MANSFIELD – Local residents in the market for a new home this spring can receive assistance from the annual Welcome Home program.
Starting on March 1, the Federal Home Loan Bank (FHLB) of Cincinnati will begin its Welcome Home program that provides down payment and closing costs assistance for low- and moderate-income homebuyers. Grants for up to $5,000 per house are available to qualified borrowers.
The Welcome Home program was created when the FHLB of Cincinnati established a set-aside of Affordable Housing Program funds to spur home ownership. These funds are available to member banks as grants to assist homebuyers. Locally, member banks include Richland Bank and Mechanics Bank.
Debbi Adams, executive vice president of Mechanics, said all member banks receive $200,000 through the Welcome Home program. That money translates to approximately 40 households receiving a $5,000 grant. Adams said at Mechanics, the lenders try to qualify their buyers for the full $5,000 grant for down payment and closing costs assistance.
“We could help more people with less funding, but that doesn’t seem like it would go as far for them,” she said.
Adams noted Mechanics also lends to contiguous counties, but Richland County tends to benefit the most from the Welcome Home program. Mechanics has participated in the program since 2004.
The Welcome Home program is designed for low- to moderate-income households, and annual household income limits apply by county. In Richland County for this year’s grant funds, a 1-2 person household income limit is $50,560. Households with three or more persons have a limit of $58,144.
When beginning the home-buying process, the best first step is to talk to a lender, who can direct buyers to the Welcome Home program as it applies.
“It’s always good before you start looking to talk to a lender, just to know what your limitations are or maybe you can afford more than you thought,” Adams said. “Knowing the guidelines and what banks look at is always a good thing.”
The next step is talking to a real estate agent to start looking at homes. Jessica Gribben, an agent with The Holden Agency, said the Welcome Home program is an asset for both home buyers and sellers.
“Your buyers are benefitting because they can buy now, but your sellers are benefitting too,” Gribben said. “If you’ve been waiting to sell your home, waiting for the market to be good, putting your home on the market this time of year means you’re going to have buyers you wouldn’t have had access to previously.”
For buyers specifically, Gribben touted the Welcome Home program as a way to eliminate one hurdle.
“They may not have quite enough funds for their down payment plus closing costs, so $5,000 added on can make the difference between buying and staying as a renter for another year to save money,” she said. “Even if you have your down payment saved up, you can put $5,000 extra dollars down and end up with a more affordable monthly payment.”
D.J. Klupp, another agent with The Holden Agency, noted the Welcome Home program also helps homebuyers tackle the fear of initial costs.
“It scares people to drain their entire savings account to buy a home, and that’s where the Welcome Home grant comes in,” Klupp said. “Especially if you get $5,000 from the Welcome Home grant, you start to build equity into your home and when you sell it down the road it’s almost like a small savings account depending on the market.”
First-time homebuyers also receive an extra bit of help through required home ownership counseling. Adams said at Mechanics the counseling is arranged through the bank, and all costs associated with counseling will be covered by the grant.
“Some things you learn are how to budget and things they may not have thought about, like maybe owning a house is less than their rent is going to be,” Adams said. “But home ownership counseling will ask did you think about garbage collection, utilities, taxes and insurance.”
Reservations for Welcome Home funding are accepted starting March 1, and are awarded on a first-come, first-served basis. Buyers are not required to pay back any of the funding they receive so long as they remain in their new home for five years; should the homeowner move before five years, they are required to pay the grant back on a pro-rated basis.
After participating in the Welcome Home grant for 12 years, Adams said the experience in sharing this with homeowners is always gratifying.
“Their faces just light up, especially if they haven’t heard about the grant and we see they’re within the income guidelines,” she said. “And it’s possible they could buy more house than they would’ve originally been able to. It’s always rewarding.”
