The program's objective is to provide funds for low/moderate income families for downpayment and closing cost by working with local lenders with CRA and FHA loan products.

Click here for a Homebuyer Brochure

Click here for a Homebuyer's guidelines pdf

ELIGIBILITY:

Applicant must be a resident of Gaston County but not within the city limits of High Shoals or Spencer Mountain or be a resident of the city limits of Kings Mountain, Cleveland County.

Must be a first time homebuyer, displaced homebuyer or not have owned a home within the last three years.

Borrower’s income cannot exceed 80% of area’s median income per family size. The income guidelines are subject to change annually:

Base/regular income along with child support, bonus, overtime and/or commission income will be used to determine qualifying income. Written verification of all household members over the age of 18 will be used to determine total family income.

Applicant’s assets cannot exceed $20,000

ASSISTANCE AMOUNT:

Amount of assistance based on income and need:

The Case Management Specialist will determine the amount of assistance to maintain affordability of the housing expense (25 to 30%) to the applicant’s income so as not to over compensate. Program cannot be used in conjunction with other programs, which will be doubling-dipping, or over compensating unless the applicant is below 50% of HUD’s income guidelines. Gift funds from immediate family members cannot exceed $5,000.00.

Funds to be used for downpayment and closing cost expenses and is secured by a second mortgage. Closing costs are for customary and reasonable expenses. Funds cannot be used for payment of prepaids, debts, collections or judgments.

There is no interest on the second mortgage and the term is 5 years.

The second mortgage becomes due and payable at the occurrence of a trigger event during the five-year term:

• Sale or transfer of the property,
• Change in owner-occupancy status,
• Refinance,
• Default of first mortgage.

Reduction during the affordability period. The downpayment and closing costs assistance must be recaptured on a pro-rata basis for the time the homeowner has owned and occupied the housing measured against the required affordability period.

When the recapture requirement is triggered by foreclosure of the housing unit, and there are no net proceeds or the net proceeds are insufficient to repay the HOME Investment due, the City of Gastonia can only recapture the net proceeds.

Minimum loan amount: $1,000.00

ELIGIBLE PROPERTIES:

Property must be used as primary residence.

Properties in Gaston County or city limits of Kings Mountain that are:

• Single family
• Condominium
• Manufactured home that is connected to permanent utility hookups

Community Development staff inspects each property for compliance with HUD’s Housing Quality Standards. Prior to closing, the property must comply with Housing Quality Standards. Pre-1978 housing must not have clipping, cracking, or scaling paint.

UNDERWRITING GUIDELINES:

Ratios: 30/41
Compensating factors for increase of 1 – 2%:

• 700+ credit score,
• 2 month reserves,
• monthly PITI not to exceed current rent of 125%.

Minimum of Borrowers own funds: $500.00

Applicant funds applied to “prepaid items” in connection with the transaction. Seller can pay amount exceeding $500.00 up to a maximum seller contribution of 3%.

Base/regular income along with child support, bonus, overtime and commission income will be used to determine qualifying income. Neither child support nor Social Security benefits are grossed up. Current income will be projected for 12 months.

Reserves:

• Not required but prefer applicant to have an established banking relationship to substantiate savings habit.

Credit: Applicant must be a reasonable credit risk

• Clear credit for the past 12-month period.
• Collections, judgments, liens, charge offs must be paid prior to closing.
• Medical collections are only required to be paid off if the lender requires so.
• Credit score not required.
• Non-traditional credit will be obtained.

Bankruptcy:

• Chapter 7 – must be discharged for 2 years with re-established credit.
• Chapter 13 – can be within the repayment time with no missed payments and approval from bankruptcy court.

Foreclosures:

• Three years after foreclosure with no deficiency balance with written explanation and re-established credit

Repossessions:

• At least 12 months old with no deficiency balance

FIRST MORTGAGE LOAN CONDITIONS:

• Preferred fixed rate mortgages
• Temporary buydowns will be qualified at base PITI.
• Thirty-year term.

GENERAL REQUIREMENTS:

Homeownership education class required for anyone listed on the Deed of Trust.

Private Home Inspection fee is eligible expense.

Contract Contingencies:

1. Applicant’s approval for assistance through the City of Gastonia’s Homebuyer’s Assistance Program
2. House must pass HQS Inspection
3. Federal Funds Addendum

Individual Development Account

IDA requirements:

Must be a resident of Gaston County, Must purchase a home within the city limits of Gastonia, Family income within established guideline, Must be currently employed, Must be able to save $50 per month, and Attend Economic Literacy and Homeownership classes.

For a Individual Development Account brochure Click Here

For a Individual Development Account application Click Here