The Homebuyer Assistance Program will be open to new applications effective September 1, 2016 until further notice.
The Johnson County Housing Services Homebuyer Assistance Program is designed to assist low-to-moderate income Johnson County residents or persons who have been employed for at least two consecutive years in Johnson County with down payment/closing cost assistance towards the purchase of a home. The Program is made possible through the HOME Investment Partnership grant which is awarded to Johnson County Housing Services by the United States Department of Housing and Urban Development.
Johnson County Housing Authority
12425 W. 87th Street Parkway, Suite 200
Lenexa, KS 66215
(913) 715-6662 / VOICE
(913) 715-6631 / FAX
What are the eligibility requirements?
- Household income has to be less than the following income limits for household size based on gross income. The following income limits are based on HUD's published median income guidelines for the Kansas City Metropolitan area (MSA: Kansas City, MO-KS):
Household Size | Income Limit
- 1 person | $40,800
- 2 person | $46,600
- 3 person | $52,450
- 4 person | $58,250
- 5 person | $62,950
- 6 person | $67,600
- 7 person | $72,250
- 8 person | $76,900
- Intends to own and live in the newly purchased home for at least five (5) years as principal place of residence. If the house is sold within the first five (5) years, the homebuyer will be responsible for repayment of the pro-rated balance of HOME funds (homebuyer’s assistance). The rate of forgiveness is 20% each year for five (5) years using a full calendar year. For example, if you purchased a home on 9/21/13 you would not be completely forgiven of the debt until 9/21/18. If the homeowner does not sell the house within this time, the deferred loan will be completely forgiven.
- Mandatory homebuyer education training provided by a HUD approved counseling agency. This training may not be completed on a computer and must meet a minimum of 4 hours in length as well as provide a Certificate of Completion. Reasonable accommodations can be made for those with accessibility issues.
- Purchased home must be used as the principal place of residence. (Person receiving assistance must live at the residence purchased.)
- If you currently own a property, it must be sold before the final approval of assistance is granted.
- Must carry homeowner insurance equal to or more than the value of the property plus the Homebuyer’s Assistance amount and provide documentation upon renewal period for the duration of the affordability period to Johnson County Housing Services.
- The homeowner/applicant must occupy the home within 30 days of loan closing.
- Buyer must not have more than 30% liquid assets or equity transfer of total purchase price of home;
- Must provide a down payment investment towards purchase price of home that is equal to 1 percent of sales price or $500, whichever is greater.
- Total House Payment - PITI (Payment, Interest, Taxes and Insurance) plus recurring debt cannot exceed 38% of gross income.
- Only documented income will be used to determine the maximum purchase price of a home by a participant.
Johnson County Housing Services reserves the right to deny funding to any applicant whose income, debt, credit, etc, do not meet our local requirements.
What are the program features?
Down payment and closing cost assistance not to exceed $10,000 in the form of a deferred loan will be provided on behalf of the qualified participant (the amount to be determined at Johnson County Housing Services' discretion).
The home must be purchased in Johnson County, Kansas.
The home must be inspected by Johnson County Housing Rehabilitation Specialist and pass Housing Quality Standards. (This does not replace a mechanical, electrical, or termite inspection which is not mandatory, but highly encouraged. )
An environmental review is performed on the potential home to be purchased upon submission of the address to the Johnson County Housing Services office. If the home is found to be in a flood zone, the home will be determined ineligible and the applicant would not qualify to receive down payment assistance for this purchase.
For any home built before 1978, a lead-based paint report must be submitted to Johnson County Housing Services with the real estate sales contract. This report must reflect either that lead-based paint was not present at the time of the inspection or that lead-based hazards were present but have been remediated and a lead clearance was received after the remediation took place. See Lead Brochure
Buyers of properties located within 2,500 feet of the Johnson County Executive Airport (the Airport Clear Zone) will be required to execute an affidavit acknowledging that they are aware of the proximity of the property to the airport.
Are Subordinations Allowed?
Subordination of Deferred Loan During Affordability Period:
- Only in the case of imminent danger of foreclosure will the deferred loan be considered for subordination for refinancing during the 5 year affordability period. No other exceptions will be made to this policy.
- Fixed Mortgage Rate (15 - 30 year term)
- Interest rate cannot be more than 1 1/2 percent over FHA rate (Requirement for all lenders).
- If the lender requires, participant must purchase Private Mortgage Insurance (PMI).
- Purchase price must not exceed $195,000 on new construction. Purchase price must not exceed $169,000 on existing (not new construction) homes. These limits are subject to change in accordance with HUD guidelines.
What are eligible properties to purchase?
- Single-Family Home (including 1-4 unit dwellings)
- Condominium Units
- Site Built Homes
- Modular Homes
What can be covered with program funds?
- Processing and Settlement Costs
- Private Lender Original Fees
- Credit Reports
- Title Fees
- Recording Fees
- Appraisal Fees
- Reduction of Principal Balance of Loan
What is the anticipated time frame I can expect?
From initial application to closing, plan on at least 3 months and this is if an eligible property to purchase is found relatively soon after approval for the Homebuyer Assistance Program.
The approval for the Homebuyer Assistance Program is good for six months from the date of the approval letter.
What can I do to help ensure the fastest processing of my application?
- Provide email address to allow rapid communication
- Provide human resource phone and fax numbers
- Provide real estate agent contact information – Also inform agent as to pending application for the Homebuyer’s Assistance Program
- Provide lenders contact information - Also inform lender as to application for the Homebuyer’s Assistance Program
- Provide insurance agent contact information - Also inform agent as to pending application for the Homebuyer’s Assistance Program
What are the steps for completing the Homebuyer Assistance Program?
- Attend Homebuyer Education Class from a HUD approved counseling agency. The class must be at least 4 hours long in a physical location and provide you with a certificate of completion at the conclusion of the class. Internet classes are not allowed. Reasonable accommodations can be made for those with accessibility issues.
- Get pre-approved for a mortgage with a lender. Any lender can participate with our program.
- Apply for the Homebuyer Assistance Program - Click here to download an application or contact Housing Services office at (913-715-6662) Complete the application entirely - read carefully. Only complete applications with documentation will be processed. Also please submit Authorization for the Release of Information and Certification of Legal Residency in the United States.
Provide all necessary support documents i.e. bank statements, social security award letters, pension statements etc. (see application for a complete list). Sign your name in all necessary places in the application packet. **Note that providing fax numbers for assets, banks, and employers will help our office process your application in less time.
- Return the application and supporting documents to the Housing Services office. Fax to 913-715-6631, or scan and e-mail to Carlotte.Lindsey@jocogov.org or mail to the address below or drop off at:
Attention: Homebuyer Assistance Program
Johnson County Housing Services
12425 West 87th Street Parkway, Suite 200
Lenexa, KS 66215
- Begin looking for a home when you receive a Homebuyer Assistance approval letter. Upon completion of credit counseling with Johnson County Housing Services staff and receipt of Certificate of Completion of Homebuyer Education class from a HUD approved counseling agency, eligible participants will be given a Homebuyer Assistance approval letter. Participant may now begin looking for a home.
- Once a sales contract is executed, a copy of the sales contract must be forwarded to:
Johnson County Housing Services
Homebuyer Assistance Program
12425 W. 87th Street Parkway, Suite 200
Lenexa, KS 66215
It can also be faxed to (913) 715-6631 or emailed to Carlotte.Lindsey@jocogov.org.
Participation in the Johnson County Housing Services Homebuyer Assistance Program does not guarantee mortgage approval. The Housing Quality Standards (HQS) inspection performed on the property must pass inspection prior to a closing date being scheduled. A minimum of 14 business days in advance of a scheduled closing date all required documents must be in the possession of Johnson County Housing Services.
Required documents include:
- Certificate of Completion of Homebuyer Education Course
- Credit Report with Scores from Lender
- Loan Application
- Pre-qualification or Pre-approval Letter
- Real Estate Sales Contract
- Good Faith Estimate
- Appraisal Report
Termite, electrical and mechanical inspections are highly recommended, but not mandatory. If these inspections are performed, a report of the results must be forwarded, along with the above documents, within the timeline indicated above.
Once all required documents are received by Johnson County Housing Services, they will be forwarded to legal counsel for review and approval of release of funds.
Johnson County Housing Services must be in the possession of HUD-1 a minimum of 3 business days in advance of a scheduled closing date for final review and approval to proceed to close.
Checks are not processed internally in the Johnson County Housing Services Office. Therefore, timelines have been established to accommodate the required amount of time necessary for external processing.
Can I have a roommate? All persons who will reside in the purchased property must be listed on the application and income included in determining eligibility.
Can I buy a duplex and rent out the other side? No, the property must be your principal place of residence and cannot be split.
What if I have a Real Estate Contract on a home already? Unless the existing contract can be renegotiated to include a minimum 60-day extension, the applicant would be ineligible. Consideration should also be given to a contingency in the contract based on a failed housing inspection.
What about Homeowners Insurance? It is required to secure and maintain homeowners insurance equal to or more than the value of the property in addition to the amount of assistance from the Homebuyer’s Assistance Program. Johnson County Housing Services must be provided evidence of insurance coverage on or before closing.
This coverage must be kept current throughout the affordability period to be in compliance with The Homebuyer Assistance Program. Failure to provide evidence and/or keep insurance coverage on the home will be deemed non-compliant and the Homebuyer Assistance Program funds which were utilized to purchase the property will become due immediately.
The 2nd mortgagee must be listed on the Certificate Holder as:
Board of County Commissioners Johnson County Kansas
C/O Johnson County Housing Services
12425 West 87th St. Pkwy, Suite 200
Lenexa, Kansas 66215
How much should I have saved up (minimum)? Beyond a minimum 1% or $500, whichever is greater, and purchase of homeowners insurance, visit with your realtor/lender about potential expenses and incidentals related to your home purchase.
What if my home is in danger of foreclosure and I need a Subordination of Deferred Loan? If your purchased property is in jeopardy of foreclosure please contact Johnson County Housing Services’ Director at 913-715-6601.
What If I want to refinance my home? Once the affordability period is complete you may refinance your home. During the affordability period (5 years) subordination is not allowed, therefore refinancing is not an option until the affordability period has expired.
What do we have to do to become an approved lender to work with your program? Any lender who wishes to participate with the Homebuyer Assistance Program may do so as long as they are willing to comply with the terms and conditions of the program. It should be noted that our guidelines and regulations are not negotiable and will direct the entire purchase process.
What is Johnson County Housing Services’ role in the closing? Johnson County Housing Services must be in possession of the closing disclosure a minimum of 3 business days in advance of a scheduled closing date for final review and approval to proceed to close. The Grant Coordinator or other JCHS staff member will attend the closing to obtain signatures and provide the funds to the title company on behalf of the client.
What type of loan can the client utilize? The loan types clients can utilize include:• FHA• FHA 203B• FHA 203K• USDA• VA • Conventional • Conventional Insured
Can Homebuyer Assistance funds be used to pay commissions? Our funds cannot be utilized to pay realtor commissions.
Are there other programs out there that can be utilized with Homebuyer Assistance program, or programs to avoid? Johnson County Housing Services is unaware of any programs currently that can be utilized in conjunction with the Homebuyer Assistance Program. Freddie Mac or Fannie Mae owned properties do not work with our program.