The HOME Investment Partnership Program, known as HOME was implemented by the City of Norfolk and Norfolk Redevelopment and Housing Authority (“NRHA”) to expand the supply of decent affordable housing to low-to-moderate income households who choose to purchase a home in Norfolk . The HOME Program assists eligible first-time homebuyers with downpayment and closing cost assistance in the form of a forgivable, no interest and no monthly payment “soft second” mortgage loan with a principal residence requirement, affordability period, forgiveness term, recapture restrictions, and refinance restrictions.
The Department of Housing and Urban Development (“HUD”) allocates HOME funds to the City of Norfolk annually. NRHA administers the HOME Program for the City of Norfolk. NRHA has established partnerships with Virginia Housing Development Authority (“VHDA”), private lenders, realtors and HUD-certified housing agencies to allow homebuyers access to substantial homebuyer benefits (such as SPARC).
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The “property” purchased with borrowed downpayment and closing cost assistance must be the principal residence of the “borrower” during the affordability period. The “borrower” is not allowed to temporarily sublease the “property” (exceptions, with restrictions, can be made for military families with prior written approval from NRHA).
The “property” occupied by the “borrower” as a principal residence must remain affordable for a specific period of time, depending on the amount of “HOME” funds invested. The affordability period for the “borrower” assisted with “HOME” funds is as follows:
- HOME Loan less than $15,000 has a 5-Year Term
- HOME Loan between $15,000 and $40,000 has a 10-Year Term
- HOME Loan greater than $40,000 has a 15-Year Term
The date of forgiveness shall begin on the date of closing (Settlement Date). The borrowed “HOME” funds will be forgiven each annual anniversary date as follows:
- On a 5-Year Term Note for a HOME Loan less than $15,000 - 20% of the original amount of the NRHA HOME Note is forgiven each anniversary year.
- On a 10-Year Term Note for a HOME Loan between $15,000 and $40,000 - 10% of the original amount of the NRHA HOME Note is forgiven each anniversary year.
- On a 15-Year Term Note for a HOME Loan greater than $40,000 - 6.67% of the original amount of the NRHA HOME Note is forgiven each anniversary year.
Recapture Restrictions apply if the “property” is either sold or rented during the affordability (term) of the NRHA HOME Note - the unforgiven amount of the principle balance of the NRHA HOME Note must be repaid to NRHA, unless
- The property is sold to an income eligible buyer approved for HOME funds that can assume all or part of the unforgiven balance, or
- The Net Proceeds from the sale of the “property” at its fair market value are insufficient to the pay the unforgiven balance of the NRHA HOME Note in full, in this situation NRHA will forgive repayment of the amount of the unforgiven balance in excess of the Net Proceeds.
During the affordability period (term) of the NRHA HOME Note, the “borrower” is not permitted to refinance the “property” without specific written permission from NRHA. NRHA will allow the subordination of its lien interest only for the sole purpose of the “borrower” obtaining an interest rate reduction on a new 30 year fixed rate standard Conventional, FHA or VA first mortgage loan with a principal balance that does not exceed the balance owed on the existing first mortgage loan. The “borrower” must make payable to NRHA the unforgiven amount of the principal balance of the NRHA HOME Note at the time of refinancing if cash or equity is removed from the “property” proceeds.
HOME Program Office Hours:
Monday – Thursday: 6:30am to 5:00pm
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