By Stacy Spendlove, Senior Home Loan Expert
SouthWest Federal Credit Union
The City of Hurricane recently announced a mortgage assistance program that grants $2,000 toward closing costs to lower and moderate income buyers who wish to acquire newly constructed homes. To qualify for the grant, the new home must be the primary residence of the home buyer. Homes that have been previously occupied do not qualify.
The primary objective of the grant is to stimulate the sale of new homes and make quality housing affordable for residents who are less affluent.
The Hurricane Grant must be issued in connection with a purchase that is financed with a US Department of Agriculture 30-year fixed rate Rural Development loan. This requirement assures that applicants meet federally established low or moderate income criteria and minimizes Hurricane City’s administrative burden by outsourcing all underwriting and processing to a competent third party like SouthWest Federal Credit Union.
Listed below are some of the most frequently asked questions about the program:
Information supplied by Hurricane City staff
Who is eligible to receive a $2,000 Hurricane Grant?
Buyers must not have previously owned a home
(i.e. within 3 years prior to closing)
Buyers must use a USDA Rural Housing Guaranteed or Direct Lending 30-year fixed rate loan
Home buyers must occupy the purchased home as the primary, permanent residence.
The property type must be eligible (see below)
What property types can be purchased with the $2,000 Hurricane Grant?
Residential properties located within Hurricane city limits may be single-family detached homes, condominiums, planned unit developments (PUD), twin homes, town homes and manufactured homes permanently affixed to a foundation. Properties, regardless of type, must never have been occupied previously (i.e. if Hurricane City has already issued a Certificate of Occupancy prior to the application date, the property does not qualify).
What type of loan can a home buyer use to purchase the home?
The home buyer must be use a fixed interest rate loan with a term of 30 years that is originated or guaranteed by the USDA’s Rural Development program. SouthWest Federal Credit Union is a local Rural Development lender and may be reached by calling 674-6900.
Can Cash Buyers qualify to get the Hurricane City Grant?
No. This specific Grant is intended to assist those who need financing in order to own property.
How does a home buyer apply for a $2,000 Hurricane Grant?
Buyer signs a Real Estate Purchase Contract to: (A) have a new home constructed, (B) have a partially-constructed home completed, or (C) purchase a newly-constructed home. It must be the primary residence of the home buyer and located within Hurricane City limits. Homes that have been previously occupied do not qualify.
Buyer applies for USDA Rural Development mortgage loan through a USDA lender such as SouthWest Federal Credit Union.
How do I find a lender to help me obtain a Hurricane Affordable Housing Grant?
SouthWest Federal Credit Union is a USDA Rural Housing Approved Lender. Call 674-6900 for more information.
Can the $2,000 Hurricane Affordable Housing Grant be combined with the U.S. Federal tax credit?
Yes, if home buyers meet the independent criteria of both the federal government and the Hurricane Grant
How many Hurricane City Affordable Housing Grants are available to home buyers?
A total of approximately 69 grants of $2,000 each will be available in 2010. Only one grant can be used for the purchase of each home. Hurricane City Grants are distributed on a first-come, first-served basis to fully-qualified home buyers. The number of grants will vary from year-to-year and will be announced in January by public notice.
Is the Hurricane Affordable Housing Grant taxable?
The Hurricane Grant will probably be taxable as income under federal and state tax laws. Hurricane City does not provide any tax advice regarding the taxability of the Grant.
If I have additional questions, who do I contact?
Contact Toni Foran at the City of Hurricane 635-2811 x11 8. Please allow 24 hours for a reply.