HomeOwnership Program Financing (HOP)

Full-Cycle Lending Process

Eligible properties: Single family, owner occupied, principal residence. Property can be within the City of Reading or in the Townships or Boroughs of Berks County.
Description: Standard fixed rate mortgage loan product offered to first time homebuyers with incomes up to 105% of median income for city properties; and for first time homebuyers with incomes up to 80% of area median income for non-city properties. See Chart Below

Maximum Sales Price: None.

Maximum C L-T-V: 120% of the lower of the sales price or appraisal value with repair escrow, or 110% without repair escrow.

Financing terms: Bank L-T-V: Minimum of 80% of the lesser of the sales price or appraisal value

Amortization: 15, 20, 25 or 30 years (depending on the bank)

Interest:Banks quoted rate at time of application

NHS – HOP L-T-V: 15% or 20% of the lesser of the sales price or appraisal value for down payment, plus up to $ 3,000.00 towards property repairs, plus closing cost in excess of $1,500 of own funds, with a combined loan to value not to exceed above guidelines.

Amortization: 5, 10, or 15 years  Interest: NHS quoted rate, typically 4%.

Down payment: No down payment required ($0)

Closing Cost: Borrower must have a minimum of $1,500 of their own funds toward closing costs. The remainder of the settlement/ closing cost may be from a gift and/or seller contribution up to 6% of the sales price and/or up to 10% extra from the NHS loan, once the minimum of borrower’s own funds requirement has been met. Also Federal Home Loan Bank Home Equity Fund can be used by borrowers meeting FHLB eligibility requirements in combination with this program when it is available.

Points & Underwriting fee: None charged by NHS

Private Mortgage Insurance:Not required

Counseling: Pre-purchase homebuyer counseling is mandatory. Budget counseling is mandatory and must be provided to all borrowers. The borrower’s net income budget must demonstrate the ability to save a minimum of $50.00 each month.

Income Qualifications:Not to exceed 105% of HUD Median Income based on family size for City of Reading properties; or not to exceed 80% of the HUD Median Income outside the city.

Income Ratios: 33% - 38%

Property & Wood Infestation Inspections:Required. Property Inspection completed by NHS Rehabilitation Specialist. All health and safety repairs must be corrected prior to settlement if responsibility of the seller. Or the borrower can borrow up to $3,000.00 to be held in escrow by NHS to complete repairs after closing. Wood infestation inspection conducted by certified company of Buyer’s choice.
 

PHFA Keystone Renovate & Repair Program Summation and Highlights

The Renovate & Repair Loan Program (R&R) is designed for homeowners in Pennsylvania to help in making their home a safe and healthy one, and to help make sure their home continues to be an asset. The unique program helps to avoid Pennsylvania homeowners from becoming victims of predatory lending, and improves the relationships between contractors, government programs, housing counseling agencies, and Pennsylvania citizens.

To qualify for the R&R program, you should have:

• Household incomes no greater than 150% of the Area Median Income
  (see http://www.phfa.org/ for area specific limits)
• A middle FICO score of at least 620
• An interest in improving or repairing your permanent, primary residence located in Pennsylvania
• Currently own the home that needs repairs, or be under contract to buy it
• Sufficient monthly income to be able to support a monthly loan payment
• Additional qualifications can be found at http://www.phfa.org/, or with your Local Program Administrator

The benefits to Pennsylvania Homeowners are:

• Lower interest rate than a traditional home equity loan
• Low fees
• Ability to burrow up to $35,000 or 120% or your home's value
• 10, 15, 20 year repayment terms
• No pre-payment penalty
• Technical Assistance throughout the entire loan and repair process.

NHS of Greater Berks, Inc. will be your Loan Program Administrator (LPA) through the R&R process to help you see if you qualify and afford the R&R loan, help you prioritize spending of the borrowed funds, and help you in finding the right contractor to complete the repairs. This is a program of PHFA, which governs all aspects of the program.

(See other financing assistance programs in the Rehab and Real Estate section)

For more information, contact NHS at 610-372-8433 or visit our office at 213 N. 5th Street, Suite 1030, Reading, PA 19601.