Bensalem, PA – May 2, 2013 – (RealEstateRama) — The Federal Home Loan Bank of Pittsburgh (FHLBank) and six area banks had some good news today for first-time homebuyers: they and other Keystone State banks may be able to provide lower-income families with grants to help them meet their down payment and closing costs.
First Savings Bank of Perkasie, Fulton Bank, Huntingdon Valley Bank, Meridian Bank, Polonia Bank and William Penn Bank joined FHLBank in announcing that the First Front Door program is returning to the region to assist qualifying individuals and families when they buy their first home. Joining the banks in making the announcement in Bucks County today was U.S. Rep. Mike Fitzpatrick (Pa.-08). The banks will begin registering homebuyers for the program in Bucks and Montgomery counties on June 17. Additional banks are expected to become program partners within the next few weeks.
â€śWhile many of us enjoy the benefits of homeownership, some of our neighbors still dream of owning their own home,â€ť said Congressman Fitzpatrick in an announcement made at the Bucks County Visitor Center in Bensalem. â€śFor some families, the costs associated with down payments and closing continue to represent a prohibitive hurdle. I salute the Federal Home Loan Bank of Pittsburgh and participating local banks for making responsible home ownership possible for additional families across the Eighth District.â€ť
A total of $2 million has been set aside for use in 2013 to make more than 400 First Front Door grants across Delaware, Pennsylvania and West Virginia.
Launched by FHLBank Pittsburgh in 1996 as the Home Buyer Equity Fund, the program was re-named First Front Door in 2006 and was suspended in 2009 during the economic crisis. To date, more than $34 million in funds to more than 8,500 first-time homebuyers have been awarded.
â€śStudies have shown that owning a home is beneficial to both the homeowner and the surrounding community,â€ť said David Buches, manager of community investment at FHLBank Pittsburgh. â€śHomeowners move less often than renters, enjoy better physical and psychological health, have children with higher levels of education and annual incomes, and tend to maintain their property with care,â€ť he explained. â€śFirst Front Door will help not only actual buyers but their neighbors as well.â€ť
How the program works
Through First Front Door, FHLBank Pittsburgh supplements a homebuyerâ€™s down payment and closing costs through a matching grant. The program will match a homebuyerâ€™s contribution to their closing costs or down payment 3-to-1. For every $1 of funding provided by the buyer, FHLBank will provide $3 in matching grant assistance, up to $5,000, through participating local banks. Those banks will enroll home buyers for this matching grant while working with them to finance their mortgage. It will make the grant available to the buyer at closing and then be reimbursed by FHLBank. Funds are awarded to home buyers on a first-come, first-served basis.
Program applicants must meet a number of requirements to qualify for participation:
Be a first-time homebuyer (a first-time homebuyer is an individual who has not owned a home within the past three years or owned a home only while married but not as a single person within the past three years â€“ this includes a married couple if either has not owned a home within the past three years);
Contribute personal funds as part of the down payment and closing costs;
Have household income at or below 80 percent of the area median income at the time of First Front Door registration;
Complete at least four hours of homeownership counseling, including the topic of predatory lending, prior to the purchase of the home;
Pay at least 15 percent of his/her monthly household income for PITI (principal, interest, taxes and insurance). Homebuyers paying less than 15 percent for PITI may still qualify, but a more thorough assessment of need is required;
Retain the home for five years to avoid having to repay any portion of the grant. A First Front Door mortgage and note are required as part of the original mortgage documentation.
About FHLBank Pittsburgh
FHLBank Pittsburgh is a wholesale bank that serves the housing finance and community and economic development needs of its owner-members. FHLBank Pittsburgh provides reliable access to low-cost funds, competitive pricing in the purchase of mortgage loans, correspondent banking, technical assistance, affordable housing grants and other programs so members can better serve their own communities. FHLBank Pittsburgh is privately capitalized and funded and does not use taxpayer dollars. At December 31, 2012, it had 294 members in its district of Delaware, Pennsylvania and West Virginia and approximately $65 billion in assets. FHLBank Pittsburgh is one of twelve Banks in the Federal Home Loan Bank System, established by Congress in 1932 to support the residential mortgage and community development activities of local financial institutions.
Aaron Clark, Office of Rep. Mike Fitzpatrick, 215-579-8102,
John Bendel, FHLBank Pittsburgh, 1-800-288-3400;