First-Time Home Buyers Have a HOP-ping Opportunity

August 16, 2016 • Author: Dorothy Dodd, Salin Bank, Mortgage Consultant

Introducing Salin Bank's Home Ownership Program (HOP)
“Young adults’ presence in the housing market has been largely predicted for years, REALTOR®Mag wrote last fall. That prediction is coming true. While Millennials (basically buyers in their 30’s) represented nearly one-third of home buyers in 2015, that trend towards increased homebuying is continuing this year.
Rents are accelerating at a more rapid pace than home prices, observes Jonathan Smoke,’s chief economist. Because of this, he explains, it is more affordable to buy in more than three-quarters of the U.S. “However,” he cautions, for the majority of renting households, buying is not a near-term option.”  Smoke cites three reasons:
  • Poor household credit scores
  • Limited savings
  • Lack of documentable stable income
Now, however, first time home buyers have a “HOP-ping” opportunity in the form of the Salin Bank Home Ownership Program. (As a member of the Federal Home Loan Bank, Salin customers have access to first-time home buyer grants).

Under the HOP program, eligible buyers can receive up to $10,000 towards the cost of a down payment and closing costs for a home. This is not a loan, but FHA grant money that does not have to be repaid if the buyer stays in the home for at least five years.
Eligibility requirements for HOP grants:
  • Applicant has not owned a home within the past three years
  • Applicant’s annual income is 80% or less of the median income in the area where the home is located
  • Applicant invests a minimum of $1,000 of their own money
  • Applicant participates in a qualified Home Buyer Education class

What happens if the homeowner does not stay in the home for the next five years?  A repayment of 20% of the grant money is required for each year NOT in the home.
According to the U.S. Department of Housing and Urban Development, one of the most common questions from first time home buyers is this:
Why should I buy instead of rent?
There are several “becauses”, says HUD Secretary Julian Castro:
  • A home is an investment.  When you rent, you write a monthly check, and that money is gone forever.
  • Mortgage loan interest can be deducted from your federal income taxes.
  • The property taxes you pay as a homeowner can be deducted on your income tax return
  • The value of your home may go up over the years
Young working adults ready to buy a home can now move forward with the help of a Salin Bank Home Ownership HOP grant.