan has a three-year repayment period after which the entire loan debt is totally erased. You don't have to pay any principal or interest on a forgiving loan. The main requirement is that you remain in the home for the full three years necessary for the debt to be forgiven.
Types of NHF Assistance
The US National Homebuyers Fund provides several types of assistance to help low- and moderate-income individuals and families achieve homeownership in the United States. Here are some of the key programs and services offered by NHF :
1) Down Payment Assistance :
NHF provides grants of up to 5% of the purchase price of a home to eligible homebuyers. These grants can be used to cover the down payment and closing costs associated with purchasing a home.
2) Mortgage Credit Certificates :
NHF offers mortgage credit certificates (MCCs) that can help homebuyers reduce their federal income tax liability. MCCs provide a dollar-for-dollar reduction in federal income tax liability based on a percentage of the mortgage interest paid by the homeowner each year.
3) Homebuyer Education :
NHF requires all homebuyers to complete a homebuyer education course before receiving assistance. The course covers topics such as budgeting, credit management, and the home buying process.
4) Counseling and Support :
NHF provides counseling and support services to help homebuyers navigate the home buying process and achieve long-term financial stability. These services include credit counseling, budget planning, and post-purchase support.
How to Qualify for National Homebuyers Fund ?
To qualify for down payment assistance from the US National Homebuyers Fund, homebuyers must meet certain eligibility requirements. Here are the key requirements to qualify for NHF down payment assistance :
1) Income Limits :
NHF programs are designed to assist low- and moderate-income homebuyers. The income requirements vary depending on the program, location, and the size of the home being purchased. Typically, homebuyers must earn less than 115% of the median income in their area to be eligible.
2) Credit Score :
Homebuyers must have a credit score of at least 640 to qualify for NHF down payment assistance. However, some programs may have more lenient credit score requirements.
3) Debt-to-Income Ratio :
Homebuyers must need a debt-to-income ratio of 45% or lower to qualify for NHF down payment assistance.
4) Home Purchase :
NHF down payment assistance can only be used for the purchase of a primary residence. The home must be located in a participating state and meet certain purchase price limits.
5) Homebuyer Education Course :
All homebuyers who receive NHF down payment assistance must complete a homebuyer education course. The course covers topics such as budgeting, credit management, and the home buying process.
6) Partner Lenders :
NHF down payment assistance is provided in partnership with approved lenders. Homebuyers must obtain their primary mortgage from one of these partner lenders to be eligible for NHF down payment assistance.
National Homebuyers Fund Income Limits
The NHF has income limits for its down payment assistance programs, which vary depending on the location of the home being purchased and the size of the household. The income limits are based on the area median income (AMI) and are adjusted annually. Here are the income limits for NHF down payment assistance programs for 2023 :
- For most areas, the income limit for a household of one is $86,900, and for a household of two or more, the income limit is $99,760.
- For high-cost areas, such as some parts of California and New York, the income limit for a household of one is $125,040, and for a household of two or more, the income limit is $143,600.
It is important to note that these income limits are subject to change and may vary based on the specific NHF program and the location of the home being purchased. Additionally, other factors such as credit score, debt-to-income ratio, and home purchase price may also affect eligibility for NHF down payment assistance programs. It is recommended to consult with an NHF-approved lender or NHF directly to determine if you meet the income limits for their programs.
How Much is National Homebuyers Fund Grant ?
The NHF offers various grants and down payment assistance programs to help eligible homebuyers purchase a home. The amount of grant you can receive from the NHF depends on the specific program you qualify for and the funding availability at the time of your application.
For example, NHF's down payment assistance program provides up to 5% of the loan amount as a grant to be used towards down payment and/or closing costs. This means that if you're purchasing a $300,000 home, you could potentially receive up to $15,000 in grant funds. However, eligibility requirements and grant amounts may vary by state and program.
It's important to note that grant funds from NHF and other down payment assistance programs are typically limited and may run out quickly. It's a good idea to consult with a mortgage lender or housing counselor to determine your eligibility and explore all available options.
How to Apply for National Homebuyers Fund ?
To get a National Homebuyers Fund (NHF) grant, you will need to follow these steps :
1) Check Eligibility :
Check if you meet the eligibility requirements for NHF grants. The eligibility requirements include income limits, credit score requirements, and home purchase price limits. You can check the eligibility requirements on the NHF website or by contacting an NHF-approved lender.
2) Find an NHF-Approved Lender :
NHF grants are provided in partnership with approved lenders. You will need to find an NHF-approved lender to apply for grants. You can find a list of National Homebuyers Fund lenders on the NHF website.
3) Complete Homebuyer Education Course :
All NHF grant recipients are required to complete a homebuyer education course. The course covers topics such as budgeting, credit management, and the home buying process. You can complete the course online or in-person through an NHF-approved counseling agency.
4) Submit National Homebuyers Fund Application :
Your NHF-approved lender will guide you through the application process and help you determine which NHF programs you qualify for. You will need to submit your application and provide documentation to verify your income and assets.
5) Approval and Closing :
If you are approved for NHF grants, you can use the funds to cover the down payment and closing costs associated with purchasing your home. NHF grants are typically provided as a second mortgage that is subordinate to the primary mortgage. Once your loan is approved, you can close on your home and begin your homeownership journey.
How to Contact National Homebuyers Fund ?
NHF Inc. contact info :
- 1215 K Street, Suite 1650, Sacramento, California, 95814, United States
- Toll-free no. : (866) 643-4968 | Local (916) 444-2615
- E-mail : info@nhfloan.org
- Website : www.nhfloan.org
Bottom-line
Overall, NHF grants can help make homeownership more accessible to low- and moderate-income individuals and families by reducing the upfront costs associated with purchasing a home. By meeting the eligibility requirements and working with an approved lender, homebuyers can access this assistance to help them achieve their dream of homeownership.