Atlanta NeighborhoodLIFT SM Frequently Asked Questions (as of 1/31/2013)

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1 Atlanta NeighborhoodLIFT SM Frequently Asked Questions (as of 1/31/2013) ABOUT THE PROGRAM What is NeighborhoodLIFT SM? NeighborhoodLIFT SM is a collaborative program of Wells Fargo Bank, N.A., Wells Fargo Foundation, and NeighborWorks America. It invests in the future by supporting sustainable homeownership and neighborhood stability. The program offers: Down payment assistance for qualified buyers provided through local nonprofits Financial education to help buyers prepare for homeownership Events to showcase area homes for sale The program provides millions of dollars in down payment assistance to multiple cities throughout the country. I missed the Atlanta launch event in February. Are NeighborhoodLIFT funds still available for eligible homebuyers? Yes. The Atlanta NeighborhoodLIFT program has sufficient funding for at least 375 homebuyers in the City of Atlanta to receive down payment assistance. Is NeighborhoodLIFT a grant? NeighborhoodLIFT down payment assistance is considered a soft loan. Any amount you receive is fully forgivable after you live in the home for five years. If you sell, refinance with cash out or lose the home to foreclosure, or if the home stops being the primary residence, NeighborhoodLIFT funds are forgivable 20% for each year prior to one of the actions noted above. For example, if you receive $15,000 in down payment assistance from the program and you sale your home after three years, $9,000 or 60% of the assistance will be forgiven. The remaining amount would be due to be repaid. Is there a fee to use the Neighborhood LIFT Program? There is a fee of $1,000 for processing the NeighborhoodLIFT transaction. This fee may be paid by the borrower or the seller, but it cannot come from the down payment assistance funds. However, it can come from the homebuyer s earnest money. 1

2 I don t have money saved for a down payment but I want to buy a house. Is NeighborhoodLIFT a no money down program? No. NeighborhoodLIFT is not a no money down program. Each NeighborhoodLIFT homebuyer will have to pay fees and/or expenses to close on a home. First, there is a $1,000 fee for the NeighborhoodLIFT transaction that must be paid by the buyer or the seller, and the funds cannot come from the down payment assistance funds. Second, some loans require that some or all of the down payment comes from the homebuyer s own funds and not from other sources like the program. I m interested in NeighborhoodLIFT SM. What is my first step? The first step for interested homebuyers is to attend an eight hour homebuyer education workshop with an approved provider. To find an approved provider near you, contact Resources for Residents and Communities (RRC) at or visit their website at Use of a HUD approved, online homebuyer education service such as EHome America through RRC is allowed as a means of completing the eight hour education requirement. However, it must be followed by one hour of face-to-face counseling from the HUD approved housing counseling agency that is providing the homebuyer education certificate. Can I choose my own lender although NeighborhoodLIFT is funded by Wells Fargo? Yes, you can choose any loan officer on Invest Atlanta s approved lender list. The loan officers on the list have been trained by Invest Atlanta, and they know the NeighborhoodLIFT program. To see the list of approved lenders, go to and select Homeownership Center from the menu. HOW TO QUALIFY The maximum down payment assistance amount is $15,000. How do I qualify for the maximum? After you are approved for NeighborhoodLIFT by Invest Atlanta, the amount of your downpayment assistance will be determined. In most cases, homebuyers will receive the full $15,000. However, the program reserves the possibility to provide a lesser amount if it is evident that the homebuyer does not need the full amount. Additionally, the total amount of downpayment assistance received by the homebuyer cannot be greater than 50% of the sales price of the home. What is the minimum credit score to participate in NeighborhoodLIFT? There is no credit score requirement to participate in NeighborhoodLIFT. However, interested homebuyers must be approved for a mortgage by a participating lender first to receive any 2

3 down payment assistance funds. There may be minimum credit scores for certain mortgages and lenders. Although I ll be the only person in my household listed on the mortgage, will the income of others in my household (i.e., family member, roommate, etc.) be included as part of the household income? I know there is an income limit to participate in NeighborhoodLIFT. Yes. Your lender will only examine the credentials of the borrower when qualifying for the mortgage, however for the NeighborhoodLIFT down payment assistance program, we will need to include, and verify, the income of every person who will live in the home that you are purchasing who is 17 years of age or older. What happens if my income is within the income limits when I apply, but it is over the limit by the time I am ready close on the house? If your income exceeds the income limit by the time of closing, it could prevent you from receiving the downpayment assistance. Remember that overtime, raises, bonuses, commission, etc. will affect the income that is used to qualify for NeighborhoodLIFT down payment assistance. However, the change in income may or may not impact your loan approval. You will need to check with your lender. I already have a current homebuyer education certificate, and I am getting ready to place a contract on a home. What will happen next? Your participating lender will verify that the property is eligible for NeighborhoodLIFT and will have you submit a formal loan application. Your lender will provide a complete loan package to Invest Atlanta for review for the NeighborhoodLIFT down payment assistance. Your lender will also submit the loan package to their internal underwriting department for approval. Your loan officer will work with you to ensure that the following additional documents are submitted to Invest Atlanta for review. See the checklist below. NeighborhoodLIFT Homebuyer Document Checklist Last 3 months consecutive YTD pay-stubs (for all eligible household members), Last 3 months consecutive bank statements, Last 2 year s W-2 s (for all eligible household members), Federal Income Tax Return Transcripts from IRS of last 3 years (for all eligible household members), Copy of Homebuyers Training Certificate from Neighborhood Lift approved counseling agency (dated within 12 months of closing date) Copy of Executed Sales Contract with applicable extensions Copy of Home Inspection (Existing Homes) or Certificate of Occupancy (New Construction) Copy of Homeowner s Insurance Policy including the second mortgagee clause Program Acknowledgement Form (Original, signed and witnessed) Family Information Form (Original, signed) Homebuyers Training Seminar Acknowledgment (Original, signed and witnessed) 3

4 First Time/Non-First Time Homebuyer Affidavit (Original, signed and witnessed) Mortgage Assistance Inspection Acknowledgment (signed and witnessed) Lead Based Paint Disclosure (signed and witnessed) Systematic Alien Verification for Entitlements (SAVE) Affidavit (Original, signed and notarized) Personal Inspection Acknowledgment (signed and witnessed) Verification of Income from Business Form for self-employed Homebuyers (for all eligible household members) Verification of Receipt of Child Support Payments Form for single parents/guardians. After Invest Atlanta has received a complete package, Invest Atlanta has up to 10 business days to process the down payment assistance. Invest Atlanta will provide a missing items checklist to your loan officer if any documents are missing. If approved, Invest Atlanta will send an Approval Transmittal to the lender. At that point, a closing date and time can be confirmed. Invest Atlanta will need at least 48 business hours to issue funds after the Approval Transmittal is sent. If I already have a contract on a home, can I still qualify for NeighborhoodLIFT? Yes, you may qualify for NeighborhoodLIFT assistance as long as you meet the eligibility requirements. A contract will be required at the time your NeighborhoodLIFT application is submitted to Invest Atlanta, but the date on the contract does not matter as long as it is currently valid. CLOSING ON THE PROPERTY How long will it take to close on a home with NeighborhoodLIFT? My realtor suggested that my sales contract be for 30 days. It will take about 60 days, or two months, to close with NeighborhoodLIFT. Please allow for 60 days from the time you submit the loan application to closing. Also, your sales contract should be written for at least a 60-day period. I am putting earnest money down on a home. If I use NeighborhoodLIFT, will I be able to get any of that earnest money back at closing? No, earnest money will be credited towards the purchase of the home at closing. Homebuyers participating in NeighborhoodLIFT will not receive any money back at the closing. If I am approved for down payment assistance and it is more than my actual down payment and closing costs combined, will I have to pay any money at closing? The good news is that any downpayment assistance funds beyond the actual downpayment and closing costs can be used to lower the mortgage loan amount, which can lower the monthly mortgage payment. However, each NeighborhoodLIFT buyer will still likely have to pay something at closing although the amount required may vary. 4

5 What happens if I qualify for NeighborhoodLIFT assistance but am unable to close by my sales contract date? The NeighborhoodLIFT downpayment assistance funds are available on a first come, first serve basis. If you are approved for NeighborhoodLIFT by Invest Atlanta, but are unable to close by the date on your sales contract, Invest Atlanta will continue to work with you if you are able to get that closing date officially extended. If you are approved for NeighborhoodLIFT by Invest Atlanta, and then are unable to close on the property for which you were originally approved, you will need to reenter the application process once you have a contract on a new property. You will be reentering a first come, first serve situation. If I am not approved for the mortgage, can I still participate in NeighborhoodLIFT if I am approved for a mortgage in the next six or nine months? Yes. Once you are approved for a mortgage, attend a homebuyer education course and have a sales contract on a home, you can apply for the program if funds are still available. Although funds are currently available, they may not be available by the time you apply. Funds will be used on a first-come, first- approved basis. Approximately 375 buyers will receive the assistance in Atlanta. PROPERTY IN CITY LIMITS I know the house must be located within the Atlanta city limits without exception to participate in NeighborhoodLIFT. How can I be sure that the properties I consider are in the city of Atlanta? Maps of the City of Atlanta are available on the Atlanta website at Also, go to which allows you to look up particular addresses to determine if they are City of Atlanta properties. A note of caution, just because an address appears on the address locator does not mean it is in the City of Atlanta. Certain fields have to be completed - the City Council District number must be given, the NPU must be named, the neighborhood must be named and the census tract must be named. (A handout is available from RRC at to further explain this). TYPES OF HOUSING Can NeighborhoodLIFT be used to buy a short sale or a foreclosed home? Yes, NeighborhoodLIFT can be used to buy a new or existing home within the Atlanta city limits, even a short sale or foreclosure. However, the a foreclosed home cannot be a Wells Fargo property. 5

6 I understand that NeighborhoodLIFT cannot be used to purchase manufactured housing, but can it be used to purchase a modular home? Yes, it can be used to purchase a modular home. I want to buy investment property. Can I use NeighborhoodLIFT to purchase an investment property in Atlanta? No. Down payment assistance funds cannot be used for investment property. The funds can only be used for primary, owner-occupied property. Can NeighborhoodLIFT be used to buy a home that needs renovations? Yes, NeighborhoodLIFT can be used with a 203K loan, the type of mortgage loan you will probably use to buy a house that needs renovations. Several of the approved lenders offer 203K loans. DEADLINE What is the deadline to apply for NeighborhoodLIFT down payment assistance? The deadline to apply for NeighborhoodLIFT down payment assistance is December 31, However, the funds will be used on a first-come, first-approved basis. The funds may be gone by the deadline. 6