A completed, signed and dated loan application;

Third party documentation for all sources of current year income for all persons who will reside in the home; and

A Good Faith Estimate.

A Funding Request and Certification

An executed HUD-1 Settlement Statement; and

The Warranty Deed containing the Welcome Home five-year retention language.

Funds may be used only to assist households whose incomes are at or below 80 percent of Mortgage Revenue Bond (MRB) income limits, as adopted by the appropriate state housing finance agency, adjusted for family size.

The member who reserves the Welcome Home funds must originate and close the first mortgage in their name.

Homebuyers must contribute at least $500 of their own funds toward downpayment and closing costs ($300 may be received as a gift). This requirement is waived if the borrower is disabled (evidenced by documentation of SSI or other disability income).

The rate of interest, points, fees, and any other charges must not exceed a reasonable market rate for a loan of similar maturity, terms, and risk.

Welcome Home first mortgage loans must comply with applicable federal, state and local anti-predatory lending laws, regulations and orders designed to prevent or regulate abusive and deceptive lending practices and loan terms (collectively, “Anti-Predatory Lending Laws”). For example, Anti-Predatory Lending Laws may prohibit or limit certain practices and characteristics, including, but not limited to the following:

The FHLBank will not provide Welcome Home assistance to any project in which a loan exceeds the annual percentage rate, or points and fees thresholds of the Home Ownership and Equity Protection Act of 1994 and its implementing regulations (Federal Reserve Board Regulation Z)

The transaction may not include single-premium credit life insurance. If the HUD-1 Settlement Statement shows a charge for single-premium credit life insurance, no Welcome Home funds will be disbursed.

First-time homebuyers must complete a homebuyer counseling program. The counseling program must be provided by, or based on one provided by, an organization recognized as experienced in homeownership counseling. The counseling program must cover, at minimum, mortgage financing, credit-worthiness, household budgeting, and home maintenance. Welcome Home funds cannot be used to pay more than $300 for costs related to counseling. Please see the list of HUD approved counseling agencies.

The housing assisted with Welcome Home funds must be subject to a legally enforceable restriction in the warranty deed or restrictive covenant to the warranty deed requiring that the Federal Home Loan Bank of Cincinnati be given notice of any refinancing or sale of the unit prior to the end of a five-year retention period. Homebuyers may also be required to pay back a pro rata amount of the Welcome Home grant if the home is sold or refinanced during the five-year retention period.

Funds must be drawn down and used to assist the homebuyer to purchase the specific home within six months of notice that funds have been reserved for the member, but no later than December 1.

Welcome Home funds may be used in conjunction with other local, state, and federal funding sources and with the FHLBank’s Community Investment Program. However, Welcome Home funds may not be used with an existing or future award through any FHLBank’s competitive or homeownership set-aside Affordable Housing Program.

If Welcome Home funds have been disbursed to the member and the funds are misused, or if the housing is sold or refinanced during the five-year retention period, the FHLBank may recapture all or a portion of the funds pursuant to the retention language in the warranty deed.

If the homebuyer receives any cash back at closing, as indicated on the HUD-1 Settlement Statement, the Welcome Home grant will be reduced by a like amount. However, instead of receiving cash back at closing, any excess Welcome Home funds may be applied as a “prepayment” or as a “principal reduction” to the first mortgage and such use must be shown on the HUD-1.

If the Welcome Home funds appear to be used for an ineligible purpose, e.g., paying off consumer debt, the Welcome Home grant will be reduced by a like amount.

If the origination fee is greater than one percent (1%), or if discount points charged are greater than one-half of one percent (0.5%), those additional amounts must be paid from the borrower’s funds, in addition to the $500 required. If the borrower’s funds are not sufficient to cover these costs, the Welcome Home grant will be reduced by a like amount.

Welcome Home is not intended for purchases requiring any repair or rehabilitation. If funds are escrowed for repairs, the funds must come either from the seller or from the buyer’s own funds, in addition to the $500 required. Welcome Home funds will not be disbursed until the member certifies that all repairs were required for mortgage approval, that all repairs have been completed, and that all escrowed funds have either been disbursed or released. If unused escrowed funds are released to the homebuyer, the Welcome Home grant funds will be reduced by a like amount.

Welcome Home funds are intended only for homebuyers who would qualify for the first mortgage based on their current household income, not relying on others as co-signors or guarantors, and not relying on any expected but uncertain change in job status or income or other circumstances. That is, the member's mortgage approval should not be contingent on some change in status or income or based on a reliance on some other party to pay or guarantee the payment of the first mortgage. Unless the member is approving the first mortgage based solely on the homebuyer’s current income, the homebuyer is not eligible for Welcome Home funds.