October 18, 2017
9:05 AM

Housing & Economic Development Department  
First-Time Homebuyer Program  

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Program Summary

The First-Time Homebuyer Program promotes homeownership for low and moderate income homebuyers.  The program is intended to assist buyers with financial and technical assistance in purchasing a home. The program expects to serve about twenty (20) homebuyers with the funds authorized by City Council on August 3, 2017. 

Eligible Applicants

Prospective homebuyers must meet the following requirements to be eligible to receive assistance:

  • Purchase a home within the City of Trenton;
  • Must be able to obtain a home loan (mortgage); 
  • Have not owned a home in the last three (3) years (exception: or be a single parent); 
  • Be a qualified low-income or moderate income household;
  • Occupy the property as their primary residence after the purchase;
  • Attend certified housing counseling certificate courses; 
  • Be the owner of the property after purchase; and
  • Be a United States citizen or legal resident

Eligible participants do not need to be residents of the City of Trenton at the time of application. 

Income Limits

All households applying to the program must submit to an income certification. Income information must be provided for all members of the household and cannot exceed 80% of Area Median Income by household size. Income limits are revised by the US Department of Housing & Urban Development on an annual basis and currently set as follows:

Mercer County HUD Section 8 Income Limits

Household Size

Income Limit

1 person

$47,600

2 persons

$54,400

3 persons

$61,200

4 persons

$68,000

5 persons

$73,450

6 persons

$78,900

7 persons

$84,350

8 persons

$89,800

              
If your household income exceeds these limits, please scroll down to the bottom of the page to Other Homebuying Resources

Eligible Properties

Eligible properties for the program are limited to single-family and multi-family homes that will serve as the prospective homebuyer’s primary residence. Multi-family homes are limited to 4 units or less. Housing styles may include attached (row homes), semi-detached (duplexes), detached single-family homes, condominiums, or manufactured homes.

Eligible Uses of Assistance

Eligible homebuyers may receive funds to:

  • Provide down payments; and/or
  • Provide closing costs; and/or
  • Reduce the purchase price (principal write-down).

Resale Restriction

Recipients of assistance are required to maintain the unit as their primary residence for the duration of the restriction period. Annual certification of the owner's occupancy of the home is required during this period.  The length of the term of the restriction period will be dependent on the total amount of assistance provided to the applicant:

  • Less than $15,000 in total assistant: 5 year term
  • $15,000 to $25,000 in total assistance: 10 year term

At the end of the restriction period, the loan will be forgiven. 

Types of Assistance

The minimum level of assistance provided for the First Time Homebuyer Program is $1,000.  The maximum level of assistance a homebuyer can receive towards a transaction is $25,000. The funds can be used for a combination of downpayment and/or closing costs and/or principal write-down. The homebuyer will be encouraged to contribute up to three (3%) of their own funds toward the down payment. All assistance provided by the City’s FTHBP will be based on demonstrated need by the lender or closing agent not to exceed total funds of $25,000. Principal write-downs will not be considered for applicants attempting to purchase a home with more bedrooms than needed by the household. Loans will be provided at zero (0) percent.  Prepaid fees will not be reimbursed with closing costs.  Assistance received from this program cannot be combined or used in conjunction with assistance from any other federal sources.

Mortgage Lending Terms

The City of Trenton does not provide mortgages or home loans. However, in order to participate in the Program, loans secured by applicants to purchase must meet the folllowing program requirements:

  • All loans must have a fixed rate interest rate.
  • Lenders are encouraged to offer “below-market” interest rates.
  • Loans must be free of “origination fees” or points.
  • Loans may not exceed a term of more than thirty (30) years.
  • In situations where the applicant’s gross income exceeds a 45% debt-to-income ratio, lenders must be willing to consider income from other household members as a “compensating factor.”
  • In the case of multi-family units, lenders must be able to consider rental income from either current or prospective tenants to help qualify for the loan.

Also, lenders should make every effort to avoid providing a loan product that requires private mortgage insurance (PMI). 

Homebuyer Counseling

In order to qualify for assistance from this program, applicants must complete at least eight (8) hours of homebuyer education or credit counseling courses from a HUD-certified agency. Applicants can contact two local agencies for counseling:

American Credit Alliance, Inc
2 South Delmorr Avenue
Morrisville, PA 19067   

Telephone: 215-295-7195
http://www.501plan.org/

Isles, Inc.
10 Wood St
Trenton, New Jersey 08618-3921

Telephone: 609-341-4783
http://www.isles.org

Program Funding Source

The program is funded by the US Department of Housing & Urban Development’s Community Development Block Grant and Home Investment Partnership programs to fund the First Time Homebuyer Program. More information on the City’s use of these funding sources can be found on the City’s website at www.trentonnj.org/cdbg

 

After you have found a home and received a mortgage commitment, you will need to submit a complete application with source documentation (ID, income documents, etc.). The applicant will be required to be pre-qualified for a mortgage, have received credit counseling, and have executed a sales agreement prior to executing a FTHB Program Agreement and receiving assistance. Applicants uncertain about their eligibility for assistance can complete an online pre-application and receive a preliminary determination of eligibilty. Once the pre-application has been reviewed, you will receive a full application for assistance.

Click here for to complete the First Time Homebuyer Program Pre-Application.

If you have any additional questions regarding the program, please call 609-989-3536 or email mleckington@trentonnj.org.

Other Homebuying Resources

The State of New Jersey's Housing Mortgage and Finance Agency has several loan products that may be useful to anyone that exceeds the income limits of Trenton's First Time Homebuying Program. Please visit NJ HMFA's Road Home website to learn more.


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