Frequently Asked Questions

About the First Home Clubsm

 

  1. What is the First Home Clubsm (FHC)?
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    • The FHC is a first-time homebuyers program that provides subsidy funds to assist households earning 80% or less of area median income (AMI) overcome the financial difficulties of purchasing a home. The program provides households with $4 match for every $1 of savings (a grant of up to $7,500) that they systematically deposit in their dedicated account with our member. A second grant of up to $500 (no match required), is available to defray homebuyer education and credit counseling costs of a Federal Home Loan Bank of New York (FHLBNY) approved non-profit counseling agencies for households which purchase a home using FHC assistance.
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  2. What are the FHC funds to be used for?
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    • The matching funds are to be used for down payment and closing cost assistance. The homebuyer counseling defrayal grants are awarded to FHLBNY approved non-profit homebuyer counseling agencies and the grant funds are used only to help defray the counseling costs for FHC households which close on a home.
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  3. Who is qualified to receive FHC funds?
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    • In order to participate in the program, a prospective household must meet the following requirements:
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  4. What are the eligibility requirements for a member?
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    • In order to participate in the program, a member institution must complete the FHC Lender’s Application and include the following:
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  5. Where do the funds for the FHC come from?
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    • The FHC is completely funded by the profits of the FHLBNY and does not rely on taxpayer assistance.
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  6. What type of property must the household have in order to be eligible?
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    • One to four-family homes, co-ops, condos and mobile homes attached to a permanent foundation within the FHLBNY’s district area.
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  7. What is the FHLBNY’s district area?
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    • New York, New Jersey, Puerto Rico, and the US Virgin Islands
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  8. How long does the household have to deposit funds into their dedicated savings account?
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    • A minimum of ten (10) consecutive months, to a maximum of twenty-four (24) months.
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  9. Is the household still eligible to receive subsidy if the 10 consecutive monthly deposit requirement is not met?
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    • No. The household must meet the minimum monthly deposit requirement of no less than 10 deposits.
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  10. Is the household still eligible to receive subsidy if a monthly deposit is missed, but made up?
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    • It is up to the discretion of the member institution and ultimately the FHLBNY. Decisions will be based on the homeowner’s written explanation of the missed deposit as well as the consistency of the remaining savings history.
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  11. Is this an asset-based program?
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    • No. The program is strictly income-based. However, any interest, dividends or other net income earned on monetary assets will be assessed as income.
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  12. What if a household’s income increases over the program’s allowable income level threshold after the household has been approved to participate in the program?
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    • Once a household becomes a qualified participant in the program, the income level that was submitted (at time of enrollment) will be locked-in through the term of the subsidy grant.
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  13. What if a household’s size increases or decreases during the enrollment period and prior to the closing date?
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    • In this event, the household income will be re-evaluated retroactively to the time of enrollment.
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  14. What if a household wishes to enroll in the program but has previously owned a home?
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    • If it has been at least three (3) years since the household has owned a home, then they may be eligible to participate in the program. If the household is that of a single parent or a displaced homemaker (a previously owned home has been sold due to dissolution of a household) the 3 year rule is waived.
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  15. What if a household requires a co-borrower in order obtain a mortgage from the member, however, the co-borrower either currently owns a home or has income that exceeds 80% of the AMI?
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    • As long as the co-borrower will not be residing at the mortgaged property, the household will still qualify for FHC subsidy.
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  16. What if a household currently resides outside of the FHLBNY’s district, but wishes to purchase a home within FHLBNY’s district boundaries?
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    • The household must reside and purchase a home within the FHLBNY’s district boundaries in order to receive subsidy.
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  17. Does the FHLBNY disburse funds directly to the household?
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    • No. Once a household has been approved and a closing date has been set, the funds are disbursed to the member’s Direct Deposit Account. The member institution will then disburse the funds on behalf of the household at the time of closing.
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  18. Once the household receives the grant, how long will the FHLBNY have interest in the property?
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    • There is a five-(5) year retention period which starts on the settlement date, which requires the member to place a lien on the property. The lien is forgiven at a rate of 1/60 per month for properties that remain in use as agreed upon in the FHC subordinate mortgage.
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  19. In what position will the First Home Club lien be?
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    • The FHC lien is generally in second lien position, however, in some circumstances, it is acceptable for the lien to be moved to another position.
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  20. If the homeowner sells the house before the end of the 5-year retention period, must they repay the subsidy?
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    • The household must remain in compliance with FHC regulations for five years. In the event that the property is sold to a household who is not income eligible for FHC subsidy, the FHLBNY may request that a pro-rata amount of the subsidy be returned. During each year of the 5-year retention period, 20% of the grant is forgiven.
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  21. If the homeowner refinances the first mortgage before the end of the 5-year retention period, must they repay the subsidy?
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    • If the household refinances the first mortgage they are not obligated to repay a portion of the grant at that time.
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  22. Who prepares the "Subordination of Lien" when a household refinances or sells to an ineligible household?
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    • The member, as the lender, generally prepares the "Subordination of Lien."
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  23. At the end of the 5-year retention period when the subsidy has matured, who prepares the "Satisfaction of Lien?"
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    • The member generally prepares the "Satisfaction of Lien."
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  24. When can member institutions enroll households into the program?
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    • There are three (3) enrollment periods throughout the year. Generally, they are announced via email and on our website: www.fhlbny.com.
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  25. Are members limited to the amount of households they may enroll?
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    • In order to ensure availability of funds, the FHLBNY may, at any given time, limit the number of households that a member may enroll during a particular enrollment period.
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  26. Can the FHC subsidy funds be used with other grant programs?
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    • Yes, the funds may also be used in conjunction with other grant programs including the FHLBNY’s Affordable Housing Program (AHP); however the combined FHC and AHP subsidy funds may not exceed $20,000 per household. If the use of FHC subsidy was not originally approved when the AHP application was scored, the application will have to be rescored reflecting the use of FHC subsidy to determine the effect of the ranking.
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  27. Once a household has enrolled in the FHC and begins making deposits with one member institution, can the household transfer their enrollment and deposits to another member institution?
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    • Under very limited circumstances, a household may transfer to another approved member institution. In order to commence the transfer, a letter must be submitted to the FHLBNY by the member who is willing to let the household transfer. Please refer to FHC Program Guidelines for the appropriate procedure.
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  28. What if a household is not ready to close, for whatever reason, twenty-four (24) months after the date of enrollment?
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    • The FHLBNY may extend the date of expiration for a household’s 24-month enrollment period for a one time 12 month extension. All program requirements must be fulfilled, (savings and home ownership counseling completed). Members are expected to monitor their FHC households to insure that enrollment status is correct. Extensions must be made prior to the date of expiration. Please refer to FHC Program Guidelines for the appropriate procedure.
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  29. How long does the member institution have to disburse the FHC funds to the household?
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    • Once the FHLBNY has credited the member institution’s DDA, the member institution has 30 days or the funds must be returned to the FHLBNY.
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  30. If the household does not meet the maximum equity goal in order to receive the full $7,500 grant, does the FHLBNY take into consideration any interest earned on the deposits made into the account?
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    • Yes, the FHLBNY does take into consideration any interest earned on deposits made into the account.
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  31. Why, if the maximum FHC grant assistance to a household is $8,000 (up to $7,500 for downpayment and closing costs and up to $500 to defray non-profit housing agency counseling costs) is the FHC savings account equity goal $1,875 rather than $2,000?
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    • The downpayment and closing cost subsidy of up to $7,500 is directly related to the purchase of a particular home. Home ownership counseling is an FHC programmatic requirement for which up to $500 may be granted to defray the costs of the non-profit housing agency providing the counseling and associated services for an FHC household which has closed on a home.
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  32. May a household opt out of a grant for the defrayment of homeownership counseling costs?
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    • No. It is the choice of the FHLBNY member whether to participate in the special set-aside program for the defrayal of nonprofit housing agency counseling costs or not.
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  33. How will the amount of the grant for the non-profit housing agency be determined?
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    • On a one time basis, the non-profit housing agency will provide a cost basis for providing home ownership counseling, financial education and other expenses directly associated with fulfilling FHLBNY FHC requirements.
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  34. If a non-profit housing agency is approved for one member, is it approved for all?
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    • Yes, non-profit agencies may counsel potential homeowners and refer applicants to FHLBNY's participating FHC members. Non-profit agencies may submit their interest for participation directly to the FHLBNY via email to fhc@fhlbny.com.
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  35. If a household’s equity goal is less than $1,875, is the counseling cost defrayment grant proportionally less?
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    • No. The grant amounts are independent of each other. Housing agency per household counseling expenses are the same regardless of the amount of the FHC closing cost and downpayment assistance grant.
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  36. If an FHLBNY FHC participant member directly provides homeownership counseling using member staff, will the counseling defrayal grant be available to the member?
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    • No. As a condition of participation in the FHC program, members are expected to provide households certain financial assistance. Since the FHC program requires members to offer a homeownership counseling program, members may provide counseling or arrange for non-profit housing agencies to provide counseling. The set-aside is specifically intended to help defray the costs of non-profit housing agencies providing counseling.
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FHC Enrollment Period Deadline: October 10

Members may enroll an unlimited # of qualified households.The Enrollment Form must be received via email to fhc@fhlbny.com no later than Friday, October 10, 2014, by 5pm EST.

FHC Success Stories

First Home Clubsm Recipient Spotlight
Member: The Summit Federal Credit Union
Recipients: Darlyn Colon

Family Realizes Their Home Ownership Dream
Member: Ulster Savings Bank
Recipients: The Brehse Family

› Other Success Stories