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Saturday, September 19, 2015

OHFA Launches New Product to Reduce Out-of-Pocket Expenses for Home Buyers

On September 1, OHFA rolled out a new product, Your Choice! Down Payment Assistance, which provides down payment assistance equal to 2.5% or 5% of the purchase price and can be used to pay for the down payment, closing costs or other prepaid expenses incurred prior to closing. Your Choice! Down Payment Assistance will help reduce out-of-pocket expenses for home buyers and help increase home ownership within Ohio. While we will continue to price this product daily, the new mortgage rates are expected to be more competitive in the future.

Program Highlights
The borrower will have the option to choose down payment assistance equal to 2.5% or 5% in the form of a 0 % second mortgage. Down payment assistance is forgiven after seven years. If the homebuyer sells or refinances within seven years, they must repay all of the assistance provided. The lender and borrower can decide the best use of the funds such as 3.5% toward down payment and 1.5% towards closing costs or 5% toward down payment 0% toward closing costs. (Homebuyer can apply funds in any combination.)

Your Choice! Down Payment Assistance (2.5% or 5%) will be included in Grants for Grads, however, the forgiveness for Grants for Grads will remain the same. The second mortgage will be forgiven at 20% per year over five years. If the borrower sells the home prior to the end of fifth year and provides evidence of continued residency in Ohio, the remaining balance will be forgiven. If a homebuyer refinances their first mortgage, OHFA will continue to re-subordinate their second mortgage. Borrowers can apply for Grants for Grads within 48 months of graduating from an accredited educational institute with an associate's, bachelor's, master's or doctoral degree.