Down payment assistance, discounted interest rate and mortgage tax credit available for government and conventional loans
COLUMBUS – May 5, 2014 – (RealEstateRama) — The Ohio Housing Finance Agency (OHFA) encourages first-time buyers to take advantage of multiple savings through the Agency’s First-Time Homebuyer program. Qualified buyers receive down payment assistance of up to 2.5 percent of the home’s purchase price, a new mortgage tax credit, and a special interest rate reduction of .25 percent on all home loans. The special mortgage rate is limited to the first 250 loans reserved through a participating OHFA lender.
“It’s our mission to design affordable home loan products that promote sustainable home ownership,” said OHFA Executive Director Doug Garver. “OHFA’s First-Time Homebuyer program may be the best kept secret in the housing market.”
Down Payment Assistance
OHFA offers down payment assistance of up to $10,000, equal to 2.5 percent of the home’s purchase price (the average OHFA first-time homebuyer receives $2,500 toward a $100,000 home). The money can be used for pre-ownership expenses such as down payment or closing costs. “Many people believe they can’t qualify for a mortgage loan because student loans or other debt prevents them from saving enough for a down payment,” Garver said. “OHFA’s programs make home buying much easier for Ohioans by reducing the amount of out-of-pocket expenses needed to purchase a home.”
Free homebuyer education is required, whether through a HUD-approved housing counseling agency or OHFA’s Streamlined Homebuyer Education program.
Mortgage Rate Reduction
OHFA is also supporting homebuyers with an interest rate reduction of .25 percent. The discount is available for the first 250 closed loans. For example, a reduced mortgage rate of 4.3 percent, even with down payment assistance, will save borrowers about $5,200 on a $100,000 loan and reduce their monthly payment by more than $15.
The benefits of the special rate reduction are even greater for “Ohio Heroes” including police, firefighters, teachers, direct patient caregivers, military and veterans, who receive an additional .25 percent rate discount and optional down payment assistance. The mortgage rate for Ohio Heroes with down payment assistance is currently 4.1 percent. Another program, “Grants for Grads,” rewards graduates who have received a degree within the last 24 months with down payment assistance and OHFA’s discounted mortgage rate, currently at 4.0 percent.
OHFA partners with a variety of lenders including banks, mortgage companies and credit unions. Buyers should visit myohiohome.org to find an OHFA-approved lender in their area, current interest rates, and more information on OHFA’s homeownership programs.
Mortgage Tax Credit
OHFA’s Mortgage Credit Certificate for the First-Time Homebuyer provides a direct federal tax credit on a portion of the mortgage interest. The certificate can lower the homebuyer’s federal tax liability by 40 percent with a maximum of $2,000 per year for the life of the mortgage.
For example, an OHFA First-Time Homebuyer who purchases a $100,000 home at a special reduced interest rate of 4.25 percent will receive a tax credit of $1,787 after the first year. The mortgage credit is in addition to the home mortgage interest deduction on IRS Schedule A.
“Despite the effects of the harsh winter on the housing market, it’s promising to see Ohio’s market experiencing an upswing,” Garver said. “While home prices remain steady, OHFA offers competitive interest rates and incentives to help homebuyers transitioning from renting to buying their first home.”
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About the Ohio Housing Finance Agency
OHFA is a self-supporting quasi-public agency governed by an eleven member board. The Agency uses federal and state resources to provide housing opportunities for families and individuals through programs designed to develop, preserve and sustain affordable housing throughout the state of Ohio. OHFA is also the administrator of the state’s foreclosure prevention program, Save the Dream Ohio.
Media Contact: Arlyne Alston