Family Services Center Homeownership & Housing Counseling Programs

Homeownership Resource Center

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FSC is a HUD-Approved Housing Counseling Agency and a
certified Community Housing Development Organization (CHDO).

First Time Homebuyer
Pre-Purchase Housing Counseling

Family Services Center provides individual, one-on-one counseling for first time home buyers, whether you’re ready to buy now or several years from now. Learn how to obtain an affordable mortgage loan, the best way to shop for a home, and how to improve your credit score to obtain the lowest cost mortgage. We also provide information on how to qualify for homebuyer financial assistance programs.

You'll learn how to:

Get started

Improve your credit

Qualify for an affordable mortgage

Obtain downpayment and other assistance

Free group training classes are also available. Each course consists of two 4-hour sessions. Classes fill-up, so be sure to call 551-1610 to register.

Family Services Center provides Pre-Purchase Housing Counseling covering:

a.    Pre-purchase Counseling for Prospective Homeowners

Individual counseling sessions for prospective low to moderate income homebuyers with emphasis on lower income first time home buyers. Services include assessing each client's needs and financial situation, presenting information on all available homeownership assistance programs, establishing an individualized homebuyer plan, developing corrective action plans and timelines for success, and encouraging and facilitating progress as clients overcome obstacles and move toward mortgage-readiness.

b.    Matching Clients with Non-predatory Loan Products & Homebuyer Assistance Programs

Analysis of financials, risk elements, and general concepts affecting conventional and government mortgage loan decisions, using effective procedures and techniques that translate into appropriate loans and satisfied housing counseling clients.

c.    Homebuyer Education Programs

Comprehensive homebuyer education program to turn prospective homebuyers into satisfied homeowners including how to shop for a home, obtain an affordable mortgage loan, improve budget and credit profiles, and maintain the home and finances after purchase.

d.    Housing Choice Voucher Homeownership

Information, outreach and referral for local area Housing Choice Voucher Homeownership Program.

e.   Training on Avoidance of Delinquency, Predatory Lending & Foreclosure

Training on how to avoid predatory lenders and common lending pitfalls, including helping unwary borrowers avoid inflated appraisals, unreasonably high interest rates, unaffordable repayment terms, and other conditions that can result in a loss of equity, increased debt, default or foreclosure.

Financial Assistance
Huntsville Downpayment Assistance Program (DAP) - Accepting applications at Family Services Center

The City of Huntsville Community Development Department provides downpayment and/or closing cost assistance for first time homebuyers in Huntsville. The assistance is available on a first-come, first-served basis, until funds run out.

$5000 is provided at time of closing to be used exclusively for the downpayment and/or closing costs associated with buying a single-family home. The $5000 is a 0% interest deferred loan with no monthly payments. The loan is gradually forgiven by 20% per year and is totally forgiven after the buyer has lived in the home for five (5) years.

Eligibility Requirements
To be eligible, a participant must:

Be a first-time homebuyer (have not owned a home within the last three years, or are a displaced homemaker or single parent – see definition below)

Complete a free eight-hour homebuyer training course provided at Family Services Center

Have at least $500 in personal savings account prior to loan closing

Purchase home in Huntsville city limits, not in flood plain, with purchase price not exceeding $150K

Home must be built 1978 or after, or if built pre-1978, it must pass a lead-based paint assessment performed by certified company

Home cannot be a Neighborhood Stabilization Program (NSP) property (from FSC, HHA or HFH)

Home must pass a (no-charge) code inspection by City of Huntsville before closing, so foreclosure may not work. (Please note that if it fails inspection, seller will have to bring it up to code even if you don’t buy it; see note on back*.)

Use City approved lender - no seller financing (and approved builder, if new home ) - see list on back of page

Live in the property - it cannot be used for rental, business, or other commercial purposes

Meet lender standards for creditworthiness with maximum qualifying ratios of 31 & 43, i.e., mortgage payment no more than 31% of gross monthly income, and no more than 43% including credit payments; using 30 year fixed loan

Have a household income (gross income of all persons who will live in home) at or below 80% of the area’s median income based on family size as defined by HUD (see below)

Income Limits for Huntsville Downpayment Assistance Program (effective December 1, 2011)

Household Size

1

2

3

4

5

6

7

8

Gross Annual Income

40,150

45,900

51,650

57,350

61,950

65,550

71,150

75,750

City-Approved Lenders for DAP (alphabetical order):
Bank of America, Consumer First Mortgage, First Federal Mortgage, Habitat for Humanity, Hamilton Mortgage Corporation, Hometown Lenders - Alabama Mortgage, Hometown Lenders - 1st Family Mortgage Mortgage America, NAB Mortgage Group, Platinum Mortgage, Progress Bank & Trust, Redstone Federal Credit Union, Southwest Funding, WR Starkey Mortgage (others may be approved, check with us for updates)

Lender approval requirements are at http://www.hsvcity.com/comdev/dap.php

City-Approved Builders for DAP (alphabetical order):

Breland Homes, Habitat for Humanity, Hunter Homes

First Time Homebuyer Definition
The Borrower must be a first-time homebuyer. For the purposes of the DAP Program, a first time homebuyer is defined as an individual or his or her spouse who has not owned or held an interest in a principal residence in three years prior to acquiring the subsidy of the down payment assistance.

The term first-time buyer includes an individual who is a displaced homemaker or single parent and who, even if while a homemaker or married, owned a home with his or her spouse or resided in a home owned by the spouse.

A displaced homemaker means an individual who: (1) is an adult; (2) has not worked on a full-time basis as a member of the labor force for a number of years, but has, during such years, worked primarily without remuneration to care for the home and family; and (3) is unemployed or underemployed and is experiencing difficulty in obtaining or upgrading employment.

A single parent is defined to mean an individual who: (1) is unmarried or legally separated from a spouse; and (2) has one or more minor children for whom the individual has custody or joint custody, or is pregnant.

*City of Huntsville Building Code Inspection

The home must pass a (no-charge) code inspection by the City of Huntsville before closing. If it fails inspection, the seller will have to bring it up to code even if you don’t buy it.
Please note that it will require wired-in smoke detectors with battery back-up in all bedrooms, etc., which only new homes will have.

USDA Rural Development Mortgage Loans

U.S. Department of Agriculture Rural Development provides loans directly to homebuyers (Direct Loans), and also guarantees loans made by other lenders for homes in rural areas. These loans do not require mortgage insurance payments and have low interest rates. Additionally, their Direct Loans do not require a down payment. Call 544-5795 to apply for a Direct Loan, or go to your lender to apply for a Guaranteed Loan.

USDA Rural Development Home Repair & Rehab

USDA Rural Development also provides grants (up to $7500), and loans (with as low as 1% interest) to repair or rehabilitate owner-occupied homes in rural areas. Call 544-5795 for more information.

FIRST STEP

Offered by the Alabama Housing Finance Authority, through approved lenders, this tax-exempt Mortgage Revenue Bond program offers lower-than-market, fixed interest rates on 30-year FHA, VA, Rural Development and conventional mortgages to first-time and lower-income home buyers.

In conjunction, AHFA provides up to 6 percent of the home's sales price in down payment and closing cost aid, financed over a 20-year term. To get these funds, you must use an FHA, Rural Development or conventional loan. If your household income is 80 percent or less of the state's median income, then the down payment funds are interest-free. If your household income is more than 80% of the state's median income, then the down payment funds will be loaned to you at the same interest rate as your low-interest First Step mortgage.

RURAL ALABAMA MORTGAGE PROGRAM

The Rural Alabama Mortgage Program (RAMP) provides low-interest mortgages and entry cost assistance to rural home buyers. RAMP is a combination of the Alabama Housing Finance Authority's low-interest rate funding and down payment assistance and USDA Rural Development's 502 Direct Loan Program.

There are three parts to a RAMP loan:

1) AHFA and Rural Development will each finance half of the purchase price of a new or existing home, combining their tools to offer the lowest rate available.

2) Borrowers are eligible for up to $2,000 in down payment funds, interest-free, to reduce up-front, out-of-pocket expenses.

3) Borrowers will learn the basic responsibilities of buying and maintaining a home through a homeownership education course.

RAMP's income limits are set by Rural Development and range from $13,800 to $64,000, depending on family size and location. Maximum sales prices range from $94,000 to $110,000, with no first-time homebuyer restriction.

To apply, contact one of USDA Rural Development's 17 regional field offices. The phone number for the Huntsville area Rural Development office is 532-1677.

STEP UP

Offered by the Alabama Housing Finance Authority, through approved lenders, the Step Up program is available statewide and year-round on a first-come, first-served basis. AHFA provides up to 100% financing (up to 6 percent of the home's sales price) to income-qualified buyers using FHA, Rural Development, or select "My Community" conventional mortgage loans.

In conjunction with the down payment funds, AHFA offers a 30-year, fixed-rate mortgage with an interest rate just slightly higher than the current market rate. Program participants also must complete a home buyer education workbook.

Participants may earn up to $97,300 and remain eligible for the Step Up program, regardless of household size or location.

The down payment funds are blended into the home mortgage, so there's only one check to write.

MORTGAGE CREDIT CERTIFICATES

Offered by the Alabama Housing Finance Authority, through approved lenders, Mortgage Credit Certificates (MCC) are not mortgages. Administered by AHFA, an MCC reduces the amount of federal income tax homeowners pay, giving them more available income to qualify for a mortgage loan.

The federal government allows every homeowner an income tax deduction for all the interest paid each year on a mortgage loan, but an MCC provides a tax credit of 20 percent. The tax credit provided by the MCC simply helps borrowers increase their disposable income to qualify for a loan and meet mortgage obligations.

The MCC program is offered in conjunction with AHFA's Step Up financing program.

Alabama Housing Finance Authority
P.O. Box 230909
Montgomery, AL 36123-0909

www.ahfa.com

Toll-free: 800-325-AHFA

Homebuyer Education Course

2012 Homebuyer Training Schedule

Family Services Center provides a free 8-hour homebuyer training course each month, covering the following topics:

I.      Money Management

·         Setting goals

·         Budgeting (tools and considerations)

·         Income/Expenses

·         Cost cutting measures: dining out, grocery shopping, utilities

II.    Banking Concepts

·         Definitions

·         Financial Institutions (banks, credit unions, thrifts)

·         Savings options/tips

·         Checking accounts (ordering and writing checks, balancing, reconciling)

·         Investments (CD’s, 401k, stocks, bonds, etc.)

·         Add’l bank services (ATM’s, debit cards, online services)

·         Banks fees: minimum balance, overdraft, etc.

III.   Basics of Borrowing

·         Types of loans

·         Interest rates (APR)

·         Loan consolidation

IV.   Credit Management

·         Credit reports

·         Building/repairing credit

·         Establishing good credit

·         Credit Cards

·         Consumer credit laws

·         Bankruptcy

V.     Keeping Your Money Safe

·         Predatory lending

·         Federal Consumer Protection Laws

·         Identity Theft

·         Credit card security

VI.   Real-Life Issues

·         Insurance & Risk

VII.  Homeownership Preparation

·        Develop savings plan

·        Finding the right real estate agent

·        How to increase your borrowing power

·        Creditworthiness

·        Finding the right mortgage

VIII. House Shopping

·        Deciding what house you want

·        Comparison shopping

·        Making an offer

·        Negotiating the purchase

IX.   Mortgages

·        Shopping for an affordable mortgage loan

·        Applying for a loan

·        Loan processing

·        If your loan is rejected

X.   Closing

·        Preparing for closing

·        Closing Day

·        Getting the keys to your new home

XI.   Homeownership

·        Settling in

·        Obligations as a borrower

·        Reaping the benefits

Programs & Services Agency Profile Special Events
Needs & Volunteer Opportunities Contact Us T

Household Size	1	2	3	4	5	6	7	8
Gross Annual Income	40,150	45,900	51,650	57,350	61,950	65,550	71,150	75,750

Homeownership Resource Center

Free Homebuyer Counseling

FSC is a HUD-Approved Housing Counseling Agency and a certified Community Housing Development Organization (CHDO).

USDA Rural Development Home Repair & Rehab

FIRST STEP

RURAL ALABAMA MORTGAGE PROGRAM

STEP UP

MORTGAGE CREDIT CERTIFICATES

I. Money Management

· Setting goals

· Budgeting (tools and considerations)

· Income/Expenses

· Cost cutting measures: dining out, grocery shopping, utilities

· Definitions

· Financial Institutions (banks, credit unions, thrifts)

· Savings options/tips

· Checking accounts (ordering and writing checks, balancing, reconciling)

· Investments (CD’s, 401k, stocks, bonds, etc.)

· Add’l bank services (ATM’s, debit cards, online services)

· Banks fees: minimum balance, overdraft, etc.

VII. Homeownership Preparation

FSC is a HUD-Approved Housing Counseling Agency and a
certified Community Housing Development Organization (CHDO).